Exhibit 10.1

SEVENTH AMENDMENT

TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

This SEVENTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this
“Amendment”) is entered into as of January 11, 2019 (the “Seventh Amendment
Effective Date”), by and among HERCULES FUNDING II LLC, a Delaware limited
liability company (“Borrower”), the lenders identified on the signature page
hereof (such lenders, together with their respective successors and assigns, are
referred to hereinafter each individually as a “Lender” and collectively as the
“Lenders”), and WELLS FARGO CAPITAL FINANCE, LLC, formerly known as Wells Fargo
Foothill, LLC, a Delaware limited liability company, as the arranger and
administrative agent for the Lenders (in such capacity, “Agent”), with reference
to the following facts, which shall be construed as part of this Amendment:

RECITALS

A. Borrower, Lenders and Agent have entered into that certain Amended and
Restated Loan and Security Agreement dated as of June 29, 2015, as amended by
that certain First Amendment to Amended and Restated Loan and Security Agreement
dated as of December 16, 2015, that certain Second Amendment to Amended and
Restated Loan and Security Agreement dated as of March 8, 2016, that certain
Third Amendment to Amended and Restated Loan and Security Agreement dated as of
April 7, 2016, that certain Fourth Amendment to Amended and Restated Loan and
Security Agreement dated as of April 3, 2017 (as amended, supplemented,
replaced, renewed or otherwise modified from time to time, the “Loan
Agreement”), that certain Fifth Amendment to Amended and Restated Loan and
Security Agreement dated as of July 31, 2018, and that certain Sixth Amendment
to Amended and Restated Loan and Security Agreement dated as of October 26,
2018, pursuant to which Lenders and Agent are providing financial accommodations
to or for the benefit of Borrower upon the terms and conditions contained
therein.

B. Borrower has requested that Lenders and the Agent agree to (i) provide a
letter of credit sub-facility to Borrower, (ii) extend the Maturity Date under
the Loan Agreement, and (iii) amend certain other provisions of the Loan
Agreement, in each case, subject to the terms and conditions set forth herein.

C. Lenders and the Agent are willing to (i) provide a letter of credit
sub-facility to Borrower, (ii) extend the Maturity Date under the Loan
Agreement, and (iii) amend certain other provisions of the Loan Agreement, in
each case, subject to the terms and conditions set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the continued performance by Borrower of its
promises and obligations under the Loan Agreement and the other Loan Documents,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrower, Lenders and Agent hereby agree as
follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, capitalized terms or
matters of construction defined or established in the Loan Agreement shall be
applied herein as defined or established therein.

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SECTION 2. Amendments to Loan Agreement. The Loan Agreement is hereby amended
(a) to delete the red or green stricken text (indicated textually in the same
manner as the following examples: stricken text and stricken text) and (b) to
add the blue or green double-underlined text (indicated textually in the same
manner as the following examples: double-underlined text and double-underlined
text), in each case, as set forth in the marked copy of the Loan Agreement
attached hereto as Exhibit A hereto and made a part hereof for all purposes.

(a) Amendments to Exhibits. Each of Exhibit B-1, Exhibit C-1, and Exhibit L-1 to
the Loan Agreement is hereby deleted in its entirety and replaced with Revised
Exhibit B-1, Revised Exhibit C-1, and Revised Exhibit L-1, respectively, in the
forms attached hereto.

(b) Amendments to Schedules. Each of Schedule 5.6(a), Schedule 5.6(c), Schedule
5.7(b), and Schedule 5.7(c) to the Loan Agreement is hereby deleted in its
entirety and replaced with Revised Schedule 5.6(a), Revised Schedule 5.6(c),
Revised Schedule 5.7(b), and Revised Schedule 5.7(c), respectively, in the forms
attached hereto.

SECTION 3. Conditions Precedent. Notwithstanding any other provision of this
Amendment, this Amendment shall be of no force or effect, and Lenders and Agent
shall not have any obligations hereunder, unless and until each of the following
conditions have been satisfied:

(a) Each of Borrower, the Lenders, and Agent shall have executed and delivered
to the Agent this Amendment and such other documents as the Agent may reasonably
request;

(b) Each of Borrower, HTGC, and Agent shall have executed and delivered to the
Agent (i) an amendment to the Sale and Servicing Agreement, and (ii), a
supplemental Fee Letter, in each case, in form and substance reasonably
satisfactory to Agent;

(c) Agent shall have received certificates from an Authorized Person of Borrower
and an Authorized Person of HTGC, in each case (i) attesting to the resolutions
of such Person’s Board of Directors authorizing its execution, delivery, and
performance of this Amendment and the other Loan Documents to which such Person
is a party, (ii) evidencing the existence of and good standing of Borrower from
the Secretary of State of its jurisdiction of organization, and (iii) addressing
such other factual matters in connection with this Amendment and the other Loan
Documents as set forth in such certificates.

(d) Agent shall have received (i) updated UCC lien searches with respect to
Borrower and Servicer, which lien searches shall be satisfactory to Agent in its
sole discretion, (ii) a favorable legal opinion from counsel to Borrower and
HTGC, in form and substance reasonably satisfactory to Agent, (iii) an updated
version of Borrower’s Required Procedures, in form and substance reasonably
satisfactory to Agent, (iv) completed reference checks (including personal
credit reports, tax lien and litigation histories) with respect to each Loan
Party, and HTGC, their respective Affiliates and each of the Executive Officers
and of specified officers of HTGC, the results of which are satisfactory to
Agent in its sole discretion, and (v) formal credit approval from its credit
committee;

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(e) Agent shall have completed its business, legal, and collateral due
diligence, including a review of Servicer’s and Borrower’s collateral valuation
methods, verification of each Loan Party’s and HTGC’s representations and
warranties to Agent, a review and approval of Borrower’s Projections and
capitalization plan, a review of HTGC’s, Borrower’s and their respective
Affiliates’ systems (including, without limitation, operating and accounting
systems), controls, and legal and organizational structure, the results of which
shall be satisfactory to Agent; and

(f) All legal matters incident to the transactions contemplated hereby shall be
reasonably satisfactory to counsel for the Agent.

SECTION 4. Representations and Warranties Regarding Loan Agreement. Borrower
hereby represents and warrants to the Lenders and Agent and agrees that:

(a) the representations and warranties contained in the Loan Agreement (as
amended hereby) and the other outstanding Loan Documents are true and correct in
all material respects at and as of the date hereof as though made on and as of
the date hereof, except (i) to the extent specifically made with regard to a
particular date, and (ii) for such changes as are a result of any act or
omission specifically permitted under the Loan Agreement (or under any Loan
Document), or as otherwise specifically permitted by the Lender Group;

(b) on the Seventh Amendment Closing Date, after giving effect to this
Amendment, no Default or Event of Default will have occurred and be continuing;

(c) the execution, delivery and performance of this Amendment have been duly
authorized by all necessary action on the part of, and duly executed and
delivered by Borrower, and this Amendment is a legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms, except as the enforcement thereof may be subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting creditors’ rights generally and general principles of equity
(regardless of whether such enforcement is sought in a proceeding in equity or
at law); and

(d) the execution, delivery and performance of this Amendment do not conflict
with or result in a breach by Borrower of any term of any material contract,
loan agreement, indenture or other agreement or instrument to which Borrower is
a party or is subject.

SECTION 5. Execution in Counterparts. This Amendment may be executed in
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.

SECTION 6. Costs and Expenses. Borrower hereby affirms its obligation under the
Loan Agreement to reimburse the Agent for all Lender Group Expenses paid or
incurred by the Agent in connection with the preparation, negotiation, execution
and delivery of this Amendment, including but not limited to the attorneys’ fees
and expenses of attorneys for the Agent with respect thereto.

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SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUCTED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE INTERNAL CONFLICTS OF LAWS PROVISIONS THEREOF.

SECTION 8. Effect of Amendment; Reaffirmation of Loan Documents.

(a) The terms and provisions set forth in this Amendment shall modify and
supersede all inconsistent terms and provisions set forth in the Loan Agreement
and the other Loan Documents, and, except as expressly modified and superseded
by this Amendment, the terms and provisions of the Loan Agreement and the other
Loan Documents are ratified and confirmed and shall continue in full force and
effect. Borrower, Agent, and Lenders agree that the Loan Agreement and the other
Loan Documents, as amended hereby, shall continue to be legal, valid, binding
and enforceable in accordance with their respective terms. Upon the
effectiveness of this Amendment, each reference in the Loan Agreement to “this
Agreement”, “hereunder”, “hereof”, “herein” or words of similar import shall
mean and be a reference to the Loan Agreement as amended hereby.

(b) Borrower confirms that all of its obligations under the Loan Documents (as
amended by this Amendment) are in full force and effect and are performable in
accordance with their respective terms without setoff, defense, counter-claim or
claims in recoupment. Borrower further confirms that the term “Obligations”, as
used in the Loan Agreement, shall include all Obligations of Borrower under the
Loan Agreement (as amended by this Amendment), and each other Loan Document.

(c) Execution of this Amendment by the Lenders and Agent (i) shall not
constitute a waiver of any Default or Event of Default that may currently exist
or hereafter arise under the Loan Agreement, (ii) shall not impair, restrict or
limit any right or remedy of the Lenders or Agent with respect to any Default or
Event of Default that may now exist or hereafter arise under the Loan Agreement
or any of the other Loan Documents, and (iii) shall not constitute any course of
dealing or other basis for altering any obligation of the Borrower or any right,
privilege or remedy of the Lenders and Agent under the Loan Agreement or any of
the other Loan Documents.

SECTION 9. Headings. Section headings in this Amendment are included herein for
convenience of any reference only and shall not constitute a part of this
Amendment for any other purposes.

SECTION 10. Release. BORROWER HEREBY ACKNOWLEDGES THAT AS OF THE DATE HEREOF IT
HAS NO DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY
KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY
PART OF BORROWER’S LIABILITY TO REPAY THE OBLIGATIONS OR TO SEEK AFFIRMATIVE
RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM LENDERS, AGENT, OR THEIR RESPECTIVE
AFFILIATES, PARTICIPANTS OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, AGENTS,
EMPLOYEES OR ATTORNEYS. BORROWER HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND
FOREVER DISCHARGES LENDERS, AGENT, THEIR RESPECTIVE AFFILIATES AND PARTICIPANTS,
AND THEIR PREDECESSORS, AGENTS, OFFICERS, DIRECTORS, EMPLOYEES, SUCCESSORS AND
ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES,

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COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR
UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT
LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS
AMENDMENT IS EXECUTED, WHICH BORROWER MAY NOW OR HEREAFTER HAVE AGAINST LENDERS,
AGENT, OR THEIR RESPECTIVE PREDECESSORS, AGENTS, OFFICERS, DIRECTORS, EMPLOYEES,
SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS
ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND
ARISING FROM THE LIABILITIES, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE
LOAN AGREEMENT OR OTHER LOAN DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF
THIS AMENDMENT. BORROWER HEREBY COVENANTS AND AGREES NEVER TO INSTITUTE ANY
ACTION OR SUIT AT LAW OR IN EQUITY, NOR INSTITUTE, PROSECUTE, OR IN ANY WAY AID
IN THE INSTITUTION OR PROSECUTION OF ANY CLAIM, ACTION OR CAUSE OF ACTION,
RIGHTS TO RECOVER DEBTS OR DEMANDS OF ANY NATURE AGAINST LENDERS, AGENT, THEIR
RESPECTIVE AFFILIATES AND PARTICIPANTS, OR THEIR RESPECTIVE SUCCESSORS, AGENTS,
ATTORNEYS, OFFICERS, DIRECTORS, EMPLOYEES, AND PERSONAL AND LEGAL
REPRESENTATIVES ARISING ON OR BEFORE THE DATE HEREOF OUT OF OR RELATED TO
LENDERS’ OR AGENT’S ACTIONS, OMISSIONS, STATEMENTS, REQUESTS OR DEMANDS IN
ADMINISTERING, ENFORCING, MONITORING, COLLECTING OR ATTEMPTING TO COLLECT THE
OBLIGATIONS OF BORROWER TO LENDERS AND AGENT, WHICH OBLIGATIONS ARE EVIDENCED BY
THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS.

[Remainder of page intentionally left blank with signature pages immediately to
follow]

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IN WITNESS WHEREOF, the parties hereto have executed this Seventh Amendment to
Amended and Restated Loan and Security Agreement as of the day and year first
above written.

 

BORROWER:

HERCULES FUNDING II LLC,

a Delaware limited liability company, as Borrower

By:    /s/ Melanie Grace

Name:   Melanie Grace Title:   Secretary

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AGENT AND SOLE LENDER:

WELLS FARGO CAPITAL FINANCE, LLC,

formerly known as Wells Fargo Foothill, LLC,

a Delaware limited liability company,

as Agent and a Lender

By:    /s/ Tami Barrows

Name:   Tami Barrows Title:   Senior Vice President

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EXHIBIT A

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EXECUTION VERSIONAMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

by and among

HERCULES FUNDING II LLC

as Borrower,

THE LENDERS THAT ARE SIGNATORIES HERETO

as the Lenders,

and

WELLS FARGO CAPITAL FINANCE, LLC

as the Arranger and Administrative Agent,

Dated as of June 29, 2015

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TABLE OF CONTENTS

 

1.

  DEFINITIONS AND CONSTRUCTION      1     1.1    Definitions      1     1.2   
Accounting Terms      35     1.3    Code      36     1.4    Construction      36
    1.5    Schedules and Exhibits      36  

2.

  LOAN AND TERMS OF PAYMENT      37     2.1    Revolver Advances      37     2.2
   Borrowing Procedures and Settlements      27     2.3    Payments      46    
2.4    Overadvances and Required Amortization Amount      49     2.5    Interest
Rates: Rates, Payments, and Calculations      49     2.6    Cash Management     
51     2.7    Crediting Payments      52     2.8    Designated Account      52  
  2.9    Maintenance of Loan Account; Statements of Obligations      52     2.10
   Fees      53     2.11    Capital Requirements      54     2.12    LIBOR
Option      54     2.13    Restatement of Obligations      56  

3.

  CONDITIONS; TERM OF AGREEMENT      66     3.1    Conditions Precedent to the
Initial Extension of Credit      66     3.2    Conditions Subsequent to the
Initial Extension of Credit      69     3.2A    Condition Subsequent to
Additional Commitment Closing Date      69     3.3    Conditions Precedent to
all Extensions of Credit      69     3.4    Term      69     3.5    Effect of
Termination      69     3.6    Early Termination by Borrower      70  

4.

  CREATION OF SECURITY INTEREST      71     4.1    Grant of Security Interest   
  71     4.2    Negotiable Collateral      72     4.3    Collection of Accounts,
General Intangibles, and Negotiable Collateral      72  

 

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TABLE OF CONTENTS

 

  4.4    Filing of Financing Statements; Commercial Tort Claims; Delivery of
Additional Documentation Required      71     4.5    Power of Attorney      73  
  4.6    Right to Inspect and Verify      73     4.7    Control Agreements     
73     4.8    Servicing of Notes Receivable      74     4.9    Release of Notes
Receivable      74  

5.

 

REPRESENTATIONS AND WARRANTIES

     74     5.1    No Encumbrances      75     5.2    Eligible Notes Receivables
     75     5.3    Equipment      75     5.4    Location of Collateral      75  
  5.5    Records      75     5.6    State of Incorporation; Location of Chief
Executive Office; Organizational Identification Number; Commercial Tort Claims
     75     5.7    Due Organization and Qualification; Subsidiaries      76    
5.8    Due Authorization; No Conflict      76     5.9    Litigation      77    
5.10    No Material Adverse Change      77     5.11    Fraudulent Transfer     
77     5.12    Employee Benefits      78     5.13    Environmental Condition   
  78     5.14    Brokerage Fees      78     5.15    Intellectual Property     
78     5.16    Leases      78     5.17    Deposit Accounts and Securities
Accounts      78     5.18    Complete Disclosure      79     5.19   
Indebtedness      79     5.20    Compliance      79     5.21    Servicing     
79     5.22    Permits, Licenses, Etc.      79     5.23    Margin Stock      80
    5.24    Holding Company and Investment Company Acts      80  

 

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TABLE OF CONTENTS

 

6.

  AFFIRMATIVE COVENANTS    80   6.1    Accounting System    80   6.2   
Collateral Reporting    80   6.3    Financial Statements, Reports, Certificates
   81   6.4    Notices Regarding Collections Servicing Staff    84   6.5   
Collection of Notes Receivable    84   6.6    Maintenance of Properties    84  
6.7    Taxes    84   6.8    Insurance    84   6.9    Location of Collateral   
86   6.10    Compliance with Laws    86   6.11    Leases    86   6.12   
Existence    86   6.13    Environmental    87   6.14    Disclosure Updates    87
  6.15    Formation of Subsidiaries    87   6.16    Required Asset Documents   
88   6.17    Sale and Servicing Agreement    88   6.18    Escrow Deposits    88
  6.19    Maintenance of Treasury Management Accounts at Wells Fargo    88

7.

  NEGATIVE COVENANTS    88   7.1    Indebtedness    88   7.2    Liens    89  
7.3    Restrictions on Fundamental Changes    89   7.4    Disposal of Assets   
90   7.5    Change Name    90   7.6    Nature of Business    90   7.7   
Prepayments and Amendments    90   7.8    Change of Control    90   7.9   
Required Procedures    90   7.10    Restricted Payments    91   7.11   
Accounting Methods    91

 

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TABLE OF CONTENTS

 

  7.12    Investments      91     7.13    Transactions with Affiliates      91  
  7.14    Use of Proceeds      91     7.15    Collateral with Bailees      91  
  7.16    Financial Covenants      91     7.17    Certain Borrower and HTGC
Portfolio Covenants      92     7.18    Sale and Servicing Agreement      93  

8.

  EVENTS OF DEFAULT      94  

9.

  THE LENDER GROUP’S RIGHTS AND REMEDIES      96     9.1    Rights and Remedies
     96     9.2    Remedies Cumulative      99  

10.

  TAXES AND EXPENSES      99  

11.

  WAIVERS; INDEMNIFICATION      100     11.1    Demand; Protest; etc.      100  
  11.2    The Lender Group’s Liability for Borrower Collateral      100     11.3
   Indemnification      100  

12.

  NOTICES      101  

13.

  CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER      102   14.   ASSIGNMENTS AND
PARTICIPATIONS; SUCCESSORS      103     14.1    Assignments and Participations
     103     14.2    Successors      105  

15.

  AMENDMENTS; WAIVERS      106     15.1    Amendments and Waivers      106    
15.2    Replacement of Holdout Lender      107     15.3    No Waivers;
Cumulative Remedies      107  

16.

  AGENT; THE LENDER GROUP      108     16.1    Appointment and Authorization of
Agent      108     16.2    Delegation of Duties      109     16.3    Liability
of Agent      109     16.4    Reliance by Agent      109     16.5    Notice of
Default or Event of Default      109     16.6    Credit Decision      110  

 

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TABLE OF CONTENTS

 

  16.7    Costs and Expenses; Indemnification      110     16.8    Agent in
Individual Capacity      111     16.9    Successor Agent      111     16.10   
Lender in Individual Capacity      112     16.11    Withholding Taxes      112  
  16.12    Collateral Matters      114     16.13    Restrictions on Actions by
Lenders; Sharing of Payments      115     16.14    Agency for Perfection     
116     16.15    Payments by Agent to the Lenders      116     16.16   
Concerning the Collateral and Related Loan Documents      116     16.17    Field
Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information      117     16.18    Several Obligations; No Liability
     118     16.19    Bank Product Providers      118  

17.

  GENERAL PROVISIONS      119     17.1    Effectiveness      119     17.2   
Section Headings      119     17.3    Interpretation      120     17.4   
Severability of Provisions      120     17.5    Counterparts; Electronic
Execution      120     17.6    Revival and Reinstatement of Obligations      120
    17.7    Confidentiality      120     17.8    Lender Group Expenses      136
    17.9    USA Patriot Act      136     17.10    Integration      136  

 

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EXHIBITS AND SCHEDULES

 

Exhibit A-1

   Form of Assignment and Acceptance

Exhibit B-1

   Form of Borrowing Base Certificate

Exhibit C-1

   Form of Compliance Certificate

Exhibit L-1

   Form of LIBOR Notice[Reserved]

Schedule C-1

   Commitments

Schedule P-1

   Permitted Liens

Schedule R-1

   Required Asset Documents

Schedule 2.6(a)

   Cash Management Banks

Schedule 5.4

   Locations of Collateral

Schedule 5.6(a)

   Jurisdictions of Organization

Schedule 5.6(b)

   Chief Executive Offices

Schedule 5.6(c)

   Organizational ID Numbers

Schedule 5.6(d)

   Commercial Tort Claims

Schedule 5.7(b)

   Capitalization of Borrower and HTGC

Schedule 5.7(c)

   Capitalization of Borrower’s and HTGC’s Subsidiaries

Schedule 5.9

   Litigation

Schedule 5.13

   Environmental Matters

Schedule 5.15

   Intellectual Property

Schedule 5.17

   Deposit Accounts and Securities Accounts

Schedule 5.19

   Permitted Indebtedness

Schedule 5.22

   Licenses, Franchises, Consents and Approvals

 

 

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AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”), is
entered into as of June 29, 2015, between and among, on the one hand, the
lenders identified on the signature pages hereof (such lenders, together with
their respective successors and assigns, and such other lenders as may become a
party hereto in accordance with the terms hereof, are referred to hereinafter
each individually as a “Lender” and collectively as the “Lenders”), WELLS FARGO
CAPITAL FINANCE, LLC, a Delaware limited liability company formerly known as
Wells Fargo Foothill, LLC, as the arranger and administrative agent for the
Lenders (in such capacity, together with its successors and assigns in such
capacity, “Agent”), and, on the other hand, HERCULES FUNDING II LLC, a Delaware
limited liability company (“Borrower”).

RECITALS

A. Borrower, Lenders as of the date hereof and Agent are parties to that certain
Loan and Security Agreement dated as of August 25, 2008, as amended by that
certain First Amendment to Loan and Security Agreement dated as of April 30,
2009, that certain Second Amendment to Loan and Security Agreement dated as of
June 20, 2011, that certain Third Amendment to Loan and Security Agreement dated
as of August 1, 2012, that certain Fourth Amendment to Loan and Security
Agreement dated as of December 17, 2012, that certain Fifth Amendment to Loan
and Security Agreement dated as of August 8, 2014, that certain Sixth Amendment
to Loan and Security Agreement dated as of February 6, 2015, and that certain
Seventh Amendment to Loan and Security Agreement dated as of May 6, 2015 (as so
amended, the “Original Loan Agreement”) and certain other “Loan Documents” under
and as defined therein (together with the Original Loan Agreement, as amended
prior to the date hereof, collectively, the “Original Loan Documents”), pursuant
to which Lenders and Agent are providing financial accommodations to or for the
benefit of Borrower upon the terms and conditions set forth therein.

B. Borrower has requested that the Original Loan Agreement be amended and
restated in order to modify certain provisions of the Original Loan Agreement,
and Lenders and Agent are willing to do so in accordance with the terms and
conditions set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the terms and conditions set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Borrower, Lenders and Agent hereby agree, and the
Original Loan Agreement is hereby amended and restated in its entirety, as
follows:

1. DEFINITIONS AND CONSTRUCTION.

1.1 Definitions. As used in this Agreement, the following terms shall have the
following definitions:

“Account” means an account (as that term is defined in the Code).

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“Account Debtor” means any Person who is obligated under, with respect to, or on
account of, an Account, chattel paper or a General Intangible, or is a debtor
under, or a maker of, a Note Receivable.

“Additional Commitment Closing Date” means the first date on which both of the
following clauses (a) and (b) are satisfied: (a) in addition to WFCF or an
Affiliate of WFCF, there is at least one other Lender that is not WFCF or an
Affiliate of WFCF, and (b) the aggregate Commitments are greater than
$75,000,000.

“Additional Documents” has the meaning set forth in Section 4.4(c).

“Advances” has the meaning set forth in Section 2.1(a).

“Affiliate” means, as applied to any Person, any other Person who, directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such Person. For purposes of this definition,
“control” means the possession, directly or indirectly through one or more
intermediaries, of the power to direct the management and policies of a Person,
whether through the ownership of Stock, by contract, or otherwise; provided,
however, that, in any event: (a) any Person which owns directly or indirectly
10% or more of the Stock having ordinary voting power for the election of
directors or other members of the governing body of a Person or 10% or more of
the partnership, membership or other ownership interests of a Person (other than
as a limited partner of such Person) shall be deemed to control such Person,
(b) each director (or comparable manager) of a Person shall be deemed to be an
Affiliate of such Person, and (c) each partnership or joint venture in which a
Person is a partner or joint venturer shall be deemed to be an Affiliate of such
Person; and provided, further, that notwithstanding the foregoing, for purposes
of clause (r) of the definition of Eligible Notes Receivable, any Person which
owns directly or indirectly 20% or more of the Stock having ordinary voting
power for the election of directors or other members of the governing body of a
Person or 20% or more of the partnership, membership or other ownership
interests of a Person (other than as a limited partner of such Person) shall be
deemed to control such Person.

“Agent” means WFCF, solely in its capacity as agent for the Lenders hereunder,
and any successor thereto.

“Agent Advances” has the meaning set forth in Section 2.2(e)(i).

“Agent- Related Persons” means Agent together with its Affiliates, officers,
directors, employees, and agents.

“Agent’s Account” means an account at a bank designated by Agent from time to
time as the account into which Borrower shall make all payments to Agent for the
benefit of the Lender Group and into which the Lender Group shall make all
payments to Agent under this Agreement and the other Loan Documents; unless and
until Agent notifies Borrower and the Lender Group to the contrary, Agent’s
Account shall be that certain deposit account bearing account number ***** and
maintained by Agent with Wells Fargo Bank, N.A., San Francisco, CA, ABA
No. 121000248.

 

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“Agent’s Liens” means the Liens granted by Borrower and its Subsidiaries to
Agent for the benefit of the Lender Group under this Agreement or the other Loan
Documents.

“Agreement” has the meaning set forth in the preamble hereto.

“Amortization Commencement Date” means the day immediately following the end of
the Revolving Credit Availability Period.

“Amortization Commencement Date Principal Balance” means the aggregate
outstanding principal balance of Advances as of the Amortization Commencement
Date.

“Amortization Period” means the period commencing on the Amortization
Commencement Date and ending on the earlier of (a) payment in full of the
Obligations, and (b) the Maturity Date.

“Assignee” has the meaning set forth in Section 14.1(a).

“Assignment and Acceptance” means an Assignment and Acceptance substantially in
the form of Exhibit A-1.

“Authorized Person” means any of Manuel Henriquez, Andrew Olson, Ben Bang,
Robert Lake, Mark Harris, or any other individual then serving as the Chief
Executive Officer, Chief Financial Officer, Corporate Controller, Chief Credit
Officer, or Chief Legal Officer of Borrower or HTGC, as applicable; provided,
that for purposes of this Agreement, no individual who is an Authorized Person
shall cease to be an Authorized Person, and no individual who is not then an
Authorized Person shall become an Authorized Person, unless and until Agent has
received written notice of such change from Borrower or HTGC, as applicable, and
in the case of an individual becoming an Authorized Person such individual has
been approved by Agent in its Permitted Discretion.

“Availability” means, as of any date of determination, the amount that Borrower
is entitled to borrow as Advances under Section 2.1 (after giving effect to all
then outstanding Obligations (other than Bank Product Obligations) and all
sublimits and reserves then applicable hereunder).

“Available Increase Amount” means, as of any date of determination, an amount
equal to the result of (a) $50,000,000 minus (b) the aggregate principal amount
of Increases to the Commitments previously made pursuant to Section 2.15 of this
Agreement.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

 

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“Bank Product” means any one or more of the following financial products or
accommodations extended to Borrower or its Subsidiaries by a Bank Product
Provider: (i) credit cards, (ii) credit card processing services, (iii) debit
cards, (iv) stored value cards, (v) purchase cards (including so-called
“procurement cards” or “P-cards”), (vi) Cash Management Services, or
(vii) transactions under Hedge Agreements.

“Bank Product Agreements” means those agreements entered into from time to time
by Borrower or its Subsidiaries with a Bank Product Provider in connection with
the obtaining of any of the Bank Products.

“Bank Product Collateralization” means providing cash collateral (pursuant to
documentation reasonably satisfactory to Agent) to be held by Agent for the
benefit of the Bank Product Providers (other than the Hedge Providers) in an
amount determined by Agent as sufficient to satisfy the reasonably estimated
credit exposure with respect to the then existing Bank Product Obligations
(other than Hedge Obligations).

“Bank Product Obligations” means (a) all obligations, liabilities, reimbursement
obligations, fees, or expenses owing by Borrower or its Subsidiaries to any Bank
Product Provider pursuant to or evidenced by a Bank Product Agreement and
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
(b) all Hedge Obligations, and (c) all amounts that Agent or any Lender is
obligated to pay to a Bank Product Provider as a result of Agent or such Lender
purchasing participations from, or executing guarantees or indemnities or
reimbursement obligations to, a Bank Product Provider with respect to the Bank
Products provided by such Bank Product Provider to Borrower or its Subsidiaries.

“Bank Product Provider” means Wells Fargo or any of its Affiliates.

“Bank Product Reserve Amount” means, as of any date of determination, the Dollar
amount of reserves that Agent has determined it is necessary or appropriate to
establish (based upon the Bank Product Providers’ reasonable determination of
their credit exposure to Borrower and its Subsidiaries in respect of Bank
Product Obligations) in respect of Bank Products then provided or outstanding;
provided, however, that such amount shall at no time exceed (a) five percent
(5%) of the Maximum Revolver Amount at such time, or (b) $15,000,000.

“Bankruptcy Code” means title 11 of the United States Code, as in effect from
time to time.

“Base LIBOR Rate” means, for any Interest Period, the rate per annum appearing
on Macro*World’s (https://capitalmarkets.mworld.com; the “Service”) Page BBA
LIBOR—USD (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service) two Business Days prior to the
commencement of such Interest Period, for a term of three months and in the
amount of $1,000,000 (and, if any such rate is below zero, the LIBOR Rate shall
be deemed to be zero), which determination shall be made by Lender and shall be
conclusive in the absence of manifest error.

 

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“Base Rate” means the greatest of (a) the Federal Funds Rate plus one-half of
one percent (0.50%), (b) the LIBOR Rate plus one percent (1.00%), and (c) the
rate of interest announced, from time to time, within Wells Fargo at its
principal office in San Francisco as its “prime rate”, with the understanding
that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the
lowest of such rates) and serves as the basis upon which effective rates of
interest are calculated for those loans making reference thereto and is
evidenced by the recording thereof after its announcement in such internal
publications as Wells Fargo may designate (and if any such announced rate is
below zero, then the rate determined pursuant to this clause (c) shall be deemed
to be zero).

“Base Rate Loan” means each portion of an Advance that bears interest at a rate
determined by reference to the Base Rate.

“Base Rate Margin” means twoone and three-fourths percent (2.001.75%).

“Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35) of
ERISA) for which Borrower or any Subsidiary or ERISA Affiliate of Borrower has
been an “employer” (as defined in Section 3(5) of ERISA) within the past six
years.

“Board of Directors” means the board of directors (or comparable managers or
managing members) of a Person or any committee thereof duly authorized to act on
behalf of the board of directors (or comparable managers or managing members).

“Books” means all of Borrower’s and its Subsidiaries’ now owned or hereafter
acquired books and records (including all of their Records indicating,
summarizing, or evidencing their assets (including the Collateral) or
liabilities, all of Borrower’s and its Subsidiaries’ Records relating to their
business operations or financial condition, and all of their goods or General
Intangibles related to such information).

“Borrower” has the meaning set forth in the preamble to this Agreement.

“Borrower Collateral” means all of Borrower’s now owned or hereafter acquired
right, title, and interest in and to all property, including, without
limitation, each of the following:

(a) all of its Accounts,

(b) all of its Books,

(c) all of its commercial tort claims,

(d) all of its Deposit Accounts,

(e) all of its Equipment,

(f) all of its General Intangibles,

(g) all of its Inventory,

 

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(h) all of its Investment Property (including all of its securities and
Securities Accounts),

(i) all of its Negotiable Collateral, including all of its Notes Receivable,

(j) all of its Supporting Obligations,

(k) money or other assets of Borrower that now or hereafter come into the
possession, custody, or control of Agent or any Lender, and

(l) the proceeds and products, whether tangible or intangible, of any of the
foregoing, including proceeds of insurance covering any or all of the foregoing,
and any and all Accounts, Books, Deposit Accounts, Equipment, General
Intangibles, Inventory, Investment Property, Negotiable Collateral, Real
Property, Supporting Obligations, money, or other tangible or intangible
property resulting from the sale, exchange, collection, or other disposition of
any of the foregoing, or any portion thereof or interest therein, and the
proceeds thereof.

“Borrower’s Required Procedures” means the “Credit and Collection Policy” as
defined in the Sale and Servicing Agreement, specifically including
underwriting, valuation, auditing and documentation guidelines, standard
documentation, and portfolio management policies and procedures, in the form
delivered to Agent and approved by Agent on or prior to the Original Closing
Date, as amended from time to time in accordance with the Sale and Servicing
Agreement.

“Borrowing” means a borrowing hereunder consisting of Advances made on the same
day by the Lenders (or Agent on behalf thereof), or by Swing Lender in the case
of a Swing Loan, or by Agent in the case of an Agent Advance.

“Borrowing Base” means, as of any date of determination, the sum of:

(a) fifty-five percent (5055%) of the Net Eligible Balance, minus

(b) the sum of (i) the Bank Product Reserve Amount, and (ii) the aggregate
amount of reserves, if any, established by LenderAgent under Section 2.1(b).

“Borrowing Base Certificate” means a certificate in the form of Exhibit B-1.

“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks are authorized or required to close in the State of New York, the
State of California, the State of Texas, or the State of Minnesota, except that
if a determination of a Business Day shall relate to a LIBOR Rate Loan, the term
“Business Day” also shall exclude any day on which banks are closed for dealings
in Dollar deposits in the London interbank market.

“Capital Lease” means a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.

“Capitalized Lease Obligation” means that portion of the obligations under a
Capital Lease that is required to be capitalized in accordance with GAAP.

 

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“Cash Equivalents” means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors Service, Inc.
(“Moody’s”), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit or
bankers’ acceptances maturing within 1 year from the date of acquisition thereof
issued by any bank organized under the laws of the United States or any state
thereof having at the date of acquisition thereof combined capital and surplus
of not less than $250,000,000, (e) demand Deposit Accounts maintained with any
bank organized under the laws of the United States or any state thereof so long
as the amount maintained with any individual bank is less than or equal to
$250,000 and is insured by the Federal Deposit Insurance Corporation, and
(f) Investments in money market funds or mutual funds substantially all of whose
assets are invested in the types of assets described in clauses (a) through (e)
above.

“Cash Management Account” has the meaning set forth in Section 2.6(a).

“Cash Management Agreements” means those certain cash management service
agreements, in form and substance satisfactory to Agent, each of which is among
Borrower or one of its Subsidiaries, Agent, and one of the Cash Management
Banks.

“Cash Management Bank” has the meaning set forth in Section 2.6(a).

“Cash Management Services” means any cash management or related services,
including treasury, depository, return items, overdraft, controlled
disbursement, merchant store value cards, e -payables services, electronic funds
transfer, interstate depository network, automatic clearing house transfer
(including the Automated Clearing House processing of electronic funds transfers
through the direct Federal Reserve Fedline system) and other cash management
arrangements.

“Change in Law” means the occurrence after the Seventh Amendment Closing Date
of: (a) the adoption or effectiveness of any law, rule, regulation, judicial
ruling, judgment or treaty, (b) any change in any law, rule, regulation,
judicial ruling, judgment or treaty or in the administration, interpretation,
implementation or application by any Governmental Authority of any law, rule,
regulation, guideline or treaty, or (c) the making or issuance by any
Governmental Authority of any request, rule, guideline or directive, whether or
not having the force of law; provided that notwithstanding anything in this
Agreement to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives thereunder or
issued in connection therewith and (ii) all requests, rules, guidelines or
directives concerning capital adequacy promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities shall,
in each case, be deemed to be a “Change in Law,” regardless of the date enacted,
adopted or issued.

 

 

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“Change of Control” means any of the following: (a) HTGC ceases to directly own
and control 100% of the outstanding capital Stock of Borrower; (b) Borrower
ceases to directly own and control 100% of the outstanding capital Stock of each
of its Subsidiaries; (c) HTGC or parties designated or appointed by HTGC cease
to be the only Manager(s) of Borrower; (d) any Person or two or more Persons
acting in concert shall have acquired beneficial ownership (within the meaning
of Rule 13d-3 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of twenty percent (20%) or more of the issued
and outstanding shares of capital Stock of HTGC having the right to vote for the
election of directors of HTGC under ordinary circumstances; or (e) during any
period of twelve consecutive calendar months, individuals who at the beginning
of such period constituted the board of directors of HTGC (together with any new
directors whose election to the board of directors of HTGC or whose nomination
for election by the Stockholders of HTGC was approved by a vote of at least a
majority of the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason other than death or disability to
constitute a majority of the directors then in office; provided, that
notwithstanding the foregoing, one such director serving on the board of
directors of HTGC may cease to be a director serving on the board of directors
of HTGC during such twelve-month period without triggering a “Change of Control”
hereunder .

“Closing Certificates” means certificates from an Authorized Person of Borrower
and an Authorized Person of HTGC, in each case (i) attesting to the resolutions
of such Person’s Board of Directors authorizing its execution, delivery, and
performance of this Agreement and the other Loan Documents to which such Person
is a party, (ii) authorizing specific officers of such Person to execute the
same, (iii) attesting to the incumbency and signatures of such specific officers
of such Person, and (iv) addressing such other factual matters in connection
with thethis Agreement and the other Loan Documents as may reasonably be
required by Agent.

“Closing Date” means the date of this Agreement.

“Code” means the New York Uniform Commercial Code, as in effect from time to
time; provided, however, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection, priority, or
remedies with respect to Agent’s Lien on any Collateral is governed by the
Uniform Commercial Code as enacted and in effect in a jurisdiction other than
the State of New York, the term “Code” shall mean the Uniform Commercial Code as
enacted and in effect in such other jurisdiction solely for purposes of the
provisions thereof relating to such attachment, perfection, priority, or
remedies.

“Collateral” means the Borrower Collateral and all other assets and interests in
assets and proceeds thereof now owned or hereafter acquired by Borrower or its
Subsidiaries in or upon which a Lien is granted under any of the Loan Documents.

“Collateral Access Agreement” means a landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or
other Person in possession of, having a Lien upon, or having rights or interests
in any Collateral, in each case, in form and substance satisfactory to Agent.

 

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“Collateral Custodian” means a Person acceptable to both Borrower and Agent that
is appointed pursuant to a Collateral Custodian Agreement acceptable to such
Person, Borrower and Agent to hold the original Notes Receivable and certain
other documents to be delivered under this Agreement or the Sale and Servicing
Agreement for Agent’s benefit. As of the Seventh Amendment Closing Date, there
is no Collateral Custodian, and the original Notes Receivable and certain other
documents required to be delivered under this Agreement or the Sale and
Servicing Agreement will be delivered directly to and held by Agent.

“Collateral Custodian Agreement” means a written agreement pursuant to which
Borrower and Agent appoint a Collateral Custodian with respect to this Agreement
and the Sale and Servicing Agreement and specify the duties and compensation of
such Collateral Custodian.

“Collateral Custodian Fees” means any fees payable to a Collateral Custodian in
accordance with its Collateral Custodian Agreement.

“Collections” means all cash, checks, notes, instruments, and other items of
payment (including insurance proceeds, proceeds of cash sales, rental proceeds,
and tax refunds) of Borrower.

