Exhibit 10.1

 

EXECUTION VERSION

 

 

 

 

 

 

 

 

 

 

 

 

AMENDED AND RESTATED
CREDIT AGREEMENT

dated as of October 16, 2014

among

FS Senior Funding LLC,

as Borrower,

 

the Lenders Referred to Herein,

Natixis, New York Branch,
as Administrative Agent,

and

U.S. Bank National Association,
as Collateral Agent and Custodian

 

 

 

 

 

TABLE OF CONTENTS

Page

 

Article I DEFINITIONS AND INTERPRETATION 3 Section 1.1   Definitions. 3 Section
1.2   Accounting Terms and Determinations and UCC Terms. 51 Section
1.3   Assumptions and Calculations with respect to Collateral Loans. 51 Section
1.4   Cross-References; References to Agreements. 53 Section 1.5   Reference to
Secured Parties. 53 Article II THE LOANS 54 Section 2.1   The Commitments. 54
Section 2.2   Making of the Loans. 55 Section 2.3   Evidence of Indebtedness;
Notes. 56 Section 2.4   Maturity of Loans. 57 Section 2.5   Interest Rates. 57
Section 2.6   Commitment Fees. 57 Section 2.7   Reduction of Commitments;
Prepayments. 58 Section 2.8   General Provisions as to Payments. 59 Section
2.9   Funding Losses. 60 Section 2.10   Computation of Interest and Fees. 60
Section 2.11   Increased Commitments; Additional Loans. 60 Section 2.12   No
Cancellation of Indebtedness. 61 Section 2.13   Loans Held by Borrower
Affiliated Lenders. 61 Article III CONDITIONS TO BORROWINGS 62 Section
3.1   Effectiveness of Commitments. 62 Section 3.2   Borrowings. 64 Section
3.3   Effectiveness of Increased Commitments. 66 Article IV REPRESENTATIONS AND
WARRANTIES OF THE BORROWER 67 Section 4.1   Existence and Power. 67 Section
4.2   Power and Authority. 67 Section 4.3   No Violation. 67 Section
4.4   Litigation. 68 Section 4.5   Compliance with ERISA. 68 Section
4.6   Environmental Matters. 68 Section 4.7   Taxes. 68 Section 4.8   Full
Disclosure. 68 Section 4.9   Solvency. 69 Section 4.10   Use of Proceeds; Margin
Regulations. 69 Section 4.11   Governmental Approvals. 69 Section
4.12   Investment Company Act. 69 Section 4.13   Representations and Warranties
in Loan Documents. 69 Section 4.14   [Reserved]. 69 Section 4.15   Ownership of
Assets. 69 Section 4.16   No Default. 69 Section 4.17   Labor Matters. 70
Section 4.18   Subsidiaries/Equity Interests. 70 Section 4.19   Ranking. 70
Section 4.20   Representations Concerning Collateral. 70 Section 4.21   OFAC. 70
Section 4.22   Ordinary Course. 70

 

 

Article V AFFIRMATIVE AND NEGATIVE COVENANTS OF THE BORROWER 71 Section
5.1   Information. 71 Section 5.2   Payment of Obligations. 74 Section
5.3   Non-Petition. 74 Section 5.4   Good Standing. 74 Section 5.5   Compliance
with Laws. 74 Section 5.6   Inspection of Property, Books and Records; Audits;
Etc. 74 Section 5.7   Existence. 75 Section 5.8   Subsidiaries/Equity Interest.
75 Section 5.9   Investments. 75 Section 5.10   Restriction on Fundamental
Changes. 75 Section 5.11   ERISA. 76 Section 5.12   Liens. 76 Section
5.13   Business Activities. 76 Section 5.14   Fiscal Year; Fiscal Quarter. 76
Section 5.15   Margin Stock. 76 Section 5.16   Indebtedness. 76 Section
5.17   Use of Proceeds. 76 Section 5.18   Bankruptcy Remoteness; Separateness.
76 Section 5.19   Amendments, Modifications and Waivers to Collateral Loans. 77
Section 5.20   Hedging. 78 Section 5.21   Title Covenants. 79 Section
5.22   Further Assurances. 79 Section 5.23   Costs of Transfer; Taxes; and
Expenses. 79 Section 5.24   Collateral Agent May Perform. 80 Section
5.25   Notice of Name Change. 80 Section 5.26   Stamp and Other Similar Taxes.
80 Section 5.27   Filing Fees, Excise Taxes, etc. 80 Section 5.28   Investment
Company Restriction. 80 Section 5.29   Delivery of Proceeds. 81 Section
5.30   Performance of Obligations. 81 Section 5.31   Limitation on Dividends. 81
Section 5.32   OFAC. 81 Section 5.33   Annual Rating Review. 81 Section
5.34   Collateral Management Agreement; Master Transfer Agreement. 81 Section
5.35   Transactions With Affiliates. 81 Section 5.36   Reports by Independent
Accountants. 82 Section 5.37   Tax Matters as to the Borrower. 83 Section
5.38   Retention of Net Economic Interest Letter. 83 Article VI EVENTS OF
DEFAULT 83 Section 6.1   Events of Default. 83 Section 6.2   Remedies. 86
Section 6.3   Additional Collateral Provisions. 87 Section 6.4   Application of
Proceeds. 90 Section 6.5   Addition of Capital Contributions. 91 Article VII THE
AGENTS 91 Section 7.1   Appointment and Authorization. 91 Section 7.2   Agents
and Affiliates. 91 Section 7.3   Actions by Agent. 92 Section 7.4   Delegation
of Duties; Consultation with Experts. 92 Section 7.5   Liability of Agents. 92
Section 7.6   Indemnification. 95 Section 7.7   Credit Decision. 95

 

 

Section 7.8   Successor Agent. 96 Article VIII ACCOUNTS AND COLLATERAL 96
Section 8.1   Collection of Money. 96 Section 8.2   Collection Account. 98
Section 8.3   Payment Account; Future Funding Reserve Account; Lender Collateral
Account; Closing Expense Account. 100 Section 8.4   Custodial Account. 103
Section 8.5   Acquisition of Collateral Loans and Eligible Investments. 105
Section 8.6   Release of Security Interest in Sold Collateral Loans and Eligible
Investments; Release of Security Interests Upon Termination. 105 Section
8.7   Method of Collateral Transfer. 105 Section 8.8   Continuing Liability of
the Borrower. 107 Section 8.9   Reports. 107 Article IX APPLICATION OF MONIES
109 Section 9.1   Disbursements of Funds from Payment Account. 109 Article X
SALE OF COLLATERAL LOANS; ELIGIBILITY CRITERIA 113 Section 10.1   Sale of
Collateral Loans. 113 Section 10.2   Eligibility Criteria. 116 Article XI CHANGE
IN CIRCUMSTANCES 116 Section 11.1   Basis for Determining Interest Rate
Inadequate or Unfair. 116 Section 11.2   Illegality. 117 Section
11.3   Increased Cost and Reduced Return. 117 Section 11.4   Taxes. 119 Section
11.5   Replacement of Lenders; Downgraded Lenders; Defaulting Lenders. 122
Article XII MISCELLANEOUS 123 Section 12.1   Notices. 123 Section 12.2   No
Waivers. 124 Section 12.3   Expenses; Indemnification 124 Section 12.4   Sharing
of Set-Offs. 125 Section 12.5   Amendments and Waivers. 126 Section
12.6   Successors and Assigns. 127 Section 12.7   Collateral. 129 Section
12.8   Governing Law; Submission to Jurisdiction. 129 Section
12.9   Marshalling; Recapture. 129 Section 12.10   Counterparts; Integration;
Effectiveness. 130 Section 12.11   WAIVER OF JURY TRIAL. 130 Section
12.12   Survival. 130 Section 12.13   Domicile of Loans. 130 Section
12.14   Limitation of Liability. 130 Section 12.15   Recourse; Non-Petition. 130
Section 12.16   Confidentiality. 131 Section 12.17   Special Provisions
Applicable to CP Lenders. 132 Section 12.18   Direction of Collateral Agent 133
Section 12.19   Borrowings/Loans Made in the Ordinary Course of Business 133
Section 12.20   Effect of Amendment and Restatement 133 Article XIII THE FUNDING
AGENT 134 Section 13.1   Appointment. 134 Section 13.2   Delegation of Duties.
134 Section 13.3   Exculpatory Provisions. 134 Section 13.4   Reliance by
Funding Agent. 134

 

 

Section 13.5   Non-reliance on Funding Agent. 135 Section 13.6   Funding Agent
in Its Individual Capacity. 135 Section 13.7   Conflict Waiver. 135 Article XIV
ASSIGNMENT OF COLLATERAL MANAGEMENT AGREEMENT 135 Section 14.1   Assignment of
Collateral Management Agreement. 135

 

SCHEDULES AND EXHIBITS

 

Schedule A - Approved Appraisal Firms

Schedule B - DBRS Industry Classifications

Schedule C - DBRS Risk Scores

Schedule D - Diversity Score Calculation

Schedule E - DBRS Rating Procedure

Schedule F - Collateral Quality Matrix

Schedule G - DBRS Contact Information

 

Exhibit A-1 - Form of Note for Class A-R Loans

Exhibit A-2 - Form of Note for Class A-T-1 Loans

Exhibit A-3 - Form of Note for Class A-T-2 Loans

Exhibit B - Form of Notice of Borrowing

Exhibit C - Form of Assignment and Assumption Agreement

Exhibit D - [Reserved]

Exhibit E - Scope of Collateral Report

Exhibit F - Scope of Payment Date Report

Exhibit G - Scope of Asset-Level Reporting to Lenders and DBRS

Exhibit H - Form of Retention of Net Economic Interest Letter

 

 

 

 

CREDIT AGREEMENT

 

THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of October 16, 2014, is
entered into by and among FS Senior Funding LLC, a limited liability company
organized under the law of the State of Delaware, as Borrower, the Lenders party
hereto from time to time, NATIXIS, NEW YORK BRANCH, as Administrative Agent, and
U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent and Custodian.

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the Administrative Agent, the Collateral Agent, the
Custodian and Versailles, as sole Lender, are parties to a Credit Agreement
dated as of November 1, 2013 (the "Existing Credit Agreement");

 

WHEREAS, the Commitments under (and as defined in) the Existing Credit Agreement
are hereby replaced with the Commitments hereunder;

 

WHEREAS, the Borrower desires that the Lenders make Loans, in the case of the
Class A-R Loans, on a revolving basis, and in the case of the Class A-T Loans,
on a term loan basis, to the Borrower on the terms and subject to the conditions
set forth in this Agreement, and each Lender is willing to make Loans to the
Borrower on the terms and subject to the conditions set forth in this Agreement;

 

WHEREAS, the proceeds of the Loans made by the Lenders to the Borrower shall be
used by the Borrower to purchase and originate Collateral Loans (including the
acquisition of Collateral Loans from the BDC) and for certain other purposes,
all in accordance with the terms hereof (including Section 5.17);

 

WHEREAS, pursuant to the Existing Credit Agreement the Collateral was Granted to
the Collateral Agent thereunder for the benefit of the Secured Parties; and

 

WHEREAS, pursuant to the Granting Clause herein, such Grant under the Existing
Credit Agreement shall continue in full force and effect in favor of the
Collateral Agent for the benefit of the Secured Parties to secure the
Obligations.

 

NOW, THEREFORE, the parties to the Existing Credit Agreement have agreed to
amend the Existing Credit Agreement in certain respects and to restate the
Existing Credit Agreement as so amended as provided in this Agreement, in each
case effective upon the satisfaction of the conditions precedent set forth in
Section 3.1. Accordingly, the parties hereto agree that on the Effective Date
the Existing Credit Agreement shall be amended and restated in its entirety as
follows:

 

 

GRANTING CLAUSE

 

To secure the due and punctual payment and performance of all Obligations,
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing or due or to become due, in accordance
with the terms thereof, the Borrower hereby (1) confirms the Grant made on the
Original Closing Date pursuant to the Granting Clause of the Existing Credit
Agreement and (2) without constituting a novation of the Grant confirmed under
the preceding clause (1), Grants to the Collateral Agent for the benefit of the
Secured Parties a security interest in all of the Borrower's right, title and
interest in and to the following, whether now owned or hereafter acquired
(collectively, the "Pledged Collateral"):

 

 

 

 

(a) all Collateral Loans, all other loans and securities of the Borrower whether
or not such loans and securities constitute Collateral Loans, all Related
Contracts and Collections with respect thereto, all collateral security granted
under any Related Contracts, and all interests in any of the foregoing, whether
now or hereafter existing;

 

(b) (i)  the Custodial Account and all Collateral which is delivered to the
Collateral Agent pursuant to the terms hereof and all payments thereon or with
respect thereto, (ii) each of the other Covered Accounts and (iii) Eligible
Investments or other investments (whether or not such investments constitute
Eligible Investments) purchased with funds on deposit in the Covered Accounts,
and all income or Distributions from the investment of funds in the Covered
Accounts;

 

(c) cash, Money, securities, reserves and other property now or at any time in
the possession of the Borrower or which is delivered or received by the
Collateral Agent or its bailee, agent or custodian (including, without
limitation, all Eligible Investments and other investments with respect to any
Collateral or proceeds thereof);

 

(d) all liens, security interests, property or assets securing or otherwise
relating to any Collateral Loan, Eligible Investment, other investment,
Collateral or any Related Contract;

 

(e) the Interest Hedge Agreements;

 

(f) the Master Transfer Agreement;

 

(g) the Collateral Management Agreement;

 

(h) the Account Control Agreement;

 

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

 

(j) all products, proceeds, rents and profits of any of the foregoing, all
substitutions therefor and all additions and accretions thereto (whether the
same now exist or arise or are acquired), including, without limitation,
proceeds of insurance policies insuring any or all of the foregoing, any
indemnity or warranty payable by reason of loss or damage to or otherwise in
respect of any of the foregoing or any guaranty.

 

Except as set forth in the Priority of Payments, the Loans are secured by the
foregoing Grant equally and ratably without prejudice, priority or distinction
between any Loan and any other Loan by reason of difference in time of borrowing
or otherwise. The Grant is made to secure, in accordance with the priorities set
forth in the Priority of Payments, the payment of all amounts due on the Loans
in accordance with their terms, the payment by the Borrower of all other sums
payable under this Agreement and the other Loan Documents and compliance with
the provisions of this Agreement and the other Loan Documents, all as provided
herein.

  

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Article I

DEFINITIONS AND INTERPRETATION

 

Section 1.1             Definitions. The following terms, as used herein, have
the following meanings:

  

"ABL Facility" means a lending facility pursuant to which the loans thereunder
are secured by a perfected, first priority security interest in accounts
receivable, inventory, machinery, equipment, real estate, oil and gas reserves,
vessels or periodic revenues, where such collateral security consists of assets
generated or acquired by the related Obligor in its business.

 

"Account Control Agreement" means the Account Control Agreement among the
Borrower, as debtor, the Collateral Agent, as secured party, and U.S. Bank
National Association, as Custodian and Securities Intermediary, dated as of the
Original Closing Date.

 

"Accountants' Report" means an agreed upon procedures report prepared by a
nationally recognized firm of independent certified public accountants appointed
by the Borrower.

 

"Additional Draw Date" means October 30, 2014, subject to satisfaction of the
conditions set forth in Section 2.1(h).

 

"Additional Lender" means a Lender that has made an Additional Loan or provided
an Increased Commitment hereunder.

 

"Additional Loans" has the meaning assigned to such term in Section 2.11(a).

 

"Adjusted London Interbank Offered Rate" means, with respect to any Interest
Period, a rate per annum (expressed as a percentage) equal to the quotient
obtained (rounded upward, if necessary, to the next higher 1/100th of 1%) by
dividing (i) the applicable London Interbank Offered Rate by (ii) 1.00 minus the
Euro-Dollar Reserve Percentage.

 

"Administrative Agent" means Natixis, in its capacity as administrative agent
for the Lenders hereunder, and its successors in such capacity.

 

"Administrative Agent Fee" means the fee payable to the Administrative Agent in
arrears on each Quarterly Payment Date, equal to $2,500 per Quarterly Payment
Date.

 

"Administrative Expenses" means, without duplication, fees, expenses (including
indemnities) and other amounts due or accrued with respect to any Quarterly
Payment Date (including, with respect to any Quarterly Payment Date, any such
amounts that were due and not paid on any prior Quarterly Payment Date) and
payable in the following order by the Borrower to:

 

(a) first, the Collateral Agent in respect of the Collateral Agent Fee and any
fees owed to the Custodian and U.S. Bank as Securities Intermediary (if any),
and for the reimbursement of other reasonable and documented Administrative
Expenses and disbursements incurred and payable hereunder to the Collateral
Agent, the Custodian and U.S. Bank, as Securities Intermediary under any Loan
Documents, in accordance with the provisions of this Agreement;

 

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(b) second, the Administrative Agent in respect of the Administrative Agent Fee
and for the reimbursement of reasonable and documented expenses and
disbursements incurred and payable hereunder by the Administrative Agent or the
Lenders in accordance with the provisions of this Agreement;

 

(c) third, on a pro rata basis, the following amounts (excluding indemnities) to
the following parties:

 

(i) the Borrower and the Collateral Manager for the reimbursement of reasonable
and documented expenses and disbursements incurred by the Borrower and the
Collateral Manager in accordance with the provisions of this Agreement and the
Collateral Management Agreement, including appraisal fees and other
out-of-pocket expenses incurred in connection with the Collateral Loans and
payable to third parties and including any amounts payable by the Borrower and
the Collateral Manager in connection with any advances made to protect or
preserve rights against an Obligor or to indemnify an agent or representative
for lenders pursuant to any Related Contracts (but excluding Collateral
Management Fees);

 

(ii) DBRS for fees and reasonable and documented expenses in connection with any
rating of the Loans or the Collateral Loans, including fees related to the
obtaining of credit estimates by DBRS and ongoing Rating Agency surveillance
fees;

 

(iii) any other Person in respect of any governmental fee, charge or tax
incurred on behalf of the Borrower; and

 

(iv) any other Person in respect of any other fees or expenses expressly
permitted under this Agreement and the documents delivered pursuant to or in
connection with this Agreement and the Loan Documents; and

 

(d) fourth, on a pro rata basis, indemnities payable to any Person permitted
under this Agreement and the documents delivered pursuant to or in connection
with this Agreement and the Loan Documents not otherwise paid;

 

provided that Administrative Expenses shall not include (i) any amounts due or
accrued with respect to the actions taken in connection with the closing of the
transaction to occur on the Effective Date, (ii) any salaries of any employees
of the Borrower (for the avoidance of doubt, the Borrower does not pay any
salaries) (but Administrative Expenses may include any fees, reimbursements,
indemnities, costs and expenses payable to the directors and/or independent
directors of the Borrower) or the Collateral Manager, (iii) any Increased Costs
or (iv) for the avoidance of doubt, amounts that are expressly payable to any
Person under the Priority of Payments in respect of an amount that is expressly
payable therein other than as an Administrative Expense (including, without
limitation, interest, principal and other amounts owing in respect of the Loans
and Commitments, the Senior Management Fee and the Subordinated Management Fee);
provided further that amounts due in respect of actions taken in connection with
the closing of the transaction to occur on the Effective Date shall not be
payable as Administrative Expenses but shall be payable only from the Closing
Expense Account pursuant to Section 8.3(e) or as otherwise agreed by the parties
hereto.

 

"Administrative Officer" means, (i) when used with respect to the Collateral
Agent (or U.S. Bank in each of its capacities under the Loan Documents), any
vice president, assistant vice president, treasurer, assistant treasurer,
secretary, assistant secretary, trust officer, associate or any other officer of
the Collateral Agent who shall have direct responsibility for the administration
of this Agreement or to whom any corporate trust matter is referred within the
Corporate Trust Office because of his or her knowledge of and familiarity with
the particular subject and (ii) when used with respect to the Administrative
Agent, any officer within the office of the Administrative Agent at the address
listed on the signature pages hereto, including any vice president, assistant
vice president, officer of the Administrative Agent customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
at such location because of his or her knowledge of and familiarity with the
particular subject.

 

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"Administrative Questionnaire" means, with respect to each Lender, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Lender.

 

"Affected Lender" means a Lender that is subject to regulation under the
Retention Requirement Laws from time to time or party to liquidity or credit
support arrangements provided by a financial institution that is subject to such
regulation.

 

"Affiliate" or "Affiliated" means, with respect to any Person, (a) any other
Person who, directly or indirectly, is in control of, or controlled by, or is
under common control with, such Person or (b) any other Person who is a
director, officer or employee of (i) such Person, (ii) any subsidiary or parent
company of such Person or (iii) any Person described in clause (a) above;
provided that, solely for purposes of the definitions of "Collateral Loan" and
"Concentration Limitations", the term "Affiliate" as used therein with respect
to any Obligor shall not include any Affiliate relationship which may exist
solely as a result of direct or indirect ownership of, or control by, a common
Financial Sponsor (except if any such Person or Obligor provides collateral
under, guarantees or otherwise supports the obligations of the other such Person
or Obligor).

 

"Agents" means the Administrative Agent, the Collateral Agent and U.S. Bank, in
its capacities of Custodian and Securities Intermediary under the Loan Documents
to which it is a party in such capacity, and "Agent" means any of them.

 

"Aggregate Maximum Principal Balance" means, when used with respect to all or a
portion of the Collateral Loans, the sum of the Maximum Principal Balances of
all or of such portion of such Collateral Loans.

 

"Aggregate Participation Exposure" means, at any time, the Maximum Principal
Balance of all Collateral Loans that are in the form of Participation Interests
owned by the Borrower at such time.

 

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

 

"Aggregate Principal Balance" means, when used with respect to all or a portion
of the Collateral Loans, the sum of the Principal Balances of all or of such
portion of such Collateral Loans.

 

"Agreement" means the Existing Credit Agreement, as amended and restated hereby,
and including all further amendments, modifications and supplements and any
exhibits or schedules to any of the foregoing, and shall refer to the Agreement
as the same may be in effect at the time such reference becomes operative.

 

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

 

-5-

 

 

"Alternate Base Rate" means, for any day, a fluctuating rate of interest per
annum equal to the highest of:

 

(a) the Prime Rate in effect on such day;

 

(b) the Federal Funds Rate in effect on such day plus ½ of 1% per annum; and

 

(c) LIBOR.

 

Any change in the Alternate Base Rate due to a change in the Prime Rate, the
Federal Funds Rate or LIBOR shall be effective from and including the effective
day of such change in the Prime Rate, the Federal Funds Rate or LIBOR,
respectively.

 

The Alternate Base Rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged to any customer of any Agent or any
Lender. Interest calculated pursuant to clause (a) above will be determined
based on a year of 365 days or 366 days, as applicable, and actual days elapsed.
Interest calculated pursuant to clauses (b) and (c) above will be determined
based on a year of 360 days and actual days elapsed.

 

"Applicable Counterparty Criteria" means, with respect to any Participation
Interest acquired or committed to be acquired by the Borrower, criteria that
will be met if immediately after giving effect to such acquisition, (a) the
percentage of Total Capitalization that consists in the aggregate of
Participation Interests with Selling Institutions that have the same or a lower
DBRS Long Term Rating does not exceed the "Aggregate Percentage Limit" set forth
below for such DBRS Long Term Rating and (b) the percentage of Total
Capitalization that consists in the aggregate of Participation Interests with
any single Selling Institution that has the DBRS Long Term Rating set forth
below or a lower credit rating does not exceed the "Individual Percentage Limit"
set forth below for such DBRS Long Term Rating:

 

DBRS Long Term Rating of Selling Institution (at or below)   Aggregate
Percentage Limit   Individual Percentage Limit AAA   20%   20% AA (high)   20%  
20% AA   20%   20% AA (low)   20%   15% A (high)   10%   5% A   7.5%   5%

 

"Applicable Lending Office" means, with respect to any Lender, the office or
offices designated as its "Lending Office" opposite its name in the signature
pages hereto or such other office of such Lender as such Lender may from time to
time specify in writing to the Borrower and the Administrative Agent.

 

"Applicable Margin" means, in respect of any Class of Loans, (a) if a CP Conduit
is a Lender with respect to such Loans, 1.90% per annum and (b) if any other
Person is a Lender with respect to such Loans, 2.00% per annum.

 

"Applicable Rate" means, with respect to each Loan, (i) if a CP Conduit is a
Lender with respect to such Loan and is not a CP LIBOR Lender, the sum of (x)
the Cost of Funds Rate for such Loan plus (y) the Applicable Margin and (ii) if
any other Person is a Lender with respect to such Loan or is a CP LIBOR Lender,
the sum of (x) the Adjusted London Interbank Offered Rate applicable to the
relevant Interest Period plus (y) the Applicable Margin (provided in the case of
this clause (ii) that, in the case of any Interest Period on or after the first
day on which a Lender shall have notified the Administrative Agent pursuant to
Section 11.1 that the Adjusted London Interbank Offered Rate will not adequately
and fairly reflect the cost to such Lender of funding its Loans for such
Interest Period or shall have notified the Administrative Agent pursuant to
Section 11.2 that it is not permitted to fund Loans at the Adjusted London
Interbank Offered Rate (and such Lender shall not have subsequently notified the
Administrative Agent that the circumstances giving rise to such situation no
longer exist), the Applicable Rate shall be a rate per annum equal to the sum of
(1) the Alternate Base Rate in effect on each day of such Interest Period plus
(2) the Applicable Margin for such Loans).

 

-6-

 

 

"Applicable Row Level" means the column of that name as set forth in the
Collateral Quality Matrix.

 

"Appraisal" means, with respect to any Collateral Loan, an appraisal of either
(A) such Collateral Loan or (B) the assets securing such Collateral Loan, in
each case, that is conducted by an Approved Appraisal Firm on the basis of the
fair market value of such Collateral Loan or such assets (that is, the price
that would be paid by a willing buyer to a willing seller of such Collateral
Loan or such assets in a commercially reasonable sale on an arm's-length basis).
Any Appraisal required hereunder (i) may be in the form of an update or
reaffirmation by an Approved Appraisal Firm of an Appraisal previously performed
by an Approved Appraisal Firm and (ii) shall be provided within five Business
Days following completion to the Collateral Agent for purposes of the Collateral
Report.

 

"Appraised Value" means, with respect to any Collateral Loan, the Appraisal
value (determined in Dollars, and which, if Appraisals for both of the following
are available, the greater) of either (A) such Collateral Loan or (B) the assets
securing such Collateral Loan, net of estimated costs of their liquidation as
determined by the applicable Approved Appraisal Firm, in each case as set forth
in the related Appraisal or, if a range of values is set forth therein, the
midpoint of such values. If the Borrower owns less than 100% of the total
lenders' interests secured by the assets securing any Collateral Loan or has
sold Participation Interests in such Collateral Loan, then the Appraised Value
with respect to such Collateral Loan will be reduced to reflect the
proportionate interests of all other lenders or participants secured by such
assets (taking into account the relative seniority of all such lenders and
participants) that rank pari passu with or senior to (including with respect to
liquidation) the Borrower's interest under the Collateral Loan.

 

"Approved Appraisal Firm" means those entities whose names are set forth on
Schedule A, as it may be amended from time to time; provided that (a) any such
entity shall be an independent appraisal firm (i) recognized as being
experienced in conducting valuations of loans of the type constituting
Collateral Loans and (ii) that the Borrower or the Collateral Manager
determines, in accordance with the Servicing Standard, is qualified with respect
to each Collateral Loan, (b) at no time may the Borrower, the Collateral Manager
or any Affiliate thereof be an Approved Appraisal Firm and (c) any amendment to
Schedule A will be not effective without the satisfaction of the Rating
Condition.

 

"Approved Foreign Jurisdiction" means each of the United Kingdom, Luxembourg,
Australia and the Netherlands; provided that each such country has a ceiling for
foreign currency bonds that is at least "AA (low)" by DBRS.

 

"Approved Indices" has the meaning assigned to such term in the definition of
Eligible Loan Index.

 

-7-

 

 

"Approved Lender" means (a) with respect to any Lender that is not a CP Lender,
a financial institution (including a securities broker-dealer or Affiliate
thereof) or other institutional lender with a DBRS Short Term Rating of at least
"R-1 (middle)" (or an entity whose obligations hereunder are absolutely and
unconditionally guaranteed by an entity that has a DBRS Short Term rating of at
least "R-1 (middle)") and (b) with respect to any Lender that is a CP Lender, a
CP Conduit whose Commercial Paper Notes are rated at least "A-1", "P-1" or the
equivalent rating by a Conduit Rating Agency; provided in each case that any
Lender (including a CP Lender) that has fully funded the Lender Collateral
Account in accordance with the provisions set forth in Sections 8.3(d) and
11.5(b)(i) shall be an Approved Lender notwithstanding that its (or any such
parent guarantor's or its Commercial Paper Notes') ratings are below such
levels; provided further that (i) after the Class A-R Commitment Period, all
Class A-R Lenders shall be Approved Lenders, (ii) after the Effective Date, all
Class A-T-1 Lenders shall be Approved Lenders and (iii) after the Additional
Draw Date, all Class A-T-2 Lenders shall be Approved Lenders.

 

"Article 17" means Article 17 of the AIFMD.

 

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

 

"Asset-Backed Commercial Paper" means commercial paper or other short-term
obligations of a program that primarily issues externally rated commercial paper
backed by assets or exposures held in a bankruptcy-remote, special purpose
entity.

 

"Assignee" has the meaning set forth in Section 12.6(c)(i).

 

"Assignment and Assumption" means an Assignment and Assumption Agreement in
substantially the form of Exhibit C hereto, entered into by a Lender, an
assignee, the Borrower (if applicable) and the Administrative Agent (if
applicable).

 

"Assumed Reinvestment Rate" means, at any time, LIBOR minus 1.00% per annum;
provided that the Assumed Reinvestment Rate shall not be less than 0.00%.

 

"Authorized Officer" means:

 

(a) with respect to each of the Borrower and the Collateral Manager, those of
its respective officers and agents whose signatures and incumbency shall have
been certified to the Agents on or prior to the Effective Date pursuant to the
documents delivered pursuant to Section 3.1 or thereafter from time to time in
substantially similar form; and

 

(b) with respect to either Agent or any other bank or trust company acting as
trustee of an express trust or as custodian, an Administrative Officer thereof.

 

Each party may receive and accept a certification of the authority of any other
party as conclusive evidence of the authority of any person to act, and such
certification may be considered as in full force and effect until receipt by
such other party of written notice to the contrary.

 

"Bankruptcy Code" means Title 11 of the United States Code, entitled
"Bankruptcy", as amended from time to time, and any successor statute or
statutes.

 

"Base Rate Loans" means Loans accruing interest at an Applicable Rate based upon
the Alternate Base Rate.

 

"BDC" means Fifth Street Senior Floating Rate Corp., a Delaware corporation.

 

-8-

 

 

"Bleachers" means Bleachers Finance 1 Limited, an Irish limited liability
company, with company number 408465 and whose registered address is c/o Global
Securitization Services LLC, 68 South Service Road, Suite 120, Melville, NY
11747.

 

"Borrower" means FS Senior Funding LLC, a limited liability company organized
under the law of the State of Delaware.

 

"Borrower Affiliated Lender" means any Lender that is (or has granted a
participation (but only to the extent of such participation) to or for the
benefit of) the Borrower, the Collateral Manager or an Affiliate of the Borrower
or the Collateral Manager.

 

"Borrower Order" means a written order or request dated and signed in the name
of the Borrower by an Authorized Officer of the Borrower.

 

"Borrowing" has the meaning assigned to such term in Section 2.1(d).

 

"Borrowing Date" means the date of a Borrowing.

 

"Bridge Loan" means any loan or other obligation that (a) is unsecured and
incurred in connection with a merger, acquisition, consolidation or sale of all
or substantially all of the assets of a person or similar transaction and (b) by
its terms, is required to be repaid within one year of the incurrence thereof
with proceeds from additional borrowings or other refinancings (it being
understood that any such loan or debt security that has a nominal maturity date
of one year or less from the incurrence thereof but has a term-out or other
provision whereby (automatically or at the sole option of the Obligor thereof)
the maturity of the indebtedness thereunder may be extended to a later date is
not a Bridge Loan).

 

"Business Day" means any day except a Saturday, Sunday or a day on which
commercial banks in London, England (for purposes of calculating interest
rates), New York, New York or in the city in which the Corporate Trust Office of
the Collateral Agent is located (initially being Boston, Massachusetts and
Minneapolis, Minnesota) are authorized or required by law to close; provided
that, if the location of the Corporate Trust Office of the Collateral Agent
changes at any time, the Collateral Agent shall provide prompt written notice of
such change to the Borrower, the Administrative Agent and the Lenders.

 

"Calculation Date" means the 20th day of each month immediately prior to a month
in which a Quarterly Payment Date occurs, commencing in April 2014 and the last
Calculation Date shall be the date that is ten days prior to the Stated
Maturity; provided that, if any such date is not a Business Day, such
Calculation Date shall be the next succeeding Business Day.

 

"Capped Amounts" means any amounts in excess of the Interest Rate Cap on any
Loan that pays interest based on the Cost of Funds Rate and that would otherwise
be payable hereunder if not for the Interest Rate Cap; provided that Capped
Amounts payable pursuant to clause (I) of Section 9.1(a)(i) shall not be
considered "due and payable" on any Quarterly Payment Date for purposes of this
Agreement unless funds are available to pay such Capped Amounts on such
Quarterly Payment Date in accordance with the Priority of Payments; it being
understood and agreed that (i) the aggregate accrued and unpaid Capped Amounts
shall be due and payable from available funds (including from the liquidation of
the Collateral) on the date on which all Loans shall become due and payable in
full hereunder, whether by acceleration or otherwise, and (ii) with respect to
any Loans prepaid pursuant to Section 2.7(c), the aggregate accrued and unpaid
Capped Amounts with respect to such Loans shall be due and payable from
available funds on the date of prepayment of such Loans.

 

-9-

 

 

"Cash" means such coin or currency of the United States of America as at the
time shall be legal tender for payment of all public and private debts.

 

"CFTC" means the Commodity Futures Trading Commission.

 

"Change in Control" means (i) the BDC ceasing to own, directly, all of the
Equity Interests in the Borrower or (ii) Fifth Street Management LLC ceasing to
manage the BDC.

 

"Class" means each class of Loans that may be made hereunder, which are the
Class A-R Loans and the Class A-T Loans.

 

"Class A-R Borrowing" has the meaning assigned to such term in Section 2.1(d).

 

"Class A-R Commitment" means, with respect to each Class A-R Lender, the
commitment of such Class A-R Lender to make Class A-R Loans to the Borrower in
the amount set forth opposite such Class A-R Lender's name on the signature
pages hereto, as such amount may be terminated, reduced or increased from time
to time in accordance with the terms of this Agreement; provided that, for
purposes of any calculations made pursuant to this Agreement (including, without
limitation, with respect to the conditions to any Class A-R Borrowing and the
calculation of the Commitment Fee), the Class A-R Commitment of each Class A-R
Lender shall be deemed to be one-half of such amount until the Additional Draw
Date.

 

"Class A-R Commitment Period" means the period commencing on the Original
Closing Date and ending on the earliest of:

 

(a) the time at which the Class A-R Commitments are terminated or reduced to
zero as provided in this Agreement (whether pursuant to Article II, Article VI
or otherwise); and

 

(b) the last day of the Reinvestment Period;

 

provided that the Class A-R Commitment Period shall not end unless and until, if
necessary, the Future Funding Reserve Borrowing has occurred.

 

"Class A-R Lender" means a Lender with a Class A-R Commitment or which holds any
Class A-R Loan.

 

"Class A-R Loan" has the meaning assigned to such term in Section 2.1(a).

 

"Class A-T Borrowing" has the meaning assigned to such term in Section 2.1(d).

 

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

 

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

 

"Class A-T Loans" means, collectively, Class A-T-1 Loans and Class A-T-2 Loans.

 

"Class A-T-1 Borrowing" has the meaning assigned to such term in Section 2.1(d).

 

-10-

 

"Class A-T-1 Commitment" means, with respect to each Class A-T-1 Lender, the
commitment of such Class A-T-1 Lender to make Class A-T-1 Loans to the Borrower
in the amount set forth opposite such Class A-T-1 Lender's name on the signature
pages hereto, as such amount may be terminated, reduced or increased from time
to time in accordance with the terms of this Agreement.

 

"Class A-T-1 Lender" means a Lender with a Class A-T-1 Commitment or that holds
any Class A-T-1 Loan.

 

"Class A-T-1 Loan" has the meaning assigned to such term in Section 2.1(b).

 

"Class A-T-2 Borrowing" has the meaning assigned to such term in Section 2.1(d).

 

"Class A-T-2 Commitment" means, with respect to each Class A-T-2 Lender, the
commitment of such Class A-T-2 Lender to make Class A-T-2 Loans to the Borrower
in the amount set forth opposite such Class A-T-2 Lender's name on the signature
pages hereto, as such amount may be terminated, reduced or increased from time
to time in accordance with the terms of this Agreement.

 

"Class A-T-2 Lender" means a Lender with a Class A-T-2 Commitment or that holds
any Class A-T-2 Loan.

 

"Class A-T-2 Loan" has the meaning assigned to such term in Section 2.1(c).

 

"Closing Expense Account" means the trust account established pursuant to
Section 8.3(e) of the Existing Credit Agreement and maintained pursuant to
Section 8.3(e) hereof.

 

"Code" means the Internal Revenue Code of 1986, as amended, or any successor
statute.

 

"Collateral" means the Pledged Collateral and all other property and/or rights
on or in which a Lien was, is or is intended to be granted to the Collateral
Agent for the benefit of the Secured Parties pursuant to this Agreement, any of
the Loan Documents or any other instruments provided for herein or therein or
delivered or to be delivered hereunder or thereunder or in connection herewith
or therewith.

 

"Collateral Agent" means U.S. Bank in its capacity as collateral agent under
this Agreement, and its successors in such capacity.

 

"Collateral Agent Fee" means the fee payable to the Collateral Agent in arrears
on each Quarterly Payment Date in an amount specified in the Fee Letter, dated
as of September 25, 2013, between the Collateral Manager on behalf of the
Borrower and the Collateral Agent.

 

"Collateral Loan" means a Senior Secured Loan, a Second Lien Loan or an
Unsecured Loan (in each case whether originated by or assigned to the Borrower)
or a Participation Interest in any Senior Secured Loan, Second Lien Loan or
Unsecured Loan that as of the date of acquisition or origination by the Borrower
meets each of the following criteria:

 

(a) [reserved];

 

-11-

 

 

 

(b) provides the Borrower (or an agent on behalf of the applicable lenders with
respect to such Collateral Loan) with a valid, perfected security interest in
the collateral granted under the related Underlying Instruments and/or Related
Contracts at the level of priority indicated in the related Underlying
Instruments (in the case only of Senior Secured Loans and

Second Lien Loans); constitutes the legal and enforceable obligation of the
applicable Obligor (except as enforceability may be limited by applicable
insolvency, bankruptcy or other laws affecting creditors' rights generally, or
general principles of equity, whether such enforceability is considered in a
proceeding in equity or at law); is owned by the Borrower free and clear of
adverse claims (other than Permitted Liens); may be pledged and assigned by the
Borrower in accordance with the terms of the related Underlying Instruments
and/or Related Contracts; with respect to which all steps required by Section
8.7 have been taken and in which the Collateral Agent holds a first-priority
perfected security interest for the benefit of the Secured Parties; and, at the
time such Collateral Loan was purchased or originated, was not subject to
set-off or defense (other than a discharge in the event of a subsequent
bankruptcy) by the related Obligor and, together with the documentation relating
thereto, does not contravene in any material respect any applicable law, rule or
regulation;

 

(c) is denominated and payable in Dollars (and is not convertible into, or
payable in, any other currency) and is governed by the law of a state of the
United States, the law of a province of Canada or the law of the Approved
Foreign Jurisdiction where the Obligor is domiciled;

 

(d) is an obligation of an Obligor organized or incorporated in the United
States (or any state thereof), Canada (or any province thereof) or an Approved
Foreign Jurisdiction;

 

(e) is not a Defaulted Loan;

 

(f) is not a Credit Risk Loan, a Bridge Loan, a Synthetic Security, a Zero
Coupon Loan or a Real Estate Loan;

 

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

 

(h) is not subject to forfeiture of principal based on a material non-credit
related risk (such as the occurrence of a catastrophe), as reasonably determined
by the Borrower or the Collateral Manager in accordance with the Servicing
Standard;

 

(i) (x) is not an equity security or a component of an equity security; and (y)
is not exchangeable or convertible into equity;

 

(j) is not a PIK loan;

 

(k) is not the subject of an Offer or called for redemption (except for any
repayment under a Revolving Collateral Loan of amounts that may be reborrowed
thereunder pursuant to the applicable Underlying Instrument);

 

(l) does not constitute Margin Stock;

 

(m) does not subject the Borrower to withholding tax unless the relevant Obligor
is required to make "gross-up" payments or pay "additional amounts" in respect
of, or otherwise compensate the Borrower for, the full amount of such
withholding tax for any reason (including in the event of a change of law);

 

(n) (i) provides for the full principal balance to be payable at or prior to its
maturity and (ii) except as permitted by clause (n) of the definition of
"Concentration Limitations", has a maturity date falling no later than the
Stated Maturity of the Loans;

-12-

 

 

(o) if such Collateral Loan is a Participation Interest, then such Participation
Interest is acquired from (i) a Selling Institution incorporated or organized
under the laws of the United States (or any state thereof) or any U.S. branch of
a Selling Institution incorporated or organized outside the United States or
(ii) with respect to Collateral Loans the Obligors of which are organized or
incorporated in Canada or an Approved Foreign Jurisdiction, a Selling
Institution organized or incorporated in Canada or an Approved Foreign
Jurisdiction, as applicable, in each case to the extent such Selling Institution
satisfies the Applicable Counterparty Criteria;

 

(p) provides for payment of interest at least semi-annually;

 

(q) pays interest in cash of at least LIBOR (for any relevant funding period)
plus 2.00% per annum (or a rate equivalent thereto);

 

(r) is not an obligation (other than a Revolving Collateral Loan or a Delayed
Funding Loan) pursuant to which any future advances or payments to the Obligor
may be required to be made by the Borrower;

 

(s) will not cause the Borrower or the pool of assets to be required to be
registered as an investment company under the Investment Company Act;

 

(t) has a DBRS Long Term Rating or a DBRS Risk Score;

 

(u) is not (i) a Subordinated Loan or (ii) a mezzanine loan or debt security;

 

(v) the acquisition price (exclusive of the portion thereof attributable to
accrued interest) paid by the Borrower therefor is not less than 90% of the
Principal Balance thereof;

 

(w) is not an obligation of an Obligor Affiliated with the BDC or the Investment
Advisor;

 

(x) is not a Cov-Lite Loan unless it is an Eligible Cov-Lite Loan;

 

(y) is not a bond, repurchase obligation, letter of credit, reimbursement
obligation under a letter of credit (other than pursuant to the definition of
"Revolving Collateral Loan"), or other debt security not constituting a loan;
and

 

(z) is Registered.

 

"Collateral Management Agreement" means the Collateral Management Agreement
dated as of the Original Closing Date between the Borrower and the Collateral
Manager, as amended from time to time in accordance with the terms hereof and
thereof.

 

"Collateral Management Fees" means, collectively, the Senior Management Fees and
the Subordinated Management Fees.

 

"Collateral Manager" means Fifth Street Senior Floating Rate Corp., a Delaware
corporation, or any successor in such capacity in accordance with the Collateral
Management Agreement.

 

-13-

 

  

"Collateral Quality Matrix" means the Collateral Quality Matrix set forth on
Schedule F. On or prior to the Original Closing Date, the Collateral Manager
shall specify to the Agents (with a copy to DBRS and the Lenders) the Applicable
Row Level to be in effect initially. Thereafter, upon not less than ten Business
Days' prior written notice to the Agents (with a copy to DBRS and the Lenders),
the Borrower or the Collateral Manager may specify a different Applicable Row
Level than the one in use at that time; provided that the Borrower demonstrates
compliance with all columns in the table for the proposed Applicable Row Level
on Schedule F.

 

"Collateral Quality Test" means a test that is satisfied if, as of any date of
determination, in the aggregate, the Collateral Loans owned (or in relation to a
proposed purchase of a Collateral Loan, both owned and proposed to be owned) by
the Borrower satisfy each of the tests set forth below, calculated in each case
in accordance with Section 1.3:

 

(a) the Minimum Weighted Average Spread Test;

 

(b) the Maximum Weighted Average Life Test;

 

(c) the Minimum Diversity Score Test; and

 

(d) the Maximum DBRS Risk Score Test.

 

"Collateral Report" has the meaning set forth in Section 5.1(h).

 

"Collateral Report Determination Date" means the 15th day of each calendar
month; provided that, if any such date is not a Business Day, such Collateral
Report Determination Date shall be the next succeeding Business Day.

 

"Collection Account" means the trust account established pursuant to
Section 8.2(a) of the Existing Credit Agreement and maintained pursuant to
Section 8.2(a) hereof.

 

"Collections" means, with respect to any Collateral, all principal payments,
interest payments, fees and other payments received by the Borrower with respect
thereto and all other amounts paid with respect to such Collateral, including
dividends of any type, distributions with respect thereto and any proceeds of
collateral for, or any guaranty of, such Collateral or the relevant Obligor's
obligation to make payments with respect thereto.

 

"Commercial Paper Funding" means, with respect to any Loan funded by a CP
Lender, at any time, the funding by a CP Lender of all or a portion of the
outstanding principal amount of such Loan with funds provided by the issuance of
Commercial Paper Notes.

 

"Commercial Paper Funding Period" means, with respect to any Loan funded by a CP
Conduit, a period of time during which all or a portion of the outstanding
principal amount of such Loan is funded by a Commercial Paper Funding.

 

"Commercial Paper Notes" means commercial paper notes or secured liquidity notes
issued by a CP Conduit or a conduit providing funding to a CP Conduit in the
commercial paper market from time to time.

 

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

 

-14-

 

  

"Commitment Fee" has the meaning set forth in Section 2.6(a).

 

"Commitment Shortfall" means the amount by which:

 

(a) the aggregate Unfunded Amount exceeds

 

(b) the sum of (i) the Total Class A-R Commitment minus the aggregate principal
amount of the Class A-R Loans outstanding at such time (which amount under
clause (i) shall not be less than zero) plus (ii) amounts on deposit in the
Collection Account, including Eligible Investments credited thereto,
representing Principal Proceeds, plus (iii) amounts on deposit in the Future
Funding Reserve Account, including Eligible Investments credited thereto.

 

"Commitments" means, collectively, the Class A-R Commitments and the Class A-T
Commitments.

 

"Commodity Exchange Act" means the Commodity Exchange Act of 1936, as amended.

 

"Concentration Limitations" means limitations that are satisfied if, as of any
date of determination, in the aggregate, the Maximum Principal Balance of the
Collateral Loans owned (or, in relation to a proposed purchase or origination of
a Collateral Loan, proposed to be owned) by the Borrower comply with all of the
requirements set forth below, calculated as a percentage of Total Capitalization
(unless otherwise specified) and in each case in accordance with the procedures
set forth in Section 1.3:

 

(a) not more than 15.0% consist of Collateral Loans whose Obligors are organized
or incorporated in Canada (or any province thereof) or in Approved Foreign
Jurisdictions; provided that no more than 5.0% consist of Collateral Loans with
Obligors organized or incorporated in any one Approved Foreign Jurisdiction;

 

(b) [reserved];

 

(c) not more than 10.0% consist of Collateral Loans that are Second Lien Loans
and Unsecured Loans;

 

(d) not more than 5.0% consist of Unsecured Loans;

 

(e) not more than 10.0% consist of Fixed Rate Obligations;

 

(f) not more than 40.0% consist of Eligible Cov-Lite Loans;

-15-

 

 

(g) not more than 10.0% consist of DIP Loans;

 

(h) not more than 15.0% consist of Current Pay Obligations;

 

(i) not more than 4.5% consist of obligations of any one Obligor (and Affiliates
thereof), provided that up to two Obligors (and their respective Affiliates) may
each constitute up to 7.0%, and up to an additional two Obligors (and their
respective Affiliates) may each constitute up to 6.0%;

 

(j) not more than 5.0% consist of Collateral Loans that permit the payment of
interest to be made less frequently than quarterly ("Semi-Annual Payment
Loans");

 

(k) not more than 10.0% consist of Revolving Collateral Loans and Delayed
Funding Loans;

 

(l) not more than 12.0% consist of Collateral Loans with Obligors in any one
DBRS Industry Classification; provided that (i) the largest DBRS Industry
Classification may represent up to 20.0% and (ii) the second largest DBRS
Industry Classification may represent up to 14.0%;

 

(m) the Aggregate Participation Exposure is not more than 20.0%; provided that
(i) no more than 10.0% shall consist of Participation Interests of which the BDC
is the Selling Institution and (ii) such Participation Interests referred to in
clause (i) shall be assigned to the Borrower from the BDC within 90 days after
the sale of such Participation Interest; and

 

(n) not more than 2.5% consist of Collateral Loans that have a maturity date
that falls in the one-year period after the Stated Maturity.

 

"Conduit Assignee" means any multi-seller commercial paper conduit or special
purpose entity funded by a multi-seller commercial paper conduit which is, in
either case, administered by a common manager or an Affiliate of a CP Conduit,
or the collateral trustee of such entity.

 

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

 

"Conduit Support Provider" means, without duplication, (i) a provider of a
Credit Facility or Liquidity Facility to or for the benefit of any CP Conduit,
and any guarantor of such provider or (ii) an entity that issues commercial
paper or other debt obligations, the proceeds of which are used (directly or
indirectly) to fund the obligations of any CP Conduit.

 

"Constituent Documents" means, in respect of any Person, the certificate or
articles of formation or organization, the limited liability company agreement,
operating agreement, partnership agreement, joint venture agreement or other
applicable agreement of formation or organization (or equivalent or comparable
constituent documents) and other organizational documents and by-laws and any
certificate of incorporation, certificate of formation, certificate of limited
partnership and other agreement, or similar instrument filed or made in
connection with its formation or organization, in each case, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

-16-

 

 

"Contingent Obligation" means, as to any Person, without duplication, (i) any
contingent obligation of such Person required to be shown on such Person's
balance sheet in accordance with GAAP, and (ii) any obligation required to be
disclosed in the footnotes to such Person's financial statements in accordance
with GAAP, guaranteeing partially or in whole any non-recourse Indebtedness,
lease, dividend or other obligation, exclusive of contractual indemnities
(including, without limitation, any indemnity or price-adjustment provision
relating to the purchase or sale of securities or other assets) and guarantees
of non-monetary obligations (other than guarantees of completion) which have not
yet been called on or quantified, of such Person or of any other Person. The
amount of any Contingent Obligation described in clause (ii) shall be deemed to
be (a) with respect to a guaranty of interest or interest and principal, or
operating income guaranty, the sum of all payments required to be made
thereunder (which in the case of an operating income guaranty shall be deemed to
be equal to the debt service for the note secured thereby), calculated at the
applicable interest rate, through (i) in the case of an interest or interest and
principal guaranty, the stated date of maturity of the obligation (and
commencing on the date interest could first be payable thereunder), or (ii) in
the case of an operating income guaranty, the date through which such guaranty
will remain in effect, and (b) with respect to all guarantees not covered by the
preceding clause (a), an amount equal to the stated or determinable amount of
the primary obligation in respect of which such guaranty is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as recorded on
the balance sheet and on the footnotes to the most recent financial statements
of the Borrower required to be delivered pursuant to Section 5.1 hereof.
Notwithstanding anything contained herein to the contrary, guarantees of
completion shall not be deemed to be Contingent Obligations unless and until a
claim for payment or performance has been made thereunder by the person entitled
to performance or payment thereunder, at which time any such guaranty of
completion shall be deemed to be a Contingent Obligation in an amount equal to
any such claim. Subject to the preceding sentence, (i) in the case of a joint
and several guaranty given by such Person and another Person (but only to the
extent such guaranty is directly or indirectly recourse to such Person), the
amount of the guaranty, to the extent it is directly or indirectly recourse to
such Person, shall be deemed to be 100% thereof unless and only to the extent
that such other Person has delivered Cash or cash equivalents to secure all or
any part of such Person's guaranteed obligations and (ii) in the case of any
other guaranty, (whether or not joint and several) of an obligation otherwise
constituting Indebtedness of such Person, the amount of such guaranty shall be
deemed to be only that amount in excess of the amount of the obligation
constituting Indebtedness of such Person.

