Exhibit 10.1

EXECUTION VERSION

PENNANTPARK SENIOR LOAN FUND, LLC

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR REGISTERED OR
QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATES OR OTHER JURISDICTIONS. THEY
ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND THE REGISTRATION AND QUALIFICATION
REQUIREMENTS OF SUCH LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AS SET FORTH HEREIN. NEITHER THE U.S. SECURITIES AND EXCHANGE
COMMISSION (THE “SEC”) NOR ANY STATE OR OTHER SECURITIES COMMISSION OR OTHER
REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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TABLE OF CONTENTS

 

         Page  

ARTICLE 1 DEFINITIONS

     1  

Section 1.1

 

Definitions

     1  

ARTICLE 2 GENERAL PROVISIONS

     5  

Section 2.1

  Formation of the Limited Liability Company      5  

Section 2.2

  Company Name      6  

Section 2.3

  Place of Business; Agent for Service of Process      6  

Section 2.4

  Purpose and Powers of the Company      6  

Section 2.5

  Fiscal Year      7  

Section 2.6

  Liability of Members      7  

Section 2.7

  Member List      7  

ARTICLE 3 COMPANY CAPITAL AND INTERESTS

     7  

Section 3.1

  Capital Commitments      7  

Section 3.2

  [RESERVED]      7  

Section 3.3

  Defaulting Members      7  

Section 3.4

  Interest or Withdrawals      8  

Section 3.5

  Admission of Additional Members      8  

ARTICLE 4 ALLOCATIONS

     9  

Section 4.1

  Capital Accounts      9  

Section 4.2

  Allocations      9  

Section 4.3

  Changes of Interests      9  

Section 4.4

  Tax Matters      9  

ARTICLE 5 DISTRIBUTIONS

     10  

Section 5.1

  General      10  

Section 5.2

  Withholding      10  

Section 5.3

  Certain Limitations      11  

ARTICLE 6 MANAGEMENT OF COMPANY

     11  

Section 6.1

  Management Generally      11  

Section 6.2

  Member Designees’ Committee      12  

Section 6.3

  Meetings of the Member Designees’ Committee      12  

Section 6.4

  Committee Quorum; Acts of the Members (Acting Through the Committee)      12  

Section 6.5

  Investment Restrictions      13  

Section 6.6

  [RESERVED]      13  

 

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TABLE OF CONTENTS

(continued)

 

        

Page

 

 

Section 6.7

  [RESERVED]      13  

Section 6.8

  Electronic Communications      13  

Section 6.9

  Compensation; Expenses      13  

Section 6.10

  Removal and Resignation; Vacancies      13  

Section 6.11

  [RESERVED]      13  

Section 6.12

  Duties of Committee      13  

Section 6.13

  Reliance by Third Parties      14  

Section 6.14

  Members’ Outside Transactions; Investment Opportunities      14  

Section 6.15

  Indemnification      14  

Section 6.16

  Partnership Representative      15  

ARTICLE 7 TRANSFERS OF COMPANY INTERESTS; WITHDRAWALS

     17  

Section 7.1

  Transfers by Members      17  

Section 7.2

  Withdrawal by Members      20  

ARTICLE 8 TERM, DISSOLUTION AND LIQUIDATION OF COMPANY

     20  

Section 8.1

  Term      20  

Section 8.2

  [RESERVED]      20  

Section 8.3

  Dissolution      20  

Section 8.4

  Wind-down      21  

ARTICLE 9 ACCOUNTING, REPORTING AND VALUATION PROVISIONS

     23  

Section 9.1

  Books and Accounts      23  

Section 9.2

  Financial Reports; Tax Return      23  

Section 9.3

  Tax Elections      25  

Section 9.4

  Confidentiality      25  

Section 9.5

  Valuation      27  

ARTICLE 10 MISCELLANEOUS PROVISIONS

     28  

Section 10.1

  [RESERVED.]      28  

Section 10.2

  Governing Law; Jurisdiction; Jury Waiver      28  

Section 10.3

  Other Documents      28  

Section 10.4

  Force Majeure      28  

Section 10.5

  Waivers      28  

Section 10.6

  Notices      28  

Section 10.7

  Construction      29  

Section 10.8

  Amendments      29  

Section 10.9

  Legal Counsel      29  

Section 10.10

  Execution      29  

Section 10.11

  Binding Effect      30  

Section 10.12

  Severability      30  

Section 10.13

  Computation of Time      30  

Section 10.14

  Entire Agreement      30  

 

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PENNANTPARK SENIOR LOAN FUND, LLC

AMENDED & RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

This Amended and Restated Limited Liability Company Agreement, dated as of
July 31, 2020 (as amended from time to time, this “Agreement”), of PennantPark
Senior Loan Fund, LLC, a Delaware limited liability company (the “Company”), is
entered into by and among PennantPark Investment Corporation, a Maryland
corporation, Pantheon Private Debt Program SCSp SICAV – RAIF In Respect Of Its
Compartment Pantheon Senior Debt Secondaries II (USD), a Luxembourg limited
partnership (“PPDP”), and Solutio Premium Private Debt I SCSp, a Luxembourg
limited partnership (“SPPD”) (each, a “Member,” and collectively, the
“Members”).

WHEREAS, the Company was formed as a limited liability company pursuant to the
Act by filing the Certificate of Formation with the Secretary of State of the
State of Delaware on July 10, 2020;

WHEREAS, on July 10, 2020, PennantPark Investment Corporation, in its capacity
as sole member of the Company, entered into that certain Limited Liability
Company Agreement of the Company, dated as of July 10, 2020 (the “Original LLC
Agreement”);

WHEREAS, pursuant to Section 14 of the Original LLC Agreement, one or more
additional members of the Company may be admitted to the Company with the
written consent of PennantPark Investment Corporation, as the initial member of
the Company, and upon the admission of one or more additional members of the
Company, the Original LLC Agreement may be amended to reflect such new member or
members as a Member or Members of the Company;

WHEREAS, on the date hereof, the Company wishes to admit PPDP and SPPD as
additional Members of the Company; and

WHEREAS, PennantPark Investment Corporation, in its capacity as the sole member
of the Company, desires to amend and restate the Original LLC Agreement in its
entirety, and agrees that this Agreement shall govern the rights of the Members
and other matters as set forth in this Agreement.

NOW THEREFORE, in consideration of the mutual agreements set forth below, and
intending to be legally bound, the Members hereby agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.1 Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

“1940 Act” has the meaning set forth in Section 7.1(f)(ii).

“Acceptance Period” has the meaning set forth in Section 7.1(g)(ii).

“Act” means the Limited Liability Company Act of the State of Delaware, as from
time to time in effect.

“Administration Agreement” means the Administration Agreement between the
Company and the Administrative Agent, as amended from time to time in accordance
with the terms hereof.

 

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“Administrative Agent” means PennantPark Investment Administration, LLC or any
other entity retained by the Company with Prior Committee Approval to perform
administrative services for the Company.

“Advisers Act” has the meaning set forth in Section 6.14(b).

“Affiliate” means, with respect to a Person, (a) any other Person that directly,
or indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person and (b) in the case of any Pantheon
Member, any Affiliated Fund; provided, however, that, except as required by
applicable law, no Member shall be deemed an Affiliate of any other Member and
no Member shall be deemed an Affiliate of the Company (or vice versa), in each
case solely on account of ownership of interests in the Company or being party
to this Agreement.

“Affiliated Fund” means of any Pantheon Member, a fund, pooled investment
vehicle, managed account (including separately managed accounts), other entity
or client now or hereafter existing that is directly or indirectly controlled,
managed, advised or sub-advised by any member of the Pantheon Group.

“Agreement” has the meaning set forth in the recitals.

“Applicable Entity” means the Company and any other vehicle treated as a
partnership for U.S. federal income tax purposes that is organized and
controlled by the Company or its applicable Affiliates in accordance with this
Agreement or any organizational documents governing an Applicable Entity and in
which each of PNNT and a Pantheon Member holds a direct or indirect interest
through one or more Applicable Entities.

“Capital Account” means, as to a Member, the capital account maintained on the
books of the Company for such Member in accordance with the terms hereof.

“Capital Commitment” means, as to each Member, the total amount set forth in
such Member’s Subscription Agreement delivered herewith and on the Member List,
which is contributed or agreed to be contributed to the Company by such Member
as a Capital Contribution. The Capital Commitment of any Member may be increased
by such Member with Prior Committee Approval.

“Capital Contribution” means, as to each Member, the aggregate amount of cash
actually contributed to the equity capital of the Company by such Member or the
fair market value of any property contributed to the equity capital of the
Company by such Member (as determined by the Members (acting through the
Committee)), each in accordance with the terms hereof.

“Certificate of Formation” means the certificate of formation of the Company
filed under the Act, as amended from time to time.

“Code” means the United States Internal Revenue Code of 1986, as amended from
time to time.

“Committee” means the Member Designees’ Committee of the Company.

“Company” has the meaning set forth in the recitals.

“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.

 

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“Default Date” has the meaning set forth in Section 3.3(a).

“Defaulting Member” has the meaning set forth in Section 3.3(a).

“Electing Member” has the meaning set forth in Section 8.4(e).

“Entire Interest” means all of a Member’s interests in the Company, including
the Member’s transferable interest and all management and other rights.

“Expenses” means all costs and expenses, of whatever nature, directly or
indirectly borne by the Company, including expenses under the Administration
Agreement.

“GAAP” means United States generally accepted accounting principles, in effect
from time to time.

“GAAP Profit or GAAP Loss” means, as to any transaction or fiscal period, the
net income or loss of the Company determined in accordance with GAAP.

“Implementation Rules” has the meaning set forth in Section 9.2(e).

“Investment” means an investment of any type held, directly or indirectly, by
the Company, other than interests in Subsidiaries.

“IRS” means the United States Internal Revenue Service.

“Leverage Ratio” means, on any date of incurrence of any indebtedness for
borrowed money by the Company or any of its Subsidiaries, the quotient obtained
by dividing (a) the aggregate amount of indebtedness for borrowed money of the
Company and its Subsidiaries (excluding the Subordinated Notes) by (b) the sum
of the par values of the Company and its Subsidiaries’ existing Investments less
the aggregate amount of Indebtedness for borrowed money of the Company and its
Subsidiaries (excluding Subordinated Notes).

“Loss” has the meaning set forth in Section 6.15(a).

“Member” and “Members” have the meaning set forth in the recitals and also
include any Person that becomes a Member of the Company after the date hereof
under the terms of this Agreement.

“Member Designee” means each individual elected, designated or appointed by a
Member to serve as a member of the Committee; provided, that (a) such individual
is acting as a representative of such Member (such Member acting in its capacity
as a Member with respect to the management of the Company) and (b) such
individual is an employee, officer, partner, member or owner of such Member, its
investment adviser or any of their respective Affiliates.

“Member List” has the meaning set forth in Section 2.7.

“Notice of Intent” has the meaning set forth in Section 7.1(g)(i).

“Offer to Purchase” has the meaning set forth in Section 8.4(e).

“Organization Costs” means all out-of-pocket costs and expenses reasonably
incurred directly by the Company or for or on behalf of the Company by a Member,
the Administrative Agent or any of their respective Affiliates in connection
with the formation, organization and capitalization of the Company and the
preparation by the Company to commence its business operations.

 

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“Original LLC Agreement” has the meaning set forth in the recitals.

“Pantheon” means, collectively, PPDP, SPPD, and any transferee in any Permitted
Transfer by any of the foregoing, or any Person substituted for any of the
foregoing as a Member pursuant to the terms of this Agreement; and any of the
foregoing, individually, a “Pantheon Member”.

“Pantheon Group” means Pantheon Holdings Limited, Pantheon Ventures, Inc.,
Pantheon Capital (Asia) Limited, Pantheon Ventures (UK) LLP, Pantheon Ventures
(US) LP, Pantheon Ventures (HK) LLP, Pantheon Ventures (Ireland) DAC and each of
their respective subsidiaries, subsidiary undertakings, from time to time,
including any successor or assign of any of the foregoing entities for so long
as such successor or assign is directly or indirectly a subsidiary or subsidiary
undertaking of a holding company or parent undertaking of any of the foregoing
entities or is controlled by any Person or Persons which control(s) any of the
foregoing entities.

“Partnership Representative” has the meaning set forth in Section 6.16(a).

“Permitted Transfer” has the meaning set forth in Section 7.1(a).

“Person” means an individual, corporation, partnership, association, joint
venture, company, limited liability company, trust, governmental authority or
other entity.

“PNNT” means PennantPark Investment Corporation or any Person substituted for
PennantPark Investment Corporation as a Member pursuant to the terms of this
Agreement.

“PNNT Entity” means PNNT and each Affiliate of PNNT.

“Portfolio Company” means, with respect to any Investment, any Person that is
the issuer of any securities or the debtor under any loan or other debt
obligations that is the subject of such Investment.

“Prior Committee Approval” means, as to any matter requiring Prior Committee
Approval hereunder, the prior approval of a quorum of the Member Designees.