“Commercial Tort Claim Assignment” has the meaning set forth in Section 4.4(b).

“Commitment” means, with respect to each Lender, the aggregate commitment of
such Lender to make Advances and, with respect to all Lenders, the aggregate
commitments of all Lenders to make Advances, in each case as such Dollar amounts
are such Dollar amount as is set forth beside such Lender’s name under the
applicable heading on Schedule C- 1 (as amended from time to time in accordance
with the terms hereof) or on the signature page ofon Schedule C-1 to this
Agreement, as the same may be updated by Agent to reflect an increase in the
Maximum Revolver Amount after the Seventh Amendment Closing Date in accordance
with Section 2.15, or in the Assignment and Acceptance pursuant to which such
Lender became a Lender hereunderunder this Agreement, as such amounts may be
reduced or increased from time to time pursuant to assignments made in
accordance with the provisions of Section 14.1.14.1 of this Agreement.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C-1 delivered by the chief financial officer of Borrower to Agent.

“Control Agreement” means a control agreement, in form and substance
satisfactory to Agent, executed and delivered by Borrower or one of its
Subsidiaries, Agent, and the applicable securities intermediary (with respect to
a Securities Account) or bank (with respect to a Deposit Account).

“Daily Balance” means, with respect to each day during the term of this
Agreement, the aggregate outstanding amount of all Advances or Obligations, as
the context requires, at the end of such day.

 

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“Debt to Worth Ratio” means, with respect to any Person as of any date of
determination, a ratio of (a) the sum of (i) the outstanding amount of all
Indebtedness (other than Indebtedness owed by such Person to the Small Business
Administration) of such Person as of such date, minus (ii) the outstanding
amount of the Subordinated Debt of such Person as of such date, to (b) the sum
of (i) Tangible Net Worth of such Person as of such date, plus (ii) the
outstanding amount of the Subordinated Debt of such Person as of such date.

“Default” means an event or condition that, but for the giving of notice or the
passage of time, or both, would constitute an Event of Default.

“Defaulted Note Receivable” means any Note Receivable with respect to which
(a) any payment thereunder remains outstanding and unpaid, in whole or in part,
for more than ninety (90) days past the date it became due and payable according
to the original face and tenor of such Note Receivable or as extended in
accordance with Borrower’s Required Procedures, (b) with respect to which
foreclosure proceedings have been initiated against any property securing such
Note Receivable, or (c) that Borrower or Agent in its Permitted Discretion deems
to be non-collectible.

“Defaulting Lender” means any Lender that (a) has failed to fund any amounts
required to be funded by it under this Agreement (including the failure to make
available to Agent amounts required pursuant to a Settlement or to make a
required payment in connection with a Letter of Credit Disbursement) within one
(1) Business Day of the date that it is required to do so under this Agreement
unless such Lender notifies Agent and Borrower in writing that such failure to
fund any Advance is the result of such Lender’s good faith determination that
one or more conditions precedent to such funding (each of which conditions
precedent, together with any applicable default, shall be specifically
identified in such writing) has not been satisfied, (b) notified the Borrower,
Agent, or any Lender in writing that it does not intend to comply with all or
any portion of its funding obligations under this Agreement (unless such writing
relates to such Lender’s obligation to fund an Advance hereunder and states that
such position is based on such Lender’s good faith determination that a
condition precedent to funding (which condition precedent, together with any
applicable default, shall be specifically identified in such writing or public
statement) cannot be satisfied), (c) has made a public statement to the effect
that it does not intend to comply with its funding obligations under this
Agreement or under other agreements generally (as reasonably determined by
Agent) under which it has committed to extend credit (unless such public
statement relates to such Lender’s obligation to fund an Advance hereunder and
states that such position is based on such Lender’s good faith determination
that a condition precedent to funding (which condition precedent, together with
any applicable default, shall be specifically identified in such writing or
public statement) cannot be satisfied), (d) failed, within three (3) Business
Days after written request by Agent, to confirm that it will comply with the
terms of this Agreement relating to its obligations to fund any amounts required
to be funded by it under this Agreement, (e) otherwise failed to pay over to
Agent or any other Lender any other amount required to be paid by it under this
Agreement within one (1) Business Day of the date that it is required to do so
under this Agreement, or (f) (i) becomes or is insolvent or has a parent company
that has become or is insolvent or (ii) becomes the subject of a bankruptcy or
insolvency proceeding, or has had a receiver, conservator, trustee, or custodian
or appointed for it, or has taken any action in furtherance of, or indicating
its consent to, approval of or acquiescence in any such proceeding or
appointment or

 

 

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has a parent company that has become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee, or custodian appointed
for it, or has taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in any such proceeding or appointment, or (g) such
Lender (or any Affiliate thereof) becomes subject to a Bail-In Action; provided
that a Lender shall not be a Defaulting Lender solely by virtue of the ownership
or acquisition of any equity interest in that Lender or any direct or indirect
parent company thereof by a Governmental Authority so long as such ownership
interest does not result in or provide such Lender with immunity from the
jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Lender.

“Defaulting Lender Rate” means (a) for the first three (3) days from and after
the date the relevant payment is due, the Base Rate, and (b) thereafter, the
interest rate then applicable to Advances that are Base Rate Loans (inclusive of
the Base Rate Margin applicable thereto).

“Delinquent Note Receivable” means any Note Receivable with respect to which any
payment thereunder remains outstanding and unpaid, in whole or in part, for more
than sixty (60) days past the date it became due and payable according to the
original face and tenor of such Note Receivable or as extended in accordance
with Borrower’s Required Procedures.

“Deposit Account” means any deposit account (as that term is defined in the
Code).

“Designated Account” means account number ***** of Borrower maintained with
Borrower’s Designated Account Bank, or such other deposit account of Borrower
(located within the United States) that has been designated as such, in writing,
by Borrower to Agent.

“Designated Account Bank” means Wells Fargo.

“Disbursement Letter” means an instructional letter executed and delivered by
Borrower to Agent regarding the extensions of credit to be made on the Closing
Date, the form and substance of which is satisfactory to Agent.

“Dollars” or “$” means United States dollars.

“Drawing Document” means any Letter of Credit or other document presented for
purposes of drawing under any Letter of Credit.

“EBITDA” means, with respect to any Person for any fiscal period, such Person’s
consolidated net earnings (or loss), minus to the extent included in determining
net earnings, extraordinary gains, minus to the extent included in determining
net earnings, interest income, plus interest expense, plus income taxes, plus
depreciation and amortization, in each case as determined for such period and in
each case not otherwise defined herein as determined in accordance with GAAP.

“EEA Financial Institution” means (a) any institution established in any EEA
Member Country which is subject to the supervision of an EEA Resolution
Authority, (b) any entity established in an EEA Member Country which is a parent
of an institution described in clause (a)

 

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of this definition, or (c) any institution established in an EEA Member Country
which is a subsidiary of an institution described in clauses (a) or (b) of this
definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any
Person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Eligible Notes Receivable” means those Notes Receivable that comply with each
of the representations and warranties respecting Eligible Notes Receivable made
in the Loan Documents, and that are not excluded as ineligible by virtue of one
or more of the excluding criteria set forth below; provided, however, that such
criteria may be modified from time to time by Required Lenders in their
Permitted Discretion; provided further, that so long as no Default or Event of
Default has occurred and is continuing, Required Lenders shall first notify and
attempt to discuss with Borrower any such modification that Required Lenders
propose to make to such criteria unless Required Lenders, in their Permitted
Discretion, believe that exigent circumstances justify the immediate
modification of such criteria. Eligible Notes Receivable shall not include a
Note Receivable (unless specifically determined to be an Eligible Note
Receivable by Required Lenders following a review thereof on a case-by-case
basis) if:

(a) (c) such Note Receivable does not evidence a commercial loan made to an
Account Debtor in which venture capital firms, private equity groups or other
institutional investors have an aggregate equity ownership of at least fifteen
percent (15%) on a fully-diluted basis;

(b) (d) such Note Receivable does not represent a valid and binding obligation
enforceable in accordance with its terms for the amount outstanding thereof
without defense (whether actual or alleged);

(c) (e) such Note Receivable (i) is not approved, documented, managed and
otherwise in conformance with Borrower’s Required Procedures in effect upon
Borrower’s acquisition thereof, or (ii) is not evidenced by HTGC’s standard loan
documents for loans to be sold to Borrower and financed under this Agreement, or
other documentation acceptable to Agent;

(d) (f) such Note Receivable is owed by an Account Debtor that is rated
Investment Grade 4 or Investment Grade 5 in accordance with Borrower’s Required
Procedures then in effect;

(e) (g) such Note Receivable is owed by an Account Debtor that, based upon
Borrower’s most-recent quarterly credit analysis and taking into account such
Account Debtor’s anticipated positive or negative cash flow, does not have
either (i) sufficient unrestricted cash on hand or committed availability under
revolving lines of credit to allow such Account Debtor to service at least two
(2) months of operations under such Note Receivable or (ii) a signed

 

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commitment letter from a “qualified investor” to make an additional equity
investment in such Account Debtor in an amount sufficient to allow such Account
Debtor to service at least six (6) months of operations under such Note
Receivable (for purposes of this clause (e), “qualified investor” shall mean a
venture capital firm on Borrower’s approved list, a private equity group, a
strategic acquirer or other institutional investor acceptable to Agent in its
Permitted Discretion;

(f) (h) Borrower’s Liens to secure payment of such Note Receivable are not first
priority Liens on substantially all property of the Account Debtor, except for
such permitted Liens or exclusions as are consistent with Borrower’s Required
Procedures; provided, that such Note Receivable shall not be ineligible solely
by reason of this clause (f) by reason of the existence of a prior Lien secured
solely by the Accounts and/or Inventory (and proceeds thereof) owned by such
Account Debtor to secure a revolving line of credit provided to the Account
Debtor by a Person other than Borrower so long as the maximum committed
principal amount of such revolving line of credit does not exceed fifty percent
(50%) of the maximum committed principal amount of Borrower’s loan to such
Account Debtor;

(g) (i) such Note Receivable has a remaining term of more than sixty (60)
months;

(h) (j) such Note Receivable has a remaining term of more than forty-two
(42) months, unless the Account Debtor maintains a trailing twelve-month EBITDA
in excess of $2,000,000thereof is rated Investment Grade 1 or Investment Grade 2
in accordance with Borrower’s Required Procedures then in effect;

(i) (k) the Account Debtor with respect to such Note Receivable is subject to an
Insolvency Proceeding, is not Solvent, has gone out of business, or as to which
Borrower has received notice of an imminent Insolvency Proceeding or a material
impairment of the financial condition of such maker;

(j) (l) the documentation associated with such Note Receivable does not require
the Account Debtor to provide ongoing financial information to Borrower,
including financial statements on not less than a quarterly basis, annual
audited financial statements with an opinion prepared by an independent
third-party auditor, annual budgets and ongoing loan monitoring and covenant
compliance certificates consistent with Borrower’s Required Procedures;

(k) (m) such Note Receivable was originated by a lender other than HTGC, or a
bank, commercial finance company or other institutional lender approved by Agent
in its Permitted Discretion;

(l) (n) such Note Receivable has not been originated in accordance with, or does
not comply in all respects with, all applicable federal, state and local laws
and regulations, including applicable usury and credit disclosure laws and
regulations;

(m) (o) such Note Receivable does not require current payments of the full
amount of cash interest accruing on the full unpaid principal amount thereof on
at least a quarterly basis; provided, that notwithstanding this clause (m),
Notes Receivable that provide for

 

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payment-in-kind or accrual of a portion of such interest may be eligible so long
as at least seventy-five percent (75%) of the total interest then due on such
Note Receivable is interest that is required to be paid in cash;

(n) (p) such Note Receivable (i) is a Delinquent Note Receivable or a Defaulted
Note Receivable, or (ii) unless waived by Agent on a case by case basis in its
sole discretion, has been at any time a Delinquent Note Receivable or a
Defaulted Note Receivable;

(o) (q) the Account Debtor with respect to such Note Receivable is in the
nuclear waste, natural resource, utility, or fishing vessel industry;

(p) (r) the proceeds of such Note Receivable were or are to be used for
personal, family or household purposes;

(q) (s) Borrower’s interest in such Note Receivable represents (i) its interest
as one of the lenders in a multi-lender syndicate or other co-lending
arrangement, unless such arrangement has been reviewed and approved by Agent on
a case by case basis in its sole discretion, or (ii) isis an Eligible
Split-Funded Note Receivable, or (ii) only a participating interest;

(r) (t) the Account Debtor with respect to such Note Receivable is an Affiliate
of Borrower or a shareholder or employee or agent of Borrower or a member,
employee or agent of any Affiliate of Borrower, or a member of the family of any
of the foregoing:

(s) (u) such Note Receivable that is not payable in Dollars;

(t) (v) the Account Debtor with respect to such Note Receivable (i) does not
maintain its chief executive office or principal residence in the United States,
or (ii) is not organized under the laws of the United States or any state
thereof, or (iii) is the government of any foreign country or sovereign state,
or of any state, province, municipality, or other political subdivision thereof,
or of any department, agency, public corporation, or other instrumentality
thereof;

(u) (w) the Account Debtor with respect to such Note Receivable is either
(i) the United States or any department, agency, or instrumentality of the
United States, or (ii) any state of the United States, or any department,
agency, or instrumentality of such state;

(v) (x) the Account Debtor with respect to such Note Receivable is also a
creditor of Borrower, or has made a refundable deposit (not held in a separate
escrow account), or has or has asserted a right of setoff, or has disputed its
obligation to pay all or any portion of thesuch Note Receivable, to the extent
of such deposit, claim, right of setoff, or dispute;

(w) (y) the Agent or the Collateral Custodian (if one has been appointed) is not
then in possession of each of the Required Asset Documents;

(x) (z) Agent has not received a copy of HTGC’s investment memorandum with
respect to the loan evidenced by such Note Receivable;

 

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(y) (aa) such Note Receivable is not subject to a valid and perfected
first-priority Lien in favor of Agent; or

(z) (bb) such Note Receivable has been modified or has had its maturity extended
in a manner that is not in compliance with Borrower’s Required Procedures;

(aa) (cc) such Note Receivable Balance has an outstanding principal amount that
exceeds $15,000,00025,000,000; provided, that such dollar limitation may be
raised or waived by Required Lenders on a case by case basis in their sole
discretion, and only the amount in excess of such $15,000,00025,000,000 or any
higher limit agreed to by Required Lenders shall be deemed ineligible solely by
reason of this clause (aa). Notwithstanding the foregoing, Agent will have the
right to underwrite any Note Receivable with an original principal balance in
excess of $15,000,00025,000,000 to determine, in Agent’s sole discretion,
whether such Note Receivable shall be an Eligible Note Receivable;

(bb) any Split-Funded Note Receivable that is not an Eligible Split-Funded Note
Receivable; or

(cc) any Note Receivable with respect to which Wells Fargo, or any Affiliate
thereof, is a co-lender with Borrower thereunder, unless approved by Agent in
its sole discretion.

Concentration Limits

On each date of determination of the Borrowing Base, after determining a
preliminary aggregate outstanding balance of Eligible Notes Receivable by
applying the foregoing exclusions and aggregating the outstanding balance of the
eligible portions thereof (the eligible portion of any Note Receivable after
applying the foregoing exclusions shall be referred to as a “Preliminary
Eligible Note Receivable,” and such aggregate outstanding balance shall be
referred to as the “Preliminary Eligible Notes Receivable Balance”), each of the
below listed clauses (1) through (78) shall be applied, using the Preliminary
Eligible Notes Receivable Balance to determine additional ineligible portions,
if any, without duplication, and thus determine the Net Eligible Balance.
Eligible Notes Receivable shall not include the following (except to the extent
that any Note Receivable is specifically determined, on a case-by-case basis, to
be an Eligible Note Receivable by Agent in its sole discretion):

(1) The portion of the Preliminary Eligible Notes Receivable Balance consisting
of the aggregate outstanding principal amount of all Eligible Notes Receivable
that have been materially modified in accordance with Borrower’s Required
Procedures, that exceeds ten percent (10%) of the Preliminary Eligible Notes
Receivable Balance at such time; provided, however, that whether an Eligible
NotesNote Receivable has been “materially modified” shall be determined by Agent
in its Permitted Discretion;

(2) The portion of the Preliminary Eligible Notes Receivable Balance consisting
of the aggregate outstanding principal amount of all Eligible Notes Receivable
owed by Account Debtors who have received equity investments from the same
venture capital firm as the lead investor, that exceeds twenty-five percent
(25%) of the Preliminary Eligible Notes Receivable Balance at such time;

 

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(3) The portion of the Preliminary Eligible Notes Receivable Balance consisting
of (i) the aggregate outstanding principal amount of all Eligible Notes
Receivable that are Technology Industry Notes Receivable that exceeds sixty
percent (60%) of the Preliminary Eligible Notes Receivable Balance at such time,
(ii) the aggregate outstanding principal amount of all Eligible Notes Receivable
that are Life Sciences Industry Notes Receivable that exceeds sixty percent
(60%) of the Preliminary Eligible Notes Receivable Balance at such time,
(iii) the aggregate outstanding principal amount of all Eligible Notes
Receivable that are Healthcare Industry Notes Receivable that exceeds sixty
percent (60%) of the Preliminary Eligible Notes Receivable Balance at such time,
or (iv) the aggregate outstanding principal amount of all Eligible Notes
Receivable Notes Receivable owed by Account Debtors whose business activities
fall within any other single industry, as defined by the Standard Industrial
Classification/NAIC classification (six-digit NAIC codes) then in effect, that
exceeds thirty-five percent (35%) of the Preliminary Eligible Notes Receivable
Balance at such time;

(4) The portion of the Preliminary Eligible Notes Receivable Balance consisting
of the aggregate outstanding principal amount of all Eligible Notes Receivable
owed by Account Debtors that are rated Investment Grade 3 in accordance with
Borrower’s Required Procedures then in effect, that exceeds thirtyforty percent
(3040%) of the Preliminary Eligible Notes Receivable Balance at such time;
provided, that, at least twenty-five percent (25%) of such Account Debtors are
rated Investment Grade 3 “positive” in accordance with Borrower’s Required
Procedures then in effect (it being understood and agreed that if such
twenty-five percent (25%) threshold is not met, the concentration limit under
this clause (4) for Account Debtors that are rated Investment Grade 3 shall be
thirty percent (30%)) of the Preliminary Eligible Notes Receivable Balance at
such time;

(5) The portion of the Preliminary Eligible Notes Receivable Balance consisting
of the aggregate outstanding principal amount of all Eligible Notes Receivable
with respect to which a revolving line of credit described in clause (f) exists,
that exceeds ten percent (10%) of the Preliminary Eligible Notes Receivable
Balance at such time;

(6) The portion of the Preliminary Eligible Notes Receivable Balance consisting
of the aggregate outstanding principal amount of all Eligible Notes Receivable
that have a remaining term of more than forty-two (42) months, that exceeds
twenty-fivethirty percent (2530%) of the Preliminary Eligible Notes Receivable
Balance at such time; provided, that such concentration limit may be waived by
Required Lenders on a case by case basis in their sole discretion;

(7) The portion of the Preliminary Eligible Notes Receivable Balance consisting
of the aggregate outstanding principal amount of all Eligible Notes Receivable
that were originated by a lender other than HTGC or one of its wholly-owned
Subsidiaries, that exceeds twenty percent (20%) of the Preliminary Eligible
Notes Receivable Balance at such time; or

(8) The portion of the Preliminary Eligible Notes Receivable Balance consisting
of the aggregate outstanding principal amount of all Eligible Notes Receivable
that are Eligible Split-Funded Notes Receivable, that exceeds forty-five (45%)
of the Preliminary Eligible Notes Receivable Balance at such time.

 

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Notwithstanding the foregoing, the concentration limitations in the foregoing
clauses (1) through (78) relative to the aggregate outstanding principal amount
of the Preliminary Eligible Notes Receivable Balance at such time, shall not
apply during the Amortization Period.

“Eligible Split-Funded Note Receivable” means those Split-Funded Notes
Receivable that comply with each of the representations and warranties
respecting Eligible Notes Receivable made in the Loan Documents, and that are
not excluded as ineligible by virtue of one or more of the excluding criteria
set forth below or in the definition of “Eligible Notes Receivable”; provided,
however, that such criteria may be modified from time to time by Required
Lenders in their Permitted Discretion; provided further, that so long as no
Default or Event of Default has occurred and is continuing, Required Lenders
shall first notify and attempt to discuss with Borrower any such modification
that Required Lenders propose to make to such criteria unless Required Lenders,
in their Permitted Discretion, believe that exigent circumstances justify the
immediate modification of such criteria. Eligible Split-Funded Notes Receivable
shall not include a Split-Funded Note Receivable (unless specifically determined
to be an Eligible Split-Funded Note Receivable by Required Lenders following a
review thereof on a case-by-case basis) if:

(a) Either HTGC or Borrower does not serve as the sole administrative agent and
collateral agent for such Split-Funded Note Receivable, with sole rights of
enforcement thereof;

(b) HTGC does not serve as the sole “servicer ” for such Split-Funded Note
Receivable;

(c) the applicable Split-Funded Note Receivable Documents do not prohibit,
restrict, or condition the replacement of (i) HTGC, as servicer thereunder, or
(ii) HTGC or Borrower as administrative agent and collateral agent thereunder,
in each case, other than by requiring the prior, written consent, or the prior,
written direction, of Agent;

(d) the Account Debtor with respect to such Split-Funded Note Receivable is not
contractually obligated thereunder to remit all payments on account of, and all
Collections with respect to, such Split-Funded Note Receivable, to a Cash
Management Account in accordance with Section 2.6 of this Agreement;

(e) any portion of the Collections with respect to such Split-Funded Note
Receivable are not paid directly to a Cash Management Account in accordance with
Section 2.6 of this Agreement;

(f) any portion of such Split-Funded Note Receivable has been sold to any Person
other than (i)  Hercules Funding III, (ii) an Affiliate of Borrower approved by
Agent in its Permitted Discretion, or (iii) a securitization vehicle of HTGC;

(g) such Split-Funded Note Receivable is not subject to an Intercreditor
Agreement that is in full force and effect as of the applicable date of
determination;

(h) such Split-Funded Note Receivable permits or requires the issuance of
letters of credit under the underlying loan documents evidencing same;

 

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(i)     Agent has not received the notice required pursuant to Section 6.3(i)(A)
with respect to such Split-Funded Note Receivable, in accordance with the terms
thereof;

(j)     Agent has received the notice required pursuant to Section 6.3(i)(B)
with respect to such Split-Funded Note Receivable;

(k)     Borrower’s commitment under such Split-Funded Note Receivable is greater
than or less than any other syndicate member’s or co-lender’s commitment under
such Split-Funded Note Receivable; or

(l)     Agent determines in its Permitted Discretion that such Split-Funded Note
Receivable is ineligible for any other reason.

provided, that subject to the limitations set forth in clause (8) in the section
titled, “Concentration Limits” set forth in the definition of “Eligible Notes
Receivable,” (x) so long as the Maximum Revolver Amount is less than or equal to
$75,000,000, there shall be no more than (i) three (3) Eligible Split-Funded
Notes Receivable, and (ii) one (1) Eligible Split-Funded Note Receivable with
respect to which a securitization vehicle is the co-lender with respect thereto,
(y) so long as the Maximum Revolver Amount is greater than $75,000,000, but less
than $100,000,000 there shall be no more than (i) five (5) Eligible Split-Funded
Notes Receivable, and (ii) two (2) Eligible Split-Funded Notes Receivable with
respect to which a securitization vehicle is the co-lender with respect thereto,
and (z) so long as the Maximum Revolver Amount is equal to or greater than
$100,000,000, there shall be no more than (i) seven (7) Eligible Split-Funded
Notes Receivable, or (ii) three (3) Eligible Split-Funded Notes Receivable with
respect to which a securitization vehicle is the co-lender with respect thereto,
in each case, at any one time.

“Eligible Transferee” means (a) a commercial bank organized under the laws of
the United States, or any state thereof, and having total assets in excess of
$250,000,000, (b) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of any such country and which has total
assets in excess of $250,000,000, provided that such bank is acting through a
branch or agency located in the United States, (c) a finance company, insurance
company, or other financial institution or fund that is engaged in making,
purchasing, or otherwise investing in commercial loans in the ordinary course of
its business and having (together with its Affiliates) total assets in excess of
$250,000,000, (d) any Affiliate (other than individuals) of a Lender that was
party hereto as of the Closing Date, (e) so long as no Event of Default has
occurred and is continuing, any other Person approved by Agent, Swing Lender,
and Borrower, (which approval of Borrower shall not be unreasonably withheld,
delayed, or conditioned), and (f) during the continuation of an Event of
Default, any other Person approved by Agent.

“Environmental Actions” means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter, or other communication from any Governmental
Authority, or any third party involving violations of Environmental Laws or
releases of Hazardous Materials from (a) any assets, properties, or businesses
of Borrower, its Subsidiaries, or any of their predecessors in interest,
(b) from

 

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adjoining properties or businesses, or (c) from or onto any facilities which
received Hazardous Materials generated by Borrower, its Subsidiaries, or any of
their predecessors in interest.

“Environmental Law” means any applicable federal, state, provincial, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy, or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, in each case, to the extent binding on
Borrower or its Subsidiaries, relating to the environment, the effect of the
environment on employee health or safety, or Hazardous Materials, including the
Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. §
9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et
seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the
Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Clean Air Act, 42
U.S.C. § 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 3803 et seq.;
the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the Emergency Planning
and the Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq.; the
Hazardous Material Transportation Act, 49 U.S.C. § 1801 et seq.; and the
Occupational Safety and Health Act, 29 U.S.C. §651 et seq. (to the extent it
regulates occupational exposure to Hazardous Materials); any state and local or
foreign counterparts or equivalents, in each case as amended from time to time.

“Environmental Liabilities and Costs” means all liabilities, monetary
obligations, losses, damages, punitive damages, consequential damages, treble
damages, costs and expenses (including all reasonable fees, disbursements and
expenses of counsel, experts, or consultants, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of any claim or demand, or Remedial Actions required, by any Governmental
Authority or any third party, and which relate to any Environmental Action.

“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities and Costs.

“Equipment” means all equipment (as that term is defined in the Code), including
machinery, machine tools, motors, furniture, furnishings, fixtures, vehicles
(including motor vehicles), computer hardware, tools, parts and goods (other
than consumer goods, farm products, or Inventory), wherever located, including
all attachments, accessories, accessions, replacements, substitutions,
additions, and improvements to any of the foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute thereto.

“ERISA Affiliate” means (a) any Person subject to ERISA whose employees are
treated as employed by the same employer as the employees of Borrower or its
Subsidiaries under IRC Section 414(b), (b) any trade or business subject to
ERISA whose employees are treated as employed by the same employer as the
employees of Borrower or its Subsidiaries under IRC Section 414(c), (c) solely
for purposes of Section 302 of ERISA and Section 412 of the IRC, any
organization subject to ERISA that is a member of an affiliated service group of
which Borrower or any of its Subsidiaries are a member under IRC Section 414(m),
or (d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC,
any Person subject to ERISA that is a party to an arrangement with Borrower or
any of its Subsidiaries and whose employees are aggregated with the employees of
Borrower or its Subsidiaries under IRC Section 414(o).

 

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“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor Person), as in effect
from time to time.

“Event of Default” has the meaning set forth in Section 8.

“Excess” has the meaning specified therefor in Section 2.15 of this Agreement.

“Exchange Act” means the Securities Exchange Act of 1934, as in effect from time
to time.

“Fee Letter ” means that certain Fourth Amended and Restated Fee Letter, dated
as of the First Amendment Closing Date, between Borrower and Agent, in form and
substance satisfactory to Agent. Excluded Swap Obligation” means, with respect
to any Loan Party, any Swap Obligation if, and to the extent that, all or a
portion of the Guaranty of such Loan Party of, or the grant by such Loan Party
of a security interest to secure, such Swap Obligation (or any Guaranty thereof)
is or becomes illegal under the Commodity Exchange Act or any rule, regulation
or order of the Commodity Futures Trading Commission (or the application or
official interpretation of any thereof) by virtue of such Loan Party’s failure
for any reason to constitute an “eligible contract participant” as defined in
the Commodity Exchange Act and the regulations thereunder at the time the
Guaranty of such Loan Party or the grant of such security interest becomes
effective with respect to such Swap Obligation. If a Swap Obligation arises
under a master agreement governing more than one swap, such exclusion shall
apply only to the portion of such Swap Obligation that is attributable to swaps
for which such Guaranty or security interest is or becomes illegal.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal to, for each day during such period, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by Agent from three Federal funds brokers of recognized
standing selected by it (and, if any such rate is below zero, then the rate
determined pursuant to this definition shall be deemed to be zero).

“Fee Letter” means that certain Fifth Amended and Restated Fee Letter, dated as
of the Seventh Amendment Closing Date, between Borrower and Agent, in form and
substance satisfactory to Agent, as the same may be amended, restated,
supplemented, or modified from time to time.

“FEIN” means Federal Employer Identification Number.

“ Fifth Amendment” means the Fifth Amendment to Amended and Restated Loan and
Security Agreement, dated as of the Fifth Amendment Closing Date, by and among
Lenders, Agent and Borrower.

 

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“Fifth Amendment Closing Date” means July 31, 2018.

“First Amendment” means the First Amendment to Amended and Restated Loan and
Security Agreement, dated as of December 16, 2015, by and among Lenders, Agent
and Borrower.

“First Amendment Closing Date” means December 16, 2015.

“Fourth Amendment” means the Fourth Amendment to Amended and Restated Loan and
Security Agreement, dated as of April 3, 2017, by and among Lenders, Agent and
Borrower.

“Fourth Amendment Closing Date” means April 3, 2017.

“Funding Date” means the date on or after the Closing Date on which a Borrowing
occurs.

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

“General Intangibles” means all general intangibles (as that term is defined in
the Code), including payment intangibles, contract rights, rights to payment,
rights arising under common law, statutes, or regulations, choses or things in
action, goodwill, patents, trade names, trade secrets, trademarks, servicemarks,
copyrights, blueprints, drawings, purchase orders, customer lists, monies due or
recoverable from pension funds, route lists, rights to payment and other rights
under any royalty or licensing agreements, infringement claims, computer
programs, information contained on computer disks or tapes, software,
literature, reports, catalogs, insurance premium rebates, tax refunds, and tax
refund claims, and any other personal property other than Accounts, commercial
tort claims, Deposit Accounts, goods, Investment Property, and Negotiable
Collateral.

“Governing Documents” means, with respect to any Person, the certificate or
articles of incorporation, formation or organization, bylaws, partnership
agreement, operating or limited liability company agreement, or other
organizational documents of such Person.

“Governmental Authority” means any federal, state, local, or other governmental
or administrative body, instrumentality, board, department, or agency or any
court, tribunal, administrative hearing body, arbitration panel, commission, or
other similar dispute-resolving panel or body.

“Guarantor” means any Person that executes a Guaranty with respect to the
Obligations.

“Guaranty” means any guaranty executed and delivered by a Guarantor in favor of
Agent, for the benefit of the Lender Group and the Bank Product Providers, in
form and substance satisfactory to Agent.

“Hazardous Materials” means (a) substances that are defined or listed in, or
otherwise classified pursuant to, any applicable laws or regulations as
“hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic
substances,” or any other formulation intended to define,

 

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list, or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity,
or “EP toxicity”, (b) oil, petroleum, or petroleum derived substances, natural
gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and
other wastes associated with the exploration, development, or production of
crude oil, natural gas, or geothermal resources, (c) any flammable substances or
explosives or any radioactive materials, and (d) asbestos in any form or
electrical equipment that contains any oil or dielectric fluid containing levels
of polychlorinated biphenyls in excess of 50 parts per million.

“Healthcare Industry Note Receivable” means a Note Receivable due from an
Account Debtor that is a company that procures, provides and/or distributes
medical equipment, medical supplies, and health care services to providers such
as hospitals, home health care providers, and nursing homes or directly to
consumers.

“Hedge Agreement” means a “swap agreement” as that term is defined in
Section 101(53B)(A) of the Bankruptcy Code.

“Hedge Obligations” means any and all obligations or liabilities, whether
absolute or contingent, due or to become due, now existing or hereafter arising,
of Borrower or its Subsidiaries arising under, owing pursuant to, or existing in
respect of Hedge Agreements entered into with one or more of the Hedge
Providers.

“Hedge Provider” means Wells Fargo or any of its Affiliates.

“Hercules Funding III” means Hercules Funding III, LLC, a Delaware limited
liability company, or any successor thereto.

“Holdout Lender” has the meaning set forth in Section 15.2(a).

“HTGC” means Hercules Technology Growth Capital, Inc., a Maryland corporation
formerly known as Hercules Technology Growth Capital, Inc.

“Increase” has the meaning specified therefor in Section 2.15.

“Increase Date” has the meaning specified therefor in Section 2.15.

“Increase Joinder” has the meaning specified therefor in Section 2.15.

“Indebtedness” means (a) all obligations for borrowed money, (b) all obligations
evidenced by bonds, debentures, notes, or other similar instruments and all
reimbursement or other obligations in respect of letters of credit, bankers
acceptances, interest rate swaps, or other financial products, (c) all
obligations as a lessee under Capital Leases, (d) all obligations or liabilities
of others secured by a Lien on any asset of a Person or its Subsidiaries,
irrespective of whether such obligation or liability is assumed, (e) all
obligations to pay the deferred purchase price of assets (other than trade
payables incurred in the ordinary course of business and repayable in accordance
with customary trade practices), (f) all obligations owing under Hedge
Agreements, and (g) any obligation of guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person that constitutes
Indebtedness under any of clauses (a) through (f) above.

 

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“Indemnified Liabilities” has the meaning set forth in Section 11.3.

“Indemnified Person” has the meaning set forth in Section 11.3.

“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.

“Intangible Assets” means, with respect to any Person, that portion of the book
value of all of such Person’s assets that would be treated as intangibles under
GAAP.

“Intercreditor Agreement” means any intercreditor agreement or similar agreement
between or among, as the case may be, an Account Debtor, Agent, Borrower, HTGC,
and any lender or agent acting for a group of lenders to HTGC or a Subsidiary
thereof, providing for the relative rights and priorities on account of any
Split-Funded Note Receivable and any collections or other collateral in respect
thereof, in form and substance reasonably satisfactory to Agent, and
“Intercreditor Agreements” means all of them, collectively.

“Interest Coverage Ratio” means, with respect to any Person for any period, the
ratio of (i) Net Investment Income for such period, plus interest expense
(including unused line fees), plus depreciation and amortization (excluding
amortization of issuance costs and financing fees), plus non-cash extraordinary
losses, and minus non-cash extraordinary gains, in each case determined in
accordance with GAAP, to (ii) total interest expense (including unused line
fees) to the extent paid or required to be paid during such period, in each case
determined for such Person.

“Interest Period” means, with respect to each LIBOR Rate Loan, a period
commencing on the first day of a calendar month and ending on the last day of
such calendar month; provided, however, that if Borrower delivers a LIBOR Notice
in accordance with Section 2.12 on or before the Closing Date, then such LIBOR
Notice shall create and be effective with respect to an Interest Period
commencing on the Closing Date and ending on the last day of the calendar month
in which the Closing Date occurs.

“Inventory” means inventory (as that term is defined in the Code).

“Investment” means, with respect to any Person, any investment by such Person in
any other Person (including Affiliates) in the form of loans, guarantees,
advances, or capital contributions (excluding (a) commission, travel, and
similar advances to officers and employees of such Person made in the ordinary
course of business, and (b) bona fide Accounts arising in the ordinary course of
business consistent with past practice), purchases or other acquisitions of
Indebtedness, Stock or all or substantially all of the assets of such Person (or
of any division or business line of such other Person), and any other items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.

 

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“Investment Property” means investment property (as that term is defined in the
Code).

“IRC” means the Internal Revenue Code of 1986, as in effect from time to time.

“ISP” means, with respect to any Letter of Credit, the International Standby
Practices 1998 (International Chamber of Commerce Publication No. 590) and any
subsequent revision thereof adopted by the International Chamber of Commerce on
the date such Letter of Credit is issued.

“Issuer Document” means, with respect to any Letter of Credit, a letter of
credit application, a letter of credit agreement, or any other document,
agreement or instrument entered into (or to be entered into) by Borrower in
favor of Issuing Bank and relating to such Letter of Credit.

“Issuing Bank” means WFCF or any other Lender that, at the request of Borrower
and with the consent of Agent, agrees, in such Lender’s sole discretion, to
become an Issuing Bank for the purpose of issuing Letters of Credit pursuant to
Section 2.14 of this Agreement and the Issuing Bank, in such capacity, shall be
deemed to be a Lender.

“Lender” and “Lenders” have the respective meanings set forth in the preamble to
this Agreement, shall include the Issuing Bank and the Swing Lender, and shall
include any other Person made a party to this Agreement in accordance with the
provisions of Section 14.1.

“Lender Group” means, individually and collectively, each of the Lenders
(including the Issuing Bank and the Swing Lender) and Agent.

“Lender Group Expenses” means all reasonable (a) costs or expenses (including
taxes, and insurance premiums) required to be paid by Borrower or its
Subsidiaries under any of the Loan Documents that are paid, advanced or incurred
by the Lender Group, (b) fees or charges paid or incurred by Agent in connection
with the Lender Group’s transactions with Borrower or its Subsidiaries,
including, fees or charges for photocopying, notarization, couriers and
messengers, telecommunication, public record searches (including tax lien,
litigation, and UCC searches and including searches with the patent and
trademark office, the copyright office, or the department of motor vehicles),
filing, recording, publication, appraisal (including initial and subsequent
periodic Collateral appraisals or valuations or business valuations to the
extent of the fees and charges therefor (and up to the amount of any limitation
contained in this Agreement)), real estate surveys, real estate title policies
and endorsements, and environmental audits, (c) Agent’s customary fees and
charges (as adjusted from time to time) with respect to the disbursement of
funds (or the receipt of funds) to or for the account of Borrower (whether by
wire transfer or otherwise), together with any out-of-pocket costs and expenses
incurred in connection therewith, (by wire transfer or otherwise), (d) charges
paid or incurred by Agent resulting from the dishonor of checks, (e) costs and
expenses paid or incurred by the Lender Group to correct any default or enforce
any provision of the Loan Documents, or in gaining possession of, maintaining,
handling, preserving, storing, shipping, selling, preparing for sale, or
advertising to sell the Collateral, or any portion thereof, irrespective of
whether a sale is consummated, (f) out of pocket audit fees and expenses
(including travel, meals, and lodging) of Agent related to any inspections or
audits to the extent of the fees and charges (and up to the

 

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amount of any limitation) contained in thethis Agreement or the Fee Letter,
(g) costs and expenses of third party claims or any other suit paid or incurred
by the Lender Group in enforcing or defending the Loan Documents or in
connection with the transactions contemplated by the Loan Documents or the
Lender Group’s relationship with Borrower or any of its Subsidiaries or any
Guarantor, (h) Agent’s costs and expenses (including attorneys’ fees) incurred
in advising, structuring, drafting, reviewing, administering, or amending the
Loan Documents, and (i) Agent’s and each Lender’s costs and expenses (including
attorneys’, accountants’, consultants’, and other advisors’ fees and expenses)
incurred in terminating, enforcing (including attorneys’, accountants’,
consultants’, and other advisors’ fees and expenses incurred in connection with
a “workout,” a “restructuring,” or an Insolvency Proceeding concerning Borrower
or any of its Subsidiaries or any Guarantor or in exercising rights or remedies
under the Loan Documents), or defending the Loan Documents, irrespective of
whether suit is brought, or in taking any Remedial Action concerning the
Collateral. All such amounts representing a mere pass-through by a member of the
Lender Group of out-of-pocket costs and expenses set by a third-party shall be
deemed to be reasonable for purposes of this Agreement and other Loan Documents.