 

"Corporate Trust Office" means the corporate trust office of the Collateral
Agent currently located at One Federal Street, 3rd Floor, Boston, MA 02110,
Attention: Corporate Trust Services (CDO), Reference: FS Senior Funding, LLC or
such other address as the Collateral Agent may designate from time to time by
notice to the Borrower, the Administrative Agent, and the Lenders or the
principal corporate trust office of any successor Collateral Agent.

 

"Cost of Funds Rate" means, with respect to any Loan funded by a CP Lender that
is not a CP LIBOR Lender, the weighted average of the Commercial Paper Rate, the
Liquidity Funding Rate and the Credit Funding Rate at any time and from time to
time based upon the portion of the outstanding principal amount of such Loan
that is funded by Commercial Paper Funding, Liquidity Funding or Credit Funding
for one or more Commercial Paper Funding Periods, Liquidity Funding Periods or
Credit Funding Periods, respectively; provided that in no event shall the Cost
of Funds Rate for any period exceed the Cost of Funds Rate Cap for such period.
For purposes of this definition and its use in this Agreement, the Commercial
Paper Rate established by a CP Lender shall be associated with the Commercial
Paper Funding undertaken by such CP Lender.

 

-17-

 

 

"Cost of Funds Rate Cap" means, for any Interest Period, the sum of (i) the
Adjusted London Interbank Offered Rate applicable to such Interest Period plus
(ii) 0.45% per annum; provided that, if, pursuant to Section 11.1(a), the
Administrative Agent is unable to obtain a quotation for the London Interbank
Offered Rate, the Cost of Funds Rate Cap shall equal, for each day in any
Interest Period, (i) the Alternate Base Rate applicable to such day plus (ii)
0.45% per annum.

 

"Cov-Lite Loan" means a Collateral Loan the Related Contracts for which do not
require the borrower thereunder to comply with any Maintenance Covenant
(regardless of whether compliance with one or more Incurrence Covenants is
otherwise required by such Related Contracts); provided that, notwithstanding
the foregoing, a Collateral Loan shall be deemed not to be a Cov-Lite Loan if
the Related Contracts for such Collateral Loan contain a cross-default provision
to, or the Collateral Loan is pari passu with, another loan, debt obligation or
credit facility of the underlying Obligor that contains one or more Maintenance
Covenants.

 

"Coverage Tests" means each of the Overcollateralization Ratio Test and Interest
Coverage Ratio Test.

 

"Covered Accounts" means, collectively, the Collection Account, the Custodial
Account, the Future Funding Reserve Account, the Payment Account, the Lender
Collateral Account, the Closing Expense Account and any subaccounts of each of
the foregoing.

 

"CP Conduit" means any limited-purpose entity established to use the direct or
indirect proceeds of the issuance of Commercial Paper Notes to finance financial
assets.

 

"CP Lender" means a CP Conduit that is a Lender, and that is identified to the
Borrower as a CP Conduit on its signature page to this Agreement, an Assignment
and Assumption or otherwise.

 

"CP LIBOR Lender" means a CP Conduit that has elected in a written notice to the
Borrower and the Administrative Agent to have its Loans accrue interest by
reference to the Adjusted London Interbank Offered Rate.

 

"Credit Estimate" means, with respect to any Collateral Loan, a credit estimate
obtained from DBRS in accordance with the Credit Estimate Procedures.

 

"Credit Estimate Procedures" means, with respect to any Collateral Loan,

 

(a) if at any time such Collateral Loan does not have a DBRS Long Term Rating,
then the Borrower shall, within fourteen days after (x) the purchase of such
Collateral Loan or (y) the withdrawal of a DBRS Long Term Rating from such
Collateral Loan, apply to DBRS for a Credit Estimate (and promptly notify the
Collateral Agent of such application), which shall be used to determine the DBRS
Risk Score for such Collateral Loan;

 

(b) if the DBRS Risk Score of such Collateral Loan is determined based on a
Credit Estimate, (i) the Borrower shall renew such Credit Estimate at least
annually and (ii) the Borrower shall notify DBRS within 10 Business Days of any
amendment to the Underlying Instruments for such Collateral Loan that, in the
judgment of the Collateral Manager in accordance with the Servicing Standard,
could reasonably be expected to materially impact the creditworthiness of such
Collateral Loan; and

 

(c) promptly following the receipt of a Credit Estimate from DBRS with respect
to such Collateral Loan, the Borrower shall notify the Collateral Agent and
provide the Collateral Agent with the details of such Credit Estimate.

 

-18-

 

"Credit Facility" means, with respect to any Loan by any CP Lender, a credit
asset purchase agreement or other similar facility that provides credit support
for defaults in respect of the failure to make such Loan, and any guaranty of
any such agreement or facility.

 

"Credit Funding" means, with respect to any Loan by any CP Lender, at any time,
funding by a CP Lender of all or a portion of the outstanding principal amount
of such Loan with funds provided under a Credit Facility.

 

"Credit Funding Period" means, with respect to any Loan by any CP Lender, a
period of time during which all or a portion of the outstanding principal amount
of such Loan is funded by a Credit Funding.

 

"Credit Funding Rate" means, with respect to any Credit Funding for any period,
the per annum rate of interest equal to the sum of (i) the Adjusted London
Interbank Offered Rate applicable to such period plus (ii) 0.45% per annum;
provided that, if a quotation for the London Interbank Offered Rate is not able
to be obtained, the Credit Funding Rate shall equal, for each day in any period,
(i) the Alternate Base Rate applicable to such day plus (ii) 0.45% per annum.

 

"Credit Improved Loan" means any Collateral Loan that, in the Collateral
Manager's commercially reasonable business judgment applying the Servicing
Standard has significantly improved in credit quality from the condition of its
credit at the time of origination or purchase, which judgment may (but need not)
be based on one or more of the following facts:

 

(a) the Obligor in respect of such Collateral Loan has shown improved financial
results since the published financial reports first produced after it was
originated or purchased by the Borrower;

 

(b) the Obligor in respect of such Collateral Loan since the date on which such
Collateral Loan was originated or purchased by the Borrower has raised
significant equity capital or has raised other capital that has improved the
liquidity or credit standing of such Obligor; or

 

(c) with respect to which one or more of the following criteria applies: (i)
such Collateral Loan has been upgraded or put on a watch list for possible
upgrade by DBRS since the date on which such Collateral Loan was originated or
purchased by the Borrower; (ii) the proceeds from a sale of such Collateral Loan
would be at least 101% of its purchase price; (iii) the price of such Collateral
Loan has changed during the period from the date on which it was originated or
purchased by the Borrower to the proposed sale date by a percentage either more
positive, or less negative, as the case may be, than the percentage change in
the average price of the applicable Eligible Loan Index plus 0.25% over the same
period; or (iv) the price of such Collateral Loan changed during the period from
the date on which it was originated or purchased by the Borrower to the date of
determination by a percentage either more positive, or less negative, as the
case may be, than the percentage change in a nationally recognized loan index
selected by the Borrower or the Collateral Manager over the same period plus
0.50%.

 

"Credit Risk Loan" means a Collateral Loan that is not a Defaulted Loan but
which has, in the Collateral Manager's commercially reasonable judgment applying
the Servicing Standard, a significant risk of declining in credit quality and,
with lapse of time, becoming a Defaulted Loan, and is designated as a "Credit
Risk Loan" by the Borrower or the Collateral Manager.

 

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

-19-

 

 

"Current Pay Obligation" means a Collateral Loan that would otherwise be a
Defaulted Loan as to which (i) all scheduled interest and principal payments due
(other than those due as a result of any bankruptcy, insolvency, receivership or
other analogous proceeding) were paid in Cash and the Borrower or the Collateral
Manager reasonably expects, and delivers to DBRS (if DBRS is then rating any
Loans) a certificate of an Authorized Officer certifying that it reasonably
expects, that the remaining scheduled interest and principal payments due will
be paid in cash, (ii) the DBRS Rating of such Collateral Loan is at least "CCC"
and is not on a watch list for possible downgrade, (iii) the Market Value (which
is not determined pursuant to clause (d) or (e) of the definition thereof) of
such Collateral Loan is at least 80% of par and (iv) if the Obligor of such
Collateral Loan is the subject of a bankruptcy, insolvency, receivership or
other analogous proceeding, the bankruptcy court or other authorized official
has authorized the payment of interest due and payable on such Collateral Loan;
provided that to the extent that more than 15% of Total Capitalization would
otherwise constitute Current Pay Obligations, one or more Collateral Loans
designated by the Borrower having a Principal Balance plus aggregate Exposure
Amounts at least equal to such excess shall be deemed not to constitute Current
Pay Obligations (and shall therefore constitute Defaulted Loans).

 

"Custodial Account" means a custodial account at the Custodian, established in
the name of the Collateral Agent pursuant to Section 8.4(a) of the Existing
Credit Agreement and maintained pursuant to Section 8.4(a) hereof.

 

"Custodian" has the meaning set forth in Section 8.4(a).

 

"Daily Report" has the meaning set forth in Section 8.9(a).

 

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

 

"DBRS Industry Classification" means each industry identified on Schedule B.

 

"DBRS Long Term Rating" means a long-term credit rating determined in accordance
with the provisions set forth on Schedule E.

 

"DBRS Rating" means, as the context requires, a DBRS Long Term Rating or a DBRS
Short Term Rating.

 

"DBRS Recovery Rate" means (a) for any Senior Secured Loan, 52.00%; (b) for any
Second Lien Loan, 32.50% and (c) for any Unsecured Loan, 12.50%.

 

"DBRS Risk Score" has the meaning set forth on Schedule C.

 

"DBRS Short Term Rating" means a short-term credit rating determined in
accordance with the provisions set forth on Schedule E.

 

"Default" means any condition or event which constitutes an Event of Default or
which with the giving of notice or lapse of time or both would, unless cured or
waived, become an Event of Default.

 

"Defaulted Loan" means any Collateral Loan as to which:

 

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(a) a default as to the payment of principal and/or interest has occurred and is
continuing with respect to such Collateral Loan (without regard to any grace
period applicable thereto, or waiver thereof, after the passage of five Business
Days in the case of interest or three Business Days in the case of principal if
the Borrower or the Collateral Manager determines that such default is unrelated
to credit-related causes (which determination shall be reported in the next
Collateral Report required to be delivered pursuant to Section 5.1(h)), but in
no case beyond the passage of any grace period applicable thereto);

 

(b) the Borrower or the Collateral Manager has received written notice or a
Senior Authorized Officer of the Borrower or the Collateral Manager has actual
knowledge that a default as to the payment of principal and/or interest has
occurred and is continuing on another debt obligation of the same Obligor that
is senior or pari passu in right of payment to such Collateral Loan (in each
case, after the passage of five Business Days in the case of interest or three
Business Days in the case of principal if the Borrower or the Collateral Manager
determines that such default is unrelated to credit-related causes (which
determination shall be reported in the next Collateral Report required to be
delivered pursuant to Section 5.1(h)), but in no case beyond the passage of any
grace period applicable thereto; provided that both the Collateral Loan and such
other debt obligation are full recourse obligations of the applicable Obligor);

 

(c) except in the case of a DIP Loan, the Obligor in respect of such Collateral
Loan has, or others have, instituted proceedings to have such Obligor
adjudicated as bankrupt or insolvent or placed into receivership and such
proceedings have not been stayed or dismissed, or such Obligor has filed for
protection under Chapter 11 of the Bankruptcy Code;

 

(d) such Collateral Loan has a DBRS Long Term Rating of "D", or had such a
rating immediately before such rating was withdrawn;

 

(e) the Borrower or the Collateral Manager has received notice or a Senior
Authorized Officer of the Borrower or the Collateral Manager has actual
knowledge that another debt obligation of the same Obligor that is senior or
pari passu in right of payment to such Collateral Loan has a DBRS Long Term
Rating of "D", or had such a rating immediately before such rating was
withdrawn;

 

(f) a default with respect to which the Borrower or the Collateral Manager has
received written notice, or a Senior Authorized Officer of the Borrower or the
Collateral Manager has actual knowledge, that a default has occurred under the
Underlying Instruments and any applicable grace period has expired and the
holders of such Collateral Loan have accelerated the repayment of the Collateral
Loan (but only until such acceleration has been rescinded) in the manner
provided in the Underlying Instruments;

 

(g) such Collateral Loan is a Participation Interest (until it is elevated or
converted to an assigned loan) with respect to which the related Selling
Institution has defaulted in any material respect in the performance of any of
its payment obligations under the Participation Interest;

 

(h) such Collateral Loan is a Participation Interest (until it is elevated or
converted to an assigned loan) in a loan that would, if such loan were a
Collateral Loan, constitute a "Defaulted Loan" (other than under this clause
(h)) or with respect to which the Selling Institution has a DBRS Long Term
Rating of "D", or had such a rating immediately before such rating was
withdrawn;

 

(i) the Borrower or the Collateral Manager has in accordance with the Servicing
Standard otherwise declared such Collateral Loan to be a "Defaulted Loan"; or

 

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(j) such Collateral Loan has been placed on non-accrual status by the Collateral
Manager;

 

provided that Current Pay Obligations up to 15.0% of Total Capitalization shall
be deemed not to be Defaulted Loans.

 

"Defaulting Lender" means a Class A-R Lender that has at any time (i) failed to
fund all or any portion of its Class A-R Loans when and as required hereunder
(other than failures to fund (a) solely as a result of a bona fide dispute as to
whether the conditions to borrowing were satisfied on the relevant Borrowing
Date, but only for such time as such Class A-R Lender is continuing to engage in
good faith discussions regarding the determination or resolution of such
dispute, and such Class A-R Lender has notified the Administrative Agent in
writing of its intention not to fund and has specifically identified such
condition precedent to funding that was not satisfied, or (b) solely as a result
of a failure to disburse due to an administrative error or omission by such
Class A-R Lender, and such failure is cured within five Business Days after such
Class A-R Lender receives written notice or has actual knowledge of such
administrative error or omission) or (ii) has notified the Borrower and the
Administrative Agent in writing, or has made a public statement to the effect,
that it does not intend or expect to comply with any of its funding obligations
under this Agreement (unless such writing or public statement indicates that
such position is based on such Class A-R Lender's dispute as to the satisfaction
of any condition precedent pursuant to the foregoing clause (a)) or generally
under other agreements under which it shall have committed to extend credit.

 

"Delayed Funding Loan" means a Collateral Loan pursuant to which one or more
future advances will be required to be made to the Obligor thereunder but which
does not permit any such advance that has been made to be reborrowed once repaid
by the Obligor; provided that such loan shall only be considered to be a Delayed
Funding Loan to the extent of the undrawn commitment and only for so long as any
future funding obligations remain in effect.

 

"DIP Loan" means any interest in a loan or financing facility with a DBRS Rating
(i) which is an obligation of a debtor-in-possession as described in Section
1107 of the Bankruptcy Code or a trustee (if appointment of such trustee has
been ordered pursuant to Section 1104 of the Bankruptcy Code) (a "Debtor")
organized under the laws of the United States or any State therein; (ii) which
is paying interest on a current basis; and (iii) the terms of which have been
approved by an order of the United States Bankruptcy Court, the United States
District Court, or any other court of competent jurisdiction, the enforceability
of which order is not subject to any pending contested matter or proceeding (as
such terms are defined in the Federal Rules of Bankruptcy Procedure) and which
order provides that (a) such DIP Loan is secured by liens on the Debtor's
otherwise unencumbered assets pursuant to Section 364(c)(2) of the Bankruptcy
Code; (b) such DIP Loan is secured by liens of equal or senior priority on
property of the Debtor's estate that is otherwise subject to a lien pursuant to
Section 364(d) of the Bankruptcy Code; (c) such DIP Loan is secured by junior
liens on the Debtor's encumbered assets and such DIP Loan is fully secured based
upon a current valuation or appraisal report; or (d) if the DIP Loan or any
portion thereof is unsecured, the repayment of such DIP Loan retains priority
over all other administrative expenses pursuant to Section 364(c)(1) of the
Bankruptcy Code (provided, in the case of this clause (d), that notice has been
provided to DBRS prior to the acquisition of such loan).

 

"Discount Loan" means any Collateral Loan that is acquired by the Borrower for a
purchase price paid by the Borrower to the seller of such Collateral Loan of
less than 95% of the principal balance of such Collateral Loan; provided that
such Collateral Loan shall cease to be a Discount Loan at such time as the
Market Value of such Collateral Loan, as determined daily for any period of 30
consecutive days since the acquisition by the Borrower of such Collateral Loan,
equals or exceeds 95% of the principal balance of such Collateral Loan; and
provided further that Collateral Loans for which the purchase price paid by the
Borrower to the seller of such Collateral Loan was less than 95%, but at least
90%, of the principal balance of such Collateral Loan shall be deemed not to be
Discount Loans, except that at any time when the Maximum Principal Balance of
such Collateral Loans exceeds 10% of Total Capitalization, the excess portion
shall constitute Discount Loans.

 

-22-

 

 

"Distribution" means any payment of principal or interest or any dividend or
premium payment made on, or any other distribution in respect of, a Collateral
Loan or other security.

 

"Diversity Score" means a single number that indicates collateral concentration
in terms of both issuer and industry concentration, calculated as set forth on
Schedule D hereto.

 

"Dollars" and "$" mean lawful money of the United States of America.

 

"Downgraded Lender" means a Lender that fails to be an Approved Lender in
accordance with the terms of such definition.

 

"Due Date" means each date on which a Distribution is due on a Collateral Loan.

 

"Due Period" means, with respect to any Quarterly Payment Date, the period
commencing on the last day of the immediately preceding Due Period (or, in the
case of the initial Due Period after the Original Closing Date, the period
commencing on the Original Closing Date) and ending on (and including) the
Calculation Date immediately preceding such Quarterly Payment Date (or, in the
case of the Due Period that is applicable to the Quarterly Payment Date
occurring on the Stated Maturity, ending on the day preceding such Quarterly
Payment Date).

 

"Early-Monthly Tape" has the meaning set forth in Section 5.1(q).

 

"EBA" means the European Banking Authority and/or its predecessor, the Committee
of European Banking Supervisors, and any successor or replacement agency or
authority.

 

"EBITDA" means earnings before interest, taxes, depreciation and amortization
(determined, for any Collateral Loan, in the manner provided in the Related
Contracts).

 

"Effective Date" means the date on which the conditions specified in Section 3.1
are satisfied (or waived in accordance with Section 12.5).

 

"Eligibility Criteria" means, as of the date of each acquisition or origination
of a debt obligation (including in connection with a substitution pursuant to
Section 10.1(a)(vii)), each of the following:

 

(a) each Concentration Limitation is satisfied immediately after giving effect
to such acquisition or origination (or, if not satisfied immediately prior to
such acquisition or origination, compliance with such Concentration Limitation
is maintained or improved after giving effect to such acquisition or
origination);

 

(b) the Collateral Quality Test is satisfied immediately after giving effect to
such acquisition or origination (or, if not satisfied immediately prior to such
acquisition or origination, compliance with the Collateral Quality Test is
maintained or improved after giving effect to such acquisition or origination);

 

-23-

 

 

(c) each Coverage Test is satisfied immediately after giving effect to such
acquisition or origination;

 

(d) the Portfolio Advance Rate is less than or equal to the Maximum Advance
Rate, unless the Portfolio Advance Rate is maintained or reduced after giving
effect to such acquisition or origination;

 

(e) there is no Commitment Shortfall after giving effect to such acquisition or
origination;

 

(f) unless waived in writing by the Administrative Agent and the Borrower
provides notice to DBRS of such waiver, no more than 20.0% of Total
Capitalization (calculated in accordance with the procedures set forth in
Section 1.3) shall consist of Collateral Loans whose Obligors have a trailing
twelve month EBITDA of less than $12,500,000 at the time of such acquisition or
origination;

 

(g) each of the criteria in the definition of "Collateral Loan" is satisfied
with respect to such acquisition or origination of a debt obligation; provided
that, for the avoidance of doubt, for purposes of determining whether the
Eligibility Criteria have been satisfied, such criteria shall only be tested as
of the date of such acquisition or origination of such debt obligation;

 

(h) the Retention Provider, either itself or through related entities (including
the Borrower), directly or indirectly, was involved or will be involved in
negotiating the original agreements which created or will create over 50%
(measured by total nominal amount) of all the Senior Secured Loans, Second Lien
Loans and/or Unsecured Loans (including any Participation Interest therein)
acquired (or committed to be acquired) by the Borrower, such proportion measured
on the basis of the nominal value at each respective origination of all the
Senior Secured Loans, Second Lien Loans and/or Unsecured Loans (including any
Participation Interest therein) acquired (or committed to be acquired) by the
Borrower in aggregate during the term of this Agreement; and

 

(i) only in relation to any Senior Secured Loans, Second Lien Loans and/or
Unsecured Loans (including any Participation Interest therein) to be acquired by
the Borrower that will not be acquired from the Retention Provider, the
Retention Provider, either itself or through related entities (including the
Borrower), directly or indirectly, was involved or will be involved in
negotiating the original agreements which created or will create over 50%
(measured by total nominal amount) of all the Senior Secured Loans, Second Lien
Loans and/or Unsecured Loans (including any Participation Interest therein)
acquired (or committed to be acquired) by the Borrower, such proportion measured
on the basis of the nominal value at each respective origination of all the
Senior Secured Loans, Second Lien Loans and/or Unsecured Loans (including any
Participation Interest therein) that are expected to be held by the Borrower
following the settlement of any such acquisition.

 

"Eligible Account Bank" means, with respect to any specified account, a
financial institution:

 

(a) (x) that (i) if such account is a fully segregated trust account with the
trust department or corporate trust department of such financial institution,
has a DBRS Long Term Rating of at least "A"; or (ii) otherwise, has a DBRS Long
Term Rating of at least "AA" (provided that if such financial institution ceases
to have a DBRS Long Term Rating of at least "AA", it is replaced within 30 days
by a financial institution with a DBRS Long Term Rating of at least "AA"); and
(y) that has a combined capital and surplus of at least $200,000,000; or

  

-24-

 

 

(b) as to which the Rating Condition is satisfied and the Borrower and the
Majority Lenders have consented to such financial institution constituting an
"Eligible Account Bank" hereunder.

 

"Eligible Cov-Lite Loan" means a Collateral Loan that (i) is a Cov-Lite Loan,
(ii) is a Senior Secured Loan, (iii) has a DBRS Rating of "B(low)" or higher,
and (iv) constitutes all, or part, of a tranche at least equal to $150,000,000
at the time such tranche is issued.

 

"Eligible Investment Required Ratings" means, in the case of each Eligible
Investment, a DBRS Short Term Rating of at least "R-1 (middle)" and, in the case
of any Eligible Investment with a maturity of longer than 90 days, a DBRS Long
Term Rating of at least "AA (low)".

 

"Eligible Investments" means any investment denominated in Dollars that, at the
time it is delivered to the Collateral Agent (directly or through a financial
intermediary or bailee), is one or more of the following obligations or
securities:

 

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

 

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

 

(iii) non-extendable commercial paper (other than Asset-Backed Commercial Paper)
with the Eligible Investment Required Ratings and that either bear interest or
are sold at a discount from the face amount thereof and have a maturity of not
more than 183 days from their date of issuance; and

 

(iv) money market funds domiciled outside of the United States which funds have,
at all times, the highest Moody's credit rating assignable at such time and
credit ratings of "AAA-mf" by Standard & Poor's;

 

and, in the case of clauses (i) through (iii) above, with a stated maturity
(after giving effect to any applicable grace period) no later than the Business
Day immediately preceding the Quarterly Payment Date next following the Interest
Period in which the date of investment occurs; provided that none of the
foregoing obligations or securities shall constitute Eligible Investments if
(a) such obligation or security has an "f", "r", "p", "pi", "q" or "t" subscript
assigned by Standard & Poor's, (b) all, or substantially all, of the remaining
amounts payable thereunder consist of interest and not principal payments,
(c) such obligation or security is subject to any withholding tax unless the
issuer of the security is required to make "gross-up" payments or pay
"additional amounts" in respect of, or otherwise compensate the holder of such
security for, the full amount of such withholding tax for any reason (including
in the event of a change of law), (d) such obligation or security is secured by
real property, (e) such obligation or security is purchased at a price greater
than 100% of the principal or face amount thereof, (f) such obligation or
security is subject of a tender offer, voluntary redemption, exchange offer,
conversion or other similar action or (g) in the Borrower's or the Collateral
Manager's judgment, such obligation or security is subject to material
non-credit related risks. Eligible Investments may include, without limitation
and subject to the restrictions set forth in this definition, those investments
for which an Agent or an affiliate of an Agent provides services. Any
investment, which otherwise qualifies as an Eligible Investment, may (1) be made
by the Collateral Agent or any of its Affiliates and (2) be made in securities
of any entity for which the Collateral Agent or any of its Affiliates receives
compensation or serves as offeror, distributor, investment advisor or other
service provider.

 

-25-

 

 

"Eligible Loan Index" means, with respect to each Collateral Loan, one of the
following indices as selected by the Borrower or the Collateral Manager upon the
origination or acquisition of such Collateral Loan: the CSFB Leveraged Loan
Indices (formerly the DLJ Leveraged Loan Index Plus), the Deutsche Bank
Leveraged Loan Index, the Goldman Sachs/Loan Pricing Corporation Liquid
Leveraged Loan Index, the Banc of America Securities Leveraged Loan Index, the
S&P/LSTA Leveraged Loan Indices or any other nationally recognized loan index
subject to the consent of the Majority Lenders with written notice thereof to be
provided to DBRS (collectively, the "Approved Indices"); provided that the
Borrower or the Collateral Manager may change the index applicable to a
Collateral Loan to another of the Approved Indices at any time following the
origination or acquisition thereof after giving notice to the Administrative
Agent and the Collateral Agent.

 

"Engagement Letter" means the Letter Agreement, dated as of July 3, 2013,
between Fifth Street and Natixis, as amended from time to time in accordance
with the terms thereof.

 

"Environmental Claim" means, with respect to any Person, any written notice,
claim, demand or similar communication by any other Person having jurisdiction
alleging potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damage, property damages,
personal injuries, fines or penalties arising out of, based on or resulting from
(i) the presence, or release into the environment, of any Hazardous Substances
at any location, whether or not owned by such Person or (ii) circumstances
forming the basis of any violation, of any applicable Environmental Law, in each
case as to which there is a reasonable likelihood of an adverse determination
with respect thereto and which, if adversely determined, would have a Material
Adverse Effect.

 

"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to the
environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.

 

"Equity Interests" means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation), including
partnership interests and membership interests, and any and all warrants, rights
or options to purchase or other arrangements or rights to acquire any of the
foregoing.

 

"Equity Security" means any equity security or any other security or loan that
is not eligible for purchase by the Borrower as a Collateral Loan and any
security purchased by the Borrower as part of a "unit" with a Collateral Loan
and which itself is not eligible for purchase by the Borrower as a Collateral
Loan.

-26-

 

 

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
or any successor statute.

 

"ERISA Group" means each controlled group of corporations or trades or
businesses (whether or not incorporated) under common control that is treated as
a single employer under Section 414(b), (c), (m) or (o) of the Code with the
Borrower.

 

"Eurodollar Rate Loans" means Loans accruing interest at an Applicable Rate
based upon the Adjusted London Interbank Offered Rate.

 

"Euro-Dollar Reserve Percentage" means, for any day, the percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
for a member bank of the Federal Reserve System in New York City in respect of
"Eurocurrency liabilities" (or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on Loans is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any Lender to United States
residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.

 

"Event of Default" has the meaning set forth in Section 6.1.

 

"Excess Concentration Amount" means, without duplication, at any time in respect
of which any one or more of the Concentration Limitations are exceeded, the
portions of each Collateral Loan that cause such Concentration Limitations to be
exceeded.

 

"Excess Reserve Amount" means, on any date, the excess (if any) of:

 

(a) the amount standing to the credit of the Future Funding Reserve Account on
such date over

 

(b)  (i) the aggregate Unfunded Amount on such date minus (ii) if such date is
prior to the last day of the Reinvestment Period, the excess (if any) of (x) the
Total Class A-R Commitment on such date over (y) the aggregate principal amount
of the Class A-R Loans outstanding on such date.

 

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder, all as from time to time in
effect, or any successor law, rules or regulations, and any reference to any
statutory or regulatory provision shall be deemed to be a reference to any
successor statutory or regulatory provision.

 

"Existing Credit Agreement" has the meaning set forth in the first whereas
clause.

 

"Existing Loan Documents" means the "Loan Documents" as defined in the Existing
Credit Agreement.

 

"Existing Loans" means the Loans (as defined in the Existing Credit Agreement)
made under the Existing Credit Agreement and outstanding as of the Effective
Date.

 

-27-

 

"Exposure Amount" as of any date means, with respect to any Revolving Collateral
Loan or Delayed Funding Loan, the excess of (a) the Borrower's maximum funding
commitment thereunder over (b) the Principal Balance of such Revolving
Collateral Loan or Delayed Funding Loan. For the avoidance of doubt, Exposure
Amounts in respect of a Defaulted Loan shall be included in the calculation of
the Exposure Amount if the Borrower is at such time subject to contractual
funding obligations with respect to such Defaulted Loan.

 

"FATCA" means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof, any agreements entered into
pursuant to Section 1471(b)(1) of the Code and any legislation, law, regulation
or practice enacted or promulgated pursuant to an intergovernmental agreement
entered into in connection with such Sections of the Code.

 

"Federal Funds Rate" means, for any day, the rate per annum (rounded upward, if
necessary, to the nearest 1/100th of 1%) equal to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers on such day, as published by
the FRBNY on the Business Day next succeeding such day, provided that (i) if
such day is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the immediately preceding Business Day as so
published on the next succeeding Business Day, and (ii) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average (rounded upward, if necessary, to the next 1/100th of
1%) of the quotations for such day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.

 

"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System as constituted from time to time.

 

"Fee Proceeds" means all amounts in the Collection Account representing upfront,
commitment, amendment and waiver, late payment (including compensation for
delayed settlement or trades), anniversary, annual, facility, prepayment,
redemption or any other fees of any type received in respect of any Collateral
Loan and any excess, with respect to Participation Interests in Collateral Loans
which have been sold by the Borrower pursuant to Section 10.1(b), of the
interest paid by the applicable Obligor in respect of the portion of such
Collateral Loan that is the subject of such Participation Interest over the
amount of interest required to be paid by the Borrower to the purchaser of such
Participation Interest pursuant to the underlying participation agreement;
provided that Fee Proceeds shall not include any reimbursement of expenses
payable by the Borrower to third parties, including legal fees, that may be
received by the Borrower from any Obligor or any fees received in connection
with the reduction of the par of the related Collateral Loan. Fee Proceeds shall
in all cases constitute Interest Proceeds.

 

"Fifth Street" means Fifth Street Senior Floating Rate Corp.

 

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

 

"Financial Sponsor" means any Person whose principal business activity is
acquiring, holding, and selling investments (including controlling interests) in
otherwise unrelated companies that each are distinct legal entities with
separate management, books and records and bank accounts, whose operations are
not integrated with one another and whose financial condition and
creditworthiness are independent of the other companies so owned by such Person.

 

-28-

 

"Fitch" means Fitch Ratings, Inc., together with its successors.

 

"Fixed Rate Obligation" means any Collateral Loan that bears a fixed rate of
interest.

 

"Floating Rate Obligation" means any Collateral Loan that bears a floating rate
of interest.

 

"FRBNY" means the Federal Reserve Bank of New York.

 

"Funding Agent" means the bank or other financial institution acting as the
agent of a CP Lender under this Agreement pursuant to a Joinder Agreement or
other similar agreement, as applicable.

 

"Future Funding Reserve Account" means the trust account established pursuant to
Section 8.3(b) of the Existing Credit Agreement and maintained pursuant to
Section 8.3(b) hereof.

 

"Future Funding Reserve Borrowing" means a borrowing of a Future Funding Reserve
Loan hereunder.

 

"Future Funding Reserve Loan" has the meaning set forth in Section 2.1(a).

 

"GAAP" means generally accepted accounting principles in effect from time to
time in the United States.

 

"Grant" means to grant, bargain, sell, warrant, alienate, remise, demise,
release, convey, assign, transfer, mortgage, pledge, create and grant a security
interest in and right of set-off against, deposit, set over and confirm. A Grant
of the Collateral, or of any other instrument, shall include all rights, powers
and options (but none of the obligations) of the granting party thereunder,
including without limitation the immediate continuing right to claim for,
collect, receive and receipt for principal and interest payments in respect of
the Collateral, and all other Moneys payable thereunder, to give and receive
notices and other communications, to give consents, waivers or make other
agreements, to exercise all rights and options, to bring Proceedings in the name
of the granting party or otherwise, and generally to do and receive anything
that the granting party is or may be entitled to do or receive thereunder or
with respect thereto.

 

"Hazardous Substances" means any toxic, radioactive, caustic or otherwise
hazardous substance, identified as such as a matter of Environmental Law,
including petroleum, its derivatives, by-products and other hydrocarbons, or any
substance having any constituent elements displaying any of the foregoing
characteristics.

 

"Hedge Counterparty Rating Criteria" means, in respect of a counterparty or
entity guaranteeing the obligations of such counterparty, a DBRS Long Term
Rating of "A (high)" or higher; provided that if an Interest Hedge Counterparty
or guarantor ceases to meet the Hedge Counterparty Rating Criteria, within 30
Business Days after such failure to meet the Hedge Counterparty Rating Criteria,
such Interest Hedge Counterparty or guarantor must either (a) provide a
guarantee acceptable to DBRS from a guarantor rated "A (high)" or higher or (b)
assign its obligations under the Interest Hedge Agreement to a counterparty that
holds a rating of "A (high)" or higher.

 

"Increased Commitment Date" means the date of the effectiveness of the Increased
Commitments pursuant to the terms of this Agreement.

 

-29-

 

"Increased Commitment Notice" has the meaning assigned to such term in Section
2.11(a).

 

"Increased Commitments" has the meaning assigned to such term in Section
2.11(a).

 

"Increased Costs" means any amounts due pursuant to Section 2.9 and/or Article
XI.

 

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

 

"Indebtedness" of any Person means, without duplication, (a) as shown on such
Person's balance sheet (i) all indebtedness of such Person for borrowed money or
for the deferred purchase price of property and (ii) all indebtedness of such
Person evidenced by a note, bond, debenture or similar instrument (whether or
not disbursed in full), (b) the face amount of all letters of credit issued for
the account of such Person and, without duplication, all unreimbursed amounts
drawn thereunder, (c) all Contingent Obligations of such Person, and (d) all
payment obligations of such Person under any interest rate protection agreement
(including, without limitation, any interest rate swaps, caps, floors, collars
and similar agreements) and currency swaps and similar agreements which were not
entered into specifically in connection with Indebtedness set forth in clauses
(a), (b) or (c) hereof.

 

"Indemnitee" has the meaning set forth in Section 12.3(b).

 

"Initial Ratings" means the ratings given by DBRS to the Class A-R Loans and the
Class A-T Loans as of the Effective Date.

 

"Interest Coverage Amount" means, at any time, without duplication, the sum of
(a) the scheduled interest payments and scheduled fees due (in each case
regardless of whether the applicable payment date has yet occurred) on the
Collateral Loans (excluding Defaulted Loans to the extent set forth in the
definition of "Interest Proceeds") for the then-current Due Period; (b) amounts
on deposit in the Collection Account, including Eligible Investments,
representing Interest Proceeds; (c) scheduled interest on Eligible Investments
held in the Collection Account, the Future Funding Reserve Account and the
Closing Expense Account, in each case for the then-current Due Period; and (d)
all regularly scheduled amounts due and payable to the Borrower under Interest
Hedge Agreements during the then-current Due Period.

 

"Interest Coverage Ratio" means, as of any Measurement Date, the ratio
(expressed as a percentage) obtained by dividing:

 

(a) (i) the Interest Coverage Amount less (ii) all amounts payable on the
related Quarterly Payment Date pursuant to clauses (A) through (D) of Section
9.1(a)(i) by

 

(b)  the sum of (i) all interest due on the Loans on the related Quarterly
Payment Date and (ii) the Commitment Fees due on the related Quarterly Payment
Date.

 

"Interest Coverage Ratio Test" means a test satisfied on any Measurement Date
following the first Quarterly Payment Date if the Interest Coverage Ratio is
greater than or equal to 200.0% on such date.

 

-30-

 

"Interest Hedge Agreement" means an interest rate protection agreement that may
be entered into between the Borrower and an Interest Hedge Counterparty after
the Original Closing Date, for the sole purpose of hedging interest rate risk
between the portfolio of Collateral Loans and the Loans, as amended from time to
time in accordance with the terms thereof, with respect to which the Rating
Condition is satisfied.

 

"Interest Hedge Counterparty" means a counterparty meeting, at the time of entry
by the Borrower into an Interest Hedge Agreement, the Hedge Counterparty Rating
Criteria (or, with respect to any counterparty not meeting such Hedge
Counterparty Rating Criteria at such time, any counterparty whose obligations in
respect of such Interest Hedge Agreement are absolutely and unconditionally
guaranteed by an Affiliate of such counterparty meeting such criteria at such
time), together with any permitted assignee or successor (which meets the Hedge
Counterparty Rating Criteria) under such Interest Hedge Agreement with respect
to which the Rating Condition is satisfied.

 

"Interest Period" means, with respect to each Borrowing, (a) the period from
(and including) the date of such Borrowing to but excluding the following
Quarterly Payment Date, and (b) each successive period from and including each
Quarterly Payment Date to but excluding the following Quarterly Payment Date
until the principal of such Borrowing is repaid.

 

"Interest Proceeds" means, with respect to any Pledged Collateral (including
Cash), (a) any payments with respect thereto that are attributable to interest
or yield in accordance with the Underlying Instruments of such Pledged
Collateral, (b) all Fee Proceeds, (c) all cash capital contributions made to the
Borrower that, to the extent provided in Section 8.2(h), are to be treated as
Interest Proceeds and (d) any amounts deposited in the Collection Account from
the Closing Expense Account in accordance with Section 8.3(e). Interest Proceeds
shall also include any amounts paid to the Borrower pursuant to an Interest
Hedge Agreement. No amounts that are required by the terms of any participation
agreement to be paid by the Borrower to any Person to whom the Borrower has sold
a Participation Interest shall constitute "Interest Proceeds" hereunder. Any
amounts received in respect of any Defaulted Loan will constitute Principal
Proceeds (and not Interest Proceeds) until the aggregate of all Collections in
respect of such Defaulted Loan since it became a Defaulted Loan equals the
outstanding principal balance of such Collateral Loan at the time it became a
Defaulted Loan; thereafter, any such amounts will constitute Interest Proceeds.
Any amounts received in respect of any Equity Security will constitute Principal
Proceeds (and not Interest Proceeds).

 

"Interest Rate Cap" means, with respect to each Interest Period, the sum of (i)
the Adjusted London Interbank Offered Rate applicable to such Interest Period
plus (ii) 2.00% per annum.

 

"Interpolated Rate" means (a) for any Interest Period equal to three months,
three month LIBOR as calculated in accordance with the definition of LIBOR and
(b) for any Interest Period of less than or greater than three months, the rate
determined through the use of straight-line interpolation by reference to two
rates calculated in accordance with the definition of LIBOR, one of which shall
be determined as if the maturity of the Dollar deposits referred to therein were
the period of time for which rates are available next shorter than the Interest
Period and the other of which shall be determined as if such maturity were the
period of time for which rates are available next longer than the Interest
Period; provided that, if an Interest Period is less than or equal to seven
days, then LIBOR shall be determined by reference to a rate calculated in
accordance with the definition of LIBOR as if the maturity of the Dollar
deposits referred to therein were a period of time equal to seven days.

 

"Investment Advisers Act" means the Investment Advisers Act of 1940, as amended.

 

-31-

 

"Investment Advisor" means Fifth Street Management LLC, a Delaware limited
liability company, or any successor in such capacity in accordance with the
Investment Advisory Agreement.

 

"Investment Advisory Agreement" means the Investment Advisory Agreement dated as
of June 27, 2013 between the BDC and Fifth Street Management LLC, as amended,
supplemented or replaced from time to time.

 

"Investment Company Act" means the Investment Company Act of 1940, as amended.

 

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

 

"IRS" means the U.S. Internal Revenue Service.

 

"Joinder Agreement" means an agreement substantially in the form of Exhibit D to
the Existing Credit Agreement, pursuant to which a Funding Agent may act as
agent of a CP Lender under this Agreement.

 

"Key Manager Event" shall be deemed to have occurred on any date whereby any two
of (i) Leonard Tannenbaum, (ii) Bernard Berman and (iii) Ivelin Dimitrov (each
such person, a "Key Person") is no longer actively involved in the operations of
the Collateral Manager (with respect to each Key Person, a "Key Person Trigger")
and such person or persons have not been replaced by an individual or
individuals consented to by the Administrative Agent in accordance with process
described below. The Borrower shall provide prompt notice to DBRS and the Agents
of the occurrence of a Key Person Trigger and the Collateral Manager may propose
a replacement for a Key Person on any date up to and including the date that is
90 days after the occurrence of a Key Person Trigger (such date, the "Proposal
End Date"). If the Collateral Manager proposes a replacement Key Person, the
Administrative Agent shall have 30 days from the date of its receipt of the
written Key Person replacement proposal to reject, based upon reasonable
grounds, the Collateral Manager's proposal in writing (each such period, an
"Objection Period"). If the Administrative Agent does not reject such proposed
replacement in writing within such Objection Period pursuant to the immediately
preceding sentence, such replacement shall be deemed to be approved. In the
event any Collateral Manager proposed Key Person replacement is rejected in
writing by the Administrative Agent, the Collateral Manager may propose
additional replacements pursuant to the foregoing process; provided that, if
such additional proposed replacement has been objected to by the Administrative
Agent during the applicable Objection Period in accordance with the foregoing,
then (until a replacement has been approved) the Collateral Manager may continue
to propose Key Person replacements until the Proposal End Date. For purposes of
this definition, the Administrative Agent shall act at the direction of the
Majority Lenders.

 

"Lender" means each Person that is listed as "Lender" on the signature pages
hereto, any Person that shall have become a party hereto pursuant to an
Assignment and Assumption, each Additional Lender and, in each case, their
respective successors, in each case other than any such Person that ceases to be
a party hereto pursuant to an Assignment and Assumption.

 

"Lender Collateral Account" means the trust account established pursuant to
Section 8.3(d) of the Existing Credit Agreement and maintained pursuant to
Section 8.3(d) hereof.

 

"Lender Collateral Subaccount" has the meaning set forth in Section 8.3(d)(ii)
of the Existing Credit Agreement and maintained pursuant to Section 8.3(d)(ii)
hereof.

 

-32-

 

"LIBOR Business Day" means any day except a Saturday, a Sunday or a day on which
commercial banks in London or New York City are authorized or required by law to
close.

 

"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind, or any other type of preferential
arrangement that has the practical effect of creating a security interest, in
respect of such asset. For the purposes of this Agreement, any Person shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.

 

"Liquidity Facility" means, with respect to any Loan by any CP Lender, a
liquidity asset purchase agreement, swap transaction or other facility that
provides liquidity for Commercial Paper Notes, and any guaranty of any such
agreement or facility.

 

"Liquidity Funding" means, with respect to any Loan by any CP Lender, at any
time, funding by a CP Lender of all or a portion of the outstanding principal
amount of such Loan with funds provided under a Liquidity Facility.

 

"Liquidity Funding Period" means, with respect to any Loan by any CP Lender, a
period of time during which all or a portion of the outstanding principal amount
of such Loan is funded through a Liquidity Funding.

 

"Liquidity Funding Rate" means with respect to any Liquidity Funding under a
Liquidity Facility for any period, the per annum rate of interest equal to the
sum of (i) the Adjusted London Interbank Offered Rate applicable to such period
plus (ii) 0.45% per annum; provided that, if a quotation for the London
Interbank Offered Rate is not able to be obtained, the Liquidity Funding Rate
shall equal, for each day in any period, (i) the Alternate Base Rate applicable
to such day plus (ii) 0.45% per annum.

 

"LLC Agreement" means the Limited Liability Company Agreement of the Borrower,
dated as of the Original Closing Date, among the BDC, as member, and the
independent managers party thereto, as further amended, restated or otherwise
modified from time to time.

 

"Loan Documents" means this Agreement, the Account Control Agreement, the
Collateral Management Agreement, the Notes, the Interest Hedge Agreements, each
Joinder Agreement, the Master Transfer Agreement and the Investment Advisory
Agreement.

 

"Loans" means, collectively, Class A-R Loans and Class A-T Loans.

 

"London Interbank Offered Rate" or "LIBOR" means, with respect to each Interest
Period for a Eurodollar Rate Loan, the rate determined by the Administrative
Agent in accordance with the following provisions:

 

(a) The rate (expressed as a percentage per annum rounded upwards to the nearest
one hundredth (1/100) of one percent (1%)) for deposits in Dollars for the
appropriate periods (as provided in the definition of "Interpolated Rate") that
appear on Reuters Page 3750 (or such page as may replace Reuters Page 3750) as
reported by Bloomberg Financial Markets Commodities News as of 11:00 a.m.,
London time, two LIBOR Business Days before the first day of such Interest
Period.

 

-33-

 

 

(b) If the rates referred to in clause (a) above do not appear on Reuters Page
3750 (or such page as may replace Reuters Page 3750) as of 11:00 a.m., London
time, two LIBOR Business Days before the first day of such Interest Period, the
London Interbank Offered Rate will be the arithmetic mean of the offered rates
(expressed as a percentage per annum rounded upwards, if necessary, to the
nearest one hundredth (1/100) of one percent (1%)) for deposits in Dollars for
the appropriate periods (as provided in the definition of "Interpolated Rate")
that appear on the Reuters Screen LIBO Page as of 11:00 a.m., London time, two
LIBOR Business Days before the first day of such Interest Period, if at least
two such offered rates so appear.

 

(c) If fewer than two such offered rates appear on the Reuters Screen LIBO Page
as of 11:00 a.m., London time, on any such date (as provided in clause (b)
above), the Administrative Agent will request the principal London office of any
four (4) major reference banks in the London interbank market selected by the
Administrative Agent to provide such bank's offered quotation (expressed as a
percentage per annum rounded upwards to the nearest one hundredth (1/100) of one
percent (1%)) to prime banks in the London interbank market for deposits in
Dollars for the appropriate periods (as provided in the definition of
"Interpolated Rate") that as of 11:00 a.m., London time, on such date for
amounts comparable to the then outstanding principal amount of the applicable
Loan (if available). If at least two such offered quotations are so provided,
LIBOR will be the arithmetic mean of such quotations.

 

(d) If fewer than two such quotations are so provided pursuant to clause (c)
above, the Administrative Agent will request any three (3) major banks in New
York City selected by the Administrative Agent to provide such bank's rate
(expressed as a percentage per annum rounded upwards to the nearest one
hundredth (1/100) of one percent (1%)) for loans in Dollars to leading European
banks for the appropriate periods (as provided in the definition of
"Interpolated Rate") that as of approximately 11:00 a.m., New York City time, on
the date which is two LIBOR Business Days before the first day of such Interest
Period for amounts comparable to the then outstanding principal amount of the
applicable Loan (if available). If at least two such rates are so provided, the
London Interbank Offered Rate will be the arithmetic mean of such rates.

 

(e) If only one rate is so provided pursuant to clause (d) above, then the
London Interbank Offered Rate will be the rate so provided. If no such rate is
provided, the London Interbank Offered Rate for such Interest Period will be the
London Interbank Offered Rate in effect for the prior Interest Period.

 

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

 

"Majority Lenders" means the Lender or Lenders holding, collectively, more than
50% of the sum of (a) the aggregate principal amount of all of the Loans
outstanding at such time plus (b) the aggregate undrawn Commitments in respect
of the Class A-R Loans at such time; provided that in determining whether the
Majority Lenders have consented to or approved any action or inaction, (x) the
vote of any Borrower Affiliated Lender shall not be taken into account and the
outstanding principal amounts and aggregate unutilized commitments held by each
Borrower Affiliated Lender shall be excluded from the amounts set forth in
clauses (a) and (b) of this definition and (y) the vote of any Defaulting Lender
shall not be taken into account to the extent provided in Section 11.5(b)(ii).

 

"Margin Stock" shall have the meaning provided such term in Regulation U.

 

 

-34-

 

 

 

"Market Value" means, as of any date of determination, with respect to any loans
or other assets, the amount (determined by the Borrower or the Collateral
Manager in accordance with theServicing Standard) equal to the product of the
principal amount thereof and the price determined in the following manner: 

 

(a)         the bid-side quote determined by any of (i) Loan Pricing
Corporation, LoanX Inc., MarkIt Partners, Mergent, Inc., IDC or Houlihan Lokey
or (ii) subject to satisfaction of the Rating Condition, any other nationally
recognized loan pricing service selected by the Borrower or the Collateral
Manager with notice to the Lenders; provided that the Majority Lenders may
object to the selection of any loan pricing service selected pursuant to the
immediately preceding clause (ii) within 5 Business Days after receipt of such
notice;

 

(b)        if such quote described in clause (a) is not available,

 

(i)       the average of the bid-side quotes determined by three independent
SEC-registered broker-dealers active in the trading of such asset;

 

(ii)       if only two such bids can be obtained, the lower of the bid-side
quotes of such two bids; or

 

(iii)       if only one such bid can be obtained, such bid;

 

provided that a bid provided pursuant to this clause (b) shall not be from any
of the Borrower, the Collateral Manager, the Investment Advisor or any Affiliate
of any thereof; or

 

(c)       if the Market Value of an asset cannot be determined in accordance
with clause (a) or (b) above, then the Market Value shall be the Appraised
Value, provided that (i) the Appraised Value of such Collateral Loan has been
obtained or updated within the immediately preceding three months and (ii) if
the Appraised Value of a Collateral Loan is determined pursuant to clause (B) of
the definition of "Appraised Value", the Market Value of such Collateral Loan
shall not exceed the aggregate principal amount thereof (or the portion thereof
held by the Borrower);

 

(d)       if such quote or bid described in clause (a), (b) or (c) is not
available, then the Market Value of such Collateral Loan shall be the lower of
(i) the DBRS Recovery Rate and (ii) if any, the Market Value determined by the
Borrower or the Collateral Manager (according to its own internal marking
procedure) exercising reasonable commercial judgment in accordance with the
Servicing Standard, consistent with the manner in which it would determine the
market value of an asset for purposes of other funds or accounts managed by it;
provided that, so long as the BDC is the Collateral Manager, if the Collateral
Manager or the Investment Advisor is not a registered investment adviser under
the Investment Advisers Act, the Market Value of any such asset may not be
determined in accordance with this clause (d) for more than 45 days; or

 

(e)       if the Market Value of an asset cannot be determined in accordance
with clause (a), (b), (c) or (d) above, then the Market Value shall be deemed to
be zero until such determination is made in accordance with clause (a), (b), (c)
or (d) above.

 

"Master Transfer Agreement" means the Amended and Restated Loan Sale and
Contribution Agreement, dated as of the Effective Date, between the BDC, as
seller, and the Borrower, as buyer, as amended, restated, supplemented or
otherwise modified from time to time.

 

"Material Adverse Effect" means a material adverse effect individually or in the
aggregate with other adverse effects on the ability of the Borrower or the
Collateral Manager to perform

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its respective obligations under any of the Loan Documents or the rights,
interests or remedies (taken as a whole) of the Agents or any Lender under the
Loan Documents (taken as a whole).

 

"Maximum Advance Rate" means (a) during the Ramp-Up Period, (i) while the
Diversity Score is less than 10, 50%, and (ii) while the Diversity Score is
equal to or greater than 10, 55%, and (b) after the Ramp-Up Period has ended,
64%.