“Proceeding” has the meaning set forth in Section 6.15(a).

“Profit or Loss” means, as to any transaction or fiscal period, the GAAP Profit
or GAAP Loss with respect to such transaction or period, with such adjustments
thereto as may be required by this Agreement; provided that in the event that
the Value of any Company asset is adjusted under Section 9.5, the amount of such
adjustment shall in all events be taken into account in the same manner as gain
or loss from the disposition of such asset for purposes of computing Profit or
Loss, and the gain or loss from any disposition of such asset shall be
calculated by reference to such adjusted Value; and provided further, that GAAP
Profit or GAAP Loss may be adjusted by the Members (acting through the
Committee) to amortize Organization Costs over four (4) years.

“Proportionate Share” means, as to any Member, the percentage that its aggregate
Capital Contributions represent of the aggregate Capital Contributions of all
Members.

“Sale Period” has the meaning set forth in Section 7.1(g)(iii).

“SEC” has the meaning set forth on the cover page.

“Securities Act” has the meaning set forth on the cover page.

 

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“Solvency II” has the meaning set forth in Section 9.2(e).

“Subordinated Notes” means the following subordinated notes (each, a
“Subordinated Note”): (a) that certain subordinated note, dated as of the date
hereof with the Company as issuer and PNNT as holder, (b) that certain
subordinated note, dated as of the date hereof, with the Company as issuer and
PPDP as holder, and (c) that certain subordinated note, dated as of the date
hereof, with the Company as issuer and SPPD as holder, in each case and each
replacement or successor subordinated note thereto.

“Subscription Agreement” means any subscription agreement entered into by any
Member in respect of its Capital Commitment.

“Subsidiary” as to the Company, means any Affiliate Controlled by the Company
directly, or indirectly through one or more intermediaries. For the avoidance of
doubt, Portfolio Companies shall not be included within the definition of
Subsidiary.

“Tax Liability” has the meaning set forth in Section 6.16(b).

“Term” has the meaning set forth in Section 8.1.

“Transfer” or “transfer” means, with respect to any Member’s interest in the
Company, the direct or indirect sale, assignment, transfer, withdrawal,
mortgage, pledge, hypothecation, exchange or other disposition of any part or
all of such interest, whether or not for value and whether such disposition is
voluntary, involuntary, by operation of law or otherwise, and a “transferee” or
“transferor” means a Person that receives or makes a transfer.

“Treasury Regulations” means all final and temporary U.S. federal income tax
regulations, as amended from time to time, issued under the Code by the U.S.
Department of the Treasury.

“Value” means, as of the date of computation with respect to some or all of the
assets of the Company or any assets acquired by the Company, the value of such
assets determined in accordance with Section 9.5.

“Withholding Payment” has the meaning set forth in Section 5.2.

ARTICLE 2

GENERAL PROVISIONS

Section 2.1 Formation of the Limited Liability Company.

(a) The Company was formed under and pursuant to the Act upon the filing of the
Certificate of Formation with the office of the Secretary of State of the State
of Delaware on July 10, 2020. The Members hereby agree to continue the Company
under and pursuant to the Act. The Members agree that the rights, duties,
obligations and liabilities of the Members shall be as provided in the Act,
except as otherwise provided herein. Each Person admitted as a Member as of the
date hereof shall be admitted as a Member at the time such Person has executed
this Agreement or a counterpart of this Agreement.

(b) PNNT hereby represents and warrants to Pantheon that the Company has not
engaged in any activities or business, and has not incurred any liabilities or
obligations, in each case, prior to the date of this Agreement other than its
organization.

 

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(c) PNNT hereby represents and warrants to Pantheon that the neither Company nor
any member, officer, director, employee or Affiliate agent thereof who has, or
will have, access to funds under management by the Company have ever been
charged or convicted of a misdemeanor involving the misapplication or misuse of
money of another, or charged or convicted of any felony, and (ii) there is no
action, proceeding or investigation pending or, to the knowledge of PNNT,
threatened in writing against the Company or its members, officers, directors,
employees or Affiliate agents and (iii) during the five (5) years prior to the
date hereof, none of the Company or its members, officers, directors, employees
or Affiliate agents, have been the subject of any action, proceeding or, to the
knowledge of PNNT, investigation that relates to a claim or allegation of fraud,
the misapplication or misuse of money of another, or violation of any U.S.
federal or state securities law, or material rule or regulation. Except as
otherwise disclosed to Pantheon in writing, there is no legal action, suit,
arbitration or other legal, administrative or other governmental investigation,
inquiry or proceeding (whether U.S. federal, state, local or foreign) pending
or, to the knowledge of PNNT, threatened in writing against (x) the Company or
any of its properties, assets or business, and (y) any Subsidiary and Portfolio
Company of the Company or any of such Subsidiary’s or Portfolio Company’s
respective properties, assets or business, in each case, to the extent that any
matter described in the foregoing clauses (x) or (y) would be reasonably
expected to have a material adverse effect on the Company. PNNT shall, as soon
as reasonably practicable (and in no event more than five (5) business days
after having knowledge), provide Pantheon with written notice of the
commencement of any legal action, suit or arbitration involving the Company, any
of its Subsidiaries, any of its Portfolio Companies, or any officer or
investment professional of the Company that would reasonably be expected to have
a material adverse effect on the Company or any PNNT Entity.

Section 2.2 Company Name. The name of the Company shall be “PennantPark Senior
Loan Fund, LLC” or such other name as approved by Prior Committee Approval.

Section 2.3 Place of Business; Agent for Service of Process.

(a) The registered office of the Company in the State of Delaware is located at
1209 Orange Street, Wilmington, Delaware 19801, or such other place as the
Members may designate. The name of its registered agent for service at such
address is The Corporation Trust Company or such other Person as the Members may
designate.

(b) The initial principal business office of the Company shall be at 590 Madison
Avenue, 15th Floor, New York, New York 10022.

Section 2.4 Purpose and Powers of the Company.

(a) The purpose and business of the Company shall be (i) to make Investments,
either directly or indirectly, as may be approved from time to time in
accordance with the terms hereof and (ii) to engage in any other lawful acts or
activities as the Members (acting through the Committee) deem reasonably
necessary or advisable for which limited liability companies may be organized
under the Act.

(b) Subject to any limitations in this Agreement, the Company shall have the
power and authority to take any and all actions necessary, appropriate, proper,
advisable, convenient or incidental to, or for the furtherance of, the purposes
set forth in Section 2.4(a).

(c) The Company may enter into and perform Subscription Agreements between the
Company and each Member in substantially the form attached hereto as Annex A,
without any further act, vote or approval of any Member or the Committee
notwithstanding any other provision of this Agreement (other than Section 3.1(a)
hereof), the Act or any other applicable law, rule or regulation; provided that
(i) the Capital Commitment of PNNT under any such Subscription Agreement shall
equal seventy-two percent

 

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(72.00%) of the total Capital Commitments made under all such Subscription
Agreements, such that the Proportionate Share of PNNT shall equal seventy-two
percent (72.00%); and (ii) the Capital Commitment of Pantheon under any such
Subscription Agreements shall collectively equal twenty-eight percent (28.00%)
of the total Capital Commitments made under all such Subscription Agreements,
such that the Proportionate Share of Pantheon shall equal twenty-eight percent
(28.00%) in the aggregate.

Section 2.5 Fiscal Year. The fiscal year of the Company shall be the period
ending on September 30 of each year.

Section 2.6 Liability of Members. Subject to the provisions of the Act and other
applicable law, no Member shall be liable for the repayment, satisfaction or
discharge of any Company liabilities. No Member shall be personally liable for
the return of any portion of the Capital Contributions (or any return thereon)
of any other Member.

Section 2.7 Member List. The Administrative Agent shall maintain a list (the
“Member List”) setting forth, with respect to each Member, such Member’s name,
address, Capital Commitment, Capital Contributions and such other information as
the Administrative Agent may deem necessary or desirable or as required by the
Act. The Administrative Agent shall from time to time update the Member List as
necessary in its discretion to reflect accurately the information therein. Any
reference in this Agreement to the Member List shall be deemed to be a reference
to the Member List as in effect from time to time. No action of the Members
shall be required to supplement or amend the Member List. Revisions to the
Member List as a result of changes to the information set forth therein made in
accordance with the terms of this Agreement or to evidence the making of Capital
Commitments or Capital Contributions shall not constitute an amendment of this
Agreement.

ARTICLE 3

COMPANY CAPITAL AND INTERESTS

Section 3.1 Capital Commitments.

(a) Each Member’s Capital Commitment shall be set forth on the Member List and
in such Member’s Subscription Agreement and shall be payable in cash in U.S.
dollars, or, with Prior Committee Approval, other property. Following the
approval of any Investment by Prior Committee Approval of a Capital
Contribution, the Administrative Agent shall issue a notice to each Member
setting forth the terms of the associated Capital Contribution, including the
payment date (provided that notice shall be provided no less than three
(3) business days prior to the payment date). Capital Contributions shall be
made by all Members pro rata based on their respective Capital Commitments. As
of the date hereof, the Capital Commitments and Proportionate Share of the
Members shall be as set forth on Schedule A hereto.

(b) Capital Contributions which are not used within forty-five (45) business
days shall be returned to the Members in the same proportion in which made, in
which case such amount shall be added back to the unfunded Capital Commitments
of the Members and may be recalled by the Company as set forth in this
Article 3.

Section 3.2 [RESERVED].

Section 3.3 Defaulting Members.

(a) Upon the failure of any Member (a “Defaulting Member”) to pay in full any
portion of such Member’s Capital Commitment within ten (10) business days after
written notice from any other Member that such payment is overdue (the “Default
Date”), any of the other Members, in its sole discretion, shall have the right
to pursue one or more of the following remedies on behalf of the Company if such
failure has not been cured in full within such ten (10) business day period:

(i) seek to collect such unpaid portion (and all attorneys’ fees and other costs
incident thereto) by exercising or pursuing any legal remedy the Company may
have; and

 

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(ii) upon ten (10) business days’ written notice to the other Members (which
period may commence during the ten-business day notice period provided above),
and provided that the overdue payment has not been made, dissolve and wind down
the Company in accordance with Article 8.

Except as set forth below, the non-defaulting Member’s election to pursue any
one of such remedies shall not be deemed to preclude such Member from pursuing
any other such remedy, or any other available remedy, simultaneously or
subsequently.

(b) Notwithstanding any provision of this Agreement to the contrary,

(i) a Defaulting Member shall remain fully liable to the creditors of the
Company to the extent provided by law as if such default had not occurred and
shall remain subject to Section 2.6;

(ii) a Defaulting Member shall not be entitled to distributions made after the
Default Date until the default is cured and any such distributions to which such
Defaulting Member would otherwise have been entitled if such default had not
occurred shall be debited against the Capital Account of the Defaulting Member
so as to reduce the remaining amount of the default; and

(iii) the Company shall not make new Investments after the Default Date until
the default is cured.

Section 3.4 Interest or Withdrawals. No Member shall be entitled to receive any
interest on any Capital Contribution to the Company. Except as otherwise
specifically provided herein, no Member shall be entitled to withdraw any part
of its Capital Contributions or Capital Account balance.

Section 3.5 Admission of Additional Members.

(a) The Members (acting through the Committee) may, (i) admit additional Members
upon terms approved by Prior Committee Approval, (ii) permit existing Members to
subscribe for additional interests in the Company and increase their respective
Capital Commitments and (iii) admit a substitute Member in accordance with
Section 7.1.

(b) Each additional Member shall execute and deliver a written instrument
satisfactory to the existing Members whereby such Member becomes a party to this
Agreement, as well as a subscription agreement and any other documents
reasonably required by the Members (acting through the Committee). Each such
additional Member shall thereafter be entitled to all the rights and subject to
all the obligations of Members as set forth herein. Upon the admission of or the
increase in the interest of any Member as herein provided, the Administrative
Agent shall update the Member List, to reflect such admission or increase.

 

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ARTICLE 4

ALLOCATIONS

Section 4.1 Capital Accounts.

(a) A Capital Account shall be maintained for each Member consisting of such
Member’s Capital Contributions, increased or decreased by Profit or Loss
allocated to such Member, decreased by the cash or Value of property distributed
to such Member (giving net effect to any liabilities the property is subject to,
or which the Member assumes), and otherwise maintained consistent with this
Agreement. In the event that the Administrative Agent determines that it is
prudent to modify the manner in which Capital Accounts, including all debits and
credits thereto, are computed in order to be maintained consistent with this
Agreement, the Administrative Agent is authorized to make such modifications to
the extent that they do not result in a material adverse effect to any Member.
For U.S. federal income tax purposes, Capital Accounts shall be maintained in a
manner consistent with the Code and applicable Treasury Regulations.