“Lender-Related Person” means, with respect to any Lender, such Lender, together
with such Lender’s Affiliates, and the officers, directors, employees, and
agents of such Lender.

“LIBOR Deadline” has the meaning specified therefor in Section  2.12(a).Letter
of Credit” means a letter of credit (as that term is defined in the Code) that
is issued or is to be issued by Issuing Bank under this Agreement.

“LIBOR Notice” means a written notice in the form of Exhibit L-1.Letter of
Credit Collateralization” means either (a) providing cash collateral (pursuant
to documentation reasonably satisfactory to Agent, including provisions that
specify that the Letter of Credit Fees and all commissions, fees, charges and
expenses provided for in Section 2.14(k) of this Agreement (including any usage
charges) will continue to accrue while the Letters of Credit are outstanding) to
be held by Agent for the benefit of the Lenders in an amount equal to 105% of
the then existing Letter of Credit Usage, (b) delivering to Agent documentation
executed by all beneficiaries under the Letters of Credit, in form and substance
reasonably satisfactory to Agent and Issuing Bank, terminating all of such
beneficiaries’ rights under the Letters of Credit, or (c) providing Agent with a
standby letter of credit, in form and substance reasonably satisfactory to
Agent, from a commercial bank acceptable to Agent (in its sole discretion) in an
amount equal to 105% of the then existing Letter of Credit Usage (it being
understood that the Letter of Credit Fee and all usage charges set forth in this
Agreement will continue to accrue while the Letters of Credit are outstanding
and that any such fees that accrue must be an amount that can be drawn under any
such standby letter of credit).

“LIBOR Option” has the meaning specified therefor in Section 2.12(a).Letter of
Credit Disbursement” means a payment made by Issuing Bank pursuant to a Letter
of Credit.

“Letter of Credit Exposure” means, as of any date of determination with respect
to any Lender, such Lender’s Pro Rata Share of the Letter of Credit Usage on
such date.

 

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“Letter of Credit Fee” has the meaning specified therefor in Section 2.5(f) of
this Agreement.

“Letter of Credit Indemnified Costs” has the meaning specified therefor in
Section 2.14(f) of this Agreement.

“Letter of Credit Related Person” has the meaning specified therefor in
Section 2.14(f) of this Agreement.

“Letter of Credit Usage” means, as of any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit.

“LIBOR Rate” means, for eachany Interest Period for each LIBOR Rate Loan, the
rate per annum determined by Agent by dividing (a) the Base LIBOR Rate for such
Interest Period, by (b) 100% minus the Reserve Percentage. The LIBOR Rate shall
be adjusted on and as of the effective day of any change in the Reserve
Percentage, the rate (expressed as a percentage per annum and rounded upward, if
necessary, to the next nearest 1/100 of 1%) for deposits in Dollars, for a term
of three months, that appears on Bloomberg Screen US0003M (or the successor
thereto) as the London interbank offered rate for deposits in Dollars as of
11:00 a.m., London time, as of two Business Days prior to the commencement of
such Interest Period (and, if any such rate is below zero, the LIBOR Rate shall
be deemed to be zero), which determination shall be made by Agent and shall be
conclusive in the absence of manifest error.

“LIBOR Rate Loan” means each portion of an Advance that bears interest at a rate
determined by reference to the LIBOR Rate pursuant to Borrower’s exercise of the
LIBOR Option in accordance with Section 2.12..

“LIBOR Rate Margin” means three and one-quarter percent (3.253.00%).

“Life Sciences Industry Note Receivable” means a Note Receivable due from an
Account Debtor that is a company that researches and produces pharmaceuticals,
biotechnology, and medical devices for use in humans. The industry sub-sectors
of the life sciences industry, include, but are not limited to medical devices,
bio-pharmaceutical, drug discovery and drug delivery.

“Lien” means any interest in an asset securing an obligation owed to, or a claim
by, any Person other than the owner of the asset, irrespective of whether
(a) such interest is based on the common law, statute, or contract, (b) such
interest is recorded or perfected, and (c) such interest is contingent upon the
occurrence of some future event or events or the existence of some future
circumstance or circumstances. Without limiting the generality of the foregoing,
the term “Lien” includes the lien or security interest arising from a mortgage,
deed of trust, deed to secure debt, encumbrance, pledge, hypothecation,
assignment, deposit arrangement, security agreement, conditional sale or trust
receipt, or from a lease, consignment, or bailment for security purposes and
also includes reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases, and other title exceptions and
encumbrances affecting Real Property.

“Loan Account” has the meaning set forth in Section 2.9.

 

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“Loan Documents” means this Agreement, the Letters of Credit, the Omnibus
Amendment and Reaffirmation, the Cash Management Agreements, the Closing
Certificates, the Control Agreements, the Sale and Servicing Agreement, the
Disbursement Letter, the Fee Letter, the Guaranties (if any), each Intercreditor
Agreement, the Officers’ Certificates, any note or notes executed by Borrower in
connection with this Agreement and payable to a member of the Lender Group, and
any other agreement entered into, previously, now or in the future, by Borrower
or any of its Subsidiaries or any Guarantor and the Lender Group in connection
with this Agreement and not specifically being amended and restated or canceled
in connection with this Agreement.

“Loan Party” means, as the case may be, Borrower or a Guarantor, and “Loan
Parties” means all of them, collectively.

“Material Adverse Change” means (a) a material adverse change in the business,
prospects, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of Borrower and its Subsidiaries, taken as a whole, or
HTGC and its Subsidiaries, taken as a whole, (b) a material impairment of the
ability to HTGC, Borrower’s or their respective Subsidiaries to perform their
obligations under the Loan Documents to which they are parties or of the Lender
Group’s ability to enforce the Obligations or realize upon the Collateral, or
(c) a material impairment of the enforceability or priority of the Agent’s Liens
with respect to the Collateral as a result of an action or failure to act on the
part of HTGC, Borrower’s or their respective Subsidiaries.

“Maturity Date” has the meaning set forth in Section 3.4.

“Maximum Revolver Amount” means $300,000,000, or such other75,000,000, as
increased from time to time by the amount of increases in the aggregate
Commitments at such time as reflected on Schedule C-1 as then in effect pursuant
to this Agreement or any amendment to Commitments made in accordance with
Section 2.15 of this Agreement. Notwithstanding any provision in Section 15.1,
any amendment to this Agreement that only adds one or more additional lenders as
a Lender under this Agreement or adds or increases the amount of a Lender’s
Commitment shall be effective if signed by the additional or existing Lender
whose Commitment is added or increased thereby, Borrower and Agent, and shall
not require the consent of Required Lenders or any other Lender.

“Negotiable Collateral” means letters of credit, letter of credit rights,
instruments, promissory notes, drafts, documents, and chattel paper (including
electronic chattel paper and tangible chattel paper).

“Net Eligible Balance” means, as of any date of determination, the aggregate
outstanding principal balance of all Eligible Notes Receivable, as calculated
after taking into account the concentration limits set forth in clauses
(1) through (8) in the definition of Eligible Notes Receivable.

“Net Investment Income” means, with respect to any Person for any fiscal period,
such Person’s interest and fee income, less operating expenses, in each case as
determined for such period and in each case not otherwise defined herein as
determined in accordance with GAAP.

 

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“Non-Defaulting Lender” means each Lender other than a Defaulting Lender.

“Note Receivable” means a promissory note evidencing a commercial loan made or
purchased by Borrower in accordance with Borrower’s Required Procedures and
secured by a Lien on property owned by the maker of such note; provided, that if
Borrower’s Required Procedures as in effect at the time that such loan is made
or purchased by Borrower do not require the execution of a promissory note and
no promissory note is executed to evidence such loan, then the term “Note
Receivable” means the obligation of the Account Debtor to repay such loan as
evidenced by the agreements and documents evidencing such loan.

“Obligations” means (a) all loans, Advances, debts, principal, interest
(including any interest that, but for the commencement of an Insolvency
Proceeding, would have accrued), reimbursement or indemnification obligations
with respect to Letters of Credit (irrespective of whether contingent),
premiums, liabilities (including all amounts charged to Borrower’s Loan Account
pursuant hereto), obligations (including indemnification obligations), fees
(including the fees provided for in the Fee Letter), charges, costs, Lender
Group Expenses (including any fees or expenses that, but for the commencement of
an Insolvency Proceeding, would have accrued), lease payments, guaranties,
covenants, and duties of any kind and description owing by Borrower to the
Lender Group pursuant to or evidenced by the Loan Documents and irrespective of
whether for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, and
including all interest not paid when due and all Lender Group Expenses that
Borrower is required to pay or reimburse by the Loan Documents, by law, or
otherwise, (b) all Bank Product Obligations, and (c) all “Obligations” under and
as defined in the Original Loan Agreement in existence as of or accrued through
the Closing Date; provided, that anything to the contrary contained in the
foregoing notwithstanding, the “Obligations ” shall exclude any and all Excluded
Swap Obligations. Without limiting the generality of the foregoing, the
Obligations of Borrower under the Loan Documents include the obligation to pay
(i) the principal of the Advances, (ii) interest accrued on the Advances,
(iii) Lender Group Expenses, (iv) fees payable under thethis Agreement or any of
the other Loan Documents, and (v) indemnities and other amounts payable by
Borrower under any Loan Document, (vi) the amount necessary to reimburse Issuing
Bank for amounts paid or payable pursuant to Letters of Credit, and (vii) Letter
of Credit commissions, fees (including fronting fees) and charges. Any reference
in this Agreement or in the Loan Documents to the Obligations shall include all
extensions, modifications, renewals, supplements, restatements or alterations
thereof, both prior and subsequent to any Insolvency Proceeding.

“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.

“Officer’s Certificates” means the forms of Representations and Warranties of
Officers provided by Agent to Borrower and HTGC, together with each of
Borrower’s and HTGC’s completed responses to the inquiries set forth therein,
the form and substance of such responses to be satisfactory to Agent.

“Omnibus Amendment and Reaffirmation” shall mean the Omnibus Amendment and
Reaffirmation of Loan Documents effective as of June 29, 2015, executed by
Agent, Borrower and HTGC with respect to those Original Loan Documents that are
not being amended and restated on the Closing Date but will continue to be Loan
Documents under this Agreement.

 

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“Original Closing Date” shall mean the “Closing Date” under and as defined in
the Original Loan Agreement.

“Original Loan Agreement” shall have the meaning set forth in the Recitals to
this Agreement.

“Original Loan Documents” shall have the meaning set forth in the Recitals to
this Agreement.

“Original Loan Documents Waiver Letter” shall mean the letter agreement among
Agent, Lenders, Borrower and HTGC, dated June 29, 2015, pursuant to which Agent
and Lenders waive certain specified Defaults or Events of Default under the
Original Loan Agreement and Original Loan Documents.

“Originating Lender” has the meaning set forth in Section 14.1(e).

“Overadvance” has the meaning set forth in Section 2.4.

“Participant” has the meaning set forth in Section 14.1(e).

“Permitted Discretion” means a determination made in the exercise of reasonable
(from the perspective of a secured asset-based lender) business judgment.

“Permitted Dispositions” means (a) sales or other dispositions of Equipment that
is substantially worn, damaged, or obsolete in the ordinary course of business,
(b) sales of Inventory to buyers in the ordinary course of business, (c) the use
or transfer of money or Cash Equivalents in a manner that is not prohibited by
the terms of this Agreement or the other Loan Documents, (d) the licensing, on a
non-exclusive basis, of patents, trademarks, copyrights, and other intellectual
property rights in the ordinary course of business, (e) a sale of a Note
Receivable in the ordinary course of business, without recourse to Borrower
(other than limited recourse for not more than 90 days for any misrepresentation
or for failure of Account Debtor to make first payment following sale or for
other conditions approved in writing by Agent) for a cash purchase price of not
less than one hundred percent (100%) of the unpaid balance thereof,

(f) a sale of Note Receivable Collateral in connection with a foreclosure or
similar proceeding following a default under the Note Receivable secured by such
Note Receivable Collateral, and

(g)

sale of Real Estate Owned.

“Permitted Investments” means (a) Investments in cash and Cash Equivalents,
(b) Investments in negotiable instruments for collection, (c) advances made in
connection with purchases of goods or services in the ordinary course of
business, (d) commercial loans evidenced by a Note Receivable made in the
ordinary course of business, (e) Investments received in settlement of amounts
due to Borrower or any of its Subsidiaries effected in the ordinary course of
business or owing to Borrower or any of its Subsidiaries as a result of
Insolvency Proceedings involving an Account Debtor or upon the foreclosure or
enforcement of any Lien in favor of Borrower or its Subsidiaries, and (f) Real
Estate Owned.

 

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“Permitted Liens” means (a) Liens held by Agent, for the benefit of the Lender
Group or any Bank Product Provider, (b) Liens for unpaid taxes or assessments
that either (i) are not yet delinquent, or (ii) do not constitute an Event of
Default hereunder and are the subject of Permitted Protests, (c) Liens set forth
on Schedule P-1, (d) the interests of lessors under operating leases, (e) Liens
that secure Purchase Money Indebtedness, including the interests of lessors
under Capital Leases to the extent that such Liens or interests secure Permitted
Purchase Money Indebtedness and so long as such Lien attaches only to the asset
purchased or acquired and the proceeds thereof, (f) Liens arising by operation
of law in favor of warehousemen, landlords, carriers, mechanics, materialmen,
laborers, or suppliers, incurred in the ordinary course of business and not in
connection with the borrowing of money, and which Liens either (i) are for sums
not yet delinquent, or (ii) are the subject of Permitted Protests, (g) Liens on
amounts deposited in connection with obtaining worker’s compensation or other
unemployment insurance, (h) Liens on amounts deposited in connection with the
making or entering into of bids, tenders, or leases in the ordinary course of
business and not in connection with the borrowing of money, (i) Liens on amounts
deposited as security for surety or appeal bonds in connection with obtaining
such bonds in the ordinary course of business, (j) Liens resulting from any
judgment or award that is not an Event of Default hereunder, (k) with respect to
any Real Property, easements, covenants, restrictions, rights of way, and zoning
restrictions that do not materially interfere with or impair the use or
operation thereof, and (l) rights of setoff imposed by law upon deposit of cash
and cash equivalents in favor of banks or other depository institutions incurred
in the ordinary course of business in deposit accounts maintained with such bank
or depository institution to the extent permitted under this Agreement.

“Permitted Protest” means the right of Borrower or any of its Subsidiaries to
protest any Lien (other than any Lien that secures the Obligations), taxes
(other than payroll taxes or taxes that are the subject of a United States
federal tax lien), or rental payment, provided that (a) a reserve with respect
to such obligation is established on the Books in such amount as is required
under GAAP, (b) any such protest is instituted promptly and prosecuted
diligently by Borrower or any of its Subsidiaries, as applicable, in good faith,
and (c) Agent is satisfied that, while any such protest is pending, there will
be no impairment of the enforceability, validity, or priority of any of the
Agent’s Liens.

“Permitted Purchase Money Indebtedness” means, as of any date of determination,
Purchase Money Indebtedness incurred after the Original Closing Date in an
aggregate principal amount outstanding at any one time not in excess of $25,000.

“Person” means natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, limited liability partnerships,
joint ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and governments and agencies
and political subdivisions thereof.

“Post-Increase Lenders” has the meaning specified therefor in Section 2.15 of
this Agreement.

“Pre-Increase Lenders” has the meaning specified therefor in Section 2.15 of
this Agreement.

 

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“Projections” means, with respect to any Person, such Person’s forecasted
(a) balance sheets, (b) profit and loss statements, and (c) cash flow
statements, in the form provided to such Person’s Board of Directors, together
with appropriate supporting details and a statement of underlying assumptions,
in the form provided to such Person’s Board of Directors.

“Pro Rata Share” means, as of any date of determination, with respect to all
matters as to a particular Lender (including the indemnification obligations
arising under Section 16.7), (a) prior to the Commitments being terminated or
reduced to zero, the percentage obtained by dividing (i) such Lender’s
Commitment, by (ii) the aggregate Commitments of all Lenders, and

(b) from and after the time that the Commitments have been terminated or reduced
to zero, the percentage obtained by dividing (i) the aggregate outstanding
principal amount of such Lender’s Advances, by (ii) the aggregate outstanding
principal amount of all Advances; provided , that if all of the Advances have
been repaid in full, all Letters of Credit have been made the subject of Letter
of Credit Collateralization, and all Commitments have been terminated, Pro Rata
Share under this clause shall be determined as if the Commitments had not been
repaid, collateralized, or terminated and shall be based upon the Commitments as
they existed immediately prior to their repayment, collateralization, or
termination.

“Purchase Money Indebtedness” means Indebtedness (other than the Obligations,
but including Capitalized Lease Obligations), incurred at the time of, or within
20 days after, the acquisition of any fixed assets for the purpose of financing
all or any part of the acquisition cost thereof.

“Real Estate Owned” means Real Property that secured a Note Receivable and was
acquired by Borrower in connection with a foreclosure, deed-in-lieu of
foreclosure or other similar process in which Borrower took legal title to such
Real Property following a default under such Note Receivable.

“Real Property” means any estates or interests in real property now owned or
hereafter acquired by Borrower or any of its Subsidiaries and the improvements
thereto.

“Record” means information that is inscribed on a tangible medium or which is
stored in an electronic or other medium and is retrievable in perceivable form.

“Remedial Action” means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate, or in any way address Hazardous
Materials in the indoor or outdoor environment, (b) prevent or minimize a
release or threatened release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) restore or reclaim natural resources or the
environment,

(d) perform any pre-remedial studies, investigations, or post-remedial operation
and maintenance activities, or (e) conduct any other actions with respect to
Hazardous Materials authorized by Environmental Laws.

“Replacement Lender” has the meaning set forth in Section 15.2(a).

“Report” has the meaning set forth in Section 16.17(a).

 

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“Required Amortization Amount” means, as of any date of determination, an amount
equal to the product of (x) 1/12 multiplied by (y) the Amortization Commencement
Date Principal Balance multiplied by (z) the number of full or partial months
elapsed since the Amortization Commencement Date.

“Required Asset Documents” means the documents set forth on Schedule R-1 hereto.

“Required Lenders” means, at any time, the Lenders whose aggregate Pro Rata
Shares constitute more than fifty percent (50%) of the Commitments, or if the
Commitments have been terminated irrevocably, more than fifty percent (50%) of
the Obligations then outstanding; provided, however, that at any time when there
are two or more Lenders, “Required Lenders” shall mean two or more Lenders whose
aggregate Pro Rata Shares constitute more than fifty percent (50%) of the
Commitments, or if the Commitments have been terminated irrevocably, more than
fifty percent (50%) of the Obligations then outstanding; provided further, that
the Pro Rata Share or existence of any Defaulting Lender shall be disregarded in
any determination of what constitutes Required Lenders.

“Reserve Percentage” means, on any day, for any Lender, the maximum percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor Governmental Authority) for determining the reserve requirements
(including any basic, supplemental, marginal, or emergency reserves) that are in
effect on such date with respect to eurocurrency funding (currently referred to
as “eurocurrency liabilities”) of that Lender, but so long as such Lender is not
required or directed under applicable regulations to maintain such reserves, the
Reserve Percentage shall be zero.

“Restricted Payments” means (a) any dividend or other distribution, in cash or
other property, direct or indirect, on account of any class of Stock in
Borrower, now or hereafter outstanding, (b) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any class of Stock in Borrower, now or hereafter outstanding,
(c) any payment made to retire, or obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Stock in
Borrower, now or hereafter outstanding, (d) any payment or prepayment of
principal, or redemption, purchase, retirement, defeasance, sinking fund or
similar payment with respect to, any Subordinated Debt or any Indebtedness owing
to a holder of Stock in Borrower or an Affiliate of a holder of Stock in
Borrower, or (e) any payment (other than compensation to an officer or director
of Borrower, as such, in the ordinary course of business) to a holder of Stock
in Borrower or to an Affiliate of Borrower or an Affiliate of any holder of
Stock in Borrower not expressly authorized herein.

“Revolver Usage” means, as of any date of determination, the sum of (a) the
amount of outstanding Advances, plus (b) the amount of the Letter of Credit
Usage.

“Revolving Credit Availability Period” means the period commencing on the
Original Closing Date and ending on the earlier of (a) January 28, 2019,11,
2022, and (b) termination pursuant to Section 9.1.

“Sale and Servicing Agreement” means the Amended and Restated Sale and Servicing
Agreement, dated as of the Closing Date, among Borrower, HTGC, (as Originator
and initial

 

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Servicer), HTGC, as Originator, and Agent, in form and substance satisfactory to
Agent, as the same has been or may be amended, restated, supplemented, or
modified from time to time.

“SEC” means the United States Securities and Exchange Commission and any
successor thereto.

“Second Amendment” means the Second Amendment to Amended and Restated Loan and
Security Agreement, dated as of March 8, 2016, by and among Lenders, Agent and
Borrower.

“Second Amendment Closing Date” means March 8, 2016.

“Securities Account” means a “securities account,” as that term is defined in
the Code.

“Servicer” means HTGC, or any other Person that assumes the functions of
servicing the Notes Receivables with the prior written consent of Agent or is
otherwise appointed pursuant to the terms of the Sale and Servicing Agreement.

“Servicing Fees” means the “Servicing Fee” payable to Servicer in accordance
with the Sale and Servicing Agreement, which shall in no case exceed for each
Collection Period (as defined in the Sale and Servicing Agreement) one percent
(1.0%) per annum on the average of the Aggregate Outstanding Loan Balances (as
defined in the Sale and Servicing Agreement) as of the first and last day of
such Collection Period.

“Settlement” has the meaning set forth in Section 2.2(f)(i).

“Settlement Date” has the meaning set forth in Section 2.2(f)(i).

“Seventh Amendment Closing Date” means January 11, 2019.

“Solvent” means, with respect to any Person on a particular date, that, at fair
valuations, the sum of such Person’s assets is greater than all of such Person’s
debts.

“Standard Letter of Credit Practice” means, for Issuing Bank, any domestic or
foreign law or letter of credit practices applicable in the city in which
Issuing Bank issued the applicable Letter of Credit or for its branch or
correspondent, such laws and practices applicable in the city in which it has
advised, confirmed or negotiated such Letter of Credit, as the case may be, in
each case, (a) which letter of credit practices are of banks that regularly
issue letters of credit in the particular city, and (b) which laws or letter of
credit practices are required or permitted under ISP or UCP, as chosen in the
applicable Letter of Credit.

“Stock” means all shares, options, warrants, membership interests, units of
membership interests, other interests, participations, or other equivalents
(regardless of how designated) of or in a Person, whether voting or nonvoting,
including common stock, preferred stock, or any other “equity security” (as such
term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated
by the SEC under the Exchange Act).

 

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“Split-Funded Note Receivable” means any (a) Note Receivable originated by HTGC
or Borrower with respect to which Borrower is the administrative agent or lead
lender (but in either case, the lienholder pursuant to such Note Receivable) and
with respect to which any of (i)  Hercules Funding III, (ii) an Affiliate of
Borrower approved by Agent in its Permitted Discretion, or (iii) a
securitization vehicle of HTGC, has purchased 50% of the aggregate commitment
thereunder, in each case, to the extent such Note Receivable is subject to an
Intercreditor Agreement.

“Split-Funded Note Receivable Documents” collectively means, at any time, any
loan agreements, Intercreditor Agreements, or other agreements and documents
between or among, as applicable, an Account Debtor, Borrower, HTGC, and/or any
other Person, as a co-lender, Agent, and/or any lender or agent acting for a
group of lenders to HTGC or a Subsidiary thereof, providing for or otherwise
governing Split-Funded Notes Receivable and each co-lender’s (including
Borrower’s) rights and remedies with respect thereto.

“Subordinated Debt” means any unsecured Indebtedness specifically subordinated
to the Obligations on terms and conditions reasonably satisfactory to Agent and
subject to a Subordination Agreement.

“Subordination Agreement” means a subordination agreement executed and delivered
by Borrower and each of the holders of Subordinated Debt and Agent, the form and
substance of which is satisfactory to Agent.

“Subsidiary” of a Person means a corporation, partnership, limited liability
company, or other entity in which that Person directly or indirectly owns or
controls the shares of Stock having ordinary voting power to elect a majority of
the board of directors (or appoint other comparable managers) of such
corporation, partnership, limited liability company, or other entity.

“Supporting Obligation” means a letter-of-credit right or secondary obligation
that supports the payment or performance of an Account, chattel paper, document,
General Intangible, Note Receivable, instrument, or Investment Property.

“Swap Obligation” means, with respect to any Loan Party, any Hedge Obligation or
other obligation to pay or perform under any agreement, contract or transaction
that constitutes a “swap ” within the meaning of section 1a(47) of the Commodity
Exchange Act.

“Swing Lender” means WFCF or any other Lender that, at the request of Borrower
and with the consent of Agent agrees, in such Lender’s sole discretion, to
become the Swing Lender hereunder.

“Swing Loan” has the meaning set forth in Section 2.2(d)(i).

“Tangible Net Worth” means, with respect to any Person as of any date of
determination, determined on a consolidated basis and in accordance with GAAP,
the result of (a) such Person’s total members’ or shareholder’s equity, minus
(b) all Intangible Assets of such Person, minus (c) all of such Person’s prepaid
expenses, minus (d) all amounts due to such Person from Affiliates of such
Person.

 

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“Taxes” has the meaning set forth in Section 16.11(a).

“Technology Industry Note Receivable” means a Note Receivable due from an
Account Debtor that is a company that provides products or services that require
advanced innovative technologies. The industry sub-sectors, include, but are not
limited to, computer software and hardware, networking systems, semiconductors,
semiconductor capital equipment, information technology infrastructure or
services, internet consumer and business services, telecommunications,
telecommunications equipment, media, sustainable and renewable energy
technologies and energy efficiency and monitoring technologies.

“ Third Amendment” means the Third Amendment to Amended and Restated Loan and
Security Agreement, dated as of April 7, 2016, by and among Lenders, Agent and
Borrower.

“Third Amendment Closing Date” means April 7, 2016.

“UCC Filing Authorization Letter” means a letter duly executed by Borrower
authorizing Agent to file appropriate financing statements in such office or
offices as may be necessary or, in the opinion of Agent, desirable to perfect
the security interests purported to be created by the Loan Documents.

“unfunded commitments of Borrower” means, as of any date, all unfunded
commitments of Borrower, excluding those unfunded commitments that require the
Account Debtor’s achievement of a milestone or other funding hurdle that has not
been met as of such date.

“Union Bank Facility” means the credit facility evidenced by that certain Loan
and Security Agreement, dated as of May 5, 2016, by and among Hercules Funding
III, the lenders party thereto from time to time, and MUFG Union Bank, N.A., as
Arranger and Administrative Agent, as amended, modified or supplemented from
time to time, as well as any Indebtedness that refinances such credit facility.

“United States” means the United States of America.

“Voidable Transfer” has the meaning set forth in Section 17.6.

“Wells Fargo” means Wells Fargo Bank, National Association, a national banking
association.

“WFCF” means Wells Fargo Capital Finance, LLC, a Delaware limited liability
company formerly known as Wells Fargo Foothill, LLC.

“Write -Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write -down and conversion powers of such EEA Resolution
Authority from time to time under the Bail-In Legislation for the applicable EEA
Member Country, which write-down and conversion powers are described in the EU
Bail-In Legislation Schedule.

1.2 Accounting Terms. All accounting terms not specifically defined herein shall
be construed in accordance with GAAP. When used herein, the term “financial
statements” shall include the notes and schedules thereto. Whenever the term
“Borrower” is used in respect of a

 

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financial covenant or a related definition, it shall be understood to mean
Borrower and its Subsidiaries on a consolidated basis unless the context clearly
requires otherwise.

1.3 Code. Any terms used in this Agreement that are defined in the Code shall be
construed and defined as set forth in the Code unless otherwise defined herein;
provided however, that to the extent that the Code is used to define any term
herein and such term is defined differently in different Articles of the Code,
the definition of such term contained in Article 9 shall govern.

1.4 Construction. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.” The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Agreement or in the other Loan
Documents to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). The words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties. Any reference herein or in
any other Loan Document to the satisfaction, repayment, or payment in full of
the Obligations shall mean the repayment in full in cash or immediately
available funds (or, in the case of obligations with respect to Bank Products
(other than Hedge Obligations), providing Bank Product Collateralization) of all
of the Obligations (including the payment of any Lender Group Expenses that have
accrued irrespective of whether demand has been made therefor and the payment of
any termination amount then applicable (or which would or could become
applicable as a result of the repayment of the other Obligations) under Hedge
Agreements provided by Hedge Providers) other than (i) unasserted contingent
indemnification Obligations, (ii) any Bank Product Obligations (other than Hedge
Obligations) that, at such time, are allowed by the applicable Bank Product
Provider to remain outstanding without being required to be repaid or cash
collateralized, and (iii) any Hedge Obligations that, at such time, are allowed
by the applicable Hedge Provider to remain outstanding without being required to
be repaid. Any reference herein to any Person shall be construed to include such
Person’s successors and assigns. Any requirement of a writing contained herein
or in the other Loan Documents shall be satisfied by the transmission of a
Record and any Record transmitted shall constitute a representation and warranty
as to the accuracy and completeness of the information contained therein.

1.5 Schedules and Exhibits. All of the schedules and exhibits attached to this
Agreement shall be deemed incorporated herein by reference.

 

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2. LOAN AND TERMS OF PAYMENT.

2.1 Revolver Advances.

(a) Subject to the terms and conditions of this Agreement, and during the
Revolving Credit Availability Period, each Lender agrees (severally, not jointly
or jointly and severally) to make advances (“Advances”) to Borrower in an amount
at any one time outstanding not to exceed such Lender’s Pro Rata Share of an
amount equal to the lesser of (i) the Maximum Revolver Amount minus the Letter
of Credit Usage at such time, or (ii) the Borrowing Base minus the Letter of
Credit Usage at such time. All “Advances” outstanding under the Original Loan
Agreement as of the Closing Date immediately before the effectiveness of this
Agreement will be deemed to be and continued as Advances outstanding hereunder.

(b) Anything to the contrary in this Section 2.1 notwithstanding, Agent shall
have the right to establish reserves in such amounts, and with respect to such
matters, as Agent in its Permitted Discretion shall deem necessary or
appropriate, against the Borrowing Base, including reserves with respect to
(i) sums that Borrower is required to pay (such as taxes, assessments, insurance
premiums, or, in the case of leased assets, rents or other amounts payable under
such leases) and has failed to pay under any Section of this Agreement or any
other Loan Document, (ii) amounts owing by Borrower or any of its Subsidiaries
to any Person to the extent secured by a Lien on, or trust over, any of the
Collateral (other than any existing Permitted Lien set forth on Schedule P-1
which is specifically identified thereon as entitled to have priority over the
Agent’s Liens), which Lien or trust, in the Permitted Discretion of Agent likely
would have a priority superior to the Agent’s Liens (such as Liens or trusts in
favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or
suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes
where given priority under applicable law) in and to such item of the
Collateral, (iii) the valuation of any Note Receivable, the Collateral securing
any Note Receivable, or other Collateral, and (iv) the aggregate amount of
unfunded commitments of Borrower to the makers of Notes Receivable. So long as
no Default or Event of Default has occurred and is continuing, Agent shall first
notify and attempt to discuss with Borrower any such reserve that Agent proposes
to establish unless Agent, in its Permitted Discretion, believes that exigent
circumstances justify the immediate establishment of such reserve.

(c) The Lenders shall have no obligation to make additional Advances hereunder
to the extent such additional Advances would cause the Revolver Usage to exceed
the Maximum Revolver Amount.

(d) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to
the terms and conditions of this Agreement, reborrowedre-borrowed at any time
during the term of this Agreement. The outstanding principal amount of the
Advances, together with interest accrued and unpaid thereon, shall constitute
Obligations and shall be due and payable on the Maturity Date or, if earlier, on
the date on which they are declared due and payable pursuant to the terms of
this Agreement.

2.2 Borrowing Procedures and Settlements.

 

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(a) Procedure for Borrowing. Each Borrowing shall be made by an irrevocable
written request by an Authorized Person delivered to Agent (which notice must be
received by Agent no later than 1:00 p.m. (New York time) on the Business Day
prior to the date that is the requested Funding Date specifying (i) the amount
of such Borrowing, and (ii) the requested Funding Date, which shall be a
Business Day. At Agent’s election, in lieu of delivering the above-described
written request, any Authorized Person may give Agent telephonic notice of such
request by the required time. In such circumstances, Borrower agrees that any
such telephonic notice will be confirmed in writing within 24 hours of the
giving of such telephonic notice, but the failure to provide such written
confirmation shall not affect the validity of the request.

(b) Agent’s Election. Promptly after receipt of a request for a Borrowing
pursuant to Section 2.2(a), Agent shall elect, in its discretion, (i) to have
the terms of Section 2.2(c) apply to such requested Borrowing, or (ii) to
request Swing Lender to make a Swing Loan pursuant to the terms of
Section 2.2(d) in the amount of the requested Borrowing; provided, however, that
if Swing Lender declines in its sole discretion to make a Swing Loan pursuant to
Section 2.2(d), Agent shall elect to have the terms of Section 2.2(c) apply to
such requested Borrowing.

(c) Making of Advances.

(i) In the event that Agent shall elect to have the terms of this Section 2.2(c)
apply to a requested Borrowing as described in Section 2.2(b), then promptly
after receipt of a request for a Borrowing pursuant to Section 2.2(a), Agent
shall notify the Lenders, not later than 4:00 p.m. (New York time) on the
Business Day immediately preceding the Funding Date applicable thereto, by
telecopy, telephone, or other similar form of transmission, of the requested
Borrowing. Each Lender shall make the amount of such Lender’s Pro Rata Share of
the requested Borrowing available to Agent in immediately available funds, to
Agent’s Account, not later than 1:00 p.m. (New York time) on the Funding Date
applicable thereto. After Agent’s receipt of the proceeds of such Advances, upon
satisfaction of the applicable conditions precedent set forth in Section 3
hereof, Agent shall make the proceeds thereof available to Borrower on the
applicable Funding Date by transferring immediately available funds equal to
such proceeds received by Agent to Borrower’s Designated Account; provided,
however, that, subject to the provisions of Section 2.2(i), Agent shall not
request any Lender to make, and no Lender shall have the obligation to make, any
Advance if Agent shall have actual knowledge that (1) one or more of the
applicable conditions precedent set forth in Section 3 will not be satisfied on
the requested Funding Date for the applicable Borrowing unless such condition
has been waived, or (2) the requested Borrowing would exceed the Availability on
such Funding Date.

(ii) Unless Agent receives notice from a Lender on or prior to the Closing Date
or, with respect to any Borrowing after the Closing Date, prior to 12:00 noon
(New York time) on the date of such Borrowing, that such Lender will not make
available as and when required hereunder to Agent for the account of Borrower
the amount of that Lender’s Pro Rata Share of the Borrowing, Agent may assume
that each Lender has made or will make such amount available to Agent in
immediately available

 

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funds on the Funding Date and Agent may (but shall not be so required), in
reliance upon such assumption, make available to Borrower on such date a
corresponding amount. If and to the extent any Lender shall not have made its
full amount available to Agent in immediately available funds and Agent in such
circumstances has made available to Borrower such amount, that Lender shall on
the Business Day following such Funding Date make such amount available to
Agent, together with interest at the Defaulting Lender Rate for each day during
such period. A notice submitted by Agent to any Lender with respect to amounts
owing under this subsection shall be conclusive, absent manifest error. If such
amount is so made available, such payment to Agent shall constitute such
Lender’s Advance on the date of Borrowing for all purposes of this Agreement. If
such amount is not made available to Agent on the Business Day following the
Funding Date, Agent will notify Borrower of such failure to fund and, upon
demand by Agent, Borrower shall pay such amount to Agent for Agent’s account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate applicable at the time
to the Advances composing such Borrowing. The failure of any Lender to make any
Advance on any Funding Date shall not relieve any other Lender of any obligation
hereunder to make an Advance on such Funding Date, but no Lender shall be
responsible for the failure of any other Lender to make the Advance to be made
by such other Lender on any Funding Date.

(iii) Agent shall not be obligated to transfer to a Defaulting Lender any
payments made by Borrower to Agent for the Defaulting Lender’s benefit, and, in
the absence of such transfer to the Defaulting Lender, Agent shall transfer any
such payments (A) first, to Swing Lender to the extent of any Swing Loans that
were made by Swing Lender and that were required to be, but were not, paid by
the Defaulting Lender, (B) second, to Issuing Bank, to the extent of the portion
of a Letter of Credit Disbursement that was required to be, but was not, paid by
the Defaulting Lender, (C) third, to each Non-Defaulting Lender ratably in
accordance with their Commitments (but, in each case, only to the extent that
such Defaulting Lender’s portion of an Advance (or other funding obligation) was
funded by such other Non-Defaulting Lender), (CD) to a suspense account
maintained by Agent, the proceeds of which shall be retained by Agent and may be
made available to be re-advanced to or for the benefit of Borrower (upon the
request of Borrower and subject to the conditions set forth in Section 3.3) as
if such Defaulting Lender had made its portion of Advances (or other funding
obligations) hereunder, and (DE) from and after the date on which all other
Obligations have been paid in full, to such Defaulting Lender in accordance with
tier (M) of Section 2.3(b)(i). Subject to the foregoing, Agent may hold and, in
its Permitted Discretion, re-lend to Borrower for the account of such Defaulting
Lender the amount of all such payments received and retained by Agent for the
account of such Defaulting Lender. Solely for the purposes of voting or
consenting to matters with respect to the Loan Documents (including the
calculation of Pro Rata Share in connection therewith) and for the purpose of
calculating the fee payable under Section 2.10(a), such Defaulting Lender shall
be deemed not to be a “Lender” and such Lender’s Commitment shall be deemed to
be zero (and Borrower shall not be required to pay any fee payable under
Section 2.10(a) that otherwise would have been required to have been paid to
such Defaulting Lender); provided, that (x) any Commitment of any Defaulting
Lender may not be increased or extended without the consent of such Defaulting
Lender, and (y) any waiver, amendment

 

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or modification to this Agreement requiring the consent of all Lenders or each
affected Lender that by its terms affects any Defaulting Lender
disproportionately adversely relative to other affected Lenders shall require
the consent of such Defaulting Lender. The provisions of this
Section 2.2(c)(iii) shall remain effective with respect to such Defaulting
Lender until the earlier of (y) the date on which all of the Non-Defaulting
Lenders, Agent, Issuing Bank, and Borrower shall have waived, in writing, the
application of this Section 2.2(c)(iii) to such Defaulting Lender, or (z) the
date on which such Defaulting Lender makes payment of all amounts that it was
obligated to fund hereunder, pays to Agent all amounts owing by Defaulting
Lender in respect of the amounts that it was obligated to fund hereunder, and,
if requested by Agent, provides adequate assurance of its ability to perform its
future obligations hereunder (on which earlier date, so long as no Event of
Default has occurred and is continuing, any remaining cash collateral held by
Agent pursuant to Section 2.2(c)(iv) shall be released to Borrower); provided,
that no adjustments will be made retroactively with respect to fees accrued or
payments made by or on behalf of Borrower while that Lender was a Defaulting
Lender; provided further, that except to the extent otherwise expressly agreed
by the affected parties, no change hereunder from Defaulting Lender to
Non-Defaulting Lender will constitute a waiver or release of any claim of any
party hereunder arising from that Lender’s having been a Defaulting Lender. The
operation of this Section 2.2(c)(iii) shall not be construed to increase or
otherwise affect the Commitment of any Lender, to relieve or excuse the
performance by such Defaulting Lender or any other Lender of its duties and
obligations hereunder, or to relieve or excuse the performance by Borrower of
its duties and obligations hereunder to Agent, Issuing Bank, or to the Lenders
other than such Defaulting Lender. Any failure by a Defaulting Lender to fund
amounts that it was obligated to fund hereunder shall constitute a material
breach by such Defaulting Lender of this Agreement and shall entitle Borrower,
at its option, upon written notice to Agent, to arrange for a substitute Lender
to assume the Commitment of such Defaulting Lender, such substitute Lender to be
reasonably acceptable to Agent. In connection with the arrangement of such a
substitute Lender, the Defaulting Lender shall have no right to refuse to be
replaced hereunder, and agrees to execute and deliver a completed form of
Assignment and Acceptance in favor of the substitute Lender (and agrees that it
shall be deemed to have executed and delivered such document if it fails to do
so) subject only to being paid its share of the outstanding Obligations (other
than Bank Product Obligations, but including (1) all interest, fees (other than
any fee payable under Section 2.10(a) relating to any period in which Lender was
a Defaulting Lender, and (2) an assumption of its Pro Rata Share of its
participation in the Letters of Credit), and other amounts that may be due and
payable in respect thereof; provided, that any such assumption of the Commitment
of such Defaulting Lender shall not be deemed to constitute a waiver of any of
the Lender Groups’ or Borrower’s rights or remedies against any such Defaulting
Lender arising out of or in relation to such failure to fund. In the event of a
direct conflict between the priority provisions of this Section 2.2(c)(iii) and
any other provision contained in this Agreement or any other Loan Document, it
is the intention of the parties hereto that such provisions be read together and
construed, to the fullest extent possible, to be in concert with each other. In
the event of any actual, irreconcilable conflict that cannot be resolved as
aforesaid, the terms and provisions of this Section 2.2(c)(iii) shall control
and govern.