 

"Maximum DBRS Risk Score Test" means a test that will be satisfied on any
Measurement Date if the Weighted Average DBRS Risk Score of the Collateral Loans
is less than or equal to the numerical equivalent of the Row Weighted Average
Risk Score based upon the Applicable Row Level from the Collateral Quality
Matrix and as determined as provided on Schedule C hereto; provided that during
the Ramp-Up Period, the Maximum DBRS Risk Score Test shall be satisfied if the
DBRS Risk Score is at least 31.8670.

 

"Maximum Principal Balance" means, as of any date of determination and with
respect to all or any specified portion of the Collateral Loans, the sum of
(a) the Principal Balance of such Collateral Loans as of such date and (b) in
the case of any such Collateral Loans that are Revolving Collateral Loans or
Delayed Funding Loans, the Exposure Amounts thereof.

 

"Maximum Weighted Average Life Test" is a test satisfied on any Measurement Date
if the Weighted Average Life of all Collateral Loans as of such date is less
than or equal to 6.5 years minus (b) the number of years (rounded to the nearest
quarter) that have elapsed since the Original Closing Date.

 

"Measurement Date" means each Calculation Date, each day Collateral Loans are
purchased, originated or sold, each Collateral Report Determination Date and
each day pursuant to the request of the Majority Lenders or DBRS; provided that
if any such date is not a Business Day, such Measurement Date shall be the next
succeeding Business Day.

 

"Member" has the meaning assigned to such term in the LLC Agreement.

 

"Mid-Monthly Loan Tape" has the meaning set forth in Section 5.1(o).

 

"Minimum Diversity Score Test" means a test that will be satisfied on any
Measurement Date if the Diversity Score (calculated as a single number in
accordance with standard diversity scoring methodology using DBRS Industry
Classifications) equals or exceeds the Row Diversity Score for the Applicable
Row Level in effect at such time in the Collateral Quality Matrix; provided that
the Minimum Diversity Score Test will not apply during the Ramp-Up Period.

 

"Minimum Weighted Average Spread Test" means a test that will be satisfied on
any Measurement Date if the Weighted Average Spread equals or exceeds the
Minimum Weighted Average Spread Test Level.

 

"Minimum Weighted Average Spread Test Level" means, on any Measurement Date, the
Row Spread Level for the Applicable Row Level in effect at such time in the
Collateral Quality Matrix; provided that during the Ramp-Up Period, the Minimum
Weighted Average Spread Test Level shall equal 5%.

 

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

 

"Moody's" means Moody's Investors Service, Inc. and any successor thereto.

 

-36-

 

"Multiemployer Plan" means at any time an "employee pension benefit plan" within
the meaning of Section 4001(a) (3) of ERISA that is sponsored by the Borrower or
a member of its ERISA Group or to which the Borrower or a member of its ERISA
Group is then making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions.

 

"MV Overcollateralization Amount" means, with respect to all Performing
Collateral Loans, an aggregate amount equal to sum of, with respect to each such
Performing Collateral Loan, the lesser of (a) the purchase price paid for such
Performing Collateral Loan by the Borrower, provided that, if the purchase price
paid exceeds the par amount of such Performing Collateral Loan, the purchase
price shall be deemed to be the par amount, and (b) the market value of such
Performing Collateral Loan determined by the Borrower or the Collateral Manager
(according to its own internal marking procedure) exercising reasonable
commercial judgment in accordance with the Servicing Standard, consistent with
the manner in which it would determine the market value of an asset for purposes
of other funds or accounts managed by it.

 

"MV Overcollateralization Ratio" means, as of any date of determination, the
ratio (expressed as a percentage) obtained by dividing:

 

(a)  the sum of (i) the MV Overcollateralization Amount as of such date plus
(ii) the aggregate amount on deposit in the Collection Account and the Future
Funding Reserve Account representing Principal Proceeds as of such date, plus
(iii) the Net Aggregate Exposure Amount as of such date, by

 

(b)  the sum of (i) the aggregate outstanding principal amount of the Loans as
of such date plus (ii) the Unfunded Amount as of such date.

 

"MV Overcollateralization Ratio Test" means, as of any date of determination, a
test that will be satisfied on such date if the MV Overcollateralization Ratio
is greater than or equal to 200.00%.

 

"Natixis" means Natixis, New York Branch.

 

"Natixis Conduit" means any CP Conduit that is an Affiliate of Natixis, or that
is provided liquidity or credit support by Natixis or an Affiliate.

 

"Net Aggregate Exposure Amount" means the excess (if any) of (i) the aggregate
Unfunded Amount on such date over (ii) the sum of (x) amounts on deposit in the
Future Funding Reserve Account on such date and (y) amounts on deposit in the
Collection Account on such date, including Eligible Investments, representing
Principal Proceeds.

 

"Net Purchased Collateral Loan Balance" means, as of any date of determination,
an amount equal to (a) the Aggregate Principal Balance of all Collateral Loans
sold and/or contributed to the Borrower prior to such date minus (b) the
Aggregate Principal Balance of all Collateral Loans sold and/or distributed by
the Borrower to its Affiliates prior to such date.

 

"Note" means each promissory note, if any, issued by the Borrower to a Lender in
accordance with the provisions of this Agreement, substantially in the form set
forth on Exhibit A-1, Exhibit A-2 or Exhibit A-3 hereto, as the same may from
time to time be amended, supplemented, waived or modified.

 

"Notice of Borrowing" has the meaning set forth in Section 2.2(a).

 

-37-

 

"Obligations" means all obligations, liabilities and Indebtedness of every
nature of the Borrower, from time to time owing to the Agents, the Interest
Hedge Counterparties, the Lenders and the other Secured Parties under or in
connection with this Agreement and the other Loan Documents, including, without
limitation, (a) the unpaid principal amount of, and interest on (including
interest which, but for the commencement of an insolvency, reorganization or
bankruptcy case or proceeding or any receivership, liquidation, reorganization
or other similar case or proceeding with respect to the Borrower or with respect
to any of its assets, would have accrued on any Obligation, whether or not a
claim is allowed against the Borrower for such interest in any such case or
proceeding), all Loans then outstanding, and (b) all fees, expenses, indemnity
payments and other amounts owed to any Secured Party pursuant to this Agreement
and the other Loan Documents, in each case, whether or not then due and payable.

 

"Obligor" means, with respect to a Collateral Loan, the person who is obligated
to repay such Collateral Loan (including, if applicable, a guarantor thereof),
and whose assets are principally relied upon by the Borrower at the time such
Collateral Loan was originated or purchased by the Borrower as the source of
repayment of such Collateral Loan.

 

"Offer" means with respect to any security, any offer by the issuer of such
security or by any other Person made to all of the holders of such security to
purchase or otherwise acquire such security (other than pursuant to any
redemption in accordance with the terms of the related Underlying Instruments)
or to convert or exchange such security into or for Cash, securities or any
other type of consideration.

 

"Original Closing Date" means November 1, 2013.

 

"Other Connection Taxes" means, with respect to any Lender or the Administrative
Agent, taxes imposed as a result of a present or former connection between such
Lender or the Administrative Agent and the jurisdiction imposing such tax (other
than connections arising from such Lender or the Administrative Agent having
executed, delivered, become a party to, performed its obligations under,
received payments under, received or perfected a security interest under,
engaged in any other transaction pursuant to or enforced any Loan Document, or
sold or assigned an interest in any Loan or Loan Document).

 

"Other Taxes" has the meaning set forth in Section 11.4(b).

 

"Overcollateralization Ratio" means, as of any Measurement Date, the ratio
(expressed as a percentage) obtained by dividing:

 

(a)  the sum of (i) the Principal Collateralization Amount as of such date plus
(ii) the Net Aggregate Exposure Amount (excluding any Unsettled Amounts to the
extent already included in the amount in clause (i)) for all Collateral Loans as
of such date minus (iii) the Excess Concentration Amount for all Collateral
Loans as of such date; by

 

(b)  the sum of (i) the aggregate outstanding principal amount of the Loans as
of such date plus (ii) the Net Aggregate Exposure Amount for all Collateral
Loans as of such date.

 

"Overcollateralization Ratio Test" means a test satisfied on any Measurement
Date if the Overcollateralization Ratio equals or exceeds 140.00%.

 

"Participant" has the meaning set forth in Section 12.6(b)(i).

 

-38-

 

"Participant Register" has the meaning set forth in Section 12.6(b)(ii).

 

"Participation Interest" means a participation interest in a loan originated by
a bank or financial institution that, at the time of acquisition, or the
Borrower's commitment to acquire the same, satisfies each of the following
criteria: (i) such participation would constitute a Collateral Loan were it
acquired directly, (ii) the Selling Institution is a lender on the loan, (iii)
the aggregate participation in the loan granted by such Selling Institution to
any one or more participants does not exceed the principal amount or commitment
with respect to which the Selling Institution is a lender under such loan, (iv)
such participation does not grant, in the aggregate, to the participant in such
participation a greater interest than the Selling Institution holds in the loan
or commitment that is the subject of the participation, (v) the entire purchase
price for such participation is paid in full (without the benefit of financing
from the Selling Institution or its affiliates) at the time of the Borrower's
acquisition (or, to the extent of a participation in the unfunded commitment
under a Revolving Collateral Loan or Delayed Funding Loan, at the time of the
funding of such loan), (vi) the participation provides the participant all of
the economic benefit and risk of the whole or part of the loan or commitment
that is the subject of the loan participation and (vii) such participation is
documented under a Loan Syndications and Trading Association, Loan Market
Association or similar agreement standard for loan participation transactions
among institutional market participants. For the avoidance of doubt, a
Participation Interest shall not include a sub-participation interest in any
loan.

 

"Payment Account" means the payment account established pursuant to
Section 8.3(a) of the Existing Credit Agreement and maintained pursuant to
Section 8.3(a) hereof.

 

"Payment Date Report" has the meaning set forth in Section 9.1(c).

 

"Percentage Share" means:

 

(a)                with respect to a Class A-R Lender's obligation to make
Class A-R Loans and receive payments of interest, fees, principal and other
amounts with respect thereto, the percentage obtained by dividing (i) such
Class A-R Lender's Class A-R Commitment by (ii) the Total Class A-R Commitment,
provided that, if the Total Class A-R Commitment has been reduced to zero, the
numerator shall be the aggregate unpaid principal amount of such Class A-R
Lender's Class A-R Loans and the denominator shall be the aggregate unpaid
principal amount of all Class A-R Loans;

 

(b)               with respect to a Class A-T Lender's obligation to make
Class A-T Loans and receive payments of interest, fees, principal and other
amounts with respect thereto, the percentage obtained by dividing (i) such
Class A-T Lender's Class A-T Commitment by (ii) the Total Class A-T Commitment,
provided that, if the Total Class A-T Commitment has been reduced to zero, the
numerator shall be the aggregate unpaid principal amount of such Class A-T
Lender's Class A-T Loans and the denominator shall be the aggregate unpaid
principal amount of all Class A-T Loans; and

 

(c)                with respect to all other matters in relation to a Lender at
any time, the percentage obtained by dividing (i) the sum of such Lender's
undrawn Commitments plus the aggregate outstanding principal amount of Loans
held by such Lender at such time by (ii) the sum of all Lenders' undrawn
Commitments plus the aggregate outstanding principal amount of all Loans at such
time.

 

"Performing Collateral Loan" means a Collateral Loan that is not a Defaulted
Loan, Credit Risk Loan, Current Pay Obligation or a Specified Collateral Loan.

 

-39-

 

"Permitted Liens" means (a) Liens for state, municipal or other local Taxes if
such Taxes shall not at the time be due and payable or if the Borrower shall
currently be contesting the validity thereof in good faith by appropriate
proceedings and with respect to which reserves in accordance with GAAP have been
provided on the books of the Borrower, and no enforcement, collection,
execution, levy or foreclosure proceeding shall have been commenced with respect
to such Liens, and (b) Liens granted to the Collateral Agent for the benefit of
the Secured Parties pursuant to or by the Loan Documents.

 

"Person" means an individual, a corporation, a partnership, an association, a
trust, a limited liability company, member or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.

 

"PIK Loan" means any loan on which a portion (but not all) of the interest
accrued for a specified portion of time or until the maturity thereof is, or at
the option of the Obligor may be, added to the principal balance of such loan or
otherwise deferred rather than being paid in cash; provided that a loan that, in
addition to any capitalized interest, requires by the terms of its applicable
Underlying Instrument interest to be paid in cash at a rate of (in the case of a
PIK Loan that is a Fixed Rate Obligation) at least 4.00% and (in the case of a
PIK Loan that is a Floating Rate Obligation) at least LIBOR plus 3.00% per annum
shall be deemed not to be a PIK Loan hereunder. For the avoidance of doubt, (i)
a Zero Coupon Loan shall be deemed not to be a PIK Loan hereunder and (ii) if
the Obligor under a PIK Loan fails to make a required cash interest payment
thereunder and such failure continues longer than the grace period set forth for
such payment in clause (a) of the definition of "Defaulted Loan", such PIK Loan
shall become a Defaulted Loan.

 

"Plan" means at any time an "employee pension benefit plan" as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan) which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and either (i) is maintained, or contributed to, by the Borrower or
a member of its ERISA Group or (ii) has at any time within the preceding five
plan years been maintained, or contributed to, by the Borrower or a member of
its ERISA Group.

 

"Pledged Collateral" has the meaning specified in the Granting Clause herein.

 

"Portfolio Advance Rate" means, as of any Measurement Date (or other applicable
date), the ratio (expressed as a percentage) obtained by dividing:

 

(a) the sum of (i) the aggregate outstanding principal amount of all Loans as of
such date plus (ii) the Net Aggregate Exposure Amount for all Collateral Loans
as of such date; by

 

(b)  the sum of (i) the Principal Collateralization Amount as of such date plus
(ii) the Net Aggregate Exposure Amount (excluding any Unsettled Amounts to the
extent already included in the amount in clause (i)) for all Collateral Loans as
of such date minus (iii) the Excess Concentration Amount for all Collateral
Loans as of such date.

 

"Post-Default Rate" has the meaning assigned to such term in Section 2.5(b).

 

"Primary Limitation Amount" has the meaning assigned to such term in Section
9.1(f)(vii).

 

-40-

 

 

"Prime Rate" means, for any day, the rate of interest in effect for such day
that is identified and normally published by The Wall Street Journal as the
"Prime Rate" (or, if more than one rate is published as the Prime Rate, then the
highest of such rates), with any change in Prime Rate to become effective as of
the date the rate of interest which is so identified as the "Prime Rate" is
different from that published on the preceding Business Day. If The Wall Street
Journal no longer reports the Prime Rate, or if the Prime Rate no longer exists,
or the Administrative Agent determines in good faith that the rate so reported
no longer accurately reflects an accurate determination of the prevailing Prime
Rate, then the Administrative Agent may select a reasonably comparable index or
source to use as the basis for the Prime Rate.

 

"Principal Allocation Formula" means, with respect to any applicable prepayment
of the Loans:

 

(a) first, to the Class A-R Loans in an amount equal to the excess, if any, of
(x) the Net Aggregate Exposure Amount on such Quarterly Payment Date over
(y) the difference between the Total Class A-R Commitment and the aggregate
principal amount of the Class A-R Loans outstanding on such Quarterly Payment
Date;

 

(b) second, if the Principal Sharing Percentage of the Class A-T Loans on such
Quarterly Payment Date (determined immediately prior to the application provided
for in this clause second) is higher than the Principal Sharing Percentage
calculated on the Effective Date, then to the Class A-T Loans until the
Principal Sharing Percentage of the Class A-T Loans on such date (determined
immediately after giving effect to the application provided for in this clause
(b)) equals the Principal Sharing Percentage calculated on the Effective Date;
and

 

(c) third, to each of the Class A-R Loans and Class A-T Loans in accordance with
their respective Principal Sharing Percentages (determined immediately prior to
the application provided for in this clause (c));

 

provided, in each case, that if the Principal Allocation Formula would result in
the allocation of a payment of principal to the Class A-R Loans in excess of the
aggregate outstanding principal amount thereof, then the amount of such excess
shall be deposited into the Future Funding Reserve Account.

 

"Principal Balance" means, as of any date of determination with respect to any
Collateral Loan, the aggregate outstanding principal amount of such Collateral
Loan as of such date, excluding (a) deferred or capitalized interest on any
Collateral Loan (other than any such interest that was added to principal on or
before the date when such Collateral Loan was acquired by the Borrower) and (b)
any portion of such principal amount that has been assigned or participated by
the Borrower pursuant to Section 10.1.

 

"Principal Collateralization Amount" means, at any time, the sum of:

 

(a) the Aggregate Principal Balance of all Collateral Loans (excluding Defaulted
Loans, Discount Loans, Current Pay Obligations and Specified Collateral Loans
(each as to which the applicable rule below shall apply)), plus

 

(b) (i) the aggregate amount of funds on deposit in the Collection Account,
including Eligible Investments, constituting Principal Proceeds, plus (ii) the
aggregate amount of funds on deposit in the Future Funding Reserve Account,
including Eligible Investments; plus

 

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

 

-41-

 

(d) for each Defaulted Loan that has been a Defaulted Loan for less than one
year, the Recovery Value; plus

 

(e) (i) for Current Pay Obligations up to 5.0% of Total Capitalization, the
Aggregate Principal Balance of all such Current Pay Obligations, plus (ii) for
each Current Pay Obligation in excess of 5.0% of Total Capitalization, 90% of
such Current Pay Obligation's Market Value (but no greater than the par value of
such Current Pay Obligation); plus

 

(f) for each Specified Collateral Loan, zero;

 

provided that, (i) with respect to any Collateral Loan that satisfies more than
one of the definitions of Defaulted Loan, Discount Loan or Current Pay
Obligation, such Collateral Loan shall, for the purposes of this definition, be
treated as belonging to the category of Collateral Loans which results in the
lowest Principal Collateralization Amount on any date of determination and (ii)
the Principal Collateralization Amount for any Defaulted Loan which has been a
Defaulted Loan for one year or more will be zero.

 

"Principal Proceeds" means (a) with respect to any Pledged Collateral (including
Cash) any payments with respect thereto that are attributable to principal in
accordance with the Underlying Instruments of such Pledged Collateral or that do
not otherwise constitute Interest Proceeds (including unapplied proceeds of the
Collateral Loans) and (b) any cash capital contributions made to the Borrower
and applied pursuant to Section 8.2(h) (except to the extent that such capital
contributions are to be treated as Interest Proceeds in accordance with Section
8.2(h)) and Section 6.5. All sales of Participation Interests or assignments
pursuant to Section 10.1 shall be for cash the proceeds of which shall be deemed
to be Principal Proceeds for all purposes hereunder and all amounts deposited
pursuant to Section 8.2(h) and designated as Principal Proceeds in accordance
therewith shall be deemed to be Principal Proceeds for all purposes hereunder.
No amounts that are required by the terms of any participation agreement to be
paid by the Borrower to any Person to whom the Borrower has sold a Participation
Interest shall constitute "Principal Proceeds" hereunder.

 

"Principal Sharing Percentage" means, with respect to any payment of principal
of the Loans that is to be allocated according to the Principal Allocation
Formula, a fraction, expressed as a percentage:

 

(a)                the numerator of which is:

 

(i)                 in the case of the Class A-T Loans, the aggregate principal
amount of the Class A-T Loans outstanding on such date; or

 

(ii)               in the case of the Class A-R Loans, the lesser of (x) the sum
of (A) the aggregate principal amount of the Class A-R Loans outstanding on such
date and (B) the Net Aggregate Exposure Amount on such date and (y) the amount
of the Total Class A-R Commitment on such date, provided that, if the Total
Class A-R Commitment has been reduced to zero, then the amount determined
pursuant to this clause (ii) shall equal the aggregate principal amount of the
Class A-R Loans outstanding on such date, and

 

(b)               the denominator of which is the sum of:

 

(i)                 the aggregate principal amount of the Class A-T Loans
outstanding on such date; and

 

-42-

 

(ii)               the lesser of (x) the sum of (A) the aggregate principal
amount of the Class A-R Loans outstanding on such date and (B) the Net Aggregate
Exposure Amount on such date and (y) the amount of the Total Class A-R
Commitment on such date, provided that if the Total Class A-R Commitment has
been reduced to zero, the amount determined pursuant to this clause (ii) shall
equal the aggregate principal amount of the Class A-R Loans outstanding on such
date.

 

"Priority of Payments" has the meaning set forth in Section 9.1(a), provided
that, at all times after the Majority Lenders have exercised their right to
direct the liquidation of the Collateral under Article VI, "Priority of
Payments" shall mean the priorities set forth in Section 6.4 hereof.

 

"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.

 

"Program Manager" means the investment manager or administrator of a CP Lender,
as applicable.

 

"Prohibited Transaction" means (i) a transaction described in Section 406(a) of
ERISA, that is not exempted by a statutory or administrative or individual
exemption pursuant to Section 408 of ERISA or (ii) a transaction prohibited
under Similar Law and not exempted.

 

"Quarterly Cap" means, with respect to any Quarterly Payment Date, an amount
equal to (x) $50,000 plus (y) 0.02% multiplied by the sum of, without
duplication, (i) the Aggregate Principal Balance of all Collateral Loans, (ii)
the aggregate amount of funds on deposit in the Collection Account, including
Eligible Investments, constituting Principal Proceeds, (iii) the aggregate
amount of funds on deposit in the Future Funding Reserve Account, including
Eligible Investments and (iv) the Net Aggregate Exposure Amount, in each case,
measured as of the Calculation Date immediately preceding such Quarterly Payment
Date.

 

"Quarterly Loan Tape" has the meaning set forth in Section 5.1(o).

 

"Quarterly Payment Date" means the 1st day of February, May, August and November
in each year and the Stated Maturity; provided that, if any such date is not a
Business Day, such Quarterly Payment Date shall be the next succeeding Business
Day.

 

"Ramp-Up Period" means the period from and including the Original Closing Date
to and including the date on which the Diversity Score equals or exceeds 15.

 

"Rating Agency" means (i) with respect to the Loans, DBRS (and/or, if, at any
time any other nationally recognized investment rating agency provides a rating
of any Loans, such rating agency) or (ii) with respect to the Collateral
generally, DBRS, Moody's, Fitch or Standard & Poor's (or, if, at any time DBRS,
Moody's, Fitch or Standard & Poor's ceases to provide rating services with
respect to debt obligations, any other nationally recognized investment rating
agency selected by the Borrower or the Collateral Manager).

 

In the event that at any time any of the rating agencies referred to above
ceases to be a "Rating Agency" and a replacement rating agency is selected in
accordance with the preceding sentence, then references to rating categories of
such replaced rating agency in this Agreement shall be deemed instead to be
references to the equivalent categories of such replacement rating agency as of
the most recent date on which such replacement rating agency and such replaced
rating agency's published ratings for the type of obligation in respect of which
such replacement rating agency is used.

-43-

 

 

"Rating Condition" means, with respect to any action taken or to be taken by or
on behalf of the Borrower, a condition that is satisfied if DBRS has been
notified in writing by the Borrower of such action or proposed action and none
of the Borrower, the Collateral Manager or any of the Secured Parties has
received a written communication (including by electronic messages, facsimile,
press release, posting to its internet website, or other means deemed acceptable
to DBRS) objecting to such action or proposed action from DBRS within 10
Business Days following such notification by the Borrower; provided that such 10
Business Day period may be waived in writing by DBRS in its sole discretion. If
at any time the Loans are not then rated by DBRS, the Rating Condition will
automatically be deemed to be satisfied at such time with respect to any action
or proposed action.

 

"Real Estate Loan" means any debt obligation that is (a) directly or indirectly
secured by a mortgage, deed of trust or similar Lien on commercial real estate,
residential real estate, office, retail or industrial property or undeveloped
land and is underwritten as a mortgage loan or (b) a loan to a company engaged
primarily in acquiring and developing undeveloped land (whether or not such loan
is secured by real estate).

 

"Recovery Value" means, for each Defaulted Loan that has been a Defaulted Loan
for less than one year, the lowest of:

 

(i) the Principal Balance of such Defaulted Loan multiplied by the applicable
DBRS Recovery Rate for such Defaulted Loan;

 

(ii) the Market Value of such Defaulted Loan; and

 

(iii) the carrying value of such Defaulted Loan on the books and records of the
Borrower.

 

"Register" has the meaning set forth in Section 12.6(f).

 

"Registered" means, in registered form within the meaning of Section
881(c)(2)(B)(i) of the Code and the United States Department of the Treasury
regulations promulgated thereunder and issued after July 18, 1984; provided that
a certificate of interest in a grantor trust shall not be treated as Registered
unless each of the obligations or securities held by the trust was issued after
that date.

 

"Regulation U" means Regulation U of the Federal Reserve Board, as in effect
from time to time.

 

"Reinvestment Period" means the period from and including the Original Closing
Date to and including the earliest of (a) the date that is 18 months after the
Original Closing Date, (b) the date of the acceleration of the maturity of the
Loans or the termination of the Commitments pursuant to Section 6.2, (c) any
date on which the Borrower or the Collateral Manager reasonably determines that
it can no longer purchase or originate additional Collateral Loans appropriate
for inclusion in the Collateral in accordance with the terms of this Agreement
and the Collateral Management Agreement (provided that, in the case of this
clause (c), an Authorized Officer of the Collateral Manager shall provide a
written certification as to such determination to the Agents, the Lenders and
DBRS at least five Business Days prior to such date) and (d) any date on which
the Majority Lenders provide written notice to the Borrower that an event
constituting "Cause" as defined in the Collateral Management Agreement has
occurred.

 

"Related Contracts" means all credit agreements, indentures, notes, security
agreements, leases, financing statements, guaranties, and other contracts,
agreements, instruments and other papers

-44-

 

evidencing, securing, guaranteeing or otherwise relating to any Collateral Loan
or Eligible Investment or other investment with respect to any Collateral or
proceeds thereof (including the related Underlying Instruments), together with
all of the Borrower's right, title and interest in and to all property or assets
securing or otherwise relating to any Collateral Loan or other loan or security
of the Borrower or Eligible Investment or other investment with respect to any
Collateral or proceeds thereof or any Related Contract.

 

"Related CP Issuer" means a multi-seller commercial paper conduit that issues
commercial paper, the proceeds of which are loaned to or are otherwise the CP
Lender's source of funding for the CP Lender's acquisition or maintenance of its
funding obligations hereunder.

 

"Repurchase and Substitution Limits" has the meaning assigned to such term in
Section 10.1(a)(vii).

 

"Requested Amount" has the meaning assigned to such term in Section 2.2(a).

 

"Restricted Junior Payment" means (i) any dividend or other distribution, direct
or indirect, on account of any class of membership interests of the Borrower now
or hereafter outstanding, except a dividend made solely in interests of that
class of membership interests or in any junior class of membership interests of
the Borrower, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any class of
membership interests of the Borrower now or hereafter outstanding, (iii) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
membership interests of Borrower now or hereafter outstanding, (iv) any payment
of management or similar fees by the Borrower and (v) any other dividend,
distribution or payment to any equityholder of the Borrower.

 

"Restricted Trading Period" means each day during which (a) the DBRS rating of
any of the Loans is one or more sub-categories below any of the Initial Ratings
by DBRS or (b) the DBRS rating of any Loans then outstanding has been withdrawn
and not reinstated; provided that such period will not be a Restricted Trading
Period upon the direction of 100% of the Lenders (provided that (i) the Borrower
shall provide notice to DBRS of such direction and (ii) such direction shall not
apply to any subsequent occurrence of any of the Loans being downgraded,
withdrawn or put on watch).

 

"Retained Expense Amount" with respect to any Quarterly Payment Date means the
amount, if any, by which (x) the sum of the amount determined pursuant to the
definition of "Quarterly Cap" for such Quarterly Payment Date and each of the
three prior Quarterly Payment Dates exceeds (y) the sum of (i) the aggregate
payments made under Section 9.1(a)(i)(B)(1) on such Quarterly Payment Date and
each of the three prior Quarterly Payment Dates and (ii) Administrative Expenses
paid pursuant to Section 8.2(d) during each of the Due Periods prior to each of
the three prior Quarterly Payment Dates.

 

"Retention Interest" means a material net economic interest in the
securitisation position comprised by the Loans which, in any event, shall not be
less than 5% of the nominal value of the Collateral Loans and Eligible
Investments.

 

"Retention of Net Economic Interest Letter" means a letter, dated as of the
Effective Date and as amended, restated, supplemented, updated or otherwise
modified from time to time, relating to the retention of net economic interest,
in substantially the form of Exhibit H hereto (relating to the Retention
Requirement Laws), from the Retention Provider and addressed to the Borrower,
the Administrative Agent and any Affected Lender.

 

"Retention Provider" means the BDC.

 

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"Retention Requirement" means the requirements and obligations of the Retention
Provider as set forth in the Retention of Net Economic Interest Letter.

 

"Retention Requirement Laws" means, together, Articles 404-410, the CRR, Article
17, the AIFMD, the Final RTS, any further technical standards, any similar or
successor laws (including any retention requirements applicable to EEA insurance
and reinsurance undertakings and UCITS funds), any guidelines or other materials
published by the EBA in relation thereto and any delegated regulations of the
European Commission (in each case including any amendments, replacements or
successors thereto).

 

"Revolving Collateral Loan" means a Collateral Loan that provides the Obligor
thereunder with a revolving credit facility from which one or more borrowings
may be made up to the stated principal amount of such revolving credit facility
and which provides that borrowed amounts may be repaid and reborrowed from time
to time (including any unfunded letter of credit for which the Borrower is
required to reimburse the issuing bank thereunder).

 

 

"Row Diversity Score" means the column of that name in the Collateral Quality
Matrix.

 

"Row Spread Level" means the column of that name in the Collateral Quality
Matrix.

 

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

 

"Sale Proceeds" means all proceeds (excluding accrued interest, if any) received
with respect to Collateral as a result of sales of such Collateral less any
reasonable expenses incurred by the Borrower, the Collateral Manager or the
Collateral Agent (other than amounts payable as Administrative Expenses) in
connection with such sales.

 

"Sanctions" has the meaning assigned to such term in Section 4.21.

 

"Scheduled Distribution" means, with respect to any Collateral Loan, for each
Due Date, the scheduled payment of principal and/or interest and/or fee due on
such Due Date with respect to such Collateral Loan, determined in accordance
with the assumptions specified in Section 1.3.

 

"SEC" means the United States Securities and Exchange Commission.

 

"Second Lien Loan" means any origination or assignment of or Participation
Interest in a loan that: (a) is not (and cannot by its terms become) subordinate
in right of payment to any other obligation of the Obligor of the loan (other
than with respect to trade claims, capitalized leases or similar obligations)
but which is subordinated (with respect to liquidation preferences with respect
to the primary pledged collateral securing such loan) to a Senior Secured Loan
of the Obligor; (b) is secured by a valid second-priority perfected security
interest or lien in, to or on specified collateral securing the Obligor's
obligations under the Second Lien Loan the value of which is adequate (in the
commercially reasonable judgment of the Borrower) to repay the loan in
accordance with its terms and to repay all other loans of equal or higher
seniority secured by a lien or security interest in the same collateral and (c)
is not secured solely or primarily by common stock or other equity interests;
provided that the limitation set forth in this clause (c) shall not apply with
respect to a loan made to a parent entity that is secured solely or primarily by
the stock of one or more of the subsidiaries of such parent entity to the extent
that (i) the granting by any such subsidiary of a lien on its own property would
violate law or regulations applicable to such subsidiary (whether the obligation
secured is such loan or any other similar type of indebtedness owing to third
parties) and (ii) such subsidiary does not have any Indebtedness (other than
current accounts payable in the ordinary course of business, capitalized leases
or other similar indebtedness incurred in the ordinary course of business).

 

-46-

 

 

"Secured Parties" means, collectively, the Agents, the Custodian and the
Lenders.

 

"Securities Intermediary" means U.S. Bank in its capacity as securities
intermediary under the Account Control Agreement.

 

"Selling Institution" means an entity obligated to make payments to the Borrower
under the terms of a Participation Interest.

 

"Senior Authorized Officer" means, with respect to any Person, any officer of
such Person that is a chief executive officer, chief operating officer, chief
credit officer, credit committee member, executive vice president or president
(or, in each case, any other officer with a position analogous to those
identified above and in the case of any limited liability company, any manager)
or any other officer responsible for the administration of the Collateral or the
performance of such Person's obligations under the Loan Documents.

 

"Senior Management Fee" has the meaning assigned to such term in the Collateral
Management Agreement.

 

"Senior Secured Loan" means any origination or assignment of or Participation
Interest in a loan that: (a) is not (and cannot by its terms become) subordinate
in right of payment to any other obligation of the Obligor of such loan (other
than with respect to trade claims, capitalized leases or similar obligations);
(b) is secured by a valid first priority perfected security interest or lien in,
to or on specified collateral securing the Obligor's obligations under such
loan; (c) the value of the collateral securing such loan at the time of
origination or purchase together with other attributes of the Obligor
(including, without limitation, its general financial condition, ability to
generate cash flow available for debt service and other demands for that cash
flow) is adequate (in the commercially reasonable judgment of the Borrower) to
repay such loan in accordance with its terms and to repay all other such loans
of equal seniority secured by a first lien or security interest in the same
collateral; and (d) is not secured solely or primarily by common stock or other
equity interests; provided that the limitation set forth in this clause (d)
shall not apply with respect to a loan made to a parent entity that is secured
solely or primarily by the stock of one or more of the subsidiaries of such
parent entity to the extent that (i) the granting by any such subsidiary of a
lien on its own property would violate law or regulations applicable to such
subsidiary (whether the obligation secured is such loan or any other similar
type of indebtedness owing to third parties) and (ii) such subsidiary does not
have any Indebtedness (other than current accounts payable in the ordinary
course of business, capitalized leases or other similar indebtedness incurred in
the ordinary course of business)

 

"Servicing Standard" means, with respect to the Borrower and the Collateral
Manager, in rendering its services hereunder and under the other Loan Documents,
diligently using a degree of skill and attention no less than that which (i)
would be exercised by a prudent institutional portfolio manager in connection
with the servicing and administration of assets similar to the Collateral Loans
under similar circumstances and (ii) each of the Borrower, the Collateral
Manager and its respective Affiliates exercises with respect to comparable
assets that it manages for itself and for others having similar investment
objectives and restrictions in accordance with its existing practices and
procedures relating to assets of the nature and character of the Collateral
Loans.

 

"Similar Law" means any federal, state or local law or regulations that are
substantially similar to Part 4, Subtitle B, Title I of ERISA or Section 4975 of
the Code.

-47-

 

 

"Special Member" has the meaning assigned to such term in the LLC Agreement.

 

"Specified Change" means any amendment, consent, modification or waiver of, or
supplement to, an Underlying Instrument that (a) extends the final maturity of a
Collateral Loan beyond the Stated Maturity, (b) reduces or forgives the
principal amount of a Collateral Loan (other than a Defaulted Loan that has been
a Defaulted Loan for one year or more), (c) reduces the rate of interest payable
on a Collateral Loan by more than 50%, unless the Minimum Weighted Average
Spread Test is satisfied after giving effect to such change, (d) postpones the
Due Date of any Scheduled Distribution in respect of a Collateral Loan, unless
the Maximum Weighted Average Life Test is satisfied after giving effect to such
change, (e) subordinates (in right of payment, with respect to liquidation
preferences or otherwise) a Collateral Loan if such subordination causes (i) any
of the Coverage Tests or the Collateral Quality Test to cease to be in
compliance (or, if any of the Coverage Tests or the Collateral Quality Test are
not satisfied prior to such subordination, causes any such Coverage Test or
Collateral Quality Test to be worsened) or (ii) the Concentration Limitations to
be worsened, (f) releases any material guarantor or co-obligor of a Collateral
Loan from its obligations, (g) releases a material portion of the collateral
securing such Collateral Loan (excluding Defaulted Loans and any such releases
associated with a prepayment) or (h) changes any of the provisions of an
Underlying Instrument specifying the number or percentage of lenders required to
effect any of the foregoing; provided that, in the case of clause (e) above,
such tests have been calculated, if applicable, after the Underlying Instrument
has been re-evaluated by DBRS.

 

"Specified Collateral Loan" means any Collateral Loan as to which the Credit
Estimate Procedures have not been satisfied; provided that, upon the receipt of
a Credit Estimate from DBRS with respect to such Collateral Loan, such
Collateral Loan shall no longer constitute a Specified Collateral Loan.

 

"Standard & Poor's" or "S&P" means Standard & Poor's Ratings Services, a
Standard & Poor's Financial Services LLC business, and any successor thereto.

 

"Stated Maturity" means November 1, 2021.

 

"Step-Down Loan" means an obligation or security which by the terms of the
related Underlying Instruments provides for a decrease in the per annum interest
rate on such obligation or security (other than by reason of any change in the
applicable index or benchmark rate used to determine such interest rate) or in
the spread over the applicable index or benchmark rate, solely as a function of
the passage of time; provided that, an obligation or security providing for
payment of a constant rate of interest or in the spread over the applicable
index or benchmark rate at all times after the date of acquisition by the
Borrower shall not constitute a Step-Down Loan.

 

"Step-Up Loan" means an obligation or security which by the terms of the related
Underlying Instruments provides for an increase in the per annum interest rate
on such obligation or security, or in the spread over the applicable index or
benchmark rate, solely as a function of the passage of time; provided that, an
obligation or security providing for payment of a constant rate of interest or
in the spread over the applicable index or benchmark rate at all times after the
date of acquisition by the Borrower shall not constitute a Step-Up Loan.

 

"Structured Finance Obligation" means any debt obligation owing by a finance
vehicle that is secured directly and primarily by, primarily referenced to,
and/or primarily representing ownership of, a pool of receivables or a pool of
other assets, including collateralized debt obligations, residential
mortgage-backed securities, commercial mortgage-backed securities, other
asset-backed securities, "future flow" receivable transactions and other similar
obligations; provided that any ABL Facility and loans directly to financial
service companies, factoring businesses, health care providers and other genuine
operating businesses do not constitute Structured Finance Obligations.

 

-48-

 

 

"Subordinated Loan" means a loan obligation of any corporation, partnership,
trust or other business entity which is (whether by its terms or otherwise)
subordinate in right of payment to any other debt for borrowed money incurred by
the Obligor under such loan and that is not a Second Lien Loan.

 

"Subordinated Management Fee" has the meaning assigned to such term in the
Collateral Management Agreement.

 

"Subsidiary" means any corporation, limited partnership, limited liability
company or other entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions are at the time directly or indirectly
owned by the Borrower.

 

"Synthetic Security" means a security or swap transaction, other than a
Participation Interest, that has payments associated with either payments of
interest on and/or principal of a reference obligation or the credit performance
of a reference obligation.

 

"Taxes" has the meaning set forth in Section 11.4(a).

 

"Total Capitalization" means, at any time, the sum of (a) the Aggregate
Principal Balance of the Collateral Loans (excluding any Defaulted Loans), (b)
the Recovery Value of the Defaulted Loans, (c) the aggregate amount of the
undrawn Class A-R Commitments and undrawn Class A-T-2 Commitments that could be
drawn at such time (assuming that, notwithstanding anything to the contrary
contained herein, the Total Class A-R Commitment available is $100,000,000 and
the Total Class A-T-2 Commitment available is $50,000,000 at such time) in
accordance with the terms of this Agreement (including, for the avoidance of
doubt, that the Portfolio Advance Rate is less than or equal to the Maximum
Advance Rate); and (d) the amount of all cash and Eligible Investments in the
Collection Account and in the Future Funding Reserve Account, in each case
constituting Principal Proceeds (excluding any Unsettled Amounts to the extent
already included in the amount in clause (a)).

 

"Total Class A-R Commitment" as of any date of determination means the aggregate
amount of the Class A-R Commitments (funded or unfunded) on such date, which as
of the Effective Date is $100,000,000 (as such amount may be reduced from time
to time pursuant to Section 2.7 or increased from time to time pursuant to
Section 2.11); provided that, for purposes of any calculations made pursuant to
this Agreement (including, without limitation, with respect to the conditions to
any Class A-R Borrowing and the calculation of the Commitment Fee), the Total
Class A-R Commitment shall be deemed to be $50,000,000 until the Additional Draw
Date.

 

"Total Class A-T Commitment" means, collectively, the Class A-T-1 Commitments
and the Class A-T-2 Commitments.

 

"Total Class A-T-1 Commitment" as of any date of determination means the
aggregate amount of the Class A-T-1 Commitments on such date, which as of the
Effective Date is $50,000,000 (as such amount may be reduced from time to time
pursuant to Section 2.7 or increased from time to time pursuant to Section
2.11).

 

-49-

 

"Total Class A-T-2 Commitment" as of any date of determination means the
aggregate amount of the Class A-T-2 Commitments on such date, which as of the
Additional Draw Date is $50,000,000 (as such amount may be reduced from time to
time pursuant to Section 2.7 or increased from time to time pursuant to Section
2.11).

 

"UCC" means the Uniform Commercial Code as in effect from time to time in the
State of New York.

 

"Underlying Instruments" means the indenture or other agreement pursuant to
which a Collateral Loan has been issued or created and each other agreement that
governs the terms of or secures the obligations represented by such Collateral
Loan or of which the holders of such Collateral Loan are the beneficiaries.

 

"Undrawn Commitment Amount" means, on any day, the amount by which the aggregate
principal amount of all Class A-R Loans outstanding at the close of business on
such day is less than the Total Class A-R Commitment on such day.

 

"Unfunded Amount" means, at any time, the sum of (i) the aggregate Exposure
Amount at such time plus (ii) the aggregate Unsettled Amount at such time.

 

"United States" means the United States of America, including the states and the
District of Columbia, but excluding its territories and possessions.

 

"Unsecured Loan" means a senior unsecured loan obligation of any corporation,
partnership or trust which is not (and by its terms is not permitted to become)
subordinate in right of payment to any other debt for borrowed money incurred by
the Obligor under such loan (other than with respect to trade claims,
capitalized leases or similar obligations).

 

"Unsettled Amount" as of any date means all amounts due in respect of any
Collateral Loans that the Borrower has entered into a binding commitment to
originate or purchase but has not yet settled.

 

"U.S. Bank" means U.S. Bank National Association.

 

"U.S. Person" means any Person that is a "United States Person" as defined in
Section 7701(a)(30) of the Code.

 

"Versailles" means Versailles Assets LLC, a Delaware limited liability company,
whose registered address is c/o Global Securitization Services LLC, 68 South
Service Road, Suite 120, Melville, NY 11747.

 

"Weighted Average DBRS Risk Score" means the number (rounded up to the nearest
hundredth) determined by:

 

The Maximum Principal Balance of each Collateral Loan X The DBRS Risk Score of
such Collateral Loan (as determined as provided on Schedule C hereto) divided by
The Aggregate Maximum Principal Balance of all such Collateral Loans

-50-

 

 

"Weighted Average Life" means, as of any Measurement Date, the number obtained
by (a) for each Collateral Loan (other than a Defaulted Loan), multiplying the
amount of each Scheduled Distribution of principal (treating each Revolving
Collateral Loan and Delayed Funding Loan as if the same were fully funded) to be
paid after such Measurement Date by the number of years (rounded to the nearest
hundredth) from such Measurement Date until such Scheduled Distribution of
principal is due; (b) summing all of the products calculated pursuant to
clause (a); and (c) dividing the sum calculated pursuant to clause (b) by the
sum of all Scheduled Distributions of principal due on all the Collateral Loans
(other than Defaulted Loans) as of such Measurement Date.

 

"Weighted Average Spread" means, with respect to any Collateral Loans (in each
case excluding Defaulted Loans), as of any date, the number obtained by:

 

(x) summing (i) the sum of the products obtained by multiplying the excess of
the cash-pay portion of the interest rate payable on such Collateral Loan (plus
for any Collateral Loan, any other fees (such as anniversary fees, commitment
fees, etc.) that are contractually required to be paid) (such rate stated as a
per annum rate) over LIBOR as then in effect (which spread or excess may be
expressed as a negative percentage) by the Principal Balance of each Collateral
Loan as of such date and (ii) the sum of the products obtained by multiplying,
with respect to each such Collateral Loan that is a Revolving Collateral Loan or
a Delayed Funding Loan, the related commitment or undrawn fee as of such date by
the Exposure Amount of each such Collateral Loan as of such date; and

 

(y) dividing such sum by the Aggregate Principal Balance plus the Exposure
Amount of all such Collateral Loans, and rounding the result up to the nearest
0.001%.

 

"Zero Coupon Loan" means a Collateral Loan that at the time of purchase does not
by its terms provide for periodic payments of interest in Cash.

 

Section 1.2             Accounting Terms and Determinations and UCC Terms.

 

(a) Unless otherwise specified herein, all accounting terms used herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with GAAP as in effect from time to time.

 

(b) Unless otherwise specified herein and unless the context requires a
different meaning, all terms used herein that are defined in Articles 8 and 9 of
the UCC are used herein as so defined.

 

Section 1.3             Assumptions and Calculations with respect to Collateral
Loans.

 

In connection with all calculations required to be made pursuant to this
Agreement with respect to Scheduled Distributions on any Collateral Loans, or
any payments on any other assets included in the Collateral, with respect to the
sale of and reinvestment in Collateral Loans, and with respect to the income
that can be earned on Scheduled Distributions on such Collateral Loans and on
any other amounts that may be received for deposit in the Collection Account,
the provisions set forth in this Section 1.3 shall be applied. The provisions of
this Section 1.3 shall be applicable to any determination or calculation that is
covered by this Section 1.3, whether or not reference is specifically made to
Section 1.3, unless some other method of calculation or determination is
expressly specified in the particular provision.

 

-51-

 

(a) Scheduled interest due on Collateral Loans on which payments are subject to
foreign withholding taxes will be the minimum net amount to be received after
giving effect to the maximum permitted withholding and to any "gross-up"
payments required to be made by the related Obligor pursuant to such loan's
Underlying Instruments.

 

(b) Notwithstanding any other provision of this Agreement to the contrary, all
monetary calculations under this Agreement shall be in Dollars.

 

(c) The determination of the percentage of Total Capitalization that would be
represented by a specified type of Collateral Loans will be calculated by
dividing the aggregate Maximum Principal Balance of such specified type of
Collateral Loans by Total Capitalization. For purposes of this Section 1.3(c), a
"type" of Collateral Loan shall correspond to each clause of the definition of
"Concentration Limitations" and clause (f) of the definition of "Eligibility
Criteria".

 

(d) Any portion of a Collateral Loan or other loan or security owned of record
by the Borrower that has been assigned by the Borrower to a third party and
released from the Lien of this Agreement in accordance with the terms hereof
shall no longer constitute Collateral or a Collateral Loan hereunder.

 

(e) For purposes of calculating the Coverage Tests, except as otherwise
specified in the Coverage Tests, such calculations will not include scheduled
interest and principal payments on Defaulted Loans unless or until such payments
are actually made.

 

(f) For each Due Period and as of any date of determination, the Scheduled
Distribution on any Collateral Loans (other than Defaulted Loans, which, except
as otherwise provided herein, shall be assumed to have a Scheduled Distribution
of zero) shall be the sum of (i) the total amount of payments and collections to
be received during such Due Period in respect of such Collateral Loans
(including the proceeds of the sale of such Collateral Loans received and, in
the case of sales which have not yet settled, to be received during such Due
Period) and not reinvested in additional Collateral Loans or retained in the
Collection Account for subsequent reinvestment pursuant to Section 8.2 that, if
received as scheduled, will be available in the Collection Account at the end of
such Due Period and (ii) any such amounts received in prior Due Periods that
were not disbursed on a previous Quarterly Payment Date or retained in the
Collection Account for subsequent reinvestment pursuant to Section 8.2.

 

(g) Each Scheduled Distribution receivable with respect to a Collateral Loan
shall be assumed to be received on the applicable Due Date, and each such
Scheduled Distribution shall be assumed to be immediately deposited in the
Collection Account to earn interest at the Assumed Reinvestment Rate. All such
funds shall be assumed to continue to earn interest until the date on which they
are required to be available in the Collection Account for application, in
accordance with the terms hereof, to payments of principal of or interest on the
Loans or other amounts payable pursuant to this Agreement.

 

(h) References in the Priority of Payments to calculations made on a "pro forma
basis" shall mean such calculations after giving effect to all payments, in
accordance with the Priority of Payments, that precede (in priority of payment)
or include the clause in which such calculation is made.

 

(i) For purposes of calculating all Concentration Limitations, in the numerator
of any component of the Concentration Limitations, Defaulted Loans will be
treated as having a Maximum Principal Balance equal to zero.

 

-52-

 

(j) Except as otherwise provided herein, Defaulted Loans will not be included in
the calculation of the Collateral Quality Test.

 

(k) For purposes of calculating the Coverage Tests, the Collateral Quality Test
and the Concentration Limitations, capitalized or deferred interest (and any
other interest that is not paid in cash) on Collateral Loans will be excluded.

 

(l) References in this Agreement to the Borrower's "purchase" or "acquisition"
of a Collateral Loan include references to the Borrower's making or origination
of such Collateral Loan. Portions of the same Collateral Loan acquired or
originated by the Borrower on different dates (whether through purchase, receipt
by contribution or the making or origination thereof, but excluding subsequent
draws under Revolving Collateral Loans or Delayed Funding Loans) will, for
purposes of determining the purchase price of such Collateral Loan, be treated
as separate purchases on separate dates (and not a weighted average purchase
price for any particular Collateral Loan). Each Collateral Loan that is
originated by the Borrower shall be deemed to have a "purchase price" of par.

 

(m) For purposes of calculating the Weighted Average Spread, (i) a Collateral
Loan that is a Step-Down Loan will be treated as having the lowest per annum
interest rate or spread over the applicable index or benchmark rate over the
remaining maturity of such Collateral Loan and (ii) a Collateral Loan that is a
Step-Up Loan will be treated as having the then current per annum interest rate
or spread over the applicable index or benchmark rate.

 

(n) For purposes of calculating compliance with any tests under this Agreement
(including without limitation the Coverage Tests, the Collateral Quality Test
and the Concentration Limitations), the trade date (and not the settlement date)
with respect to any acquisition or disposition of a Collateral Loan or Eligible
Investment shall be used to determine whether and when such acquisition or
disposition has occurred.

 

(o) For the avoidance of doubt, a failure to satisfy the Eligibility Criteria
upon the acquisition or origination of a debt obligation or a breach of Section
5.12 shall not occur solely as a result of any property of an Obligor being
subject to a Lien imposed by law, such as materialmen's, warehousemen's,
mechanics', carriers', workmen's and repairmen's Liens and other similar Liens,
arising by operation of law in the ordinary course of business for sums that are
not overdue or are being contested in good faith.

 

Section 1.4             Cross-References; References to Agreements. "Herein",
"hereof" and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision. Unless
otherwise specified, references in this Agreement to any Article, Section,
Schedule or Exhibit are references to such Article or Section of, or Schedule or
Exhibit to, this Agreement, and references in any Article, Section, Schedule or
definition to any subsection or clause are references to such subsection or
clause of such Article, Section, Schedule or definition. Unless otherwise
specified, all references herein to any agreement or instrument shall be
interpreted as references to such agreement or instrument as it may be amended,
supplemented or restated from time to time in accordance with its terms and the
terms of this Agreement and the other Loan Documents. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". The word "will" shall be construed to have the same meaning and
effect as the word "shall".

 

 

Section 1.5             Reference to Secured Parties.

 

In each case herein where any payment or distribution is to be made or notice is
to be given to the "Secured Parties", such payments, distributions and notices
in respect of the Lenders shall be made to the Administrative Agent.

 

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Article II

THE LOANS

 

Section 2.1             The Commitments.

 

On the terms and subject to the applicable conditions hereinafter set forth,
including, without limitation, Section 2.1(h) and Article III:

 

(a) Each Class A-R Lender severally agrees to (i) make loans to the Borrower
(each, a "Class A-R Loan") from time to time on any Business Day during the
period from the Effective Date until the end of the Class A-R Commitment Period,
in each case in an aggregate principal amount at any one time outstanding up to
but not exceeding such Lender's Class A-R Commitment and, as to all Class A-R
Lenders, in an aggregate principal amount up to but not exceeding the Total
Class A-R Commitment as then in effect; and (ii) if applicable, on the last day
of the Reinvestment Period (except if the Reinvestment Period terminates as a
result of clause (b) of the definition thereof), to make a Class A-R Loan (and
the Borrower hereby directs that such Loan be made) in an amount equal to its
Percentage Share of the difference (if positive) between the Unfunded Amount and
the amount on deposit in the Future Funding Reserve Account as of the date such
Class A-R Loan is made (such Class A-R Loan, the "Future Funding Reserve Loan"),
but only to the extent that its Percentage Share of such amount does not exceed
its unfunded Class A-R Commitment, and the Borrower shall deposit the proceeds
of such Future Funding Reserve Loan in the Future Funding Reserve Account such
that the amounts on deposit in the Future Funding Reserve Account equal the
Unfunded Amount.