(b) Profit or Loss shall be allocated among Members as of the end of each fiscal
year of the Company; provided that Profit or Loss shall also be allocated at the
end of (i) each period terminating on the date of any withdrawal by any Member,
(ii) each period terminating immediately before the date of any admission or
increase in Capital Commitment of any Member, (iii) the liquidation of the
Company, or (iv) any period which is determined by the Members (acting through
the Committee) to be appropriate. Organization Costs shall be amortized over
four (4) years or such other period deemed appropriate by the Members (acting
through the Committee).

Section 4.2 Allocations. Profit or Loss shall be allocated among the Members pro
rata in accordance with the Members’ respective Proportionate Share.

Section 4.3 Changes of Interests. For purposes of allocating Profit or Loss for
any fiscal year or other fiscal period between any permitted transferor and
transferee of a Company interest, or between any Members whose relative Company
interests have changed during such period, or to any withdrawing Member that is
no longer a Member in the Company, the Company shall allocate according to any
method allowed by the Code and selected by the Members (acting through the
Committee). Distributions with respect to an interest in the Company shall be
payable to the owner of such interest on the date of distribution. For purposes
of determining the Profit or Loss allocable to or the distributions payable to a
permitted transferee of an interest in the Company or to a Member whose interest
has otherwise increased or decreased, Profit or Loss allocations and
distributions made to predecessor owners with respect to such transferred
interest or increase of interest shall be deemed allocated and made to the
permitted transferee or other holder.

Section 4.4 Tax Matters.

(a) The Company shall be properly classified as a partnership for U.S. federal
income tax purposes, and neither the Company nor any Member shall elect to treat
the Company as a corporation for U.S. federal income tax purposes. Each
Subsidiary, including PennantPark Investment Funding I, LLC, shall be properly
classified as a disregarded entity or, with Prior Committee Approval, a
partnership, for U.S. federal income tax purposes, and the Company shall not
elect to treat any such Subsidiary as a corporation for U.S. federal income tax
purposes.

(b) Each item of income, gain, loss, deduction or credit determined in
accordance with the Code and the applicable Treasury Regulations shall be
allocated in the same manner as such item is allocated pursuant to Section 4.2
or Section 4.3, as appropriate.

 

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(c) The allocation methodology set forth in this Article 4 is intended to comply
with certain requirements of the Treasury Regulations. In the event of any
variation between the adjusted tax basis and value of any Company property
reflected in the Members’ Capital Accounts maintained for U.S. federal income
tax purposes, such variation shall be taken into account in allocating taxable
income or loss for income tax purposes in accordance with, and to the extent
consistent with, the principles under Section 704 of the Code and applicable
Treasury Regulations; provided, however, that the Company shall utilize the
“traditional method” provided in Treasury Regulation Section 1.704-3(b) with
respect to the property contributed or deemed contributed to the Company by any
Member on or about the date hereof. A decision to use a method to allocate such
variation pursuant to Treasury Regulation Section 1.704-3, other than as
described above, shall be considered a tax election requiring Prior Committee
Approval.

(d) Notwithstanding anything to the contrary herein, if the Code or Treasury
Regulations require an adjustment to be made to a Capital Account of a Member,
or some other event or events occurs or occur necessitating or justifying, in
the Members’ judgment, an adjustment deemed equitable to the Members, the
Members (acting through the Committee) shall make such adjustment in the
determination and allocation among the Members of Capital Accounts, or items of
income, deduction, gain, or loss for tax purposes, accounting procedures or such
other financial or tax items as shall equitably take into account such event and
applicable provisions of law, and the determination thereof in the sole
discretion of the Members (acting through the Committee) shall be final and
conclusive as to all of the Members.

ARTICLE 5

DISTRIBUTIONS

Section 5.1 General.

(a) To the extent of available cash and cash equivalents, the Company shall make
distributions in such amounts and at such times as determined by Prior Committee
Approval, to the Members in accordance with Section 5.1(b) below; provided that
the amount of any such distribution may be reduced as provided by Section 5.2
and Section 5.3.

(b) Any distribution under this Section 5.1 shall be shared among the Members as
follows:

(i) First, to pay any interest accrued on the Subordinated Notes in proportion
to the outstanding amount on each such Subordinated Note; and

(ii) Second, to the Members pro rata in proportion to their respective
Proportionate Share; provided, however, that if any Member is in default in its
obligation to make Capital Contributions or to reimburse the Company for any
amounts as and when such Capital Contributions are required to be made or
amounts are required to be reimbursed, as applicable, distributions pursuant to
this Section 5.1(b)(ii) shall be withheld and applied against such Capital
Contributions or reimbursement obligations and treated for all purposes hereof
as having been distributed to such Member and contributed to the Company as a
Capital Contribution or paid to the Company as a reimbursement, as applicable.

Section 5.2 Withholding. The Company may withhold from any distribution to any
Member any amount which the Company has paid or is obligated to pay in respect
of any withholding or other foreign, U.S. federal, state or local tax, including
any interest, penalties or additions with respect thereto (a “Withholding
Payment”), imposed on any interest or income of or distributions to such Member,
and such withheld amount shall be considered a distribution to such Member for
purposes hereof. If no payment is then being made to such Member in an amount
sufficient to pay the Company’s withholding obligation, any amount which the
Company is obligated to pay shall be deemed an interest-free advance from the

 

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Company to such Member, payable by such Member by withholding from subsequent
distributions or within seven (7) business days after receiving written request
for payment from the Company. If the proceeds to the Company from an Investment
are reduced on account of taxes withheld by any other Person (such as an entity
in which the Company owns an interest, directly or indirectly), and such taxes
are imposed on or otherwise are attributable to one or more Members, the amount
of the reduction shall be treated as if it were paid by the Company as a
Withholding Payment with respect to the relevant Member. Each Member hereby
agrees to indemnify the Company for, and hold the Company harmless from, any
Withholding Payment that is attributable to such Member (as reasonably
determined by the Members (acting through the Committee)), including any
interest, penalties and additions to tax with respect thereto. The obligations
set forth in this Section 5.2 shall survive a Member’s ceasing to be a Member of
the Company, the termination, dissolution, liquidation or winding up of the
Company and the termination of this Agreement. The Company shall use
commercially reasonable efforts to obtain on behalf of each Member any available
exemption from, reduction in, or refund of withholding or other taxes imposed on
such Member (or any beneficial owner of such Member) in connection with income
or distributions from the Company or otherwise provide a Member, at such
Member’s expense, with reasonable assistance and such reasonably available
information as may be required by such Member (or any beneficial owner of such
Member) to itself obtain any such available exemption, reduction or refund.

Section 5.3 Certain Limitations. Notwithstanding the foregoing provisions:

(a) In no event shall the Company make a distribution to the extent that it
would (i) render the Company insolvent or (ii) violate Section 18-607(a) of the
Act or other applicable law.

(b) Any distributions shall require Prior Committee Approval and shall be made
in cash or, in the sole discretion of the Members (with Prior Committee
Approval), in-kind in such Company assets as may be selected by the Members
(with Prior Committee Approval) in its sole discretion; provided that the
Members (with Prior Committee Approval) may elect to have any payments made in
respect of the principal of any indebtedness of the Company to be made in-kind
by redeeming the applicable Member’s interest in the Company (or any portion
thereof) at its net asset value as determined in accordance with Company’s
valuation guidelines; it being agreed that in no event shall any such redemption
be permitted if it would cause PNNT’s Proportionate Share or ownership of the
Company to exceed eighty-seven-and-one-half-of-one percent (87.5%). The value of
any asset distributed in-kind shall equal the fair market value of such asset on
the date of distribution as determined by Prior Committee Approval, and,
provided, further, that, for the avoidance of doubt, the Company shall not be
required to distribute the same Company assets to each Member in any-kind
distribution. Securities listed on a national securities exchange that are not
restricted as to transferability and unlisted securities for which an active
trading market exists and that are not restricted as to transferability shall be
valued in the manner contemplated by Section 9.5 as of the close of business on
the day preceding the distribution, and all other securities and non-cash assets
shall be valued as determined in the last valuation made pursuant to
Section 9.5.

ARTICLE 6

MANAGEMENT OF COMPANY

Section 6.1 Management Generally.

(a) The management of the Company and its business and affairs shall be vested
in the Members who shall, for administrative convenience, act through the
Committee as described in Section 6.2.

(b) Concurrently with the execution of this Agreement, the Company entered into
the Administration Agreement with the Administrative Agent, pursuant to which
the Administrative Agent agreed to provide certain services to the Company,
including those services set forth on Annex B. Any amendments to the
Administration Agreement shall require Prior Committee Approval.

 

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Section 6.2 Member Designees’ Committee.

(a) For administrative convenience, the Members desire to act through their
representatives serving on the Committee. The Members may determine at any time
by mutual agreement the number of Member Designees to constitute the Committee
and the authorized number of Member Designees may be increased or decreased by
the Members at any time by mutual agreement, upon notice to all Member
Designees; provided that at all times each of PNNT and Pantheon has an equal
number of Member Designees on the Committee. The initial number of Member
Designees shall be four (4), and each of PNNT and Pantheon shall elect,
designate or appoint two (2) Member Designees. Each Member Designee elected,
designated or appointed by PNNT or Pantheon, as applicable, shall hold office
until a successor is elected and qualified by PNNT or Pantheon, as applicable,
or until such Member Designee’s earlier death, resignation, expulsion or
removal.

(b) Matters to be decided by the Members (acting through the Committee) on
behalf of the Company or any Subsidiary requiring Prior Committee Approval are
set forth in further detail in Schedule B hereto, which is incorporated by
reference herein.

(c) Subject to matters requiring Prior Committee Approval, the Members (acting
through the Committee) shall have the power to do any and all acts necessary,
convenient or incidental to or for the furtherance of the purposes described
herein, including all powers, statutory or otherwise.

Section 6.3 Meetings of the Member Designees’ Committee. The Committee may hold
meetings, both regular and special, within or outside the State of Delaware.
Meetings of the Committee may be called by any Member Designee on not less than
twenty-four (24) hours’ notice to each Member Designee by telephone, facsimile,
mail, email or any other similar means of communication, with such notice
stating the place, date, time and other necessary details of the meeting (and
the means by which each Member Designee may participate by telephone or video
conference) and the purpose or purposes for which such meeting is called.
Attendance of a Member Designee at any meeting shall constitute a waiver of
notice of such meeting, except where a Member Designee attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.

Section 6.4 Committee Quorum; Acts of the Members (Acting Through the
Committee).

(a) At all meetings of the Committee: (i) the presence of two (2) Member
Designees shall constitute a quorum for the transaction of business, provided
that at least one (1) Member Designee is present that was elected, designated or
appointed by each of PNNT and Pantheon; (ii) the presence of three (3) Member
Designees shall constitute a quorum for the transaction of business, provided
that the Member Designee that was elected, designated or appointed by the PNNT
or Pantheon, as the case may be, with only one (1) Member Designee present shall
be entitled to cast two votes on each matter and (iii) the presence of four
(4) Member Designees shall constitute a quorum, provided that two (2) Member
Designees are present that were elected, designated or appointed by each of PNNT
and Pantheon. If a quorum shall not be present at any meeting of the Committee,
the Member Designees present at such meeting may adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
shall be present.

(b) Every act or decision done or made by the Members (acting through the
Committee) shall require the unanimous approval of all Member Designees present
at a meeting duly held at which a quorum is present. The Company shall not have
the authority without the Members (acting through the Committee)

 

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to approve or undertake any item set forth in Section 1 of Schedule B hereto (as
such schedule may be amended from time to time by the Members (acting through
the Committee)). Any action required or permitted to be taken at any meeting of
the Committee may be taken without a meeting, without notice and without a vote
if: (i) two (2) Member Designees entitled to vote with respect to the subject
matter thereof consent thereto in writing (including by e-mail), and the writing
or writings are filed with the minutes of proceedings of the Committee, provided
that one (1) Member Designee elected, designated or appointed by each of PNNT
and Pantheon, provides such consent; or (ii) all Member Designees entitled to
vote with respect to the subject matter thereof consent thereto in writing
(including by e-mail), and the writing or writings are filed with the minutes of
proceedings of the Committee.

Section 6.5 Investment Restrictions. Except with Prior Committee Approval, the
Company and its Subsidiaries shall not incur indebtedness for borrowed money
(including entering into guarantees relating to the incurrence of borrowed money
by any Person) to the extent such incurrence would cause the Leverage Ratio to
exceed one hundred and fifty percent (150%).

Section 6.6 [RESERVED].

Section 6.7 [RESERVED].

Section 6.8 Electronic Communications. Member Designees may participate in
meetings of the Committee by means of telephone or video conference, and such
participation in a meeting shall constitute presence in person at the meeting to
the extent permissible by applicable law.

Section 6.9 Compensation; Expenses. The Member Designees will not receive any
compensation from the Company or its Subsidiaries for their service as Member
Designee. However, the Member Designees shall be reimbursed for their reasonable
out-of-pocket expenses, if any, of attendance at meetings of the Committee.