 

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(iv) If any Swing Loan or Letter of Credit is outstanding at the time that a
Lender becomes a Defaulting Lender then:

(A) such Defaulting Lender’s Pro Rata Share of the Swing Loans and Letter of
Credit Exposure shall be reallocated among the Non-Defaulting Lenders in
accordance with their respective Pro Rata Shares but only to the extent (x) the
sum of all Non-Defaulting Lenders’ Pro Rata Shares of the Advances (including
the Swing Loans) plus such Defaulting Lender’s Pro Rata Share of such Swing
Loans and Letter of Credit Exposure, does not exceed the total of all
Non-Defaulting Lenders’ Commitments and (y) the conditions set forth in
Section 3.3 are satisfied at such time;

(B) if the reallocation described in clause (A) above cannot, or can only
partially, be effected, Borrower shall within one (1) Business Day following
notice by the Agent (x) first, prepay such Defaulting Lender’s Pro Rata Share of
the Swing Loan (after giving effect to any partial reallocation pursuant to
clause (A) above); and (y) second, cash collateralize such Defaulting Lender’s
Letter of Credit Exposure (after giving effect to any partial reallocation
pursuant to clause (A) above), pursuant to a cash collateral agreement to be
entered into in form and substance reasonably satisfactory to the Agent, for so
long as such Letter of Credit Exposure is outstanding; provided, that Borrower
shall not be obligated to cash collateralize any Defaulting Lender’s Letter of
Credit Exposure if such Defaulting Lender is also the Issuing Bank;

(C) if Borrower cash collateralizes any portion of such Defaulting Lender’s
Letter of Credit Exposure pursuant to this Section 2.2(c)(iv), Borrower shall
not be required to pay any Letter of Credit Fees to Agent for the account of
such Defaulting Lender pursuant to Section 2.5(f) with respect to such cash
collateralized portion of such Defaulting Lender’s Letter of Credit Exposure
during the period such Letter of Credit Exposure is cash collateralized;

(D) to the extent the Letter of Credit Exposure of the Non-Defaulting Lenders is
reallocated pursuant to this Section 2.2(c)(iv), then the Letter of Credit Fees
payable to the Non-Defaulting Lenders pursuant to Section 2.5(f) shall be
adjusted in accordance with such Non-Defaulting Lenders’ Letter of Credit
Exposure;

(E) to the extent any Defaulting Lender’s Letter of Credit Exposure is neither
cash collateralized nor reallocated pursuant to this Section 2.2(c)(iv), then,
without prejudice to any rights or remedies of the Issuing Bank or any Lender
hereunder, all Letter of Credit Fees that would have otherwise been payable to
such Defaulting Lender under Section 2.5(f) with respect to such portion of such
Letter of Credit Exposure shall instead be payable to the Issuing Bank until
such portion of such Defaulting Lender’s Letter of Credit Exposure is cash
collateralized or reallocated;

 

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(F) so long as any Lender is a Defaulting Lender, the Swing Lender shall not be
required to make any Swing Loan and the Issuing Bank shall not be required to
issue, amend, or increase any Letter of Credit, in each case, to the extent
(x) the Defaulting Lender’’s Pro Rata Share of such Swing Loans or Letter of
Credit cannot be reallocated pursuant to this Section 2.2(c)(iv) or (y) the
Swing Lender or Issuing Bank, as applicable, has not otherwise entered into
arrangements reasonably satisfactory to the Swing Lender or Issuing Bank, as
applicable, and Borrower to eliminate the Swing Lender’’s or Issuing Bank’s risk
with respect to the Defaulting Lender’’s participation in Swing Loans or Letters
of Credit; and

(G) Agent may release any cash collateral provided by Borrower pursuant to this
Section 2.2(c)(iv) to the Issuing Bank and the Issuing Bank may apply any such
cash collateral to the payment of such Defaulting Lender’s Pro Rata Share of any
Letter of Credit Disbursement that is not reimbursed by Borrower pursuant to
Section 2.14(d).

(d) Making of Swing Loans.

(i) In the event Agent shall elect, with the consent of Swing Lender, as a
Lender, to have the terms of this Section 2.2(d) apply to a requested Borrowing
as described in Section 2.2(b), Swing Lender as a Lender shall make such Advance
in the amount of such Borrowing (any such Advance made solely by Swing Lender as
a Lender pursuant to this Section 2.2(d) being referred to as a “Swing Loan” and
such Advances being referred to collectively as “Swing Loans”) available to
Borrower on the Funding Date applicable thereto by transferring immediately
available funds to Borrower’s Designated Account or, at the request of Borrower,
to the account of a Settlement Agent. Each Swing Loan shall be deemed to be an
Advance hereunder and shall be subject to all the terms and conditions
applicable to other Advances, except that all payments on any Swing Loan shall
be payable to Swing Lender as a Lender solely for its own account (and for the
account of the holder of any participation interest with respect to such Swing
Loan). Subject to the provisions of Section 2.2(i), Agent shall not request
Swing Lender as a Lender to make, and Swing Lender as a Lender shall not make,
any Swing Loan if Agent has actual knowledge that (i) one or more of the
applicable conditions precedent set forth in Section 3 will not be satisfied on
the requested Funding Date for the applicable Borrowing unless such condition
has been waived, (ii) the requested Borrowing would exceed the Availability on
such Funding Date, or (iii) the requested Borrowing would cause the aggregate
outstanding amount of Swing Loans to exceed the lesser of (A) $15,000,000 or
(B) five percent (5%) of the Maximum Revolver Amount at such time. Swing Lender
as a Lender shall not otherwise be required to determine whether the applicable
conditions precedent set forth in Section 3 have been satisfied on the Funding
Date applicable thereto prior to making, in its sole discretion, any Swing Loan.

(ii) The Swing Loans shall be secured by the Agent’s Liens, constitute Advances
and Obligations hereunder, and bear interest at the rate applicable from time to
time to Advances that are Base Rate Loans.

 

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(e) Agent Advances.

(i) Agent hereby is authorized by Borrower and the Lenders, from time to time in
Agent’s sole discretion, (1) after the occurrence and during the continuance of
a Default or an Event of Default, or (2) at any time that any of the other
applicable conditions precedent set forth in Section 3 have not been satisfied,
to make Advances to Borrower on behalf of the Lenders that Agent, in its
Permitted Discretion deems necessary or desirable (A) to preserve or protect the
Collateral, or any portion thereof, (B) to enhance the likelihood of repayment
of the Obligations (other than the Bank Product Obligations), or (C) to pay any
other amount chargeable to Borrower pursuant to the terms of this Agreement,
including Lender Group Expenses and the costs, fees, and expenses described in
Section 10 (any of the Advances described in this Section 2.2(e) shall be
referred to as “Agent Advances”); provided, however, that Agent shall not
knowingly make additional Agent Advances that would cause the aggregate amount
of outstanding Agent Advances at such time to exceed ten percent (10%) of the
Borrowing Base at such time without the consent of all Lenders. Each Agent
Advance shall be deemed to be an Advance hereunder, except that all payments
thereon shall be payable to Agent solely for its own account.

(ii) The Agent Advances shall be repayable on demand and secured by the Agent’s
Liens granted to Agent under the Loan Documents, shall constitute Advances and
Obligations hereunder, and shall bear interest at the rate applicable from time
to time to Advances that are Base Rate Loans.

(f) Settlement. It is agreed that each Lender’s funded portion of the Advances
is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share
of the outstanding Advances. Such agreement notwithstanding, Agent, Swing
Lender, and the other Lenders agree (which agreement shall not be for the
benefit of or enforceable by Borrower) that in order to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
them as to the Advances, the Swing Loans, and the Agent Advances shall take
place on a periodic basis in accordance with the following provisions:

(i) Agent shall request settlement (“Settlement”) with the Lenders on a weekly
basis, or on a more frequent basis if so determined by Agent, (1) on behalf of
Swing Lender, with respect to each outstanding Swing Loan, (2) for itself, with
respect to each Agent Advance, and (3) with respect to Collections received, as
to each by notifying the Lenders by telecopy, telephone, or other similar form
of transmission, of such requested Settlement, no later than 5:00 p.m. (New York
time) on the Business Day immediately prior to the date of such requested
Settlement (the date of such requested Settlement being the “Settlement Date”).
Such notice of a Settlement Date shall include a summary statement of the amount
of outstanding Advances, Swing Loans, and Agent Advances for the period since
the prior Settlement Date. Subject to the terms and conditions contained herein
(including Section 2.2(c)(iii)): (y) if a Lender’s balance of the Advances,
Swing Loans, and Agent Advances exceeds such Lender’s Pro Rata Share of the
Advances, Swing Loans, and Agent Advances as of a Settlement Date, then Agent
shall, by no later than 2:00 p.m. (New York time) on the Settlement Date,
transfer in immediately available funds to the account of such Lender as such
Lender may designate,

 

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an amount such that each such Lender shall, upon receipt of such amount, have as
of the Settlement Date, its Pro Rata Share of the Advances, Swing Loans, and
Agent Advances, and (z) if a Lender’s balance of the Advances, Swing Loans, and
Agent Advances is less than such Lender’s Pro Rata Share of the Advances, Swing
Loans, and Agent Advances as of a Settlement Date, such Lender shall no later
than 2:00 p.m. (New York time) on the Settlement Date transfer in immediately
available funds to the Agent’s Account, an amount such that each such Lender
shall, upon transfer of such amount, have as of the Settlement Date, its Pro
Rata Share of the Advances, Swing Loans, and Agent Advances. Such amounts made
available to Agent under clause (z) of the immediately preceding sentence shall
be applied against the amounts of the applicable Swing Loan or Agent Advance
and, together with the portion of such Swing Loan or Agent Advance representing
Swing Lender’s Pro Rata Share thereof, shall constitute Advances of such
Lenders. If any such amount is not made available to Agent by any Lender on the
Settlement Date applicable thereto to the extent required by the terms hereof,
Agent shall be entitled to recover for its account such amount on demand from
such Lender together with interest thereon at the Defaulting Lender Rate.

(ii) In determining whether a Lender’s balance of the Advances, Swing Loans, and
Agent Advances is less than, equal to, or greater than such Lender’s Pro Rata
Share of the Advances, Swing Loans, and Agent Advances as of a Settlement Date,
Agent shall, as part of the relevant Settlement, apply to such balance the
portion of payments actually received in good funds by Agent with respect to
principal, interest, fees payable by Borrower and allocable to the Lenders
hereunder, and proceeds of Collateral. To the extent that a net amount is owed
to any such Lender after such application, such net amount shall be distributed
by Agent to that Lender as part of such next Settlement.

(iii) Between Settlement Dates, Agent, to the extent no Agent Advances or Swing
Loans are outstanding, may pay over to Swing Lender any payments received by
Agent, that in accordance with the terms of this Agreement would be applied to
the reduction of the Advances, for application to Swing Lender’s Pro Rata Share
of the Advances. If, as of any Settlement Date, Collections received since the
then immediately preceding Settlement Date have been applied to Swing Lender’s
Pro Rata Share of the Advances other than to Swing Loans, as provided for in the
previous sentence, Swing Lender shall pay to Agent for the accounts of the
Lenders, and Agent shall pay to the Lenders, to be applied to the outstanding
Advances of such Lenders, an amount such that each Lender shall, upon receipt of
such amount, have, as of such Settlement Date, its Pro Rata Share of the
Advances. During the period between Settlement Dates, Swing Lender with respect
to Swing Loans, Agent with respect to Agent Advances, and each Lender (subject
to the effect of letter agreements between Agent and individual Lenders) with
respect to the Advances other than Swing Loans and Agent Advances, shall be
entitled to interest at the applicable rate or rates payable under this
Agreement on the daily amount of funds employed by Swing Lender, Agent, or the
Lenders, as applicable.

(g) Notation. Agent, as a non-fiduciary agent for Borrower, shall record on its
books the principal amount of the Advances and stated interest owing to each
Lender, including the Swing Loans owing to Swing Lender, and Agent Advances
owing to Agent, and

 

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the interests therein of each Lender, from time to time and such records shall,
absent manifest error, conclusively be presumed to be correct and accurate. In
addition, each Lender is authorized, at such Lender’s option, to note the date
and amount of each payment or prepayment of principal of such Lender’s Advances
in its books and records, including computer records.

(h) Lenders’ Failure to Perform. All Advances (other than Swing Loans and Agent
Advances) shall be made by the Lenders contemporaneously and in accordance with
their Pro Rata Shares. It is understood that (i) no Lender shall be responsible
for any failure by any other Lender to perform its obligation to make any
Advance (or other extension of credit) hereunder, nor shall any Commitment of
any Lender be increased or decreased as a result of any failure by any other
Lender to perform its obligations hereunder, and (ii) no failure by any Lender
to perform its obligations hereunder shall excuse any other Lender from its
obligations hereunder.

(i) Optional Overadvances. Any contrary provision of this Agreement
notwithstanding, the Lenders hereby authorize Agent or Swing Lender, as
applicable, and Agent or Swing Lender, as applicable, may, but is not obligated
to, knowingly and intentionally, continue to make Advances (including Swing
Loans) to Borrower notwithstanding that an Overadvance exists or thereby would
be created, so long as (i) after giving effect to such Advances (including a
Swing Loan), the outstanding Revolver Usage does not exceed the Borrowing Base
by more than ten percent (10%) of the Borrowing Base, (ii) after giving effect
to such Advances (including a Swing Loan), the outstanding Revolver Usage
(except for and excluding amounts charged to the Loan Account for interest,
fees, or Lender Group Expenses) does not exceed the Maximum Revolver Amount, and
(iii) at the time of the making of any such Advance (including any Swing Loan),
Agent does not believe, in good faith, that the Overadvance created by such
Advance will be outstanding for more than 90 days. The foregoing provisions are
for the exclusive benefit of Agent, Swing Lender, and the Lenders and are not
intended to benefit Borrower in any way. The Advances and Swing Loans, as
applicable, that are made pursuant to this Section 2.2(i) shall be subject to
the same terms and conditions as any other Advance or Swing Loan, as applicable,
except that the rate of interest applicable thereto shall be the rate applicable
to Advances under Section 2.5(b) hereof without regard to the presence or
absence of a Default or Event of Default.

(i) In the event Agent obtains actual knowledge that the Revolver Usage exceeds
the amounts permitted by the preceding paragraph, regardless of the amount of,
or reason for, such excess, Agent shall notify Lenders as soon as practicable
(and prior to making any (or any additional) intentional Overadvances (except
for and excluding amounts charged to the Loan Account for interest, fees, or
Lender Group Expenses) unless Agent determines that prior notice would result in
imminent harm to the Collateral or its value), and the Lenders thereupon shall,
together with Agent, jointly determine the terms of arrangements that shall be
implemented with Borrower intended to reduce, within a reasonable time, the
outstanding principal amount of the Advances to Borrower to an amount permitted
by the preceding paragraph. In the event Agent or any Lender disagrees over the
terms of reduction or repayment of any Overadvance, the terms of reduction or
repayment thereof shall be implemented according to the determination of the
Required Lenders.

 

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(ii) Each Lender shall be obligated to settle with Agent as provided in
Section 2.2(f) for the amount of such Lender’s Pro Rata Share of any
unintentional Overadvances by Agent reported to such Lender, any intentional
Overadvances made as permitted under this Section 2.2(i), and any Overadvances
resulting from the charging to the Loan Account of interest, fees, or Lender
Group Expenses.

2.3 Payments.

(a) Payments by Borrower.

(i) Except as otherwise expressly provided herein, all payments by Borrower
shall be made to Agent’s Account for the account of the Lender Group and shall
be made in immediately available funds, no later than 2:00 p.m. (New York time)
on the date specified herein. Any payment received by Agent later than 2:00 p.m.
(New York time) shall be deemed to have been received on the following Business
Day and any applicable interest or fee shall continue to accrue until such
following Business Day.

(ii) Unless Agent receives notice from Borrower prior to the date on which any
payment is due to the Lenders that Borrower will not make such payment in full
as and when required, Agent may assume that Borrower has made (or will make)
such payment in full to Agent on such date in immediately available funds and
Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent Borrower does not make such payment in
full to Agent on the date when due, each Lender severally shall repay to Agent
on demand such amount distributed to such Lender, together with interest thereon
at the Defaulting Lender Rate for each day from the date such amount is
distributed to such Lender until the date repaid.

(b) Apportionment and Application of Payments.

(i) Except as otherwise provided with respect to Defaulting Lenders and except
as otherwise provided in the Loan Documents (including letter agreements between
Agent and individual Lenders), aggregate principal and interest payments shall
be apportioned ratably among the Lenders (according to the unpaid principal
balance of the Obligations to which such payments relate held by each Lender)
and payments of fees and expenses (other than fees or expenses that are for
Agent’s separate account or for the separate account of Issuing Bank, after
giving effect to any letter agreements between Agent and individual Lenders)
shall be apportioned ratably among the Lenders having a Pro Rata Share of the
type of Commitment or Obligation to which a particular fee relates. All payments
shall be remitted to Agent and all such payments (other than payments received
while no Event of Default has occurred and is continuing and which relate to the
payment of principal or interest of specific Obligations or which relate to the
payment of specific fees payable to Agent or Lenders, in either case as
specified by Borrower), and all proceeds of Accounts or other Collateral
received by Agent, shall be applied as follows:

(A) first, to pay on a ratable basis, until paid in full any Collateral
Custodian Fees then due to a Collateral Custodian (if one has been appointed)
under its Collateral Custodian Agreement,

 

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(B) second, to pay the Servicing Fee of Servicer and, with respect to a
successor Servicer, expenses and other amounts due such successor Servicer,
under the Sale and Servicing Agreement (provided, that with respect to the
initial Servicer, such Fee shall only be paid so long as no Event of Default has
occurred and is continuing), until paid in full,

(C) third, to pay any Lender Group Expenses then due to Agent under the Loan
Documents, until paid in full,

(D) fourth, to pay any Lender Group Expenses then due to the Lenders under the
Loan Documents, on a ratable basis, until paid in full,

(E) fifth, to pay any fees then due to Agent (for its separate account, after
giving effect to any letter agreements between Agent and individual Lenders)
under the Loan Documents until paid in full,

(F) sixth, to pay any fees then due to any or all of the Lenders (after giving
effect to any letter agreements between Agent and individual Lenders) under the
Loan Documents, on a ratable basis, until paid in full,

(G) seventh, to pay interest due in respect of all Agent Advances, until paid in
full,

(H) eighth, ratably to pay interest due in respect of the Advances (other than
Agent Advances) and the Swing Loans until paid in full,

(I) ninth, to pay the principal of all Agent Advances until paid in full,

(J) tenth, to pay the principal of all Swing Loans until paid in full,

(K) eleventh, ratably

(i) to pay the principal of all Advances until paid in full,

(ii) to Agent, to be held by Agent, for the benefit of Issuing Bank (and for the
ratable benefit of each of the Lenders that have an obligation to pay to Agent,
for the account of Issuing Bank, a share of each Letter of Credit Disbursement),
as cash collateral in an amount up to 105% of the Letter of Credit Usage (to the
extent permitted by applicable law, such cash collateral shall be applied to the
reimbursement of any Letter of Credit Disbursement as and when such disbursement
occurs and, if a Letter of Credit expires undrawn, the cash collateral held by
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respect of such Letter of Credit shall, to the extent permitted by applicable
law, be reapplied pursuant to this Section  2.3(b)(i), beginning with tier
(A) hereof),

(iii) ratably, up to the amount (after taking into account any amounts
previously paid pursuant to this clause ii) of the most recently established
Bank Product Reserve Amount (but in no event in an amount in excess of (a) five
percent (5%) of the Maximum Revolver Amount at such time, or (b) $15,000,000) to
(y) the Bank Product Providers based upon amounts then certified by the
applicable Bank Product Provider to Agent (in form and substance satisfactory to
Agent) to be due and payable to such Bank Product Providers on account of Bank
Product Obligations, and (z) with any balance to be paid to Agent, to be held by
Agent, for the ratable benefit of the Bank Product Providers, as cash collateral
(which cash collateral may be released by Agent to the applicable Bank Product
Provider and applied by such Bank Product Provider to the payment or
reimbursement of any amounts due and payable with respect to Bank Product
Obligations owed to the applicable Bank Product Provider as and when such
amounts first become due and payable and, if and at such time as all such Bank
Product Obligations are paid or otherwise satisfied in full, the cash collateral
held by Agent in respect of such Bank Product Obligations shall be reapplied
pursuant to this Section 2.3(b)(i), beginning with tier (A) hereof,

(L) twelfth, to pay any other Obligations other than Obligations owed to
Defaulting Lenders,

(M) thirteenth, ratably to pay any Obligations owed to Defaulting Lenders, and

(N) fourteenth, to Borrower (to be wired to the Designated Account) or such
other Person entitled thereto under applicable law.

(ii) Agent promptly shall distribute to each Lender, pursuant to the applicable
wire instructions received from each Lender in writing, such funds as it may be
entitled to receive, subject to a Settlement delay as provided in
Section 2.2(f).

(iii) In each instance, so long as no Event of Default has occurred and is
continuing, this Section 2.3(b) shall not apply to any payment made by Borrower
to Agent and specified by Borrower to be for the payment of specific Obligations
then due and payable (or prepayable) under any provision of this Agreement.

(iv) For purposes of the foregoing, “paid in full” means payment of all amounts
owing under the Loan Documents according to the terms thereof, including loan
fees, service fees, professional fees, interest (and specifically including
interest accrued after the commencement of any Insolvency Proceeding), default
interest, interest on

 

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interest, and expense reimbursements, whether or not any of the foregoing would
be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.

(v) In the event of a direct conflict between the priority provisions of this
Section 2.3 and other provisions contained in any other Loan Document, it is the
intention of the parties hereto that such priority provisions in such documents
shall be read together and construed, to the fullest extent possible, to be in
concert with each other. In the event of any actual, irreconcilable conflict
that cannot be resolved as aforesaid, the terms and provisions of this
Section 2.3 shall control and govern.

2.4 Overadvances and Required Amortization Amount.

(a) Overadvances. If, at any time or for any reason, the amount of Obligations
(other than Bank Product Obligations) owed by Borrower to the Lender Group
pursuant to Section 2.1 or Section 2.14 is greater than any of the limitations
set forth in Section 2.1 or Section 2.14, as applicable (an “Overadvance”),
except as otherwise permitted pursuant to Section 2.2(i), Borrower immediately
shall pay to Agent, in cash, the amount of such excess, which amount shall be
used by Agent to reduce the Obligations in accordance with the priorities set
forth in Section 2.3(b). All Overadvances shall be treated as Base Rate Loans.
In addition, Borrower hereby promises to pay the Obligations (including
principal, interest, fees, costs, and expenses) in Dollars in full as and when
due and payable under the terms of this Agreement and the other Loan Documents.

(b) Required Amortization Amount. If, as of the first day of any month following
the Amortization Commencement Date, the Amortization Commencement Date Principal
Balance has not been reduced by at least the Required Amortization Amount as of
such date, then Borrower immediately shall pay to Agent, in cash, the amount of
such shortfall, which amount shall be used by Agent to reduce the outstanding
principal amount of the Amortization Commencement Date Principal Balance.

2.5 Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations.

(a) Interest Rates. Except as provided in Section 2.5(b) belowand
Section 2.12(a), all Obligations (except for Bank Product Obligationsundrawn
Letters of Credit) that have been charged to the Loan Account pursuant to the
terms hereof shall bear interest on the Daily Balance thereof as follows:(i) if
the relevant Obligation is a LIBOR Rate Loan, at a per annum rate equal to (Athe
lesser of (i) the LIBOR Rate plus (B) the LIBOR Rate Margin, and(ii)
otherwise,the LIBOR Rate Margin, or (ii) the maximum rate of interest allowed by
applicable laws; provided, that following notice to Borrower in accordance with
Section 2.12(a) hereof, all Obligations that have been charged to the Loan
Account pursuant to the terms hereof shall bear interest at a per annum rate
equal to the lesser of (A) the Base Rate plus (B) the Base Rate Margin or
(B) the maximum rate of interest allowable by applicable laws.

(b) Default Rate. Upon the occurrence and during the continuation of an Event of
Default (and at the election of Agent or the Required Lenders), (i ) all
Obligations (except for Bank Product Obligations and undrawn Letters of Credit)
that have been charged to the Loan Account pursuant to the terms hereof shall
bear interest on the Daily Balance thereof at

 

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a per annum rate equal to four percent (4.0%) above the per annum rate otherwise
applicable hereunder to Base Rate Loans, and (ii) the Letter of Credit Fee shall
be increased to four (4) percentage points above the per annum rate otherwise
applicable hereunder.

(c) Payment. Except to the extent, if any, provided to the contrary in
Section 2.10 or2.10, Section 2.12, or Section 2.14(k), all interest, all Letter
of Credit Fees and all other fees payable hereunder shall be due and payable, in
arrears, (i) on the first day of each month at any time that Obligations or
Commitments are outstanding, and (ii) on the Maturity Date. Borrower hereby
authorizes Agent, from time to time without prior notice to Borrower, to charge
(i) all interest and fees (when due and payable), (ii) all Lender Group Expenses
(as and when incurred), the(iii) all Letter of Credit Fees accrued or chargeable
hereunder during the prior month, (iv) the other fees and costs provided for in
Section 2.10 (as and when accrued or incurred), (v) as and when incurred or
accrued, the fronting fees and all commissions, other fees, charges and expenses
provided for in Section 2.14(k), (vi) and all other payments as and when due and
payable under any Loan Document or any Bank Product Agreement (including any
amounts due and payable to the Bank Product Providers in respect of Bank
Products up to the Bank Product Reserve Amount) to Borrower’s Loan Account,
which amounts thereafter constitute Advances hereunder and shall accrue interest
at the rate then applicable to Advances hereunder. Any interest not paid when
due shall be compounded by being charged to Borrower’s Loan Account and shall
thereafter constitute Advances hereunder and shall accrue interest at the rate
then applicable to Advances hereunder.

(d) Computation. All interest and fees chargeable under the Loan Documents shall
be computed on the basis of a 360-day year for the actual number of days
elapsed. In the event the Base Rate is changed from time to time hereafter, the
rates of interest hereunder based upon the Base Rate automatically and
immediately shall be increased or decreased by an amount equal to such change in
the Base Rate.

(e) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the
interest rate or rates payable under this Agreement, plus any other amounts paid
in connection herewith, exceed the highest rate permissible under any law that a
court of competent jurisdiction shall, in a final determination, deem
applicable. Borrower and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, however, that, anything contained herein
to the contrary notwithstanding, if said rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, ipso facto, as
of the date of this Agreement, Borrower is and shall be liable only for the
payment of such maximum as allowed by law, and payment received from Borrower in
excess of such legal maximum, whenever received, shall be applied to reduce the
principal balance of the Obligations to the extent of such excess.

(f) Letter of Credit Fee. Borrower shall pay Agent (for the ratable benefit of
the Lenders), a Letter of Credit fee (the “Letter of Credit Fee”) (which fee
shall be in addition to the fronting fees and commissions, other fees, charges
and expenses set forth in Section 2.14(k)), which shall accrue at a per annum
rate equal to the LIBOR Rate Margin times the undrawn amount of all outstanding
Letters of Credit.

 

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2.6 Cash Management.

(a) Borrower shall and shall cause each of its Subsidiaries to, or shall cause
Servicer to, (i) establish and maintain cash management services of a type and
on terms satisfactory to Agent at one or more of the banks set forth on Schedule
2.6(a) (each, a “Cash Management Bank”), and shall request in writing and
otherwise take such reasonable steps to ensure that all of Borrower’s and its
Subsidiaries’ Account Debtors forward payment of the amounts owed by them
directly to such Cash Management Bank, and (ii) deposit or cause to be deposited
promptly, and in any event no later than the first Business Day after the date
of receipt thereof, all of their Collections (including those sent directly by
their Account Debtors to Borrower or one of its Subsidiaries) into a bank
account in AgentBorrower’s name (a “Cash Management Account”) at one of the Cash
Management Banks, (iii) cause all payments for each sale or other disposition of
one or more Notes Receivable or payment in full of one or more Notes Receivable
in connection with the refinancing of such Note Receivable or the sale and
release of the collateral securing such Note Receivable to be made by the escrow
company, title insurance company or refinancing lender or purchaser directly to
a Cash Management Account by wire transfer or check drawn on the account of such
escrow company or title insurance company or by cashier’s check, and (iv) until
such time as a Cash Management Account is established, forward or cause to be
forwarded no later than the first Business Day after the date of receipt
thereof, all of their Collections to Agent’s Account. Borrower shall, or shall
cause Servicer to, request in writing and otherwise take such reasonable steps
to ensure that all of Borrower’s and its Subsidiaries’ Account Debtors forward
payment of the amounts owed by them to Borrower directly to a Cash Management
Account.

(b) Each Cash Management Bank shall establish and maintain Cash Management
Agreements with Agent and Borrower, in form and substance acceptable to Agent.
Each such Cash Management Agreement shall provide, among other things, that
(i) the Cash Management Bank will comply with any instructions originated by
Agent directing the disposition of the funds in such Cash Management Account
without further consent by Borrower or its Subsidiaries, as applicable, (ii) the
Cash Management Bank has no rights of setoff or recoupment or any other claim
against the applicable Cash Management Account other than for payment of its
service fees and other charges directly related to the administration of such
Cash Management Account and for returned checks or other items of payment, and
(iii) (iii) it will forward, by an automatic daily sweep, all amounts in the
applicable Cash Management Account to the Agent’s Account (except that if Agent
agrees to the establishment of a separate Cash Management Account for
Collections from Notes Receivable in which Borrower has sold a
participatingco-lending interest, the Cash Management Agreement shall require
that all disbursements from such Cash Management Account shall require the
authorization of Agent).

(c) So long as no Default or Event of Default has occurred and is continuing,
Borrower may amend Schedule 2.6(a) to add or replace a Cash Management Bank or
Cash Management Account; provided, however, that (i) such prospective Cash
Management Bank shall be reasonably satisfactory to Agent and Agent shall have
consented in writing in advance to the establishment of such Cash Management
Account with the prospective Cash Management Bank, and (ii) prior to the time of
the opening of such Cash Management Account, Borrower (or its Subsidiary, as
applicable) and such prospective Cash Management Bank shall have executed and
delivered to Agent a Cash Management Agreement. Borrower (or its Subsidiaries,
as applicable) shall close any of its Cash Management Accounts (and establish
replacement cash management accounts in accordance with the foregoing sentence)
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within 30 days of notice from Agent that the creditworthiness of any Cash
Management Bank is no longer acceptable in Agent’s reasonable judgment, or as
promptly as practicable and in any event within 60 days of notice from Agent
that the operating performance, funds transfer, or availability procedures or
performance of the Cash Management Bank with respect to Cash Management Accounts
or Agent’s liability under any Cash Management Agreement with such Cash
Management Bank is no longer acceptable in Agent’s reasonable judgment.

(d) The Cash Management Accounts shall be cash collateral accounts subject to
Control Agreements, and Borrower hereby grants a Lien in all Cash Management
Accounts to Agent to secure payment of the Obligations.

2.7 Crediting Payments. The receipt of any payment item by Agent (whether from
transfers to Agent by the Cash Management Banks pursuant to the Cash Management
Agreements or otherwise) shall not be considered a payment on account unless
such payment item is a wire transfer of immediately available federal funds made
to the Agent’s Account or unless and until such payment item is honored when
presented for payment. Should any payment item not be honored when presented for
payment, then Borrower shall be deemed not to have made such payment and
interest shall be calculated accordingly. Anything to the contrary contained
herein notwithstanding, any payment item shall be deemed received by Agent only
if it is received into the Agent’s Account on a Business Day on or before 2:00
p.m. (New York time). If any payment item is received into the Agent’s Account
on a non-Business Day or after 2:00 p.m. (New York time) on a Business Day, it
shall be deemed to have been received by Agent as of the opening of business on
the immediately following Business Day.

2.8 Designated Account . Agent is authorized to make the Advances, and Issuing
Bank is authorized to issue Letters of Credit, under this Agreement based upon
telephonic or other instructions received from anyone purporting to be an
Authorized Person or, without instructions, if pursuant to Section 2.5(c).
Borrower agrees to establish and maintain the Designated Account with the
Designated Account Bank for the purpose of receiving the proceeds of the
Advances requested by Borrower and made by Agent or the Lenders hereunder.
Unless otherwise agreed by Agent and Borrower, any Advance, Agent Advance, or
Swing Loan requested by Borrower and made by Agent or the Lenders hereunder
shall be made to the Designated Account.

2.9 Maintenance of Loan Account; Statements of Obligations. Agent shall maintain
an account on its books in the name of Borrower (the “Loan Account”) on which
Borrower will be charged with all Advances (including Agent Advances and Swing
Loans) made by Agent, Swing Lender, or the Lenders to Borrower or for Borrower’s
account, the Letters of Credit issued or arranged by Issuing Bank for Borrower’s
account, and with all other payment Obligations hereunder or under the other
Loan Documents (except for Bank Product Obligations), including, accrued
interest, fees and expenses, and Lender Group Expenses. In accordance with
Section 2.7, the Loan Account will be credited with all payments received by
Agent from Borrower or for Borrower’s account, including all amounts received in
the Agent’s Account from any Cash Management Bank. Agent shall render statements
regarding the Loan Account to Borrower, including principal, interest, fees, and
including an itemization of all charges and expenses constituting Lender Group
Expenses owing, and such statements, absent manifest error, shall be
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account stated between Borrower and the Lender Group unless, within 30 days
after receipt thereof by Borrower, Borrower shall deliver to Agent written
objection thereto describing the error or errors contained in any such
statements.

2.10 Fees. Borrower shall pay to Agent the following fees and charges, which
fees and charges shall be non-refundable when paid (irrespective of whether this
Agreement is terminated thereafter) and shall be apportioned among the Lenders
in accordance with the terms of letter agreements between Agent and individual
Lenders:

(a) Unused Line Fee. On the first day of each month, Borrower shall pay an
unused line fee equal to (i) the amount by which (A) the Maximum Revolver Amount
then in effect exceeds (B) the average Daily Balance of Advances that were
outstanding during the immediately preceding month, or portion thereof during
which the Revolving Credit Availability Period was in effect, multiplied by
(ii) (A) if the sum of (1) the average Daily Balance of Advances that wereand
(2) the average Daily Balance of the Letter of Credit Usage that was outstanding
during such month, or portion thereof during which the Revolving Credit
Availability Period was in effect, was equal to or less than fifty percent (50%)
of the average Maximum Revolver Amount in effect during such month, then
one-halfthree-eighths of one percent (0.500.375%) per annum, (B) if the sum of
(1) the average Daily Balance of Advances that wereand (2) the average Daily
Balance of the Letter of Credit Usage that was outstanding during such month, or
portion thereof during which the Revolving Credit Availability Period was in
effect, was greater than fifty percent (50%), but equal to or less than
eightyseventy-five percent (8075%), of the average Maximum Revolver Amount in
effect during such month, then three-eighthsone-fourth of one percent
(0.3750.25%) per annum, and (C) if the sum of (1) the average Daily Balance of
Advances that wereand (2) the average Daily Balance of the Letter of Credit
Usage that was outstanding during such month, or portion thereof during which
the Revolving Credit Availability Period was in effect, was greater than
eightyseventy-five percent (8075%) of the average Maximum Revolver Amount in
effect during such month, then zero (0).

(b) Fee Letter Fees. As and when due and payable under the terms of the Fee
Letter, Borrower shall pay to Agent the fees set forth in the Fee Letter.

(c) Audit, Appraisal, and Valuation Charges. For the separate account of Agent,
Borrower shall pay to Agent audit, appraisal, and valuation fees and charges as
follows:

(i) a fee of $1,200 per day, per auditor, plus out-of-pocket expenses for each
financial or collateral audit of Borrower performed by personnel employed by
Agent, (ii) a fee of $1,000 per day, per applicable individual, plus out of
pocket expenses for the establishment of electronic collateral reporting
systems, if requested by Agent, (iii) a fee of $1,500 per day per appraiser,
plus out-of-pocket expenses, for each appraisal of the Collateral, or any
portion thereof, performed by personnel employed by Agent, and (iv) the actual
charges paid or incurred by Agent if it elects to employ the services of one or
more third Persons to perform financial or collateral audits of Borrower or its
Subsidiaries, to establish electronic collateral reporting systems, to appraise
the Collateral or any portion thereof, or to assess Borrower’s or its
Subsidiaries’ procedures or business valuation; provided that so long as no
Event of Default has occurred and is continuing, Borrower will not be charged
for more than three (3) financial or collateral audits in any twelve-month
period.

 

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2.11 Capital Requirements. If, after the date hereof, Issuing Bank or any Lender
determines that (i) any Change in Law regarding capital requirements for banks
or bank holding companies, or any change in the interpretation or application
thereof by any Governmental Authority charged with the administration thereof,
or (ii) compliance by Issuing Bank or such Lender or its parent bank holding
company with any guideline, request, or directive of any such entity regarding
capital adequacy (whether or not having the force of law), has the effect of
reducing the return on Issuing Bank’s or such Lender’s or such holding company’s
capital as a consequence of Issuing Bank or such Lender’s Commitments hereunder
to a level below that which Issuing Bank or such Lender or such holding company
could have achieved but for such Change in Law or compliance (taking into
consideration Issuing Bank or such Lender’s or such holding company’s then
existing policies with respect to capital adequacy and assuming the full
utilization of such entity’s capital) by any amount deemed by Issuing Bank or
such Lender to be material, then Issuing Bank or such Lender may notify Borrower
and Agent thereof. Following receipt of such notice, Borrower agrees to pay
Issuing Bank or such Lender on demand the amount of such reduction of return of
capital as and when such reduction is determined, payable within 90 days after
presentation by Issuing Bank or such Lender of a statement in the amount and
setting forth in reasonable detail Issuing Bank or such Lender’s calculation
thereof and the assumptions upon which such calculation was based (which
statement shall be deemed true and correct absent manifest error). In
determining such amount, Issuing Bank or such Lender may use any reasonable
averaging and attribution methods. Failure or delay on the part of Issuing Bank
or any Lender to demand compensation pursuant to this Section shall not
constitute a waiver of Issuing Bank or such Lender’s right to demand such
compensation; provided that Borrower shall not be required to compensate Issuing
Bank or a Lender pursuant to this Section for any reductions in return incurred
more than 180 days prior to the date that such Lender notifies Borrower of such
Change in Law giving rise to such reductions and of Issuing Bank or such
Lender’s intention to claim compensation therefor; provided further that if such
claim arises by reason of the Change in Law that is retroactive, then the
180-day period referred to above shall be extended to include the period of
retroactive effect thereof.