 

(b) Each Class A-T-1 Lender severally agrees to make loans to the Borrower
(each, a "Class A-T-1 Loan") on the Effective Date, in a principal amount equal
to such Class A-T-1 Lender's Class A-T-1 Commitment and, as to all Class A-T-1
Lenders, in an aggregate principal amount equal to $50,000,000.

 

(c) Each Class A-T-2 Lender severally agrees to make loans to the Borrower
(each, a "Class A-T-2 Loan") on the Additional Draw Date, in a principal amount
equal to such Class A-T-2 Lender's Class A-T-2 Commitment and, as to all Class
A-T-2 Lenders, in an aggregate principal amount equal to $50,000,000.

 

(d) Each such borrowing of a Class A-R Loan on any single day is referred to
herein as a "Class A-R Borrowing"; the borrowing of the Class A-T-1 Loans is
referred to herein as the "Class A-T-1 Borrowing"; the borrowing of the Class
A-T-2 Loans is referred to herein as the "Class A-T-2 Borrowing"; the Class
A-T-1 Borrowing and the Class A-T-2 Borrowing are referred to herein
collectively as "Class A-T Borrowings"; and Class A-R Borrowings and Class A-T
Borrowings are referred to herein collectively as "Borrowings".

 

(e) Within the limits set forth in this Section 2.1 and subject to the other
terms and conditions of this Agreement, the Borrower may borrow (and re-borrow)
Class A-R Loans under this Section 2.1 and prepay Class A-R Loans under Section
2.7. Class A-T Loans once repaid may not be reborrowed.

 

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(f) Notwithstanding the foregoing provisions of this Section 2.1 or any other
provision herein or in any other Loan Document to the contrary, from and after
the date occurring 60 days after any Key Person Trigger, no Borrowings shall be
made under this Agreement unless a replacement Key Person has been approved by
the Administrative Agent in accordance with the definition of "Key Manager
Event".

 

(g) All Existing Loans shall remain outstanding as of the Effective Date (with
the then-existing Interest Periods, if any, therefor) and shall be Loans for all
purposes of this Agreement and the other Loan Documents.

 

(h) No later than three Business Days prior to the Additional Draw Date, the
Borrower shall deliver to the Agents (with a copy to DBRS), (i) a Notice of
Borrowing for Class A-T-2 Loans in the amount of $50,000,000, requesting such
Class A-T-2 Borrowing to occur on the Additional Draw Date; (ii) a certificate
of an Authorized Officer of the Borrower certifying that, (A) as of the
Additional Draw Date and after giving effect to such Class A-T-2 Borrowing, the
Overcollateralization Ratio shall be greater than or equal to 150.00%; and (B)
in the case of each item of Collateral pledged to the Collateral Agent in
connection with the Additional Draw Date, the following shall be true and
correct, (x) (1) the Borrower is the owner of such Collateral free and clear of
any liens, claims or encumbrances of any nature whatsoever except for Permitted
Liens and those which are being released on the Additional Draw Date; (2) the
Borrower has acquired its ownership in such Collateral in good faith without
notice of any adverse claim, except as described in clause (1) above; (3) the
Borrower has not assigned, pledged or otherwise encumbered any interest in such
Collateral (or, if any such interest has been assigned, pledged or otherwise
encumbered, it has been released) other than pursuant to this Agreement; (4) the
Borrower has and has had at all times since its acquisition of such Collateral
the full right to grant a security interest in and assign and pledge such
Collateral to the Collateral Agent; and (5) the Borrower has full right to
confirm and continue such assignment and pledge pursuant hereto; and (y) the
Collateral Agent has a first priority perfected security interest in the
Collateral, except as permitted by this Agreement; and (iii) a "Sources and
Uses" spreadsheet, setting forth (x) a description of the Collateral being
transferred to the Borrower in connection with the Additional Draw Date; and (y)
the use of proceeds of such Class A-T-2 Borrowing (including the distribution to
the equityholders of the Borrower pursuant to the third proviso of Section
9.1(f)).

 

Section 2.2             Making of the Loans.

 

(a) If the Borrower desires to make a Borrowing under this Agreement it shall
give the Agents a written notice in substantially the form set forth on Exhibit
B hereto (each, a "Notice of Borrowing"), which Notice of Borrowing shall
promptly be sent by the Administrative Agent to each Lender, for such Borrowing
not later than 5:00 p.m. (New York City time) at least two Business Days prior
to the day of the requested Borrowing.

 

Each Notice of Borrowing shall be substantially in the form of Exhibit B hereto,
dated the date the request for the related Borrowing is being made, signed by an
Authorized Officer of the Borrower and otherwise be appropriately completed
(including an indication by the Borrower of the Loans proposed to be borrowed).
The proposed Borrowing Date specified in each Notice of Borrowing shall be a
Business Day falling on or prior to the end of the Class A-R Commitment Period.

 

The amount of the Borrowing requested in each Notice of Borrowing (the
"Requested Amount") shall be equal to at least $250,000 and integral multiples
of $100 in excess thereof (or, if less, the remaining unfunded Class A-R
Commitments hereunder).

 

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Each Notice of Borrowing shall be revocable by the Borrower only if notice of
such revocation is given to the Lenders and the Administrative Agent (with a
copy to the Collateral Agent) no later than 2:00 p.m. (New York City time) on
the date that is one Business Day before the date of the related Borrowing.
Notices of Borrowing shall otherwise be irrevocable.

 

(b) Each Lender shall, not later than 1:00 p.m. (New York City time) on each
Borrowing Date in respect of the Loans to be made by it hereunder, make its
Percentage Share of the applicable Requested Amount available to the Borrower by
disbursing such funds in Dollars to an account specified by the Borrower in the
Notice of Borrowing.

 

(c) [Reserved].

 

(d) The failure of any Lender to make any Loan on a date of Borrowing hereunder
shall not relieve any other Lender of any obligation hereunder to make a Loan on
such date. Notwithstanding the foregoing and any other provision to the contrary
contained herein, if any Lender shall have failed to fund its Percentage Share
of a previously requested Loan on the applicable date of Borrowing and the
Borrower provides a new Notice of Borrowing as a result of such failure to fund,
then, in each such case, if necessary to make such Borrowing, the Borrower shall
be permitted a single additional Loan without regard to the minimum borrowing
limit set forth herein.

 

Section 2.3             Evidence of Indebtedness; Notes.

 

(a) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to it and resulting from
the Loans made by such Lender to the Borrower, from time to time, including the
amounts of principal and interest thereon and paid to it, from time to time
hereunder. Notwithstanding any provision herein to the contrary, the parties
hereto intend that the Loans made hereunder shall constitute a "loan" and not a
"security" for purposes of Section 8-102(15) of the UCC.

 

(b) The Administrative Agent shall maintain, in accordance with its usual
practices, accounts in which it will record (i) the amount of each Loan made
hereunder to the Borrower, (ii) the amount and Class of any principal due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any principal sum paid by the Borrower hereunder and
each Lender's share thereof.

 

(c) The entries maintained in the accounts maintained pursuant to clauses (a)
and (b) of this Section 2.3 shall, absent manifest error, be prima facie
evidence of the existence and amounts of the Loans therein recorded; provided
that the failure of the Administrative Agent or any Lender to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Loans in accordance with the terms of this Agreement.

 

(d) Any Lender may request that its Loans of any Class to the Borrower be
evidenced by a Note of such Class. In such event, the Borrower shall promptly
prepare, execute and deliver to such Lender a Note of such Class payable to such
Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and otherwise appropriately completed. Thereafter, the Loans of such
Class of such Lender evidenced by such Note and interest thereon shall at all
times (including after any assignment pursuant to Section 12.6) be represented
by one or more Notes of such Class payable to such Lender (or registered assigns
pursuant to Section 12.6), except to the extent that such Lender (or registered
assignee) subsequently returns any such Note for cancellation and requests that
such Loans once again be evidenced as described in clauses (a) and (b) of this
Section 2.3. At the time of any payment or prepayment in full of the Loans
evidenced by any Note, such Note shall be surrendered to the Administrative
Agent promptly (but no more than 5 Business Days) following such payment or
prepayment in full. Any such Note shall be cancelled and shall not be reissued,
and no Note shall be issued in lieu of any prepaid principal amount of any Note.

 

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Section 2.4             Maturity of Loans.

 

Each Loan shall mature, and the principal amount thereof shall be due and
payable, on the Stated Maturity thereof.

 

Section 2.5             Interest Rates.

 

(a) Each Loan shall bear interest on the unpaid principal amount thereof, for
each day such Loan is outstanding during each Interest Period applicable
thereto, at a rate per annum equal to the Applicable Rate with respect thereto.
The Loans shall be Eurodollar Rate Loans, except as otherwise provided in this
Agreement, including without limitation, in clause (i) of the definition of
"Applicable Rate" and Sections 11.1 and 11.2. Such interest shall be payable for
each Interest Period on the Quarterly Payment Date immediately following the end
of such Interest Period and on the Stated Maturity. All accrued and unpaid
interest in respect of the Existing Loans as of the Effective Date shall be
payable on the first Quarterly Payment Date to occur after the Effective Date.

 

(b) In the event that, and for so long as, an Event of Default shall have
occurred and be continuing, the outstanding principal amount of the Loans, and,
to the extent permitted by applicable law, overdue interest in respect of all
Loans, shall bear interest for each day at the annual rate of the sum of (i) the
Applicable Rate for such Loan for such day plus (ii) two percent (the
"Post-Default Rate" for such Loan).

 

(c) The Administrative Agent shall determine each interest rate applicable to
the Loans hereunder for any Interest Period or portion thereof pursuant to this
Section 2.5 and the related definitions; provided that the relevant CP Lender,
its Program Manager or its Funding Agent, as applicable, shall determine and
announce to the Administrative Agent the Cost of Funds Rate for each Loan that
is made by a CP Lender and to which the Cost of Funds Rate applies, such
determination to be conclusive absent manifest error. The Administrative Agent
shall give prompt notice to the Borrower and the participating Lenders of each
rate of interest so determined, and its determination thereof shall be
conclusive in the absence of manifest error. The Administrative Agent shall, at
the request of the Borrower, the Collateral Agent or any Lender, deliver to the
Borrower, the Collateral Agent or such Lender, as the case may be, a statement
showing the quotations and demonstrating the calculations used by the
Administrative Agent or the relevant CP Lender, its Program Manager or its
Funding Agent, as applicable, in determining any interest rate pursuant to this
Section 2.5.

 

(d) The Administrative Agent agrees to use its best efforts to obtain quotations
of LIBOR as contemplated by Section 2.5(c) and the definition of "London
Interbank Offered Rate". If the Administrative Agent does not obtain a timely
quotation, the provisions of Section 11.1 shall apply.

 

Section 2.6             Commitment Fees.

 

(a) Commitment Fees Payable. The Borrower shall, subject to Section
11.5(b)(ii)(y), pay to the Class A-R Lenders pursuant to Section 6.4 or 9.1, as
applicable, ratably in proportion to their respective Percentage Shares, a
commitment fee (the "Commitment Fee") accruing for each day during each Interest
Period during the Class A-R Commitment Period at a per annum rate equal to 1.00%
of the Undrawn Commitment Amount. The Commitment Fee shall be payable quarterly
in arrears on the Quarterly Payment Date immediately following each Interest
Period for which it accrues as provided in the Priority of Payments and shall be
calculated by the Administrative Agent pursuant to Section 2.10; provided that
all accrued and unpaid Commitment Fees in respect of the Commitments under (and
as defined in) the Existing Credit Agreement as of the Effective Date shall be
payable on the first Quarterly Payment Date to occur after the Effective Date.

 

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(b) Fees Non-Refundable. All fees set forth in this Section 2.6 shall be deemed
to have been earned on the date such payment is due in accordance with the
provisions of this Agreement and shall be non-refundable. The obligation of the
Borrower to pay such fees in accordance with the provisions of this Agreement
shall be binding upon the Borrower and shall inure to the benefit of the Class
A-R Lenders regardless of whether any Class A-R Loans are actually made.

 

Section 2.7             Reduction of Commitments; Prepayments.

 

(a) Automatic Reduction and Termination. (i) The Total Class A-R Commitment (and
the Class A-R Commitment of each Lender) shall be automatically reduced to zero
at the close of business (New York City time) on the last day of the Class A-R
Commitment Period. Upon the making of the Class A-T-1 Loans on the Effective
Date, the amount of the Total Class A-T-1 Commitment shall be reduced to zero.
Upon the making of the Class A-T-2 Loans on the Additional Draw Date, the amount
of the Total Class A-T-2 Commitment shall be reduced to zero.

 

(ii) Prior to the end of the Class A-R Commitment Period, the Borrower shall
have the right at any time (x) to terminate in its entirety the Total Class A-R
Commitment or (y) to permanently reduce all or a portion of the unfunded amount
of the Class A-R Commitments, in each case upon not less than two Business Days'
prior notice to the Lenders, DBRS and the Administrative Agent of any such
termination or reduction, which notice shall specify the effective date of such
termination or reduction; provided, in the case of clause (x) above, that all
amounts due under this Agreement and the other Loan Documents are satisfied in
full, including without limitation all principal, interest, Commitment Fees and
Administrative Expenses. Such notice of termination or reduction shall be
effective only upon receipt and shall terminate or permanently reduce (as
applicable) the Class A-R Commitments of each Class A-R Lender on the date
specified in such notice and, in the case of clause (y) above, shall specify the
amount of any such reduction; provided that no such reduction will reduce the
Total Class A-R Commitment below the aggregate principal amount of the Class A-R
Loans at such time.

 

(iii) The Total Class A-R Commitment (and the Class A-R Commitment of each Class
A-R Lender) once terminated or reduced may not be reinstated. Each reduction of
the Total Class A-R Commitment pursuant to this Section 2.7 shall be applied
ratably among the Class A-R Lenders in accordance with their respective Class
A-R Commitments.

 

(iv) The Borrower will not terminate or reduce the Total Class A-R Commitment
if, after giving effect to such reduction or termination, it would result in a
Commitment Shortfall.

 

(b) Prepayments on Quarterly Payment Dates. The Loans may be prepaid in whole or
in part on each Quarterly Payment Date in accordance with Article IX. Each such
prepayment of Loans may be made with not less than two Business Days' prior
written notice thereof to the Agents and DBRS.

 

(c) Other Prepayments. Notwithstanding anything to the contrary contained
herein, subject to the requirement that after giving effect to the proposed
prepayment (i) there will be sufficient funds in the Collection Account to make
all payments described in clauses (A) through (F) of Section 9.1(a)(i) on the
next Quarterly Payment Date and (ii) there is no Commitment Shortfall, the
Borrower may at any time, upon at least two Business Days' notice (which notice
shall contain a certificate of an Authorized Officer of the Borrower certifying
as to the satisfaction of the requirements set forth in clauses (i) and (ii) of
this Section 2.7(c) with respect to such proposed prepayment) to the
Administrative Agent and DBRS, prepay with amounts on deposit in the Collection
Account constituting Principal Proceeds, without penalty or premium, all or any
portion of the Loans then outstanding on any Business Day that is not a
Quarterly Payment Date by paying to the Lenders the principal amount to be
prepaid together with accrued interest thereon to the date of prepayment and any
amount due pursuant to Section 2.9; provided that the amount of any such
prepayment shall be allocated between the Class A-R Loans and the Class A-T
Loans based on the Principal Allocation Formula. Each notice of such prepayment
shall be effective upon receipt and shall be dated the date such notice is being
given, signed by an Authorized Officer of the Borrower and otherwise
appropriately completed. Each prepayment of any Loan by the Borrower pursuant to
this Section 2.7(c) shall in each case be in a principal amount of at least
$250,000 or a whole multiple of $100 in excess thereof or, if less, the entire
outstanding principal amount of the Loans. If a notice of such prepayment is
given by the Borrower, the Borrower shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein. Each prepayment pursuant to this Section 2.7(c) shall be subject to
Section 2.9. Prepayments of Loans pursuant to this Section 2.7(c) shall not be
subject to the Priority of Payments except as provided pursuant to Sections
9.1(a)(i)(M)(1)(ii), 9.1(a)(i)(M)(2)(i) and 9.1(a)(ii)(B)(2). 

 

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(d) Upon receipt of a notice of reduction or prepayment from the Borrower
pursuant to Section 2.7(a), 2.7(b) or 2.7(c), the Administrative Agent shall
promptly notify each Lender of the contents thereof and of such Lender's ratable
share (if any) of such reduction or prepayment and such notice shall thereafter
be revocable by the Borrower no later than 2:00 p.m. (New York City time) one
Business Day before the date set forth by the Borrower in the applicable notice
of reduction or prepayment as the reduction or prepayment date. Upon the
expiration of such time period, the notice of reduction or prepayment shall be
irrevocable; provided that any such notice may provide that repayment shall be
subject to and contingent on the consummation of alternative financing.

 

All reductions of the Class A-R Commitments shall be applied to the Class A-R
Commitments of each Class A-R Lender ratably in accordance with their relevant
applicable Percentage Shares, and all prepayments of the Loans of any Class
shall be applied to the Loans of such Class of each applicable Lender in
accordance with their relevant applicable Percentage Shares.

 

(e) All reductions of the Commitments pursuant to this Section 2.7 shall be
permanent, and the Commitments, once reduced, shall not be reinstated. Any
amount of the Class A-R Loans prepaid pursuant to Section 2.7(b) or 2.7(c) may
be reborrowed to the extent permitted by Section 2.1. Class A-T Loans, once
prepaid, cannot be reborrowed.

 

Section 2.8             General Provisions as to Payments.

 

(a) The failure of any Lender to make any Loan to be made by it on the date
specified therefor shall not relieve any other Lender of its obligation to make
its Loan on such date, neither Agent shall be responsible for the failure of any
Lender to make any Loan, and no Lender shall be responsible for the failure of
any other Lender to make a Loan to be made by such other Lender.

 

(b) Except as otherwise provided in Section 2.7(c), all payments by the Borrower
pursuant to this Agreement or any of the Loan Documents in respect of principal
of, or interest on or other amounts owing in respect of, the Loans shall be made
in Dollars pursuant to the Priority of Payments. All amounts payable to the
Administrative Agent or the Collateral Agent under this Agreement or otherwise
(including, but not limited to, fees) shall be paid to the Administrative Agent
or the Collateral Agent for the account of the Person entitled thereto. All
payments hereunder or under the other Loan Documents shall be made, without
setoff or counterclaim, in funds immediately available in New York City, to the
Administrative Agent or the Collateral Agent at its address referred to in
Section 12.1. All payments hereunder or under the other Loan Documents to the
Administrative Agent or the Collateral Agent shall be made not later than 1:00
p.m. (New York City time) on the date when due.

 

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(c) The Administrative Agent will promptly distribute to each Lender its ratable
share, if any, of any payment received hereunder by the Administrative Agent for
the account of the Lenders without setoff or counterclaim. Whenever any payment
of principal of, or interest on, the Loans or any other amount hereunder shall
be due on a day which is not a Business Day, the date for payment thereof shall
be extended to the next succeeding Business Day unless such Business Day falls
in another calendar month, in which case the date for payment thereof shall be
the immediately preceding Business Day. If the date for any payment of principal
is extended by operation of law or otherwise, interest thereon shall be payable
for such extended time.

 

Section 2.9             Funding Losses. If the Borrower (1) makes any payment of
principal with respect to any Loan on any day other than on a Quarterly Payment
Date, (2) fails to borrow any Loans after notice thereof has been given to any
Lender in accordance with Section 2.2 and not revoked as permitted in this
Agreement or (3) fails to prepay any Loans after notice thereof has been given
to any Lender in accordance with Section 2.7 and not revoked as permitted in
this Agreement, then, in each case, upon demand therefor from a Lender, any
resulting loss or expense reasonably and actually incurred by it (including,
without limitation, (a) in the case of any payment of principal with respect to
any Loan on any day other than on a Quarterly Payment Date, the amount, if any,
by which (i) the reasonable and documented losses, costs and expenses (including
those incurred by reason of the liquidation or reemployment of deposits or other
funds acquired by such Lender to fund the Loan being repaid or by reason of a CP
Lender's inability to retire the source of the Borrowing being prepaid
simultaneously with the prepayment, but excluding in any event the loss of
anticipated profits) sustained by such Lender exceed (ii) the income, if any,
received by such Lender from such Lender's investment of the proceeds of such
prepayment or (b) in the case of any failure to borrow, the amount, if any, by
which (i) any losses (excluding loss of anticipated profits), costs or expenses
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Loan to be made by such Lender as part of
the Borrowing requested in such Notice of Borrowing when such Loan, as a result
of such failure, is not made on such date exceed (ii) the income, if any,
received by such Lender from such Lender's investment of funds acquired by such
Lender to fund the Loan to be made as part of such Borrowing), shall constitute
Increased Costs payable by the Borrower on the next Quarterly Payment Date
pursuant to the Priority of Payments.

 

 

Section 2.10         Computation of Interest and Fees. Except as otherwise
expressly provided herein, interest and fees payable pursuant to this Agreement
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed (including the first day but excluding the last day
except in the case of interest or fees calculated on the basis of an Interest
Period). All amounts payable hereunder shall be paid in Dollars.

 

 

Section 2.11         Increased Commitments; Additional Loans.

 

(a) At any time during the Reinvestment Period, with the consent of the
Administrative Agent, the Borrower may propose that the Commitments of the Class
A-R Loans and/or the Class A-T Loans be increased (each such increase being
"Increased Commitments" and any loans made to the Borrower pursuant to the
Increased Commitments, "Additional Loans") by notice to the Agents, DBRS and the
Lenders; provided that (i) the Borrower shall comply with the requirements of
Section 3.3, (ii) the net proceeds of any Additional Loans are used (x) to
purchase or originate additional Collateral Loans, (y) to pay fees and expenses
of the Agents and the Lenders in connection therewith and/or (z) as Principal
Proceeds for purposes permitted hereunder, (iii) the Rating Condition for each
Class of the existing Loans is satisfied after giving effect to any such
Increased Commitments, (iv) immediately prior to, and after giving effect to,
such increase and the application of the proceeds of the Additional Loans, each
Coverage Test is satisfied and the Collateral Quality Test is satisfied (or,
only with respect to the Collateral Quality Test, if not satisfied, maintained
or improved) and (v) no Lender shall have any obligation to increase its
Commitment hereunder, and any election to do so shall be in the sole discretion
of each Lender. Such notice (the "Increased Commitment Notice") shall be
provided by the Borrower not less than 10 Business Days prior to the proposed
date of the Increased Commitments.

 

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(b) The terms and conditions (other than the Applicable Margin and Commitment
Fees) of the Increased Commitments and the Additional Loans of any Class issued
pursuant to this Section 2.11 will be identical to those of the initial Loans of
that Class and Commitments (except that the interest and commitment fees due on
the Increased Commitments and the Additional Loans will accrue from the issue
date of such Increased Commitments and such Additional Loans, as applicable, and
the interest rate and commitment fee rate in respect of such Increased
Commitments and such Additional Loans do not have to be identical to those of
the initial Loans and Commitments). Interest on the Additional Loans will be
payable commencing on the first applicable Quarterly Payment Date following the
issue date of such Additional Loans. Commitment Fees on the Undrawn Commitment
Amount will be payable commencing on the first applicable Quarterly Payment Date
following the issue date of such Increased Commitments. The Additional Loans of
a Class will rank pari passu in all respects with the initial Loans of such
Class.

 

(c) The issuance of Additional Loans shall be in a cumulative amount no greater
than the amount of Cash and/or Collateral Loans (to be valued at the Principal
Collateralization Amount for each such Collateral Loan) that is contributed, or
otherwise invested, in the Borrower (and deposited in, or credited to, the
Collection Account or the Custodial Account, as applicable) concurrently with
the issuance of such Additional Loans.

 

(d) To the extent that any portion of Increased Commitments shall remain
unfunded after the date that such Increased Commitments take effect, each
Additional Lender shall be an Approved Lender and, upon the making of an
Additional Loan or the extension of an Increased Commitment, shall be deemed to
be a Lender for all purposes hereunder.

 

Section 2.12         No Cancellation of Indebtedness. Notwithstanding anything
to the contrary herein, no Loan may be cancelled, surrendered, abandoned or
forgiven except for payment as provided herein.

 

 

Section 2.13         Loans Held by Borrower Affiliated Lenders. Notwithstanding
anything to the contrary herein, in determining whether Lenders constituting the
requisite outstanding amount of Loans and Commitments have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, any Loans
or Commitments held by Borrower Affiliated Lenders shall be disregarded and
deemed not to be outstanding.

 

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Article III

CONDITIONS TO BORROWINGS

 

Section 3.1             Effectiveness of Commitments.

 

The effectiveness of the Commitments shall occur when each of the following
conditions is satisfied (or waived by the Administrative Agent and each Lender),
each document to be dated the Effective Date (unless otherwise indicated) and
delivered to the relevant Persons indicated below, and each document and other
condition or evidence to be in form and substance reasonably satisfactory to the
Administrative Agent: 

 

(a) The Agents shall have received counterparts of (i) this Agreement duly
executed and delivered by all of the parties hereto and (ii) each of the other
Loan Documents (and any other documents) to be executed and delivered on or
about the Effective Date duly executed and delivered by all of the parties
thereto.

 

(b) The Agents shall have received (i) if determined to be necessary by the
Administrative Agent or any Lender, amendments to the financing statements,
filed in connection with the Existing Credit Agreement (and the Borrower hereby
consents to the filing of any such amendments by the Collateral Agent or the
Administrative Agent) under the UCC in all jurisdictions that the Administrative
Agent reasonably deems necessary or desirable in order to perfect the interests
in the Collateral contemplated by this Agreement and any other Loan Documents
and (ii) copies of proper financing statements, if determined to be necessary by
the Administrative Agent or any Lender, releasing all security interests and
other rights of any Person in the Collateral previously granted by the Borrower
or any other transferor.

 

(c) The Agents shall have received legal opinions (addressed to each of the
Secured Parties and DBRS) from (i) Dechert LLP, New York counsel to the Borrower
and the Collateral Manager and (ii) Nixon Peabody, counsel to the Collateral
Agent and Custodian, each covering such matters as the Administrative Agent and
its counsel shall reasonably request; provided that the foregoing shall not
include any true sale (unless new Collateral Loans are being transferred from
any Affiliate (other than the BDC pursuant to the Master Transfer Agreement) to
the Borrower) and non-consolidation (unless there are changes to the structure
of the transaction contemplated hereby) opinions.

 

(d) The Administrative Agent shall have received evidence reasonably
satisfactory to it that (i) all of the Covered Accounts established in
connection with the Existing Credit Agreement remain open, (ii) the Account
Control Agreement is in full force and effect and (iii) all amounts required to
be deposited in any of the Covered Accounts as of the Effective Date pursuant to
Section 8.3 shall have been so deposited.

 

(e) The Agents shall have received a letter from DBRS addressed to the Borrower
(or DBRS shall have issued a press release) confirming that (i) the DBRS rating
assigned to the Existing Loans has been discontinued and (ii) each of the Class
A-R Loans, the Class A-T-1 Loans and the Class A-T-2 Loans has been assigned a
rating of at least "AA (sf)".

 

(f) The Borrower shall have paid all reasonable and documented fees and
out-of-pocket costs and expenses of the Agents, the Lenders, DBRS and respective
legal counsel payable in connection with the preparation, execution and delivery
of this Agreement and the other documents related thereto that are delivered on
or about the Effective Date.

 

(g) The Agents shall have received evidence satisfactory to the Administrative
Agent and the Lenders that (i) (x) the grant of security pursuant to the
Granting Clause in the Existing Credit Agreement of all of the Borrower's right,
title and interest in and to the Collateral pledged to the Collateral Agent on
the Original Closing Date shall remain effective in all relevant jurisdictions
and the priority of such security interest shall remain unchanged and (y) the
grant of security pursuant to the Granting Clause herein of all of the
Borrower's right, title and interest in and to the Collateral pledged to the
Collateral Agent on the Effective Date shall be effective in all relevant
jurisdictions, (ii) delivery of such Collateral in accordance with Section 8.7
(including any promissory notes, executed assignment agreements and Microsoft
Word or portable document format (.pdf) copies of the principal credit agreement
for each initial Collateral Loan, to the extent in the possession of the
Borrower) to the Custodian shall have been effected and (iii) the Collateral
Agent (for the benefit of the Secured Parties) shall have a security interest in
such Collateral.

  

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(h) The Agents shall have received a certificate of an Authorized Officer of the
Borrower:

 

(i) to the effect that, as of the Effective Date (A) subject to any conditions
that are required to be satisfactory or acceptable to any Agent, all conditions
set forth in this Section 3.1 have been fulfilled; (B) all representations and
warranties of the Borrower set forth in this Agreement and each of the other
Loan Documents are true and correct in all material respects; and (C) no Default
has occurred and is continuing; and

 

(ii) certifying as to and attaching (A) its Constituent Documents; (B) its
resolutions or other action of its board of directors or members approving this
Agreement, the other Loan Documents to which it is a party and the transactions
contemplated thereby; (C) the incumbency and specimen signature of each of its
Authorized Officers authorized to execute the Loan Documents to which it is a
party; and (D) a good standing certificate from its state or jurisdiction of
incorporation or organization and any other state or jurisdiction in which it is
qualified to do business in which the failure to be so qualified would
reasonably be expected to have a Material Adverse Effect.

 

(i) The Agents shall have received a certificate of an Authorized Officer of the
Collateral Manager and the Retention Provider:

 

(i) to the effect that, as of the Effective Date, all representations and
warranties of the Collateral Manager and the Retention Provider set forth in
each of the Loan Documents and the Retention of Net Economic Interest Letter are
true and correct in all material respects; and

 

(ii) certifying as to and attaching (A) its Constituent Documents; (B) its
resolutions or other action of its board of directors or members approving the
Loan Documents to which it is a party and the transactions contemplated thereby;
(C) the incumbency and specimen signature of each of its Authorized Officers
authorized to execute the Loan Documents to which it is a party; and (D) a good
standing certificate from its state or jurisdiction of incorporation or
organization and any other state or jurisdiction in which it is qualified to do
business in which the failure to be so qualified would reasonably be expected to
have a Material Adverse Effect.

 

(j) The Agents shall have received a report satisfactory to the Administrative
Agent and the Lenders that is certified by an Authorized Officer of the Borrower
(or the Collateral Manager on its behalf) that contains a pro forma Collateral
Report calculated after giving effect to the proposed Class A-R Borrowing, Class
A-T-1 Borrowing and equity distribution contemplated by Section 9.1(f) on the
Effective Date.

  

(k) The Borrower, the Administrative Agent and each Affected Lender shall have
received an updated Retention of Net Economic Interest Letter, duly executed and
delivered by the Retention Provider.

 

(l) The Agents shall have received a certificate of an Authorized Officer of the
Borrower certifying that the Borrower does not have outstanding debt prior to
the Effective Date (other than debt incurred pursuant to the Existing Credit
Agreement), and is not at such time party to, any interest rate hedging
agreements or currency hedging agreements.

 

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(m) [Reserved].

 

(n) The Administrative Agent shall have received a secretary's certificate from
the Collateral Agent, which shall include the incumbency and specimen signature
of each of its Authorized Officers authorized to execute the Loan Documents to
which it is a party.

 

(o) The Agents shall have received from the Borrower either (A) a certificate
thereof or other official document evidencing the due authorization, approval or
consent of any governmental body or bodies, at the time having jurisdiction in
the premises, together with an opinion of counsel of the Borrower, as
applicable, that no other authorization, approval or consent of any governmental
body is required for the making of the Loans contemplated hereby, or (B) an
opinion of counsel of the Borrower that no such authorization, approval or
consent of any governmental body is required for the making of the Loans
contemplated hereby except as have been given.

 

(p) All legal matters incident to this Agreement and the other Loan Documents
shall be satisfactory to the Borrower, the Administrative Agent, the Lenders and
their respective counsel.

 

(q) The Agents shall have received such other opinions, instruments,
certificates and documents from the Borrower as the Agents or any Lender shall
have reasonably requested; provided that sufficient notice of such request has
been given to the Borrower (though nothing herein shall impose an obligation on
any Agent to make any such request).

 

For purposes of determining compliance with the conditions specified in Section
3.1 above, each of the Agents and each Lender that has signed this Agreement
shall be deemed to have consented to or accepted each document or other matter
required thereunder to be consented to by or acceptable to such Agent and Lender
unless the Administrative Agent shall have received notice from a Lender prior
to the Effective Date specifying its objection thereto and unless the Collateral
Agent shall have received notice from the Administrative Agent prior to the
Effective Date specifying its objection thereto.

 

Section 3.2             Borrowings. The obligation of any Lender to make a Loan
on the occasion of any Borrowing is subject to the satisfaction of the following
conditions:

  

(a) in the case of the Class A-T-1 Borrowing on the Effective Date, (i) the
conditions precedent set forth in Section 3.1 shall have been fully satisfied on
or prior to the applicable Borrowing Date; and (ii) the Agents shall have
received a certificate of an Authorized Officer of the Collateral Manager (which
certificate shall include a schedule listing the Collateral Loans owned by the
Borrower on such Borrowing Date), to the effect that, in the case of each item
of Collateral pledged to the Collateral Agent, on such Borrowing Date and
immediately prior to the delivery thereof, (A) (w) the Borrower is the owner of
such Collateral free and clear of any liens, claims or encumbrances of any
nature whatsoever except for Permitted Liens and those which are being released
on such Borrowing Date; (x) the Borrower has acquired its ownership in such
Collateral in good faith without notice of any adverse claim, except as
described in clause (w) above; (y) the Borrower has not assigned, pledged or
otherwise encumbered any interest in such Collateral (or, if any such interest
has been assigned, pledged or otherwise encumbered, it has been released) other
than pursuant to this Agreement; and (z) the Borrower has full right to grant a
security interest in and assign and pledge such Collateral to the Collateral
Agent; and (B) upon grant by the Borrower, the Collateral Agent has a first
priority perfected security interest in the Collateral, except in respect of any
Permitted Lien or as otherwise permitted by this Agreement;

 

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(b) the Administrative Agent shall have received a Notice of Borrowing as
required by Section 2.2 and the conditions set forth in clause (c) below are met
in connection with such Borrowing (as evidenced by the Notice of Borrowing);

 

(c) immediately after such Borrowing:

 

(i) in the case of a Borrowing of Class A-R Loans, the aggregate outstanding
principal amount of the Class A-R Loans shall not exceed the Total Class A-R
Commitment as in effect on such Borrowing Date;

 

(ii) in the case of the Borrowing of Class A-T-1 Loans, the aggregate
outstanding principal amount of the Class A-T-1 Loans shall not exceed the Total
Class A-T-1 Commitment as in effect on such Borrowing Date; and

 

(iii) in the case of the Borrowing of Class A-T-2 Loans, the aggregate
outstanding principal amount of the Class A-T-2 Loans shall not exceed the Total
Class A-T-2 Commitment as in effect on such Borrowing Date;

 

(d) except in the case of Class A-R Loans obtained to fund Unfunded Amounts,
immediately before and after such Borrowing, no Default shall have occurred and
be continuing both before and after giving effect to the making of such Loans;

 

(e) except in the case of Class A-R Loans obtained to fund Unfunded Amounts, the
representations and warranties of the Borrower contained in this Agreement and
each of the other Loan Documents shall be true and correct in all material
respects on and as of the date of such Borrowing (unless stated to relate solely
to an earlier date, in which case such representations and warranties shall be
true and correct in all material respects as of such earlier date) both before
and after giving effect to the making of such Loans;

 

(f) except in the case of Class A-R Loans obtained to fund Unfunded Amounts, no
law or regulation shall have been adopted, no order, judgment or decree of any
governmental authority shall have been issued, and no litigation shall be
pending or, to the actual knowledge of a Senior Authorized Officer of the
Borrower, threatened, which does or, with respect to any threatened litigation,
seeks to enjoin, prohibit or restrain the making or repayment of the Loans or
the consummation of the transactions among the Borrower, the Collateral Manager,
the Lenders and the Agents contemplated by this Agreement;

 

(g) except in the case of Class A-R Loans obtained to fund Unfunded Amounts,
each of the Loan Documents remains in full force and effect and is the binding
and enforceable obligation of the Borrower and the Collateral Manager, in each
case, to the extent such Person is a party thereto (except for those provisions
of any Loan Document not material, individually or in the aggregate with other
affected provisions, to the interests of any of the Lenders);

 

(h) except in the case of Class A-R Loans obtained to fund Unfunded Amounts,
immediately before and after giving effect to the requested Borrowing, the
Eligibility Criteria shall be satisfied (as demonstrated in a writing attached
to such Notice of Borrowing); and

 

(i) in the case of the Class A-T-2 Borrowing on the Additional Draw Date, the
conditions set forth in Section 2.1(h) have been satisfied.

 

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Section 3.3             Effectiveness of Increased Commitments. The
effectiveness of the Increased Commitments and the obligation of any Lender to
make an Additional Loan on the occasion of any Borrowing is each subject to the
satisfaction of the following conditions:

 

 

(a) The Agents shall have received a certificate of an Authorized Officer of the
Borrower:

 

(i) to the effect that, and subject to any conditions that are required to be
satisfactory or acceptable to any Agent, as of the Increased Commitment Date (A)
all conditions set forth in this Section 3.3 have been fulfilled; (B) all
representations and warranties of the Borrower set forth in this Agreement and
each of the other Loan Documents are true and correct in all material respects;
and (C) no Default has occurred and is continuing; and

 

(ii) certifying as to and attaching (A) its Constituent Documents; (B) its
resolutions or other action of its board of directors or members approving the
Increased Commitments, the Additional Loans and any other matters related
thereto; and (C) a good standing certificate from its state or jurisdiction of
incorporation or organization and any other state or jurisdiction in which it is
qualified to do business in which the failure to be so qualified would
reasonably be expected to have a Material Adverse Effect.

 

(b) The Agents shall have received legal opinions (addressed to each of the
Secured Parties and DBRS) from counsel to the Borrower in New York and any other
applicable jurisdictions (as reasonably determined by the Agents), dated the
Increased Commitment Date, substantially in the form of the legal opinions
delivered at the Original Closing Date (but excluding any true sale (unless new
Collateral Loans are being transferred from any Affiliate to the Borrower) and
non-consolidation (unless there are changes to the structure of the transaction
contemplated hereby) opinions), each with additions or deletions reflecting the
Increased Commitments and Additional Loans.

 

(c) The Agents shall have received a certificate of an Authorized Officer of the
Borrower, to the effect that, in the case of each item of Collateral pledged to
the Collateral Agent on the Increased Commitment Date, (A) the Borrower is the
owner of such Collateral free and clear of any liens, claims or encumbrances of
any nature whatsoever except for Permitted Liens; (B) the Borrower has acquired
its ownership in such Collateral in good faith without notice of any adverse
claim, except as described in clause (A) above; (C) the Borrower has not
assigned, pledged or otherwise encumbered any interest in such Collateral (or,
if any such interest has been assigned, pledged or otherwise encumbered, it has
been released) other than Permitted Liens; (D) the Borrower has full right to
grant a security interest in and assign and pledge such Collateral to the
Collateral Agent; and (E) upon grant by the Borrower, the Collateral Agent has a
first priority perfected security interest in the Collateral, except as
permitted by this Agreement.

 

(d) The Agents shall have received (i) a letter from DBRS addressed to the
Borrower (or other written confirmation from DBRS) confirming that the rating of
each Class of Loans by DBRS shall not have been lowered from any of the Initial
Ratings, and will not be lowered as a result of such increase of the Commitments
and the making of the Additional Loans and (ii) a letter from DBRS addressed to
the Borrower confirming that the Additional Loans have been assigned a rating of
at least "AA (sf)".

 

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(e) The Agents shall have received from the Borrower either (A) a certificate
thereof or other official document evidencing the due authorization, approval or
consent of any governmental body or bodies, at the time having jurisdiction in
the premises, together with an opinion of counsel of the Borrower that no other
authorization, approval or consent of any governmental body is required for the
making of the Additional Loans, or (B) an opinion of counsel of the Borrower
that no such authorization, approval or consent of any governmental body is
required for the making of the Additional Loans except as have been given.

 

(f) The Administrative Agent and any Affected Lender shall have received a
Retention of Net Economic Interest Letter.

 

(g) The Borrower shall have paid all reasonable and documented fees and expenses
(including reasonable and documented fees and expenses of respective counsel to
the Agents and the Lenders) payable in connection with such increase of the
Commitments.

 

(h) The Agents shall have received such other documents as they may reasonably
require in connection with such increase of the Commitments.

 

 

Article IV

REPRESENTATIONS AND WARRANTIES OF THE BORROWER

 

In order to induce the Administrative Agent and each of the Lenders which may
become a party to this Agreement to make the Loans, the Borrower makes the
following representations and warranties as of the Effective Date. Such
representations and warranties shall survive the effectiveness of this
Agreement, the execution and delivery of the other Loan Documents and the making
of the Loans and shall be deemed to be reaffirmed as of the date of each
Borrowing.

 

Section 4.1             Existence and Power. The Borrower is a limited liability
company duly organized and validly existing and in good standing under the laws
of the State of Delaware. The Borrower has all powers and all material
governmental licenses, authorizations, consents and approvals required to own
its property and assets and carry on its business as now conducted or as it
presently proposes to conduct it, and has been duly qualified and is in good
standing (as applicable) in every jurisdiction in which the failure to be so
qualified and/or in good standing is likely to have a Material Adverse Effect.

  

Section 4.2             Power and Authority.

 

The Borrower has the power and authority to execute, deliver and carry out the
terms and provisions of each of the Loan Documents to which it is a party and
has taken all necessary action to authorize the execution, delivery and the
performance of such Loan Documents to which it is a party. The Borrower has duly
executed and delivered each such Loan Document, and each such Loan Document
constitutes the legal, valid and binding obligation of the Borrower, enforceable
in accordance with its terms, except as enforceability may be limited by
applicable insolvency, bankruptcy or other laws affecting creditors' rights
generally, or general principles of equity, whether such enforceability is
considered in a proceeding in equity or at law.

 

Section 4.3             No Violation. Neither the execution, delivery or
performance by the Borrower of the Loan Documents to which it is a party nor
compliance by the Borrower with the terms and provisions thereof nor the
consummation of the transactions among the Borrower, the Collateral Manager, the
Lenders and the Agents contemplated by the Loan Documents (i) will contravene in
any material respect any applicable provision of any law, statute, rule,
regulation, order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict, in any material respect, with or result in
any breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets of
the Borrower pursuant to the terms of any indenture, agreement, lease,
instrument or undertaking to which the Borrower is a party or by which it or any
of its property or assets is bound or to which it is subject (except the Lien
created by the Loan Documents), or (iii) will contravene the terms of any
organizational documents of the Borrower, or any amendment thereof.

 

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Section 4.4             Litigation. There is no action, suit or proceeding
pending against, or to the actual knowledge of a Senior Authorized Officer of
the Borrower, after due inquiry, threatened against or adversely affecting,
(i) the Borrower or the Collateral Manager or (ii) the Loan Documents or any of
the transactions contemplated by the Loan Documents, before any court,
arbitrator or any governmental body, agency or official, in each case, which has
had or would reasonably be expected to have a Material Adverse Effect.

 

Section 4.5             Compliance with ERISA. 

 

(a) Neither the Borrower nor any member of its ERISA Group, if any, has, or in
the past five years had, any liability or obligation with respect to any Plan or
any Multiemployer Plan.

 

(b) The assets of the Borrower are not treated as "plan assets" for purposes of
Section 3(42) of ERISA or Similar Law and the Collateral is not deemed to be
"plan assets" for purposes of Section 3(42) of ERISA or Similar Law. The
Borrower has not taken, or omitted to take, any action which would result in any
Collateral being treated as "plan assets" for purposes of Section 3(42) of ERISA
or Similar Law or the occurrence of any Prohibited Transaction in connection
with the transactions contemplated hereunder.

 

Section 4.6             Environmental Matters.

 

(a) The Borrower's operations comply in all material respects with all
applicable Environmental Laws;

 

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(b) None of the Borrower's operations is the subject of a federal or state
investigation evaluating whether any remedial action, involving expenditures, is
needed to respond to a release of any Hazardous Substances into the environment;
and

 

(c) The Borrower does not have any material contingent liability in connection
with any release of any Hazardous Substances into the environment.

 

Section 4.7             Taxes. The Borrower has filed all tax returns and
reports required to be filed by it and has paid all taxes, assessments, fees,
and other governmental charges levied or imposed on it or its property, income
or assets except such as are being contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP have been
provided.

  

Section 4.8             Full Disclosure. All written information (other than
projections, other forward-looking information, information of a general
economic or general industry nature and pro forma financial information)
heretofore (as of each date when this representation and warranty is made)
furnished by or on behalf of the Borrower to the Agents or any Lender for
purposes of, or in connection with this Agreement or any transaction
contemplated hereby is true and accurate in all material respects (to the best
knowledge of the Borrower, in the case of information obtained by the Borrower
from Obligors or other unaffiliated third parties), and, taken as a whole,
contained as of the date of delivery thereof no untrue statement of a material
fact (to the best knowledge of the Borrower, in the case of information obtained
by the Borrower from Obligors or other unaffiliated third parties) and did not
omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances under
which such information was furnished (to the best knowledge of the Borrower, in
the case of information obtained by the Borrower from Obligors or other
unaffiliated third parties). The projections and pro forma financial information
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of the Borrower to be reasonable at the
time made, it being recognized by the Lenders that such projections and pro
forma financial information as it relates to future events are not to be viewed
as fact and that actual results during the period or periods covered by such
projections and pro forma financial information may differ from the projected
and pro forma results set forth therein by a material amount.

 

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Section 4.9             Solvency. On the Effective Date and on the date of each
Borrowing, and after giving effect to the transactions contemplated by the Loan
Documents, the Borrower will be solvent.

  

Section 4.10         Use of Proceeds; Margin Regulations. All proceeds of the
Loans will be used by the Borrower only in accordance with the provisions of
this Agreement and the other Loan Documents. No part of the proceeds of any Loan
will be used by the Borrower to purchase or carry any Margin Stock. Neither the
making of any Loan nor the use of the proceeds thereof will violate or be
inconsistent with the provisions of Regulations T, U or X of the Federal Reserve
Board.

  

Section 4.11         Governmental Approvals. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection with
the execution, delivery and performance of any Loan Document to which the
Borrower is a party or the consummation of any of the transactions contemplated
thereby other than those that have already been duly made or obtained and remain
in full force and effect or those recordings and filings in connection with the
Liens granted to the Collateral Agent under the Loan Documents, except for any
order, consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption, that, if not obtained, would not,
either individually or in the aggregate reasonably be expected to have a
Material Adverse Effect.

  

Section 4.12         Investment Company Act. The Borrower is not an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act.

 

Section 4.13         Representations and Warranties in Loan Documents. All
representations and warranties made by the Borrower in the Loan Documents to
which it is a party are true and correct in all material respects as of the date
of this Agreement and as of any date that Borrower is deemed to reaffirm the
same under this Agreement (unless stated to relate solely to an earlier date, in
which case such representations and warranties shall be true and correct in all
material respects as of such earlier date).

 

Section 4.14         [Reserved].

 

Section 4.15         Ownership of Assets. The Borrower owns all of its
properties and assets, of any nature whatsoever, free and clear of all Liens,
except Permitted Liens.

 

Section 4.16         No Default. No Default exists under or with respect to any
Loan Document. The Borrower is not in default under or with respect to any
material agreement, instrument or undertaking to which it is a party or by which
it or any of its properties is bound in any respect, the existence of which
default has had or would reasonably be expected to have a Material Adverse
Effect.

 

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Section 4.17         Labor Matters. There is no labor controversy pending with
respect to or, to the best knowledge of a Senior Authorized Officer of the
Borrower, threatened against the Borrower, which has had or, if adversely
determined, would reasonably be expected to have a Material Adverse Effect.

  

Section 4.18         Subsidiaries/Equity Interests. The Borrower (a) has no
Subsidiaries and (b) owns no equity interest in any other entity except equity
received in connection with the exercise of remedies against an Obligor or
through a restructuring of the Obligor, subject to Section 10.1(a)(iv).

  

Section 4.19         Ranking. All Obligations, including the Obligations to pay
principal of, interest on and any other amounts in respect of, the Loans,
constitute senior indebtedness of the Borrower.

  

Section 4.20         Representations Concerning Collateral.

 

(a) Upon each transfer of Collateral in the manner specified in Section 8.7 and
after the other actions described in Section 8.7 have been taken by the
appropriate parties, the Collateral Agent in accordance with Section 8.7, for
the benefit of the Secured Parties, will have a perfected pledge of and security
interest in such Collateral and all proceeds thereof (subject to § 9-315(c) of
the UCC), which security interest shall be prior to all other interests in such
Collateral, other than certain Permitted Liens that are prior to the security
interest of the Secured Parties by operation of law. No filings other than those
described or referred to in Section 8.7 or any other action other than those
described in Section 8.7 will be necessary to perfect such security interest.

 

(b) Immediately before giving effect to each transfer of Collateral Loans,
Eligible Investments and other Collateral by the Borrower to the Collateral
Agent in accordance with Section 8.7, the Borrower will be the beneficial owner
of such Collateral Loans, Eligible Investments and other Collateral, and the
Borrower will have the right to receive all Collections on such Collateral
Loans, Eligible Investments and other Collateral, in each case free and clear of
all Liens, security interests and adverse claims other than Permitted Liens.

 

(c) All of the Obligors and administrative agents, as applicable, in respect of
the Collateral Loans, or Selling Institutions in respect of Participation
Interests, have been instructed to make payments to the Collection Account.

 

Section 4.21         OFAC.

 

None of the Borrower, any of its subsidiaries or any director, officer,
employee, agent, or affiliate of the Borrower or any of its subsidiaries is a
Person that is, or is owned or controlled by Persons that are: (i) the subject
of any sanctions administered or enforced by the U.S. Department of the
Treasury's Office of Foreign Assets Control, the U.S. Department of State or
other relevant sanctions authority (collectively, "Sanctions"), or (ii) located,
organized or resident in a country or territory that is, or whose government is,
the subject of Sanctions, including, without limitation, Cuba, Iran, North
Korea, Sudan and Syria.

 

Section 4.22         Ordinary Course.

 

Each repayment of principal or interest under this Agreement shall be (x) in
payment of a debt incurred by the Borrower in the ordinary course of business or
financial affairs of the Borrower and (y) made in the ordinary course of
business or financial affairs of the Borrower.