Section 6.10 Removal and Resignation; Vacancies. Unless otherwise restricted by
law, any Member Designee may be removed or expelled, with or without cause, at
any time solely by the Member(s) that elected, designated or appointed such
individual. Any Member Designee may resign at any time by giving written notice
to the Member(s) who elected, designated or appointed such individual with a
copy to the Company. Such resignation shall take effect at the time specified
therein and, unless tendered to take effect upon acceptance thereof, the
acceptance of such resignation shall not be necessary to make it effective. Any
vacancy caused by removal or expulsion of a Member Designee or the resignation
of a Member Designee in accordance with this Section 6.10 shall be filled solely
by the action of the Member who previously elected, designated or appointed such
individual in order to fulfill the Committee composition requirements of
Section 6.2(a).

Section 6.11 [RESERVED].

Section 6.12 Duties of Committee. To the extent that, at law or in equity, a
Member Designee of the Company has duties (including fiduciary duties) and
liabilities relating thereto to the Company or to any Member, such individual
acting in good faith pursuant to the terms of this Agreement shall not be liable
to the Company or to any Member for its good faith reliance on the provisions of
this Agreement and no Member Designee shall otherwise owe any duty (including
any fiduciary duty) to the Company or to any Member or any of their respective
Affiliates, officers, directors, members, partners, shareholders, employees or
agents of any of the foregoing, or any of their respective heirs, successors or
assigns (other than the duty of good faith and fair dealing). The provisions of
this Agreement, to the extent that they restrict the duties and liabilities of
such individual otherwise existing at law or in equity, are agreed by the
parties hereto to replace such other duties and liabilities of such individual.

 

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Section 6.13 Reliance by Third Parties. Notwithstanding any other provision of
this Agreement, any contract, instrument or act on behalf of the Company by an
officer or any other Person delegated by Prior Committee Approval shall be
conclusive evidence in favor of any third party dealing with the Company that
such Person has the authority, power and right to execute and deliver such
contract or instrument and to take such act on behalf of the Company. This
Section 6.13 shall not be deemed to limit the liabilities and obligations of
such Person to seek Prior Committee Approval.

Section 6.14 Members’ Outside Transactions; Investment Opportunities.

(a) No Member or Member Designee shall be required to devote any fixed portion
of its time to the activities and affairs of the Company and its Subsidiaries;
provided, that each of PNNT and Pantheon shall devote such time and effort as is
reasonably necessary to diligently conduct the activities and affairs of the
Company and its Subsidiaries.

(b) The Administrative Agent and its Affiliates manage, advise or administer
other investment funds and other accounts and may manage, advise or administer
additional funds and other accounts in the future, some of which may have
similar mandates as the Company. The Administrative Agent and its Affiliates are
subject to the provisions of the U.S. Investment Advisers Act of 1940, as
amended (the “Advisers Act”), and the rules, regulations and interpretations
thereof, with respect to the allocation of investment opportunities among such
other investment funds and other accounts and the Company. Except for any
obligations under the Advisers Act, neither the Administrative Agent nor its
Affiliates shall be obligated to offer any investment opportunity, or portion
thereof, to the Company.

(c) Subject to the foregoing provisions of this Section 6.14 and other
provisions of this Agreement, each of the Members, the Administrative Agent and
each of their respective Affiliates and members may engage in, invest in,
participate in or otherwise enter into other business ventures of any kind,
nature and description, individually and with others, including the formation
and management of other investment funds, with or without the same or similar
purposes as the Company, and the ownership of and investment in securities, and
neither the Company nor any other Member shall have any right in or to any such
activities or the income or profits derived therefrom.

(d) No Member, in its capacity as Member of the Company, shall owe any duty
(including any fiduciary duty) to the Company, to any other Member or any of
their respective Affiliates, officers, directors, members, partners,
shareholders, employees or agents of any of the foregoing, or any of their
respective heirs, successors or assigns (other than the duty of good faith and
fair dealing).

Section 6.15 Indemnification.

(a) Subject to the limitations and conditions as provided in this Section 6.15,
each Person who was or is made a party to or is threatened to be made a party to
or is involved in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative, investigative or
arbitrative or in the nature of an alternative dispute resolution in lieu of any
of the foregoing (hereinafter a “Proceeding”), or any appeal in such a
Proceeding or any inquiry or investigation that could lead to such a Proceeding,
by reason of the fact that such Person, or a Person of which such Person is the
legal representative, is or was a Member, a Member Designee, Partnership
Representative or a representative, officer, director or employee thereof, shall
be indemnified by the Company to the fullest extent permitted by applicable law,
as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Company to provide
broader indemnification rights than said law permitted the Company to provide
prior to such amendment) against all liabilities and expenses (including
judgments, penalties (including excise and similar taxes and punitive damages),
losses, fines, settlements and reasonable expenses (including, without
limitation, reasonable attorneys’ and experts’ fees)) actually

 

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incurred by such Person in connection with such Proceeding, appeal, inquiry or
investigation (each a “Loss”), unless such Loss shall have been primarily the
result of bad faith, gross negligence, fraud or intentional misconduct
by the Person seeking indemnification hereunder (or, in the case of the
Administrative Agent, a breach of its duties under the Administration
Agreement), in which case such indemnification shall not cover such Loss to the
extent resulting from such bad faith, gross negligence, fraud, intentional
misconduct. A Person who has ceased to serve in the capacity which initially
entitled such Person to indemnity hereunder shall continue to be entitled to
indemnity hereunder. The rights granted pursuant to this Section 6.15 shall be
contract rights to the indemnified Persons hereunder, and no amendment,
modification or repeal of this Section 6.15 shall have the effect of limiting or
denying any such rights with respect to actions taken or Proceedings, appeals,
inquiries or investigations arising prior to any such amendment, modification or
repeal. To the fullest extent permitted by law, no Person entitled to
indemnification under this Section 6.15 shall be liable to the Company or any
Member for any act or omission performed or omitted by or on behalf of the
Company; provided that such act or omission has not been fully adjudicated to
constitute bad faith, gross negligence, fraud or intentional misconduct (or, in
the case of the Administrative Agent, a breach of its duties under the
Administration Agreement). In addition, any Person entitled to indemnification
under this Section 6.15 may consult with legal counsel selected with reasonable
care and shall incur no liability to the Company or any Member to the extent
that such Person acted or refrained from acting in good faith in reliance upon
the opinion or advice of such counsel.

(b) The right to indemnification conferred in Section 6.15(a) shall include the
right to be paid or reimbursed by the Company for the reasonable expenses
incurred by a Person entitled to be indemnified under Section 6.15(a) who was,
is or is threatened to be made, a named defendant or respondent in a Proceeding
in advance of the final disposition of the Proceeding and without any
determination as to the Person’s ultimate entitlement to indemnification;
provided, however, that the payment of such expenses incurred by any such Person
in advance of the final disposition of a Proceeding shall be made only upon
delivery to the Company of a written undertaking by such Person to repay all
amounts so advanced if it shall be finally adjudicated that such indemnified
Person is not entitled to be indemnified under this Section 6.15 or otherwise.

(c) The Company, with Prior Committee Approval, may indemnify and advance
expenses to an employee or agent of the Company to the same extent and subject
to the same conditions under which it may indemnify and advance expenses to a
Member under Sections 6.15(a) and (b).

(d) The right to indemnification and the advancement and payment of expenses
conferred in this Section 6.15 shall not be exclusive of any other right that a
Member or other Person indemnified pursuant to this Section 6.15 may have or
hereafter acquire under any law (common or statutory) or provision of this
Agreement.

(e) The indemnification rights provided by this Section 6.15 shall inure to the
benefit of the heirs, executors, administrators, successors, and assigns of each
Person indemnified pursuant to this Section 6.15.

(f) The Administrative Agent shall promptly provide Pantheon with written notice
of any indemnification or advancements of fees and expenses to PNNT or any of
its Affiliates or representatives pursuant to Section 6.15(a) or 6.15(b), as
applicable.

Section 6.16 Partnership Representative.

(a) PNNT will serve as the “partnership representative” of the Company as
provided in Section 6223(a) of the Code (or any successor or similar provision
of U.S. federal, state or local law) and a “designated individual” that is
subject to the control of PNNT will be appointed by the Company through

 

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whom the partnership representative will act (individually and collectively
referred to as the “Partnership Representative”). In such capacity, subject to
the last sentence of this paragraph, the Partnership Representative shall have
sole discretion to make or refrain from making any election or otherwise act on
behalf of the Company (at the Company’s expense) in connection with all
examinations of the Company’s affairs by tax authorities, including resulting
administrative and judicial proceedings. The Partnership Representative shall
have the right to retain professional assistance in respect of any audit of the
Company and all reasonable, documented out-of-pocket expenses and fees incurred
by the Partnership Representative on behalf of the Company as Partnership
Representative shall be reimbursed by the Company. Each Member agrees to
cooperate with the Partnership Representative and provide such information as
may be reasonably requested by the Partnership Representative in relation to
carrying out its responsibilities under Section 6223 of the Code (and the
regulations promulgated thereunder). The Company agrees to indemnify the
Partnership Representative and its agents and save and hold them harmless, from
and in respect to all Losses incurred by the Partnership Representative in
connection with or resulting from any claim, action, or demand against the
Partnership Representative or the Company that arise out of or in any way relate
to the Partnership Representative’s status as “partnership representative” of
the Company. For the avoidance of doubt, the Partnership Representative shall
not take any action requiring Prior Committee Approval prior to such Prior
Committee Approval being obtained.

(b) If the Company is subject to any tax liability imposed under Subchapter C of
Chapter 63 of the Code, as well as any related interest, penalties, or other
charges or expenses (collectively, a “Tax Liability”), the Members (acting
through the Committee) (or the Partnership Representative, in consultation with
the Members (acting through the Committee)) shall allocate among the Members any
Tax Liability in a manner it determines to be fair and equitable and the Capital
Accounts hereunder by deducting amounts from Capital Accounts or reducing
amounts otherwise distributable to Members, taking into account any
modifications attributable to a Member pursuant to Section 6225(c) of the Code
and any similar state and local authority. To the extent that a portion of a Tax
Liability for a prior tax year relates to a former Member, the Members (acting
through the Committee) (or the Partnership Representative, in consultation with
the Members (acting through the Committee)) may require a former Member to
indemnify the Company for its allocable portion of such tax. Each Member
acknowledges that, notwithstanding the Transfer or withdrawal of all or any
portion of its interest in the Company, pursuant to this Section 6.16, it may
remain liable for Tax Liabilities with respect to its allocable share of income
and gain of the Company for the Company’s tax years (or portions thereof) prior
to such Transfer or withdrawal, as applicable, under Subchapter C of Chapter 63
of the Code or any similar state or local provisions. Any Tax Liability that is
payable by the Company shall, to the extent attributable to a Member’s (or a
former Member’s) interest in the Company, be treated as distributed or otherwise
paid to such Member in the same manner as a withholding tax. The Members
acknowledge and agree that the Members (acting through the Committee) or the
Partnership Representative shall be permitted to take any actions to avoid Tax
Liability being imposed on the Company or any of its Subsidiaries or Portfolio
Companies under Subchapter C of Chapter 63 of the Code. To the fullest extent
permitted by law, each Member hereby agrees to indemnify and hold harmless the
Company and the other Members from and against any Tax Liability incurred by the
Company or such other Members with respect to income attributable to or
distributions or other payments to such Member, except in the event such
liability arises due to the Company’s bad faith, gross negligence, fraud or
intentional misconduct (or, in the case of the Administrative Agent, a breach of
its duties under the Administration Agreement). Each Member agrees that,
notwithstanding the Transfer of all or any portion of its interest in the
Company, if requested by the Committee, it shall provide an IRS Form W-9, the
appropriate IRS Form W-8 or any other certificate or documentation, which, the
Committee reasonably determines, is necessary.

(c) Company Audits.

(i) The Partnership Representative shall (or with respect to any Applicable
Entity other than the Company, PNNT shall cause the applicable general partner
or other Affiliate thereof

 

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serving in a like capacity to) use commercially reasonable efforts to secure any
reduction in any imputed underpayment within the meaning of Section 6225 of the
Code, and for which any Applicable Entity has not made the election provided in
Section 6226 of the Code, that is available by reason of a Member’s status
(including by means of any procedures provided pursuant to Section 6225(c)(3) of
the Code) and the Company shall apportion the benefit of any such reduction to
such Member (or, with respect to any Applicable Entity other than the Company,
the entity through which such Member directly or indirectly invests in such
entity) pursuant to this Agreement (or, with respect to any Applicable Entity
other than the Company, the applicable organizational documents of such
Applicable Entity), provided that in no event shall the Partnership
Representative be required to take any action under this paragraph to the extent
the Partnership Representative determines such action could have an adverse
impact on the Company, or any other Member (or, with respect to any Applicable
Entity other than the Company, such Applicable Entity or its owners).