2.12 LIBOR OptionRate Provisions.

(a) LIBOR Election. So long as no Event of Default has occurred and is
continuing, Borrower may, by notifying Agent prior to 1:00 p.m. (New York time)
at least three (3) Business Days prior to the commencement of an Interest Period
(the “LIBOR Deadline”), elect to exercise Borrower’s option (the “LIBOR Option”)
to have interest on all of the Advances (other than Advances with respect to
Swing Loans, Agent Advances and Overadvances) determined for such Interest
Period by reference to the LIBOR Rate. Notice of Borrower’s election of the
LIBOR Option for any Interest Period shall be made by delivery by Borrower to
Agent of a LIBOR Notice received by Agent before the LIBOR Deadline, or by
telephonic notice to Agent by Borrower received by Agent before the LIBOR
Deadline (to be confirmed by delivery to Agent of a LIBOR Notice received by
Agent prior to 5:00 p.m. (New York time) on the same day). Each LIBOR Notice
shall be irrevocable and binding on Borrower. Promptly upon its receipt of any
LIBOR Notice, Agent shall provide a copy thereof to each of the Lenders.
Notwithstanding the foregoing, if Borrower has not exercised the LIBOR Option in
accordance with this Section 2.12 prior to the LIBOR Deadline for an Interest
Period, then interest on all of the Advances eligible to have interest
determined by reference to the LIBOR Rate (including the Advances that were
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immediately preceding Interest Period) shall be determined for such Interest
Period by reference to the LIBOR Rate unless Borrower has notified Lender prior
to 1:00 p.m. (New York time) at least three (3) Business Days prior to the
commencement of an Interest Period that it elects interest on such Advances to
accrue by reference to the Base Rate. At any time that an Event of Default has
occurred and is continuing, Borrower no longer shall have the option to request
that Advances bear interest determined by reference to the LIBOR Rate, and
Lender shall have the right to convert the interest rate on all outstanding
LIBOR Rate Loans to the rate then applicable to Base Rate Loans hereunder for
the remainder of such Interest Period.

(b) Base Rate Loans in Absence of LIBOR Election Availability. If Borrower is
not entitled to exercise the LIBOR Option for such Interest Period, then
interest on all of the Advances (including Advances that were treated as LIBOR
Rate Loans during the immediately preceding Interest Period) shall be determined
for such Interest Period by reference to the Base Rate.

(a) (c) Special Provisions Applicable to LIBOR Rate.

(i) The LIBOR Rate may be adjusted by Agent with respect to any Lender on a
prospective basis to take into account any additional or increased costs to such
Lender of maintaining or obtaining any eurodollar deposits or increased costs,
in each case, due to changes in applicable law occurring subsequent to the
commencement of the then applicable Interest Period, including any Changes in
Law (including any changes in tax laws (except changes of general applicability
in corporate income tax laws)) and changes in the reserve requirements imposed
by the Board of Governors of the Federal Reserve System (or any successor),
excluding the Reserve Percentage, which additional or increased costs would
increase the cost of funding or maintaining loans bearing interest by reference
toat the LIBOR Rate. In any such event, the affected Lender shall give Borrower
and Agent notice of such a determination and adjustment and Agent promptly shall
transmit the notice to each other Lender and, upon its receipt of the notice
from the affected Lender, Borrower may, by notice to such affected Lender
(A) require such Lender to furnish to Borrower a statement setting forth in
reasonable detail the basis for adjusting such LIBOR Rate and the method for
determining the amount of such adjustment, or (B) repay (or convert to Base Rate
Loans) the LIBOR Rate Loans of such Lender with respect to which such adjustment
is made (together with any amounts due under Section 2.11(a)(ii)).

(ii) In the event that any change in market conditions or any Change in Law
shall at any time after the date hereof, in the reasonable opinion of any
Lender, make it unlawful or impractical for such Lender to fund or maintain
LIBOR Rate Loans or to continue such funding or maintaining, or to determine or
charge interest rates by reference tobased on the LIBOR Rate, (x) such Lender
shall give notice of such changed circumstances to Agent and Borrower, and Agent
promptly shall transmit thesuch notice to each other Lender and (Ay) in the case
of any LIBOR Rate Loans of such Lender that are outstanding, the date specified
in such Lender’s notice shall be deemed to be the last day of the Interest
Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans of such
Lender thereafter shall accrue interest at the rate then applicable to Base Rate
Loans, and (B) thereafter, all Advances of such Lender shall be deemed to be
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Rate Loansa per annum rate equal to the Base Rate plus the Base Rate Margin
until such Lender determines that it would no longer be unlawful or impractical
to do so.

(iii) If at any time Agent determines (which determination shall be conclusive
absent manifest error) that (i)  the circumstances set forth in clause (a)(ii)
immediately above have arisen and such circumstances are unlikely to be
temporary or (ii) the circumstances set forth in clause (a)(ii) immediately have
not arisen but the supervisor for the administrator of the LIBOR Rate or a
Governmental Authority having jurisdiction over Agent has made a public
statement identifying a specific date after which the LIBOR Rate shall no longer
be used for determining interest rates for loans, then Agent and the Borrower
shall endeavor to establish an alternate rate of interest to the LIBOR Rate that
gives due consideration to the then prevailing market convention for determining
a rate of interest for syndicated loans in the United States at such time, and
shall enter into an amendment to this Agreement to reflect such alternate rate
of interest and such other related changes to this Agreement as may be
applicable. Notwithstanding anything to the contrary in Section 15.1, such
amendment shall become effective without any further action or consent of any
other party to this Agreement so long as Agent shall not have received, within
five Business Days of the date notice of such alternate rate of interest is
provided to the Lenders, a written notice from the Required Lenders stating that
such Required Lenders object to such amendment.

(b) (d) No Requirement of Matched Funding. Anything to the contrary contained
herein notwithstanding, neither Agent, nor any Lender, nor any of their
Participants, is required actually to acquire eurodollar deposits to fund or
otherwise match fund any Advance as to which interest accrues by reference to
the LIBOR Rate.

2.13 Restatement of Obligations. Borrower, Lenders and Agent hereby acknowledge
and agree that upon satisfaction or waiver in writing of all conditions
precedent set forth in Section 3.1:

(a) this Agreement shall amend, restate and supersede in its entirety the
Original Loan Agreement;

(b) those other Loan Documents that amend and restate any of the Original Loan
Documents shall amend, restate and supersede such other Original Loan Documents
in accordance with the terms of such Loan Documents;

(c) those Original Loan Documents that are not being amended and restated or
canceled by the Loan Documents shall remain in full force and effect;

(d) the Loan Documents do not constitute an accord and satisfaction or a
novation of the obligations of Borrower under the Original Loan Agreement and
the other Original Loan Documents;

(e) the outstanding “Advances” under the Original Loan Agreement shall become
Advances under this Agreement;

 

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(f) the outstanding “Obligations” under the Original Loan Agreement in existence
or accrued through the Closing Date shall become Obligations under this
Agreement;

(g) the Agent’s Liens granted under the Original Loan Documents will continue to
secure the Obligations under this Agreement and the other Loan Documents;

(h) (i) amounts in respect of interest, fees, and other amounts payable to or
for the account of Lenders or Agent shall be calculated in accordance with the
provisions of the Original Loan Agreement with respect to any period (or portion
thereof) ending prior to the Closing Date, and (ii) amounts in respect of
interest, fees, and other amounts payable to or for the account of Lenders or
Agent shall be calculated in accordance with this Agreement with respect to any
period (or portion thereof) commencing on or after the Closing Date; and

(i) except as specifically waived under the Original Loan Documents Waiver
Letter, no “Default” or “Event of Default” that has occurred and is continuing
under the Original Loan Documents immediately prior to the occurrence of the
Closing Date shall be or be deemed to be waived or cured by the execution of
this Agreement or the occurrence of the Closing Date.

2.14 Letters of Credit.

(a) Subject to the terms and conditions of this Agreement, upon the request of
Borrower made in accordance herewith, Issuing Bank agrees to issue a requested
Letter of Credit for the account of Borrower. By submitting a request to Issuing
Bank for the issuance of a Letter of Credit, Borrower shall be deemed to have
requested that Issuing Bank issue the requested Letter of Credit. Each request
for the issuance of a Letter of Credit, or the amendment, renewal, or extension
of any outstanding Letter of Credit, shall be irrevocable and shall be made in
writing by an Authorized Person and delivered to Issuing Bank via telefacsimile
or other electronic method of transmission reasonably acceptable to Issuing Bank
and reasonably in advance of the requested date of issuance, amendment, renewal,
or extension. Each such request shall be in form and substance reasonably
satisfactory to Issuing Bank and (i)  shall specify (A) the amount of such
Letter of Credit, (B) the date of issuance, amendment, renewal, or extension of
such Letter of Credit, (C) the proposed expiration date of such Letter of
Credit, (D) the name and address of the beneficiary of the Letter of Credit, and
(E) such other information (including, the conditions to drawing, and, in the
case of an amendment, renewal, or extension, identification of the Letter of
Credit to be so amended, renewed, or extended) as shall be necessary to prepare,
amend, renew, or extend such Letter of Credit, and (ii) shall be accompanied by
such Issuer Documents as Agent or Issuing Bank may request or require, to the
extent that such requests or requirements are consistent with the Issuer
Documents that Issuing Bank generally requests for Letters of Credit in similar
circumstances. Bank’s records of the content of any such request shall be
conclusive. Anything contained herein to the contrary notwithstanding, Issuing
Bank may, but shall not be obligated to, issue a Letter of Credit that supports
the obligations of Borrower or its Subsidiaries in respect of (A) a lease of
real property, or (B) an employment contract.

 

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(b) Issuing Bank shall have no obligation to issue a Letter of Credit if any of
the following would result after giving effect to the requested issuance:

(i) the Letter of Credit Usage would exceed $7,000,000, or

(ii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less
the outstanding amount of Advances (including Swing Loans), or

(iii) the Letter of Credit Usage would exceed the Borrowing Base at such time
less the outstanding amount of Advances (inclusive of Swing Loans) at such time.

(c) In the event there is a Defaulting Lender as of the date of any request for
the issuance of a Letter of Credit, the Issuing Bank shall not be required to
issue or arrange for such Letter of Credit to the extent (x) the Defaulting
Lender’s Letter of Credit Exposure with respect to such Letter of Credit may not
be reallocated pursuant to Section  2.2(c)(iv)or (y) the Issuing Bank has not
otherwise entered into arrangements reasonably satisfactory to it and Borrower
to eliminate the Issuing Bank’s risk with respect to the participation in such
Letter of Credit of the Defaulting Lender, which arrangements may include
Borrower cash collateralizing such Defaulting Lender’s Letter of Credit Exposure
in accordance with Section 2.2(c)(iv). Additionally, Issuing Bank shall have no
obligation to issue a Letter of Credit if (I) any order, judgment, or decree of
any Governmental Authority or arbitrator shall, by its terms, purport to enjoin
or restrain Issuing Bank from issuing such Letter of Credit, or any law
applicable to Issuing Bank or any request or directive (whether or not having
the force of law) from any Governmental Authority with jurisdiction over Issuing
Bank shall prohibit or request that Issuing Bank refrain from the issuance of
letters of credit generally or such Letter of Credit in particular, or (II) the
issuance of such Letter of Credit would violate one or more policies of Issuing
Bank applicable to letters of credit generally.

(d) Any Issuing Bank (other than Wells Fargo or any of its Affiliates) shall
notify Agent in writing no later than the Business Day immediately following the
Business Day on which such Issuing Bank issued any Letter of Credit; provided
that (i)  until Agent advises any such Issuing Bank that the provisions of
Section 3.3 are not satisfied, or (ii) unless the aggregate amount of the
Letters of Credit issued in any such week exceeds such amount as shall be agreed
by Agent and such Issuing Bank, such Issuing Bank shall be required to so notify
Agent in writing only once each week of the Letters of Credit issued by such
Issuing Bank during the immediately preceding week as well as the daily amounts
outstanding for the prior week, such notice to be furnished on such day of the
week as Agent and such Issuing Bank may agree. Each Letter of Credit shall be in
form and substance reasonably acceptable to Issuing Bank, including the
requirement that the amounts payable thereunder must be payable in Dollars. If
Issuing Bank makes a payment under a Letter of Credit, Borrower shall pay to
Agent an amount equal to the applicable Letter of Credit Disbursement on the
date such Letter of Credit Disbursement is made and, in the absence of such
payment, the amount of the Letter of Credit Disbursement immediately and
automatically shall be deemed to be an Advance hereunder (notwithstanding any
failure to satisfy any condition precedent set forth in Section 3) and,
initially, shall bear interest at the rate then applicable to Advances. If a
Letter of Credit Disbursement is deemed to be an Advance hereunder, Borrower’s
obligation to pay the amount of such Letter of Credit Disbursement to Issuing
Bank shall be automatically converted into an obligation to pay the resulting
Advance. Promptly following receipt by Agent of any payment from Borrower
pursuant to this paragraph, Agent shall distribute such payment to Issuing Bank
or, to the extent that Lenders have made payments pursuant to Section 2.14(e) to
reimburse Issuing Bank, then to such Lenders and Issuing Bank as their interests
may appear.

 

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(e) Promptly following receipt of a notice of a Letter of Credit Disbursement
pursuant to Section 2.14(d), each Lender agrees to fund its Pro Rata Share of
any Advance deemed made pursuant to Section 2.14(d) on the same terms and
conditions as if Borrower had requested the amount thereof as an Advance and
Agent shall promptly pay to Issuing Bank the amounts so received by it from the
Lenders. By the issuance of a Letter of Credit (or an amendment, renewal, or
extension of a Letter of Credit) and without any further action on the part of
Issuing Bank or the Lenders, Issuing Bank shall be deemed to have granted to
each Lender, and each Lender shall be deemed to have purchased, a participation
in each Letter of Credit issued by Issuing Bank, in an amount equal to its Pro
Rata Share of such Letter of Credit, and each such Lender agrees to pay to
Agent, for the account of Issuing Bank, such Lender’s Pro Rata Share of any
Letter of Credit Disbursement made by Issuing Bank under the applicable Letter
of Credit. In consideration and in furtherance of the foregoing, each Lender
hereby absolutely and unconditionally agrees to pay to Agent, for the account of
Issuing Bank, such Lender’s Pro Rata Share of each Letter of Credit Disbursement
made by Issuing Bank and not reimbursed by Borrower on the date due as provided
in Section 2.14(d), or of any reimbursement payment that is required to be
refunded (or that Agent or Issuing Bank elects, based upon the advice of
counsel, to refund) to Borrower for any reason. Each Lender acknowledges and
agrees that its obligation to deliver to Agent, for the account of Issuing Bank,
an amount equal to its respective Pro Rata Share of each Letter of Credit
Disbursement pursuant to this Section 2.14(e) shall be absolute and
unconditional and such remittance shall be made notwithstanding the occurrence
or continuation of an Event of Default or Default or the failure to satisfy any
condition set forth in Section 3. If any such Lender fails to make available to
Agent the amount of such Lender’s Pro Rata Share of a Letter of Credit
Disbursement as provided in this Section, such Lender shall be deemed to be a
Defaulting Lender and Agent (for the account of Issuing Bank) shall be entitled
to recover such amount on demand from such Lender together with interest thereon
at the Defaulting Lender Rate until paid in full.

(f) Borrower agrees to indemnify, defend and hold harmless each member of the
Lender Group (including Issuing Bank and its branches, Affiliates, and
correspondents) and each such Person’s respective directors, officers,
employees, attorneys and agents (each, including Issuing Bank, a “Letter of
Credit Related Person”) (to the fullest extent permitted by law) from and
against any and all claims, demands, suits, actions, investigations,
proceedings, liabilities, fines, costs, penalties, and damages, and all
reasonable fees and disbursements of attorneys, experts, or consultants and all
other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), which may be incurred by
or awarded against any such Letter of Credit Related Person (other than Taxes,
which shall be governed by Section 16.11) (the “Letter of Credit Indemnified
Costs”), and which arise out of or in connection with, or as a result of:

(i) any Letter of Credit or any pre-advice of its issuance;

 

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(ii) any transfer, sale, delivery, surrender or endorsement of any Drawing
Document at any time(s) held by any such Letter of Credit Related Person in
connection with any Letter of Credit;

(iii) any action or proceeding arising out of, or in connection with, any Letter
of Credit (whether administrative, judicial or in connection with arbitration),
including any action or proceeding to compel or restrain any presentation or
payment under any Letter of Credit, or for the wrongful dishonor of, or honoring
a presentation under, any Letter of Credit;

(iv) any independent undertakings issued by the beneficiary of any Letter of
Credit;

(v) any unauthorized instruction or request made to Issuing Bank in connection
with any Letter of Credit or requested Letter of Credit or error in computer or
electronic transmission;

(vi) an adviser, confirmer or other nominated person seeking to be reimbursed,
indemnified or compensated;

(vii) any third party seeking to enforce the rights of an applicant,
beneficiary, nominated person, transferee, assignee of Letter of Credit proceeds
or holder of an instrument or document;

(viii) the fraud, forgery or illegal action of parties other than the Letter of
Credit Related Person;

(ix) Issuing Bank’s performance of the obligations of a confirming institution
or entity that wrongfully dishonors a confirmation; or

(x) the acts or omissions, whether rightful or wrongful, of any present or
future de jure or de facto governmental or regulatory authority or cause or
event beyond the control of the Letter of Credit Related Person;

in each case, including that resulting from the Letter of Credit Related
Person’s own negligence; provided, that such indemnity shall not be available to
any Letter of Credit Related Person claiming indemnification under clauses (i)
 through (x) above to the extent that such Letter of Credit Indemnified Costs
may be finally determined in a final, non-appealable judgment of a court of
competent jurisdiction to have resulted directly from the gross negligence or
willful misconduct of the Letter of Credit Related Person claiming indemnity.
Borrower hereby agrees to pay the Letter of Credit Related Person claiming
indemnity on demand from time to time all amounts owing under this
Section 2.14(f). If and to the extent that the obligations of Borrower under
this Section 2.14(f) are unenforceable for any reason, Borrower agrees to make
the maximum contribution to the Letter of Credit Indemnified Costs permissible
under applicable law. This indemnification provision shall survive termination
of this Agreement and all Letters of Credit.

(g) The liability of Issuing Bank (or any other Letter of Credit Related Person)
under, in connection with or arising out of any Letter of Credit (or
pre-advice),

 

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regardless of the form or legal grounds of the action or proceeding, shall be
limited to direct damages suffered by Borrower that are caused directly by
Issuing Bank’s gross negligence or willful misconduct in (i) honoring a
presentation under a Letter of Credit that on its face does not at least
substantially comply with the terms and conditions of such Letter of Credit,
(ii) failing to honor a presentation under a Letter of Credit that strictly
complies with the terms and conditions of such Letter of Credit or
(iii) retaining Drawing Documents presented under a Letter of Credit. Issuing
Bank shall be deemed to have acted with due diligence and reasonable care if
Issuing Bank’s conduct is in accordance with Standard Letter of Credit Practice
or in accordance with this Agreement. Borrower’s aggregate remedies against
Issuing Bank and any Letter of Credit Related Person for wrongfully honoring a
presentation under any Letter of Credit or wrongfully retaining honored Drawing
Documents shall in no event exceed the aggregate amount paid by Borrower to
Issuing Bank in respect of the honored presentation in connection with such
Letter of Credit under Section 2.14(d), plus interest at the rate then
applicable to Base Rate Loans hereunder. Borrower shall take action to avoid and
mitigate the amount of any damages claimed against Issuing Bank or any other
Letter of Credit Related Person, including by enforcing its rights against the
beneficiaries of the Letters of Credit. Any claim by Borrower under or in
connection with any Letter of Credit shall be reduced by an amount equal to the
sum of (x) the amount (if any) saved by Borrower as a result of the breach or
alleged wrongful conduct complained of; and (y) the amount (if any) of the loss
that would have been avoided had Borrower taken all reasonable steps to mitigate
any loss, and in case of a claim of wrongful dishonor, by specifically and
timely authorizing Issuing Bank to effect a cure.

(h) Borrower is responsible for preparing or approving the final text of the
Letter of Credit as issued by Issuing Bank, irrespective of any assistance
Issuing Bank may provide such as drafting or recommending text or by Issuing
Bank’s use or refusal to use text submitted by Borrower. Borrower is solely
responsible for the suitability of the Letter of Credit for Borrower’s purposes.
With respect to any Letter of Credit containing an “automatic amendment” to
extend the expiration date of such Letter of Credit, Issuing Bank, in its sole
and absolute discretion, may give notice of nonrenewal of such Letter of Credit
and, if Borrower does not at any time want such Letter of Credit to be renewed,
Borrower will so notify Agent and Issuing Bank at least 15 calendar days before
Issuing Bank is required to notify the beneficiary of such Letter of Credit or
any advising bank of such nonrenewal pursuant to the terms of such Letter of
Credit.

(i) Borrower’s reimbursement and payment obligations under this Section 2.14 are
absolute, unconditional and irrevocable and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever, including:

(i) any lack of validity, enforceability or legal effect of any Letter of Credit
or this Agreement or any term or provision therein or herein;

(ii) payment against presentation of any draft, demand or claim for payment
under any Drawing Document that does not comply in whole or in part with the
terms of the applicable Letter of Credit or which proves to be fraudulent,
forged or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, or which is signed, issued or presented by a Person
or a transferee of such Person purporting to be a successor or transferee of the
beneficiary of such Letter of Credit;

 

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(iii) Issuing Bank or any of its branches or Affiliates being the beneficiary of
any Letter of Credit;

(iv) Issuing Bank or any correspondent honoring a drawing against a Drawing
Document up to the amount available under any Letter of Credit even if such
Drawing Document claims an amount in excess of the amount available under the
Letter of Credit;

(v) the existence of any claim, set-off, defense or other right that Borrower or
any other Person may have at any time against any beneficiary, any assignee of
proceeds, Issuing Bank or any other Person;

(vi) any other event, circumstance or conduct whatsoever, whether or not similar
to any of the foregoing that might, but for this Section 2.14(i), constitute a
legal or equitable defense to or discharge of, or provide a right of set-off
against, Borrower’s reimbursement and other payment obligations and liabilities,
arising under, or in connection with, any Letter of Credit, whether against
Issuing Bank, the beneficiary or any other Person; or

(vii) the fact that any Default or Event of Default shall have occurred and be
continuing;

provided, that subject to Section 2.14(g) above, the foregoing shall not release
Issuing Bank from such liability to Borrower as may be finally determined in a
final, non-appealable judgment of a court of competent jurisdiction against
Issuing Bank following reimbursement or payment of the obligations and
liabilities, including reimbursement and other payment obligations, of Borrower
to Issuing Bank arising under, or in connection with, this Section 2.14 or any
Letter of Credit.

(j) Without limiting any other provision of this Agreement, Issuing Bank and
each other Letter of Credit Related Person (if applicable) shall not be
responsible to Borrower for, and Issuing Bank’s rights and remedies against
Borrower and the obligation of Borrower to reimburse Issuing Bank for each
drawing under each Letter of Credit shall not be impaired by:

(i) honor of a presentation under any Letter of Credit that on its face
substantially complies with the terms and conditions of such Letter of Credit,
even if the Letter of Credit requires strict compliance by the beneficiary;

(ii) honor of a presentation of any Drawing Document that appears on its face to
have been signed, presented or issued (A) by any purported successor or
transferee of any beneficiary or other Person required to sign, present or issue
such Drawing Document or (B) under a new name of the beneficiary;

(iii) acceptance as a draft of any written or electronic demand or request for
payment under a Letter of Credit, even if nonnegotiable or not in the form of a
draft, or notwithstanding any requirement that such draft, demand or request
bear any or adequate reference to the Letter of Credit;

(iv) the identity or authority of any presenter or signer of any Drawing
Document or the form, accuracy, genuineness or legal effect of any Drawing
Document (other than Issuing Bank’s determination that such Drawing Document
appears on its face substantially to comply with the terms and conditions of the
Letter of Credit);

 

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(v) acting upon any instruction or request relative to a Letter of Credit or
requested Letter of Credit that Issuing Bank in good faith believes to have been
given by a Person authorized to give such instruction or request;

(vi) any errors, omissions, interruptions or delays in transmission or delivery
of any message, advice or document (regardless of how sent or transmitted) or
for errors in interpretation of technical terms or in translation or any delay
in giving or failing to give notice to Borrower;

(vii) any acts, omissions or fraud by, or the insolvency of, any beneficiary,
any nominated person or entity or any other Person or any breach of contract
between the beneficiary and Borrower or any of the parties to the underlying
transaction to which the Letter of Credit relates;

(viii) assertion or waiver of any provision of the ISP or UCP that primarily
benefits an issuer of a letter of credit, including any requirement that any
Drawing Document be presented to it at a particular hour or place;

(ix) payment to any paying or negotiating bank (designated or permitted by the
terms of the applicable Letter of Credit) claiming that it rightfully honored or
is entitled to reimbursement or indemnity under Standard Letter of Credit
Practice applicable to it;

(x) acting or failing to act as required or permitted under Standard Letter of
Credit Practice applicable to where Issuing Bank has issued, confirmed, advised
or negotiated such Letter of Credit, as the case may be;

(xi) honor of a presentation after the expiration date of any Letter of Credit
notwithstanding that a presentation was made prior to such expiration date and
dishonored by Issuing Bank if subsequently Issuing Bank or any court or other
finder of fact determines such presentation should have been honored;

(xii) dishonor of any presentation that does not strictly comply or that is
fraudulent, forged or otherwise not entitled to honor; or

(xiii) honor of a presentation that is subsequently determined by Issuing Bank
to have been made in violation of international, federal, state or local
restrictions on the transaction of business with certain prohibited Persons.

(k) Borrower shall pay immediately upon demand to Agent for the account of
Issuing Bank as non-refundable fees, commissions and charges (it being
acknowledged and agreed that any charging of such fees, commissions, and charges
to the Loan Account pursuant to the provisions of Section 2.5(d) shall be deemed
to constitute a demand for payment thereof for the purposes of this
Section 2.14(k)): (i) a fronting fee which shall be imposed by Issuing Bank upon
the issuance of each Letter of Credit of .375% per annum of the face amount
thereof, plus (ii) any and all other customary commissions, fees and charges
then in effect imposed by,

 

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and any and all expenses incurred by, Issuing Bank, or by any adviser,
confirming institution or entity or other nominated person, relating to Letters
of Credit, at the time of issuance of any Letter of Credit and upon the
occurrence of any other activity with respect to any Letter of Credit (including
transfers, assignments of proceeds, amendments, drawings, renewals or
cancellations).

(l) If by reason of (x) any Change in Law, or (y) compliance by Issuing Bank or
any other member of the Lender Group with any direction, request, or requirement
(irrespective of whether having the force of law) of any Governmental Authority
or monetary authority including, Regulation D of the Board of Governors as from
time to time in effect (and any successor thereto):

(i) any reserve, deposit, or similar requirement is or shall be imposed or
modified in respect of any Letter of Credit issued or caused to be issued
hereunder or hereby, or

(ii) there shall be imposed on Issuing Bank or any other member of the Lender
Group any other condition regarding any Letter of Credit,

and the result of the foregoing is to increase, directly or indirectly, the cost
to Issuing Bank or any other member of the Lender Group of issuing, making,
participating in, or maintaining any Letter of Credit or to reduce the amount
receivable in respect thereof, then, and in any such case, Agent may, at any
time within a reasonable period after the additional cost is incurred or the
amount received is reduced, notify Borrower, and Borrower shall pay within 30
days after demand therefor, such amounts as Agent may specify to be necessary to
compensate Issuing Bank or any other member of the Lender Group for such
additional cost or reduced receipt, together with interest on such amount from
the date of such demand until payment in full thereof at the rate then
applicable to Advances hereunder; provided, that (A) Borrower shall not be
required to provide any compensation pursuant to this Section 2.14(l) for any
such amounts incurred more than 180 days prior to the date on which the demand
for payment of such amounts is first made to Borrower, and (B) if an event or
circumstance giving rise to such amounts is retroactive, then the 180-day period
referred to above shall be extended to include the period of retroactive effect
thereof. The determination by Agent of any amount due pursuant to this
Section 2.14(l), as set forth in a certificate setting forth the calculation
thereof in reasonable detail, shall, in the absence of manifest or demonstrable
error, be final and conclusive and binding on all of the parties hereto.

(m) Unless otherwise expressly agreed by Issuing Bank and Borrower when a Letter
of Credit is issued, (i) the rules of the ISP and the UCP shall apply to each
standby Letter of Credit, and (ii) the rules of the UCP shall apply to each
commercial Letter of Credit.

(n) In the event of a direct conflict between the provisions of this
Section 2.14 and any provision contained in any Issuer Document, it is the
intention of the parties hereto that such provisions be read together and
construed, to the fullest extent possible, to be in concert with each other. In
the event of any actual, irreconcilable conflict that cannot be resolved as
aforesaid, the terms and provisions of this Section 2.14 shall control and
govern.

 

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2.15 Accordion.

(a) At any time during the period from and after the Seventh Amendment Closing
Date, through but excluding the last day of the Revolving Credit Availability
Period, upon written request from Borrower and receipt of the written approval
of the Agent and each Lender participating in the applicable Increase (as
defined below), which approval shall be both subject to the conditions set forth
in clause (b) below and at the sole election of the Agent and each Lender, the
Commitments and the Maximum Revolver Amount may be increased by an amount in the
aggregate for all such increases of the Commitments and the Maximum Revolver
Amount not to exceed the Available Increase Amount (each such increase, an
“Increase”). Agent shall invite each Lender to increase its Commitments (it
being understood that no Lender shall be obligated to increase its Commitments)
in connection with a proposed Increase at the interest margin proposed by
Borrower, and if sufficient Lenders do not agree to increase their Commitments
in connection with such proposed Increase, then Agent or Borrower may invite any
prospective lender who is reasonably satisfactory to Agent and Borrower to
become a Lender in connection with a proposed Increase. Any Increase shall be in
an amount of at least $10,000,000 and integral multiples of $5,000,000 in excess
thereof. In no event may the Commitments and the Maximum Revolver Amount be
increased pursuant to this Section 2.15 on more than five (5) occasions in the
aggregate for all such Increases. Additionally, for the avoidance of doubt, it
is understood and agreed that in no event shall the aggregate amount of the
Increases to the Commitments exceed $50,000,000.

(b) Each of the following shall be conditions precedent to any Increase of the
Commitments and the Maximum Revolver Amount:

(i) Agent or Borrower have obtained the commitment of one or more Lenders (or
other prospective lenders) reasonably satisfactory to Agent and Borrower (and,
if Wells Fargo is to provide such Increase, Wells Fargo shall have obtained
credit approval for same) to provide the applicable Increase and any such
Lenders (or prospective lenders), Borrower, and Agent have signed a joinder
agreement to this Agreement (an “Increase Joinder”), or an amendment to this
Agreement, in either case, in form and substance reasonably satisfactory to
Agent, to which such Lenders (or prospective lenders), Borrower, and Agent are
party,

(ii) each of the conditions precedent set forth in Section 3.2 is satisfied,

(iii) Borrower shall have delivered to Agent evidence of compliance with such
conditions as Agent or any Lender participating in the applicable Increase shall
require as a condition to approval of the applicable Increase, including (if
requested), updated pro forma Projections indicating compliance with each of the
financial covenants set forth in Section 7.16 of this Agreement after giving
effect to the applicable Increase, and

(iv) Borrower shall have reached agreement with the Lenders (or prospective
lenders) agreeing to the increased Commitments with respect to the interest
margins applicable to Advances to be made pursuant to the increased Commitments
(which interest margins may be higher than or equal to the interest margins
applicable to Advances set forth in this Agreement immediately prior to the date
of the increased Commitments (the date of the

 

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effectiveness of the increased Commitments and the Maximum Revolver Amount, the
“Increase Date”)) and shall have communicated the amount of such interest
margins to Agent. Any Increase Joinder may, with the consent of Agent, Borrower
and the Lenders or prospective lenders agreeing to the proposed Increase, effect
such amendments to this Agreement and the other Loan Documents as may be
necessary or appropriate to effectuate the provisions of this Section 2.15
(including any amendment necessary to effectuate the interest margins for the
Advances to be made pursuant to the increased Commitments). Anything to the
contrary contained herein notwithstanding, if the interest margin that is to be
applicable to the Advances to be made pursuant to the increased Commitments are
higher than the interest margin applicable to the Advances hereunder (as
applicable) immediately prior to the applicable Increase Date (the amount by
which the interest margin is higher, the “Excess ”), then the interest margin
applicable to the Advances immediately prior to the Increase Date shall be
increased by the amount of the Excess, effective on the applicable Increase
Date, and without the necessity of any action by any party hereto.

(c) Unless otherwise specifically provided herein, all references in this
Agreement and any other Loan Document to Advances shall be deemed, unless the
context otherwise requires, to include Advances made pursuant to the increased
Commitments and Maximum Revolver Amount pursuant to this Section 2.15.

(d) Each of the Lenders having a Commitment prior to the Increase Date (the “
Pre-Increase Lenders”) shall assign to any Lender which is acquiring a new or
additional Commitment on the Increase Date (the “Post-Increase Lenders”), and
such Post-Increase Lenders shall purchase from each Pre-Increase Lender, at the
principal amount thereof, such interests in the Advances and participation
interests in Letters of Credit on such Increase Date as shall be necessary in
order that, after giving effect to all such assignments and purchases, such
Advances and participation interests in Letters of Credit will be held by
Pre-Increase Lenders and Post-Increase Lenders ratably in accordance with their
Pro Rata Share after giving effect to such increased Commitments.

(e) The Advances, Commitments, and Maximum Revolver Amount established pursuant
to this Section 2.15 shall constitute Advances, Commitments, and Maximum
Revolver Amount under, and shall be entitled to all the benefits afforded by,
this Agreement and the other Loan Documents, and shall, without limiting the
foregoing, benefit equally and ratably from any guarantees and the security
interests created by this Agreement and the other Loan Documents. Borrower shall
take any actions reasonably required by Agent to ensure and demonstrate that the
Liens and security interests granted by this Agreement and the other Loan
Documents continue to be perfected under the Code or otherwise after giving
effect to the establishment of any such new Commitments and Maximum Revolver
Amount.

3. CONDITIONS; TERM OF AGREEMENT.

3.1 Conditions Precedent to the Initial Extension of Credit. The amendment and
restatement of the Original Loan Agreement (including the “Advances” under the
Original Loan Agreement becoming Advances hereunder) and the obligation of each
Lender to make its initial extension of credit hereunder shall be deemed to be
effective as of the Closing Date upon the

 

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fulfillment, to the satisfaction of Agent and each Lender (the making of such
initial extension of credit by a Lender being conclusively deemed to be its
satisfaction or waiver of the following), of each of the following conditions
precedent:

(a) Agent shall have received each of the following documents, in form and
substance satisfactory to Agent, duly executed, and each such document shall be
in full force and effect:

(i) the Closing Certificates,

(ii) the Sale and Servicing Agreement, and

(iii) the Omnibus Amendment and Reaffirmation;

(b) Agent shall have received copies of Borrower’s and HTGC’s Governing
Documents, as amended, modified, or supplemented to the Closing Date, certified
by the Secretary or Assistant Secretary of such Person or the Manager of such
Person, as applicable;

(c) Agent shall have received certificates of status with respect to Borrower
and HTGC, dated within 10 days of the Closing Date, such certificate to be
issued by the appropriate officer of the jurisdiction of organization of such
Person, which certificate shall indicate that such Person is in good standing in
such jurisdiction;

(d) Agent shall have received certificates of status with respect to Borrower
and HTGC, each dated within 30 days of the Closing Date, such certificates to be
issued by the appropriate officer of the jurisdictions (other than the
jurisdiction of organization of such Person) in which its failure to be duly
qualified or licensed would constitute a Material Adverse Change, which
certificates shall indicate that such Person is in good standing in such
jurisdictions;

(e) Agent shall have received a certificate of insurance, together with the
endorsements thereto, as are required by Section 6.8, the form and substance of
which shall be satisfactory to Agent;

(f) Agent shall have received a certificate from the chief financial officer or
chief executive officer of Borrower, certifying (i) as to the truth and accuracy
of the representations and warranties of Borrower contained in Section 5 of this
Agreement, (ii) the absence of any Defaults or Events of Default, and (iii) that
after giving effect to the incurrence of Indebtedness under this Agreement and
the other transactions contemplated by this Agreement, Borrower is Solvent;

(g) Agent shall have completed its updated business, legal, and collateral due
diligence, including a review of the legal structure of Borrower, HTGC and their
Affiliates, a collateral audit and review of the books and records of Borrower
and HTGC and any of their Affiliates with business operations similar to those
of Borrower, a review of their collateral valuation methods, verification of
each of such Person’s representations and warranties to the Lender Group, and
verification of third-party service providers, in each case, the results of
which shall be satisfactory to Agent;

 

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(h) Agent shall have received completed reference checks with respect to HTGC,
Borrower, Manuel A. Henriquez, Robert Lake, and Andrew Olson, the results of
which are satisfactory to Agent in its sole discretion;

(i) Borrower shall pay all Lender Group Expenses incurred in connection with the
transactions evidenced by this Agreement;

(j) with respect to each Eligible Note Receivable as of the making of the
initial Advance, Agent or the Collateral Custodian (if one has been appointed)
shall be in possession of all of the Required Asset Documents;

(k) Agent shall have received and approved Borrower’s Required Procedures, which
Borrower’s Required Procedures shall be consistent with those previously
represented to Agent and shall be acceptable to Agent in its sole discretion;

(l) Agent shall have received evidence satisfactory to Agent either that any
Person having a Lien (except for Permitted Liens, if any) with respect to the
assets of Borrower shall have released such Lien or that such Lien shall be
automatically terminated upon the funding of the Advances to be made on the
Closing Date;

(m) Borrower and HTGC shall have received all licenses, approvals or evidence of
other actions required by any Governmental Authority in connection with the
execution and delivery by Borrower or HTGC of the Loan Documents or with the
consummation of the transactions contemplated thereby;

(n) Agent shall have received satisfactory evidence that as of the Closing Date
and after giving effect to the initial Advance and the continuation of all
“Advances” outstanding under the Original Loan Agreement immediately before the
effectiveness of this Agreement as Advances hereunder, (i) Borrower, on a
consolidated basis with its Subsidiaries, has a sum of (A) Tangible Net Worth,
plus (B) Subordinated Debt, of not less than the sum of (I) the lesser of (x)
the sum of the outstanding principal amounts of Borrower’s three largest Notes
Receivable, and (y) $25,000,000, plus (II) any positive amount of cumulative
capital contributions made to Borrower from and after the Closing Date, and
(ii) HTGC, on a consolidated basis with its Subsidiaries, has a sum of
(A) Tangible Net Worth, plus (B) Subordinated Debt, of not less than the sum of
(I) $500,000,000, plus (II) ninety percent (90%) of the cumulative amount of
equity raised by HTGC after June 30, 2014;

(o) Agent’s counsel shall have received and reviewed all standard documentation
evidencing, governing, securing and guaranteeing Notes Receivable, and been
satisfied such documentation provides Borrower and Agent with appropriate rights
and remedies to enforce any necessary collection actions with respect to such
Notes Receivable; and

(p) all other documents and legal matters in connection with the transactions
contemplated by this Agreement shall have been delivered, executed, or recorded
and shall be in form and substance satisfactory to Agent.