 

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Article V

AFFIRMATIVE AND NEGATIVE COVENANTS OF THE BORROWER

 

The Borrower covenants and agrees that, so long as any Lender has any Commitment
hereunder or any Obligations remain unpaid, and unless the Majority Lenders
shall otherwise consent in writing:

 

Section 5.1             Information. The Borrower will deliver the following to
the Agents and DBRS (and the Administrative Agent shall furnish copies thereof
to each of the Lenders); provided that (1) the information described in clause
(e) below will not be required to be delivered to DBRS, (2) the information
described in clause (k) below will be required to be furnished to DBRS (but only
the information referred to in paragraph 2 of Exhibit G and, if applicable,
paragraph 3(ii) of Exhibit G) and to the Administrative Agent for distribution
to each of the Lenders, (3) the information described in clause (l) below will
be required to be furnished solely to the Administrative Agent for distribution
to each Affected Lender and (4) the information described in clauses (m), (o)
and (q) below will be required to be delivered only to the Collateral Agent:

 

 

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(a) as soon as reasonably available and in any event within 120 days after the
end of each fiscal year, a balance sheet of the Borrower or, if the Borrower is
consolidated with the balance sheet of the BDC, of the BDC as of the end of such
fiscal year and the related statements of operations and cash flows for such
fiscal year audited by independent public accountants of nationally recognized
standing;

 

(b) as soon as available and in any event within 60 days after the end of each
of the first three quarters of each fiscal year, a balance sheet of the Borrower
or, if the Borrower is consolidated with the balance sheet of the BDC, of the
BDC as of the end of such quarter and the related statements of operations for
such quarter and for the portion of the Borrower's fiscal year ended at the end
of such quarter;

 

(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate of the Borrower
certifying (x) that such financial statements fairly present in all material
respects the financial condition and the results of operations of the Borrower
on the dates and for the periods indicated, on the basis of GAAP, subject, in
the case of interim financial statements, to normally recurring year-end
adjustments and the absence of notes, and (y) that an Authorized Officer of the
Borrower has reviewed the terms of the Loan Documents and has made, or caused to
be made under his or her supervision, a review in reasonable detail of the
business and condition of the Borrower during the period beginning on the date
through which the last such review was made pursuant to this Section 5.1(c) (or,
in the case of the first certification pursuant to this Section 5.1(c), the
Original Closing Date) and ending on a date not more than ten Business Days
prior to the date of such delivery and that on the basis of such financial
statements and such review of the Loan Documents, no Default has occurred and is
continuing or, if any such Default has occurred and is then continuing,
specifying the nature and extent thereof and, if continuing, the action the
Borrower is taking or proposes to take in respect thereof;

 

(d) (i) within seven days after a Senior Authorized Officer of the Borrower
obtains actual knowledge of any Default or Event of Default, if such Default or
Event of Default is then continuing, a certificate of such Senior Authorized
Officer setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto; (ii) promptly and in any event
within ten days after such Senior Authorized Officer obtains knowledge thereof,
notice of any (x) litigation or governmental proceeding pending or actions
threatened against the Borrower or its rights in the Collateral Loans or other
Collateral which have had or would reasonably be expected to, individually or in
the aggregate, have a Material Adverse Effect, and (y) any other event, act or
condition which has had or would reasonably be expected to have a Material
Adverse Effect; and (iii) promptly after a Senior Authorized Officer of the
Borrower obtains knowledge that any loan included in the Collateral does not
qualify as a "Collateral Loan," notice setting forth the details with respect to
such disqualification;

 

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(e) promptly upon the sending thereof, copies of all reports, notices or
documents that the Borrower sends to any governmental body, agency or regulatory
authority (excluding routine filings) and not otherwise required to be delivered
hereunder;

 

(f) promptly and in any event within ten Business Days after a Senior Authorized
Officer of the Borrower obtains actual knowledge of any of the following events,
a certificate of the Borrower, executed by a Senior Authorized Officer of the
Borrower, specifying the nature of such condition and the Borrower's proposed
response thereto: (i) the receipt by the Borrower of any written communication,
whether from a governmental authority, citizens group, employee or otherwise,
that alleges that the Borrower is not in compliance with applicable
Environmental Laws, and such noncompliance had or would reasonably be expected
to have a Material Adverse Effect, (ii) the Borrower has actual knowledge that
there exists any Environmental Claim pending or threatened against the Borrower
that has had or would reasonably be expected to have a Material Adverse Effect
or (iii) the Borrower has actual knowledge of any release, emission, discharge
or disposal of any Hazardous Substances that has had or would reasonably be
expected to have a Material Adverse Effect;

 

(g) [reserved];

 

(h) not later than the 10th day after the Collateral Report Determination Date
for each calendar month (or if such day is not a Business Day, the next
succeeding Business Day), a report concerning the Collateral Loans and Eligible
Investments (the "Collateral Report"); the first Collateral Report was delivered
in December 2013 and was determined with respect to the Collateral Report
Determination Date occurring in December 2013; the Collateral Report for a
calendar month shall contain the information with respect to the Collateral
Loans and Eligible Investments described in Exhibit E, and shall be determined
as of the Collateral Report Determination Date for such calendar month;

 

(i) on each Quarterly Payment Date, a Payment Date Report in accordance with
Section 9.1(c);

 

(j) from time to time such additional information regarding the Collateral or
the financial position or business of the Borrower as the Agents, on either
their own initiative or at the request of the Majority Lenders or DBRS, may
reasonably request in writing;

 

(k) the information described in Exhibit G, at the times indicated therein,
which shall be subject to adjustment with the prior written consent of the
Borrower and the Majority Lenders;

 

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(l) (i) promptly following a request by any Affected Lender which is (x)
received in connection with (A) a material amendment of any Loan Document or (B)
any Additional Loan or Increased Commitment, a refreshed Retention of Net
Economic Interest Letter from the Retention Provider, or (y) for additional
information which is either in the possession of the Retention Provider or can
be obtained at no material cost to the Retention Provider, such additional
information as such Affected Lender may reasonably request in order for such
Affected Lender to comply with the requirements of Articles 404-410;

 

(ii) promptly on becoming aware of the occurrence thereof, written notice of any
failure to satisfy the Retention Requirement at any time;

 

(iii) on a monthly basis (concurrent with the delivery of each Collateral
Report), a certificate from an Authorized Officer of the Retention Provider
confirming continued compliance with the requirements set forth in clauses (a)
through (h) of the Retention of Net Economic Interest Letter as set forth in
Exhibit H; and

 

(iv) upon any written request therefor by or on behalf of the Borrower or any
Affected Lender delivered as a result of a material change in (x) the
performance of the Loans, (y) the risk characteristics of the transaction, or
(z) the Collateral Loans and/or the Eligible Investments from time to time, a
certificate from an Authorized Officer of the Retention Provider confirming
continued compliance with the requirements set forth in clauses (a) through (h)
of the Retention of Net Economic Interest Letter as set forth in Exhibit H;

 

(m) within 5 Business Days of the receipt thereof, copies of any letters
received from DBRS in respect of credit estimates;

 

(n) within 5 Business Days of the receipt thereof, written notice of the
occurrence of an event that would permit the termination of the Collateral
Management Agreement or the Investment Advisory Agreement, or the replacement of
the Collateral Manager under the Collateral Management Agreement or the
Investment Advisor under the Investment Advisory Agreement, as applicable;

 

(o) not later than the 2nd calendar day (or if such day is not a Business Day
then the next succeeding Business Day) after the Collateral Report Determination
Date, a monthly loan data file (the "Mid-Monthly Loan Tape") for the previous
monthly period ending on the Collateral Report Determination Date (containing
such information agreed upon by the Collateral Manager, the Collateral Agent and
the Administrative Agent) and not later than the 1st day after the Calculation
Date, a quarterly loan date file (the "Quarterly Loan Tape") for the previous
quarterly period ending on the Calculation Date (containing such information
agreed upon by the Collateral Manager, the Collateral Agent and the
Administrative Agent). The Mid-Monthly Loan Tape shall specifically include the
calculations and related information for items 7(f), 7(l), 8(o), 8(u), 10(d),
10(e), 10(g) and 16 listed on Exhibit E;

 

(p) promptly and in any event within five Business Days of any change to the
information contained on Schedule H to the Existing Credit Agreement, the
Collateral Manager shall deliver to the Administrative Agent a certificate from
an Authorized Officer thereof identifying such change; and

 

(q) on the 2nd calendar day (or next succeeding Business Day if such day is not
a Business Day) following the first calendar day of each month, an early-month
loan data file (the "Early-Monthly Tape") containing such information agreed
upon by the Collateral Manager and the Collateral Agent.

 

Section 5.2             Payment of Obligations. The Borrower will pay and
discharge, at or before maturity, all its respective material obligations and
liabilities, including, without limitation, any obligation pursuant to any
agreement by which it or any of its properties or assets is bound and any
material tax liabilities, except where such liabilities may be contested in good
faith by appropriate proceedings, and will maintain in accordance with GAAP
appropriate reserves for the accrual of any of the same.

 

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Section 5.3             Non-Petition. The Borrower shall not be party to any
agreement under which it has any material obligations or liability (direct or
contingent) without using commercially reasonable efforts to include customary
"non-petition" and "limited recourse" provisions therein (and shall not amend or
eliminate such provisions in any agreement to which it is party), except for
loan agreements, related loan documents, any agreements related to the purchase
and sale of any Collateral Loans that contain customary (as determined by the
Collateral Manager) purchase or sale terms or which are documented using
customary loan trading documentation and customary service contracts and
engagement letters entered into with permitted agents in connection with the
Collateral Loans.

 

Section 5.4             Good Standing. The Borrower will remain qualified to do
business and in good standing (as applicable) in every jurisdiction in which the
nature of its businesses so requires, except where the failure to be so
qualified and in good standing (other than in the State of Delaware) would not
reasonably be expected to have a Material Adverse Effect.

  

Section 5.5             Compliance with Laws. The Borrower will comply in all
material respects with all applicable material laws, ordinances, rules,
regulations, and requirements of governmental authorities except where the
necessity of compliance therewith is contested in good faith by appropriate
proceedings.

  

Section 5.6             Inspection of Property, Books and Records; Audits; Etc.

 

(a) The Borrower will keep proper books of record and accounts in which full,
true and correct entries in all material respects in accordance with GAAP shall
be made of all material financial matters and transactions in relation to its
business and activities; and will permit representatives of the Administrative
Agent and the Collateral Agent (in each case at the Borrower's expense, in the
case of not more than one inspection during any fiscal year except during the
continuance of an Event of Default) to visit and inspect any of its properties,
to examine and make abstracts from any of its books and records and to discuss
its affairs, finances and accounts with its officers, employees and independent
public accountants, all at reasonable times in a manner so as to not unduly
disrupt the business of the Borrower, upon reasonable prior notice to the
Borrower and as often as may reasonably be desired; provided that any expenses
incurred by the Borrower hereunder shall be reasonable and documented.

 

(b) If requested by the Majority Lenders, the Borrower agrees that
representatives of the Majority Lenders (or an independent third-party auditing
firm selected by the Majority Lenders) shall (at the Borrower's expense) conduct
an audit and/or field examination of the Borrower and the Collateral Manager, at
reasonable times in a manner so as to not unduly disrupt the business of the
Borrower or the Collateral Manager, for the purpose of examining the servicing
and administration of the Collateral Loans, the results of which audit and/or
field examination shall be promptly provided to the Lenders, provided that no
more than one such audit or field examination shall be conducted during any
fiscal year of the Borrower and any expenses incurred by the Borrower hereunder
shall be reasonable and documented.

 

(c) If requested by the Administrative Agent or the Majority Lenders, the
Borrower and the Collateral Manager shall participate in a meeting with the
Administrative Agent and the Lenders once during each fiscal year of the
Borrower, to be held at a location in New York City and at a time reasonably
determined by the Borrower and the Collateral Manager.

 

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Section 5.7             Existence. The Borrower shall do or cause to be done,
all things necessary to preserve and keep in full force and effect its
existence, its material rights, and its material privileges, obligations,
licenses and franchises.

  

Section 5.8             Subsidiaries/Equity Interest. The Borrower shall not
directly or indirectly own any Subsidiaries or any equity interest in any entity
other than as otherwise permitted pursuant to Section 4.18.

  

Section 5.9             Investments.

 

(a) The Borrower shall not make any investment other than in Collateral Loans or
Eligible Investments; provided that the Borrower may own Defaulted Loans, Equity
Securities and other Collateral as permitted by the terms of this Agreement. On
and after the date of the first Borrowing through the end of the Reinvestment
Period, the Borrower shall not purchase or originate any debt obligation unless,
at the time of such purchase or origination and after giving effect thereto, the
Eligibility Criteria are satisfied with respect to the debt obligations so
purchased or originated. The Borrower shall not purchase, originate or fund any
debt obligations after the Reinvestment Period except for (i) the funding of
Exposure Amounts of Revolving Collateral Loans and Delayed Funding Loans that
were originated or purchased prior to the end of the Reinvestment Period and
(ii) the origination or purchase of a Collateral Loan where the commitment to
make such purchase or origination was made prior to the end of the Reinvestment
Period, so long as such commitment provided for settlement in accordance with
customary procedures in the relevant markets, but in any event for a settlement
period no longer than three months following the date of such commitment.

  

(b) The Borrower shall not at any time obtain or maintain title to any real
property or obtain or maintain a controlling interest in an entity that owns any
real property (except for Equity Securities that are acquired as a result of the
restructuring of a Collateral Loan so long as the Borrower directs the
Collateral Agent to sell any such Equity Security pursuant to Section
10.1(a)(iv)).

 

(c) Notwithstanding the foregoing provisions of this Section 5.9 or any other
provision herein or in any other Loan Document to the contrary, from and after
the date occurring 60 days after any Key Person Trigger, no investments other
than Eligible Investments shall be made by the Borrower under this Agreement
unless a replacement Key Person has been approved by the Administrative Agent in
accordance with the definition of "Key Manager Event".

 

(d) The Borrower shall not acquire or originate any Collateral Loan if such
acquisition or origination would violate the terms of the Master Transfer
Agreement or the Retention of Net Economic Interest Letter.

 

Section 5.10         Restriction on Fundamental Changes.

 

(a) The Borrower shall not enter into any merger or consolidation or
reorganization. The Borrower shall not liquidate, wind-up or dissolve (or suffer
any liquidation or dissolution), discontinue its business or convey, lease,
sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or any part of its business or property, whether now or
hereafter acquired, except for transfers of its property expressly permitted by
the Loan Documents.

 

(b) The Borrower shall not amend its Constituent Documents in a manner adverse
to the Lenders without the Majority Lenders' prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed.

 

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Section 5.11         ERISA. Neither the Borrower nor any member of the ERISA
Group shall establish any Plan or Multiemployer Plan.

  

Section 5.12         Liens. The Borrower shall not at any time directly or
indirectly create, incur, assume or permit to exist, on any of its property, any
Lien for borrowed monies or any other Lien except for Permitted Liens.

  

Section 5.13         Business Activities. The Borrower shall not engage in any
business activity other than (i) the making, purchase, origination, selling and
maintenance of Collateral Loans and the ownership of equity interests, (ii)
receiving capital contributions (whether in the form of Cash or Collateral
Loans) from the BDC and (iii) making distributions to its equityholders pursuant
to Section 5.31, in each case in compliance with the terms of this Agreement and
the other Loan Documents.

  

Section 5.14         Fiscal Year; Fiscal Quarter. The Borrower shall not change
its fiscal year or any of its fiscal quarters, without the Administrative
Agent's prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed.

  

Section 5.15         Margin Stock. None of the proceeds of any Loan will be used
by the Borrower, directly or indirectly, for the purpose of buying or carrying
any Margin Stock.

  

Section 5.16         Indebtedness. The Borrower shall not incur or suffer to
exist any Indebtedness other than the Obligations.

  

Section 5.17         Use of Proceeds. The Borrower shall use the proceeds of the
Loans solely (a) for the purchase and origination of Collateral Loans during the
Reinvestment Period (and after the Reinvestment Period only for the purchase and
origination of Collateral Loans committed to during the Reinvestment Period,
subject to Section 5.9), (b) to acquire Collateral Loans in accordance with the
terms hereof, the other Loan Documents and the Retention of Net Economic
Interest Letter, (c) in the case of Class A-R Loans, to fund Exposure Amounts,
(d) to pay fees and expenses incurred with the closing and execution of this
Agreement and the other Loan Documents and/or (e) to fund disbursements to any
equityholder of the Borrower on any day during the Reinvestment Period occurring
after the Ramp-Up Period, provided that (i) the Borrower requests that such
proceeds be deposited in the Collection Account as Principal Proceeds and (ii)
the requirements set forth in Section 9.1(f) are satisfied in connection with
any such disbursement thereof, in each case on and subject to the terms and
conditions set forth in this Agreement and the other Loan Documents.

  

Section 5.18         Bankruptcy Remoteness; Separateness.

 

(a) Limited Purpose Entity.

 

(i) The Borrower at all times since its formation has been, and will continue to
be, a duly organized and existing limited liability company formed under the
laws of the State of Delaware. The Borrower at all times since its formation has
been, and will continue to be, duly qualified in each jurisdiction in which such
qualification was or may be necessary for the conduct of its business, except
where the failure to be so qualified in any jurisdiction (other than in the
State of Delaware) would not reasonably be expected to have a Material Adverse
Effect;

 

(ii) the Borrower at all times since its formation has complied, and will
continue to comply, with the provisions of its Constituent Documents and the
laws of the jurisdiction of its formation relating to limited liability
companies;

 

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(iii) all customary formalities regarding the existence of the Borrower have
been observed at all times since its formation and will continue to be observed;

 

(iv) the Borrower has been adequately capitalized at all times since its
formation and will continue to be adequately capitalized in light of the nature
of its business; and

 

(v) the Borrower has not any time since its formation assumed or guaranteed, and
will not assume or guarantee, the liabilities of any other Persons (other than
any reimbursement obligation or indemnity in favor of its officers or directors;
provided that any such reimbursement obligation or indemnity shall be subject to
the Priority of Payments).

 

(b) No Bankruptcy Filing. The Borrower is not contemplating either the filing of
a petition by it under any state or federal bankruptcy or insolvency laws of any
jurisdiction or the liquidation of all or a major portion of its assets or
property, and it has no knowledge of any Person contemplating the filing of any
such petition against it.

 

(c) Separate Existence.

 

(i) At all times since its formation, the Borrower has accurately maintained,
and will continue to accurately maintain, in all material respects, its
financial statements, accounting records and other corporate documents, as
applicable, separate from those of the Collateral Manager and any other Person;
provided, however, that if the Borrower prepares consolidated financial
statements with any Affiliates, (y) any such consolidated financial statements
shall contain a note indicating the Borrower's separateness from any such
Affiliates and indicate its assets are not available to pay the debts of such
Affiliate or any other Person and (z) if the Borrower prepares its own separate
balance sheet, such assets shall also be listed on the Borrower's own separate
balance sheet. The Borrower has not at any time since its formation commingled,
and will not commingle, its assets with those of the Collateral Manager or any
other Person. The Borrower has at all times since its formation accurately
maintained, in all material respects, and will continue to accurately maintain
in all material respects, its own bank accounts and separate books of account.

 

(ii) The Borrower has at all times since its formation paid, and will continue
to pay, its own liabilities from its own separate assets.

 

(iii) The Borrower has at all times since its formation identified itself, and
will continue to identify itself, in all dealings with the public, under its own
name and as a separate and distinct entity. The Borrower has not at any time
since its formation identified itself, and will not identify itself, as being a
division or a part of any other entity.

 

(iv) The Borrower will comply at all times with Section 1.07 of the LLC
Agreement in effect on the Original Closing Date without regard to subsequent
amendments thereto.

 

Section 5.19         Amendments, Modifications and Waivers to Collateral Loans.
(a) In the performance of its obligations hereunder, the Borrower may enter into
any amendment or waiver of or supplement to any Underlying Instrument or Related
Contract; provided that (1) the prior written consent of the Majority Lenders to
any such amendment, waiver or supplement shall be required if (i) an Event of
Default has occurred and is continuing or would result from such amendment,
waiver or supplement, (ii) such amendment, waiver or supplement, individually or
together with all other such amendments, waivers and/or supplements, would
result in a Material Adverse Effect or (iii) such amendment, waiver or
supplement constitutes a Specified Change; provided further that, in the case of
clause (iii) above, (A) if the Borrower notifies the Administrative Agent of the
proposed Specified Change and the Administrative Agent (at the direction of the
Majority Lenders) does not object within five Business Days after written notice
thereof is provided to the Administrative Agent, the proposed Specified Change
will be deemed to have been consented to by the Administrative Agent (at the
direction of the Majority Lenders) and (B) during the Reinvestment Period, prior
written consent shall not be required if (x) the Rating Condition is satisfied
and (y) no Default shall have occurred and be continuing; (2) the Borrower has
notified DBRS of any such amendment, waiver or supplement and (3) the Borrower
may not enter into any such amendment, waiver or supplement that would result in
the Minimum Weighted Average Spread Test not being satisfied (or if not
satisfied at such time, being worsened) after giving effect to such amendment,
waiver or supplement.

  

(b) Any Collateral Loan that, as a result of any amendment or supplement
thereto, ceases to qualify as a Collateral Loan, will thereafter be deemed to be
a Defaulted Loan for so long as it remains unqualified to be a Collateral Loan
by the terms of this Agreement.

 

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(c) In the event of an amendment or supplement to a Collateral Loan that is not
consented to by the Majority Lenders and that results in the failure of the
Maximum Weighted Average Life Test (but would otherwise qualify as a Collateral
Loan), such Collateral Loan will thereafter be treated as a Defaulted Loan
hereunder until such time as the Maximum Weighted Average Life Test is satisfied
(provided that, if at the time of such satisfaction of the Maximum Weighted
Average Life Test, such Collateral Loan would otherwise be considered a
Defaulted Loan in accordance with the terms of this Agreement (including clause
(b) above), such Collateral Loan will continue to be treated as a Defaulted Loan
hereunder).

 

Section 5.20         Hedging.(a) The Borrower may, at any time and from time to
time, enter into any Interest Hedge Agreements (subject in each case to
satisfaction of the Rating Condition). The Borrower will not amend or replace
any Interest Hedge Agreement unless the Rating Condition shall have been
satisfied in connection with such amendment or replacement. The Borrower (or the
Collateral Manager on behalf of the Borrower) shall promptly provide written
notice of entry into, and the amendment or replacement of, any Interest Hedge
Agreement to the Agents and the Lenders. Notwithstanding anything to the
contrary contained herein, the Borrower (or the Collateral Manager on behalf of
the Borrower) shall not enter into any Interest Hedge Agreement that would cause
the Borrower to be considered a "commodity pool" as defined in Section 1(a)(10)
of the Commodity Exchange Act unless (i) the Collateral Manager is registered as
a "commodity pool operator" as defined in Section 1(a)(11) of the Commodity
Exchange Act and "commodity trading advisor" as defined in Section 1(a)(12) of
the Commodity Exchange Act with the CFTC or (ii) with respect to the Borrower as
the commodity pool, the Collateral Manager would be eligible for an exemption
from registration as a commodity pool operator and commodity trading advisor and
all conditions for obtaining the exemption have been satisfied. In addition, the
Borrower (or the Collateral Manager on behalf of the Borrower) shall not enter
into any Interest Hedge Agreement unless it obtains written advice of counsel
and a certification from the Collateral Manager that (1) the written terms of
the derivative directly relate to the Collateral Loans and the Loans and (2)
such derivative reduces the interest rate and/or foreign exchange risks related
to the Collateral Loans and the Loans.

  

(b) Each Interest Hedge Agreement shall contain appropriate limited recourse and
non-petition provisions equivalent (mutatis mutandis) to those contained in
Section 12.15. Each Interest Hedge Counterparty shall be required to satisfy, at
the time that any Interest Hedge Agreement to which it is a party is entered
into, the Hedge Counterparty Rating Criteria. Payments with respect to any
Interest Hedge Agreements shall be subject to the Priority of Payments specified
in Section 9.1(a) and Section 6.4. Each Interest Hedge Agreement shall contain
an acknowledgement by the Interest Hedge Counterparty that the obligations of
the Borrower to the Interest Hedge Counterparty under the relevant Interest
Hedge Agreement shall be payable in accordance with the Priority of Payments
specified in Section 9.1(a) and Section 6.4 and the Borrower shall use its
commercially reasonable efforts to provide that it may not be terminated due to
the occurrence of an Event of Default until liquidation of the Collateral has
commenced.

  

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Section 5.21         Title Covenants. The Borrower covenants that at no time
shall it:

  

(a) create, permit or suffer to be created any Lien or security interest in the
Collateral other than Permitted Liens; or

 

(b) except as otherwise expressly permitted herein sell, transfer, assign,
deliver or otherwise dispose of any Collateral or any interest therein.

 

The Borrower further covenants and agrees to defend the Collateral against the
claims and demands of all other parties to the extent necessary to preserve the
first-priority security interest of the Collateral Agent in the Collateral.

 

Section 5.22         Further Assurances. 

  

(a) The Borrower shall at its sole expense file, record, make, execute and
deliver all such notices, instruments, statements and other documents, and take
such acts, as the Collateral Agent (acting at the direction of the
Administrative Agent) may reasonably request from time to time to register in
the name of the Collateral Agent or its nominee, and to perfect, preserve or
otherwise protect the security interest of the Collateral Agent, for the benefit
of the Secured Parties in, the Collateral or any part thereof, or to give effect
to the rights, powers and remedies of the Collateral Agent hereunder, including
but not limited to execution and delivery of financing statements. The Borrower
shall be obligated to perform its obligations under this Agreement
notwithstanding the ability of the Collateral Agent to take such actions
pursuant to the provisions of Section 5.24. The Borrower shall not permit the
validity or effectiveness of this Agreement or any grant of Collateral hereunder
to be impaired, or permit the lien of this Agreement to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person to be
released from any covenants or obligations with respect to this Agreement.

 

(b) At least one month (but not more than six months) prior to the fifth
anniversary of the Original Closing Date and at least one month (but not more
than six months) prior to each five-year anniversary of the Original Closing
Date thereafter, the Borrower shall furnish to the Collateral Agent an opinion
of counsel stating that, in the opinion of such counsel, as of the date of such
opinion, the lien and security interest created by this Agreement with respect
to the Collateral remains a valid and perfected first priority lien in favor of
the Collateral Agent for the benefit of the Secured Parties and stating what
action, if any, needs to be taken to retain the validity and perfection of such
lien for the following five-year period.

 

Section 5.23         Costs of Transfer; Taxes; and Expenses.

 

(a) The Borrower shall pay all transfer taxes and other costs incurred in
connection with all transfers of Collateral. For the avoidance of doubt, any
amounts paid pursuant to this Section 5.23(a) shall not be indemnifiable
pursuant to Section 11.4.

 

(b) Without duplication of any other provision of this Agreement, the Borrower
agrees to pay the Collateral Agent the reasonable and documented out-of-pocket
costs and expenses, including but not limited to reasonable and documented
attorneys' fees and other charges, incurred by the Collateral Agent in
connection with making collections on any Collateral.

 

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Section 5.24         Collateral Agent May Perform.

 

(a) If the Borrower fails to perform any agreement contained herein to be
performed by it, the Collateral Agent may, upon the written instructions of the
Administrative Agent or the Majority Lenders, itself file, record, make, execute
and deliver all such notices, instruments, statements and other documents, and
take such acts, as the Majority Lenders may determine to be necessary or
desirable from time to time to perfect, preserve or otherwise protect the
security interest of the Collateral Agent, for the benefit of itself and the
Secured Parties and otherwise perform, or cause performance of, any other such
actions as the Majority Lenders shall determine is necessary or desirable, and
the reasonable, including out-of-pocket, fees and expenses of the Collateral
Agent and Lenders incurred in connection therewith shall be payable by the
Borrower and shall be part of the Obligations.

 

(b) The powers conferred on the Collateral Agent hereunder are solely to protect
its interest (on behalf of the Secured Parties) in the Collateral and shall not
impose any duty on it to exercise any such powers. Except for reasonable care of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, the Collateral Agent shall have no duty as to any Collateral or
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral.

 

Section 5.25         Notice of Name Change. The Borrower shall give the Agents
not less than 30 days' notice of any change of its name and not less than 30
days' notice of any change of its principal place of business and will take all
steps necessary to preserve the first priority perfected security interest of
the Collateral Agent in the Collateral. The Borrower shall not change its type
of organization, jurisdiction of organization or other legal structure.

  

Section 5.26         Stamp and Other Similar Taxes. The Borrower agrees to
indemnify and hold harmless the Collateral Agent and each Secured Party from any
present or future claim for liability for any stamp or other similar tax and any
penalties or interest with respect thereto, which are assessed, levied or
collected by any jurisdiction in connection with this Agreement, the Collateral
or the attachment or perfection of the security interest granted to the
Collateral Agent in any Collateral. The obligations of the Borrower under this
Section 5.26 shall survive the termination of the other provisions of this
Agreement. For the avoidance of doubt, any amounts paid pursuant to this Section
5.26 shall not be duplicative of amounts paid pursuant to Section 11.4 or
Section 12.3.

  

Section 5.27         Filing Fees, Excise Taxes, etc. The Borrower agrees (a) to
pay or to reimburse the Agents for any and all amounts in respect of all search,
filing, recording and registration fees, taxes, excise taxes and other similar
imposts which are payable in respect of the execution, delivery, performance and
enforcement of this Agreement and the other Loan Documents and (b) to save the
Agents harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees. The
obligations of the Borrower under this Section 5.27 shall survive the
termination of the other provisions of this Agreement. For the avoidance of
doubt, any amounts paid pursuant to this Section 5.27 shall not be duplicative
of amounts paid pursuant to Section 11.4 or Section 12.3.

  

Section 5.28         Investment Company Restriction. The Borrower shall not
become required to register as an "investment company" under the Investment
Company Act.

 

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Section 5.29         Delivery of Proceeds. In the event that the Borrower
receives any payments in respect of or other proceeds of Collateral Loans or
other Collateral or any capital contribution, the Borrower shall pay such
payments or other proceeds to the Collateral Agent promptly and, in no event,
later than two Business Days after the Borrower's receipt thereof.

  

Section 5.30         Performance of Obligations. The Borrower shall timely and
fully comply with and perform in all material respects its obligations under the
Collateral Loans and other Collateral in accordance with the terms thereof.

  

Section 5.31         Limitation on Dividends. The Borrower shall not make any
Restricted Junior Payment other than (i) so long as no Event of Default has
occurred and is continuing or would result therefrom, the Borrower may declare
and make distributions to its equityholders on their membership interests in
accordance with Section 9.1, and (ii) the Borrower may make distributions to its
equityholders of Collateral Loans or of cash or other proceeds relating thereto
which have been repurchased or substituted in accordance with Section
10.1(a)(vii) and the Master Transfer Agreement.

  

Section 5.32         OFAC.

 

The Borrower will not, directly or indirectly, use the proceeds of the Loans, or
lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other Person, (i) to fund any activities or business of
or with any Person, or in any country or territory, that, at the time of such
funding, is, or whose government is, the subject of Sanctions, or (ii) in any
other manner that would result in a violation of Sanctions by any Person
(including any Person participating in the Loans, whether as underwriter,
advisor, investor, or otherwise).

 

Section 5.33         Annual Rating Review. Unless waived in writing by the
Majority Lenders, on or before November 1 in each calendar year, commencing in
2014, the Borrower shall pay for the ongoing monitoring of the rating of the
Loans by DBRS. The Borrower shall promptly notify the Agents, the Collateral
Manager and the Lenders in writing if at any time the rating of the Loans has
been, or is known will be, changed or withdrawn, or the rating outlook on the
Loans has been, or is known will be, changed.

  

Section 5.34         Collateral Management Agreement; Master Transfer Agreement.
The Borrower shall not amend the Collateral Management Agreement or the Master
Transfer Agreement except pursuant to the terms thereof and Section 12.5 of this
Agreement.

  

Section 5.35         Transactions With Affiliates. (a) Unless such transaction
is upon terms no less favorable to the Borrower than it would obtain in a
comparable arm's length transaction with a Person that is not an Affiliate, the
Borrower shall not sell, lease or otherwise transfer any property or assets to,
or purchase, lease or otherwise acquire any property or assets from, or
otherwise engage in any other transactions with, any of its Affiliates, other
than (i) the payment of the Senior Management Fee or the Subordinated Management
Fee, (ii) the receipt of funds from the Borrower or the Collateral Manager
pursuant to Section 8.2(h) and (iii) the acquisition of Collateral Loans from
the BDC pursuant to the Master Transfer Agreement for consideration consisting
of an increase in the value of its equity ownership of the Borrower.

  

(b) The Borrower shall ensure that all purchases of Collateral Loans from any
Affiliate of the Borrower that are conducted after the Original Closing Date
will be pursuant to and in accordance with the Master Transfer Agreement. All
sales of Collateral Loans and other assets from the Borrower to any Affiliate of
the Borrower shall be conducted in an arm's length transaction in the ordinary
course of business.

 

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Section 5.36         Reports by Independent Accountants. 

 

 

(a) On or after the Original Closing Date, the Borrower (or the Collateral
Manager on behalf of the Borrower) shall select one or more nationally
recognized firms of independent certified public accountants for purposes of
performing agreed-upon procedures required by this Agreement, which may be the
firm of independent certified public accountants that performs accounting
services for the Borrower or the Collateral Manager. The Borrower may remove any
firm of independent certified public accountants at any time. Upon any
resignation by such firm or removal of such firm by the Borrower, the Borrower
(or the Collateral Manager on behalf of the Borrower) shall promptly appoint a
successor thereto that shall also be a nationally recognized firm of independent
certified public accountants, which may be a firm of independent certified
public accountants that performs accounting services for the Borrower or the
Collateral Manager. If the Borrower shall fail to appoint a successor to a firm
of independent certified public accountants which has resigned or has been
removed within 30 days after such resignation or removal (as applicable), the
Borrower shall promptly notify the Agents and the Collateral Manager of such
failure in writing. If the Borrower shall not have appointed a successor within
ten days thereafter, the Collateral Manager shall appoint a successor firm of
independent certified public accountants of recognized international reputation.
The fees of such firm of independent certified public accountants and its
successor shall be payable by the Borrower as Administrative Expenses in
accordance with the Priority of Payments and the terms of this Agreement. In the
event such firm requires the Collateral Agent to agree (whether in writing or
otherwise) to the procedures performed by such firm, the Borrower hereby directs
the Collateral Agent to so agree and directs the Collateral Agent to execute a
specified user agreement, access letter or agreement of similar import requested
by such accountants, which may include among other things, (i) acknowledgement
that the Borrower has agreed that the procedures to be performed by such
accountants are sufficient for the Borrower's purposes, (ii) releases by the
Collateral Agent (on behalf of itself and the Lenders and Administrative Agent)
of claims against the firm and acknowledgement of other limitations of liability
in favor of the firm, and (iii) restrictions or prohibitions on the disclosure
of information or documents provided to it by such firm (including to the
Lenders and Administrative Agent). The Collateral Agent shall not have any
responsibility to the Borrower or any Secured Party hereunder to make any
inquiry or investigation as to, and shall have no obligation, liability or
responsibility in respect of, the terms of any engagement of any such firm, or
the validity or correctness of such procedures or content of such letter
(including without limitation with respect to the sufficiency thereof for any
purpose), any report or instruction (or other information or documents) prepared
or delivered by any such accountants pursuant to any such engagement. In no
event shall the Collateral Agent be required to execute any agreement in respect
of the accountants that it reasonably determines adversely affects it.

 

(b) On or before the date that is 120 days following the end of each fiscal year
of the Borrower commencing in 2014, the Borrower shall cause to be delivered to
the Collateral Agent an agreed-upon procedures report from a firm of independent
certified public accountants appointed pursuant to clause (a) above for each
Payment Date Report received since the last statement (i) indicating that the
calculations within those Payment Date Reports have been recalculated and
compared to the information provided by the Borrower in accordance with the
applicable provisions of this Agreement and (ii) listing the Aggregate Principal
Balance of the Collateral Loans securing the Loans as of the immediately
preceding Measurement Dates; provided that in the event of a conflict between
such firm of independent certified public accountants and the Borrower with
respect to any matter in this Section 5.36, the determination by such firm of
independent public accountants shall be conclusive; provided further that, if
there is any inconsistency between the calculations of the Borrower and the
calculations of the firm of independent certified public accountants, the
Borrower shall promptly notify the Administrative Agent and the Lenders and
describe such inconsistency in reasonable detail. In the event such independent
certified public accountants require the Custodian, the Administrative Agent or
the Collateral Agent to agree to the procedures to be performed by such firm in
any of the reports required to be prepared pursuant to this Section 5.36(b), the
Borrower shall direct the Custodian, the Administrative Agent or the Collateral
Agent in writing to so agree. Notwithstanding anything to the contrary herein,
if the Custodian, Administrative Agent or Collateral Agent fail within 75 days
following the end of each fiscal year of the Borrower to execute any
documentation required by the independent certified public accountants selected
by the Borrower prior to the delivery of any report contemplated by this Section
5.36(b), then the Borrower shall have no obligation to furnish any report
covering such fiscal year pursuant to this Section 5.36(b).

 

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Section 5.37         Tax Matters as to the Borrower.

 

The Borrower shall (and each Lender hereby agrees to) treat the Loans as debt
for U.S. Federal income tax purposes and will take no contrary position. The
Borrower shall not engage in or permit any activity that causes it to be treated
as a corporation for U.S. federal income tax purposes, including, without
limitation, by election or by operation of Section 7704 of the Code. Each Member
and Special Member of the Borrower shall at all times be a U.S. Person.

 

Section 5.38         Retention of Net Economic Interest Letter.

 

The Borrower shall (i) cause the Retention Provider not to amend, supplement,
modify, repudiate or waive any provision, of any Retention of Net Economic
Interest Letter without the consent of the Administrative Agent, and (ii) ensure
that the Retention Provider has not changed and will not change the manner in
which it retains the Retention Interest, except to the extent permitted under
Articles 404-410.

 

 

Article VI

EVENTS OF DEFAULT

 

Section 6.1             Events of Default. The term "Event of Default" shall
mean any of the events set forth in this Section 6.1:

 

 

(a) a default in the payment, when due and payable, of any interest, fees,
costs, expenses, indemnities or other amounts (other than principal) due on any
Loan or any related Obligations in respect thereof and, in each case, the
continuation of such default for five Business Days after the date such amounts
become due and payable if such date is provided in this Agreement or the
applicable Loan Document (or, if no such date is provided or such amount is not
fixed, five Business Days after notice shall have been given to the Borrower by
the Majority Lenders, the intended recipient of such amounts or the
Administrative Agent, specifying such amount that has become due and payable);
provided that, in the case of a failure to pay due to an administrative error or
omission by the Collateral Agent, such failure continues for five Business Days
after the Collateral Agent receives written notice or has actual knowledge of
such administrative error or omission and has provided notice of such failure to
the Borrower;

 

(b) a default in the payment of any principal due on any Loans when such
principal becomes due and payable; provided that, in the case of a failure to
pay due to an administrative error or omission by the Collateral Agent, such
failure continues for five Business Days after the Collateral Agent receives
written notice or has actual knowledge of such administrative error or omission
and has provided notice of such failure to the Borrower;

 

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(c) the failure on any Quarterly Payment Date to disburse amounts available in
the Payment Account or Collection Account in accordance with the Priority of
Payments and continuation of such failure for a period of five Business Days or,
in the case of a failure to disburse due to an administrative error or omission
by the Administrative Agent or the Collateral Agent, such failure continues for
seven Business Days after the Administrative Agent or the Collateral Agent, as
applicable, receives written notice or has actual knowledge of such
administrative error or omission and has provided notice of such failure to the
Borrower;

 

(d) the Borrower or the pool of Collateral Loans becomes an investment company
required to be registered under the Investment Company Act;

 

(e) the occurrence of any one or more of the following:

 

(i) failure of any representation or warranty in Section 4.9 or 4.12 to be
correct in all material respects when made, or default in the performance, or
breach, of any covenant contained in Section 5.1(d)(i), 5.10, 5.11, 5.12, 5.13,
5.16, 5.18(a)(v), 5.18(b), 5.19(a)(1)(i) or 5.19(a)(1)(iii);

 

(ii) a default in the performance, or breach, of any covenant contained in
Section 5.1(d)(ii), 5.1(d)(iii), 5.18(a)(i)-(iii) or 5.19(a)(1)(ii) and such
default continues for a period of 5 Business Days after the earlier to occur of
(x) the date on which written notice of such default requiring the same to be
remedied shall have been given to the Borrower and (y) a Senior Authorized
Officer of the Borrower has actual knowledge of such default;

 

(iii) a default in the performance, or breach, of any covenant contained in
Section 5.18(c) and the Administrative Agent determines that such default would
impair the ability of a nationally recognized firm to provide a
non-consolidation opinion with respect thereto;

 

(iv) failure of the representation or warranty in Section 4.4 to be correct in
all material respects when made with respect to the Borrower's obligations under
one or more Collateral Loans or other items of Collateral and there has occurred
or there would reasonably be expected to occur a material adverse effect on the
rights, interests or remedies of the Agents or the Lenders under any of the Loan
Documents; or

 

(v) (x) a default in the performance, or breach, of any other covenant, warranty
or other agreement of the Borrower or the Collateral Manager under this
Agreement or any other Loan Document in any material respect, or (y) the failure
of any representation or warranty of the Borrower or the Collateral Manager made
in this Agreement, any other Loan Document or in any related certificate or
other writing delivered pursuant hereto or thereto or in connection herewith or
therewith to be correct in all material respects when made and such failure
would reasonably be expected to have a Material Adverse Effect (other than a
covenant, representation, warranty or other agreement or a portion thereof a
default in the performance or breach or failure of which is otherwise
specifically dealt with in this Section 6.1, it being understood, without
limiting the generality of the foregoing, that any failure to meet any
Concentration Limitation, Collateral Quality Test or Coverage Test (except as
provided in clause (h) below) is not an Event of Default), and such default,
breach or failure either (A) is not susceptible of cure or (B) continues for a
period of 30 days following the Borrower's actual knowledge of such default;

 

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(f) the entry of a decree or order by a court of competent jurisdiction
(i) adjudging the Borrower as bankrupt or insolvent, or (ii) approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Borrower under the Bankruptcy Code or any
other applicable law, or (iii) appointing a receiver, liquidator, assignee, or
sequestrator (or other similar official) of the Borrower or of any substantial
part of its respective properties, or (iv) ordering the winding up or
liquidation of the affairs of the Borrower, respectively, and the continuance of
any such decree or order is unstayed and in effect for a period of 60
consecutive days;

 

(g) the institution by the Borrower of proceedings for the Borrower to be
adjudicated as bankrupt or insolvent, or the consent by the Borrower to the
institution of bankruptcy or insolvency proceedings against it, or the filing by
the Borrower of a petition or answer or consent seeking reorganization or relief
under the Bankruptcy Code or any other similar applicable law, or the consent by
the Borrower to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee or sequestrator (or other similar
official) of the Borrower of any substantial part of its property, or the making
by it of an assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due, or the
taking of any action by the Borrower in furtherance of any such action;

 

(h) the Overcollateralization Ratio is less than 115% as of any Measurement Date
and remains so for five Business Days after such Measurement Date;

 

(i) any Lien on any Collateral created pursuant to the Loan Documents shall, at
any time after delivery of the respective Loan Documents, cease to be fully
valid and perfected as a first priority Lien subject only to Permitted Liens
(other than directly due to the action of the Lenders or the Agents);

 

(j) any of the Loan Documents (other than the Interest Hedge Agreements and the
Joinder Agreements) ceases to be in full force and effect;

 

(k) one or more judgments or decrees shall be entered against the Borrower, the
Collateral Manager or the Investment Advisor involving in the aggregate a
liability of $1,000,000 or more in excess of the amounts paid or fully covered
by insurance and the same shall not have been vacated, satisfied, undischarged,
stayed or bonded pending appeal within 30 days from the entry thereof;

 

(l) the termination of the Collateral Management Agreement or the Administrative
Agent shall have delivered to the Collateral Manager notice directing the
removal of the Collateral Manager pursuant to the Collateral Management
Agreement as a result of an event constituting "Cause" (as defined in the
Collateral Management Agreement);

 

(m) the occurrence of a Key Manager Event; or

 

(n) the occurrence of a Change in Control.

 

 

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Upon the occurrence of an Event of Default, the Borrower shall promptly notify
the Agents, the Collateral Manager, the Lenders and DBRS in writing (which
notice shall refer to this Agreement and state that such notice is a notice of
Default).

 

Section 6.2             Remedies. If an Event of Default shall have occurred and
be continuing, the Majority Lenders or the Administrative Agent (acting at the
direction of the Majority Lenders) may exercise (or direct the Collateral Agent
in the exercise of) the rights, privileges and remedies set forth in this
Section 6.2.

 

(a) Upon the occurrence and during the continuance of any Event of Default, each
of the following actions shall require the prior written approval by the
Majority Lenders, whether or not approved by the Borrower's board of directors
or other persons performing similar functions: (i) issuance of any commitment to
make, and the purchase or origination (other than pursuant to commitments then
in effect) of, any Collateral Loan or other loan or security constituting any
Collateral or any interest therein, (ii) any amendment, modification, or waiver
of, or any consent to departure from, any term or provision of any Collateral
Loan or other loan or security constituting any Collateral, (iii) any release of
any collateral for, or guarantor of or other credit support provider for, any
Collateral Loan or other loan or security constituting any Collateral, except
upon payment in full of such Collateral Loan or other loan or security, or any
subordination or limitation of recourse with respect thereto, (iv) any sale,
purchase, assignment or participation in respect of any Collateral Loan or other
loan or security constituting any Collateral (other than pursuant to commitments
then in effect or in the case of a sale or assignment upon payment in full of
such Collateral Loan or other loan or security), (v) any determination to
exercise, or not to exercise, remedies in respect of a Collateral Loan or other
loan or security constituting any Collateral following a default or event of
default thereunder, and (vi) any other action or decision not to act which
impairs or could be reasonably likely to impair the value of any Collateral Loan
or other loan or security constituting any Collateral, or to extend or increase
the Borrower's obligations with respect thereto or to interfere with the
exercise of rights or remedies with respect to any Collateral Loan or other loan
or security constituting any Collateral.

 

(b) Upon the occurrence and during the continuance of any Event of Default, in
addition to all rights and remedies specified in this Agreement and the other
Loan Documents, including Section 6.3, and the rights and remedies of a secured
party under applicable law, including the UCC, the Administrative Agent or the
Majority Lenders, by notice to the Borrower, may do any one or more of the
following:

 

(1)  declare the Commitments to be terminated forthwith, whereupon the
Commitments shall forthwith terminate (provided that, unless an Event of Default
described in Section 6.1(d), (f) or (g) has occurred and is continuing, the
Class A-R Commitments shall not be terminated unless the Net Aggregate Exposure
Amount is equal to zero); and

 

(2)  declare the principal of and the accrued interest on the Loans and the
Notes and all other amounts whatsoever payable by the Borrower hereunder
(including any amounts payable under Section 2.9) to be forthwith due and
payable, whereupon such amounts shall be immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of which are
hereby waived by the Borrower;

 

provided that, upon the occurrence of any Event of Default described in
clause (f) or (g) of Section 6.1, the Commitments shall automatically terminate
and the Loans and all such other amounts shall automatically become due and
payable, without any further action by any party.

 

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(c) Upon the occurrence and during the continuance of an Event of Default, the
Majority Lenders or the Collateral Agent (acting at the direction of the
Administrative Agent or the Majority Lenders) will have the right to take any
other remedies set forth in Section 6.3(b) below or other remedies permitted by
law.

 

Section 6.3             Additional Collateral Provisions.

 

(a) Release of Security Interest. If and only if all Obligations under the Loans
have been paid in full and all Commitments have been terminated, the Secured
Parties shall, at the expense of the Borrower, promptly execute, deliver and
file or authorize for filing such instruments as the Borrower shall reasonably
request in order to reassign, release or terminate the Secured Parties' security
interest in the Collateral. The Secured Parties acknowledge and agree that upon
the sale or disposition of any Collateral by the Borrower in compliance with the
terms and conditions of this Agreement, the security interest of the Secured
Parties in such Collateral shall immediately terminate and the Secured Parties
shall, at the expense of the Borrower, execute, deliver and file or authorize
for filing such instrument as the Borrower shall reasonably request to reflect
or evidence such termination. Any and all actions under this Article VI in
respect of the Collateral shall be without any recourse to, or representation or
warranty by any Secured Party and shall be at the sole cost and expense of the
Borrower.

 

(b) Additional Rights and Remedies. The Collateral Agent (for itself and on
behalf of the other Secured Parties), acting at the direction of the Majority
Lenders through the Administrative Agent, shall have all of the rights and
remedies of a secured party under the UCC and other applicable law. Upon the
occurrence and during the continuance of an Event of Default, the Collateral
Agent or its designees shall, at the direction of the Majority Lenders through
the Administrative Agent, to the extent permitted by applicable law and
notwithstanding anything in the Loan Documents to the contrary, (i) instruct the
Borrower to deliver any or all of the Collateral, the Related Contracts,
Underlying Instruments and any other documents relating to the Collateral to the
Collateral Agent or its designees and otherwise give all instructions for the
Borrower regarding the Collateral; (ii) sell or otherwise dispose of the
Collateral, all without judicial process or proceedings; (iii) take control of
the proceeds of any such Collateral; (iv) subject to the provisions of the
applicable Related Contracts, exercise any consensual or voting rights in
respect of the Collateral; (v) release, make extensions, discharges, exchanges
or substitutions for, or surrender all or any part of the Collateral; (vi)
enforce the Borrower's rights and remedies with respect to the Collateral; (vii)
institute and prosecute legal and equitable proceedings to enforce collection
of, or realize upon, any of the Collateral; (viii) require that the Borrower
immediately take all actions necessary to cause the liquidation of the
Collateral in order to pay all amounts due and payable in respect of the
Obligations, in accordance with the terms of the Related Contracts; (ix) to
redeem or withdraw or cause the Borrower to redeem or withdraw any asset of the
Borrower to pay amounts due and payable in respect of the Obligations; (x)
subject to Section 12.16, make copies of or, if necessary, remove from the
Borrower's and its agents' place of business all books, records and documents
relating to the Collateral; and (xi) endorse the name of the Borrower upon any
items of payment relating to the Collateral or upon any proof of claim in
bankruptcy against an account debtor. The Collateral Agent shall provide written
notice of any liquidation of the Collateral to DBRS.

 

The Collateral Agent shall not be under any duty or obligation to take any
affirmative action to exercise or enforce any power, right or remedy available
to it under this Agreement unless and until (and to the extent) at the express
direction of the Majority Lenders through the Administrative Agent; provided
that the Collateral Agent shall not be required to take any such action at the
direction of the Majority Lenders through the Administrative Agent, any Secured
Party or otherwise if the taking of such action, in the reasonable determination
of the Collateral Agent, (x) shall be in violation of any applicable law or
contrary to any provisions of this Agreement or (y) shall expose the Collateral
Agent to liability hereunder (unless it has been provided with an indemnity
agreement (including the indemnity provisions contained herein and in the other
Loan Documents) which it reasonably deems to be satisfactory with respect
thereto).

 

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The Borrower hereby agrees that, upon the occurrence and during the continuance
of an Event of Default, at the reasonable request of the Collateral Agent
(acting at the direction of the Majority Lenders or acting directly or through
the Administrative Agent) or the Majority Lenders, it shall execute all
documents and agreements which are necessary or appropriate to have the
Collateral assigned to the Collateral Agent or its designee. For purposes of
taking the actions described in clauses (i) through (xi) of this Section 6.3(b)
the Borrower hereby irrevocably appoints the Collateral Agent as its
attorney-in-fact (which appointment being coupled with an interest and is
irrevocable while any of the Obligations remain unpaid and which can be
exercised only if such Event of Default is continuing), with power of
substitution, in the name of the Collateral Agent or in the name of the Borrower
or otherwise, for the use and benefit of the Collateral Agent, for the benefit
of the Secured Parties, but at the cost and expense of the Borrower and, except
as permitted by applicable law, without notice to the Borrower.

 

All documented sums paid or advanced by the Collateral Agent in connection with
the foregoing and all documented out-of-pocket costs and expenses (including
documented and reasonable and documented attorneys' fees and expenses) incurred
in connection therewith, together with interest thereon at the Post-Default Rate
for the Loans from the date of demand of repayment by the Collateral Agent until
repaid in full, shall be paid by the Borrower to the Collateral Agent from time
to time on demand in accordance with the Priority of Payments and shall
constitute and become a part of the Obligations secured hereby.

 

Without the prior written consent of the Majority Lenders, credit bidding by any
Lender (or any other Person) in connection with any foreclosure sale hereunder
shall not be permitted.