(ii) If the Company (or, with respect to any Applicable Entity other than the
Company, the applicable general partner or other Affiliate thereof serving in a
like capacity) determines, consistent with applicable legal or regulatory
requirements or its fiduciary duties to allocate the economic burden (including,
but not limited to, the responsibility for funding or payment) of any liability
for taxes, penalties, additions to tax or interest imposed on any Applicable
Entity under Sections 6225 and 6232 of the Code, in whole or in part, to a
Member (directly or indirectly), then the Company, as promptly as reasonably
possible and, to the extent reasonably practicable, prior to payment of any tax,
penalty, addition to tax, or interest, shall use commercially reasonable efforts
to provide such Member with a written notice that sets forth the amount of the
liability for taxes, penalties, additions to tax, and interest imposed on such
Member, and if such notice cannot be provided prior to payment, to provide such
notice as promptly as reasonably possible after such payment is made. Each of
the Company and the Partnership Representative shall use its commercially
reasonable efforts to provide such additional documentation and reasonable
assistance to such Member as reasonably requested by such Member, at the
Member’s expense, to permit such Member to oppose the imposition of such taxes,
penalties, additions to tax, or interest by the IRS or to otherwise use any
other reasonably available means to reduce such amount.

(iii) The Partnership Representative shall inform each Member as to the
initiation of an audit of the Company’s tax affairs by the IRS. If an audit of
any of the Company’s tax returns shall occur, neither the Company nor the
Partnership Representative shall settle or otherwise compromise assertions of
the auditing agent which may be materially adverse to the Members or their
respective investors without first advising such Members in writing of the
proposed action.

(iv) This Section 6.16(c) shall apply, to the extent applicable, to any
substantively similar and material U.S. state and local tax audit regimes.

(d) Each Member’s obligation to comply with the requirements of this
Section 6.16 shall survive such Member’s ceasing to be a Member of the Company,
the termination, dissolution, liquidation or winding up of the Company, or the
termination of this Agreement.

ARTICLE 7

TRANSFERS OF COMPANY INTERESTS; WITHDRAWALS

Section 7.1 Transfers by Members.

(a) Subject to the requirements of this Article 7, any portion of a Member’s
interest in the Company may be Transferred with Prior Committee Approval.
Notwithstanding the foregoing, without

 

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Prior Committee Approval but with prior written notice to the Company at least
three (3) business days prior to the contemplated Transfer, (i) any Member may
Transfer any portion of its interest to an Affiliate of such Member, (ii) a
Pantheon Member may, with PNNT’s prior written consent, Transfer all or any
portion of its membership interest in the Company and all or any portion of such
Pantheon Member’s Subordinated Notes to any Person on and following January 31,
2025 (Transfers pursuant to clauses (i) and, subject to PNNT’s prior written
consent, (ii), each, a “Permitted Transfer”) and (iii) any Member may make a
transfer in accordance with Section 7.1(g) or Section 8.4(e), in each case if
such Transfer is otherwise in accordance with the requirements of this
Article 7; provided, that in each case, the transferor remains liable for its
Capital Commitment. Notwithstanding the foregoing, if a Permitted Transfer is
made without Prior Committee Approval pursuant to Section 7.1(a)(i) and the
transferee in such Permitted Transfer thereafter ceases to be an Affiliate of
the transferor, then the Permitted Transfer shall automatically be reversed. In
connection with any Transfer by a Pantheon Member, the Company shall deliver to
the transferee a certification pursuant to Proposed Treasury Regulation
Section 1.1446(f)-2(b)(4)(i) (or any corresponding final Treasury Regulation
that may be promulgated) and a certification pursuant to Treasury Regulation
Section 1.1445-11T(d)(2)(i), in each case unless the Company shall have received
advice from legal counsel of nationally recognized standing in the United States
that, based upon a “more likely than not” level of comfort, the Company is not
able to provide either of such certifications.

(b) No Transfer by a Member shall be binding upon the Company until the Company
receives an executed copy of such documentation as reasonably requested by the
other Members to demonstrate that such Transfer is in accordance with this
Article 7.

(c) Any Person which acquires an interest in the Company by Transfer in
accordance with the provisions of this Agreement shall be admitted as a
substitute Member, provided that the requirements of this Agreement are
satisfied. The admission of a transferee as a substitute Member shall be
conditioned upon the transferee’s written assumption, in form and substance
reasonably satisfactory to the other Members, of all obligations of the
transferor in respect of the Transferred interest and execution of an instrument
reasonably satisfactory to the other Members whereby such transferee becomes a
party to this Agreement. Any transferee of the interest of a Member,
irrespective of whether such transferee has accepted and adopted in writing the
terms and provisions of this Agreement, shall be deemed by the acceptance of
such Transfer to have agreed to be subject to the terms and provisions of this
Agreement in the same manner as its transferor.

(d) The Capital Contribution of a Member that is an assignee of all or a portion
of an membership interest in the Company shall include the Capital Contribution
of the assignor (or a pro rata portion thereof in the case of an assignment of
less than the Entire Interest of the assignor).

(e) In the event any Member shall be adjudicated as bankrupt, or in the event of
the winding up or liquidation of a Member, the legal representative of such
Member shall, upon written notice to the other Members of the happening, become
a transferee of such Member’s interest, subject to all of the terms of this
Agreement as then in effect.

(f) As additional conditions to the validity of any Transfer of a Member’s
interest, such assignment shall not:

(i) violate the registration provisions of the Securities Act or the securities
laws of any applicable jurisdiction;

(ii) cause the Company to cease to be entitled to the exemption from the
definition of an “investment company” pursuant to either Section 3(c)(1) or
Section 3(c)(7) of the U.S. Investment Company Act of 1940, as amended (the
“1940 Act”);

 

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(iii) result in the Company having more than ninety (90) members;

(iv) cause the Company to be treated as a “publicly traded partnership” subject
to tax as a corporation within the meaning of Section 7704 of the Code;

(v) unless each of the other Members waives in writing the application of this
clause (v) with respect to such assignment (which any of the other Members may
refuse to do in its absolute discretion), be to a Person which is an employment
benefit plan within the meaning of the U.S. Employee Retirement Income Security
Act of 1974, as amended from time to time; or

(vi) cause the Company or any other Member to be in violation of, or effect an
assignment to a Person that is in violation of, applicable law.

The non-Transferring Member may require reasonable evidence as to the foregoing,
including an opinion of counsel reasonably acceptable to the non-Transferring
Member, provided, that no opinion of counsel shall be required for a Permitted
Transfer. Any purported Transfer as to which the conditions set forth in clauses
(i) through (vi) of this Section 7.1(f) are not satisfied shall be void ab
initio. A Transferring Member shall be responsible for all costs and expenses
incurred by the Company, including reasonable legal fees and expenses, in
connection with any assignment or proposed assignment.

(g) Except for Permitted Transfers (excluding Permitted Transfers pursuant to
Section 7.1(a)(ii), to which this Section 7.1(g) shall apply), each Member
hereby unconditionally and irrevocably grants to each other Member or its
designee a right of first offer to purchase or designate a third party to
purchase all, but not less than all, of any interest in the Company that such
other Member may propose to Transfer to another Person (other than an Affiliate
pursuant to a Permitted Transfer pursuant to Section 7.1(a)) at the valuation
most recently approved in accordance with Section 9.5.

(i) The Member proposing to make a Transfer that would be subject to this
Section 7.1(g) must deliver written notice of its intention to Transfer such
interest (the “Notice of Intent”) to the other Members not later than twenty
(20) business days prior to the proposed closing date of such Transfer. Such
Notice of Intent shall contain the material terms and conditions of the proposed
Transfer and shall identify the proposed transferee of such interest, if known.

(ii) The Member receiving the Notice of Intent shall have the right, for a
period of fifteen (15) business days from the date of receipt of the Notice of
Intent (the “Acceptance Period”), to accept the interest or to designate a
third-party purchaser to accept such interest at the valuation most recently
approved in accordance with Section 9.5 and on the terms stated in the Notice of
Intent. Such acceptance shall be made by delivering a written notice to the
selling Member and the Company within the Acceptance Period stating that it
elects to exercise its right of first offer and, if applicable, providing the
identity of any Person that the non-transferring Member designates as the
purchaser.

(iii) Following expiration of the Acceptance Period, the selling Member shall be
free to sell its interest in the Company to a third party in a Transfer that
otherwise meets the requirements of this Section 7.1 on terms and conditions it
deems acceptable (but at a price not less than the price and on terms not more
favorable to the purchaser thereof than the price and terms stated in the Notice
of Intent); provided that such sale takes place within twenty (20) business days
after the expiration of the Acceptance Period (the “Sale Period”). To the extent
the selling Member Transfers its interest in the Company during the Sale Period,
the selling Member shall promptly notify the Company, and the Company shall
promptly notify the other Members, as to the terms of such Transfer and the name
of the owner(s) to whom the interest was Transferred. If no such sale occurs
during the Sale Period, any attempted Transfer of such interest shall again be
subject to the right of first offer set forth in this Section 7.1(g) and such
procedures shall be repeated de novo.

 

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(h) Notwithstanding any provision contained in this Agreement to the contrary, a
Transfer by a Member shall be effective only if the Transferring Member
simultaneously transfers or assigns the same proportion of its interest in the
Company and its Subordinated Notes to the same Person.

Section 7.2 Withdrawal by Members. Except as otherwise specifically permitted in
this Agreement, a Member may not resign or withdraw from the Company without
Prior Committee Approval. The remaining Members may, in their sole discretion,
cause the Company to distribute to the resigning or withdrawing Member the
balance in its Capital Account on the date of such resignation or withdrawal.
Upon the distribution to the resigning or withdrawing Member of the balance in
such Member’s Capital Account, the resigning or withdrawing Member shall have no
further rights with respect to the Company. Any Member resigning or withdrawing
in contravention of this Section 7.2 shall indemnify, defend and hold harmless
the Company and all other Members from and against any Losses suffered or
incurred by the Company or any such other Member arising out of or resulting
from such resignation or withdrawal.

ARTICLE 8

TERM, DISSOLUTION AND LIQUIDATION OF COMPANY

Section 8.1 Term. Except as provided in Section 8.4, the Company shall continue
without dissolution until the fifth (5th) anniversary of the date hereof (the
“Term”).

Section 8.2 [RESERVED]

Section 8.3 Dissolution. The Company shall be dissolved and its affairs wound up
upon the occurrence of any of the following events:

(a) [RESERVED]

(b) [RESERVED]

(c) the expiration of the term of the Company determined pursuant to
Section 8.1;

(d) distribution of all assets of the Company;

(e) (i) the full resignation and withdrawal of a Member of the Company pursuant
to Section 7.2, or (ii) a bankruptcy, insolvency, dissolution or liquidation of
a Member, or (iii) the making of an assignment for the benefit of creditors by a
Member, or (iv) a default under Section 3.3 by a Member which remains uncured or
unwaived after the expiration of the cure period set forth in Section 3.3, in
each case of clauses (ii) through (iv) above unless resolved otherwise by the
other Members;

(f) a determination by any regulatory agency to subject PNNT’s participation in
the Company to an accounting or reporting treatment or other consequence which
PNNT, in its sole discretion, determines to be materially adverse to it, a
change in any accounting rule or guidance that would subject PNNT’s
participation in the Company to an accounting treatment or other consequence
which PNNT, in its sole discretion, determines to be materially adverse to it,
or a change by any regulatory agency of any assent it may have granted which
PNNT, in its sole discretion, determines to be materially adverse to it, in each
case at the election of PNNT by providing written notice of such election to the
other Member;

 

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(g) the entry of a decree of judicial dissolution pursuant to the Act, in which
event the provisions of Section 8.4, as modified by said decree, shall govern
the winding up of the Company’s affairs; or

(h) a written notice delivered on or at any time following May 2, 2021 by a
Member to the other Members to dissolve the Company, which notice shall become
effective as stated therein but no less than ninety (90) days after delivery
(unless the other Members waive such notification requirement) and in no event
prior to the first anniversary of the date hereof.

Section 8.4 Wind-down.

(a) Upon the dissolution of the Company, the Company shall be liquidated in
accordance with this Article 8 and the Act. The liquidation shall be conducted
and supervised by the Members (acting through the Committee) in the same manner
provided by Article 6 with respect to the operation of the Company during its
term; provided, that in the case of a dissolution and winding up of the Company
pursuant to Sections 8.3(e) or 8.3(f), the Member that elects such dissolution
and winding up (or in the case of a full withdrawal of a Member under
Section 8.3(e), the non-withdrawing Member) may elect further, by written notice
to the other Members, to exercise as liquidating agent all of the rights, powers
and authority with respect to the assets and liabilities of the Company in
connection with the liquidation of the Company, to the same extent as the
Members (acting through the Committee) would have during the term of the
Company. In the case of a dissolution and winding up of the Company, subject to
and without limiting any provision of this Agreement, the Members shall use
commercially reasonable efforts to complete, and to cause the Company and the
Administrative Agent to complete, the liquidation as set forth in this
Section 8.4 within twelve (12) months from the date on which an event set forth
in Section 8.4 becomes effective (which, if such liquidation has not been
completed by such time, may be extended by Prior Committee Approval for up to an
additional twelve (12) months).