3.2 Conditions Subsequent to the Initial Extension of Credit. The obligation of
the Lender Group (or any member thereof) to continue to make Advances (or
otherwise extend

 

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credit hereunder) is subject to the fulfillment, on or before the date
applicable thereto, of each of the following conditions subsequent (any failure
by Borrower to satisfy or cause the satisfaction of each of such conditions
subsequent constituting an Event of Default):

3.2 (a) [RESERVED][Reserved].

3.2A Condition Subsequent to Additional Commitment Closing Date. A condition
subsequent to the occurrence of the Additional Commitment Closing Date is
Agent’s completion of updated background checks on Manuel Henriquez and Scott
Bluestein with the results being satisfactory to Agent.

3.3 Conditions Precedent to all Extensions of Credit. The obligation of the
Lender Group (or any member thereof) to make any Advances hereunder at any time
(or to extend any other credit hereunder), including the initial Advance, shall
be subject to the following conditions precedent:

(a) the representations and warranties contained in this Agreement and the other
Loan Documents shall be true and correct in all material respects on and as of
the date of such extension of credit, as though made on and as of such date
(except to the extent that such representations and warranties relate solely to
an earlier date);

(b) no Default or Event of Default shall have occurred and be continuing on the
date of such extension of credit, nor shall either result from the making
thereof;

(c) no injunction, writ, restraining order, or other order of any nature
restricting or prohibiting, directly or indirectly, the extending of such
Advance shall have been issued and remain in force by any Governmental Authority
against Borrower, Agent, any Lender, or any of their respective Affiliates;

(d) no Material Adverse Change shall have occurred,

(e) on or before the day preceding the date of such Advance, Borrower shall have
delivered to Agent or Collateral Custodian (if one has been appointed) pursuant
to this Agreement and the Sale and Servicing Agreement, with respect to each
Note Receivable to be acquired or funded with any portion of such Advance, the
originals of each of the Required Asset Documents; and

(f) Agent shall have received a current Borrowing Base Certificate.

3.4 Term. This Agreement shall continue in full force and effect for a term
commencing on the Closing Date and ending one year after the Amortization
Commencement Date (the “Maturity Date”). The foregoing notwithstanding, the
Lender Group, upon the election of the Required Lenders, shall have the right to
terminate its obligations under this Agreement immediately and without notice
upon the occurrence and during the continuation of an Event of Default.

3.5 Effect of Termination. On the Maturity Date or earlier termination of this
Agreement in accordance with its terms, all of the Obligations immediately shall
become due

 

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and payable without notice or demand and Borrower shall be required to repay all
of the Obligations in full. No termination of this Agreement, however, shall
relieve or discharge Borrower or its Subsidiaries, or HTGC, of their respective
duties, Obligations, or covenants hereunder or under any other Loan Documents
and the Agent’s Liens in the Collateral shall remain in effect until all
Obligations have been paid in full and the Lender Group’s obligations to provide
additional credit hereunder have been terminated. When this Agreement has been
terminated and all of the Obligations have been paid in full and the Lender
Group’s obligations to provide additional credit under the Loan Documents have
been terminated irrevocably, Agent will, at Borrower’s sole expense, execute and
deliver, or authorize the filing of, any termination statements, lien releases,
mortgage releases, re-assignments of trademarks, discharges of security
interests, and other similar discharge or release documents (and, if applicable,
in recordable form) as are reasonably necessary to release, as of record, the
Agent’s Liens and all notices of security interests and liens previously filed
by Agent with respect to the Obligations.

3.6 Early Termination by Borrower. Borrower has the option, at any time upon
ninety (90) days prior written notice to Agent, to terminate this Agreement by
repaying to Agent all of the Obligations in full (including either (i) providing
cash collateral to be held by Agent in an amount equal to 105% of the Letter of
Credit Usage, or (ii) causing the original Letters of Credit to be returned to
Agent). If Borrower has sent a notice of termination pursuant to the provisions
of this Section 3.6, then the Commitments shall terminate and Borrower shall be
obligated to repay the Obligations in full, on the date set forth as the date of
termination of this Agreement in such notice. In the event of the termination of
this Agreement and repayment of the Obligations at any time prior to the
Maturity Date, for any other reason, including (a) termination upon the election
of the Required Lenders to terminate after the occurrence and during the
continuation of an Event of Default, (b) foreclosure by Agent or Lenders and
sale of Collateral, (c) sale of the Collateral in any Insolvency Proceeding of
Borrower, or (d) restructure, reorganization, or compromise of the Obligations
by the confirmation of a plan of reorganization or any other plan of compromise,
restructure, or arrangement in any Insolvency Proceeding of Borrower, then, in
view of the impracticability and extreme difficulty of ascertaining the actual
amount of damages to the Lender Group or profits lost by the Lender Group as a
result of such early termination, and by mutual agreement of the parties as to a
reasonable estimation and calculation of the lost profits or damages of the
Lender Group, Borrower shall pay to Agent, in cash, for the ratable benefit of
Lenders, the Applicable Prepayment Premium, if any, determined as of such date.
For purposes of this Agreement, “Applicable Prepayment Premium” means, as of any
date of determination, an amount equal to (a) during the period starting on the
First Amendment Closing Date and ending on July 31, 2016, three percent (3.00%)
multiplied by the Maximum Revolver Amount on such date, (b) during the period
starting on August 1, 2016 and ending on July 31, 2017, two percent (2.00%)
multiplied by the Maximum Revolver Amount on such date, (c) during the period
starting on August 1, 2017 and ending on January 31, 2018, one percent (1.00%)
multiplied by the Maximum Revolver Amount on such date, and (d) thereafter, zero
dollars ($0.00).

4. CREATION OF SECURITY INTEREST.

4.1 Grant of Security Interest. Borrower hereby grants to Agent, for the benefit
of the Lender Group and the Bank Product Providers, a continuing security
interest in all of Borrower’s right, title, and interest in all currently
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Borrower Collateral in order to secure prompt repayment of any and all of the
Obligations in accordance with the terms and conditions of the Loan Documents
and in order to secure prompt performance by Borrower of each of its covenants
and duties under the Loan Documents. The Agent’s Liens in and to the Borrower
Collateral shall attach to all Borrower Collateral without further act on the
part of Agent or Borrower. Anything contained in this Agreement or any other
Loan Document to the contrary notwithstanding, except for Permitted
Dispositions, Borrower and its Subsidiaries have no authority, express or
implied, to dispose of any item or portion of the Collateral.

4.2 Negotiable Collateral. In the event that any Borrower Collateral, including
proceeds, is evidenced by or consists of Negotiable Collateral other than Notes
Receivable previously delivered to and being held by the Agent or a Collateral
Custodian (if one has been appointed), and if and to the extent that Agent
determines that perfection or priority of Agent’s security interest is dependent
on or enhanced by possession, Borrower, promptly upon the request of Agent,
shall endorse and deliver physical possession of such Negotiable Collateral and
all agreements and documents related thereto to Agent. All Notes Receivable
shall be delivered to Agent or a Collateral Custodian (if one has been
appointed) pursuant to this Agreement and the Sale and Servicing Agreement to
hold for the benefit of Agent and Lenders, duly endorsed in blank or as follows
on the back of the signature page thereof or on a separate allonge affixed
thereto:

“Pay to the Order of Wells Fargo Capital Finance, LLC, as Agent, without
recourse

 

                       HERCULES FUNDING II LLC      By:  

                

     Name:        Its: [Authorized Person].”   

4.3 Collection of Accounts, General Intangibles, and Negotiable Collateral. At
any time after the occurrence and during the continuation of an Event of
Default, Agent or Agent’s designee may (a) notify Account Debtors of Borrower
and makers of Notes Receivable that the Accounts, Notes Receivable, chattel
paper, or General Intangibles have been assigned to Agent or that Agent has a
security interest therein, (b) cause a replacement servicer to take possession
of, and collect, Borrower’s Accounts, or (c) collect Borrower’s Accounts, Notes
Receivable, chattel paper, or General Intangibles directly and charge the
collection costs and expenses to the Loan Account. Borrower agrees that it will
hold in trust for the Lender Group, as the Lender Group’s trustee, any of its or
its Subsidiaries’ Collections that it receives and immediately will deliver such
Collections to Servicer pursuant to the Sale and Servicing Agreement or, at the
request of Agent, to Agent or a Cash Management Bank, in each case in their
original form as received by Borrower or its Subsidiaries.

4.4 Filing of Financing Statements; Commercial Tort Claims; Delivery of
Additional Documentation Required.

 

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(a) Borrower authorizes Agent to file any financing statement necessary or
desirable to effectuate the transactions contemplated by the Loan Documents, and
any continuation statement or amendment with respect thereto, in any appropriate
filing office without the signature of Borrower where permitted by applicable
law. Borrower hereby ratifies the filing of any financing statement filed
without the signature of Borrower prior to the date hereof.

(b) If Borrower or its Subsidiaries acquire any commercial tort claims after the
date hereof, Borrower shall promptly (but in any event within three (3) Business
Days after such acquisition) deliver to Agent a written description of such
commercial tort claim and shall deliver a written agreement, in form and
substance satisfactory to Agent, pursuant to which Borrower or its Subsidiary,
as applicable, shall grant a perfected security interest in all of its right,
title and interest in and to such commercial tort claim to Agent, as security
for the Obligations (a “Commercial Tort Claim Assignment”).

(c) At any time upon the request of Agent, Borrower shall execute or deliver to
Agent, and shall cause its Subsidiaries to execute or deliver to Agent, any and
all fixture filings, security agreements, pledges, assignments, Commercial Tort
Claim Assignments, endorsements of certificates of title, and all other
documents (collectively, the “Additional Documents”) that Agent may request in
its Permitted Discretion, in form and substance satisfactory to Agent, to
create, perfect, and continue perfected or to better perfect the Agent’s Liens
in the assets of Borrower and its Subsidiaries (whether now owned or hereafter
arising or acquired, tangible or intangible, real or personal), to create and
perfect Liens in favor of Agent in any owned Real Property acquired after the
Original Closing Date, and in order to fully consummate all of the transactions
contemplated hereby and under the other Loan Documents. To the maximum extent
permitted by applicable law, Borrower authorizes Agent to execute any such
Additional Documents in Borrower’s name and authorizes Agent to file such
executed Additional Documents in any appropriate filing office. In addition, on
such periodic basis as Agent shall require, Borrower shall (i) provide Agent
with a report of all new material patentable, copyrightable, or trademarkable
materials acquired or generated by Borrower or its Subsidiaries during the prior
period, (ii) cause all material patents, copyrights, and trademarks acquired or
generated by Borrower or its Subsidiaries that are not already the subject of a
registration with the appropriate filing office (or an application therefor
diligently prosecuted) to be registered with such appropriate filing office in a
manner sufficient to impart constructive notice of Borrower’s or the applicable
Subsidiary’s ownership thereof, and (iii) cause to be prepared, executed, and
delivered to Agent supplemental schedules to the applicable Loan Documents to
identify such patents, copyrights, and trademarks as being subject to the
security interests created thereunder; provided, however, that neither Borrower
nor any of its Subsidiaries shall register with the U.S. Copyright Office any
unregistered copyrights (whether in existence on the Original Closing Date or
thereafter acquired, arising, or developed) unless (i) the Borrower provides
Agent with written notice of its intent to register such copyrights not less
than 30 days prior to the date of the proposed registration, and (ii) prior to
such registration, the applicable Person executes and delivers to Agent a
copyright security agreement in form and substance satisfactory to Agent,
supplemental schedules to any existing copyright security agreement, or such
other documentation as Agent reasonably deems necessary in order to perfect and
continue perfected Agent’s Liens on such copyrights following such registration.

 

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(d) Borrower hereby assigns to Agent any and all rights of Borrower to access
any and all storage facilities where any Collateral or information relating to
Collateral may be stored and Borrower hereby authorizes Agent, at any time after
the occurrence and during the continuation of an Event of Default, to enter upon
any such storage facilities and remove any contents thereof in connection with
Agent’s exercise of its remedies hereunder.

4.5 Power of Attorney. Borrower hereby irrevocably makes, constitutes, and
appoints Agent (and any of Agent’s officers, employees, or agents designated by
Agent) as Borrower’s true and lawful attorney, with power to (a) if Borrower
refuses to, or fails timely to execute and deliver any of the documents
described in Section 4.4, sign the name of Borrower on any of the documents
described in Section 4.4, (b) at any time that an Event of Default has occurred
and is continuing, sign Borrower’s name on any invoice or bill of lading
relating to the Collateral, drafts against Account Debtors, or notices to
Account Debtors, (c) send requests or make telephone inquiries for verification
of Borrower’s or its Subsidiaries’ Accounts or Notes Receivable, (d) endorse
Borrower’s name on any of its payment items (including all of its Collections)
that may come into the Lender Group’s possession, (e) at any time that an Event
of Default has occurred and is continuing, make, settle, and adjust all claims
under Borrower’s policies of insurance and make all determinations and decisions
with respect to such policies of insurance, and (f) at any time that an Event of
Default has occurred and is continuing, settle and adjust disputes and claims
respecting Borrower’s or its Subsidiaries’ Accounts, Notes Receivable, chattel
paper, or General Intangibles directly with Account Debtors or makers of Notes
Receivable, for amounts and upon terms that Agent determines to be reasonable,
in Agent’s Permitted Discretion, and Agent may cause to be executed and
delivered any documents and releases that Agent determines to be necessary. The
appointment of Agent as Borrower’s attorney, and each and every one of its
rights and powers, being coupled with an interest, is irrevocable until all of
the Obligations have been fully and finally repaid and performed and the Lender
Group’s obligations to extend credit hereunder are terminated.

4.6 Right to Inspect and Verify. Agent (through any of its officers, employees,
or agents) shall have the right, from time to time hereafter (i) to inspect the
Books and make copies or abstracts thereof, (ii) to communicate directly with
any and all Account Debtors and makers of Notes Receivable to verify the
existence and terms thereof (provided, that so long as no Event of Default has
occurred and is continuing, Agent shall notify Borrower prior to communicating
directly with an Account Debtor or maker of Notes Receivable), and (iii) to
check, test, and appraise the Collateral, or any portion thereof, in order to
verify Borrower’s and its Subsidiaries’ financial condition or the amount,
quality, value, condition of, or any other matter relating to, the Collateral;
and Borrower shall permit any designated representative of Agent to visit and
inspect any of the properties of the Borrower to inspect and to discuss its
finances and properties and Collateral, upon reasonable notice and at such
reasonable times during normal business hours.

4.7 Control Agreements. Borrower agrees that it will and will cause its
Subsidiaries to take any or all reasonable steps in order for Agent to obtain
control in accordance with Sections 8-106, 9-104, 9-105, 9-106, and 9-107 of the
Code with respect to all of its or their Securities Accounts, Deposit Accounts,
electronic chattel paper, Investment Property, and letter-of-credit rights. Upon
the occurrence and during the continuance of an Event of Default, Agent may
notify any bank or securities intermediary to liquidate the applicable Deposit

 

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Account or Securities Account or any related Investment Property maintained or
held thereby and remit the proceeds thereof to Agent’s Account.

4.8 Servicing of Notes Receivable. Until such time as Agent shall notify the
Borrower of the revocation of such right after the occurrence and during the
continuation of an Event of Default, the Borrower (a) shall, at its own expense
(including through the application of available funds pursuant to
Section 2.3(b)), cause the Servicer to service all of the Notes Receivable,
including, without limitation, (i) the billing, posting and maintaining complete
records applicable thereto, and (ii) taking of such action with respect to the
Notes Receivable as the Borrower may deem advisable, and (b) may grant, in the
ordinary course of business, to any maker of a Note Receivable, any adjustment
to which such maker may be lawfully entitled, and may take such other actions
relating to the settling of any such maker’s claims as may be commercially
reasonable, but in each case in accordance with Borrower’s Required Procedures.
Agent may, at its option, at any time or from time to time, after the occurrence
and during the continuation of an Event of Default hereunder, revoke the
collection and servicing rights given to Borrower herein by giving notice to
Borrower in accordance with the terms of the Sale and Servicing Agreement.

4.9 Release of Notes Receivable.

(a) When a Note Receivable that is in the possession of Agent or the Collateral
Custodian is repaid in its entirety, Agent shall return or shall authorize the
Collateral Custodian to return such Note Receivable to Borrower to facilitate
its payment and Agent shall release Agent’s Liens in such Note Receivable
promptly upon receipt of the final payment relating to such Note Receivable.

(b) When a Note Receivable is sold by Borrower in accordance with the terms of
this Agreement, Agent shall release Agent’s Liens in such Note Receivable and if
such Note Receivable is in the possession of Agent or the Collateral Custodian,
Agent shall transfer or shall authorize the Collateral Custodian to transfer
such Note Receivable to the purchaser thereof or as otherwise directed by such
purchaser against payment of the agreed amount therefor.

(c) In the event Borrower’s collateral assignment to Agent of any mortgage and
loan documents relating to a Note Receivable has been recorded and such Note
Receivable is (i) repaid in its entirety, (ii) sold by Borrower in accordance
with the terms of this Agreement or (iii) in default and Borrower is commencing
foreclosure proceedings against the Note Receivable Collateral securing such
Note Receivable, then Agent shall, at Borrower’s sole expense, execute a
reassignment or release of such mortgage and loan documents for the benefit of
Borrower on forms prepared by Borrower and reasonably acceptable to Agent.

5. REPRESENTATIONS AND WARRANTIES.

In order to induce the Lender Group to enter into this Agreement, Borrower makes
the following representations and warranties to the Lender Group which shall be
true, correct, and complete, in all material respects, as of the date hereof,
and shall be true, correct, and complete, in all material respects, as of the
Closing Date, and as of the date of the making of each Advance (or other
extension of credit) made thereafter, as though made on and as of the date of
such

 

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Advance (or other extension of credit) (except to the extent that such
representations and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:

5.1 No Encumbrances. Borrower and its Subsidiaries have good and indefeasible
title to, or a valid leasehold interest in, their personal property assets and
good and marketable title to, or a valid leasehold interest in, their Real
Property, in each case, free and clear of Liens except for Permitted Liens.

5.2 Eligible Notes Receivables. As to each Note Receivable that is identified by
Borrower as an Eligible Note Receivable in the most recent Borrowing Base
Certificate submitted to Agent, as of the date of such certificate: (a) such
Note Receivable is a bona fide existing payment obligation of the maker of such
Note Receivable created in the ordinary course of Borrower’s business, (b) such
Note Receivable has transferred by sale or contribution to, and is now owed to
Borrower without any known defenses, disputes, offsets, counterclaims, or rights
of cancellation, (c) such Note Receivable is not excluded as ineligible by
virtue of one or more of the excluding criteria set forth in the definition of
Eligible Notes Receivable, (d) the original amount of, the unpaid balance of,
and the amount and dates of payments on such Note Receivable shown on the Books
of Borrower and in the schedules of same delivered to Agent are true and
correct, (e) Borrower has no knowledge of any fact which is reasonably likely to
impair the validity or collectability of such Note Receivable, (f) such Note
Receivable is subject to a first-priority or second-priority security interest,
as applicable, in favor of Agent, (g) such Note Receivable and all collateral
therefor complies with all applicable laws, and (h) since delivery to Agent,
such Note Receivable has not been amended nor any requirements relating thereto
waived without the prior written consent of Agent, other than an extension or
modification in accordance with Borrower’s Required Procedures then in effect.

5.3 Equipment. All of the Equipment of Borrower and its Subsidiaries is used or
held for use in their business and is fit for such purposes.

5.4 Location of Collateral. The Borrower Collateral (other than the Collateral
in the possession of Agent or Collateral Custodian) is not stored with a bailee,
warehouseman, or similar party and is located only at, or in-transit between,
the locations identified on Schedule 5.4 (as such Schedule may be updated
pursuant to Section 6.9); provided, that loan files that do not include original
promissory notes, Lien instruments, or assignments of Lien instruments may be
stored, from time to time, with Servicer or in a public warehouse, access to
which has been assigned by Borrower to Agent.

5.5 Records. Borrower keeps complete, correct and accurate records of the Notes
Receivable owned by Borrower and all payments thereon.

5.6 State of Incorporation; Location of Chief Executive Office; Organizational
Identification Number; Commercial Tort Claims.

(a) The jurisdiction of organization of HTGC, Borrower and each of their
respective Subsidiaries is set forth on Schedule 5.6(a).

 

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(b) The chief executive office of HTGC, Borrower and each of their respective
Subsidiaries is located at the address indicated on Schedule 5.6(b) (as such
Schedule may be updated pursuant to Section 6.9).

(c) The organizational identification numbers and federal employer
identification numbers, if any, of HTGC, Borrower and each of their respective
Subsidiaries are identified on Schedule 5.6(c).

(d) As of the Closing Date, Borrower and its Subsidiaries do not hold any
commercial tort claims, except as set forth on Schedule 5.6(d).

5.7 Due Organization and Qualification; Subsidiaries.

(a) Borrower is duly organized and existing and in good standing under the laws
of the jurisdiction of its organization and qualified to do business in any
state where the failure to be so qualified reasonably could be expected to have
a Material Adverse Change.

(b) Set forth on Schedule 5.7(b), is a complete and accurate description of the
authorized capital Stock of each of HTGC and Borrower, by class, and, as of the
Closing Date, a description of the interests of each such class that are issued
and outstanding. Other than as described on Schedule 5.7(b), there are no
subscriptions, options, warrants, or calls relating to any capital Stock of
Borrower, including any right of conversion or exchange under any outstanding
security or other instrument. Borrower is not subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of its capital Stock or any security convertible into or exchangeable for
any of its capital Stock.

(c) Set forth on Schedule 5.7(c), is a complete and accurate list of HTGC’s and
Borrower’s direct and indirect Subsidiaries, showing: (i) the jurisdiction of
their organization, (ii) the number of shares of each class of common and
preferred Stock authorized for each of such Subsidiaries, and (iii) the number
and the percentage of the outstanding shares of each such class owned directly
or indirectly by HTGC or Borrower. All of the outstanding capital Stock of each
such Subsidiary has been validly issued and is fully paid and non-assessable.

(d) Except as set forth on Schedule 5.7(c), there are no subscriptions, options,
warrants, or calls relating to any shares of capital Stock of a Subsidiary of
Borrower, including any right of conversion or exchange under any outstanding
security or other instrument. Neither Borrower nor any of its Subsidiaries is
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of capital Stock of a Subsidiary of such Person or
any security convertible into or exchangeable for any such capital Stock.

5.8 Due Authorization; No Conflict.

(a) The execution, delivery, and performance by Borrower of this Agreement and
the other Loan Documents to which it is a party have been duly authorized by all
necessary action on the part of Borrower.

 

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(b) The execution, delivery, and performance by Borrower of this Agreement and
the other Loan Documents to which it is a party do not and will not (i) violate
any provision of federal, state, or local law or regulation applicable to
Borrower, the Governing Documents of Borrower, or any order, judgment, or decree
of any court or other Governmental Authority binding on Borrower, (ii) conflict
with, result in a breach of, or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation of Borrower,
(iii) result in or require the creation or imposition of any Lien of any nature
whatsoever upon any properties or assets of Borrower, other than under this
Agreement and the other Loan Documents, or (iv) require any approval of the
holders of Borrower’s Stock or any approval or consent of any Person under any
material contractual obligation of Borrower, other than consents or approvals
that have been obtained and that are still in force and effect.

(c) Other than the filing of financing statements, the execution, delivery, and
performance by Borrower of this Agreement and the other Loan Documents to which
Borrower is a party do not and will not require any registration with, consent,
or approval of, or notice to, or other action with or by, any Governmental
Authority or other Person, other than consents or approvals that have been
obtained and that are still in force and effect.

(d) This Agreement and the other Loan Documents to which Borrower is a party,
and all other documents contemplated hereby and thereby, when executed and
delivered by Borrower will be the legally valid and binding obligations of
Borrower, enforceable against Borrower in accordance with their respective
terms, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to
or limiting creditors’ rights generally.

(e) The Agent’s Liens are validly created, perfected, and first priority Liens,
subject only to Permitted Liens.

5.9 Litigation. Other than those matters disclosed on Schedule 5.9, (a) there
are no actions, suits, or proceedings pending or, to the best knowledge of
Borrower, threatened, against Borrower or any of its Subsidiaries, and (b) there
are no actions, suits, or proceedings pending or, to the best knowledge of
Borrower, threatened, against HTGC that could reasonably be expected to result
in a Material Adverse Change.

5.10 No Material Adverse Change. All financial statements relating to HTGC,
Borrower and their respective Subsidiaries that have been delivered by HTGC or
Borrower to the Lender Group have been prepared in accordance with GAAP (except,
in the case of unaudited financial statements, for the lack of footnotes and
being subject to year-end audit adjustments) and present fairly in all material
respects, the financial condition of HTGC, Borrower, and their respective
Subsidiaries as of the date thereof and results of operations for the period
then ended. There has not been a Material Adverse Change with respect to HTGC,
Borrower or their respective Subsidiaries since the date of the latest financial
statements submitted to the Lender Group on or before the Closing Date.

5.11 Fraudulent Transfer.

(a) Each of Borrower and each of its Subsidiaries is Solvent.

 

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(b) No transfer of property is being made by Borrower or its Subsidiaries and no
obligation is being incurred by Borrower or its Subsidiaries in connection with
the transactions contemplated by this Agreement or the other Loan Documents with
the intent to hinder, delay, or defraud either present or future creditors of
Borrower or its Subsidiaries.

5.12 Employee Benefits. None of Borrower, any of its Subsidiaries, or any of
their ERISA Affiliates maintains or contributes to any Benefit Plan.

5.13 Environmental Condition. Except as set forth on Schedule 5.13, (a) to
Borrower’s knowledge, none of Borrower’s or its Subsidiaries’ properties or
assets has ever been used by Borrower, its Subsidiaries or by previous owners or
operators in the disposal of, or to produce, store, handle, treat, release, or
transport, any Hazardous Materials, where such use, production, storage,
handling, treatment, release or transport was in violation, in any material
respect, of any applicable Environmental Law, (b) to Borrower’s knowledge, none
of Borrower’s or its Subsidiaries’ properties or assets has ever been designated
or identified in any manner pursuant to any environmental protection statute as
a Hazardous Materials disposal site, (c) neither Borrower nor any of its
Subsidiaries has received notice that a Lien arising under any Environmental Law
has attached to any revenues or to any Real Property owned or operated by
Borrower or its Subsidiaries, and (d) neither Borrower nor its Subsidiaries has
received a summons, citation, notice, or directive from the United States
Environmental Protection Agency or any other federal or state governmental
agency concerning any action or omission by Borrower or its Subsidiaries
resulting in the releasing or disposing of Hazardous Materials into the
environment.

5.14 Brokerage Fees. Neither Borrower nor any of its Affiliates has utilized the
services of any broker or finder in connection with Borrower’s obtaining
financing from the Lender Group under this Agreement, and any brokerage
commission or findersfinder’s fee payable in connection herewith shall be the
sole responsibility of Borrower or its Affiliates.

5.15 Intellectual Property. Borrower and its Subsidiaries own, or hold licenses
in, all trademarks, trade names, copyrights, patents, patent rights, and
licenses that are necessary to the conduct of its business as currently
conducted, and attached hereto as Schedule 5.15 (as updated from time to time)
is a true, correct, and complete listing of all material patents, patent
applications, trademarks, trademark applications, copyrights, and copyright
registrations as to which Borrower or one of its Subsidiaries is the owner or is
an exclusive licensee, other than shrink wrap and other similar licenses
generally available to the public.

5.16 Leases. Borrower and its Subsidiaries enjoy peaceful and undisturbed
possession under all leases material to their business and to which they are
parties or under which they are operating, and all of such leases are valid and
subsisting and no material default by Borrower or its Subsidiaries exists under
any of them.

5.17 Deposit Accounts and Securities Accounts. Set forth on Schedule 5.17 is a
listing of all of Borrower’s and its Subsidiaries’ Deposit Accounts and,
Securities Accounts, including, with respect to each bank or securities
intermediary (a) the name and address of such Person, and (b) the account
numbers of the Deposit Accounts or Securities Accounts maintained with such
Person.

 

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5.18 Complete Disclosure. All factual information (taken as a whole) furnished
by or on behalf of HTGC, Borrower or their respective Subsidiaries in writing to
Agent or any Lender (including all information contained in the Schedules hereto
or in the other Loan Documents) for purposes of or in connection with this
Agreement, the other Loan Documents, or any transaction contemplated herein or
therein is, and all other such factual information (taken as a whole) hereafter
furnished by or on behalf of HTGC, Borrower or their respective in writing to
Agent or any Lender will be, true and accurate, in all material respects, on the
date as of which such information is dated or certified and not incomplete by
omitting to state any fact necessary to make such information (taken as a whole)
not misleading in any material respect at such time in light of the
circumstances under which such information was provided. As of the date on which
any Projections are delivered to Agent, such Projections represent Borrower’s
good faith estimate of its and its Subsidiaries’ future performance for the
periods covered thereby based upon reasonable assumptions when made; provided,
however, that the parties acknowledge that the Projections are merely estimates
and that there is no guarantee that Borrower will achieve the results forecast
in the Projections.

5.19 Indebtedness. Set forth on Schedule 5.19 is a true and complete list of all
Indebtedness of Borrower and its Subsidiaries outstanding immediately prior to
the Closing Date that is to remain outstanding after the Closing Date and such
Schedule accurately reflects the aggregate principal amount of such Indebtedness
and describes the principal terms thereof.

5.20 Compliance. The standard forms and documents evidencing and executed in
connection with Notes Receivable and all actions and transactions by Borrower in
connection therewith comply in all material respects with all applicable laws.
Such standard forms and documents are commensurate with forms and documentation
used by prudent lenders in the same or similar circumstances as Borrower, and,
without limiting the foregoing, are sufficient to create valid, binding and
enforceable obligations of each Account Debtor named therein.

5.21 Servicing. Borrower has entered into the Sale and Servicing Agreement,
pursuant to which Borrower has engaged HTGC, as the initial Servicer and as
Borrower’s agent, to monitor, manage, enforce and collect the Notes Receivables
and disburse Collections in respect thereof as provided by the Sale and
Servicing Agreement, subject to this Agreement. HTGC has, and any replacement
Servicer proposed by Borrower will have, the requisite knowledge, experience,
expertise and capacity to service the Notes Receivables.

5.22 Permits, Licenses, Etc.. Each of Borrower and HTGC has, and is in
compliance in all material respects with, all permits, licenses, authorizations,
approvals, entitlements and accreditations required for such Person lawfully to
own, lease, manage or operate, or to acquire, each business and the Real
Property currently owned, leased, managed or operated, or to be acquired, by
such Person, except for such permits, licenses, authorizations, approvals,
entitlements and accreditations the absence of which could not reasonably be
expected to result in a Material Adverse Change. To Borrower’s knowledge, no
condition exists or event has occurred which, in itself or with the giving of
notice or lapse of time or both, would result in the suspension, revocation,
impairment, forfeiture or non-renewal of any such permit, license,
authorization, approval, entitlement or accreditation, the loss of which could
reasonably be expected to result in a Material Adverse Change, and, to
Borrower’s knowledge, there is no claim that any thereof is not in full force
and effect. Schedule 5.22 lists all of the licenses,

 

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franchises, approvals or consents of any Governmental Authority or other Person
that is required for Borrower to conduct its business as currently conducted or
proposed to be conducted except for such licenses, franchises, approvals, or
consents the absence of which could not reasonably be expected to result in a
Material Adverse Change.

5.23 Margin Stock. Borrower is not and will not be engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulations T, U or X of the Board of Governors of the Federal
Reserve System), and no proceeds of any Advance will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.

5.24 Holding Company and Investment Company Acts. Borrower is not an “investment
company” or “promoter” of, or “principal underwriter” of or for, an “investment
company”, as such terms are defined in the Investment Company Act of 1940, as
amended.

6. AFFIRMATIVE COVENANTS.

Borrower covenants and agrees that, from and after the Closing Date and until
termination of all of the Commitments and payment in full of the Obligations,
Borrower shall and shall cause each of its Subsidiaries to do all of the
following:

6.1 Accounting System. Maintain a system of accounting that enables Servicer to
produce financial statements in accordance with GAAP and maintain records
pertaining to the Collateral that contain information as from time to time
reasonably may be requested by Agent. Borrower also shall keep a reporting
system that shows all additions, fees, payments, claims, and write-downs with
respect to the Notes Receivable.

6.2 Collateral Reporting. Provide or cause Servicer to provide Agent (and if so
requested by Agent, with copies for each Lender) with the following documents at
the following times in form satisfactory to Agent:

 

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Daily    (a) notice of all claims, offsets, or disputes asserted by Account
Debtors with respect to any of Borrower’s Notes Receivables; Date of each
Advance and at least monthly (not later than the 10th day of each month)    (b)
a Borrowing Base Certificate which includes (i) a detailed calculation of the
Borrowing Base as of the date of the requested Advance, and (ii) detail
regarding Notes Receivables that are not Eligible Notes Receivables; Monthly
(not later than the 10th day of each month), calculated or determined as of the
last day of the preceding month   

(c) a detailed aging, by total, of the Notes Receivables of Borrower, together
with a reconciliation to the detailed calculation of the Borrowing Base most
recently provided to Agent,

 

(d) Collateral reports specifying (i) the current unpaid principal balance of
each Note Receivable, (ii) current committed amount with respect to each Note
Receivable, (iii) current payment status of each Note Receivable, and

 

(iv) brief description of collateral for each Note Receivable, with additional
detail showing additions to and deletions from the Collateral,

   (e) a summary aging by Account Debtor of all Notes Receivable of Borrower,
including delinquency and past-due reports and indication of any litigation or
foreclosure action,    (f) a summary report of categories of non-Eligible Notes
Receivable for the month most recently ended,    (g) Borrower’s credit watch
list, Upon request by Agent    (h) a summary aging, by vendor, of HTGC’s and its
Subsidiaries’ accounts payable and any book overdraft, and   

(i) such other reports as to the Collateral, or the financial condition of

Borrower and its Subsidiaries, as Agent may request.

In connection with the foregoing reports, (i) Borrower shall maintain and
utilize accounting and reporting systems reasonably acceptable to Agent, (ii) if
requested by Agent, Borrower agrees to cooperate fully with Agent to facilitate
and implement a system of electronic collateral reporting in order to provide
electronic reporting of each of the items set forth above, (iii) if requested by
Agent, Borrower shall use Agent’s electronic reporting system for all reporting
of the foregoing information to Agent, and (iv) to the extent required by Agent,
an Authorized Person or other representative acceptable to Agent will meet with
Agent from time to time as requested by Agent to review and discuss all Notes
Receivable then owned by Borrower.

6.3 Financial Statements, Reports, Certificates. Deliver to Agent, with copies
to each Lender:

(a) as soon as available, but in any event within thirty (30) days after the end
of each of the first two fiscal months of each fiscal quarter of Borrower,

(i) an unaudited consolidated balance sheet, income statement and statement of
cash flow (if applicable) covering such Person’s and its Subsidiaries’
operations during such period and the year-to-date period ending thereon, in
each case setting forth in comparative form the figures for the corresponding
periods in the prior year, in form acceptable to Agent, and

 

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(ii) a Compliance Certificate demonstrating in reasonable detail (A) Borrower’s
compliance at the end of such period with the applicable financial and portfolio
covenants contained in Sections 7.16 and 7.17 that are measured on a monthly
basis, and (B) HTGC’s compliance at the end of such period with the minimum
portfolio funding liquidity covenant contained in Sections 7.16(f);

(b) as soon as available, but in any event within forty-five (45) days after the
end of each fiscal quarter of Borrower and HTGC,

(i) an unaudited consolidated and consolidating balance sheet, income statement
and statement of cash flow covering HTGC’s and its Subsidiaries’ operations
during such period and the year-to-date period ending thereon, in each case
setting forth in comparative form the figures for the corresponding periods in
the prior year, in form acceptable to Agent; provided, that the availability via
EDGAR, or any successor system of the SEC, of the financial statements in HTGC’s
applicable quarterly report on Form 10-Q shall be deemed delivery to Agent of
the financial statements required to be delivered pursuant to this
clause (b)(i), on the date such documents are made so available, and

(ii) a Compliance Certificate demonstrating in reasonable detail Borrower’s and
HTGC’s compliance at the end of such period with the applicable financial and
portfolio covenants contained in Sections 7.16 and 7.17 that are measured on a
quarterly basis;

(c) as soon as available, but in any event within ninety (90) days after the end
of each fiscal year of Borrower and HTGC,

(i) consolidated financial statements of HTGC and its Subsidiaries for such
fiscal year, audited by PricewaterhouseCoopers LLP or other independent
certified public accountants reasonably acceptable to Agent and certified,
without any qualifications (including any (A) “going concern” or like
qualification or exception, (B) qualification or exception as to the scope of
such audit, or (C) qualification which relates to the treatment or
classification of any item and which, as a condition to the removal of such
qualification, would require an adjustment to such item, the effect of which
would be to cause any noncompliance with the provisions of Sections 7.16 or
7.17), by such accountants to have been prepared in accordance with GAAP (such
audited financial statements to include a balance sheet, income statement, and
statement of cash flow and, if prepared, such accountants’ letter to
management); provided, that the availability via EDGAR, or any successor system
of the SEC, of the financial statements in HTGC’s annual report on Form 10-K
shall be deemed delivery to Agent of the financial statements required to be
delivered pursuant to this clause (c)(i), on the date such documents are made so
available, and

 

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(ii) a Compliance Certificate demonstrating in reasonable detail Borrower’s and
HTGC’s compliance at the end of such period with the applicable financial and
portfolio covenants contained in Sections 7.16 and 7.17;

(d) as soon as available, but in any event not less than thirty (30) days prior
to the commencement of each fiscal year of Borrower and HTGC, copies of
Projections for Borrower and HTGC that have been provided to the Board of
Directors of Borrower or HTGC for the forthcoming fiscal year, certified by the
chief financial officer of Borrower and the chief financial officer of HTGC, as
applicable, as being such officer’s good faith estimate of the financial
performance of Borrower and HTGC during the period covered thereby,

(e) if requested by Agent, and if and when filed by Borrower or HTGC, copies of
Borrower’s or HTGC’s federal income tax returns, and any amendments thereto,
filed with the Internal Revenue Service,

(f) promptly notify Agent of the following regarding each Note Receivable and
Note Receivable Collateral which secures such Note Receivable:

(i) the occurrence of any event which may materially impair the prospect of
payment of such Note Receivable;

(ii) the sending by Servicer or Borrower of any notice of default, recordation
by Servicer or Borrower of any notice of foreclosure and the date of any
scheduled foreclosure sale thereon, or filing by Servicer or Borrower of any
lawsuit (including case number and court) on a Note Receivable or related Note
Receivable Collateral;

(iii) the consummation of any foreclosure sale or any deed or bill of sale in
lieu of foreclosure, retention of collateral in satisfaction of debt or similar
transaction, and deliver to Agent true and complete copies of all documentation
executed in respect thereof (in the case of notices, postings and the like, and
in the case of deeds, bills of sale or retention of collateral transactions, all
documents related to consummation of such transaction or transfer of such
property); and

(iv) the receipt by Servicer or Borrower of a notice by any Person of (x) a
default with respect to any agreement evidencing or governing a Lien on any Note
Receivable Collateral or (y) any foreclosure sale with respect to any Note
Receivable Collateral;

(g) promptly, but in any event within five (5) days after Borrower has knowledge
of any event or condition that constitutes a Default or an Event of Default,
notice thereof and a statement of the curative action that Borrower proposes to
take with respect thereto,

(h) promptly after the commencement thereof, but in any event within five
(5) days after the service of process with respect thereto on HTGC, Borrower or
any of their respective Subsidiaries, notice of all actions, suits, or
proceedings brought by or against HTGC, Borrower or any of their respective
Subsidiaries before any Governmental Authority which, if determined adversely to
HTGC, Borrower or such Subsidiary, reasonably could be expected to result in a
Material Adverse Change,

 

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(i) (A) promptly, notice that a new proposed Split-Funded Note Receivable will
be initially included in the calculation of availability for extensions of
credit under any credit facility for an Affiliate of Borrower or HTGC (in each
case before the application of any concentration limits under the loan documents
for such credit facility), and (B) promptly, but in any event within 3 Business
Days after an Executive Officer of Borrower or HTGC has knowledge thereof,
notice that a Split-Funded Note Receivable or newly-proposed Split-Funded Note
Receivable has been or will be excluded from the calculation of availability for
extensions of credit under any credit facility for an Affiliate of Borrower or
HTGC (in each case before the application of any concentration limits under the
loan documents for such credit facility); provided, that with respect to any
proposed Split-Funded Note Receivable that will be excluded from the calculation
of availability for extensions of credit under any credit facility for an
Affiliate of Borrower or HTGC (subject in each case to application of
concentration limits under the loan documents for such credit facility) before
actually initially being included thereunder, the notice to be provided by this
clause (B) will be delivered to Agent prior to the making of any extension of
credit with respect thereto under this Agreement, and

(j) (i) upon the request of Agent, any other information reasonably requested
relating to the financial condition of HTGC, Borrower or any of their respective
Subsidiaries.