 

Notwithstanding any other provision of this Article VI, in connection with the
sale of the Collateral following an acceleration of the Obligations, the
Collateral Manager (or any of its Affiliates) shall have the right (which right,
for avoidance of doubt, shall be irrevocably forfeited if not exercised within
the specified timeframe) to purchase all of the Collateral Loans in the
Collateral within 2 Business Days of its receipt of notice of such acceleration
by paying to the Collateral Agent in immediately available funds, an amount
equal to all outstanding Obligations and, without duplication, all unpaid
Administrative Expenses. Notwithstanding the foregoing purchase rights, if the
Collateral Agent or the Majority Lenders propose to sell the Collateral or any
part thereof in one or more parcels at a public or private sale, the Collateral
Manager (or any of its Affiliates) shall have the right to offer bids to acquire
all or any portion of the Collateral sold at such sale. To the extent the
Administrative Agent (at the direction of the Majority Lenders) elects to sell
any or all Collateral Loans at such public or private sale, such Collateral
Loans or any parcel thereof shall be sold to the party offering the highest bid
in immediately available funds.

 

(c) Remedies Cumulative. Each right, power, and remedy of the Agents and the
other Secured Parties, or any of them, as provided for in this Agreement or in
the other Loan Documents or now or hereafter existing at law or in equity or by
statute or otherwise shall be cumulative and concurrent and shall be in addition
to every other right, power, or remedy provided for in this Agreement or in the
other Loan Documents or now or hereafter existing at law or in equity or by
statute or otherwise, and the exercise or beginning of the exercise by the
Agents or any other Secured Party of any one or more of such rights, powers, or
remedies shall not preclude the simultaneous or later exercise by such Persons
of any or all such other rights, powers, or remedies.

 

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(d) Related Contracts.

 

(i) The Borrower hereby agrees that, to the extent not expressly prohibited by
the terms of the Related Contracts, after the occurrence and during the
continuance of an Event of Default, it shall (x) upon the written request of
either Agent promptly forward to such Agent all information and notices which it
receives under or in connection with the Related Contracts relating to the
Collateral, subject to applicable confidentiality requirements, and (y) upon the
written request of either Agent, act and refrain from acting in respect of any
request, act, decision or vote under or in connection with the Related Contracts
relating to the Collateral only in accordance with the direction of such Agent.

 

(ii) The Borrower agrees that, to the extent the same shall be in the Borrower's
possession, it will hold all Related Contracts relating to the Collateral in
trust for the Collateral Agent on behalf of the Secured Parties, and upon
request of either Agent following the occurrence and during the continuance of
an Event of Default or as otherwise provided herein, promptly deliver the same
to the Collateral Agent or its designee.

 

(e) Borrower Remains Liable.

 

(i) Notwithstanding anything herein to the contrary, (x) the Borrower shall
remain liable under the contracts and agreements included in and relating to the
Collateral (including the Related Contracts) to the extent set forth therein,
and shall perform all of its duties and obligations under such contracts and
agreements to the same extent as if this Agreement had not been executed, and
(y) the exercise by any Secured Party of any of its rights hereunder shall not
release the Borrower from any of its duties or obligations under any such
contracts or agreements included in the Collateral.

 

(ii) No obligation or liability of the Borrower is intended to be assumed by
either Agent or any other Secured Party under or as a result of this Agreement
or the other Loan Documents, and the transactions contemplated hereby and
thereby, including under any Related Contract or any other agreement or document
that relates to Collateral and, to the maximum extent permitted under provisions
of law, the Agents and the other Secured Parties expressly disclaim any such
assumption.

 

(f) Protection of Collateral. The Borrower, or the Collateral Manager on behalf
of and at the expense of the Borrower, shall from time to time execute and
deliver all such supplements and amendments hereto and file or authorize the
filing of all such UCC-1 financing statements, continuation statements,
instruments of further assurance and other instruments, and shall take such
other action as may be necessary or advisable or desirable to secure the rights
and remedies of the Lenders hereunder and to:

 

(i) grant security more effectively on all or any portion of the Collateral;

 

(ii) maintain, preserve and perfect any grant of security made, continued or to
be made by this Agreement including, without limitation, the first priority
nature of the lien or carry out more effectively the purposes hereof;

 

(iii) perfect, publish notice of or protect the validity of any grant made,
continued or to be made by this Agreement (including, without limitation, any
and all actions necessary or desirable as a result of changes in law or
regulations);

 

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(iv) enforce any of the Collateral or other instruments or property included in
the Collateral;

 

(v) preserve and defend title to the Collateral and the rights therein of the
Collateral Agent and the Secured Parties in the Collateral against the claims of
all Persons and parties; and

 

(vi) pay or cause to be paid any and all material taxes levied or assessed upon
all or any part of the Collateral, except to the extent such taxes are being
contested in good faith by appropriate proceedings promptly instituted and
diligently concluded; provided that any reserve or other appropriate provision
as shall be required in conformity with GAAP shall have been made therefor.

 

The Borrower hereby authorizes the Collateral Agent as its agent and attorney in
fact to prepare and file any UCC-1 financing statement, continuation statement
and all other instruments, and take all other actions, required pursuant to this
Section 6.3. Such authorization shall not impose upon the Collateral Agent, or
release or diminish, the Borrower's obligations under this Section 6.3. The
Borrower further authorizes the Administrative Agent's United States counsel to
file any UCC-1 or UCC-3 financing statements that may be required by the Agents
in connection with this Agreement and the transactions contemplated hereby.

 

Section 6.4             Application of Proceeds. Unless and until the Majority
Lenders have exercised their right to direct the liquidation of the Collateral
pursuant to this Article VI, all proceeds received in respect of the Collateral
will be applied in accordance with the Priority of Payments specified in Section
9.1(a). All proceeds received after the Majority Lenders have exercised their
right to direct the liquidation of the Collateral will be applied to the
Obligations in the following order of priority on each date or dates fixed by
the Collateral Agent (at the direction of the Majority Lenders acting through
the Administrative Agent):

 

 

(a) first, to the payment to the Collateral Agent for all due and unpaid
Collateral Agent Fees and all other Administrative Expenses owing to the
Collateral Agent, all amounts owing and payable hereunder to the Custodian and
U.S. Bank as Securities Intermediary (including, in each case, without
limitation, indemnity payments); and second, to the payment to the
Administrative Agent for all due and unpaid Administrative Agent Fees and all
other Administrative Expenses owing to the Administrative Agent (including,
without limitation, indemnity payments);

 

(b) to the payment of Administrative Expenses (other than those paid under
clause (a) above), in the order of priority set forth in the definition of
"Administrative Expenses";

 

(c) to the payment of all other amounts due to the Agents hereunder;

 

(d) to the payment of all amounts due to the Interest Hedge Counterparties under
all Interest Hedge Agreements (exclusive of any early termination or liquidation
payment owing by the Borrower by reason of the occurrence of an event of default
or termination event thereunder with respect to such Interest Hedge Counterparty
where such Interest Hedge Counterparty is the sole affected party or the
defaulting party);

 

(e) to the payment to the Collateral Manager of all due and unpaid Senior
Management Fees;

 

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(f) first, to the payment to the Lenders hereunder on a pro rata basis, of all
amounts due which constitute principal, interest (other than the additional two
percent of interest payable at the Post-Default Rate) and Commitment Fees in
respect of the Loans; and second, to the payment to the Lenders hereunder on a
pro rata basis, of all interest payable at the Post-Default Rate (to the extent
not paid in clause "first" above) and all amounts due which constitute Increased
Costs and all other amounts on and in respect of all Loans;

 

(g) to the payment of all amounts due to any Interest Hedge Counterparty under
all Interest Hedge Agreements to the extent not paid under clause (d) above;

 

(h) to the payment to the Collateral Manager of all due and unpaid Subordinated
Management Fees; and

 

(i) any remainder, to the equity of the Borrower.

 

If on any date that payments are made pursuant to this Section 6.4 the amount
available to be paid pursuant to any of the foregoing clauses (a) through (i) is
insufficient to make the full amount of the disbursements required pursuant to
any such clause, such payments will be applied in the order and according to the
priority set forth in clauses (a) through (i) above and (except as provided in
subclauses "first" and "second" of clause (a) above) ratably in accordance with
the respective amounts owing under any such clause to the extent funds are
available therefor.

 

Section 6.5             Addition of Capital Contributions. The equityholders of
the Borrower may, but shall have no obligation to, at any time or from time to
time make a capital contribution in Cash to the Borrower for the purpose of
curing any Event of Default (but, for the avoidance of doubt, no such
contribution shall cure any Event of Default without the consent of the Majority
Lenders) or satisfying any Coverage Test or Collateral Quality Test; provided
that the proceeds of such capital contribution are applied to prepay the Loans.
Unless otherwise directed by the Borrower by prior or contemporaneous written
notice to the Collateral Manager, the Administrative Agent and the Collateral
Agent, all Cash contributed to the Borrower shall be treated as Principal
Proceeds.

  

Article VII

THE AGENTS

 

Section 7.1             Appointment and Authorization. Each Lender irrevocably
appoints and authorizes the Agents to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other Loan Documents as
are delegated to such Agent by the terms hereof or thereof, together with all
such powers as are reasonably incidental thereto. Only the Agents (and not one
or more of the Lenders) shall have the authority to deal directly with the
Borrower under this Agreement and each Lender acknowledges that all notices,
demands or requests from such Lender to the Borrower must be forwarded to the
applicable Agent for delivery to the Borrower. Each Lender acknowledges that the
Borrower has no obligation to act or refrain from acting on instructions or
demands of one or more Lenders absent written instructions from an Agent in
accordance with its rights and authority hereunder.

  

Section 7.2             Agents and Affiliates. The Agents shall each have the
same rights and powers under this Agreement as the Lenders and may each exercise
or refrain from exercising the same as though it were not an Agent, and such
Agents and their respective affiliates may accept deposits from, lend money to,
and generally engage in any kind of business with the Borrower or any Affiliate
of the Borrower as if it were not an Agent hereunder, and the term "Lender" and
"Lenders" may include Natixis, U.S. Bank and/or any Affiliate of Natixis or U.S.
Bank in its individual capacity. The provisions in this Article VII with respect
to the Agents shall apply only to the Agents acting in their capacities as such
hereunder and not as Lenders.

 

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Section 7.3             Actions by Agent. The obligations of the Agents
hereunder are only those expressly set forth herein. Neither Agent shall have
any duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of any Agent
shall be read into this Agreement or any other Loan Document or shall otherwise
exist against any Agent. The provisions of this Article VII are solely for the
benefit of the Agents and the Lenders (other than Sections 7.1 and 7.8, which
are also for the benefit of the Borrower). In performing its functions and
duties solely under this Agreement, each Agent shall act solely as the agent of
the Lenders (except to the extent provided in Section 12.6(f)) and does not
assume, nor shall be deemed to have assumed, any obligation or relationship of
trust with or for the Lenders. Without limiting the generality of the foregoing,
no Agent shall be required to take any action with respect to any Default,
except as expressly provided in Article VI.

  

Section 7.4             Delegation of Duties; Consultation with Experts. Each
Agent may execute any of its duties under this Agreement by or through its
subsidiaries, affiliates, agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. No Agent
shall be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care. Each Agent may consult
with legal counsel, independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.

 

Section 7.5             Liability of Agents.(a) No Agent nor any of its
respective affiliates, directors, officers, agents or employees shall be liable
for any action taken or not taken by it in connection herewith (x) with the
consent or at the request of the Majority Lenders or (y) in the absence of its
own gross negligence or willful misconduct. No Agent nor any of its respective
affiliates, directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into or verify (i) any statement, warranty
or representation made in connection with this Agreement or any Borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any condition specified in
Article III, except receipt of items required to be delivered to such Agent; or
(iv) the validity, effectiveness or genuineness of this Agreement, the other
Loan Documents or any other instrument or writing furnished in connection
herewith. No Agent shall incur any liability by acting in reliance upon any
notice, consent, certificate, statement, or other writing (which may be a bank
wire, telex or similar writing) believed by it to be genuine or to be signed by
the proper party or parties. Each Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement or any other Loan
Document or any other document furnished in connection herewith or therewith in
accordance with a request of the Majority Lenders (and, with respect to the
Collateral Agent, the Administrative Agent) and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders.
Under no circumstances shall the Agents be deemed liable for any special,
indirect, punitive or consequential damages (including lost profits) even if the
Collateral Agent has been advised of the likelihood of such damages and
regardless of the form of action. 

 

(b) The following additional provisions apply with respect to the Collateral
Agent:

 

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(i) the Collateral Agent shall not be deemed to have notice or knowledge of the
occurrence and continuance of an Event of Default until an Administrative
Officer of the Collateral Agent shall have received written notice (which notice
shall refer to this Agreement and state that such notice is a notice of Default
or Event of Default) thereof from the Borrower, the Collateral Manager, the
Administrative Agent, a Lender or any other Person;

 

(ii) no provision of this Agreement or the other Loan Documents shall require
the Collateral Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers contemplated hereunder, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it;
provided, however, that the reasonable and documented costs of performing its
ordinary services under this Agreement shall not be deemed an "financial
liability" for purposes hereof;

 

(iii) if, in performing its duties under this Agreement, the Collateral Agent is
required to decide between alternative courses of action, the Collateral Agent
may request written instructions from the Administrative Agent (and the
Administrative Agent shall request written instructions from the Majority
Lenders) as to the course of action desired. If the Collateral Agent does not
receive such instructions within five Business Days after its request therefor,
the Collateral Agent may, but shall be under no duty to, take or refrain from
taking any such courses of action. The Collateral Agent shall act in accordance
with instructions received after such five Business Day period except to the
extent it has already taken, or committed itself to take, action inconsistent
with such instructions;

 

(iv) the Collateral Agent shall be under no liability for interest on any funds
received by it hereunder except to the extent of income or other gain on
Eligible Investments which are deposits in or certificates of deposit of U.S.
Bank or any Affiliate in its commercial capacity and income or other gain
actually received (and not subsequently reinvested, withdrawn or distributed) by
the Collateral Agent in Eligible Investments;

 

(v) the Collateral Agent shall not be liable or responsible for delays or
failures in the performance of its obligations hereunder arising out of or
caused, directly or indirectly, by circumstances beyond its control (such acts
include but are not limited to acts of God, strikes, lockouts, riots, acts of
war and interruptions, losses or malfunctions of utilities, computer (hardware
or software) or communications services); it being understood that the
Collateral Agent shall use commercially reasonable efforts which are consistent
with accepted practices in the banking industry to resume performance as soon as
reasonably practicable under the circumstances; and

 

(vi) without prejudice to the Collateral Agent's duties under Article VI or any
other provision of any Loan Document, the Collateral Agent shall be under no
obligation to take any action to collect from any Obligor any amount payable by
such Obligor on the Collateral Loans or any other Collateral under any
circumstances, including if payment is refused after due demand.

 

(c) The Collateral Agent shall have no duties or responsibilities except such
duties and responsibilities as are specifically set forth in this Agreement, and
no covenants or obligations shall be implied in this Agreement or the other Loan
Documents against the Collateral Agent. The Collateral Agent shall not be
responsible for delays or failures in performance resulting from acts beyond its
control. Such acts shall include but shall not be limited to acts of god,
strikes, lockouts, riots, acts of war, epidemics, governmental regulations
superimposed after the fact, fire, communication line failures, power failures,
earthquakes or other disasters.

 

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(d) In no event shall the Collateral Agent be liable for the selection of any
investments or any losses in connection therewith, or for any failure of the
Borrower to timely provide investment instruction to the Collateral Agent in
connection with the investment of funds in or from any account set forth herein.
Except as otherwise provided in Section 8.2(c) or Section 8.3, in the absence of
a Borrower Order or, after an Event of Default, a direction from the
Administrative Agent, all funds in any account held under this Agreement shall
be held uninvested.

 

(e) The Collateral Agent and its Affiliates shall be permitted to receive
additional compensation that could be deemed to be in the Collateral Agent's
economic self-interest for (i) serving as investment adviser, administrator,
shareholder, servicing agent, custodian or sub-custodian with respect to certain
of the Eligible Investments, (ii) using Affiliates to effect transactions in
certain Eligible Investments, and (iii) effecting transactions in certain
investments. Such compensation shall not be considered an amount that is
reimbursable or payable pursuant to this Agreement.

 

(f) Without limiting the generality of any terms of this Section 7.5, the
Collateral Agent shall have no liability for any failure, inability or
unwillingness on the part of the Lenders, the Administrative Agent, the
Collateral Manager or the Borrower to provide accurate and complete information
on a timely basis to the Collateral Agent, or otherwise on the part of any such
party to comply with the terms of this Agreement or the other Loan Documents,
and shall have no liability for any inaccuracy or error in the performance or
observance on the Collateral Agent's part of any of its duties hereunder that is
caused by or results from any such inaccurate, incomplete or untimely
information received by it, or other failure on the part of any such other party
to comply with the terms hereof.

 

(g) In order to comply with the laws, rules, regulations and executive orders in
effect from time to time applicable to banking institutions, including those
relating to the funding of terrorist activities and money laundering
(collectively, "Applicable Laws"), the Collateral Agent is required to obtain,
verify and record certain information relating to individuals and entities which
maintain a business relationship with the Collateral Agent. Accordingly, each of
the parties agrees to provide to the Collateral Agent upon its request from time
to time such identifying information and documentation as may be available for
such party in order to enable the Collateral Agent to comply with Applicable
Laws. The Collateral Agent may from time to time establish any additional
accounts deemed necessary or desirable for convenience in administering the
Collateral so long as each such account is at all times subject to a valid and
perfected first priority lien in favor of the Collateral Agent, for the benefit
of the Secured Parties.

 

(h) The Collateral Agent shall not be under any obligation to exercise any of
the rights or powers vested in it by this Agreement or any other Loan Document
at the request or direction of the Majority Lenders or Administrative Agent
unless it shall have been provided indemnity reasonably satisfactory to it
against the costs, expenses (including the reasonable fees and expenses of its
attorneys and counsel), and liabilities which may be incurred by it in
compliance with or in performing such request or direction. No provision of this
Agreement or any Loan Document shall otherwise be construed to require the
Collateral Agent to expend or risk its own funds or to take any action that
could in its judgment cause it to incur any cost, expenses or liability, unless
it is provided an indemnity reasonably acceptable to it against any such
expenditure, risk, costs, expense or liability. For the avoidance of doubt, the
Collateral Agent shall not have any duty or obligation to take any affirmative
action to exercise or enforce any power, right or remedy available to it under
this Agreement or any other Loan Document unless and until directed by the
Majority Lenders (or the Administrative Agent on their behalf).

 

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(i) The Collateral Agent shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, entitlement order, approval or other
paper or document. The Collateral Agent shall not be liable for any error of
judgment, or for any act done or step taken or omitted by it, in good faith, or
for any mistakes of fact or law, or for anything that it may do or refrain from
doing in connection herewith except in the case of its willful misconduct, bad
faith, reckless disregard or grossly negligent performance or omission of its
duties. The Collateral Agent may consult with legal counsel (including, without
limitation, counsel for the Borrower or the Administrative Agent or any of their
Affiliates) and independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts. The Collateral Agent shall not be liable for the actions of omissions
of the Administrative Agent (including without limitation concerning the
application of funds), or under any duty to monitor or investigate compliance on
the part of the Administrative agent with the terms or requirements of this
Agreement, any Loan Document or any related document, or their duties
thereunder. The Collateral Agent shall be entitled to assume the due authority
of any signatory and genuineness of any signature appearing on any instrument or
document it may receive hereunder.

 

(j) The delivery of reports, and other documents and information to the
Collateral Agent hereunder or under any other Loan Document is for informational
purposes only and the Collateral Agent's receipt of such documents and
information shall not constitute constructive notice of any information
contained therein or determinable from information contained therein. The
Collateral Agent is hereby authorized and directed to execute and deliver the
other Loan Documents to which it is a party. Whether or not expressly stated in
such Facility Documents, in performing (or refraining from acting) thereunder,
the Collateral Agent shall have all of the rights, benefits, protections and
indemnities which are afforded to it in this Agreement.

 

(k) Except as expressly provided herein or in any other Loan Document, nothing
herein shall be construed to impose an obligation on the part of the Collateral
Agent to recalculate, evaluate or verify any report, certificate or information
received by it from the Borrower, Collateral Manager, Lender or Administrative
Agent or to otherwise monitor the activities of the Borrower or Collateral
Manager.

 

(l) In the event that the Collateral Agent is also acting in the capacity of
Custodian, paying agent, securities intermediary hereunder or under the other
Loan Documents, the rights, protections, immunities and indemnities afforded the
Collateral Agent pursuant to this Article VII shall also be afforded to U.S.
Bank acting in such capacities.

 

(m) The Collateral Agent shall not be charged with knowledge or notice of any
matter unless actually known to an Administrative Officer of the Collateral
Agent responsible for the administration of this Agreement, or unless and to the
extent written notice of such matter is received by the Collateral Agent at its
address in accordance with Section 12.1.

 

Section 7.6             Indemnification. Each Lender shall, ratably in
accordance with its Percentage Share, indemnify the Agents, their respective
affiliates, directors, officers, agents and employees (to the extent not
reimbursed by the Borrower as may be required under this Agreement) against any
cost, expense (including fees of counsel and disbursements), claim, demand,
action, loss or liability (except such as result from such indemnitees' gross
negligence or willful misconduct) that such indemnitees may suffer or incur in
connection with this Agreement, the other Loan Documents or any action taken or
omitted by such indemnitees hereunder or thereunder.

 

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Section 7.7             Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon any Agent or any other Lender or any of
their respective affiliates, and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon any Agent or any other Lender or their respective
affiliates, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement or in connection therewith. The
Agents shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, property,
prospects, financial and other condition or creditworthiness of the Borrower
which may come into the possession of the Agents or any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates other
than in connection with their acting as Agents under this Agreement and the
other Loan Documents.

 

 

Section 7.8             Successor Agent. An Agent may give notice of its intent
to resign at any time by giving notice thereof to the Lenders, the Borrower, the
Collateral Manager and DBRS. Upon receipt of any such notice, the Majority
Lenders shall have the right to appoint a successor Agent with the consent of
the Borrower (which consent shall not be unreasonably withheld or delayed). If
no successor Agent shall have been so appointed by the Majority Lenders, shall
have been approved by the Borrower, and shall have accepted such appointment,
within 30 days after the notice of resignation or removal thereof, then the
retiring Agent may (i) petition a court of competent jurisdiction to appoint a
successor Agent or (ii) appoint a successor Agent, in each case, which such
successor Agent shall be a commercial bank organized or licensed under the laws
of the United States of America or of any State thereof and having a combined
capital and surplus of at least $50,000,000. Upon the acceptance of its
appointment as such Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder, and the successor Agent shall provide written notice
of such appointment to the Lenders, the Collateral Manager and DBRS. In
addition, upon the affirmative vote of the Majority Lenders exercising good
faith that an Agent has acted with gross negligence or committed an act of
willful misconduct or failed to act as required due to gross negligence or
willful misconduct in its capacity as agent for the Lenders hereunder, the
Majority Lenders may immediately remove such Agent; provided that (i) a Lender
hereunder agrees to serve as Agent and (ii) the Borrower has consented to such
Lender serving as Agent (which consent shall not be unreasonably withheld or
delayed) until a successor Agent shall be appointed pursuant to the terms of
this Section 7.8. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was an Agent. With respect to any
Person (i) into which an Agent may be merged or consolidated, (ii) that may
result from any merger or consolidation to which an Agent shall be a party, or
(iii) with respect to the Collateral Agent that may succeed to the corporate
trust business and assets of the Collateral Agent substantially as a whole,
shall be the successor to such Agent under this Agreement without further act of
any of the parties to this Agreement.

 

 

Article VIII

 

ACCOUNTS AND COLLATERAL

 

Section 8.1             Collection of Money.

 

(a) Except as otherwise expressly provided herein, the Collateral Agent may
demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary,
all Money and other property payable to or receivable by the Collateral Agent
pursuant to this Agreement (other than amounts specifically required herein to
be paid to the Administrative Agent), including, but not limited to, all
payments or any other amounts due on the Collateral Loans and Eligible
Investments, in accordance with the terms and conditions of such Collateral
Loans and Eligible Investments. The Collateral Agent shall segregate and hold
all such Money and property received by it in trust for the Lenders and shall
apply it as provided in this Agreement.

 

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(b) All payments on the Collateral Loans and other Collateral shall be made
directly to the Collateral Agent (at a bank in the United States), will be held
in the Collection Account, and will be divided into Interest Proceeds (including
Fee Proceeds) and Principal Proceeds. Such amounts shall be applied in
accordance with the Priority of Payments and the terms of this Agreement.

 

(c) The Borrower will provide the Collateral Agent with a certified copy of each
agreement under which the Borrower sells a Participation Interest in any
Collateral Loan pursuant to Section 10.1(b) or sells all or any part of a
Collateral Loan by assignment pursuant to Section 10.1. Upon receipt of written
certification by the Borrower (which may take the form of standing instructions
with respect to a specified portion of all payments received on designated
Collateral Loans) to the effect that specified amounts received by the
Collateral Agent from an Obligor do not constitute Collections subject to this
Agreement but are required by the terms of such a participation or assignment
agreement to be paid by the Borrower to the purchaser of a Participation
Interest sold by the Borrower or assignee of the Borrower, as the case may be,
the Collateral Agent will disburse such amounts, as directed in such
certificate.

 

(d) The parties to the transactions contemplated by this Agreement intend that
each of the Covered Accounts shall be securities accounts of the Collateral
Agent and not accounts of the Borrower. The Custodian shall comply with
entitlement orders originated by the Collateral Agent without the further
consent of any other person or entity. Without limiting the generality of the
foregoing, if the Collateral Agent notifies the Custodian that the Collateral
Agent shall exercise exclusive control over the Covered Accounts, the Custodian
shall cease complying with entitlement orders or other directions relating to
the Covered Accounts (or any financial assets or other funds or property
credited to or held, deposited, or carried in the Covered Accounts) originated
by the Borrower or any other Person or entity other than the Collateral Agent.
For the avoidance of doubt, the Collateral Agent shall not seek to exercise
exclusive control over the Covered Accounts at any time prior to the occurrence
and continuance of an Event of Default. The immediately preceding sentence is an
agreement as between the Collateral Agent and the Borrower alone and does not
constitute an agreement of the Custodian.

 

The Custodian shall agree, and U.S. Bank as Custodian hereby agrees, with the
Collateral Agent that (i) each of the Covered Accounts shall be securities
accounts of the Collateral Agent, (ii) all property credited to the Covered
Accounts shall be treated as a "financial asset" for purposes of the UCC, (iii)
the Custodian shall treat the Collateral Agent as entitled to exercise the
rights that comprise each financial asset credited to the Covered Accounts, (iv)
the Custodian shall not agree with any person or entity other than the
Collateral Agent to comply with entitlement orders originated by any person or
entity other than the Collateral Agent, (v) the Covered Accounts and all
property credited to the Covered Accounts shall not be subject to any lien,
security interest, right of set-off, or encumbrance in favor of the Custodian or
any person or entity claiming through the Custodian (other than the Collateral
Agent) except for the right to debit for any item returned by reason of
non-sufficient funds, (vi) the State of New York shall be the securities
intermediary's jurisdiction of the Custodian for purposes of the UCC, and (vii)
any agreement between the Custodian and the Collateral Agent with respect to the
Covered Accounts shall be governed by the laws of the State of New York.
Notwithstanding any term hereof or elsewhere to the contrary, it is hereby
expressly acknowledged that (a) interests in bank loans or participations
(collectively, "Loan Assets") may be acquired and delivered by the Borrower to
the Securities Intermediary from time to time which are not evidenced by, or
accompanied by delivery of, a security (as that term is defined in UCC Section
8-102) or an instrument (as that term is defined in Section 9-102(a)(47) of the
UCC), and may be evidenced solely by delivery to the Securities Intermediary of
a facsimile copy of an assignment agreement ("Loan Assignment Agreement") in
favor of the Borrower as assignee, (b) any such Loan Assignment Agreement (and
the registration of the related Loan Assets on the books and records of the
applicable obligor or bank agent) shall be registered in the name of the
Borrower, and (c) any duty on the part of the Securities Intermediary with
respect to such Loan Asset (including in respect of any duty it might otherwise
have to maintain a sufficient quantity of such Loan Asset for purposes of UCC
Section 8-504) shall be limited to the exercise of reasonable care by the
Securities Intermediary in the physical custody of any such Loan Assignment
Agreement that may be delivered to it; provided that the Custodian shall
maintain such Loan Assets as required by this Agreement and the other Loan
Documents. It is acknowledged and agreed that the Securities Intermediary is not
under a duty to examine underlying credit agreements or loan documents to
determine the validity or sufficiency of any Loan Assignment Agreement (and
shall have no responsibility for the genuineness or completeness thereof), or
for the Borrower's title to any related Loan Asset.

 

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Section 8.2             Collection Account.

 

(a) The Collateral Agent hereby represents that it has, in connection with the
Existing Credit Agreement, established a single, segregated non-interest bearing
trust account in the name "FS Senior Funding LLC Collection Account, subject to
the lien of the Collateral Agent for the benefit of the Secured Parties", which
has been designated as the "Collection Account" and which shall be governed
solely by the terms of this Agreement and the Account Control Agreement. Such
account shall be held in trust in the name of the Collateral Agent for the
benefit of the Secured Parties and the Collateral Agent shall have exclusive
control over such account, subject to the Borrower's right to give instructions
specified herein, and the sole right of withdrawal, into which the Collateral
Agent shall from time to time deposit (i) any amount received under any Interest
Hedge Agreement, (ii) all proceeds received from the disposition of any
Collateral (unless, during the Reinvestment Period, simultaneously reinvested in
Collateral Loans, subject to Article X, or in Eligible Investments or to prepay
the Loans in accordance with Section 2.7) and (iii) all Interest Proceeds
(including all Fee Proceeds) and all Principal Proceeds. All Monies deposited
from time to time in the Collection Account pursuant to this Agreement shall be
held by the Collateral Agent as part of the Collateral and shall be applied for
the purposes herein provided. The Collection Account shall remain at all times
with an Eligible Account Bank. The only permitted withdrawal from or application
of funds on deposit in, or otherwise to the credit of, the Collection Account
shall be in accordance with the provisions of Sections 6.4, 8.2 and 9.1.
Notwithstanding the foregoing, the Collateral Agent is hereby authorized to
establish one or more subaccounts of the Collection Account, one of which shall
be designated the "Interest Collection Account" and the other the "Principal
Collection Account" and which together will comprise the "Collection Account"
for all purposes of this Agreement and the Account Control Agreement.

 

(b) All Distributions and any net proceeds from the sale or disposition of
Pledged Collateral or any Interest Hedge Agreement or other collateral received
by the Collateral Agent shall, subject to the parenthetical in Section
8.2(a)(ii), be immediately deposited into the Collection Account. Subject to
Sections 8.2(d) and 8.2(e), all such property, together with any investments in
which funds included in such property are or will be invested or reinvested
during the term of this Agreement, and any income or other gain realized from
such investments, shall be held by the Collateral Agent in the Collection
Account as part of the Collateral subject to disbursement and withdrawal as
provided in this Section 8.2. (i) So long as no Event of Default has occurred
and is continuing, by Borrower Order (which may be in the form of standing
instructions), the Borrower shall and (ii) after the occurrence and during the
continuation of an Event of Default, the Administrative Agent (at the direction
of the Majority Lenders) shall direct the Collateral Agent to, and, upon receipt
of such Borrower Order or direction, as applicable, the Collateral Agent shall,
invest all funds received into the Collection Account during a Due Period, and
amounts received in prior Due Periods and retained in the Collection Account, as
so directed in Eligible Investments having stated maturities no later than the
second Business Day immediately preceding the next Quarterly Payment Date. The
Borrower and the Administrative Agent each agrees that it shall not give any
instruction to invest such funds other than in accordance with, or subject to an
exemption from, Articles 404-410. So long as no Event of Default has occurred
and is continuing, the Collateral Agent, within one Business Day after receipt
of any Distribution or other proceeds which are not Cash, shall so notify the
Borrower and the Borrower shall, within six months of receipt of such notice
from the Collateral Agent, sell such Distribution or other proceeds for Cash (at
a price equal to fair market value as reasonably determined by the Borrower or
the Collateral Manager in accordance with the Servicing Standard) to any Person
(including an Affiliate of the Borrower) and deposit the proceeds thereof in the
Collection Account for investment pursuant to this Section 8.2; provided that
the Borrower need not sell such Distributions or other proceeds if it delivers a
certificate of an Authorized Officer to the Administrative Agent certifying that
such Distributions or other proceeds constitute Collateral Loans or Eligible
Investments or securities subject to transfer restrictions that do not permit
such sale.

 

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(c) So long as no Event of Default has occurred and is continuing, if the
Borrower shall not have given any investment directions pursuant to Section
8.2(b), the Collateral Agent shall seek instructions from the Borrower within
one Business Day after transfer of such funds to the Collection Account. If the
Collateral Agent does not thereupon receive written instructions from the
Borrower within five Business Days after transfer of such funds to the
Collection Account, the Collateral Agent shall again seek instructions from the
Borrower. The Borrower agrees that it shall not give any instruction to invest
such funds other than in accordance with, or subject to an exemption from,
Articles 404-410. After the occurrence and during the continuation of an Event
of Default, if the Administrative Agent (at the direction of the Majority
Lenders) shall not have given investment directions to the Collateral Agent
pursuant to Section 8.2(b) for three consecutive days, the Collateral Agent
shall seek instructions from the Administrative Agent. The Administrative Agent
agrees that it shall not give any instruction to invest such funds other than in
accordance with, or subject to an exemption from, Articles 404-410. All interest
and other income from such investments shall be deposited in the Collection
Account, any gain realized from such investments shall be credited to the
Collection Account, and any loss resulting from such investments shall be
charged to the Collection Account.

 

(d) During the Reinvestment Period, the Borrower may by Borrower Order direct
the Collateral Agent to, and upon receipt of such Borrower Order the Collateral
Agent shall, (i) withdraw funds on deposit in the Collection Account
representing Principal Proceeds and reinvest such funds in Collateral Loans as
permitted under and in accordance with the requirements of Article X and such
Borrower Order, (ii) apply Principal Proceeds to make a prepayment of the Loans
in accordance with Section 2.7 so long as on the date of such prepayment no
Commitment Shortfall results therefrom and (iii) transfer Principal Proceeds to
the Future Funding Reserve Account so long as on the date of such transfer and
after giving effect thereto the amount standing to the credit of the Future
Funding Reserve Account shall not exceed the aggregate Unfunded Amount.

 

After the Reinvestment Period, the Borrower may by Borrower Order direct the
Collateral Agent to, and upon receipt of such Borrower Order the Collateral
Agent shall apply Principal Proceeds received by the Borrower (before or after
the end of the Reinvestment Period) towards (A) the purchase or origination of
Collateral Loans, (B) the payment or funding of Unfunded Amounts or (C) the
funding of the Future Funding Reserve Account on any Business Day (in an amount
not exceeding the Unfunded Amount), in each case pursuant to commitments entered
into by the Borrower prior to the end of the Reinvestment Period.

 

By Borrower Order, the Borrower may at any time direct the Collateral Agent to,
and, upon receipt of such Borrower Order, the Collateral Agent shall, pay from
time to time on dates other than Quarterly Payment Dates from Interest Proceeds
on deposit in the Collection Account, Administrative Expenses; provided that the
aggregate amount of Administrative Expenses paid in any Due Period (excluding
Administrative Expenses paid on Quarterly Payment Dates pursuant to the Priority
of Payments) shall not exceed the Retained Expense Amount determined on the
immediately prior Quarterly Payment Date plus, without duplication, the
Quarterly Cap applicable on the next Quarterly Payment Date.

 

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(e) The Collateral Agent shall transfer to the Payment Account for application
pursuant to Section 9.1(a), on or about the Business Day (but in no event more
than two Business Days) prior to each Quarterly Payment Date, any amounts then
held in the Collection Account other than proceeds received after the end of the
Due Period with respect to such Quarterly Payment Date.

 

(f) [Reserved].

 

(g) The Collateral Agent agrees to give the Borrower and the Lenders prompt
notice if an Administrative Officer of the Collateral Agent obtains actual
knowledge of or receives written notice that the Collection Account or any funds
on deposit therein, or otherwise to the credit of the Collection Account, shall
become subject to any writ, order, judgment, warrant of attachment, execution or
similar process.

 

(h) At any time and from time to time the Borrower, or the Collateral Manager on
the Borrower's behalf, may deposit (including for purposes of satisfying the
Overcollateralization Ratio Test) into the Collection Account funds not
previously subject to the Lien of the Collateral Agent (for the benefit of the
Secured Parties) granted under this Agreement; provided that (i) all such funds
are to be treated as Principal Proceeds or Interest Proceeds as designated by
the Borrower and (ii) upon the deposit of such funds into the Collection
Account, such funds shall automatically be subject to the Lien of the Collateral
Agent (for the benefit of the Secured Parties) granted under this Agreement. Any
such deposit shall be irrevocable.

 

Section 8.3             Payment Account; Future Funding Reserve Account; Lender
Collateral Account; Closing Expense Account.

 

(a) Payment Account. The Collateral Agent hereby represents that it has, in
connection with the Existing Credit Agreement, established a single, segregated
non-interest bearing trust account in the name "FS Senior Funding LLC Payment
Account, subject to the lien of the Collateral Agent for the benefit of the
Secured Parties", which has been designated as the "Payment Account" and which
shall be governed solely by the terms of this Agreement and the Account Control
Agreement. Such account shall be held in trust in the name of the Collateral
Agent for the benefit of the Secured Parties and the Collateral Agent shall have
exclusive control over such account, subject to the Borrower's right to give
instructions specified herein, and the sole right of withdrawal. Any and all
funds at any time on deposit in, or otherwise to the credit of, the Payment
Account shall be held in trust by the Collateral Agent for the benefit of the
Secured Parties. Except as provided in Sections 6.4 and 9.1, the only permitted
withdrawal from or application of funds on deposit in, or otherwise to the
credit of, the Payment Account shall be to pay the interest on and the principal
of the Loans in accordance with their terms and the provisions of this Agreement
and, upon Borrower Order or in accordance with the Payment Date Report, to pay
fees, Administrative Agent Fees, Collateral Agent Fees, Administrative Expenses,
Commitment Fees, Increased Costs and other amounts specified therein, each in
accordance with (and subject to the limitations contained in) the Priority of
Payments. The Collateral Agent agrees to give the Borrower and the Lenders
immediate notice if an Administrative Officer of the Collateral Agent obtains
actual knowledge of or receives written notice that the Payment Account or any
funds on deposit therein, or otherwise to the credit of the Payment Account,
shall become subject to any writ, order, judgment, warrant of attachment,
execution or similar process. The Borrower shall not have any legal, equitable
or beneficial interest in the Payment Account other than in accordance with the
Priority of Payments. The Payment Account shall remain at all times with an
Eligible Account Bank.

 

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(b) Future Funding Reserve Account. The Collateral Agent hereby represents that
it has, in connection with the Existing Credit Agreement, established a single,
segregated non-interest bearing trust account in the name "FS Senior Funding LLC
Future Funding Reserve Account, subject to the lien of the Collateral Agent for
the benefit of the Secured Parties", which has been designated as the "Future
Funding Reserve Account" and which shall be governed solely by the terms of this
Agreement and the Account Control Agreement. Such account shall be held in trust
in the name of the Collateral Agent for the benefit of the Secured Parties and
amounts shall be deposited from time to time in such account in accordance with
Articles VIII and IX. By Borrower Order (which may be in the form of standing
instructions), the Borrower may, so long as no Event of Default has occurred and
is continuing, direct the Collateral Agent to, and, upon receipt of such
Borrower Order, the Collateral Agent shall, invest all funds received into the
Future Funding Reserve Account as so directed solely in overnight funds that are
Eligible Investments. The only permitted withdrawals from or applications of
funds on deposit in, or otherwise to the credit of, the Future Funding Reserve
Account shall be (i) to fund or pay Unfunded Amounts, (ii) at the election of
the Borrower during the Reinvestment Period, to be applied as Principal Proceeds
for use as is provided in this Agreement (including, without limitation, as
provided in Section 9.1(a)(ii)) and (iii) after the Reinvestment Period, to the
extent of any Excess Reserve Amount, to be applied as Principal Proceeds in
accordance with Section 9.1(a)(ii). Notwithstanding the foregoing, the amount of
all funds on deposit in the Future Funding Reserve Account on any date that
exceeds the aggregate Unfunded Amount on such date shall be transferred to the
Collection Account on such date and applied as Principal Proceeds. For the
avoidance of doubt, any amounts transferred from the Future Funding Reserve
Account for application as Principal Proceeds as provided above shall be further
invested in Collateral Loans (to the extent expressly permitted by the other
provisions in this Agreement) or applied as Principal Proceeds in accordance
with Section 9.1(a)(ii), in each case as expressly provided in this Agreement.
The Collateral Agent agrees to give the Borrower immediate notice if an
Administrative Officer of the Collateral Agent obtains actual knowledge of or
receives written notice that the Future Funding Reserve Account or any funds on
deposit therein, or otherwise to the credit of the Future Funding Reserve
Account, shall become subject to any writ, order, judgment, warrant of
attachment, execution or similar process. The Future Funding Reserve Account
shall remain at all times with an Eligible Account Bank. Any interest earned on
Eligible Investments held in the Future Funding Reserve Account shall be applied
as Interest Proceeds.

 

(c) [Reserved].

 

(d) Lender Collateral Account.

 

(i) The Collateral Agent hereby represents that it has, in connection with the
Existing Credit Agreement, established a single, segregated non-interest bearing
trust account in

the name "FS Senior Funding LLC Lender Collateral Account, subject to the lien
of the Collateral Agent for the benefit of the Secured Parties", which has been
designated as the "Lender Collateral Account" and which shall be governed solely
by the terms of this Agreement and the Account Control Agreement and maintained
with the Securities Intermediary in accordance with the Account Control
Agreement for the benefit of the Secured Parties. The Collateral Agent shall
have exclusive control over such account (and each subaccount thereof) and the
sole right of withdrawal. The Lender Collateral Account may contain any number
of subaccounts for the purposes described in this Section 8.3(d). The only
permitted deposits to or withdrawals from the Lender Collateral Account shall be
in accordance with the provisions of this Agreement. The Borrower shall not have
any legal, equitable or beneficial interest in the Lender Collateral Account (or
any subaccount thereof).

 

(ii) If any Lender shall at any time be required to deposit any amount in the
Lender Collateral Account in accordance with Section 11.5(b)(i), then (x) the
Collateral Agent shall create a segregated subaccount of the Lender Collateral
Account with respect to such Lender (the "Lender Collateral Subaccount" of such
Lender) and (y) the Collateral Agent shall deposit all funds received from such
Lender into such Lender Collateral Subaccount. The only permitted withdrawal
from or application of funds credited to a Lender Collateral Subaccount shall be
as specified in this Section 8.3(d).

 

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(iii) With respect to any Lender, the deposit of any funds in the applicable
Lender Collateral Subaccount by such Lender shall not constitute a Borrowing by
the Borrower and shall not constitute a utilization of the Commitment of such
Lender, and the funds so deposited shall not constitute principal outstanding
under the Loans. However, from and after the establishment of a Lender
Collateral Subaccount, the obligation of such Lender to make Loans as part of
any Borrowing under this Agreement shall be satisfied by the Collateral Agent
withdrawing funds from such Lender Collateral Subaccount in the amount of such
Lender's pro rata share of such Borrowing. All payments of principal from the
Borrower with respect to Loans made by such Lender (whether or not originally
funded from such Lender Collateral Subaccount) shall be made by depositing the
related funds into such Lender Collateral Subaccount and all other payments from
the Borrower (including without limitation all interest and Commitment Fees)
shall be made to such Lender in accordance with the order specified in the
Priority of Payments. The Collateral Agent shall have full power and authority
to withdraw funds from each such Lender Collateral Subaccount at the time of,
and in connection with, the making of any such Borrowing and to deposit funds
into each such Lender Collateral Subaccount, all in accordance with the terms of
and for the purposes set forth in this Agreement.

 

(iv) If on any Quarterly Payment Date (or on any other Business Day upon three
Business Days' prior written request from such Lender) the sum of the amount of
funds on deposit in the Lender Collateral Subaccount exceeds such Lender's
undrawn Commitment at such time (whether due to a reduction in the aggregate
amount of the Commitments or otherwise), then the Collateral Agent shall remit
to such Lender a portion of the funds then held in the related Lender Collateral
Subaccount in an aggregate amount equal to such excess.

 

(v) Except as otherwise provided in this Agreement, for so long as any amounts
are on deposit in any Lender Collateral Subaccount, the Collateral Agent shall
invest and reinvest such funds in Eligible Investments of the type described in
clause (vii) of the definition thereof that mature overnight. Interest received
on such Eligible Investments shall be retained in such Lender Collateral
Subaccount and invested and reinvested as aforesaid. Any gain realized from such
investments shall be credited to such Lender Collateral Subaccount and any loss
resulting from such investments shall be charged to such Lender Collateral
Subaccount. Neither the Borrower nor the Collateral Agent shall in any way be
held liable by reason of any insufficiency of such Lender Collateral Subaccount
resulting from any loss relating to any such investment.

 

(e) Closing Expense Account. The Collateral Agent hereby represents that it has,
in connection with the Existing Credit Agreement, established a single,
segregated non-interest bearing trust account in the name "FS Senior Funding LLC
Closing Expense Account, subject to the lien of the Collateral Agent for the
benefit of the Secured Parties", which has been designated as the "Closing
Expense Account" and which shall be governed solely by the terms of this
Agreement and the Account Control Agreement. The Collateral Agent shall have
exclusive control over such account, subject to the Borrower's right to give
instructions specified herein, and the sole right of withdrawal. Any and all
funds at any time on deposit in, or otherwise to the credit of, the Closing
Expense Account shall be held in trust by the Collateral Agent for the benefit
of the Secured Parties. On or prior to the Effective Date, the Borrower shall
deposit $0 into the Closing Expense Account. On any Business Day during the
period that the Closing Expense Account is open, the Collateral Agent shall
apply funds from the Closing Expense Account, as directed by the Borrower, to
pay fees and expenses of the Borrower incurred in connection with the
structuring, consummation, closing and post-closing of the transaction
contemplated by this Agreement. Upon the delivery on any date that is at least
30 days after the Effective Date of a Borrower Order instructing the Collateral
Agent to close the Closing Expense Account, all funds in the Closing Expense
Account will be deposited in the Collection Account as Interest Proceeds and the
Closing Expense Account will be closed. By Borrower Order (which may be in the
form of standing instructions), the Borrower may, so long as no Event of Default
has occurred and is continuing, direct the Collateral Agent to, and, upon
receipt of such Borrower Order, the Collateral Agent shall, invest all funds
received into the Closing Expense Account during a Due Period as so directed by
the Borrower in Eligible Investments. Any income earned on amounts deposited in
the Closing Expense Account will be deposited in the Collection Account as
Interest Proceeds as it is received. The Collateral Agent agrees to give the
Borrower immediate notice if an Administrative Officer of the Collateral Agent
obtains actual knowledge of or receives written notice that the Closing Expense
Account or any funds on deposit therein, or otherwise to the credit of the
Closing Expense Account, shall become subject to any writ, order, judgment,
warrant of attachment, execution or similar process. The Closing Expense Account
shall remain at all times with an Eligible Account Bank. The only permitted
withdrawal from or application of funds on deposit in, or otherwise to the
credit of, the Closing Expense Account shall be in accordance with the
provisions of this Section 8.3(e).

 

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Section 8.4             Custodial Account.

 

(a) The Collateral Agent hereby represents that it has, in connection with the
Existing Credit Agreement, established a single, segregated non-interest bearing
trust account in the name "FS Senior Funding LLC Custodial Account, subject to
the lien of the Collateral Agent for the benefit of the Secured Parties", which
has been designated as the "Custodial Account" and which shall be governed
solely by the terms of this Agreement and the Account Control Agreement. Such
account shall be maintained with the Securities Intermediary pursuant to the
terms of the Account Control Agreement and over which the Collateral Agent shall
have exclusive control, subject to the Borrower's right to give instructions
specified herein, and the sole right of withdrawal. Any and all assets or
securities at any time on deposit in, or otherwise to the credit of, the
Custodial Account shall be held by the Custodian for the benefit for the
Collateral Agent for the benefit of the Secured Parties. Except in connection
with a liquidation pursuant to Article VI, the only permitted withdrawal from
the Custodial Account or in, or otherwise to the credit of, the Custodial
Account shall be as directed, upon Borrower Order, in accordance with the
provisions of Sections 8.5 and 8.6. The Collateral Agent agrees to give the
Borrower and the Lenders immediate notice if an Administrative Officer of the
Collateral Agent obtains actual knowledge of or receives written notice that the
Custodial Account or any assets or securities on deposit therein, or otherwise
to the credit of the Custodial Account, has become subject to any writ, order,
judgment, warrant of attachment, execution or similar process. The Custodial
Account shall remain at all times with an Eligible Account Bank.

 

The Collateral Agent shall appoint a custodian (the "Custodian") to act as a
securities intermediary for purposes of this Agreement and the other Loan
Documents. Initially, such Custodian shall be U.S. Bank. Any successor custodian
shall be a state or national bank or trust company which (i) is not an Affiliate
of the Borrower, (ii) has a combined capital and surplus of at least U.S.
$200,000,000, (iii) has a DBRS Long Term Rating of at least "A", (iv) has a DBRS
Short Term Rating of at least "R-1 (middle)" and (v) is a securities
intermediary. The rights, protections, immunities and indemnities afforded to
the Collateral Agent under this Agreement shall also be afforded to the
Custodian.

 

In taking and retaining custody of the Related Contracts, the Custodian shall be
deemed to be acting as the agent of the Secured Parties; provided that the
Custodian makes no representations as to the existence, perfection or priority
of any lien on the Related Contracts or the instruments therein; and provided
further that the Custodian's duties as agent shall be limited to those expressly
contemplated herein and under the other Loan Documents to which it is a party.
All Related Contracts that are delivered to the Custodian shall be delivered to
U.S. Bank at its document custody office located at 1719 Range Way, Florence,
South Carolina 29501, or at such other office as shall be specified to the
Administrative Agent, the Collateral Manager and the Borrower by the Custodian
in a written notice prior to such change. All Related Contracts that are
originals or copies shall be kept in fire resistant vaults, rooms or cabinets at
such offices and placed together with an appropriate identifying label and
maintained in such a manner so as to permit retrieval and access. All Related
Contracts that are originals or copies shall be clearly segregated from any
other documents or instruments maintained by the Custodian. All Related
Contracts that are delivered to the Custodian in electronic format shall be
delivered by electronic mail or on disks and maintained in a manner consistent
with the manner in which the Custodian maintains electronic documents similar to
the Related Contracts for itself and others, giving due consideration for the
customary and usual standards of practice of prudent institutional custodians.
The Custodian shall have no obligation to review or monitor any Related
Contracts but shall only be required to hold the Related Contracts in
safekeeping. In taking and retaining custody of the Related Contracts, the
Custodian shall be deemed to be acting as the agent of the Secured Parties;
provided that the Custodian makes no representations as to the existence,
perfection or priority of any lien on the Related Contracts or the instruments
therein; and provided further that the Custodian’s duties as agent shall be
limited to those expressly contemplated herein.

 

 

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(b) Except as otherwise provided in Sections 8.5 and 8.6, all right, title and
interest of the Borrower in and to the Custodial Account, all related property,
and all proceeds thereof shall be subject to the security interest of the
Collateral Agent hereunder.

 

(c) With respect to securities (including without limitation debt and equity
securities, bonds, money market funds and mutual funds) issued in the United
States, the Shareholders Communications Act of 1985 (the "Act") requires the
Custodian to disclose to the issuers of such securities, upon their request, the
name, address and securities position of its customers who are (a) the
"beneficial owners" (as defined in the Act) of such issuer's securities, if the
beneficial owner does not object to such disclosure, or (b) acting as a
"respondent bank" (as defined in the Act) with respect to such securities.
(Under the Act, "respondent banks" do not have the option of objecting to such
disclosure upon the issuers' request.) The Act defines a "beneficial owner" as
any person who has, or shares, the power to vote a security (pursuant to an
agreement or otherwise), or who directs the voting of a security. The Act
defines a "respondent bank" as any bank, association or other entity that
exercises fiduciary powers which holds securities on behalf of beneficial owners
and deposits such securities for safekeeping with a bank, such as the Custodian.
Under the Act, a customer is either the "beneficial owner" or a "respondent
bank". The "customer" for purposes hereof shall mean the Borrower and each
Lender, each of which shall be deemed to be the "beneficial owner" (as defined
in the Act) of such securities to be held by the Custodian hereunder, and each
of the Borrower and the Lenders hereby waives any objection to the disclosure of
its name, address and securities position to any such issuer which requests such
information pursuant to the Act for the specific purpose of direct
communications between such issuer and the Borrower and each Lender. Each of the
Borrower and the Lenders may, by written notice to the Custodian, opt out of the
waiver referred to in the foregoing sentence and elect not to consent to the
disclosure referred to in the foregoing sentence. With respect to such
securities issued outside of the United States, information shall be released to
issuers only if required by law or regulation of the particular country in which
the securities are located.