(b) From and after the date on which an event set forth in Section 8.3 becomes
effective, the Company shall cease to make Investments after that date, except
for (i) Investments which the Company was committed to make in whole or in part
(as evidenced by a commitment letter, term sheet or letter of intent, or
definitive legal documents under which less than all advances have been made) on
or before such effective date and (ii) at the election of the Members (acting
through the Committee). Capital calls against the Capital Commitment of the
Members shall cease from and after such effective date; provided that capital
calls against the Capital Commitment of the Members may continue to fund the
allocable share of Investments in which the Company continues to participate (as
set forth in the immediately preceding sentence), Expenses and all other
obligations of the Company. Subject to the foregoing, the Members shall continue
to bear an allocable share of Expenses and other obligations of the Company
until all Investments in which the Company participates are repaid or otherwise
disposed of in the normal course of the Company’s activities.

(c) Distributions to the Members during the winding down of the Company shall be
made no less frequently than quarterly to the extent consisting of a Member’s
allocable share of cash and cash equivalents, after taking into account
reasonable reserves deemed appropriate by the Members (acting through the
Committee) (or in the event of a dissolution and winding up of the Company
pursuant to Sections 8.3(e) or 8.3(f), by a Member that has elected to act as
liquidating agent pursuant to Section 8.4(a)), to fund Investments in which the
Company continues to participate (as set forth in the immediately preceding
paragraph), Expenses and all other obligations (including contingent
obligations) of the Company. Unless waived by the Members (with Prior Committee
Approval), the Company also shall withhold five percent (5%) of distributions in
any calendar year, which withheld amount shall be distributed within sixty
(60) days after the completion of the annual audit covering such fiscal period
ended with or within such calendar year. A Member shall remain a member of the
Company until all Investments are

 

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repaid or otherwise disposed of, the Member’s allocable share of all Expenses
and all other obligations (including contingent obligations) of the Company are
paid, and all distributions are made hereunder, at which time the Member shall
have no further rights under this Agreement.

(d) Upon dissolution of the Company, final allocations of all items of Profit
and Loss shall be made in accordance with Section 4.2. Upon dissolution of the
Company, the assets of the Company shall be applied in the following order of
priority:

(i) To creditors (other than Members) in satisfaction of liabilities of the
Company (whether by payment or by the making of reasonable provision for payment
thereof), including to establish any reasonable reserves which the Members
(acting through the Committee), in their reasonable judgment, deem necessary or
advisable for any contingent, conditional or unmatured liability of the Company;

(ii) To creditors who are Members in satisfaction of liabilities of the Company
(whether by payment or by the making of reasonable provision for payment
thereof), including to establish any reasonable reserves which the Members
(acting through the Committee), in their reasonable judgment, deem necessary or
advisable for any contingent, conditional or unmatured liability of the Company;

(iii) To establish any reserves which the Members (acting through the
Committee), in their reasonable judgment, deem necessary or advisable for any
contingent, conditional or unmatured liability of the Company to Members; and

(iv) The balance, if any, to the Members in accordance with Section 5.1(b).

(e) Notwithstanding the foregoing, (i) at any time following January 31, 2025
through the end of the Term, PNNT, or (ii) (A) upon the occurrence of an event
described in Sections 8.3(f), the Member that may elect a dissolution and
winding up, or (B) in the case of an event described in Section 8.3(e), the
Member not subject to such event (PNNT or such Member, as the case may be under
the clause (i) or clause (ii) of this Section 8.4(e), the “Electing Member”) may
elect alternatively by written notice to the other Member, for a period of
twenty (20) business days following the occurrence of such event, to (I) in the
case of the foregoing clause (i), offer to purchase the other Member’s or
Members’ Entire Interest and all of such other Member’s or Members’ Subordinated
Notes or designate a third party to effect such purchase, and (II) in the case
of the foregoing clause (ii), purchase the other Member’s or Members’ Entire
Interest and all of such other Member’s or Members’ Subordinated Notes or
designate a third party to effect such purchase (such election, the “Offer to
Purchase”). In the case of an Offer to Purchase pursuant to clause (I) in the
immediately foregoing sentence, the purchase price of such offer to purchase
shall be at least equal to the net asset value of the sum of such Entire
Interest and all of such other Member’s or Members’ Subordinated Notes,
calculated in accordance with the Company’s valuation guidelines and, if such
other Member or Members accepts such offer to purchase (which it or they may do
so in its or their sole discretion), shall be payable in cash within sixty
(60) business days thereafter; and in the case of an Offer to Purchase pursuant
to clause (II) in the immediately foregoing sentence, the purchase price for
such Entire Interest and such Subordinated Notes shall be payable in cash within
sixty (60) business days after the Offer to Purchase is delivered to the other
Member, and shall be equal to the net asset value of the sum of such Entire
Interest and all of such other Member’s or Members’ Subordinated Notes,
calculated in accordance with the Company’s valuation guidelines. With respect
only to clause (II) in the first sentence of this paragraph, each Member hereby
agrees to sell its Entire Interest and all of such Member’s Subordinated Notes
to the Electing Member or the third party designated by the Electing Member at
such price if the Offer to Purchase is timely exercised by the Electing Member.
If the Electing Member does not exercise the Offer to Purchase within the twenty
(20)-business day period set forth in this Section 8.4(e) or if the

 

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Electing Member or its third-party designee does not purchase the other Member’s
or Members’ Entire Interest and all of such other Member’s or Members’
Subordinated Notes within sixty (60) business days after the Offer to Purchase
is delivered to such other Member, then the Offer to Purchase (and such other
Member’s acceptance of such offer) shall terminate and (x) in the case of an
event described in Section 8.3(e), the other Member or Members shall withdraw
its or their Entire Interest pursuant to Section 7.2, and the Company shall
terminate as provided by this Article 8 or (y) in the case of the occurrence of
an event described in Section 8.3(f), the Electing Member shall retain the
option to elect the dissolution of the Company pursuant to Section 8.3(e) or
8.3(f), as applicable. After any purchase pursuant to an Offer to Purchase, the
other Member or Members shall no longer be a member of the Company, and the
Electing Member, or third party designee of the Electing Member that has
consummated the purchase, may dissolve or continue the Company as it may
determine.

(f) In the event that an audit or reconciliation relating to the fiscal year in
which a Member receives a distribution under this Section 8.4 reveals that such
Member received a distribution in excess of that to which such Member was
entitled, each other Member may, in its discretion, seek repayment of such
distribution to the extent that such distribution exceeded what was due to such
Member.

(g) Each Member shall be furnished with a statement prepared by the Company’s
accountant, which shall set forth the assets and liabilities of the Company as
of the date of complete liquidation, and each Member’s share thereof. Upon
compliance with the distribution plan set forth in this Section 8.4, the Members
shall cease to be such, and either Member may execute, acknowledge and cause to
be filed a certificate of cancellation of the Company.

ARTICLE 9

ACCOUNTING, REPORTING AND VALUATION PROVISIONS

Section 9.1 Books and Accounts.

(a) Complete and accurate books and accounts shall be kept and maintained for
the Company at its principal office. Such books and accounts shall be kept on
the accrual basis method of accounting and shall include separate Capital
Accounts for each Member. Each Member or its duly authorized representative, at
its own expense, shall at all reasonable times and upon reasonable prior written
notice to the Administrative Agent have access to, and may inspect, such books
and accounts and any other records of the Company for any purpose reasonably
related to its interest in the Company.

(b) All Company funds shall be deposited in the name of the Company in such bank
account or accounts or with such custodian, and securities owned by the Company
may be deposited with such custodian, as may be designated by Prior Committee
Approval from time to time and withdrawals therefrom shall be made upon such
signature or signatures on behalf of the Company as may be designated by Prior
Committee Approval from time to time.

Section 9.2 Financial Reports; Tax Return.

(a) The Company shall engage an independent certified public accountant selected
and approved by Prior Committee Approval to act as the accountant for the
Company and to audit the Company’s books and accounts as of the end of each
fiscal year. The accountant for the Company shall initially be RSM US LLP. As
soon as practicable, but no later than ninety (90) days after the end of such
fiscal year, the Company shall cause the Administrative Agent to deliver, by any
of the methods described in Section 10.6, to each Member and to each former
Member who withdrew during such fiscal year:

(i) audited financial statements of the Company as of the end of and for such
fiscal year, including a balance sheet and statement of income, together with
the report thereon of the Company’s independent certified public accountant,
which annual financial statements shall be approved by Prior Committee Approval;

 

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(ii) a schedule of Investments of the Company, including both the cost and the
valuation of such securities as determined pursuant to Section 9.5, and a
statement of such Member’s Capital Account;

(iii) to the extent that the requisite information is then available, an IRS
Form 1065, Schedule K-1 for such Member with respect to such fiscal year,
prepared in accordance with the Code, together with corresponding forms for
state income tax purposes, setting forth such Member’s distributive share of
Company items of Profit or Loss for such fiscal year and the amount of such
Member’s Capital Account determined in accordance with Section 4.4 at the end of
such fiscal year; and

(iv) such other financial information and documents with respect to the Company
and its business as the Administrative Agent deems appropriate, or as a Member
may reasonably require and request, to enable such Member to comply with
regulatory requirements applicable to it or to prepare its U.S. federal and
state income tax returns.

(b) The Members shall cause the Administrative Agent to prepare and timely file
after the end of each tax year of the Company all U.S. federal and state income
tax returns of the Company for such tax year. As soon as practicable, but no
later than one hundred and twenty (120) days after the end of each tax year of
the Company, the Company shall cause the Administrative Agent to deliver, by any
of the methods described in Section 10.6, to each Member and to each former
Member who withdrew during such tax year, to the extent that the requisite
information is then available, a IRS Form 1065, Schedule K-1 (and state
equivalents) for such Member with respect to such tax year, prepared in
accordance with the Code, together with corresponding forms for state income tax
purposes, setting forth such Member’s distributive share of Company items of
Profit or Loss for such tax year and the amount of such Member’s Capital Account
determined in accordance with Section 4.4 at the end of such tax year. For
purposes of this Section 9.2, a Member’s distributive share of Company items of
Profit or Loss shall mean an amount equal to such Member’s distributive share of
the Company’s taxable income or loss for a tax year (or portion of such tax
year), determined in accordance with Section 703(a) of the Code (for this
purpose, all items of income, gain, loss, or deduction required to be stated
separately pursuant to Section 703(a)(1) of the Code shall be included in
taxable income or loss), with the corresponding adjustments required to be made
to such Member’s Capital Account in accordance with the capital accounting
maintenance rules of Section 704 of the Code and Treasury Regulations Sections
1.704-1 and 1.704-2, as appropriate.

(c) If any Member (or any beneficial owner of such Member), solely as a result
of such Member’s investment in the Company, is required to file a tax return or
other document or pay a tax, the Company shall use commercially reasonable
efforts (i) to notify such Member of such requirement (to the extent the Company
is aware of such requirement) within a commercially reasonable period of time
after becoming aware of such requirement, (ii) to furnish such Member with such
information as may be reasonably necessary to enable such Member (and the
beneficial owners of such Member) to make such filing or pay such tax in a
timely manner, and (iii) to comply with its obligation to withhold on state
sourced income for such state(s) in which the Company deems the Company to have
a material state tax withholding obligation, and furnish to such Member the
appropriate state form (e.g., withholding statement, state equivalent to IRS
Form 1065, Schedule K-1) to enable such Member to meet its state filing
obligations and obtain a credit for taxes withheld.

 

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(d) As soon as practicable, but in no event later than forty-five (45) days
after the end of each of the first three fiscal quarters of a fiscal year, the
Company shall cause the Administrative Agent to prepare and deliver, by any of
the methods described in Section 10.6, to each Member (i) unaudited financial
information (to include a statement of assets and liabilities, statement of
operations and statement of cash flows) with respect to such Member’s allocable
share of Profit or Loss and changes to its Capital Account as of the end of such
fiscal quarter and for the portion of the fiscal year then ended, (ii) a
statement of holdings of securities of the Company as to which such Member
participates, including both the cost and the valuation of such securities as
determined pursuant to Section 9.5, and (iii) such other financial information
as the Administrative Agent deems appropriate, or as a Member may reasonably
require and request, to enable such Member to comply with regulatory
requirements applicable to it.