In addition, Borrower agrees to deliver financial statements prepared on both a
consolidated and consolidating basis to the extent required by this Section 6.3,
and agrees that Borrower will not have fiscal year different from that of HTGC
and that no Subsidiary of Borrower will have a fiscal year different from that
of Borrower. Borrower also agrees to cooperate with Agent to allow Agent to
(A) audit Borrower or its Subsidiaries, and HTGC, and (B) consult with its and
each such other Person’s independent certified public accountants if Agent
reasonably requests the right to do so. In such connection, Borrower authorizes,
and will cooperate with Agent to cause its Subsidiaries and HTGC to authorize,
its independent certified public accountants to communicate with Agent and to
release to Agent whatever financial information concerning such Person as Agent
reasonably may request.

6.4 Notices Regarding Collections Servicing Staff. Provide Agent with notice
promptly (and in any case within two (2) Business Days) if any Authorized Person
of Borrower or HTGC ceases to continue to hold such position.

6.5 Collection of Notes Receivable. (a) Subject to Section 4.8, to use or cause
Servicer to use commercially reasonable efforts, at Borrower’s sole cost and
expense (including through the application of available funds pursuant to
Section 2.3(b)) and in its own name, in accordance with industry standards and
applicable laws, to promptly and diligently collect and enforce payment of all
Notes Receivable to the extent that it is commercially reasonable to do so and
in a commercially reasonable manner, and defend and hold Lender harmless from
any and all loss, damage, penalty, fine or expense arising from such collection
or enforcement, (b) in accordance with the Borrower’s Required Procedures,
maintain at its chief executive office, and, upon the request of Lender, make
available to Lender copies of its Notes Receivable and all related documents and
instruments, and all files, surveys, certificates, correspondence,

 

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appraisals, computer programs, accounting records and other information and data
relating to the Collateral, and (c) permit Lender or its representatives to
discuss with Borrower’s officers or with appraisers furnishing appraisals of
property securing any Note Receivable the procedures for preparation, review and
retention of, and to review and obtain copies of, such appraisals.

6.6 Maintenance of Properties. Maintain and preserve all of its properties which
are necessary or useful in the proper conduct of its business in good working
order and condition, ordinary wear and tear excepted, and comply at all times
with the provisions of all material leases to which it is a party as lessee so
as to prevent any loss or forfeiture thereof or thereunder.

6.7 Taxes. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Borrower,
its Subsidiaries or any of their respective assets to be paid in full, before
delinquency or before the expiration of any extension period, except to the
extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest. Borrower will and will cause its Subsidiaries to make timely
payment or deposit of all tax payments and withholding taxes required of it and
them by applicable laws, including those laws concerning F.I.C.A., F.U.T.A.,
state disability, and local, state, and federal income taxes, and will, upon
request, furnish Agent with proof satisfactory to Agent indicating that Borrower
and its Subsidiaries have made such payments or deposits.

6.8 Insurance.

(a) At Borrower’s expense, maintain insurance respecting its and its
Subsidiaries’ assets wherever located covering loss or damage by fire, theft,
explosion, and all other hazards and risks as ordinarily are insured against by
other Persons engaged in the same or similar businesses. Borrower also shall
maintain business interruption, and public liability insurance, as well as
insurance against fraud, larceny, embezzlement, and criminal misappropriation.
All such policies of insurance shall be in such amounts and with such insurance
companies as are reasonably satisfactory to Agent. Borrower shall deliver copies
of all such policies to Agent with an endorsement naming Agent as the sole loss
payee (under a satisfactory lender’s loss payable endorsement) or additional
insured, as appropriate. Each policy of insurance or endorsement shall contain a
clause requiring the insurer to give not less than 30 days’ prior written notice
to Agent in the event of cancellation of the policy for any reason whatsoever.
Borrower shall also ensure that Servicer maintains similar insurance coverages
for the benefit of Borrower under the Sale and Servicing Agreement.

(b) Borrower shall give Agent prompt notice of any loss covered by such
insurance. Agent shall have the exclusive right to adjust any losses claimed
under any such insurance policies in excess of $50,000 (or in any amount after
the occurrence and during the continuation of an Event of Default), without any
liability to Borrower whatsoever in respect of such adjustments. Any monies
received as payment for any loss under any insurance policy mentioned above
(other than liability insurance policies) or as payment of any award or
compensation for condemnation or taking by eminent domain, shall be paid over to
Agent to be applied at the option of the Required Lenders either to the
prepayment of the Obligations or shall be disbursed to Borrower under staged
payment terms reasonably satisfactory to the Required Lenders for application to
the cost of repairs, replacements, or restorations. Any such repairs,

 

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replacements, or restorations shall be effected with reasonable promptness and
shall be of a value at least equal to the value of the items of property
destroyed prior to such damage or destruction.

(c) Borrower will not and will not suffer or permit its Subsidiaries to take out
separate insurance concurrent in form or contributing in the event of loss with
that required to be maintained under this Section 6.8, unless Agent is included
thereon as an additional insured or loss payee under a lender’s loss payable
endorsement. Borrower promptly shall notify Agent whenever such separate
insurance is taken out, specifying the insurer thereunder and full particulars
as to the policies evidencing the same, and copies of such policies promptly
shall be provided to Agent.

6.9 Location of Collateral. Keep the Collateral only at the locations identified
on Schedule 5.4, or at the Agent or at the Collateral Custodian in the case of
Notes Receivable, and maintain the chief executive offices of Borrower and its
Subsidiaries only at the locations identified on Schedule 5.6(b); provided,
however, that Borrower may amend Schedules 5.4 and 5.6 so long as such amendment
occurs by written notice to Agent not less than thirty (30) days prior to the
date on which such Collateral is moved to such new location or such chief
executive office is relocated, so long as such new location is within the
continental United States, and so long as, at the time of such written
notification, Borrower provides to Agent a Collateral Access Agreement with
respect thereto.

6.10 Compliance with Laws. Comply with the requirements of all applicable laws,
rules, regulations, and orders of any Governmental Authority, other than laws,
rules, regulations, and orders the non-compliance with which, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Change.

6.11 Leases. Pay when due all rents and other amounts payable under any leases
to which Borrower or any of its Subsidiaries is a party or by which Borrower’s
or any such its Subsidiaries’ properties and assets are bound, unless such
payments are the subject of a Permitted Protest.

6.12 Existence. At all times preserve and keep in full force and effect
Borrower’s and its Subsidiaries’ valid existence and good standing and any
rights and franchises material to their businesses. Borrower acknowledges that
the Lender Group is entering into the Loan Documents in reliance upon Borrower’s
identity as a separate legal entity from each of its other Affiliates. From and
after the Closing Date, Borrower shall conduct its own business in its own name
and take all reasonable steps, including, without limitation, all steps that
Agent may from time to time reasonably request, to maintain Borrower’s identity
and existence as a separate legal entity and to make it manifest to third
parties that Borrower is an entity with assets and liabilities distinct from
those of its other Affiliates. Without limiting the generality of the foregoing
and in addition to the other covenants set forth herein, Borrower shall:

(a) unless in favor of Borrower with respect to the allocation of ordinary
course operating expenses, conduct all transactions with its other Affiliates
strictly on an arm’s-length basis and allocate all overhead expenses (including,
without limitation, telephone and other utility charges) for items shared
between such other Affiliates, and Borrower on the basis of actual use to the
extent practicable and, to the extent such allocation is not practicable, on a
basis reasonably related to actual use;

 

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(b) observe all corporate formalities as a distinct entity, and ensure that all
actions relating to the dissolution or liquidation of Borrower or the initiation
or participation in, acquiescence in, or consent to any bankruptcy, insolvency,
reorganization, or similar proceeding involving Borrower, are duly authorized by
unanimous vote of its directors;

(c) maintain Borrower’s Books separate from those of its other Affiliates and
otherwise readily identifiable as its own assets rather than assets of its other
Affiliates;

(d) except as herein specifically otherwise provided, not commingle funds or
other assets of Borrower with those of its other Affiliates and, except for the
Cash Management Accounts, not maintain bank accounts or other depository
accounts to which Borrower is an account party, into which Borrower makes
deposits or from which Borrower has the power to make withdrawals; and

(e) not permit Borrower to pay or finance any of its other Affiliates’ operating
expenses not properly allocable to Borrower.

6.13 Environmental. (a) Keep any property either owned or operated by Borrower
or its Subsidiaries free of any Environmental Liens or post bonds or other
financial assurances sufficient to satisfy the obligations or liability
evidenced by such Environmental Liens, (b) comply, in all material respects,
with Environmental Laws and provide to Agent documentation of such compliance
which Agent reasonably requests, (c) promptly notify Agent of any release of a
Hazardous Material in any reportable quantity from or onto property owned or
operated by Borrower or its Subsidiaries and take any Remedial Actions required
to abate said release or otherwise to come into compliance with applicable
Environmental Law, and (d) promptly, but in any event within 5 days of its
receipt thereof, provide Agent with written notice of any of the following:
(i) notice that an Environmental Lien has been filed against any of the real or
personal property of Borrower or its Subsidiaries, (ii) commencement of any
Environmental Action or notice that an Environmental Action will be filed
against Borrower or its Subsidiaries, and (iii) notice of a violation, citation,
or other administrative order which reasonably could be expected to result in a
Material Adverse Change.

6.14 Disclosure Updates. Promptly and in no event later than five (5) Business
Days after obtaining knowledge thereof, notify Agent if any written information,
exhibit, or report furnished to the Lender Group contained, at the time it was
furnished, any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements contained therein not misleading
in light of the circumstances in which made. The foregoing to the contrary
notwithstanding, any notification pursuant to the foregoing provision will not
cure or remedy the effect of the prior untrue statement of a material fact or
omission of any material fact nor shall any such notification have the effect of
amending or modifying this Agreement or any of the Schedules hereto.

6.15 Formation of Subsidiaries. Not form or acquire any Subsidiary of Borrower
on or after the Closing Date without the prior written consent of Agent, and at
the time that

 

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Borrower forms any direct or indirect Subsidiary or acquires any direct or
indirect Subsidiary after the Closing Date with the prior written consent of the
Agent, Borrower shall, if and to the extent required by Agent, (a) cause such
new Subsidiary to provide to Agent a joinder to this Agreement, together with
such other security documents (including mortgages with respect to any Real
Property of such new Subsidiary), as well as appropriate financing statements
(and with respect to all property subject to a mortgage, fixture filings), all
in form and substance satisfactory to Agent (including being sufficient to grant
Agent a first priority Lien (subject to Permitted Liens) in and to the assets of
such newly formed or acquired Subsidiary), (b) provide to Agent a pledge
agreement and appropriate certificates and powers or financing statements,
hypothecating all of the direct or beneficial ownership interest in such new
Subsidiary, in form and substance satisfactory to Agent, and (c) provide to
Agent all other documentation, including one or more opinions of counsel
satisfactory to Agent, if requested by Agent, which in its opinion is
appropriate with respect to the execution and delivery of the applicable
documentation referred to above (including policies of title insurance or other
documentation with respect to all property subject to a mortgage). Any document,
agreement, or instrument executed or issued pursuant to this Section 6.15 shall
be a Loan Document.

6.16 Required Asset Documents. Immediately upon receipt, deliver to Agent or the
Collateral Custodian (if one has been appointed) all of the Required Asset
Documents related to such Note Receivable.

6.17 Sale and Servicing Agreement. Cause Servicer to promptly provide Agent with
true and complete copies of all notices sent or received by Servicer under the
Sale and Servicing Agreement.

6.18 Escrow Deposits. Deposit into a Deposit Account that is subject to a
perfected Agent’s Lien all amounts advanced by Borrower into escrow and all
amounts delivered to Borrower to be held in escrow, including, without
limitation, construction funds, insurance premiums and proceeds, taxes, and
other funds delivered to Borrower to be held on behalf of any Account Debtor.

6.19 Maintenance of Treasury Management Accounts at Wells Fargo. Maintain all of
Borrower’s respective treasury management accounts at Wells Fargo.

7. NEGATIVE COVENANTS.

Borrower covenants and agrees that, from and after the Closing Date and until
termination of all of the Commitments and full and final payment of the
Obligations, Borrower will not and will not permit any of its Subsidiaries to do
any of the following:

7.1 Indebtedness. Create, incur, assume, suffer to exist, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:

(a) Indebtedness evidenced by this Agreement and the other Loan Documents,

(b) Subordinated Debt,

 

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(c) other Indebtedness set forth on Schedule 5.19,

(d) Permitted Purchase Money Indebtedness,

(e) refinancings, renewals, or extensions of Indebtedness permitted under
clauses (c) and (d) of this Section 7.1 (and continuance or renewal of any
Permitted Liens associated therewith) so long as: (i) the terms and conditions
of such refinancings, renewals, or extensions do not, in Agent’s judgment,
materially impair the prospects of repayment of the Obligations by Borrower or
materially impair Borrower’s creditworthiness, (ii) such refinancings, renewals,
or extensions do not result in an increase in the principal amount of, or
interest rate with respect to, the Indebtedness so refinanced, renewed, or
extended, (iii) such refinancings, renewals, or extensions do not result in a
shortening of the average weighted maturity of the Indebtedness so refinanced,
renewed, or extended, nor are they on terms or conditions that, taken as a
whole, are materially more burdensome or restrictive to Borrower, (iv) if the
Indebtedness that is refinanced, renewed, or extended was subordinated in right
of payment to the Obligations, then the terms and conditions of the refinancing,
renewal, or extension Indebtedness must include subordination terms and
conditions that are at least as favorable to the Lender Group as those that were
applicable to the refinanced, renewed, or extended Indebtedness, and (v) the
Indebtedness that is refinanced, renewed, or extended is non-recourse to any
Person that is liable on account of the Obligations other than those Persons
which were obligated with respect to the Indebtedness that was refinanced,
renewed, or extended, and

(f) endorsement of instruments or other payment items for deposit.

7.2 Liens. Create, incur, assume, or suffer to exist, directly or indirectly,
any Lien on or with respect to any of its assets, of any kind, whether now owned
or hereafter acquired, or any income or profits therefrom, except for Permitted
Liens (including Liens that are replacements of Permitted Liens to the extent
that the original Indebtedness is refinanced, renewed, or extended under
Section 7.1(e) and so long as the replacement Liens only encumber those assets
that secured the refinanced, renewed, or extended Indebtedness).

7.3 Restrictions on Fundamental Changes.

(a) Enter into any merger, consolidation, reorganization, or recapitalization,
or amend any of its Governing Documents as in effect on the Original Closing
Date.

(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution).

(c) Suspend or go out of a substantial portion of its or their business.

(d) Convey, sell, lease, license, assign, transfer, or otherwise dispose of, in
one transaction or a series of transactions, all or any substantial part of its
assets, other than through Permitted Dispositions.

(e) Divide itself into two or more limited liability companies (pursuant to a
“plan of division” as contemplated under the Delaware Limited Liability Company
Act or otherwise); provided, that in the event that any Loan Party that is a
limited liability company

 

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divides itself into two or more limited liability companies, whether in
contravention of this Agreement, or not, any limited liability companies formed
as a result of such division shall comply with the terms and conditions of
Section 6.15 of this Agreement as though such Person(s) was a direct or an
indirect Subsidiary of Borrower.

7.4 Disposal of Assets. Other than Permitted Dispositions, convey, sell, lease,
license, assign, transfer, or otherwise dispose of (or enter into an agreement
to convey, sell, lease, license, assign, transfer, or otherwise dispose of) any
of Borrower’s or its Subsidiaries’ assets (including, without limitation, in the
case of a limited liability company, an effective transfer of assets by way of a
division).

7.5 Change Name. Change Borrower’s or any of its Subsidiaries’ name,
organizational identification number, state of organization or organizational
identity; provided, however, that Borrower or any of its Subsidiaries may change
their names upon at least 30 days’ prior written notice to Agent of such change
and so long as, at the time of such written notification, Borrower or its
Subsidiary provides any financing statements necessary to perfect and continue
perfected the Agent’s Liens.

7.6 Nature of Business. Make any change in the nature of its or their business,
or acquire any properties or assets that are not reasonably related to the
conduct of such business activities. Without limiting the generality of the
foregoing, Borrower shall not permit HTGC to cause the portfolio of Notes
Receivable held by Borrower, as opposed to HTGC or any other Subsidiary or
Affiliate of HTGC, to be selected in a manner adverse to Borrower or Lender.

7.7 Prepayments and Amendments. Except in connection with a refinancing
permitted by Section 7.1(e), or a Restricted Payment or other payment permitted
by Section 7.10,

(a) optionally prepay, redeem, defease, purchase, or otherwise acquire any
Indebtedness of Borrower or its Subsidiaries, other than the Obligations in
accordance with this Agreement,

(b) make any payment on account of Indebtedness that has been contractually
subordinated in right of payment if such payment is not permitted at such time
under the subordination terms and conditions, or

(c) directly or indirectly, amend, modify, alter, increase, or change any of the
terms or conditions of (i) any agreement, instrument, document, indenture, or
other writing evidencing or concerning any Subordinated Debt or any Indebtedness
permitted under Sections 7.1(c), (d) or (e), except as permitted by Sections
7.1(e), or (ii) any Intercreditor Agreement without the prior, written consent
of Agent.

7.8 Change of Control. Cause, permit, or suffer, directly or indirectly, any
Change of Control.

7.9 Required Procedures. Make any changes or revisions in any material respect
to the Borrower’s Required Procedures without advance notice to, and consent by,
Agent.

 

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7.10 Restricted Payments. Make any Restricted Payment; provided, however, that
so long as no Default or Event of Default shall have occurred and be continuing
or would occur as a result thereof and Agent and Lenders shall have received the
financial statements required by Section 6.3(a) for the most recently completed
fiscal month, then Borrower may (a) make distributions to the holders of its
Stock to the extent permitted by applicable law, and (b) make regularly
scheduled payments of interest on the Subordinated Debt only as it becomes due
and payable.

7.11 Accounting Methods. Modify or change its fiscal year or its method of
accounting (other than as may be required to conform to GAAP) or enter into,
modify, or terminate any agreement currently existing, or at any time hereafter
entered into with any third party accounting firm or service bureau for the
preparation or storage of Borrower’s or its Subsidiaries’ accounting records
without said accounting firm or service bureau agreeing to provide Agent
information regarding the Collateral or Borrower’s and its Subsidiaries’
financial condition.

7.12 Investments. Except for Permitted Investments, directly or indirectly, make
or acquire any Investment or incur any liabilities (including contingent
obligations) for or in connection with any Investment.

7.13 Transactions with Affiliates. Directly or indirectly enter into or permit
to exist any transaction with any Affiliate of Borrower except for transactions
that (i) are in the ordinary course of Borrower’s business, (ii) are upon fair
and reasonable terms, (iii) are fully disclosed to Agent, and (iv) are no less
favorable to Borrower or its Subsidiaries, as applicable, than would be obtained
in an arm’s length transaction with a non-Affiliate.

7.14 Use of Proceeds. Use the proceeds of the Advances for any purpose other
than to pay transactional fees, costs, and expenses incurred in connection with
this Agreement, the other Loan Documents, and the transactions contemplated
hereby and thereby, and for working capital purposes or to make distributions to
the holders of its Stock to the extent permitted by applicable law to the extent
permitted by this Agreement.

7.15 Collateral with Bailees. Store any Collateral at any time now or hereafter
with a bailee, warehouseman, or similar party, other than Agent or Collateral
Custodian (if one has been appointed); provided, that loan files that do not
include original promissory notes, Lien instruments, or assignments of Lien
instruments may be stored, from time to time, in a public warehouse, access to
which has been assigned by Borrower to Agent.

7.16 Financial Covenants.

(a) Minimum Tangible Net Worth of Borrower. Permit Borrower, on a consolidated
basis with its Subsidiaries, to fail to maintain as of the end of each of its
fiscal quarters a sum of (i) Tangible Net Worth, plus (ii) Subordinated Debt,
that is greater than or equal to the sum of (A) the lessergreater of (I) the sum
of the outstanding principal amounts of Borrower’s three largest Notes
Receivable, and (II) $50,000,000,75,000,000, plus (B) any positive amount of
cumulative capital contributions made to Borrower from and after the
FirstSeventh Amendment Closing Date. Notwithstanding the foregoing, Borrower
will not be required to calculate or comply with this financial covenant as of
the end of any fiscal quarter when there are no outstanding Advances under the
Loan Agreement.

 

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(b) Minimum Interest Coverage Ratio of Borrower. Permit Borrower, on a
consolidated basis with its Subsidiaries, to fail to maintain, as measured on
the last day of each of its fiscal quarters, an Interest Coverage Ratio for the
three (3) fiscal month period then ended that is greater than or equal to
2.001.75 to 1.00. Notwithstanding the foregoing, Borrower will not be required
to calculate or comply with this financial covenant as of the end of any fiscal
quarter when there are no outstanding Advances under the Loan Agreement.

(c) Minimum Tangible Net Worth of HTGC. Permit HTGC, on a consolidated basis
with its Subsidiaries, to fail to maintain as of the end of each of its fiscal
quarters a sum of (i) Tangible Net Worth, plus (ii) Subordinated Debt, that is
greater than or equal to the sum of (A) $500,000,000, plus (B) ninety percent
(90%) of the cumulative amount of equity raised by HTGC after June 30,
2014.$675,000,000.

(d) Maximum Debt to Worth Ratio of HTGC. Permit HTGC, on a consolidated basis
with its Subsidiaries, to fail to maintain as of the end of each of its fiscal
quarters a Debt to Worth Ratio that is less than or equal to 1.25(i) during the
period from and after the Seventh Amendment Closing Date, through but excluding
the first anniversary of the Seventh Amendment Closing Date, less than or equal
to 1.50 to 1.00, (ii) during the period from and after the first anniversary of
the Seventh Amendment Closing Date, through but excluding the third anniversary
of the Seventh Amendment Closing Date, less than or equal to 1.75 to 1.00, and
(iii) thereafter, less than or equal to 2.00 to 1.00.

(e) Minimum Interest Coverage Ratio of HTGC. Permit HTGC, on a consolidated
basis with its Subsidiaries, to fail to maintain, as measured on the last day of
each of its fiscal quarters, an Interest Coverage Ratio for the three (3) fiscal
month period then ended that is greater than or equal to 2.001.75 to 1.00.

(f) Minimum Portfolio Funding Liquidity Covenant of HTGC. Permit HTGC, on a
consolidated basis with its Subsidiaries, to fail to maintain, as measured on
the last day of each of its fiscal months, an aggregate amount of unrestricted
cash balances and borrowing availability under committed lines of credit that is
greater than or equal to seventy-five percent (75%) of the aggregate amount of
unfunded commitments of Borrower to the makers of Notes Receivable.

7.17 Certain Borrower and HTGC Portfolio Covenants.

(a) Maximum Delinquent Notes Receivable Percentage of Borrower. Permit the
aggregate unpaid principal balance of all Notes Receivable that are Delinquent
Notes Receivable as of the last day of any fiscal month, to be in excess of ten
percent (10%) of the aggregate unpaid principal balance of all Notes Receivable
as of such day.

(b) Maximum Defaulted Notes Receivable Percentage of Borrower. Permit the
aggregate unpaid principal balance of all Notes Receivable that are Defaulted
Notes Receivable as of the last day of any fiscal month, to be in excess of five
percent (5%)of the aggregate unpaid principal balance of all Notes Receivable as
of such day.

 

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(c) Maximum Amount of Unfunded Commitments of Borrower. Permit the aggregate
amount of unfunded commitments of Borrower to the makers of Notes Receivable as
of the last day of any fiscal month to be in excess of the greater of (i)
$30,000,000, and (ii) forty percent (40%) of the aggregate amount of the
Commitments at such time.

(d) Maximum Delinquent Notes Receivable Percentage of HTGC’s Serviced
Portfolios. Permit the aggregate unpaid principal balance of all loans that are
serviced by HTGC for its Subsidiaries and Affiliates with respect to which any
payment thereunder remains outstanding and unpaid, in whole or in part, for more
than sixty (60) days past the date it became due and payable as of the last day
of any fiscal month, to be in excess of ten percent (10%) of the aggregate
unpaid principal balance of all such loans serviced by HTGC as of such day.

(e) Maximum Defaulted Notes Receivable Percentage of HTGC’s Serviced Portfolios.
Permit the aggregate unpaid principal balance of all loans that are serviced by
HTGC for its Subsidiaries and Affiliates with respect to which (a) any payment
thereunder remains outstanding and unpaid, in whole or in part, for more than
ninety (90) days past the date it became due and payable according to the
original face and tenor of such loan, (b) with respect to which foreclosure
proceedings have been initiated against any property securing such loan, or (c)
that HTGC deems to be non-collectible as of the last day of any fiscal month, to
be in excess of ten percent (10%) of the aggregate unpaid principal balance of
all such loans serviced by HTGC as of such day.

7.18 Sale and Servicing Agreement.

(a) With respect to the Sale and Servicing Agreement (i) amend or modify the
Sale and Servicing Agreement in any manner that (A) causes or allows the
aggregate amount of the servicing fees payable under the Sale and Servicing
Agreement to exceed, as of any time of determination, an amount equal to the
amount of the servicing fees as determined pursuant to the Sale and Servicing
Agreement on the Original Closing Date, (B) except as allowed by clause
(A) preceding, obligates Borrower for payment of any professional costs or court
costs incurred by Servicer in servicing under the Sale and Servicing Agreement,
(C) causes or allows the requirements applicable to Servicer’s standards of
conduct, compliance with laws or licensing requirements to be less restrictive
than exist on the Original Closing Date, (D) releases any indemnity obligations
of Servicer or modifies any such obligations in any manner that is less
restrictive than exist on the Original Closing Date, (E) relieves Servicer of
its obligation to perform under the Sale and Servicing Agreement, or
(ii) terminate the Sale and Servicing Agreement, or allow the Sale and Servicing
Agreement to be terminated, in any such case without the prior written consent
of Agent.

(b) Allow Servicer to delegate any of its duties or functions under the Sale and
Servicing Agreement to any Person, or otherwise engage any such Person to
perform any such duties or functions for or on behalf of Servicer or Borrower,
in any such case without the prior written consent of Agent.

 

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(c) Transfer the duties and functions of Servicer under the Sale and Servicing
Agreement to any other Person without the prior written consent of Agent.

8. EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an event of default
(each, an “Event of Default”) under this Agreement:

8.1 If Borrower fails to pay when due and payable, or when declared due and
payable, all or any portion of the Obligations (whether of principal, interest
(including any interest which, but for the provisions of the Bankruptcy Code,
would have accrued on such amounts), any amount payable to Issuing Bank in
reimbursement of any drawing under a Letter of Credit, fees and charges due
Agent or any Lender, reimbursement of Lender Group Expenses, or other amounts
constituting Obligations);

8.2 If Borrower (a) fails to perform, keep, or observe any covenant or other
provision contained in Sections 2.6, 6.2, 6.3, 6.5, 6.8, 6.12, 6.14, 6.16, 6.17,
6.18, and 7.1 through 7.18 of this Agreement or any comparable provision
contained in any of the other Loan Documents (b) fails to perform, keep, or
observe any covenant or other provision contained in Sections 6.1, 6.6, 6.7,
6.9, 6.10, 6.11, 6.13, or 6.15 of this Agreement and such failure continues for
a period of ten (10) days after the date on which such failure first occurs, or
(c) fails to perform, keep, or observe any covenant or other provision contained
in any Section of this Agreement (other than a Section that is expressly dealt
with elsewhere in this Section 8.2), including failure to satisfy a condition
subsequent set forth in Section 3.2 within the period stated, or the other Loan
Documents, and such failure continues for a period of fifteen (15) Business Days
after the date on which such failure first occurs;

8.3 If assets of Borrower or any of its Subsidiaries having an aggregate value
in excess of $250,000, or assets of HTGC having an aggregate value in excess of
$1,000,000, are attached, seized, subjected to a writ or distress warrant,
levied upon, or comes into the possession of any court-appointed receiver,
trustee, custodian, conservator, or similar official;

8.4 If an Insolvency Proceeding is commenced by Borrower or any of its
Subsidiaries, or HTGC;

8.5 If an Insolvency Proceeding is commenced against Borrower, or any of its
Subsidiaries, or HTGC, and any of the following events occur: (a) such Person
consents to the institution of such Insolvency Proceeding against it, (b) the
petition commencing the Insolvency Proceeding is not timely controverted;
provided, however, that, during the pendency of such period, Agent (including
any successor agent) and each other member of the Lender Group shall be relieved
of their obligations to extend credit hereunder, (c) the petition commencing the
Insolvency Proceeding is not dismissed within 45 calendar days of the date of
the filing thereof; provided, however, that, during the pendency of such period,
Agent (including any successor agent) and each other member of the Lender Group
shall be relieved of their obligations to extend credit hereunder, (d) an
interim trustee is appointed to take possession of all or any substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of such Person, or (e) an order for relief shall have
been entered therein;

 

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8.6 If Borrower or any of its Subsidiaries, or HTGC, is enjoined, restrained, or
in any way prevented by court order from continuing to conduct all or any
material part of its business affairs;

8.7 If a notice of Lien, levy, or assessment is filed of record with respect to
any of the assets of Borrower or any of its Subsidiaries having an aggregate
value in excess of $250,000, or of any of the assets of HTGC having an aggregate
value in excess of $ 1,000,000, by the United States, or any department, agency,
or instrumentality thereof, or by any state, county, municipal, or governmental
agency, or if any taxes or debts owing at any time hereafter to any one or more
of such entities becomes a Lien upon any of the assets of Borrower or any of its
Subsidiaries having an aggregate value in excess of $250,000, or of any of the
assets of HTGC having an aggregate value in excess of $1,000,000, and in any
such case the same is not paid before such payment is delinquent;

8.8 If a judgment or other claim becomes a Lien or encumbrance upon any assets
of Borrower or any of its Subsidiaries having an aggregate value in excess of
$250,000, or of any of the assets of HTGC having an aggregate value in excess of
$1,000,000, and in any such case either (a) enforcement of such judgment or
claim remains unstayed or unsatisfied for a period of thirty (30) consecutive
days and is not fully covered (subject to standard deductibles) by insurance
coverage under which the insurer has accepted liability, or (b) the judgment
creditor or claimant begins enforcement proceedings of such judgment or Lien;

8.9 If there is (a) a default by Borrower, HTGC, or any of their respective
Subsidiaries as borrowers or obligors under any Subordinated Debt or any
agreement for borrowed money (i) in an aggregate principal amount in excess of
$250,000, in the case of such a default by Borrower or any of its Subsidiaries,
(ii) by Hercules Funding III (or any successor borrower or obligor under the
Union Bank Facility) under the Union Bank Facility, or (iii) in an aggregate
principal amount in excess of $1,000,000, in the case of such a default by HTGC
or any of its Subsidiaries other than Borrower or Hercules Funding III (or any
successor borrower or obligor under the Union Bank Facility), and (b) such
default (i) occurs at the final maturity of the obligations thereunder, or
(ii) results in a right by the other party thereto, irrespective of whether
exercised, to accelerate the maturity of the obligations thereunder of Borrower
or any of its Subsidiaries, Hercules Funding III (or any successor borrower or
obligor under the Union Bank Facility), or HTGC or any of its Subsidiaries other
than Borrower or Hercules Funding III (or any successor borrower or obligor
under the Union Bank Facility), to terminate such agreement, or to refuse to
renew such agreement in accordance with any automatic renewal right therein;

8.10 If Borrower or any of its Subsidiaries, or HTGC, makes any payment on
account of Indebtedness that has been contractually subordinated in right of
payment to the payment of the Obligations, except to the extent such payment is
permitted by the terms of the subordination provisions applicable to such
Indebtedness;

8.11 If any warranty, representation, statement, or Record made or provided to
the Lender Group by Borrower, its Subsidiaries, HTGC, or any officer, employee,
agent, or director of Borrower or any of its Subsidiaries or HTGC is incorrect
in any material respect as of the date when made or deemed made;

 

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8.12 If the obligations of any Guarantor under its Guaranty is limited or
terminated by operation of law or by such Guarantor thereunder;

8.13 If this Agreement or any other Loan Document that purports to create a Lien
in favor of Agent or Lenders shall, for any reason, fail or cease to create a
valid and perfected and, except to the extent permitted by the terms hereof or
thereof, first priority Lien on or security interest in the Collateral covered
hereby or thereby in favor of Agent or Lenders, except as a result of a
disposition of the applicable Collateral in a transaction permitted under this
Agreement;

8.14 If any of the individuals serving as of the Closing Date (or serving
thereafter as a replacement acceptable to Agent in accordance with this
Section 8.14) as the Chief Executive Officer, Chief Financial Officer, or Chief
Credit Officer, respectively, of either Borrower or HTGC, shall cease to be
actively involved in the business of Borrower or HTGC (as applicable) in such
capacity and such individual has not been replaced within 90 days by an
individual acceptable to Agent in Agent’s Permitted Discretion; provided, that
the replacement of Andrew Olson by Mark Harris as Chief Financial Officer shall
be deemed a replacement by an individual acceptable to Agent in accordance with
this Section 8.14 so long as Agent receives a completed reference check on Mark
Harris, the results of which are satisfactory to Agent in its sole discretion,
within 60 days of Mark Harris assuming such position.

8.15 Either Servicer or Borrower fails to comply, in any material respect, with
its obligations under the Sale and Servicing Agreement; or

8.16 Any provision of any Loan Document that Agent in its Permitted Discretion
deems to be material shall at any time for any reason be declared to be null and
void, or the validity or enforceability thereof shall be contested by Borrower
or its Subsidiaries, or by HTGC, or a proceeding shall be commenced by Borrower
or its Subsidiaries, or by HTGC, or by any Governmental Authority having
jurisdiction over Borrower or its Subsidiaries or HTGC seeking to establish the
invalidity or unenforceability thereof, or Borrower or its Subsidiaries, or
HTGC, shall deny that such Person has any liability or obligation purported to
be created under any Loan Document to which it is a party.

9. THE LENDER GROUP’S RIGHTS AND REMEDIES.

9.1 Rights and Remedies. Upon the occurrence, and during the continuation, of an
Event of Default, the Required Lenders (at their election but without notice of
their election and without demand) may authorize and instruct Agent to do any
one or more of the following on behalf of the Lender Group (and Agent, acting
upon the instructions of the Required Lenders, shall do the same on behalf of
the Lender Group), all of which are authorized by Borrower:

(a) (i) Declare all or any portion of the Obligations (other than the Bank
Product Obligations), whether evidenced by this Agreement or by any of the other
Loan Documents, immediately due and payable, whereupon the same shall become and
be immediately due and payable and Borrower shall be obligated to repay all of
such Obligations in full, and (ii) direct Borrower to provide (and Borrower
agrees that upon receipt of such notice it will provide) Letter of Credit
Collateralization to Agent to be held as security for Borrower’s reimbursement
obligations for drawings that may subsequently occur under issued and
outstanding Letters of Credit;

 

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(b) Declare the Revolving Credit Availability Period and the Commitments
terminated, whereupon the Revolving Credit Availability Period and the
Commitments shall immediately be terminated together with the obligation of
Issuing Bank to issue Letters of Credit and any obligation of any Lender to
advance money or extend credit to or for the benefit of Borrower under this
Agreement, under any of the Loan Documents, or under any other agreement between
Borrower and the Lender Group;

(c) Terminate this Agreement and any of the other Loan Documents as to any
future liability or obligation of the Lender Group, but without affecting any of
Agent’s Liens in the Collateral and without affecting the Obligations;

(d) Settle or adjust disputes and claims directly with Borrower’s Account
Debtors and makers of Notes Receivable for amounts and upon terms which Agent
considers advisable, and in such cases, Agent will credit Borrower’s Loan
Account with only the net amounts received by Agent in payment of such disputed
Accounts or Notes Receivable after deducting all Lender Group Expenses incurred
or expended in connection therewith;

(e) Exercise or assign any and all rights to collect, manage, and service the
Notes Receivables, including, (i) receive, process and account for all
Collections in respect of Notes Receivables, (ii) terminate the Sale and
Servicing Agreement and assign servicing responsibilities to any replacement
servicer, (iii) without notice to or demand upon Borrower, make any payments as
are reasonably necessary or desirable in connection with the Sale and Servicing
Agreement or any other agreement that Agent enters into with any replacement
servicer, and (iv) take all lawful actions and procedures which Agent or such
assignee deems necessary to collect the amounts due to Borrower in connection
with Notes Receivables (all amounts incurred by Agent pursuant to this
Section 9.1(e) shall be Lender Group Expenses);

(f) Without notice to or demand upon Borrower or any other Person, make such
payments and do such acts as Agent considers necessary or reasonable to protect
its security interests in the Collateral. Borrower agrees to assemble the
Collateral if Agent so requires, and to make the Collateral available to Agent
at a place that Agent may designate which is reasonably convenient to both
parties. Borrower authorizes Agent to enter the premises where the Collateral is
located, to take and maintain possession of the Collateral, or any part of it,
and to pay, purchase, contest, or compromise any Lien that in Agent’s
determination appears to conflict with the priority of Agent’s Liens in and to
the Collateral and to pay all expenses incurred in connection therewith and to
charge Borrower’s Loan Account therefor. With respect to any of Borrower’s owned
or leased premises, Borrower hereby grants Agent a license to enter into
possession of such premises and to occupy the same, without charge, in order to
exercise any of the Lender Group’s rights or remedies provided herein, at law,
in equity, or otherwise;

(g) Without notice to Borrower (such notice being expressly waived), and without
constituting an acceptance of any collateral in full or partial satisfaction of
an obligation (within the meaning of the Code), set off and apply to the
Obligations any and all (i) balances and deposits of Borrower held by the Lender
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Management Accounts), or (ii) Indebtedness at any time owing to or for the
credit or the account of Borrower held by the Lender Group;

(h) Hold, as cash collateral, any and all balances and deposits of Borrower held
by the Lender Group, and any amounts received in the Cash Management Accounts,
to secure the full and final repayment of all of the Obligations;

(i) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale,
advertise for sale, and sell (in the manner provided for herein) the Borrower
Collateral. Borrower hereby grants to Agent a license or other right to use,
without charge, Borrower’s labels, patents, copyrights, trade secrets, trade
names, trademarks, service marks, and advertising matter, or any property of a
similar nature, as it pertains to the Borrower Collateral, in completing
production of, advertising for sale, and selling any Borrower Collateral and
Borrower’s rights under all licenses and all franchise agreements shall inure to
the Lender Group’s benefit;

(j) Sell the Borrower Collateral at either a public or private sale, or both, by
way of one or more contracts or transactions, for cash or on terms, in such
manner and at such places (including Borrower’s premises) as Agent determines is
commercially reasonable. It is not necessary that the Borrower Collateral be
present at any such sale;

(k) Except in those circumstances where no notice is required under the Code,
Agent shall give notice of the disposition of the Borrower Collateral as
follows:

(i) Agent shall give Borrower a notice in writing of the time and place of
public sale, or, if the sale is a private sale or some other disposition other
than a public sale is to be made of the Borrower Collateral, the time on or
after which the private sale or other disposition is to be made; and

(ii) The notice shall be personally delivered or mailed, postage prepaid, to
Borrower as provided in Section 12, at least 10 days before the earliest time of
disposition set forth in the notice; no notice needs to be given prior to the
disposition of any portion of the Borrower Collateral that is perishable or
threatens to decline speedily in value or that is of a type customarily sold on
a recognized market;

(l) Agent, on behalf of the Lender Group, may credit bid and purchase at any
public sale;

(m) Agent may seek the appointment of a receiver or keeper to take possession of
all or any portion of the Borrower Collateral or to operate same and, to the
maximum extent permitted by applicable law, may seek the appointment of such a
receiver without the requirement of prior notice or a hearing;

(n) Exercise any and all rights of Borrower under the Sale and Servicing
Agreement or assume or assign any and all rights and responsibilities to
collect, manage, and service the Notes Receivables, including (i) the
responsibility for the receipt, processing and accounting for all payments on
account of the Notes Receivables, (ii) periodically sending demand notices and
statements to the Account Debtors or makers of Notes Receivable, (iii)

 

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enforcing legal rights with respect to the Notes Receivables, including hiring
attorneys to do so to the extent Agent or such assignee deems such engagement
necessary, and (iv) taking all lawful actions and procedures which Agent or such
assignee deems necessary to collect the Notes Receivables, and all such amounts
shall be Lender Group Expenses; and

(o) The Lender Group shall have all other rights and remedies available at law
or in equity or pursuant to any other Loan Document.