 

(d) At any time and from time to time the Borrower, or the Collateral Manager on
the Borrower's behalf, may deposit (including for purposes of satisfying the
Overcollateralization Ratio Test) into the Custodial Account Collateral Loans
and/or Eligible Investments not previously subject to the Lien of the Collateral
Agent (for the benefit of the Secured Parties) granted under this Agreement;
provided that (i) all such funds are to be treated as Collateral Loans and/or
Eligible Investments, as applicable, for all purposes of this Agreement, and
(ii) upon the deposit of such funds into the Custodial Account, such funds shall
automatically be subject to the Lien of the Collateral Agent (for the benefit of
the Secured Parties) granted under this Agreement. Any such deposit shall be
irrevocable. The Borrower shall notify the Agents in writing of any such deposit
prior to or contemporaneously therewith.

 

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Section 8.5             Acquisition of Collateral Loans and Eligible
Investments. Each time that the Borrower acquires any Collateral Loan, Eligible
Investment or other Collateral, the Borrower shall, if such Collateral Loan or
Eligible Investment or other Collateral has not already been transferred to the
Custodial Account, transfer or cause the transfer of such Collateral Loan or
Eligible Investment and other Collateral to the Custodian to be held for the
benefit of the Collateral Agent in accordance with the terms of this Agreement.
The security interest of the Collateral Agent in the funds or other property
utilized in connection with such acquisition shall, immediately and without
further action on the part of the Collateral Agent, be released. The security
interest of the Collateral Agent shall nevertheless come into existence and
continue in the Collateral Loans and Eligible Investments and other Collateral
so acquired, including all rights of the Borrower in and to any Related
Contracts and Collections with respect to such Collateral Loans and Eligible
Investments and other Collateral.

  

Section 8.6             Release of Security Interest in Sold Collateral Loans
and Eligible Investments; Release of Security Interests Upon Termination. 

 

(a) Upon any sale or other disposition of a Collateral Loan or Eligible
Investment or other Collateral (or portion thereof) in accordance with the terms
of this Agreement, the security interest of the Collateral Agent in such
Collateral Loan or Eligible Investment or other Collateral (or the portion
thereof which has been sold or otherwise disposed of), and in all Collections
and rights under Related Contracts with respect to such Collateral Loan or
Eligible Investment or other Collateral (but not in the proceeds of such sale or
other disposition) shall, immediately upon the sale or other disposition of such
Collateral Loan or Eligible Investment or other Collateral (or such portion),
and without any further action on the part of the Collateral Agent, be released,
except for the proceeds of such sale or other disposition and except to the
extent of the interest, if any, in such Collateral Loan or Eligible Investment
or other Collateral which is then retained by the Borrower or which thereafter
reverts to the Borrower for any reason.

 

(b) Upon the payment in full of the Obligations and termination of all
Commitments hereunder, the Collateral shall be released from the liens created
hereby and under the other Loan Documents, and this Agreement and all
obligations of the Agents and each Lender hereunder shall terminate, all without
delivery of any instrument or performance of any act by any party, and all
rights to the Collateral shall revert to the Borrower. At the request and sole
expense of the Borrower following any such termination, the Administrative Agent
and/or the Collateral Agent, as applicable, shall promptly deliver to the
Borrower (or its designee) any Collateral held by such Agent hereunder, and
execute and deliver to the Borrower such documents as the Borrower shall
reasonably request to evidence such termination. Any such release or termination
shall be subject to the provision that the Obligations shall be reinstated if
after such release or termination any portion of any payment in respect of the
Obligations shall be rescinded or must otherwise be restored or returned upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower, or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the Borrower or any
substantial part of its property, or otherwise, all as though such payment had
not been made.

 

Section 8.7 Method of Collateral Transfer. Notwithstanding any other provision
of this Agreement, each item of Collateral shall be, or shall have been,
delivered to the Custodian by:

  

(a) with respect to such of the Collateral as constitutes an instrument,
tangible chattel paper, a negotiable document, or money, causing the Custodian
to take possession of such instrument indorsed to the Custodian or in blank, or
such money, negotiable document, or tangible chattel paper, in the State of New
York separate and apart from all other property held by the Custodian;

 

 

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(b) with respect to such of the Collateral as constitutes a certificated
security in bearer form, causing the Custodian to take possession of the related
security certificate in the State of New York;

 

(c) with respect to such of the Collateral as constitutes a certificated
security in registered form, causing the Custodian to take possession of the
related security certificate in the State of New York, indorsed to the Custodian
or in blank by an effective indorsement, or registered in the name of the
Custodian, upon original issue or registration of transfer by the issuer of such
certificated security;

 

(d) with respect to such of the Collateral as constitutes an uncertificated
security, causing the issuer of such uncertificated security to register the
Custodian or its nominee for the account of the Custodian as the registered
owner of such uncertificated security;

 

(e) with respect to such of the Collateral as constitutes a security
entitlement, causing the Securities Intermediary to indicate by book entry that
the financial asset relating to such security entitlement has been credited to
the Custodial Account;

 

(f) with respect to such of the Collateral as constitutes a deposit account,
causing such deposit account to be established and maintained in the name of the
Collateral Agent or the Custodian, as applicable, by a bank the jurisdiction of
which for purposes of the UCC is the State of New York; and

 

(g) taking such additional or alternative procedures as may hereafter become
appropriate to grant a first priority, perfected security interest in such items
of the Collateral to the Collateral Agent, consistent with applicable law or
regulations.

 

If any item of Collateral is a financial asset issued by an issuer that is not
the United States of America, an agency or instrumentality thereof, or some
other United States person or entity, and if such item cannot be delivered as
set forth above, such item may be delivered by the Collateral Agent holding such
item in an account created and maintained in the name of the Collateral Agent
with a banking or securities institution or a clearing agency or system located
outside the United States such that the Collateral Agent holds a first priority,
perfected security interest in such item of Collateral.

 

The Borrower shall record and file on or before the Effective Date all financing
statements, and the Borrower agrees to record and file after the Effective Date
all appropriate financing statements, continuation statements, and other
amendments, meeting the requirements of applicable law in such manner and in
such jurisdictions as are necessary to perfect and protect the interests of the
Secured Parties in the Collateral under the applicable Uniform Commercial Code
against all creditors of and purchasers from the Borrower. The Borrower promptly
shall deliver file-stamped copies of such financing statements, continuation
statements, and amendments to the Agents.

 

In connection with each transfer of an item of Collateral to the Collateral
Agent and/or the Custodian, the Collateral Agent or the Custodian, as
applicable, shall make appropriate notations on its records indicating that such
item of the Collateral is held for the benefit of the Secured Parties pursuant
to and as provided in this Agreement and the other Loan Documents. Effective
upon the transfer of an item of Collateral to the Collateral Agent and/or the
Custodian, the Collateral Agent or the Custodian, as applicable, shall be deemed
to acknowledge that it holds such item of Collateral as Collateral Agent or as
Custodian, as applicable, under this Agreement and the other Loan Documents for
the benefit and security of the Secured Parties.

 

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Notwithstanding any other provision of this Agreement, the Collateral Agent
shall not hold any item of Collateral through an agent except as expressly
permitted by this Section 8.7.

 

Each of the Borrower, U.S. Bank, as Collateral Agent and Securities
Intermediary, agrees that all references in the Account Control Agreement to the
"Credit Agreement" shall mean the Existing Credit Agreement as amended,
restated, supplemented or otherwise modified from time to time, including
pursuant hereto.

 

Section 8.8             Continuing Liability of the Borrower. Notwithstanding
anything herein to the contrary, the Borrower shall remain liable under each
Related Contract, interest and obligation included in the Collateral, to observe
and perform all the conditions and obligations to be observed and performed by
it thereunder (including any undertaking to maintain insurance), all in
accordance with and pursuant to the terms and provisions thereof, and shall do
nothing to impair the security interest of the Collateral Agent in any
Collateral. Neither the Collateral Agent nor any Secured Party shall have any
obligation or liability under any such Related Contract, interest or obligation
by reason of or arising out of this Agreement or the receipt by the Collateral
Agent or any Secured Party of any payment relating to any such Related Contract,
interest or obligation pursuant hereto, nor shall the Collateral Agent or any
Secured Party be required or obligated in any manner to perform or fulfill any
of the obligations of the Borrower thereunder or pursuant thereto, or to make
any payment, or to make any inquiry as to the nature or the sufficiency of any
payment received by it or the sufficiency of any performance by any party under
any such Related Contract, interest or obligation, or to present or file any
claim, or to take any action to collect or enforce any performance or the
payment of any amount thereunder to which it may be entitled at any time.

  

Section 8.9             Reports.

  

(a) The Collateral Agent shall deliver to the Borrower by facsimile (or such
other medium as may be agreed upon by the Borrower and the Collateral Agent) by
11:00 a.m. (New York time) on each Business Day a report describing all Money
(including but not limited to a breakdown of all such amounts into Interest
Proceeds and Principal Proceeds) and other property received by it pursuant to
the terms of this Agreement and the other Loan Documents on the preceding
Business Day (the "Daily Report"). If any Money or property shall be received by
the Collateral Agent on a day that is not a Business Day, the Collateral Agent
shall deliver the Daily Report with respect thereto to the Borrower on the next
Business Day.

 

(b) The Collateral Agent shall compile and provide, subject to the Collateral
Agent's receipt from the Collateral Manager, the Borrower or the Administrative
Agent, as applicable, the Early-Monthly Loan Tape, Mid-Monthly Loan Tape,
Quarterly Loan Tape and such other information with respect to the Collateral
Loans and Eligible Investments to the extent not maintained or in the possession
of the Collateral Agent, the Collateral Report and the Payment Date Report in
accordance with Exhibit E and Exhibit F hereof, respectively, and prepare drafts
of such Collateral Report and Payment Date Report and provide such drafts to the
Collateral Manager for review and approval; provided that each such draft is to
be provided no later than three days prior to the date the Collateral Report or
the Payment Date Report, as applicable, is due. The Borrower shall cause the
Collateral Manager to review and confirm the calculations made by the Collateral
Agent in such Collateral Report or Payment Date Report within two days prior to
the due date of the Collateral Report or the Payment Date Report.

 

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The Collateral Manager, the Administrative Agent and the Borrower shall
cooperate with the Collateral Agent in connection with the preparation by the
Collateral Agent of Collateral Reports and Payment Date Reports. The Collateral
Manager shall review and verify the contents of the aforesaid reports,
instructions, statements and certificates, and upon verification shall make such
reports available to DBRS. Upon receipt of approval from the Collateral Manager,
the Collateral Agent shall transmit the same to the Borrower and shall make such
reports available to the Administrative Agent and each Lender.

 

(c) The Collateral Agent may conclusively rely on and without any investigation,
the Early-Monthly Loan Tape, Mid-Monthly Loan Tape and Quarterly Loan Tape and
any other information provided by the Collateral Manager, Borrower and
Administrative Agent in preparation of the Collateral Report and Payment Date
Report. Nothing herein shall obligate the Collateral Agent to review or examine
the Early-Monthly Loan Tape, Mid-Monthly Loan Tape or Quarterly Loan Tape for
accuracy, correctness or validity.

 

The Collateral Agent will make the Collateral Report and Payment Date Report
available via its internet website. The Collateral Agent's internet website
shall initially be located at www.usbank.com/cdo. The Collateral Agent may
change the way such statements are distributed. As a condition to access to the
Collateral Agent's internet website, the Collateral Agent may require
registration and the acceptance of a disclaimer. The Collateral Agent shall be
entitled to rely on but shall not be responsible for the content or accuracy of
any information provided in the Collateral Report and the Payment Date Report
which the Collateral Agent disseminates in accordance with this Agreement and
may affix thereto any disclaimer it deems appropriate in its reasonable
discretion.

 

(d) Nothing herein shall impose or imply any duty or obligation on the part of
the Collateral Agent to verify, investigate or audit any such information or
data, or to determine or monitor on an independent basis whether any issuer of
the Collateral Loan is in default or in compliance with the underlying documents
governing or securing such securities, from time to time, the role of the
Collateral Agent hereunder being solely to perform certain mathematical
computations and data comparisons as provided herein. For purposes of monitoring
changes in ratings, the Collateral Agent shall be entitled to use and rely (in
good faith) exclusively upon one or more reputable electronic financial
information reporting services, and shall have no liability for any inaccuracies
in the information reported by, or other errors or omissions of, any such
services. It is hereby expressly agreed that Bloomberg Financial Markets is one
such reputable service.

 

(e) The Collateral Agent shall have no liability for any failure, inability or
unwillingness on the part of the Collateral Manager or the Borrower or the
Administrative Agent to provide accurate and complete information on a timely
basis to the Collateral Agent, or otherwise on the part of any such party to
comply with the terms of this Agreement, and shall have no liability for any
inaccuracy or error in the performance or observance on the Collateral Agent's
part of any of its duties hereunder that is caused by or results from any such
inaccurate, incomplete or untimely information received by it, or other failure
on the part of any such other party to comply with the terms hereof.

 

(f) Nothing herein shall obligate the Collateral Agent to determine
independently any characteristic of a Collateral Loan, including the
determination of whether any item of Collateral (including any Interest Hedge
Agreement) is a Defaulted Loan, Delayed Funding Loan, DIP Loan, Discount Loan,
Eligible Cov-Lite Loan, Equity Security, Fixed Rate Obligation, Floating Rate
Obligation, Interest Rate Cap, PIK Loan, Second Lien Loan, Senior Secured Loan,
Specified Collateral Loan, Step-Down Loan, Step-Up Loan, Structured Finance
Obligation, Subordinated Loan or Synthetic Security, any such determination
being based exclusively upon notification the Collateral Agent receives from the
Collateral Manager or from (or in its capacity) the Collateral Agent (based upon
notices received by the Collateral Agent from the issuer, or trustee or agent
bank under an Underlying Instrument, or similar source) and nothing herein shall
obligate the Collateral Agent to review or examine any underlying instrument or
contract evidencing, governing or guaranteeing or securing any Collateral Loan
in order to verify, confirm, audit or otherwise determine any characteristic
thereof.

 

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(g) If, in performing its duties under this Section 8.9 in connection with
compiling and delivering reports, the Collateral Agent is required to decide
between alternative courses of action, the Collateral Agent may request written
instructions from the Collateral Manager, acting on behalf of the Borrower, as
to the course of action desired by it. If the Collateral Agent does not receive
such instructions within three Business Days after it has requested them, the
Collateral Agent may, but shall be under no duty to, take or refrain from taking
any such courses of action. The Collateral Agent shall act in accordance with
instructions received after such three-Business Day period except to the extent
it has already taken, or committed itself to take action inconsistent with such
instructions. The Collateral Agent shall be entitled to rely on the advice of
legal counsel and independent accountants in performing its duties hereunder and
shall be deemed to have acted in good faith if it acts in accordance with such
advice.

 

Article IX

APPLICATION OF MONIES

 

Section 9.1             Disbursements of Funds from Payment Account.

 

(a) Notwithstanding any other provision of this Agreement other than Section
6.4, but subject to the other subsections of this Section 9.1 and Article II
(with respect to optional repayment of Loans), on each Quarterly Payment Date,
the Collateral Agent shall disburse amounts transferred to the Payment Account
from the Collection Account pursuant to Section 8.2(e) as follows and for
application in accordance with the following priorities (the "Priority of
Payments"):

 

(i) On each Quarterly Payment Date, prior to the distribution of any Principal
Proceeds, Interest Proceeds shall be applied as follows:

 

(A) to the payment of taxes (but not including any accrued and unpaid Increased
Costs, which are addressed solely by Sections 9.1(a)(i)(G) and 9.1(a)(ii)(D)),
registration and filing fees then due and owing by the Borrower;

 

(B) to the payment of the following amounts in the following priority (without
duplication):

 

(1) accrued and unpaid Administrative Expenses in the order set forth in the
definition thereof; and

 

(2) on any Quarterly Payment Date other than the final Quarterly Payment Date,
to the retention in the Collection Account of an amount equal to the Retained
Expense Amount for such Quarterly Payment Date;

  

provided that the aggregate amount of payments under this clause (B) shall not
exceed on any Quarterly Payment Date the sum of (a) the Quarterly Cap plus (b)
the Retained Expense Amount determined on the immediately prior Quarterly
Payment Date less (c) Administrative Expenses paid pursuant to Section 8.2(d)
during the Due Period relating to such Quarterly Payment Date;

 

 

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(C) if the Borrower is party to any Interest Hedge Agreements, to the payment of
any amounts owing by the Borrower to the Interest Hedge Counterparties
thereunder (exclusive of any early termination or liquidation payment owing by
the Borrower by reason of the occurrence of an event of default or termination
event thereunder with respect to such Interest Hedge Counterparty where such
Interest Hedge Counterparty is the sole affected party or the defaulting party);

 

(D) unless waived or deferred by the Collateral Manager (or its designee), which
waiver (but not deferral) shall be permanent and irrevocable, to the payment to
the Collateral Manager (or its designee) of all due and unpaid Senior Management
Fees that have not been deferred on prior Quarterly Payment Dates (provided
that, for the avoidance of doubt, no deferred Collateral Management Fees shall
be payable pursuant to this clause (D));

 

(E) to the Lenders for payment (on a pro rata basis) of accrued interest on the
Loans and Commitment Fees due on such Quarterly Payment Date, including with
respect to the first Quarterly Payment Date to occur after the Effective Date,
all accrued and unpaid interest and Commitment Fees in respect of the Existing
Loans, excluding, in each case, in the case of interest, any Capped Amounts;

 

(F) if any of the Coverage Tests is not satisfied as of the related Calculation
Date, (1) to the repayment of principal of the Loans and the Future Funding
Reserve Account (to be allocated to the Loans and the Future Funding Reserve
Account according to the Principal Allocation Formula), or (2) only if the
outstanding principal amount of the Loans equals zero (both before and after
giving effect to any payment made pursuant to clause (1)), to deposit in the
Future Funding Reserve Account, in each case in the amount necessary to result
in the satisfaction of the Coverage Tests (on a pro forma basis as of such
Calculation Date);

 

(G) to the applicable Lenders on a pro rata basis for payment of accrued and
unpaid Increased Costs, including with respect to the first Quarterly Payment
Date to occur after the Effective Date, any unpaid Increased Costs in respect of
the Existing Loans;

 

(H) to the payment of amounts described in clause (B) above to the extent not
paid thereunder (without regard to any cap or limitation);

 

(I) to the payment of amounts described in clause (E) above to the extent not
paid thereunder (without regard to any cap or limitation), including with
respect to the first Quarterly Payment Date to occur after the Effective Date,
any such unpaid amounts in respect of the Existing Loans;

 

(J)                to the payment to the Collateral Manager (or its designee) of
any previously deferred Senior Management Fees that the Collateral Manager
elects to be paid on such Quarterly Payment Date by notice to the Collateral
Agent prior to the related Calculation Date;

 

(K) unless waived or deferred by the Collateral Manager (or its designee), which
waiver (but not deferral) shall be permanent and irrevocable, to the payment to
the Collateral Manager (or its designee) of (1) all due and unpaid Subordinated
Management Fees that have not been deferred on prior Quarterly Payment Dates and
(2) any previously deferred Subordinated Management Fees that the Collateral
Manager elects to be paid on such Quarterly Payment Date by notice to the
Collateral Agent prior to the related Calculation Date;

 

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(L) if the Borrower is party to any Interest Hedge Agreements, to any amounts
owing by the Borrower to the Interest Hedge Counterparties under such Interest
Hedge Agreements to the extent not paid under clause (C) above;

 

(M) all remaining Interest Proceeds:

 

(1) during the Reinvestment Period, at the sole discretion of the Collateral
Manager, either (i) to the Collection Account to be applied as Principal
Proceeds for the purchase of additional Collateral Loans, (ii) to be applied to
prepay the principal of the Loans pursuant to Section 2.7 in accordance with the
Principal Allocation Formula, (iii) for deposit into the Future Funding Reserve
Account and/or (iv) to the equity of the Borrower; and

 

(2) after the Reinvestment Period, at the sole discretion of the Borrower,
either (i) to be applied to prepay the principal of the Loans pursuant to
Section 2.7 in accordance with the Principal Allocation Formula or (ii) to the
equity of the Borrower.

 

(ii) On each Quarterly Payment Date, following the distribution of all Interest
Proceeds as set forth in Section 9.1(a)(i) above, Principal Proceeds (other than
Principal Proceeds previously reinvested in Collateral Loans or otherwise
designated by the Borrower for application pursuant to the parenthetical
contained in Section 8.2(a)(ii)) shall be applied as follows, provided that
after giving effect to any such payment no Commitment Shortfall would exist
(and, to the extent that any Commitment Shortfall would exist, Principal
Proceeds shall first be deposited in the Future Funding Reserve Account in the
amount needed to eliminate such Commitment Shortfall):

 

(A) to the payment of the amounts referred to in clauses (A) through (F) of
subsection (i) above (in the priority stated therein and subject to the proviso
in clause (B) of subsection (i) above), but only to the extent not paid in full
thereunder;

 

(B) during the Reinvestment Period, all remaining Principal Proceeds, at the
sole discretion of the Collateral Manager:

 

(1) to the Collection Account for the purchase of additional Collateral Loans;
and/or

 

(2) to be applied to prepay the principal of the Loans pursuant to Section 2.7
in accordance with the Principal Allocation Formula; and/or

 

(3) to be deposited into the Future Funding Reserve Account;

 

(C) after the Reinvestment Period, to be applied to the payment of principal on
the Loans (to be allocated to the Loans according to the Principal Allocation
Formula) until repaid in full;

 

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(D) to the payment of the amounts referred to in clause (G) of subsection (i)
above, but only to the extent not paid in full thereunder;

 

(E) after the Reinvestment Period, to the payment of amounts referred to in
clauses (H) through (L) of subsection (i) above, in the priority set forth
therein but only to the extent not paid in full thereunder; and

 

(F) after the Reinvestment Period, to the equity of the Borrower.

 

(b) If on any Quarterly Payment Date the amount available in the Payment Account
from amounts received in the related Due Period is insufficient to make the full
amount of the disbursements required pursuant to any clause in the Priority of
Payments, the Collateral Agent shall make the disbursements called for in the
order and according to the priority set forth under Section 9.1(a) and ratably
or in the order provided within a clause, as applicable, in accordance with the
respective amounts owing under any such clause to the extent funds are available
therefor.

 

(c) On each Quarterly Payment Date, the Collateral Agent (on behalf of the
Borrower) shall deliver to the Administrative Agent and to DBRS (so long as DBRS
is rating the Loans) a report (the "Payment Date Report") containing the
information described in Exhibit F hereto pursuant to Section 8.9 specifying the
amount of Interest Proceeds (and, of such amount, the amount of Fee Proceeds)
and Principal Proceeds received during the preceding Due Period, the amounts to
be applied to each purpose set forth in Section 9.1(a), and a calculation of the
Net Aggregate Exposure Amount (which shall be determined based on information
provided by the Borrower to the Collateral Agent including any Revolving
Collateral Loans and Delayed Funding Loans and the unpaid purchase price of all
Collateral Loans that the Borrower entered into binding commitments before the
end of the Reinvestment Period to originate or purchase after the end of the
Reinvestment Period). The information in each Payment Date Report shall be
determined as of the Calculation Date immediately preceding the applicable
Quarterly Payment Date.

 

(d) In the event that the Collateral Agent obtains actual knowledge of or
receives written notice that any Interest Hedge Counterparty defaults in the
payment of its obligations to the Borrower under any Interest Hedge Agreement on
the payment date therefor, the Collateral Agent shall notify the Borrower which
shall (or the Collateral Agent on behalf of the Borrower shall) make a demand on
such Interest Hedge Counterparty, or any guarantor, if applicable, demanding
payment by 12:00 noon, New York time, on the next Business Day. The Collateral
Agent shall give notice to the Lenders, the Administrative Agent, the Borrower
and the Collateral Manager upon the continuing failure by such Interest Hedge
Counterparty (or applicable guarantor) to perform its obligations for one
Business Day following a demand made by the Borrower (or the Collateral Manager
on behalf of the Borrower) on such Interest Hedge Counterparty.

 

(e) All amounts to be paid to the Borrower under this Section 9.1 shall be paid
to such account as the Borrower may designate and upon such payment will be
released from the lien of this Agreement.

 

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(f) Notwithstanding any other provision in this Agreement but subject to Section
6.4, the Collateral Agent shall disburse amounts on deposit in the Collection
Account representing Principal Proceeds to the equityholders of the Borrower on
any day during the Reinvestment Period occurring after the Ramp-Up Period at the
written direction of the Borrower (accompanied by the certification of the
Collateral Manager referred to in clause (B) below), so long as, (A) on a pro
forma basis after giving effect to such distribution, (i) each Collateral
Quality Test is satisfied, (ii) the Portfolio Advance Rate is less than or equal
to the Maximum Advance Rate, (iii) each Coverage Test is satisfied and has
continuously been satisfied historically, (iv) no Commitment Shortfall exists,
(v) no Default or Event of Default has occurred and is continuing, (vi) the MV
Overcollateralization Ratio Test is satisfied and (vii) the cumulative amount of
distributions pursuant to this clause will not, at any time, exceed 20% of the
Borrower's contributed equity capital, as measured on the Business Day
immediately preceding the day the first distribution is made pursuant to this
clause (such amount, the "Primary Limitation Amount"); provided that, on any
Business Day that (x) the cumulative amount of equity capital subsequently
contributed to the Borrower since the date of the first distribution pursuant to
this clause (f) equals or exceeds the Primary Limitation Amount and (y) the
Borrower directs the Collateral Agent to disburse amounts pursuant to this
clause (f), such limitation amount in respect of this subclause (vii) will be
reset to equal 20% of the Borrower's contributed equity capital as measured on
the Business Day immediately preceding the date of such distribution; provided
further that the Borrower may only reset the Primary Limitation Amount once, and
(B) the Collateral Manager shall have provided the Administrative Agent and the
Collateral Agent with a certificate demonstrating compliance with each
requirement set forth in the foregoing clauses (A)(i) through (vii); provided
further that, notwithstanding the foregoing provisions of this Section 9.1(f)
(including the tests set forth above) or any other provision of this Agreement
to the contrary, on the Effective Date, subject to receipt by the Agents of the
certified report referred to in Section 3.1(j), the Collateral Agent shall
disburse proceeds on such date to the equityholders of the Borrower from (x) the
Collection Account constituting Principal Proceeds in an amount equal to
$7,437,723.00, (y) the proceeds of the Class A-R Borrowing made on the Effective
Date in an amount equal to $43,608,202.00 and (z) the proceeds of the Class
A-T-1 Borrowing made on the Effective Date in an amount equal to $50,000,000.00.

 

Article X

 

SALE OF COLLATERAL LOANS; ELIGIBILITY CRITERIA

 

Section 10.1         Sale of Collateral Loans.

 

(a) Sales, Substitutions and Assignments. Provided that no Event of Default has
occurred and is continuing (except for sales pursuant to clauses (i), (iii),
(iv), (v)(B) or (vi) below which shall be permitted during the continuance of an
Event of Default but only so long as the Majority Lenders have provided their
written consent thereto pursuant to Section 6.2(a)) and subject to the
satisfaction of the conditions specified in this Agreement, including without
limitation Section 10.1(c), the Borrower or the Collateral Manager may direct
the Collateral Agent in writing to sell, and the Collateral Agent shall sell or
substitute in the manner directed by the Borrower or the Collateral Manager in
writing, any Collateral Loan or other loan included in the Collateral
(including, without limitation, the sale by assignment of a portion of the
Borrower's interest in any Collateral Loan or other loan); provided that (x)
such sale meets the requirements of any one of clauses (i) through (viii) of
this Section 10.1(a) and (y) such substitution shall meet the requirements of
clause (vii) of this Section 10.1(a), each of which requirements shall be
satisfied upon receipt by the Collateral Agent of a trade ticket or other
direction to sell or substitute (which shall be deemed to be a representation
and certification from the Borrower or the Collateral Manager that such
conditions are satisfied):

 

(i)                 Credit Risk Loans. The Borrower or the Collateral Manager
may direct the Collateral Agent in writing to sell any Credit Risk Loan at any
time during or after the Reinvestment Period without restriction; provided that
the sale of a Credit Risk Loan to an Affiliate shall be at a price at least
equal to its Market Value and such Market Value shall not be determined pursuant
to clause (d) or (e) of the definition thereof.

 

(ii)               Credit Improved Loans. The Borrower or the Collateral Manager
may direct the Collateral Agent in writing to sell any Credit Improved Loan
either:

 

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(A) at any time if the Sale Proceeds from such sale are at least equal to the
Investment Criteria Adjusted Balance of such Credit Improved Loan; or

 

(B) during the Reinvestment Period if the Borrower or the Collateral Manager
reasonably believes prior to such sale that it will be able to enter into
binding commitments to reinvest all or a portion of the proceeds of such sale,
in compliance with the Servicing Standard, in one or more additional Collateral
Loans with an Aggregate Principal Balance (together with any Collateral (which,
for the avoidance of doubt, may be Collateral Loans or Cash) contributed (which
contribution shall be irrevocable) by the Borrower or the Collateral Manager on
the Borrower's behalf prior to such sale) at least equal to the Investment
Criteria Adjusted Balance of such Credit Improved Loan within 30 Business Days
of such sale.

 

(iii)             Defaulted Loans. The Borrower or the Collateral Manager may
direct the Collateral Agent in writing to sell any Defaulted Loan at any time
during or after the Reinvestment Period without restriction; provided that the
sale of a Defaulted Loan to an Affiliate shall be at a price at least equal to
its Market Value and such Market Value shall not be determined pursuant to
clause (d) or (e) of the definition thereof.

 

(iv)             Equity Securities. The Borrower or the Collateral Manager (A)
may direct the Collateral Agent in writing to sell any Equity Security at any
time without restriction and (B) shall use its commercially reasonable efforts
to effect the sale of any Equity Security within 45 days after receipt if such
Equity Security constitutes Margin Stock, unless such sale is prohibited by
applicable law, in which case such Equity Security shall be sold as soon as such
sale is permitted by applicable law.

 

(v)               Discretionary Sales.

 

(A) Subject to Section 10.1(a)(viii) in the case of sales to Affiliates or to
any account or fund for which the Collateral Manager or an Affiliate thereof
acts as investment advisor with discretionary authority, so long as no Event of
Default shall have occurred and be continuing, the Borrower or the Collateral
Manager may at any time direct the Collateral Agent in writing to sell any
Collateral Loan other than a Credit Risk Loan, a Credit Improved Loan, a
Defaulted Loan or an Equity Security; provided that (i) the sale price
(expressed as a percentage of par) of such Collateral Loan shall be at least
equal to the purchase price (expressed as a percentage of par) of such
Collateral Loan, or (ii) if the sale price (expressed as a percentage of par) is
less than the purchase price (expressed as a percentage of par) of such
Collateral Loan, such sale shall be permitted so long as the Aggregate Principal
Balance of all such Collateral Loans sold during the preceding period of twelve
calendar months (or, for the first twelve calendar months after the Original
Closing Date, during the period commencing on the Original Closing Date) is not
greater than 20% of Total Capitalization, as of the first day of such twelve
calendar month period (or as of the Original Closing Date, as the case may be);
and

 

(B) if an Event of Default has occurred and is continuing, (x) if the Sale
Proceeds from the sale of such Collateral Loan are at least equal to the
Investment Criteria Adjusted Balance of such Collateral Loan or (y) during the
Reinvestment Period other than during a Restricted Trading Period, if the
Borrower or the Collateral Manager reasonably believes prior to such sale that
it will be able to enter into binding commitments to reinvest all or a portion
of the proceeds of such sale, in compliance with the Servicing Standard, in one
or more additional Collateral Loans with an Aggregate Principal Balance
(together with any Collateral (which, for the avoidance of doubt, may be
Collateral Loans or Cash) contributed (which contribution shall be irrevocable)
by the Borrower or the Collateral Manager on the Borrower's behalf prior to such
sale) at least equal to the Investment Criteria Adjusted Balance of such
Collateral Loan within 30 Business Days of such sale.

 

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Any written direction given by the Borrower or the Collateral Manager to the
Collateral Agent pursuant to this clause (v) shall be deemed a representation
and certification by the Borrower or the Collateral Manager to the Collateral
Agent that subclauses (A) and (B) of this clause (v) have been satisfied.

 

(vi)             Mandatory Sales. The Borrower or the Collateral Manager shall
use its commercially reasonable efforts to effect the sale of any Collateral
Loan (other than Defaulted Loans) that no longer meets the criteria described in
clause (m) in the definition of "Collateral Loan," within 18 months of the
failure of such Collateral Loan to meet any such criteria (unless (1) the Rating
Condition is satisfied or (2) the Borrower or the Collateral Manager determines
that such sale would not be in the best interests of the Lenders).

 

(vii)           Optional Repurchases or Substitutions by the BDC Pursuant

to the Master Transfer Agreement. The BDC may optionally repurchase and
substitute Credit Risk Loans and Defaulted Loans pursuant to and in accordance
with the Master Transfer Agreement and the Borrower shall sell and transfer
Credit Risk Loans and Defaulted Loans to the BDC in connection therewith at any
time during or after the Reinvestment Period; provided that, as certified to the
Collateral Agent and the Administrative Agent by an Authorized Officer of the
Collateral Manager, (i) the Aggregate Principal Balance of all Credit Risk Loans
and Defaulted Loans which are optionally repurchased or substituted by the BDC
pursuant to the Master Transfer Agreement may not exceed an amount equal to 15%
of the Net Purchased Collateral Loan Balance as of such date of repurchase or
substitution, (ii) such substituted loan meets the definition of "Collateral
Loan", (iii) the outstanding Aggregate Principal Balance of such substituted
loan is greater than or equal to that of the replaced Credit Risk Loan or
Defaulted Loan, (iv) such optional repurchase or substitution will not cause a
Default or an Event of Default, (v) each Coverage Test shall be satisfied after
giving effect to such repurchase or substitution, (vi) each Collateral Quality
Test is maintained or improved after giving effect to such repurchase or
substitution, (vii) such substituted loan either exceeds or maintains the lien
priority of the replaced Credit Risk Loan or Defaulted Loan; (viii) the
Eligibility Criteria are satisfied after giving effect to such repurchase or
substitution; and (ix) with respect to any such repurchase of a Credit Risk Loan
or Defaulted Loan, the sale price thereof shall be at least equal to the Market
Value of such Credit Risk Loan or Defaulted Loan and Market Value shall not be
determined pursuant to clause (d) or (e) of the definition thereof (the
limitations set forth in clauses (i) through (ix) referred to herein as the
"Repurchase and Substitution Limits").

 

(viii)         Sales of Collateral Loans to Affiliates. One or more Collateral
Loans may be sold from time to time by the Borrower, or the Collateral Manager
on the Borrower's behalf, to the Collateral Manager or an Affiliate thereof or
to any account or fund for which the Collateral Manager or an Affiliate thereof
acts as investment advisor with discretionary authority, only if (A) the terms
and conditions thereof are no less favorable to the Borrower than the terms it
would obtain in a comparable, timely sale with a non-Affiliate, (B) the
transactions are effected in accordance with all Applicable Laws, (C) to the
extent such Collateral Loan is neither a Defaulted Loan nor a Credit Risk Loan,
such sale is equal to the higher of (I) an amount not less than the original
purchase price paid by the Borrower with respect to such Collateral Loan and
(II) the Market Value with respect to such Collateral Loan and (D) to the extent
such Collateral Loan is a Credit Risk Loan or a Defaulted Loan, such sale is
equal to or greater than the Market Value of such Credit Risk Loan or Defaulted
Loan and Market Value shall not be determined pursuant to clause (d) or (e) of
the definition thereof.

 

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(b) Participations.

 

(i) During the Reinvestment Period, the Borrower may direct the Collateral Agent
in writing to sell, and the Collateral Agent shall sell in the manner directed
by the Borrower in writing, a Participation Interest in any Collateral Loan that
is a term loan (other than a Delayed Funding Loan); provided that at the time
such Participation Interest is sold (A) after giving effect to such sale, the
Concentration Limitations are satisfied and (B) the party purchasing such
Participation Interest satisfies the Applicable Counterparty Criteria.

(ii) For the avoidance of doubt, the Borrower may not sell a Participation
Interest in a Revolving Collateral Loan or a Delayed Funding Loan.

 

(c) Rules Generally Applicable to Sales of Collateral Loans.

 

(i) All sales of Collateral Loans or any portion thereof (including
Participation Interests) pursuant to this Section 10.1 shall be for Cash on a
non-recourse basis, which shall be deemed Principal Proceeds for all purposes
hereunder.

 

(ii) Anything herein to the contrary notwithstanding, the Borrower shall cause
any sale of any Collateral Loan or other property or assets to be conducted on
an arm's length basis upon fair and reasonable terms no less favorable to the
Borrower than would be obtainable in a comparable arm's length transaction with
a Person not an Affiliate.

 

Section 10.2         Eligibility Criteria. On and after the date of the first
Borrowing, a debt obligation will be eligible for purchase or origination
(including in connection with a substitution pursuant to Section 10.1(a)(vii))
by the Borrower and inclusion in the Collateral only if as evidenced by an
officer's certificate of an Authorized Officer of the Borrower delivered to the
Collateral Agent, the Eligibility Criteria are satisfied at the time such debt
obligation is purchased or originated (on a trade date basis), after giving
effect to the inclusion of such debt obligation. If a debt obligation is
purchased by the Borrower from the Collateral Manager or any of its Affiliates,
(A) the terms and conditions thereof shall be no less favorable to the Borrower
than the terms it would obtain in a comparable, timely sale with a
non-Affiliate, (B) the transactions shall be effected in accordance with all
applicable laws and (C) the purchase price shall be a dollar amount equal to the
fair market value thereof as determined by the parties thereto.

  

Article XI

CHANGE IN CIRCUMSTANCES

 

Section 11.1         Basis for Determining Interest Rate Inadequate or Unfair.
In the case of Eurodollar Rate Loans, if on or prior to the first day of any
Interest Period:

 

(a) the Administrative Agent is unable to obtain a quotation for the London
Interbank Offered Rate as contemplated by Section 2.5, or

 

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(b) the Majority Lenders advise the Administrative Agent that as a result of
changes arising after the date of this Agreement the Adjusted London Interbank
Offered Rate as determined by the Administrative Agent will not adequately and
fairly reflect the cost to such Lenders of funding their Eurodollar Rate Loans
for such Interest Period,

 

in each case the Administrative Agent shall forthwith give notice thereof (by
telephone confirmed in writing) to the Borrower, DBRS, the Collateral Agent and
the Lenders, whereupon until the Administrative Agent notifies the Borrower and
the Collateral Agent that the circumstances giving rise to such suspension no
longer exist, the obligations (if any) of the Lenders to make Eurodollar Rate
Loans shall be suspended, except in the case of Eurodollar Rate Loans required
to fund Exposure Amounts; provided that such Lenders shall instead fund Base
Rate Loans.

 

Section 11.2         Illegality. If, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender in good faith with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency shall
make it unlawful or impossible for any Lender to make, maintain or fund its
Eurodollar Rate Loans (if any) and such Lender shall so notify the
Administrative Agent, the Administrative Agent shall forthwith give notice
thereof (by telephone confirmed in writing) to the Lenders, the Collateral
Agent, DBRS and the Borrower, whereupon until such Lender notifies the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Lender to make Eurodollar Rate Loans (if
any) shall be suspended (provided that such Lender shall instead fund Base Rate
Loans). Before giving any notice to the Administrative Agent pursuant to this
Section 11.2, such Lender shall designate a different Applicable Lending Office
if such designation would avoid the need for giving such notice and would not be
otherwise disadvantageous to such Lender. If circumstances subsequently change
so that it is no longer unlawful for an affected Lender to make or maintain
Eurodollar Rate Loans as contemplated hereunder, such Lender will, as soon as
reasonably practicable after such Lender becomes aware of such change in
circumstances, notify the Borrower, the Collateral Agent and the Administrative
Agent and upon receipt of such notice, the obligations of such Lender to make or
continue Eurodollar Rate Loans shall be reinstated.

  

Section 11.3         Increased Cost and Reduced Return.

 

(a) If, on or after the Original Closing Date, the adoption of any applicable
law, rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency shall
impose, modify or deem applicable any reserve (including, without limitation,
any such requirement imposed by the Federal Reserve Board (but excluding with
respect to any Loan any such requirement reflected in an applicable Euro-Dollar
Reserve Percentage)), special deposit, insurance assessment or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender (or its Applicable Lending Office) or shall impose on
any Lender (or its Applicable Lending Office) or on the London interbank market
any other condition affecting its Eurodollar Rate Loans, its Notes evidencing
Eurodollar Rate Loans, or its obligation to make Eurodollar Rate Loans, and the
result of any of the foregoing is to increase the cost to such Lender (or its
Applicable Lending Office) of making or maintaining any Loan, or to reduce the
amount of any sum received or receivable by such Lender (or its Applicable
Lending Office) under this Agreement or under its Notes with respect thereto
(including if any such adoption, change or change in interpretation subjects any
Lender to taxes that increase such cost to, or reduce such amount received or
receivable by, such Lender (other than (i) Taxes, but only to the extent such
Taxes are imposed on or with respect to a payment hereunder, and (ii) taxes
described in Sections 11.4(a)(I)(i) through (iv)) by an amount deemed by such
Lender to be material, then, upon demand (which demand shall set forth in
reasonable detail the basis for such demand for compensation) by such Lender
(with a copy to the Administrative Agent, the Collateral Agent and DBRS), such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction shall constitute Increased Costs payable by the Borrower
pursuant to Sections 9.1(a) and 6.4; provided that such amounts shall be no
greater than that which such Lender is generally charging other borrowers
similarly situated to the Borrower.

 

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(b) If any Lender shall have determined that, after the Original Closing Date,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Lender as a consequence of such Lender's obligations
hereunder to a level below that which such Lender could have achieved but for
such adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then, upon demand (which demand shall set forth in reasonable
detail the basis for such demand for compensation) by such Lender (with a copy
to the Administrative Agent, the Collateral Agent and DBRS), such additional
amount or amounts as will compensate such Lender for such reduction (to the
extent funds are available therefor in accordance with the Priority of Payments)
shall constitute Increased Costs payable by the Borrower pursuant to Sections
9.1(a) and 6.4; provided that such amount shall be no greater than that which
such Lender is generally charging other borrowers similarly situated to the
Borrower.

 

(c) Each Lender will promptly notify the Borrower, the Collateral Agent, DBRS
and the Administrative Agent of any event of which it has knowledge, occurring
after the Original Closing Date, which will entitle such Lender to compensation
pursuant to this Section 11.3 and will designate a different Applicable Lending
Office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not be otherwise disadvantageous to such Lender. A
certificate of any Lender claiming compensation under this Section 11.3 and
setting forth in reasonable detail a calculation of the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods. Failure or delay on the part of any Lender to
demand compensation under this Section 11.3 shall not constitute a waiver of
such Lender's right to demand such compensation; provided that the Borrower
shall not be required to compensate a Lender pursuant to this Section 11.3 for
any increased costs or reductions incurred more than six months prior to the
earlier of (x) the date on which the applicable Lender has actual knowledge of
the event giving rise to such increased costs or reductions and (y) the date on
which the applicable Lender should, in the exercise of reasonable care, have
knowledge of the event giving rise to such increased costs or reductions;
provided that, if the event giving rise to such increased costs or reductions is
retroactive, then the six-month period referred to above shall be extended to
include the period of retroactive effect thereof.

 

(d) Notwithstanding anything to the contrary contained herein, (i) no Lender
shall demand compensation for any increased cost, reduction or capital referred
to above in Section 11.3(a) or (b) if it shall not at the time be the general
policy and practice of such Lender to demand such compensation in similar
circumstances under comparable provisions of other credit agreements from
similarly situated borrowers and (ii) all requests, rules, guidelines,
requirements and directives promulgated (x) by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority), the Committee of European Banking Supervisors or the United
States or foreign regulatory authorities, in each case, pursuant to Basel III or
similar capital requirements directive existing on the Original Closing Date
impacting European banks and other regulated financial institutions, including,
without limitation, any publications addressing the liquidity coverage ratio or
the supplementary leverage ratio, and (y) pursuant to the Dodd-Frank Wall Street
Reform and Consumer Protection Act, shall, in each case, be deemed to be a
change or adoption of any law, rule or regulation for purposes of this Section
11.3, regardless of the date enacted, adopted, issued or implemented.

 

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(e) If the Borrower is required to pay additional amounts to any Lender under
this Section 11.3, then the Borrower may, at its own expense and in its sole
discretion, require such Lender to transfer or assign, in whole, without
recourse (in accordance with Section 11.5) all of its interests, rights and
obligations under this Agreement and the Notes to an assignee (it being
understood that such Lender shall have no obligation to search for, seek,
designate or otherwise try to find, such assignee) which shall assume such
obligations (and which may be another Lender, if such other Lender accepts such
assignment).

 

(f) Notwithstanding anything to the contrary in this Section 11.3, the Borrower
shall not be required to pay amounts to any Lender under this Section 11.3 to
the extent such amounts would be duplicative of amounts payable by the Borrower
under Section 11.4. To the extent the Borrower is required to pay any Lender
additional amounts or indemnify any Lender in respect of Taxes or Other Taxes,
the provisions of Section 11.4 shall control.

 

(g) For the avoidance of doubt, the Borrower shall not be obligated to pay
additional amounts to a Lender pursuant to clauses (a) or (b) of this Section
11.3 to the extent any such additional amounts are attributable to a failure by
a Lender to comply with its obligations under Articles 404-410 that are within
its control.

 

Section 11.4         Taxes.

 

(a) (I) Any and all payments by or on behalf of the Borrower to or for the
account of any Lender or the Administrative Agent hereunder or under any other
Loan Document shall be made free and clear, of and without deduction for, any
and all present or future taxes, duties, levies, imposts, deductions, charges or
withholdings imposed by any governmental authority, including any interest,
additions to tax or penalties applicable thereto excluding, in the case of each
Lender and the Administrative Agent, (i) taxes imposed on or measured by its net
income (however denominated), franchise taxes, and branch profits taxes, in each
case (A) imposed as a result of any Lender or the Administrative Agent (as the
case may be) being organized under the laws of, or having its principal office
or, in the case of each Lender, its applicable lending office located in, the
jurisdiction imposing such tax (or any political subdivision thereof) or (B)
that are Other Connection Taxes, (ii) in the case of each Lender, withholding
taxes imposed on amounts payable to or for the account of such Lender with
respect to an applicable interest in a Loan or Commitment pursuant to a law in
effect on the date on which (y) such Lender acquires such interest in the Loan
or Commitment (other than pursuant to an assignment request by the Borrower
under Section 11.5) or (z) such Lender changes its lending office, except in
each case to the extent that, pursuant to this Section 11.4, amounts with
respect to such taxes were payable either to such Lender's assignor immediately
before such Lender became a party hereto or to such Lender immediately before it
changed its lending office, (iii) taxes attributable to such Lender or the
Administrative Agent's failure to comply with Section 11.4(d) and (iv) any
withholding taxes imposed under FATCA (all such non-excluded taxes, duties,
levies, imposts, deductions, charges or withholdings imposed by any governmental
authority, including any interest, additions to tax or penalties applicable
thereto being hereinafter referred to as "Taxes"). (II) If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Lender or the Administrative Agent, (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 11.4(a)) such Lender or the Administrative Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant governmental
authority in accordance with applicable law and the Priority of Payments and
(iv) the Borrower shall furnish to the Administrative Agent, at its address set
forth on the signature pages hereof, the original or a certified copy of a
receipt evidencing payment thereof or, if a receipt is not available, such other
evidence of payment as may be reasonably acceptable to such Lender or the
Administrative Agent.

 

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(b) In addition, the Borrower agrees to pay, in accordance with the Priority of
Payments, any present or future stamp or documentary taxes and any other excise
or property taxes, or charges or similar levies which arise from any payment
made hereunder or under any Note or from the execution or delivery of, or
otherwise with respect to, this Agreement or any Note (other than any such taxes
arising with respect to an assignment) (hereinafter referred to as "Other
Taxes").

 

(c) (i) The Borrower agrees to indemnify each Lender and the Agents for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 11.4) paid by such Lender or the Agents (as the case may be) and
any liability (including penalties, interest and reasonable expenses) arising
therefrom or with respect thereto. This indemnification shall be made within 15
days from the date such Lender or the Agents (as the case may be) makes demand
therefor accompanied by evidence reasonably satisfactory to the Borrower
establishing liability for such Taxes or Other Taxes.

 

(ii) Each Lender shall severally indemnify the Borrower and the Administrative
Agent for any taxes (but only to the extent such taxes are excluded from the
definition of Taxes pursuant to Section 11.4(a)) attributable to such Lender
that are payable or paid by the Borrower or the Administrative Agent (as the
case may be) and any liability (including penalties, interest and reasonable
expenses) arising therefrom or with respect thereto. This indemnification shall
be made within 15 days from the date the Borrower or the Administrative Agent
(as the case may be) makes demand therefor accompanied by evidence reasonably
satisfactory to the relevant Lender establishing liability for such taxes.

 

(d) (i) Each Lender that is a U.S. Person, on or prior to the date of its
execution and delivery of this Agreement, or on or prior to the date on which it
becomes a Lender, as the case may be, and from time to time thereafter if
requested in writing by the Borrower or any Agent (but only so long as such
Lender remains lawfully able to do so), shall provide the Borrower or such Agent
with two executed original IRS Forms W-9 certifying that such Lender is exempt
from U.S. Federal backup withholding tax. Each Lender that is not a U.S. Person,
on or prior to the date of its execution and delivery of this Agreement, or on
or prior to the date on which it becomes a Lender, as the case may be, and from
time to time thereafter if requested in writing by the Borrower or any Agent
(but only so long as such Lender remains lawfully able to do so), shall provide
the Borrower or such Agent with two executed original IRS Forms W-8BEN,
W-8BEN-E, W-8ECI or W-8IMY, as appropriate, or any successor form prescribed by
the IRS, either (w) certifying that such Lender is entitled to benefits under an
applicable income tax treaty to which the United States is a party which
eliminates, or reduces the rate of U.S. Federal withholding tax on payments
hereunder, (x) certifying that the income receivable pursuant to this Agreement
is effectively connected with the conduct of a trade or business in the United
States, (y) in the case of a Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, accompanied by a
certificate to the effect that such Lender is not (A) a "bank" within the
meaning of section 881(c)(3)(A) of the Code, (B) a "10 percent shareholder" of
the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a
"controlled foreign corporation" described in section 881(c)(3)(C) of the Code
or (z) in the case of a Lender providing a Form W-8IMY, certifying that such
Lender is not the beneficial owner of payments hereunder and providing such
information and forms as required by applicable law to establish the rate of
U.S. withholding tax (if any) with respect to such payments. In addition to the
foregoing requirements of this Section 11.4(d)(i), each Lender shall, on or
prior to the date on which such Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the reasonable request of the Borrower or
the Administrative Agent), deliver to the Borrower and the Administrative Agent
(in such number of copies as shall be requested by the recipient) executed
originals of any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in U.S. Federal withholding tax, duly completed,
together with any required supplementary information.