(e) The Company acknowledges that certain limited partners of the Pantheon
Members are directly or indirectly subject to the European harmonization
framework for insurance companies that has come into effect on January 1, 2016
(“Solvency II”, Directive 2009/138/EC) and applicable implementing regulations,
laws and guidelines (including level II, level III and Technical Specifications,
and any other European or national implementation – “Implementation Rules”),
each as amended from time to time. Therefore, the Company agrees to use
commercially reasonable efforts to provide each Pantheon Member on a quarterly
basis within twenty (20) business days following the end of the relevant fiscal
quarter of the Company with the most recent version of the information of the
Company and PennantPark Investment Funding I, LLC and the Company’s other
Subsidiaries required by Solvency II or the Implementation Rules (as requested
by Pantheon in writing) substantially in the form of the “Tripartite Data
Exchange Template” (as amended from time to time), including, but not limited
to, a distinct identification number for each of the Company’s and PennantPark
Investment Funding I, LLC’s and the Company’s other Subsidiaries’ portfolio
companies (legal entity identifier (LEI) or similar). In addition, the Company
agrees to use commercially reasonable efforts to provide, within a reasonable
timeframe as the context allows, such other information of the Company and
PennantPark Investment Funding I, LLC and the Company’s other Subsidiaries as
may be reasonably requested by the Pantheon Members in writing to assist in
their compliance with Solvency II, provided such information is readily
available to the Company. The out-of-pocket costs of providing the reporting
heretofore discussed shall be promptly reimbursed on a pro rata basis by the
Pantheon Members receiving such reporting upon presentation of reasonably
itemized receipts, invoices or other proof of expenditure.

Section 9.3 Tax Elections.

(a) The Company shall timely and properly make an election pursuant to
Section 754 of the Code for its first taxable year and shall not revoke such
election for any subsequent year without the prior written consent of each
Member. The Company may, by Prior Committee Approval, but shall not be required
to, make (i) any election pursuant to the provisions of Section 1045 of the
Code, or (ii) any other election required or permitted to be made by the Company
under the Code.

(b) Each Member agrees to furnish to the Committee such information as may be
required for the Company to comply with any tax accounting, withholding or
reporting obligations, including any obligation to make any mandatory basis
adjustments to Company property pursuant to Section 754 of the Code

Section 9.4 Confidentiality.

(a) Each Member agrees to maintain the confidentiality of the Company’s records,
reports and affairs, and all information and materials furnished to such Member
by the Company, PNNT, PNNT’s investment adviser, the Administrative Agent or
their respective Affiliates with respect to their respective businesses and
activities; each Member agrees not to provide to any other Person copies of any
financial

 

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statements, tax returns or other records or reports, or other information or
materials, provided or made available to such Member; and each Member agrees not
to disclose to any other Person any information contained therein (including any
information respecting Portfolio Companies), without the express prior written
consent of the disclosing party; provided that:

(i) PNNT may disclose (1) any such information as may be required by law in
connection with its filings with the SEC and (2) the names of borrowers of loans
made by the Company and summaries of such loan transactions in any marketing
materials of PNNT and its Affiliates; and

(ii) The Members hereby acknowledge that (A) Pantheon and its manager or advisor
has a need to report to its own investors, clients and equity holders regarding
the nature and performance of its investment in the Company, (B) the manager or
adviser of Pantheon may receive such confidential information and (C) Pantheon
and its manager or adviser may disclose to Pantheon’s investors, clients and
equity holders, or prospective investors, clients and equity holders, the
following information regarding the Company provided that the recipients are
informed of the confidential nature of the information: (1) the name and address
of the Company and the Administrative Agent; (2) the total size, currency and
the year of formation of the Company and a brief description of the investment
strategy of the Partnership (geography, style, stage); (3) the amount of
Pantheon’s Capital Commitment and original principal amount of its Subordinated
Notes; (4) and the amount of Pantheon’s Capital Commitment drawn down and the
amount thereof remaining uncalled; (5) the amount of any distributions received
by Pantheon; (6) the net asset value of Pantheon’s investment in the Company;
(7) such ratios and performance information calculated by the investment manager
or investment adviser of Pantheon using the information in sub-clauses (3)-(6)
above (including but not limited to the internal rate of return of the Company);
(8) the name and a brief description of each Investment and information
regarding the industry and geographic location of each such Investment; (9) the
costs of the Company’s investment in an Investment acquired by the Company;
(10) the book value of an Investment on the last day of the quarter (as reported
by the Company to Pantheon in the Company’s financial statements); (11) with
respect to any distribution in-kind of securities the name and issuer of such
securities, the number of such securities distributed to each Pantheon Member
and the fair market value at the time of distribution as determined under this
Agreement; and (12) such other information as may be required by law or
regulation or the accounting principles or standards applicable to Pantheon.
Notwithstanding the foregoing, Pantheon shall not disclose any confidential
information to any Person unless the proposed recipient of such confidential
information is first required to maintain the confidentiality of such
information on terms no less restrictive than those set forth in this
Section 9.4 and Pantheon shall be liable to the Company, each other Member and
the Administrator for any losses arising from the breach of such confidentiality
provisions.

(iii) any Member may provide financial statements, tax returns and other
information contained therein: (A) to such Member’s general partner, investment
manager and investment adviser, accountants, internal and external auditors,
legal counsel, financial advisors and other fiduciaries and representatives (who
may be Affiliates of such Member) as long as such Member instructs such Persons
to maintain the confidentiality thereof and not to disclose to any other Person
any information contained therein; (B) to bona fide potential transferees of
such Member’s Entire Interest that agree in writing, for the benefit of the
Company, to maintain the confidentiality thereof, but only after reasonable
advance notice to the Company; (C) if and to the extent required by law
(including judicial or administrative order); provided that, to the extent
legally permissible, the Company is given prior notice to enable it to seek a
protective order or similar relief; (D) to representatives of any governmental
regulatory agency or authority with jurisdiction over such Member, or as
otherwise may be necessary to comply with regulatory requirements applicable to
such Member; and (E) in order to enforce rights under this Agreement.

 

26

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(b) Notwithstanding the foregoing, the following shall not be considered
confidential information for purposes of this Agreement: (i) information
generally known to the public; (ii) information obtained by a Member from a
third party who is not prohibited from disclosing the information;
(iii) information in the possession of a Member prior to its disclosure by the
Company, PNNT, PNNT’s investment adviser, the Administrative Agent or their
respective Affiliates; or (iv) information which a Member can show by written
documentation was developed independently of disclosure by the Company, PNNT,
PNNT’s investment adviser, the Administrative Agent or their respective
Affiliates. Without limitation to the foregoing, no party shall engage in the
purchase, sale or other trading of securities or derivatives thereof based upon
confidential information.

Section 9.5 Valuation.

(a) Valuations shall be made as of the end of each fiscal quarter and upon
liquidation of the Company in accordance with following provisions and the
Company’s valuation guidelines then in effect (which shall be consistent with
PNNT’s valuation guidelines then in effect):

(i) Within thirty (30) days after the date as of which a valuation is to be
made, the Administrative Agent shall deliver to the Committee a report as to the
recommended valuation as of such date, and provide such Persons with a
reasonable opportunity to request information and to provide comments with
respect to the report.

(ii) The recommended valuation as of such date shall be deemed final if (A) such
valuation is approved by Prior Committee Approval or (B) there is no objection
by the Members (acting through the Committee) to such valuation within ten
(10) business days of the Committee’s receipt of the Administrative Agent’s
report.

(iii) If there is an objection to the recommended valuation by the Members
(acting through the Committee), then the Administrative Agent shall cause a
valuation of the asset(s) subject to unresolved objection to be made as of such
date by an approved valuation expert (if not already made), and shall determine
a valuation of such asset(s) consistent with the valuation as of such date by
the approved valuation expert, and such valuation shall be final. For this
purpose, a valuation of an asset as of such date shall be considered consistent
with a valuation of an approved valuation expert if it is equal to the
recommended value or within the recommended range of values determined by the
approved valuation expert as of such date. An approved valuation expert shall
mean an independent valuation consultant that either has been approved by the
Members (acting through the Committee) or has been referenced as the independent
valuation consultant of the Company in a previous valuation report by the
Administrative Agent without objection by any Member Designee.

(iv) Liabilities of the Company shall be taken into account at the amounts at
which they are carried on the books of the Company, and provision shall be made
in accordance with GAAP for contingent or other liabilities not reflected on
such books and, in the case of the liquidation of the Company, for the expenses
(to be borne by the Company) of the liquidation and winding up of the Company’s
affairs.

(v) No value shall be assigned to the Company name and goodwill or to the office
records, files, statistical data, or any similar intangible assets of the
Company not normally reflected in the Company’s accounting records.

 

27

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(b) All valuations shall be made in accordance with this Section 9.5 shall be
final and binding on all Members, absent actual and apparent error. Valuations
of the Company’s assets by independent valuation consultants shall be at the
Company’s expense.

ARTICLE 10

MISCELLANEOUS PROVISIONS

Section 10.1 [RESERVED.]

Section 10.2 Governing Law; Jurisdiction; Jury Waiver. This Agreement shall be
governed by, and construed in accordance with, the law of the State of Delaware.
To the fullest extent permitted by law, in the event of any dispute or
controversy arising out of the terms and conditions of this Agreement, the
parties hereto consent and submit to the jurisdiction of the courts of the State
of New York in the county of New York and of the U.S. District Court for the
Southern District of New York.

EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

Section 10.3 Other Documents. The Members agree to execute such instruments and
documents as may be required by law or which a Member deems necessary or
appropriate to carry out the intent of this Agreement.

Section 10.4 Force Majeure. Whenever any act or thing is required of the Company
or a Member hereunder to be done within any specified period of time, the
Company and the Member shall be entitled to such additional period of time to do
such act or thing as shall equal any period of delay resulting from causes
beyond the reasonable control of the Company or the Member, including, without
limitation, bank holidays, and actions of governmental agencies, and excluding,
without limitation, economic hardship; provided that this provision shall not
have the effect of relieving the Company or the Member from the obligation to
perform any such act or thing.

Section 10.5 Waivers.

(a) No waiver of the provisions hereof shall be valid unless in writing and then
only to the extent set forth in such writing. Any right or remedy of the Members
hereunder may be waived by Prior Committee Approval, and any such waiver shall
be binding on all Members, other than situations where such rights or remedies
are non-waivable under applicable law. Except as specifically herein provided,
no failure or delay by any party in exercising any right or remedy hereunder
shall operate as a waiver thereof, and the waiver of a particular right or
remedy on one occasion shall not be deemed a waiver of any other right or remedy
or a waiver on any other occasion.

(b) Except as otherwise provided in this Agreement or for situations in which
the approval or consent of all or certain Members is required by non-waivable
provisions of applicable law, any approval or consent of the Members may be
given by the Members (acting through the Committee), and any such approval or
consent shall be binding on all Members.

Section 10.6 Notices. All notices, demands, solicitations of consent or
approval, and other communications hereunder shall be in writing or by
electronic mail (with or without attached PDFs), and shall be sufficiently given
if personally delivered or sent by postage prepaid, registered or certified
mail, return receipt requested, or sent by electronic mail, overnight courier or
facsimile transmission, addressed

 

28

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as follows: if intended for the Company, to the Company’s principal office
determined pursuant to Section 2.3; and if intended for any Member, to the
address of such Member set forth on the Member List, or to such other address as
any Member may designate by written notice to the Company. Notices shall be
deemed to have been given (i) when personally delivered, (ii) if sent by
registered or certified mail, on the earlier of (A) three days after the date on
which deposited in the mails or (B) the date on which received, or (iii) if sent
by electronic mail, overnight courier or facsimile transmission, on the date on
which received; provided that notices of a change of address shall not be deemed
given until the actual receipt thereof. The provisions of this Section 10.6
shall not prohibit the giving of written notice in any other manner; however,
any such written notice shall be deemed given only when actually received.

Section 10.7 Construction.

(a) The captions used herein are intended for convenience of reference only and
shall not modify or affect in any manner the meaning or interpretation of any of
the provisions of this Agreement.

(b) As used herein, the singular shall include the plural, the masculine gender
shall include the feminine and neuter, and the neuter gender shall include the
masculine and feminine, unless the context otherwise requires.

(c) The words “hereof,” “herein,” and “hereunder,” and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement.

(d) The words “including” and “include” and other words of similar import shall
be deemed to be followed by the phrase “without limitation.”

(e) The word “or” shall be disjunctive but not necessarily exclusive.

(f) References in this Agreement to Articles, Sections and Schedules are
intended to refer to Articles, Sections and Schedules of this Agreement unless
otherwise specifically stated.

(g) Unless otherwise specified, references herein to applicable statutes or
other laws are references to the federal laws of the United States.

(h) Nothing in this Agreement shall be deemed to create any right in or benefit
for any creditor of the Company that is not a party hereto, and this Agreement
shall not be construed in any respect to be for the benefit of any creditor of
the Company that is not a party hereto.

(i) Wherever in this Agreement a Member or other Person is empowered to take or
make a decision, direction, consent, vote, determination, election, action or
approval, such Member or Person is entitled to consider, favor and further such
interests and factors as it desires, including its own interests, and has no
duty or obligation to consider, favor or further any other interest of the
Company, any Subsidiary of the Company or any other Member or Person.

Section 10.8 Amendments. This Agreement may be amended at any time and from time
to time by a written instrument executed by each Member.

Section 10.9 Legal Counsel. Schedule C is incorporated by reference herein.

Section 10.10 Execution. This Agreement may be executed in any number of
counterparts and all such counterparts together shall constitute one agreement
binding on all Members.

 

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Section 10.11 Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the respective heirs, executors, administrators, legal
representatives, successors and assigns of the parties hereto; provided that
this provision shall not be construed to permit any assignment or transfer which
is otherwise prohibited hereby.

Section 10.12 Severability. If any one or more of the provisions contained in
this Agreement, or any application thereof, shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and all other applications thereof shall
not in any way be affected or impaired thereby.

Section 10.13 Computation of Time. In computing any period of time under this
Agreement, the day of the act, event, or default from which the designated
period of time begins to run shall not be included. The last day of the period
so computed shall be included, unless it is a Saturday, Sunday or legal holiday
on which banks in New York are closed, in which event the period shall run until
the end of the next day which is not a Saturday, Sunday or such a legal holiday.
Any reference to “business day” shall refer to any day which is not a Saturday,
Sunday or such a legal holiday. Any references to time of day shall refer to New
York time.

Section 10.14 Entire Agreement. Except as provided in this Section 10.14, this
Agreement and the Subscription Agreements constitute the entire agreement
between the parties and supersede all prior agreements, understandings and
arrangements with respect to the subject matter hereof. Notwithstanding anything
to the contrary contained herein or the provisions of any Subscription
Agreement, it is hereby acknowledged and agreed that PNNT, on the one hand, and
Pantheon or its transferees, on the other hand, without the approval of the
Company or Prior Committee Approval, may enter into a side letter or similar
agreement which has the effect of establishing rights under, or altering or
supplementing the terms of this Agreement or of any Subscription Agreement. The
parties hereto agree that any terms contained in any such side letter or similar
agreement with a Member shall govern with respect to such Member notwithstanding
anything to the contrary contained in this Agreement or in the provisions of
such Member’s Subscription Agreement.

[Remainder of this page intentionally left blank. Signatures appear on next
page.]

 

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IN WITNESS WHEREOF, the Members have caused this Agreement to be executed and
delivered as of the date first above written.

 

PENNANTPARK INVESTMENT CORPORATION   By:  

/s/ Arthur H. Penn

    Name:   Arthur H. Penn     Title:   Chief Executive Officer

PANTHEON PRIVATE DEBT PROGRAM SCSP SICAV – RAIF IN RESPECT OF ITS COMPARTMENT
PANTHEON SENIOR DEBT SECONDARIES II (USD)

 

By: Pantheon Ventures (UK) LLP, its alternative investment fund manager

  By:  

/s/ Matt Garfunkle

    Name:   Matt Garfunkle     Title:   Attorney SOLUTIO PREMIUM PRIVATE DEBT I
SCSP By: Pantheon Ventures (UK) LLP, its investment manager   By:  

/s/ Matt Garfunkle

    Name:   Matt Garfunkle     Title:   Attorney

 

[Signature Page to PennantPark Senior Loan Fund, LLC A&R Limited Liability
Company Agreement]

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Schedule A

Capitalization

 

Member

   Capital Contribution (USD)      Proportionate Share  

PNNT

   $ 27,000,000.00        72.00 % 

PennantPark Investment Corporation

   $ 27,000,000.00        72.00 % 

Pantheon

   $ 10,500,000.00        28.00 % 

PPDP

   $ 8,400,000.00        22.40 % 

SPPD

   $ 2,100,000.00        5.60 % 

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Schedule B

Prior Committee Approval

1. Prior Committee Approval shall be required for the Company or any Subsidiary
to do any of the following.

 

  (i)

Change the name or principal office of the Company or any Subsidiary or open
additional offices of the Company or any Subsidiary;

 

  (ii)

Make or acquire any Investment;

 

  (iii)

Sell, Transfer or otherwise dispose of any Investment;

 

  (iv)

Enter into any transaction or agreement (or any amendment, modification,
supplement or waiver of any provision thereof) with a Member or an Affiliate of
a Member other than (A) entering into the Administration Agreement with the
Administrative Agent (but not any amendment, modification, supplement or waiver
of any provision thereof) and (B) entering into a Subscription Agreement with
each Member (but not any amendment, modification, supplement or waiver of any
provision thereof);

 

  (v)

Enter into derivatives or commodities transactions;

 

  (vi)

Enter into any credit facility or other agreement for the incurrence of debt or
issue debt securities, or materially modify or waive the terms or extend the
maturity thereof;

 

  (vii)

Organize, acquire an interest in, or transfer or otherwise dispose of an
interest in, any Subsidiary or any other investment or financing vehicle, or
materially modify or waive the terms thereof;

 

  (viii)

Terminate the Administrative Agent for the Company; provided that Pantheon may,
in the name and on behalf of the Company and without Prior Committee Approval,
terminate the Administrative Agent at any time following the occurrence of
Disabling Conduct (as defined in the Administration Agreement) with respect to
the Administrative Agent;

 

  (ix)

Execution, termination or material amendment of any material contract or other
arrangement of the Company or any of its Subsidiaries not entered into in the
ordinary course of business (including each contract and arrangement with any
valuation provider, loan administrator, investment banking firm, financial
institution or law firm);

 

  (x)

Modify or waive any material provision of this Agreement, including this
Schedule B, or modify the Certificate of Formation of the Company or governing
documents of any Subsidiary;

 

  (xi)

Guarantee or otherwise become liable for, the obligations of other Persons,
including Portfolio Companies;

 

  (xii)

Materially change the business of the Company or Subsidiaries from its
respective current business or enter into any line of business other than
existing or related lines of business;

 

  (xiii)

Make, change or rescind any tax election (other than making an election pursuant
to Section 754 of the Code);

--------------------------------------------------------------------------------

  (xiv)

Settle or compromise with respect to any tax audit, claim, deficiency notice,
suit or other proceeding relating to taxes; make a request for a written ruling
to any tax authority; or enter into a written and legally binding agreement with
any tax authority (including any agreement to extend or waive any statute of
limitations with respect to any taxes);

 

  (xv)

Determine the fair market value of any property contributed to the capital of
the Company by a Member;

 

  (xvi)

Retain any cash that would otherwise be available for distribution pursuant to
Article 5;

 

  (xvii)

Take any action or make any decision that results in the acquisition or
disposition of an Investment (other than funding of Investments pursuant to
commitments previously approved by Prior Committee Approval). Approval of an
Investment by Prior Committee Approval shall constitute authorization by the
Company of the necessary Capital Contributions and drawdowns of the subordinated
notes and any other credit facility;

 

  (xviii)

Materially modify or waive the terms of any Investment which results in: (a) a
waiver or forbearance related to a payment default, (b) the exchange of
securities, (c) the forgiveness of principal or (d) an extension of maturity or
increase in principal (other than funding of Investments pursuant to commitments
previously approved by Prior Committee Approval);

 

  (xix)

Except as may be otherwise expressly provided for in this Agreement, the making
of any request that the Members make additional Capital Contributions to the
Company;

 

  (xx)

Issuance of any interests, any options, rights or warrants to acquire interests
or any security convertible into or exercisable or exchangeable for an interest,
or any equity interest in a Subsidiary of the Company, any options, rights or
warrants to acquire any equity interest in a Subsidiary of the Company or any
security convertible into or exercisable or exchangeable for any equity interest
in a Subsidiary of the Company;

 

  (xxi)

Redemption, repurchase, retirement, combination, split or reclassification of
interests in the Company or any redemption or repurchase of any debt securities
not required by the terms of such debt securities, commitments or contingencies
of the Company;

 

  (xxii)

Commencement of any liquidation, dissolution or voluntary bankruptcy,
administration, insolvency proceeding, recapitalization or reorganization of the
Company or its subsidiaries in any form of transaction, any arrangement with
creditors, or the consent to entry of an order for relief in an involuntary
case, or the conversion of an involuntary case to a voluntary case, or the
consent to any plan of reorganization in any involuntary or voluntary case, or
the consent to the appointment or taking possession by a receiver, trustee or
other custodian for all or any portion of its property, or otherwise seek the
protection of any applicable bankruptcy or insolvency law; for the avoidance of
doubt, this Section (1)(xxii) relates specifically to the liquidation and
dissolution of the Company and does not limit in any way the terms of the LLC
Agreement, including Section 8.4 and Section 8.5, and no Prior Committee
Approval shall be required for any liquidation or dissolution to the extent set
forth in such sections;

 

  (xxiii)

Entering into any strategic transaction, including any joint venture,
Investment, recapitalization, reorganization or acquisition of any securities or
assets of another Person, whether in a single transaction or series of related
transactions;

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  (xxiv)

Initiation of material litigation or similar proceedings, filing or responding
to dispositive motions (including but not limited to any motion to dismiss,
motion for summary judgment, motion for summary adjudication or demurrer) with
respect to any material litigation, or the compromise or settlement of any
lawsuit or administrative matter where the amount that the Company or any of its
subsidiaries could be required to pay individually or in the aggregate pursuant
to such compromise or settlement is in excess of $10,000, or that could have a
material adverse effect on the Company or any of its subsidiaries;

 

  (xxv)

Retain third-party agents on behalf of the Company or any Subsidiary, open
accounts with third parties on behalf of the Company or any Subsidiary and
designate signatures upon which withdrawals from accounts shall be made on
behalf of the Company or any Subsidiary;

 

  (xxvi)

Determine a period to allocate Profit or Loss among the Members pursuant to
Section 4.1(b);

 

  (xxvii)

Select and approve an independent certified public accountant to act as the
accountant for the Company and its Subsidiaries and to audit the Company’s
consolidated books and accounts as of the end of each fiscal year; provided that
no such approval shall be required for the retention of RSM US LLP for any
period;

 

  (xxviii)

Except as otherwise expressly agreed, enforce the terms of, exercise any right
or remedy under, terminate pursuant to its terms or modify or waive the terms
of: (i) the Administration Agreement and (ii) any other agreement by and between
or among a PNNT Entity, on the one hand, and the Company or any Subsidiary, on
the other; or

 

  (xxix)

Take any action or decision which pursuant to any provision of this Agreement
requires Prior Committee Approval.

For the avoidance of doubt, Prior Committee Approval shall be required for all
matters set forth in Section 1 of this Schedule B.

2. Each Member and each Member Designee may, in the name and on behalf of the
Company, do all things which it deems necessary, advisable or appropriate to
make investment opportunities available to the Company, to carry out and
implement matters approved by Prior Committee Approval or Committee Approval and
to administer the activities of the Company, including:

 

  (i)

Executing and delivering all agreements, amendments and other documents and
exercise and perform all rights and obligations with respect to any Person in
which the Company holds an interest, including Subsidiaries and other investment
and financing vehicles;

 

  (ii)

Executing and delivering other agreements, amendments and other documents and
exercise and perform all rights and obligations with respect to matters approved
by Prior Committee Approval or Committee Approval or which are necessary,
advisable or appropriate for the administration of the Company, including with
respect to any contracts evidencing indebtedness for borrowed funds; and

 

  (iii)

Taking any and all other acts delegated to such Member or Member Designee by
this Agreement or by Prior Committee Approval or Committee Approval; provided
that if such acts require Prior Committee Approval, such Prior Committee
Approval has been obtained.

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3. For the avoidance of doubt, Prior Committee Approval, to the extent required,
will be deemed to have been given to the extent of any standing order approved
by Prior Committee Approval covering the matter at issue

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Schedule C

Legal Counsel

PNNT has engaged Dechert LLP (“Dechert”) as legal counsel to the Company and
PNNT. Moreover, Dechert has previously represented or concurrently represents
the interests of the Company, PNNT or parties related thereto in connection with
matters other than the preparation of this Agreement and may represent such
Persons in the future. Each Member: (i) approves Dechert’s representation of the
Company and PNNT in the preparation of this Agreement; and (ii) acknowledges
that Dechert has not been engaged by any other Member to protect or represent
the interests of such Member vis-à-vis the Company or the preparation of this
Agreement, and that actual or potential conflicts of interest may exist among
the Members in connection with the preparation of this Agreement. In addition,
each Member: (i) acknowledges the possibility of a future conflict or dispute
among Members or between any Member or Members and the Company; and
(ii) acknowledges the possibility that, under the laws and ethical rules
governing the conduct of attorneys, Dechert may be precluded from representing
the Company or PNNT (or any equity holder thereof) in connection with any such
conflict or dispute. Nothing in this Schedule C shall preclude the Company from
selecting different legal counsel to represent it at any time in the future and
no Member shall be deemed by virtue of this Schedule C to have waived its right
to object to any conflict of interest relating to matters other than this
Agreement or the transactions contemplated herein.

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Annex A

Subscription Agreement

Reference is hereby made to that certain Subscription Agreement, dated as of
July 31, 2020, by and between PennantPark Senior Loan Fund, LLC and PennantPark
Investment Corporation.

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Annex B

Administrative Services

Reference is hereby made to that certain Administration Agreement, dated as of
July 31, 2020, by and between PennantPark Senior Loan Fund, LLC and PennantPark
Investment Administration, LLC.