 

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(ii) If any payment made to a Lender or the Administrative Agent under any Loan
Document may be subject to U.S. Federal withholding tax imposed by FATCA if such
Lender or the Administrative Agent failed to comply with the applicable
reporting requirements of FATCA, such Lender or the Administrative Agent, as
applicable, shall deliver to the Borrower (with a copy to the Administrative
Agent, if applicable) a certification signed by the chief financial officer,
principal accounting officer, treasurer or controller and other documentation
reasonably requested by the Administrative Agent or the Borrower sufficient for
the Administrative Agent and the Borrower to comply with their obligations under
FATCA and to determine whether such Lender has complied with such applicable
reporting requirement and whether withholding is required under FATCA.

 

(iii) Each Lender hereby agrees that if any form or certification such Lender
previously delivered pursuant to this Section 11.4(d) expires or becomes
obsolete or inaccurate in any respect, such Lender shall update such form or
certification or notify the Borrower and the Administrative Agent in writing of
its legal inability to do so, in each case promptly after such form or
certification so expires or becomes obsolete.

 

(e) If the Borrower is required to pay additional amounts to or for the account
of any Lender pursuant to this Section 11.4, then such Lender will change the
jurisdiction of its Applicable Lending Office so as to eliminate or reduce any
such additional payment which may thereafter accrue if such change, in the sole
judgment of such Lender, is not otherwise disadvantageous to such Lender.

 

(f) If a Lender determines, in its sole discretion exercised in good faith, that
it has received a refund of any Taxes or Other Taxes as to which it has been
indemnified under this Section 11.4, it shall pay to the Borrower, as
applicable, an amount equal to such refund (but only to the extent of indemnity
payments made under this Section 11.4 with respect to the Taxes giving rise to
such refund), net of all out-of-pocket expenses (including taxes) of such Lender
and without interest (other than any interest paid by the relevant governmental
authority with respect to such refund). The Borrower, upon the request of such
Lender, shall repay to such Lender the amount paid over pursuant to this clause
(f) (plus any penalties, interest or other charges imposed by the relevant
governmental authority) in the event that such Lender is required to repay such
refund to such governmental authority. Notwithstanding anything to the contrary
in this clause (f), in no event will a Lender be required to pay an amount to
the Borrower pursuant to this clause (f) the payment of which would place the
Lender in a less favorable net after-tax position than the Lender would have
been in if the indemnification payments or additional amounts giving rise to
such refund had never been paid. This clause (f) shall not be construed to
require any Lender to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Borrower or any other
Person.

 

(g) Notwithstanding anything to the contrary contained in this Section 11.4, all
payments made pursuant to this Section 11.4 shall only be made to the extent
funds are available in accordance with the Priority of Payments.

 

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(h) Each party's obligations under this Section 11.4 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitment
and the repayment, satisfaction or discharge of all obligations under any Loan
Document.

 

Section 11.5         Replacement of Lenders; Downgraded Lenders; Defaulting
Lenders.

 

(a) (x) If and for so long as any Lender is (1) a Downgraded Lender (subject to
clauses (b) and (c) below), (2) a Defaulting Lender, (3) requesting compensation
under Section 11.3 or (4) unable to make Loans under Section 11.2 or (y) if the
Borrower is required to pay any additional amount to such Lender or any
authority for the account of such Lender pursuant to Section 11.4, then the
Borrower may, at its sole expense and effort, upon notice to such Lender, the
Agents and DBRS, direct such Lender to assign and delegate (and such Lender
shall comply with such direction but shall have no obligation to search for,
seek, designate or otherwise try to find, an assignee), without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 12.6), all of its interests, rights and obligations under
this Agreement and the Notes to a financial institution that is (I) an Approved
Lender (and is not otherwise a Defaulting Lender), (II) eligible to purchase the
replaced Lender's Loans under the terms hereof and (III) not prohibited by any
applicable law from making such purchase (such purchaser, an "Approved
Purchaser"), which shall assume such obligations (and which may be another
Lender, if such other Lender accepts such assignment); provided that:

 

(i) such assigning Lender shall have received payment of an amount equal to the
aggregate outstanding principal of its Loans, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder and under its Note (including
any amounts under Section 2.9) from such Approved Purchaser (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts);

 

(ii) in the case of any such assignment or delegation resulting from a claim for
compensation under Section 11.3 or payments required to be made pursuant to
Section 11.4, such assignment or delegation will result in a reduction in such
compensation or payments thereafter; and

 

(iii) such assignment or delegation does not conflict with any applicable law.

 

(b) If and for so long as any Lender is a Downgraded Lender or a Defaulting
Lender hereunder:

 

(i) in the case of a Downgraded Lender, it holds any portion of the Commitments
that remain in effect, then, as soon as practicable and in any event within 30
days after becoming a Downgraded Lender, (x) it shall deposit an amount equal to
its undrawn Commitments at such time into the Lender Collateral Account and (y)
all principal payments in respect of the Loans which would otherwise be made to
such Downgraded Lender shall be diverted to the Lender Collateral Subaccount of
such Downgraded Lender in accordance with Section 8.3(d), and any amounts in
such Lender Collateral Subaccount shall be applied to any future funding
obligations of such Downgraded Lender; and

 

(ii) in the case of a Defaulting Lender, (x) the Commitment and Loans of any
such Defaulting Lender shall not be included in determining whether the Majority
Lenders have taken or may take any action hereunder (including any consent to
any amendment, waiver or other modification pursuant to Section 12.5); provided
that a Defaulting Lender's vote shall be included with respect to any action
hereunder relating to any change that would require the consent of each Lender
or each affected Lender under Section 12.5 (to the extent such Defaulting Lender
is such an affected Lender) and (y) no Defaulting Lender shall be entitled to
receive any Commitment Fee for any period during which time that Lender is a
Defaulting Lender (and the Borrower shall not be required to pay any such fee
that otherwise would have been required to have been paid to that Defaulting
Lender during such time).

 

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(c) Notwithstanding anything in Section 11.5(a) to the contrary, (i) a Lender
shall not be required to make any assignment or delegation referred to in
Section 11.5(a) if, prior thereto, as a result of a waiver by such Lender or the
Borrower or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply and such Lender gives notice thereof to
the Borrower and (ii) the Borrower may not require a Downgraded Lender to make
any such assignment or delegation during the 30-day period referred to in clause
(b)(i) above or at any time that a Downgraded Lender is in compliance with
clause (b)(i)(x) above.

 

(d) Each of the Administrative Agent and any replaced Lender will agree to
cooperate with all reasonable requests of the Borrower for the purpose of
effecting a transfer in compliance with this Section 11.5.

 

(e) Nothing in this Section 11.5 shall be deemed to release a Defaulting Lender
or Downgraded Lender from any liability arising from its failure to fund any
Loans it is required to make hereunder.

 

Article XII

MISCELLANEOUS

 

Section 12.1         Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, facsimile,
facsimile transmission or similar writing) and shall be given to such party:
(w) in the case of the Borrower, the Collateral Manager, the Administrative
Agent or the Collateral Agent, at its address, facsimile number and/or email
address set forth on the signature pages hereof, (x)(1) in the case of the
initial Lender, at its address, facsimile number and/or email address set forth
on the signature pages hereof, and (2) in the case of any other Lender, at its
address, facsimile number and/or email address set forth in its Administrative
Questionnaire (which notices shall be solely by facsimile or email if so
indicated therein), (y) in the case of DBRS, at its address, facsimile number
and/or email address set forth on Schedule G (provided that all notices to DBRS
shall be sent by email, whether or not also sent by physical address and/or
facsimile) or (z) in the case of any party, such other address, facsimile number
and/or email address as such party may hereafter specify for such purpose by
notice to the Administrative Agent, the Collateral Agent and the Borrower. Each
such notice, request or other communication shall be effective (i) if given by
facsimile, when such facsimile is transmitted to the facsimile number specified
in this Section 12.1 and the appropriate answerback is received, (ii) if given
by mail, three Business Days after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid, (iii) if given by
recognized courier guaranteeing overnight delivery, one Business Day after such
communication is delivered to such courier or (iv) if given by any other means,
when delivered at the address or email address specified in this Section 12.1;
provided that notices to the Administrative Agent under Article XI or to the
Collateral Agent under Article VIII shall not be effective until received.

  

The Collateral Agent agrees to accept and act upon instructions or directions
pursuant to this Agreement sent by unsecured email, facsimile transmission or
other similar unsecured electronic methods, provided that any person providing
such instructions or directions shall provide to the Collateral Agent an
incumbency certificate listing persons designated to provide such instructions
or directions, which incumbency certificate shall be amended whenever a person
is added or deleted from the listing. If such person elects to give the
Collateral Agent email or facsimile instructions (or instructions by a similar
electronic method) and the Collateral Agent in its discretion elects to act upon
such instructions, the Collateral Agent's reasonable understanding of such
instructions shall be deemed controlling. The Collateral Agent shall not be
liable for any losses, costs or expenses arising directly or indirectly from the
Collateral Agent's reliance upon and compliance with such instructions
notwithstanding such instructions conflicting with or being inconsistent with a
subsequent written instruction. Any person providing such instructions
acknowledges and agrees that there may be more secure methods of transmitting
such instructions than the method(s) selected by it and agrees that the security
procedures (if any) to be followed in connection with its transmission of such
instructions provide to it a commercially reasonable degree of protection in
light of its particular needs and circumstances.

 

 

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Section 12.2         No Waivers. No failure or delay by either Agent or any
Lender or the Borrower in exercising any right, power or privilege hereunder or
under any Note shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.

  

Section 12.3         Expenses; Indemnification

 

(a) The Borrower shall pay (i) all reasonable and documented out-of-pocket
expenses of the Agents, the Custodian and the Securities Intermediary,
including, without limitation, reasonable and documented fees and disbursements
of counsel in connection with the preparation, syndications and administration
of this Agreement, the Loan Documents and any documents and instruments referred
to therein, and further modifications or syndications of the Loans in connection
therewith, the administration of the Loans, any Increased Commitment or
Additional Loan, any waiver or consent hereunder or any amendment or
modification hereof or any Default hereunder; provided that such reimbursement
under this subclause (a)(i) of expenses incurred up to and including the
Original Closing Date shall be limited to the amounts set forth in the
Engagement Letter and as otherwise agreed by the parties hereto and (ii) all
reasonable and documented out-of-pocket expenses incurred by any Agent,
including reasonable and documented fees and disbursements of one counsel for
the Administrative Agent and the initial Lender and one counsel for U.S. Bank,
as Collateral Agent, Custodian and Securities Intermediary (provided that (1)
the Administrative Agent and the initial Lender shall be entitled to
reimbursement for a single counsel and (2) U.S. Bank as Collateral Agent,
Custodian and Securities Intermediary shall be entitled to reimbursement for a
single counsel), in connection with the enforcement of the Loan Documents and
the instruments referred to therein and such collection, bankruptcy, insolvency
and other enforcement proceedings resulting therefrom.

 

(b) The Borrower agrees to indemnify the Administrative Agent, the Collateral
Agent, the Custodian, U.S. Bank as Securities Intermediary and each Lender,
their respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each, an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind (but excluding the fees and expenses of its internal legal
counsel and all ordinary internal costs, consisting of overhead and employee
costs and expenses incurred by such Indemnitee in connection with its
obligations under the Loan Documents), including, without limitation, the
reasonable and documented fees and disbursements of counsel (provided that (1)
the Administrative Agent and the initial Lender shall be entitled to
reimbursement for a single counsel and (2) U.S. Bank as Collateral Agent,
Custodian and Securities Intermediary shall be entitled to reimbursement for a
single counsel), which may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) that may at any time (including,
without limitation, at any time following the payment of the Obligations) be
imposed on, asserted against or incurred by any Indemnitee as a result of, or
arising out of, or in any way related to or by reason of, (i) any of the
transactions contemplated by the Loan Documents or the execution, delivery or
performance of any Loan Document, (ii) the grant to the Collateral Agent and the
Lenders of any Lien, on the Collateral, (iii) the exercise by the Administrative
Agent, the Collateral Agent or the Lenders of their rights and remedies
(including, without limitation, foreclosure) under any agreements creating any
such Lien, (iv) the failure of the Collateral Agent to have a valid and
perfected Lien on any Collateral, (v) a breach by the Borrower of any
representation, warranty or covenant contained in any Loan Document or any
document relating to any Collateral or (vi) any loss arising from any action or
inaction of the Borrower or any of its Affiliates regarding the administration
of any Collateral or otherwise relating to such Collateral (other than an
Obligor's financial inability to make payments with respect to any such
Collateral) but excluding, as to any Indemnitee, any such losses, liabilities,
damages, expenses or costs incurred by reason of the gross negligence or willful
misconduct of such Indemnitee as finally determined by a court of competent
jurisdiction. The Borrower's obligations under this Section 12.3 shall survive
the termination of this Agreement and the payment of the Obligations. For the
sake of clarity, this Section 12.3(b) shall not impose any indemnification or
similar obligation on the Borrower with respect to taxes, which obligation shall
be addressed solely by Section 11.4.

 

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(c) The Borrower shall pay, and hold the Agents, the Custodian and the
Securities Intermediary and each of the Lenders harmless from and against, any
and all present and future U.S. stamp, recording, transfer and other similar
foreclosure related taxes with respect to the foregoing matters in this Section
12.3 and hold the Agents and each Lender harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Lender) to pay such taxes. For the avoidance
of doubt, any amounts paid pursuant to this Section 12.3(c) shall not be
duplicative of amounts paid pursuant to Section 5.26, Section 5.27 or Section
11.4.

 

Section 12.4         Sharing of Set-Offs. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized at any time or from time
to time, without presentment, demand, protest or other notice of any kind to the
Borrower or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and apply any and all deposits (general or
special, time or demand, provisional or final) and any other Indebtedness at any
time held or owing by such Lender (including, without limitation, by branches
and agencies of such Lender wherever located) to or for the credit or the
account of the Borrower against and on account of the Obligations of the
Borrower then due and payable to such Lender under this Agreement or under any
of the other Loan Documents, including, without limitation, all interests in
Obligations purchased by such Lender.

  

Each Lender agrees that if it shall, by exercising any right of set-off or
counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of principal, interest, fees and other amounts due with respect to any
Loan held by it which is greater than the proportion received by any other
Lender in respect of the aggregate amount of principal, interest, fees and other
amounts due with respect to the Loans held by such other Lender, the Lender
receiving such proportionately greater payment shall purchase such
participations in the Loans held by the other Lenders, and such other
adjustments shall be made, as may be required so that all such payments of
principal, interest, fees and other amounts with respect to the Loans held by
the Lenders shall be shared by the Lenders pro rata; provided that nothing in
this Section 12.4 shall impair the right of any Lender to exercise any right of
set-off or counterclaim it may have and to apply the amount subject to such
exercise to the payment of Indebtedness of the Borrower other than its
Indebtedness under the Loans. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in a
Loan, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of set-off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation. Notwithstanding
anything to the contrary contained herein, any Lender may, by separate agreement
with the Borrower, waive its right to set off contained herein or granted by law
and any such written waiver shall be effective against such Lender under this
Section 12.4. For the avoidance of doubt, for purposes of this Section 12.4 a
pro rata allocation will mean an allocation of the amount received by such
set-off or counterclaim and other rights as if such amount had been applied as a
prepayment of the Loans under Section 2.7.

 

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Section 12.5         Amendments and Waivers. 

 

(a) Any provision of this Agreement, the Notes or any other Loan Document may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by the Borrower and the Majority Lenders (and, if the rights or duties of
the Administrative Agent and/or the Collateral Agent are affected thereby, by
the Administrative Agent and/or the Collateral Agent, as the case may be);
provided that:

 

(i) no such amendment or waiver shall, unless signed by all the Lenders, (1)
extend the Stated Maturity; (2) increase or decrease the Commitment of any
Lender (except for a ratable decrease in the Commitments of all Lenders) or
subject any Lender to any additional obligation; (3) change the Percentage Share
of the Commitments allocable to any Lender or of the aggregate unpaid principal
amount of the Loans, the definition of "Majority Lenders" or the number of
Lenders, which shall be required for the Lenders or any of them to take any
action under this Section 12.5 or any other provision of this Agreement; (4)
release any Collateral except as provided in this Agreement or the other Loan
Documents; (5) alter the terms of Section 6.4, Section 9.1 or this Section 12.5
(or any defined term as it is used therein) in a manner materially adverse to
the interests of any Lender; (6) extend the Reinvestment Period; or (7) change
any of the definitions of "Coverage Tests", "Overcollateralization Ratio Test",
"Interest Coverage Ratio Test", "Collateral Quality Test", "Portfolio Advance
Rate", "Maximum Advance Rate" or "Collateral Loan";

 

(ii) no such amendment or waiver shall, unless signed by all Lenders affected
thereby, postpone the date fixed for any payment of principal of or interest on
any Loan or any fees or other amounts hereunder or for any reduction or
termination of any Commitment;

 

(iii) no such amendment or waiver shall, unless signed by a Lender, reduce the
principal of or rate of interest on any Loan held by such Lender or any fees or
indemnities payable for the account of such Lender; provided that the foregoing
shall not apply to the rescission of interest accruing at the Post-Default Rate,
which may be rescinded by the Majority Lenders; and

 

(iv) no amendment or waiver of any provision under this Agreement or any other
Loan Document that governs the rights and obligations of CP Lenders or their
Conduit Support Providers (including this Section 12.5(a)(iv)) (other than
amendments and waivers that apply generally to Lenders) or that specifically
relates to CP Conduits shall be effective without the written consent of each CP
Lender.

 

(b) In connection with any proposed amendment or waiver of this Agreement or any
other Loan Document pursuant to this Section 12.5, either (1) such proposed
amendment or waiver will be effective only upon satisfaction of the Rating
Condition or (2) if, in the Borrower's reasonable determination, such proposed
amendment or waiver does not have a reasonable likelihood of being adverse to
the interests of any Lender, then the Borrower shall, not later than 10 Business
Days prior to the execution of such proposed amendment or waiver, deliver to
each of the Lenders a copy of such proposed amendment or waiver; provided, in
the case of the foregoing clause (2), if any Lender notifies the Borrower prior
to execution of such proposed amendment or waiver that, based on its reasonable
determination, such proposed amendment or waiver could adversely affect the
interests of any Lender, such proposed amendment or waiver will not be effective
without the satisfaction of the Rating Condition.

 

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(c) The Borrower shall, promptly following the execution of any amendment,
waiver or supplement to any Loan Document, provide copies thereof to each
Lender, the Administrative Agent, the Collateral Agent and DBRS.

 

Section 12.6         Successors and Assigns.

 

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that the Borrower may not assign or otherwise transfer any of its rights
or obligations under this Agreement or the other Loan Documents without the
prior written consent of each of the Lenders except as permitted by this
Agreement.

 

(b) (i) Any Lender may at any time grant to one or more banks, commercial paper
conduits or other institutions (each, a "Participant") participating interests
in its Commitment or any or all of its Loans. In the event of any such grant by
a Lender of a participating interest to a Participant, whether or not upon
notice to the Borrower and the Administrative Agent, such Lender shall remain
responsible for the performance of its obligations hereunder, and the Borrower
and the Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement. An assignment or other transfer which is not permitted by subsection
(c) or (d) below shall be given effect for purposes of this Agreement only to
the extent of a participating interest granted in accordance with this
subsection (b).

 

(ii) In the event that any Lender sells participations in its ommitment or any
or all of its Loans hereunder, such Lender shall, acting solely for this
purposes as a non-fiduciary agent of the Borrower, maintain a register on which
it enters the name of all Participants in the Commitments or Loans held by it
and the principal amount (and stated interest thereon) of the portion of the
Commitments or Loans which is the subject of the participation (the "Participant
Register"). A Commitment or Loan may be participated in whole or in part only by
registration of such participation on the Participant Register. Any
participation of such Commitment or Loan may be effected only by the
registration of such participation on the Participant Register. No Lender shall
have any obligation to disclose all or any portion of the Participant Register
(including the identity of any Participant or any information relating to a
Participant's interest in any Commitments, Loans or its other obligations under
any Loan Document) to any Person except to the extent that such disclosure is
necessary to establish that such Commitment, Loan or other obligation is in
registered form under Section 5f.103-1(c) of the United States Treasury
Regulations. The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary. For the avoidance
of doubt, the Administrative Agent (in its capacity as Administrative Agent)
shall have no responsibility for maintaining a Participant Register.

 

(c) (i) Any Lender may at any time assign to one or more banks, CP Conduits or
other financial institutions (each, an "Assignee") all or any portion of its
rights and obligations under this Agreement, the Notes and the other Loan
Documents, and such Assignee shall assume such rights and obligations, pursuant
to an Assignment and Assumption executed by such Assignee and such transferor
Lender, with (and subject to) the consent of the Borrower and the Administrative
Agent, which consent in each case shall not be unreasonably withheld; provided
that (1) such assignment is in an amount which is at least $5,000,000 or a
multiple of $1,000,000 in excess thereof (or the remainder of such Lender's
Loans or Commitments); and (2) no such consent of the Borrower or the
Administrative Agent shall be required in the case of an assignment that is made
(A) during the continuance of an Event of Default; (B) with respect to the Class
A-R Loans, after the Class A-R Commitment Period; (C) with respect to the Class
A-R Loans, during the Class A-R Commitment Period, if such Assignee is an
Approved Lender or an Affiliate of a Lender; (D) if any Class of Loans has been
downgraded from its Initial Rating; (E) by (I) a CP Lender to a Conduit Assignee
or (II) by a Lender to Natixis or any Natixis Conduit; (F) of any Class A-T-1
Loans; (G) with respect to the Class A-T-2 Loans, after the Additional Draw
Date; or (H) with respect to the Class A-T-2 Loans, prior to the Additional Draw
Date, if such Assignee is an Approved Lender or an Affiliate of a Lender.

 

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(ii) Upon execution and delivery of such instrument and payment by such Assignee
to such transferor Lender of an amount equal to the purchase price agreed
between such transferor Lender and such Assignee, such Assignee (and if the
Assignee is a Conduit Assignee, any Related CP Issuer, if such Conduit Assignee
does not itself issue commercial paper) shall be a party to this Agreement and
shall have all the rights, protections and obligations of a Lender with
Commitments as set forth in such instrument of assumption, and the transferor
Lender shall be released from its obligations hereunder to a corresponding
extent, and no further consent or action by any party shall be required. Upon
the consummation of any assignment pursuant to this subsection (c), the
transferor Lender, the Administrative Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee. In connection with any such assignment, the transferor Lender shall
pay to the Administrative Agent an administrative fee for processing such
assignment in the amount of $2,500 (unless such fee is waived by the
Administrative Agent). Each Assignee shall deliver to the Borrower and the
Administrative Agent the relevant form or certification in accordance with
Section 11.4(d).

 

(d) Any Lender may at any time assign all or any portion of its rights under
this Agreement and its Note to a Federal Reserve Bank. No such assignment shall
release the transferor Lender from its obligations hereunder. Promptly upon
being notified in writing of such transfer, the Administrative Agent shall
notify the Borrower thereof.

 

(e) No Assignee, Participant or other transferee of any Lender's rights shall be
entitled to receive any greater payment under Section 11.3 or 11.4 than such
Lender would have been entitled to receive with respect to the rights
transferred, unless such transfer is made by reason of the provisions of Section
11.2, 11.3 or 11.4 requiring such Lender to designate a different Applicable
Lending Office under certain circumstances or the circumstances giving rise to
such greater payment did not exist at the time of the transfer.

 

(f) The Administrative Agent, acting as non-fiduciary agent (solely for this
purpose) of the Borrower, shall maintain a copy of each Assignment and
Assumption delivered to it and a register (the "Register") for the recordation
of the names and addresses of the Lenders and the principal amount (and stated
interest thereon) of the Loans owing to each Lender from time to time. The
entries in the Register shall be prima facie evidence of the accuracy thereof,
and the Borrower, the Agents and the Lenders shall treat each Person whose name
is recorded in the Register as the owner of a Loan or Note hereunder as the
owner thereof for all purposes of this Agreement, notwithstanding any notice to
the contrary. Any assignment of any Loan or Note hereunder shall be effective
only upon appropriate entries with respect thereto being made in the Register.
If any assignment or transfer of all or any part of a Loan that is then
evidenced by a Note is made, such assignment or transfer shall be registered on
the Register only upon surrender for registration of assignment or transfer of
the related Note, duly endorsed by (or accompanied by a written instrument of
assignment or transfer duly executed by) the holder thereof, and thereupon one
or more new Note(s) in the same aggregate principal amount shall be issued to
the designated Assignee(s) (and, if applicable, assignor) and the old Note shall
be returned to the Borrower marked "cancelled". The Register shall be available
for inspection by the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice. The Administrative Agent shall
provide to the Collateral Agent from time to time at the request of the
Collateral Agent information related to the Lenders and Commitments.

 

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Section 12.7         Collateral.

 

Each of the Lenders represents to the Administrative Agent and each of the other
Lenders that it in good faith (and in reliance on the accuracy of the
representations contained in the first two sentences of Section 4.10) is not
relying upon any Margin Stock as collateral in the extension or maintenance of
the credit provided for in this Agreement.

 

Section 12.8         Governing Law; Submission to Jurisdiction.

 

(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

 

(b) Any legal action or proceeding with respect to this Agreement or any other
Loan Document and any action for enforcement of any judgment in respect thereof
may be brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Agreement, each party hereto hereby accepts for itself and in respect of
its property, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts and appellate courts from any thereof. Each party hereto
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the hand delivery, or mailing of
copies thereof by registered or certified mail, postage prepaid, to each party
hereto at its respective address on the signature pages hereto. Each party
hereto hereby irrevocably waives, to the extent permitted by applicable law, any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Loan Document brought in the courts referred to above and
hereby further irrevocably waives, to the extent permitted by applicable law,
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
Nothing herein shall affect the right of either Agent, any Lender or any holder
of a Note to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Borrower in any other
jurisdiction.

 

Section 12.9         Marshalling; Recapture. Neither the Administrative Agent,
the Collateral Agent nor any Lender shall be under any obligation to marshal any
assets in favor of the Borrower or any other party or against or in payment of
any or all of the Obligations. To the extent any Lender receives any payment by
or on behalf of the Borrower, which payment or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to the Borrower or its estate, trustee, receiver, custodian or any
other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such payment or repayment, the Obligation
or part thereof which has been paid, reduced or satisfied by the amount so
repaid shall be reinstated by the amount so repaid and shall be included within
the liabilities of the Borrower to such Lender as of the date such initial
payment, reduction or satisfaction occurred.

 

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Section 12.10     Counterparts; Integration; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective upon receipt by the Administrative Agent of
counterparts hereof signed by each of the parties hereto (which counterparts may
be delivered by facsimile or email transmission).

  

Section 12.11     WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE ADMINISTRATIVE
AGENT, THE COLLATERAL AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES 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 12.12     Survival. All indemnities set forth herein shall survive the
execution and delivery of this Agreement and the other Loan Documents, any
assignment pursuant to Section 12.6 and the making and repayment of the Loans
hereunder.

 

Section 12.13     Domicile of Loans. Each Lender may transfer and carry its
Loans at, to or for the account of any domestic or foreign branch office,
subsidiary or affiliate of such Lender.

 

Section 12.14     Limitation of Liability. No claim may be made by the Borrower,
the Collateral Manager or any other Person against the Administrative Agent, the
Collateral Agent or any Lender or the affiliates, directors, officers,
employees, attorneys or agents of any of them for any consequential or punitive
damages in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Agreement or by the other Loan Documents, or any act, omission or event
occurring in connection therewith; and each of the Borrower and the Collateral
Manager hereby waives, releases and agrees not to sue upon any claim for any
such damages, whether or not accrued and whether or not known or suspected to
exist in its favor.

 

Section 12.15     Recourse; Non-Petition. 

  

(a) All obligations, covenants and agreements of Borrower contained in or
evidenced by this Agreement, the Notes and any Loan Document shall be fully
recourse to the Borrower and each and every asset of Borrower. Notwithstanding
the foregoing, no recourse under or upon any obligation, covenant, or agreement
contained in this Agreement or the Note or any Loan Document shall be had
against any officer, director, limited liability company manager, limited
partner, member or employee (solely by virtue of such capacity) of the Borrower
(a "Non-Recourse Party") and no such Non-Recourse Party shall be personally
liable for payment of the Loans or other amounts due in respect thereof (all
such liability being expressly waived and released by each Lender and the
Agents).

 

(b) Each Lender and each Agent hereby agrees that it will not institute against
the Borrower any proceeding seeking a judgment of insolvency or bankruptcy or
any other relief under any bankruptcy or insolvency law or other similar law
affecting creditors' rights, present a petition for the winding-up or
liquidation of the Borrower or seek the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee, custodian or other
similar official for the Borrower or for all or substantially all of the assets
of the Borrower prior to the date that is one year and one day (or, if longer,
the applicable preference period then in effect) after the payment in full of
all Obligations. In the event that, notwithstanding the provisions of this
Agreement and the other Loan Documents relating to "non-petition" of the
Borrower, the Borrower becomes a debtor in a bankruptcy case by the involuntary
petition of any other Person, the Borrower hereby covenants to contest any such
petition to the fullest extent permitted by law. The obligations under this
Section 12.15(b) shall survive the termination of this Agreement and the payment
of the Obligations.

 

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Section 12.16     Confidentiality. 

 

(a) Each of the Lenders and the Agents agrees that it shall maintain
confidentiality with regard to nonpublic information concerning the Borrower
obtained from the Borrower pursuant to or in connection with this Agreement or
any other Loan Document, provided that the Lenders and the Agents shall not be
precluded from making disclosure regarding such information: (i) to the Lenders'
and Agents' counsel, accountants and other professional advisors (who are, in
each case, subject to this confidentiality agreement); (ii) to officers,
directors, employees, examiners, agents and partners of each Lender and its
Affiliates and the Agents and their Affiliates who need to know such information
in accordance with customary practices for Lenders of such type; (iii) in
response to a subpoena or order of a court or governmental agency or regulatory
authority; (iv) to any entity participating or considering participating in any
credit made under this Agreement, (provided, the Lenders and Agents shall
require that any such entity agree in writing to be subject to this
Section 12.16; however, Lenders and Agents shall have no duty to monitor any
participating entity and shall have no liability in the event that any
participating entity violates this Section 12.16); (v) as required by law or
legal process, GAAP or applicable regulation; (vi) as reasonably necessary in
connection with the exercise of any remedy hereunder or under any other Loan
Document to the extent the Person that receives such information agrees in
writing to be subject to this Section 12.16; (vii) to any Rating Agency then
rating the Loans or any Conduit Rating Agency; or (viii) to any Program Manager,
Conduit Support Provider or administrator of a CP Lender or Affiliate thereof
who needs to know such information (provided that each such Person referred to
in this clause (viii) agrees to be bound by the terms of this confidentiality
agreement). In connection with enforcing its rights pursuant to this
Section 12.16, the Borrower shall be entitled to the equitable remedies of
specific performance and injunctive relief against the Agents, any Lender or any
subsequent party that agrees to be bound hereto which shall breach the
confidentiality provisions of this Section 12.16.

 

(b) Notwithstanding anything to the contrary contained herein or in any of the
other Loan Documents, each of the parties hereto acknowledges and agrees that
each CP Lender (or its Program Manager or its Funding Agent, as applicable) may
post to a secured password-protected internet website maintained by such CP
Lender (or its Program Manager or its Funding Agent, as applicable) and required
by any Conduit Rating Agency in connection with Rule 17g-5 of the Exchange Act,
the following information: (i) its Liquidity Facility or Credit Facility, (ii) a
copy of this Agreement (including any amendments hereto, but excluding the
Schedules and Exhibits hereto), (iii) its monthly transaction surveillance
reports (substantially in the form provided to the Borrower on or before the
Original Closing Date), and (iv) such other information as may be requested by
such rating agency.

 

(c) Notwithstanding any contrary agreement or understanding, the Collateral
Manager, the Borrower, the Agents and the Lenders (and each of their respective
employees, representatives or other agents) may disclose to any and all Persons
the tax treatment and tax structure of the transactions contemplated by this
Agreement (and, for the avoidance of doubt, only those transactions contemplated
by this Agreement) and all materials of any kind (including opinions or other
tax analyses) that are provided to them relating to such tax treatment and tax
structure. The foregoing provision shall apply from the beginning of discussions
between the parties hereto. For this purpose, the tax treatment of a transaction
is the purported or claimed U.S. tax treatment of the transaction under
applicable U.S. Federal, state or local law, and the tax structure of a
transaction is any fact that may be relevant to understanding the purported or
claimed U.S. tax treatment of the transaction under applicable U.S. Federal,
state or local law.

 

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Section 12.17     Special Provisions Applicable to CP Lenders. 

 

(a) Each of the parties hereto (each, a "Restricted Person") hereby covenants
and agrees that it will not institute against any CP Lender, or encourage,
cooperate with or join any other Person in instituting against any CP Lender,
any proceeding seeking a judgment of insolvency or bankruptcy or any other
relief under any bankruptcy or insolvency law or other similar law affecting
creditors' rights, present a petition for the winding up or liquidation of any
CP Lender or seek the appointment of an administrator, provisional liquidator,
conservator, receiver, trustee, custodian or other similar official for any
CP Lender or for all or substantially all of its assets prior to the date that
is two years and a day (or, if longer, the applicable preference period then in
effect) after the last day on which any Commercial Paper Notes shall have been
outstanding. The obligations under this Section 12.17(a) shall survive the
termination of this Agreement and the payment of the Obligations.

 

(b) Provided that a Restricted Person has complied with Section 12.17(a),
nothing in clause (a) above shall limit the right of such Restricted Person to
file any claim in or otherwise take any action with respect to any proceeding of
the type described in clause (a) above that was instituted against any CP Lender
by any person other than such Restricted Person.

 

(c) Notwithstanding anything to the contrary contained herein, the obligations
of any CP Lender under this Agreement are solely the corporate obligations of
such CP Lender and, in the case of obligations of any CP Lender other than
Commercial Paper Notes, shall be payable at such time as funds are received by
or are available to such CP Lender in excess of funds necessary to pay in full
all outstanding Commercial Paper Notes or other short-term funding backing its
Commercial Paper Notes and, to the extent funds are not available to pay such
obligations, the claims relating thereto shall not constitute a claim against
such CP Lender but shall continue to accrue. Each party hereto agrees that the
payment of any claim (as defined in Section 101 of the Bankruptcy Code) of any
such party shall be subordinated to the payment in full of all Commercial Paper
Notes. The provisions of this Section 12.17(c) shall survive the termination of
this Agreement.

 

(d) No recourse under any obligation, covenant or agreement of any CP Lender
contained in this Agreement shall be had against any incorporator, stockholder,
officer, director, employee or agent of such CP Lender or any agent of such
CP Lender or any of their Affiliates (solely by virtue of such capacity) by the
enforcement of any assessment or by any legal or equitable proceeding, by virtue
of any statute or otherwise; it being expressly agreed and understood that this
Agreement is solely a corporate obligation of any such CP Lender individually,
and that no personal liability whatever shall attach to or be incurred by any
incorporator, stockholder, officer, director, employee or agent of such
CP Lender or any agent thereof or any of their Affiliates (solely by virtue of
such capacity) or any of them under or by reason of any of the obligations,
covenants or agreements of such CP Lender contained in this Agreement, or
implied therefrom, and that any and all personal liability for breaches by any
CP Lender of any of such obligations, covenants or agreements, either at common
law or at equity, or by statute, rule or regulation, of every such incorporator,
stockholder, officer, director, employee or agent is hereby expressly waived as
a condition of and in consideration for the execution of this Agreement,
provided that the foregoing shall not relieve any such Person from any liability
it might otherwise have as a result of fraudulent actions taken or omissions
made by them. The provisions of this Section 12.17(d) shall survive termination
of this Agreement.

 

(e) Each CP Lender may act hereunder by and through its Program Manager, its
administrator or its Funding Agent, as applicable.

 

(f) Each of the parties hereto waives any right to set-off and to appropriate
and apply any and all deposits and any other indebtedness at any time held or
owing thereby to or for the credit or the account of any CP Lender against and
on account of the obligations and liabilities of such CP Lender to such party
under this Agreement.

 

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(g) Notwithstanding anything to the contrary herein, each CP Lender may disclose
to its respective Conduit Support Providers, any Affiliates of any such party
and governmental authorities having jurisdiction over such CP Lender, Conduit
Support Provider, any Affiliate of such party and any Conduit Rating Agency
(including its professional advisors), the identities of (and other material
information regarding) the Borrower, any other obligor on, or in respect of, a
Loan made by such CP Lender, Collateral for such Loan and any of the terms and
provisions of the Loan Documents that it may deem necessary or advisable.

 

(h) No pledge and/or collateral assignment by any CP Lender to a Conduit Support
Provider of an interest in the rights of such CP Lender in any Loan made by such
CP Lender and the Obligations shall constitute an assignment and/or assumption
of such CP Lender's obligations under this Agreement, such obligations in all
cases remaining with such CP Lender. Moreover, any such pledge and/or collateral
assignment of the rights of such CP Lender shall be permitted hereunder without
further action or consent and any such pledgee may foreclose on any such pledge
and perfect an assignment of such interest and enforce such CP Lender's right
hereunder notwithstanding anything to the contrary in this Agreement.

 

Section 12.18                 Direction of Collateral Agent. By executing this
Agreement, each Lender hereby consents to the terms of this Agreement and to the
Collateral Agent's execution and delivery of this Agreement, and acknowledges
and agrees that the Collateral Agent shall be fully protected in relying upon
the foregoing consent and direction and hereby releases the Collateral Agent and
its respective officers, directors, agents, employees and shareholders, as
applicable, from any liability for complying with such direction, except as a
result of the bad faith, gross negligence or willful misconduct of the
Collateral Agent.

  

Section 12.19                 Borrowings/Loans Made in the Ordinary Course of
Business. The Borrower and each Lender, each as to itself only, represents,
warrants and covenants that each payment by the Borrower to such Lender under
this Agreement will have been made (i) in payment of a debt incurred by the
Borrower or a loan made by such Lender, respectively, in the ordinary course of
business or financial affairs of the Borrower and each Lender and (ii) in the
ordinary course of business or financial affairs of the Borrower and each
Lender.

 

Section 12.20                  Effect of Amendment and Restatement. On the
Effective Date, the Existing Credit Agreement shall be amended and restated in
its entirety. The parties hereto acknowledge and agree that (i) this Agreement
and the other Loan Documents, whether executed and delivered in connection
herewith or otherwise, do not constitute a novation, payment and reborrowing, or
termination of the obligations, security interest and Liens under the Existing
Credit Agreement as in effect immediately prior to the Effective Date, which
remain outstanding and in effect and (ii) such obligations, security interest
and Liens (as amended and restated hereby) are in all respects continuing.

 

 

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Article XIII

THE FUNDING AGENT

 

Section 13.1         Appointment. Each of Versailles and Bleachers, as Lender,
(in such capacity, the "Versailles Lender" and the "Bleachers Lender",
respectively), hereby irrevocably designates and appoints its Funding Agent as
specified in the relevant Joinder Agreement as Funding Agent on its behalf under
this Agreement. In furtherance of the foregoing, each of the Versailles Lender
and the Bleachers Lender (and any other applicable CP Lender after the Effective
Date) hereby authorizes its Funding Agent to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to such
Funding Agent by the terms of this Agreement and the Loan Documents, together
with such other powers as are reasonably incidental hereto or thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement or the
other Loan Documents, such Funding Agent shall not have any duties or
responsibilities, except those expressly set forth herein or therein, or any
fiduciary relationship with its CP Conduit, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of such Funding
Agent shall be read into this Agreement or any other Loan Document or shall
otherwise exist against such Funding Agent. In performing its functions and
duties solely under this Agreement, each Funding Agent shall act solely as the
agent of its CP Conduit and does not assume, nor shall be deemed to have
assumed, any obligation or relationship of trust or agency with or for such
CP Conduit.

 

 

Section 13.2         Delegation of Duties. Each Funding Agent may execute any of
its duties under this Agreement by or through its subsidiaries, affiliates,
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. No Funding Agent shall be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.

 

 

Section 13.3         Exculpatory Provisions. Neither any Funding Agent nor any
of its directors, officers, agents or employees shall be (a) liable for any
action lawfully taken or omitted to be taken by it or them or any Person
described in Section 13.2 under or in connection with this Agreement or the
other Loan Documents (except for its, their or such Person's own gross
negligence or willful misconduct), or (b) responsible in any manner to its
CP Conduit for any recitals, statements, representations or warranties contained
in this Agreement or the other Loan Documents or in any certificate, report,
statement or other document referred to or provided for in, or received under or
in connection with, such agreements or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of the Loans, this Agreement or the
other Loan Documents, or any other document furnished in connection therewith or
herewith, or for any failure of its CP Conduit to perform its obligations under
this Agreement or any other Loan Document or for the satisfaction of any
condition specified in this Agreement or the other Loan Documents. No Funding
Agent shall be under any obligation to its CP Conduit to ascertain or to inquire
as to the observance or performance of any of the agreements or covenants
contained in, or conditions of, this Agreement or the other Loan Documents, or
to inspect the properties, books or records of the Borrower.

 

 

Section 13.4         Reliance by Funding Agent. Each Funding Agent shall in all
cases be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to its
CP Conduit), independent accountants and other experts selected by such Funding
Agent. Each Funding Agent shall in all cases be fully justified in failing or
refusing to take any action under this Agreement, the other Loan Documents or
any other document furnished in connection herewith or therewith unless such
action is expressly provided for herein or therein or such Funding Agent shall
first receive such advice or concurrence of its CP Conduit as it deems
appropriate, or it shall first be indemnified to its satisfaction by such
CP Conduit against any and all liability, cost and expense which may be incurred
by it by reason of taking or continuing to take any such action. Each Funding
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document or any other document
furnished in connection herewith or therewith in accordance with a request of
its CP Conduit and such request and any action taken or failure to act pursuant
thereto shall be binding upon such CP Conduit.

 

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Section 13.5         Non-reliance on Funding Agent. Each of the Versailles
Lender and the Bleachers Lender (and any other applicable CP Lender after the
Effective Date) expressly acknowledges that neither its Funding Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by such Funding
Agent hereafter taken, including, without limitation, any review of the affairs
of its CP Conduit, or the Borrower, shall be deemed to constitute any
representation or warranty by such Funding Agent. No Funding Agent shall have
any duty or responsibility to provide its CP Conduit with any credit or other
information concerning the business, operations, property, prospects, financial
and other condition or creditworthiness of the Borrower which may come into the
possession of such Funding Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates.

 

 

Section 13.6         Funding Agent in Its Individual Capacity. Each Funding
Agent and its Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with its CP Conduit or the Borrower or any
Affiliate of such Persons as though such Funding Agent were not a Funding Agent
hereunder.

  

Section 13.7         Conflict Waiver.

 

Natixis and any of its Affiliates may act as administrative agent for a
CP Lender, as provider of backup facilities for a CP Lender, and may provide
other services or facilities from time to time (the "Multiple Roles"). Each of
the Versailles Lender and the Bleachers Lender (and any other applicable CP
Lender after the Effective Date) hereby acknowledges and consents to any and all
Multiple Roles, waives any objections it may have to any actual or potential
conflict of interest caused by Natixis' (or any of its Affiliates') acting as a
Funding Agent hereunder and acting as or maintaining any of the Multiple Roles,
and agrees that in connection with any Multiple Role, Natixis (and any of its
Affiliates, as applicable) may take, or refrain from taking, any action which it
in its discretion deems appropriate.

  

Article XIV

 
ASSIGNMENT OF COLLATERAL MANAGEMENT AGREEMENT

 

Section 14.1    Assignment of Collateral Management Agreement.

 

(a) The Borrower hereby acknowledges that the Grant made on the Original Closing
Date pursuant to the Granting Clause of the Existing Credit Agreement and the
Grant pursuant to the Granting Clause hereof includes all of the Borrower's
estate, right, title and interest in, to and under the Collateral Management
Agreement including (i) the right to give all notices, consents and releases
thereunder, (ii) the right to take any legal action upon the breach of an
obligation of the Collateral Manager thereunder, including the commencement,
conduct and consummation of proceedings at law or in equity, (iii) the right to
receive all notices, accountings, consents, releases and statements thereunder
and (iv) the right to do any and all other things whatsoever that the Borrower
is or may be entitled to do thereunder; provided that notwithstanding anything
herein to the contrary, the Agents shall not have the authority to exercise any
of the rights set forth in (i) through (iv) above or that may otherwise arise as
a result of the Grant until the occurrence of an Event of Default hereunder and
such authority shall terminate at such time, if any, as such Event of Default is
cured or waived (so long as the exercise of remedies has not commenced or such
Event of Default has been waived following the commencement of the exercise of
remedies).

 

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(b) The assignment made hereby is executed as collateral security, and the
execution and delivery hereby shall not in any way impair or diminish the
obligations of the Borrower under the provisions of the Collateral Management
Agreement or the other documents referred to in paragraph (a) above, nor shall
any of the obligations contained in the Collateral Management Agreement or such
other documents be imposed on the Agents.

 

(c) Upon the occurrence of the Stated Maturity (or, if earlier, the payment in
full of all of the Obligations and the termination of all of the Commitments),
the payment of all amounts required to be paid pursuant to the Priority of
Payments and the release of the Collateral from the lien of this Agreement, this
assignment and all rights herein assigned to the Collateral Agent for the
benefit of the Lenders shall cease and terminate and all the estate, right,
title and interest of the Collateral Agent in, to and under the Collateral
Management Agreement and the other documents referred to in this Section 14.1
shall revert to the Borrower and no further instrument or act shall be necessary
to evidence such termination and reversion.

 

(d) The Borrower represents that the Borrower has not executed any other
assignment of the Collateral Management Agreement.

 

(e) The Borrower agrees that this assignment is irrevocable until the
Obligations have been repaid in full and all Commitments have terminated, and
that it will not take any action which is inconsistent with this assignment or
make any other assignment inconsistent herewith. The Borrower will, from time to
time, execute all instruments of further assurance and all such supplemental
instruments with respect to this assignment as may be necessary to continue and
maintain the effectiveness of such assignment.

 

(f) The Borrower hereby agrees, and hereby undertakes to obtain the agreement
and consent of the Collateral Manager in the Collateral Management Agreement, to
the following:

 

(i) The Collateral Manager shall consent to the provisions of this assignment
and agree to perform any provisions of this Agreement applicable to the
Collateral Manager subject to the terms of the Collateral Management Agreement.

 

(ii) The Collateral Manager shall acknowledge that the Borrower is collaterally
assigning all of its right, title and interest in, to and under the Collateral
Management Agreement to the Collateral Agent for the benefit of the Secured
Parties, subject to both provisos in Section 14.1(a).

 

(iii) The Collateral Manager shall deliver to the Agents copies of all notices,
statements, communications and instruments delivered or required to be delivered
by the Collateral Manager to the Borrower pursuant to the Collateral Management
Agreement.

 

(iv) Neither the Borrower nor the Collateral Manager will enter into any
agreement amending, modifying or terminating the Collateral Management Agreement
without complying with the applicable terms thereof.

 

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(v) Except as otherwise set forth herein and therein (including pursuant to
Sections 12 and 13 of the Collateral Management Agreement), the Collateral
Manager shall continue to serve as Collateral Manager under the Collateral
Management Agreement notwithstanding that the Collateral Manager shall not have
received amounts due it under the Collateral Management Agreement because
sufficient funds were not then available hereunder to pay such amounts in
accordance with the Priority of Payments set forth under Section 9.1. The
Collateral Manager agrees not to cause the filing of a petition in bankruptcy
against the Borrower for the nonpayment of the fees or other amounts payable by
the Borrower to the Collateral Manager under the Collateral Management Agreement
until the payment in full of all of the Obligations and the termination of all
of the Commitments and the expiration of a period equal to one year and a day,
or, if longer, the applicable preference period, following such payment. Nothing
in this Section 14.1 shall preclude, or be deemed to stop, the Collateral
Manager (i) from taking any action prior to the expiration of the aforementioned
period in (A) any case or Proceeding voluntarily filed or commenced by the
Borrower or (B) any involuntary insolvency Proceeding filed or commenced by a
Person other than the Collateral Manager, or (ii) from commencing against the
Borrower or any of its properties any legal action which is not a bankruptcy,
reorganization, arrangement, insolvency, moratorium or liquidation proceeding.

 

(vi) Except with respect to transactions contemplated by the Collateral
Management Agreement, if the Collateral Manager determines that it or any of its
Affiliates has a conflict of interest between the Lenders and any other account
or portfolio for which the Collateral Manager or any of its Affiliates is
serving as investment adviser which relates to any action to be taken with
respect to any Collateral, then the Collateral Manager will give written notice
to the Agents, who shall promptly forward such notice to the relevant Lender,
briefly describing such conflict and the action it proposes to take. The
provisions of this clause (vi) shall not apply to any transaction permitted by
the terms of the Collateral Management Agreement.

-139-

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.

 

 

FS SENIOR FUNDING LLC,

as Borrower

 

 

 

By:
                                                                                   

Name:

Title:

 

 

Address for notices:

 

c/o Fifth Street Senior Floating Rate Corp.

10 Bank Street, 12th Floor

White Plains, NY 10606

Attention: Bernard D. Berman

Telephone No.: (914) 286-6800

Facsimile No.: (914) 328-4214

Email: bernie@fifthstreetfinance.com

       

 

 

-140-

 

 

  Agents:      

NATIXIS, NEW YORK BRANCH,

as Administrative Agent

 

 

 

By: ___________________________________

Name:

Title:

 

By: ___________________________________

Name:

Title:

 

 

Address for notices:

 

Natixis, New York Branch

1251 Avenue of the Americas

New York, New York 10020

Attention: Yazmin Vasconez

Telephone No.: 212-891-6176

Facsimile No.: 646-282-2361
Email: scsgnotices@us.natixis.com and agent_group@us.natixis.com

-141-

 

 

 

 

U.S. BANK NATIONAL ASSOCIATION,

as Collateral Agent and Custodian

 

 

 

By: ___________________________________

Name:

Title:

 

Address for notices:

 

U.S. Bank National Association

Corporate Trust Services

One Federal Street, 3rd Floor

Boston, MA 02110

Reference: FS Senior Funding LLC

Telephone No.: 617-603-6696

Email: craig.healy@usbank.com

 

 

-142-

 

 

 

VERSAILLES ASSETS LLC,

as Class A-R Lender

 

CLASS A-R COMMITMENT AMOUNT: $100,000,000

 

 

 

By: ___________________________________

Name:

Title:

 

By: ___________________________________

Name:

Title:

 

Address for notices:

 

Versailles Assets LLC

c/o Global Securitization Services LLC

68 South Service Road, Suite 120

Melville, NY 11747

Attention: Bernard J. Angelo

Telephone No.: 631-587-4700

Facsimile No.: 212-302-8767

Email: Versailles_transactions@us.natixis.com

 

Versailles Assets LLC, as Class A-R Lender, is a CP Lender for purposes of this
Agreement

 

Lending Office: New York

   

-143-

 

 

 

 

FIFTH THIRD BANK,

as Class A-T-1 Lender

 

CLASS A-T-1 COMMITMENT AMOUNT: $50,000,000

 

 

 

 

By: ___________________________________

Name:

Title:

 

Address for notices:

 

Fifth Third Bank

38 Fountain Square Plaza

4th Floor

Cincinnati, OH 45263

Attention: Brian Gardner

Telephone No.: 513-534-7949

Email: brian.gardner@53.com

 

Lending Office: Ohio

 

 

-144-

 

 

 

BLEACHERS FINANCE 1 LIMITED,
as Class A-T-2 Lender

 

CLASS A-T-2 COMMITMENT AMOUNT: $50,000,000

 

By: ___________________________________

Name:
Title:

 

Address for notices:

 

Bleachers Finance 1 Limited

c/o Global Securitization Services LLC

68 South Service Road, Suite 120

Melville, NY 11747

Attention: Bernard J. Angelo
Facsimile No.: (212) 302-8767
Email: jrangelo@gssnyc.com

 

and

 

Bleachers Finance 1 Limited

c/o 20 Gates Management, as Bleachers Manager

30 Irving Place, 2nd Floor

New York, NY 10003

Attention: Joe Soave

Email: Mountcliff@20Gates.com and Mountcliff.Group@DB.com

 

Bleachers Finance 1 Limited, as Class A-T-2 Lender, is a CP Lender for purposes
of this Agreement

 

Lending Office: New York

 

 

-145-