The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 8.4 or Section 8.5, in addition to the remedies
set forth above, without any notice to Borrower or any other Person or any act
by the Lender Group, the Revolving Credit Availability Period and the
Commitments shall automatically terminate and the Obligations (other than Bank
Product Obligations), inclusive of all accrued and unpaid interest thereon and
all fees and all other amounts due under this Agreement and the other Loan
Documents, shall automatically and immediately become due and payable and
Borrower shall be obligated to repay all of such Obligations in full (including
Borrower being obligated to provide (and Borrower agrees that it will provide)
Letter of Credit Collateralization to Agent to be held as security for
Borrower’s reimbursement obligations in respect of drawings that may
subsequently occur under issued and outstanding Letters of Credit), without
presentment, demand, protest, or notice of any kind, all of which are expressly
waived by Borrower.

9.2 Remedies Cumulative. The rights and remedies of the Lender Group under this
Agreement, the other Loan Documents, and all other agreements shall be
cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.

10. TAXES AND EXPENSES.

If Borrower fails to pay any monies (whether taxes, assessments, insurance
premiums, or, in the case of leased properties or assets, rents or other amounts
payable under such leases) due to third Persons, or fails to make any deposits
or furnish any required proof of payment or deposit, all as required under the
terms of this Agreement, then, Agent, in its sole discretion and without prior
notice to Borrower, may do any or all of the following: (a) make payment of the
same or any part thereof, (b) set up such reserves against the Borrowing Base or
the Maximum Revolver Amount as Agent deems necessary to protect the Lender Group
from the exposure created by such failure, or (c) in the case of the failure to
comply with Section 6.8 hereof, obtain and maintain insurance policies of the
type described in Section 6.8 and take any action with respect to such policies
as Agent deems prudent. Any such amounts paid by Agent shall constitute Lender
Group Expenses and any such payments shall not constitute an agreement by the
Lender Group to make similar payments in the future or a waiver by the Lender
Group of any Event of Default under this Agreement. Agent need not inquire as
to, or contest the validity of, any such expense, tax, or Lien and the receipt
of the usual official notice for the payment thereof shall be conclusive
evidence that the same was validly due and owing.

 

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11. WAIVERS; INDEMNIFICATION.

11.1 Demand; Protest; etc. Borrower waives demand, protest, notice of protest,
notice of default or dishonor, notice of payment and nonpayment, nonpayment at
maturity, release, compromise, settlement, extension, or renewal of documents,
instruments, chattel paper, and guarantees at any time held by the Lender Group
on which Borrower may in any way be liable.

11.2 The Lender Group’s Liability for Borrower Collateral. Borrower hereby
agrees that: (a) so long as Agent complies with its obligations, if any, under
the Code, the Lender Group shall not in any way or manner be liable or
responsible for: (i) the safekeeping of the Borrower Collateral, (ii) any loss
or damage thereto occurring or arising in any manner or fashion from any cause,
(iii) any diminution in the value thereof, or (iv) any act or default of any
carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all
risk of loss, damage, or destruction of the Borrower Collateral shall be borne
by Borrower.

11.3 Indemnification. Borrower shall pay, indemnify, defend, and hold the
Agent-Related Persons, the Lender-Related Persons with respect to each Lender,
each Participant (each, an “Indemnified Person”) harmless (to the fullest extent
permitted by applicable law) from and against any and all claims, demands,
suits, actions, investigations, proceedings, liabilities, costs, penalties, and
damages, and all reasonable fees and disbursements of attorneys, experts and
consultants and other reasonable costs and expenses actually incurred in
connection therewith or in connection with the enforcement of this
indemnification (as and when they are incurred and irrespective of whether suit
is brought), at any time asserted against, imposed upon, or incurred by any of
them (a) in connection with or as a result of or related to the execution,
delivery, enforcement, performance, or administration (including any
restructuring or workout with respect hereto) of the Original Loan Agreement,
the Original Loan Documents, this Agreement, any of the other Loan Documents, or
the transactions contemplated hereby or thereby or the monitoring of Borrower’s
and its Subsidiaries’ compliance with the terms of the Original Loan Agreement,
the Original Loan Documents, or the Loan Documents, (b) with respect to any
investigation, litigation, or proceeding related to the Original Loan Agreement,
the Original Loan Documents, this Agreement, any other Loan Document, or the use
of the proceeds of the credit provided hereunder (irrespective of whether any
Indemnified Person is a party thereto), or any act, omission, event, or
circumstance in any manner related thereto, and (c) in connection with or
arising out of any presence or release of Hazardous Materials at, on, under, to
or from any assets or properties owned, leased or operated by Borrower or any of
its Subsidiaries or any Environmental Actions, Environmental Liabilities and
Costs or Remedial Actions related in any way to any such assets or properties of
Borrower or any of its Subsidiaries (all the foregoing, collectively, the
“Indemnified Liabilities”) . The foregoing to the contrary notwithstanding,
Borrower shall have no obligation to any Indemnified Person under this
Section 11.3 with respect to any Indemnified Liability that a court of competent
jurisdiction finally determines to have resulted from the gross negligence or
willful misconduct of such Indemnified Person. This provision shall survive the
termination of this Agreement and the repayment of the Obligations. If any
Indemnified Person makes any payment to any other Indemnified Person with
respect to an Indemnified Liability as to which Borrower was required to
indemnify the Indemnified Person receiving such payment, the Indemnified Person
making such payment is entitled to be indemnified and reimbursed by Borrower
with respect thereto. WITHOUT

 

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LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR
ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY
OTHER PERSON.

12. NOTICES.

Unless otherwise provided in this Agreement, all notices or demands by Borrower
or Agent to the other relating to this Agreement or any other Loan Document
shall be in writing and (except for financial statements and other informational
documents which may be sent by first- class mail, postage prepaid) shall be
personally delivered or sent by registered or certified mail (postage prepaid,
return receipt requested), overnight courier, electronic mail (at such email
addresses as Borrower, Issuing Bank or Agent, as applicable, may designate to
each other in accordance herewith), or telefacsimile to Borrower, Issuing Bank
or Agent, as the case may be, at its address set forth below:

 

                If to Borrower:    Hercules Funding II LLC
c/o Hercules Technology Growth Capital, Inc.
400 Hamilton Avenue, Suite 310
Palo Alto, California 94301
Attn: Chief Executive Officer and Chief Financial Officer
Fax No. 650-473-9194                 with copies to:    Hercules Funding II LLC
c/o Hercules Technology Growth Capital, Inc.
400 Hamilton Avenue, Suite 310
Palo Alto, California 94301
Attn: Chief Legal Officer
Fax No. 650-473-9194

 

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                If to Agent or Issuing Bank:    Wells Fargo Capital Finance, LLC
14241 Dallas Parkway, Suite 1300
Dallas, Texas 75244 75254
Attn: Loan Portfolio Manager – Hercules Techology
Fax No. 866- 532-5561                 with copies to:   

McDermott Will & Emery LLP

275 Middlefield Road, Suite 100
Menlo Park, California 94025 Winston & Strawn LLP
2121 N. Pearl Street, Suite 900
Dallas, TX 75201
Attn: DickJordan M. Okada, Esq. Klein
E-mail: jordan.klein@winston.com

Fax No.: 650-469-1420: 214-453-6400

Agent and Borrower may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
party. All notices or demands sent in accordance with this Section 12, other
than notices by Agent in connection with enforcement rights against the Borrower
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or three (3) Business Days after the
deposit thereof in the mail as provided herein, or if sent by facsimile when
sent with receipt confirmed by the recipient. Borrower acknowledges and agrees
that notices sent by the Lender Group in connection with the exercise of
enforcement rights against Borrower Collateral under the provisions of the Code
shall be deemed sent when deposited in the mail or personally delivered, or,
where permitted by law, transmitted by telefacsimile or any other method set
forth above.

13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL
BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.

(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN
THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED
IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING
SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.

 

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BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED
UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM
NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 13(b).

(c) BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. BORROWER AND EACH MEMBER OF THE LENDER GROUP
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.

14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

14.1 Assignments and Participations

(a) Any Lender may assign and delegate to one or more assignees (each an
“Assignee”) that are Eligible Transferees all or any portion of the Obligations,
the Commitments and the other rights and obligations of such Lender hereunder
and under the other Loan Documents, in a minimum amount (unless waived by the
Agent) of $5,000,000 (except such minimum amount shall not apply to (x) an
assignment or delegation by any Lender to any other Lender or an Affiliate of
any Lender or (y) a group of new Lenders, each of whom is an Affiliate of each
other or a fund or account managed by any such new Lender or an Affiliate of
such new Lender to the extent that the aggregate amount to be assigned to all
such new Lenders is at least $5,000,000); provided, however, that Borrower and
Agent may continue to deal solely and directly with such Lender in connection
with the interest so assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses, and related
information with respect to the Assignee, have been given to Borrower and Agent
by such Lender and the Assignee, (ii) such Lender and its Assignee have
delivered to Borrower and Agent an Assignment and Acceptance and Agent has
notified the assigning Lender of its receipt thereof in accordance with
Section 14.1(b), and (iii) unless waived by the Agent, the assigning Lender or
Assignee has paid to Agent for Agent’s separate account a processing fee in the
amount of $5,000. Anything contained herein to the contrary notwithstanding, the
payment of any fees shall not be required and the Assignee need not be an
Eligible Transferee if such assignment is in connection with any merger,
consolidation, sale, transfer, or other disposition of all or any substantial
portion of the business or loan portfolio of the assigning Lender.

(b) From and after the date that Agent notifies the assigning Lender (with a
copy to Borrower) that it has received an executed Assignment and Acceptance
and, if applicable, payment of the required processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant

 

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to such Assignment and Acceptance, shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assigning Lender shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (except with respect to Section 11.3 hereof) and be released from any
future obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights
and obligations under this Agreement and the other Loan Documents, such Lender
shall cease to be a party hereto and thereto), and such assignment shall effect
a novation among Borrower, the assigning Lender, and the Assignee; provided,
however, that nothing contained herein shall release any assigning Lender from
obligations that survive the termination of this Agreement, including such
assigning Lender’s obligations under Section 16 and Section 17.7(a) of this
Agreement.

(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the Assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document furnished pursuant hereto,
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or the
performance or observance by Borrower of any of its obligations under this
Agreement or any other Loan Document furnished pursuant hereto, (iii) such
Assignee confirms that it has received a copy of this Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance,
(iv) such Assignee will, independently and without reliance upon Agent, such
assigning Lender or any other Lender, 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 action under this Agreement, (v) such
Assignee appoints and authorizes Agent to take such actions and to exercise such
powers under this Agreement as are delegated to Agent, by the terms hereof,
together with such powers as are reasonably incidental thereto, and (vi) such
Assignee agrees that it will perform all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.

(d) Immediately upon Agent’s receipt of the required processing fee, if
applicable, and delivery of notice to the assigning Lender pursuant to
Section 14.1(b), this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Lender
pro tanto.

(e) Any Lender may at any time sell to one or more commercial banks, financial
institutions, or other Persons (a “Participant”) participating interests in all
or any portion of its Obligations, its Commitment, and the other rights and
interests of that Lender (the “Originating Lender”) hereunder and under the
other Loan Documents; provided, however, that (i) the Originating Lender shall
remain a “Lender” for all purposes of this Agreement and the other Loan
Documents and the Participant receiving the participating interest in the
Obligations,

 

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the Commitments, and the other rights and interests of the Originating Lender
hereunder shall not constitute a “Lender” hereunder or under the other Loan
Documents and the Originating Lender’s obligations under this Agreement shall
remain unchanged, (ii) the Originating Lender shall remain solely responsible
for the performance of such obligations, (iii) Borrower, Agent, and the Lenders
shall continue to deal solely and directly with the Originating Lender in
connection with the Originating Lender’s rights and obligations under this
Agreement and the other Loan Documents, (iv) no Lender shall transfer or grant
any participating interest under which the Participant has the right to approve
any amendment to, or any consent or waiver with respect to, this Agreement or
any other Loan Document, except to the extent such amendment to, or consent or
waiver with respect to this Agreement or of any other Loan Document would
(A) extend the final maturity date of the Obligations hereunder in which such
Participant is participating, (B) reduce the interest rate applicable to the
Obligations hereunder in which such Participant is participating, (C) release
all or substantially all of the Collateral or guaranties (except to the extent
expressly provided herein or in any of the Loan Documents) supporting the
Obligations hereunder in which such Participant is participating, (D) postpone
the payment of, or reduce the amount of, the interest or fees payable to such
Participant through such Lender, or (E) change the amount or due dates of
scheduled principal repayments or prepayments or premiums, and (v) all amounts
payable by Borrower hereunder shall be determined as if such Lender had not sold
such participation, except that, if amounts outstanding under this Agreement are
due and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement. The rights of any Participant only shall be derivative through the
Originating Lender with whom such Participant participates and no Participant
shall have any rights under this Agreement or the other Loan Documents or any
direct rights as to the other Lenders, Agent, Borrower, the Collections, the
Collateral, or otherwise in respect of the Obligations. No Participant shall
have the right to participate directly in the making of decisions by the Lenders
among themselves.

(f) In connection with any such assignment or participation or proposed
assignment or participation, a Lender may, subject to the provisions of
Section 17.7, disclose all documents and information which it now or hereafter
may have relating to Borrower and its Subsidiaries and their respective
businesses.

(g) Any other provision in this Agreement notwithstanding, any Lender may at any
time create a security interest in, or pledge, all or any portion of its rights
under and interest in this Agreement in favor of any Federal Reserve Bank in
accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury
Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce such pledge
or security interest in any manner permitted under applicable law.

14.2 Successors. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, however,
that Borrower may not assign this Agreement or any rights or duties hereunder
without the Lenders’ prior written consent and any prohibited assignment shall
be absolutely void ab initio. No consent to assignment by the Lenders shall
release Borrower from its Obligations. A Lender may assign this Agreement and
the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to Section 14.1 hereof and, except as expressly required pursuant to
Section 14.1 hereof, no consent or approval by Borrower is required in
connection with any such assignment.

 

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15. AMENDMENTS; WAIVERS.

15.1 Amendments and Waivers. No amendment or waiver of any provision of this
Agreement or any other Loan Document (other than the Fee Letter), and no consent
with respect to any departure by Borrower therefrom, shall be effective unless
the same shall be in writing and signed by the Required Lenders (or by Agent at
the written request of the Required Lenders) and Borrower and then any such
waiver or consent shall be effective, but only in the specific instance and for
the specific purpose for which given; provided, however, that no such waiver,
amendment, or consent shall, unless in writing and signed by all of the Lenders
directly affected thereby and Borrower, do any of the following:

(a) increase or extend any Commitment of any Lender,

(b) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,

(c) reduce the principal of, or the rate of interest on, any loan or other
extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document,

(d) change the Pro Rata Share that is required to take any action hereunder,

(e) amend or modify this Section or any provision of this Agreement providing
for consent or other action by all Lenders,

(f) other than as permitted by Section 16.12, release Agent’s Lien in and to any
of the Collateral;

(g) change the definition of “Required Lenders” or “Pro Rata Share”,

(h) contractually subordinate any of the Agent’s Liens,

(i) release Borrower or any Guarantor from any obligation for the payment of
money,

(j) change the definitions of Borrowing Base, Eligible Note Receivables, Maximum
Revolver Amount, Amortization Commencement Date, Amortization Commencement Date
Principal Balance, Amortization Period, Required Amortization Amount or
Revolving Credit Availability Period;

(k) amend any of the provisions of Section 2.1(b) or Section 2.3(b)(i),

(l) amend any of the provisions of Section 16;

 

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and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Bank or Swing Lender, as
applicable, affect the rights or duties of Agent, Issuing Bank or Swing Lender,
as applicable, under this Agreement or any other Loan Document. The foregoing
notwithstanding, (x) any amendment, modification, waiver, consent, termination,
or release of, or with respect to, any provision of this Agreement or any other
Loan Document that relates only to the relationship of the Lender Group among
themselves, and that does not affect the rights or obligations of Borrower,
shall not require consent by or the agreement of Borrower, and (y) any
amendment, waiver, modification, elimination, or consent of or with respect to
any provision of this Agreement or any other Loan Document may be entered into
without the consent of, or over the objection of, any Defaulting Lender.

Notwithstanding any provision in this Section 15.1, any amendment to this
Agreement that only adds one or more additional lenders as a Lender under this
Agreement or adds or increases the amount of a Lender’s Commitment shall be
effective if signed by the additional or existing Lender whose Commitment is
added or increased thereby, Borrower and Agent, and shall not require the
consent of Required Lenders or any other Lender.

15.2 Replacement of Holdout Lender.

(a) If any action to be taken by the Lender Group or Agent hereunder requires
the unanimous consent, authorization, or agreement of all Lenders, and a Lender
(“Holdout Lender”) fails to give its consent, authorization, or agreement, then
Agent, upon at least 5 Business Days prior irrevocable notice to the Holdout
Lender, may permanently replace the Holdout Lender with one or more substitute
Lenders (each, a “Replacement Lender”), and the Holdout Lender shall have no
right to refuse to be replaced hereunder. Such notice to replace the Holdout
Lender shall specify an effective date for such replacement, which date shall
not be later than 15 Business Days after the date such notice is given.

(b) Prior to the effective date of such replacement, the Holdout Lender and each
Replacement Lender shall execute and deliver an Assignment and Acceptance
Agreement, subject only to the Holdout Lender being repaid its share of the
outstanding Obligations (without any premium or penalty of any kind whatsoever,
but including an assumption of its Pro Rata Share of participations in the
Letters of Credit). If the Holdout Lender shall refuse or fail to execute and
deliver any such Assignment and Acceptance Agreement prior to the effective date
of such replacement, the Holdout Lender shall be deemed to have executed and
delivered such Assignment and Acceptance Agreement. The replacement of any
Holdout Lender shall be made in accordance with the terms of Section 14.1. Until
such time as the Replacement Lenders shall have acquired all of the Obligations,
the Commitments, and the other rights and obligations of the Holdout Lender
hereunder and under the other Loan Documents, the Holdout Lender shall remain
obligated to make the Holdout Lender’s Pro Rata Share of Advances and to
purchase a participation in each Letter of Credit, in an amount equal to its Pro
Rata Share of participations in such Letters of Credit.

15.3 No Waivers; Cumulative Remedies. No failure by Agent or any Lender to
exercise any right, remedy, or option under this Agreement or any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the

 

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extent specifically stated. No waiver by Agent or any Lender on any occasion
shall affect or diminish Agent’s and each Lender’s rights thereafter to require
strict performance by Borrower of any provision of this Agreement. Agent’s and
each Lender’s rights under this Agreement and the other Loan Documents will be
cumulative and not exclusive of any other right or remedy that Agent or any
Lender may have.

16. AGENT; THE LENDER GROUP.

16.1 Appointment and Authorization of Agent. Each Lender hereby designates and
appoints WFCF as its representative under this Agreement and the other Loan
Documents and each Lender hereby irrevocably authorizes Agent to execute and
deliver each of the other Loan Documents on its behalf and to take such other
action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to Agent by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Agent agrees to
act as such on the express conditions contained in this Section 16. The
provisions of this Section 16 (other than the proviso to Section 16.11(e)) are
solely for the benefit of Agent, and the Lenders, and Borrower and its
Subsidiaries shall have no rights as a third party beneficiary of any of the
provisions contained herein. Any provision to the contrary contained elsewhere
in this Agreement or in any other Loan Document notwithstanding, Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall Agent have or be deemed to have any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Agent; it being expressly understood and
agreed that the use of the word “Agent” is for convenience only, that WFCF is
merely the representative of the Lenders, and only has the contractual duties
set forth herein. Except as expressly otherwise provided in this Agreement,
Agent shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions that Agent expressly is entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, or of any other provision of the Loan Documents
that provides rights or powers to Agent, Lenders agree that Agent shall have the
right to exercise the following powers as long as this Agreement remains in
effect: (a) maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations, the Collateral,
the Collections, and related matters, (b) execute or file any and all financing
or similar statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with respect
to the Loan Documents, (c) make Advances, for itself or on behalf of Lenders as
provided in the Loan Documents, (d) exclusively receive, apply, and distribute
the Collections as provided in the Loan Documents, (e) open and maintain such
bank accounts and cash management arrangements as Agent deems necessary and
appropriate in accordance with the Loan Documents for the foregoing purposes
with respect to the Collateral and the Collections, (f) perform, exercise, and
enforce any and all other rights and remedies of the Lender Group with respect
to Borrower, the Obligations, the Collateral, the Collections, or otherwise
related to any of same as provided in the Loan Documents, and (g) incur and pay
such Lender Group Expenses as Agent may deem necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to the Loan
Documents.

 

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16.2 Delegation of Duties. Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.

16.3 Liability of Agent. None of the Agent-Related Persons shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by Borrower or any Subsidiary or
Affiliate of Borrower, or any officer or director thereof, contained in this
Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the Books or properties of Borrower or the books or
records or properties of any of Borrower’s Subsidiaries or Affiliates.

16.4 Reliance by Agent. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telefacsimile or other electronic
method of transmission, telex or telephone message, statement 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 counsel to Borrower or counsel to any
Lender), independent accountants and other experts selected by Agent. Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless Agent shall first receive such
advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the requisite Lenders and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.

16.5 Notice of Default or Event of Default. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of the Lenders and, except
with respect to Events of Default of which Agent has actual knowledge, unless
Agent shall have received written notice from a Lender or Borrower referring to
this Agreement, describing such Default or Event of Default, and stating that
such notice is a “notice of default.” Agent promptly will notify the Lenders of
its receipt of any such notice or of any Event of Default of which Agent has
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actual knowledge of any Event of Default, such Lender promptly shall notify the
other Lenders and Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject to
Section 16.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
Section 9; provided, however, that unless and until Agent has received any such
request, Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable.

16.6 Credit Decision. Each Lender acknowledges that none of the Agent-Related
Persons has made any representation or warranty to it, and that no act by Agent
hereinafter taken, including any review of the affairs of Borrower and its
Subsidiaries or Affiliates, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender. Each Lender represents to
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of
Borrower and any other Person party to a Loan Document, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to Borrower. Each
Lender also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of Borrower and any other Person party
to a Loan Document. Except for notices, reports, and other documents expressly
herein required to be furnished to the Lenders by Agent, Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of Borrower and any other Person party
to a Loan Document that may come into the possession of any of the Agent-Related
Persons.

16.7 Costs and Expenses; Indemnification. Agent may incur and pay Lender Group
Expenses to the extent Agent reasonably deems necessary or appropriate for the
performance and fulfillment of its functions, powers, and obligations pursuant
to the Loan Documents, including court costs, attorneys’ fees and expenses, fees
and expenses of financial accountants, advisors, consultants, and appraisers,
costs of collection by outside collection agencies, auctioneer fees and
expenses, and costs of security guards or insurance premiums paid to maintain
the Collateral, whether or not Borrower is obligated to reimburse Agent or
Lenders for such expenses pursuant to this Agreement or otherwise. Agent is
authorized and directed to deduct and retain sufficient amounts from the
Collections received by Agent to reimburse Agent for such out-of-pocket costs
and expenses prior to the distribution of any amounts to Lenders. In the event
Agent is not reimbursed for such costs and expenses by Borrower, each Lender
hereby agrees that it is and shall be obligated to pay to Agent such Lender’s
Pro Rata Share thereof. Whether or not the transactions contemplated hereby are
consummated, the Lenders shall indemnify upon demand the Agent -Related Persons
(to the extent not reimbursed by or on behalf of Borrower and without limiting
the obligation of Borrower to do so), according to their Pro Rata Shares, from
and against any and all Indemnified Liabilities; provided, however, that no

 

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Lender shall be liable for the payment to any Agent-Related Person of any
portion of such Indemnified Liabilities resulting solely from such Person’s
gross negligence or willful misconduct nor shall any Lender be liable for the
obligations of any Defaulting Lender in failing to make an Advance or other
extension of credit hereunder. Without limitation of the foregoing, each Lender
shall reimburse Agent upon demand for such Lender’s Pro Rata Share of any costs
or out-of- pocket expenses (including attorneys, accountants, advisors, and
consultants fees and expenses) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Agent is not reimbursed for such expenses by or on behalf of
Borrower. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of Agent.

16.8 Agent in Individual Capacity. WFCF and its Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire equity
interests in, and generally engage in any kind of banking, trust, financial
advisory, underwriting, or other business with Borrower and its Subsidiaries and
Affiliates and any other Person party to any Loan Documents as though WFCF were
not Agent hereunder, and, in each case, without notice to or consent of the
other members of the Lender Group. The other members of the Lender Group
acknowledge that, pursuant to such activities, WFCF or its Affiliates may
receive information regarding Borrower or its Affiliates and any other Person
party to any Loan Documents that is subject to confidentiality obligations in
favor of Borrower or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to them. The
terms “Lender” and “Lenders” include WFCF in its individual capacity.

16.9 Successor Agent. Agent may resign as Agent upon 45 days’ notice to the
Lenders (unless such notice is waived by the Required Lenders). If Agent resigns
under this Agreement, the Required Lenders shall appoint a successor Agent for
the Lenders. If, at the time that Agent’s resignation is effective, it is acting
as Issuing Bank or the Swing Lender, such resignation shall also operate to
effectuate its resignation as the Issuing Bank or the Swing Lender and it shall
automatically be relieved of any further obligation to issue Letters of Credit
or make Swing Loans. If no successor Agent is appointed prior to the effective
date of the resignation of Agent, Agent may appoint, after consulting with the
Lenders, a successor Agent. If Agent has materially breached or failed to
perform any material provision of this Agreement or of applicable law, the
Required Lenders may agree in writing to remove and replace Agent with a
successor Agent from among the Lenders. In any such event, upon the acceptance
of its appointment as successor Agent hereunder, such successor Agent shall
succeed to all the rights, powers, and duties of the retiring Agent and the term
“Agent” shall mean such successor Agent and the retiring Agent’s appointment,
powers, and duties as Agent shall be terminated. After any retiring Agent’s
resignation hereunder as Agent, the provisions of this Section 16 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If no successor Agent has accepted appointment as
Agent by the date which is 45 days following a retiring Agent’s notice of
resignation, the retiring Agent’s resignation shall

 

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nevertheless thereupon become effective and the Lenders shall perform all of the
duties of Agent hereunder until such time, if any, as the Lenders appoint a
successor Agent as provided for above.

16.10 Lender in Individual Capacity. Any Lender and its respective Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with Borrower and its
Subsidiaries and Affiliates and any other Person party to any Loan Documents as
though such Lender were not a Lender hereunder without notice to or consent of
the other members of the Lender Group. The other members of the Lender Group
acknowledge that, pursuant to such activities, such Lender and its respective
Affiliates may receive information regarding Borrower or its Affiliates and any
other Person party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrower or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that,
in such circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver such Lender will use its reasonable best efforts to
obtain), such Lender shall not be under any obligation to provide such
information to them. With respect to the Swing Loans and Agent Advances, Swing
Lender shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not the sub-agent of Agent.

16.11 Withholding Taxes.

(a) All payments made by Borrower hereunder or under any note or other Loan
Document will be made without setoff, counterclaim, or other defense. In
addition, all such payments will be made free and clear of, and without
deduction or withholding for, any present or future Taxes, and in the event any
deduction or withholding of Taxes is required, Borrower shall comply with the
penultimate sentence of this Section 16.11(a). “Taxes” shall mean, any taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but excluding
any tax imposed by any jurisdiction or by any political subdivision or taxing
authority thereof or therein measured by or based on the net income or net
profits of any Lender) and all interest, penalties or similar liabilities with
respect thereto. If any Taxes are so levied or imposed, Borrower agrees to pay
the full amount of such Taxes and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement, any note, or Loan
Document, including any amount paid pursuant to this Section 16.11(a) after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein; provided, however, that Borrower shall not be
required to increase any such amounts if the increase in such amount payable
results from Agent’s or such Lender’s own willful misconduct or gross negligence
(as finally determined by a court of competent jurisdiction). Borrower will
furnish to Agent as promptly as possible after the date the payment of any Tax
is due pursuant to applicable law certified copies of tax receipts evidencing
such payment by Borrower.

(b) If a Lender claims an exemption from United States withholding tax, such
Lender agrees with and in favor of Agent and Borrower, to deliver to Agent:

 

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(i) if such Lender claims an exemption from United States withholding tax
pursuant to its portfolio interest exception, (A) a statement of the Lender,
signed under penalty of perjury, that it is not a (I) a “bank” as described in
Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of Borrower (within the
meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled foreign
corporation related to Borrower within the meaning of Section 864(d)(4) of the
IRC, and (B) a properly completed and executed IRS Form W-8BEN, before receiving
its first payment under this Agreement and at any other time reasonably
requested by Agent or Borrower;

(ii) if such Lender claims an exemption from, or a reduction of, withholding tax
under a United States tax treaty, properly completed and executed IRS Form
W-8BEN before receiving its first payment under this Agreement and at any other
time reasonably requested by Agent or Borrower;

(iii) if such Lender claims that interest paid under this Agreement is exempt
from United States withholding tax because it is effectively connected with a
United States trade or business of such Lender, two properly completed and
executed copies of IRS Form W-8ECI before receiving its first payment under this
Agreement and at any other time reasonably requested by Agent or Borrower; or

(iv) such other form or forms, including IRS Form W-9, as may be required under
the IRC or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding or backup withholding tax before
receiving its first payment under this Agreement and at any other time
reasonably requested by Agent or Borrower.

Such Lender agrees promptly to notify Agent and Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.

(c) If a Lender claims an exemption from withholding tax in a jurisdiction other
than the United States, such Lender agrees with and in favor of Agent and
Borrower, to deliver to Agent any such form or forms, as may be required under
the laws of such jurisdiction as a condition to exemption from, or reduction of,
foreign withholding or backup withholding tax before receiving its first payment
under this Agreement and at any other time reasonably requested by Agent or
Borrower.

Such Lender agrees promptly to notify Agent and Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.

(d) If any Lender claims exemption from, or reduction of, withholding tax and
such Lender sells, assigns, grants a participation in, or otherwise transfers
all or part of the Obligations of Borrower to such Lender, such Lender agrees to
notify Agent and Borrower of the percentage amount in which it is no longer the
beneficial owner of Obligations of Borrower to such Lender. To the extent of
such percentage amount, Agent and Borrower will treat such Lender’s
documentation provided pursuant to Sections 16.11(b) or 16.11(c) as no longer
valid. With respect to such percentage amount, such Lender may provide new
documentation, pursuant to Sections 16.11(b) or 16.11(c), if applicable.

 

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(e) if any Lender is entitled to a reduction in the applicable withholding tax,
Agent may withhold from any interest payment to such Lender an amount equivalent
to the applicable withholding tax after taking into account such reduction. If
the forms or other documentation required by Sections 16.11(b) or 16.11(c) are
not delivered to Agent, then Agent may withhold from any interest payment to
such Lender not providing such forms or other documentation an amount equivalent
to the applicable withholding tax.

(f) If the IRS or any other Governmental Authority of the United States or other
jurisdiction asserts a claim that Agent did not properly withhold tax from
amounts paid to or for the account of any Lender due to a failure on the part of
the Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify and hold
Agent harmless for all amounts paid, directly or indirectly, by Agent, as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to Agent under this Section 16.11,
together with all costs and expenses (including attorneys’ fees and expenses).
The obligation of the Lenders under this subsection shall survive the payment of
all Obligations and the resignation or replacement of Agent.

16.12 Collateral Matters

(a) The Lenders hereby irrevocably authorize (and by entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to authorize)
Agent to release any Lien on any Collateral (i) upon the termination of the
Commitments and payment and satisfaction in full by Borrower of all of the
Obligations, (ii) constituting property being sold or disposed of if a release
is required or desirable in connection therewith and if such sale or disposition
is a Permitted Disposition or Borrower certifies to Agent that the sale or
disposition is permitted under Section 7.4 (and Agent may rely conclusively on
any such certificate, without further inquiry), (iii) constituting property in
which Borrower owned no interest at the time Agent’s Lien was granted nor at any
time thereafter, or (iv) constituting property leased to Borrower under a lease
that has expired or is terminated in a transaction permitted under this
Agreement. Borrower and the Lenders hereby irrevocably authorize (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to authorize) Agent, based upon the instruction of the Required Lenders,
to (a) consent to, credit bid or purchase (either directly or through one or
more acquisition vehicles) all or any portion of the Collateral at any sale
thereof conducted under the provisions of the Bankruptcy Code, including under
Section 363 of the Bankruptcy Code, (b) credit bid or purchase (either directly
or through one or more acquisition vehicles) all or any portion of the
Collateral at any sale or other disposition thereof conducted under the
provisions of the Code, including pursuant to Sections 9-610 or 9-620 of the
Code, or (c) credit bid or purchase (either directly or through one or more
acquisition vehicles) all or any portion of the Collateral at any other sale or
foreclosure conducted by Agent (whether by judicial action or otherwise) in
accordance with applicable law. In connection with any such credit bid or
purchase, the Obligations owed to the Lenders and the Bank Product Providers
shall be entitled to be, and shall be, credit bid on a ratable basis (with
Obligations with respect to contingent or unliquidated claims being estimated
for such purpose if the fixing or liquidation thereof would not unduly delay the
ability of Agent to credit bid or purchase at such sale or other disposition of
the Collateral and, if such claims cannot be estimated without unduly delaying
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ability of Agent to credit bid, then such claims shall be disregarded, not
credit bid, and not entitled to any interest in the asset or assets purchased by
means of such credit bid) and the Lenders and the Bank Product Providers whose
Obligations are credit bid shall be entitled to receive interests (ratably based
upon the proportion of their Obligations credit bid in relation to the aggregate
amount of Obligations so credit bid) in the asset or assets so purchased (or in
the Stock of the acquisition vehicle or vehicles that are used to consummate
such purchase). Except as provided above, Agent will not execute and deliver a
release of any Lien on any Collateral without the prior written authorization of
(y) if the release is of all or substantially all of the Collateral, all of the
Lenders (without requiring the authorization of the Bank Product Providers), or
(z) otherwise, the Required Lenders (without requiring the authorization of the
Bank Product Providers). Upon request by Agent or Borrower at any time, the
Lenders will (and if so requested, the Bank Product Providers will) confirm in
writing Agent’s authority to release any such Liens on particular types or items
of Collateral pursuant to this Section 16.12; provided, however, that (1) Agent
shall not be required to execute any document necessary to evidence such release
on terms that, in Agent’s opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (2) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of Borrower in respect of)
all interests retained by Borrower, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral. The Lenders further
hereby irrevocably authorize (and by entering into a Bank Product Agreement,
each Bank Product Provider shall be deemed to authorize) Agent, at its option
and in its sole discretion, to subordinate any Lien granted to or held by Agent
under any Loan Document to the holder of any Permitted Lien on such property if
such Permitted Lien secures Permitted Purchase Money Indebtedness.

(b) Agent shall have no obligation whatsoever to any of the Lenders (or the Bank
Product Providers) to assure that the Collateral exists or is owned by Borrower
or is cared for, protected, or insured or has been encumbered, or that Agent’s
Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, or that any
particular items of Collateral meet the eligibility criteria applicable in
respect thereof or whether to impose, maintain, reduce, or eliminate any
particular reserve hereunder or whether the amount of any such reserve is
appropriate or not, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to Agent pursuant to any of
the Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, subject to the terms
and conditions contained herein, Agent may act in any manner it may deem
appropriate, in its sole discretion given Agent’s own interest in the Collateral
in its capacity as one of the Lenders and that Agent shall have no other duty or
liability whatsoever to any Lender (or Bank Product Provider) as to any of the
foregoing, except as otherwise provided herein.

16.13 Restrictions on Actions by Lenders; Sharing of Payments

(a) Each of the Lenders agrees that it shall not, without the express written
consent of Agent, and that it shall, to the extent it is lawfully entitled to do
so, upon the written request of Agent, set off against the Obligations, any
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Borrower or any deposit accounts of Borrower now or hereafter maintained with
such Lender. Each of the Lenders further agrees that it shall not, unless
specifically requested to do so in writing by Agent, take or cause to be taken
any action, including, the commencement of any legal or equitable proceedings,
to foreclose any Lien on, or otherwise enforce any security interest in, any of
the Collateral.

(b) If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender’s Pro Rata Share of all such
distributions by Agent, such Lender promptly shall (A) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (B) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that to the extent that such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.

16.14 Agency for Perfection. Agent hereby appoints each other Lender as its
agent (and each Lender hereby accepts such appointment) for the purpose of
perfecting the Agent’s Liens in assets which, in accordance with Article 8 or
Article 9, as applicable, of the Code can be perfected only by possession or
control. Should any Lender obtain possession or control of any such Collateral,
such Lender shall notify Agent thereof, and, promptly upon Agent’s request
therefor shall deliver possession or control of such Collateral to Agent or in
accordance with Agent’s instructions.

16.15 Payments by Agent to the Lenders. All payments to be made by Agent to the
Lenders shall be made by bank wire transfer or internal transfer of immediately
available funds pursuant to such wire transfer instructions as each party may
designate for itself by written notice to Agent. Concurrently with each such
payment, Agent shall identify whether such payment (or any portion thereof)
represents principal, premium, fees, or interest of the Obligations.

16.16 Concerning the Collateral and Related Loan Documents. Each member of the
Lender Group authorizes and directs Agent to enter into this Agreement and the
other Loan Documents. Each member of the Lender Group agrees that any action
taken by Agent in accordance with the terms of this Agreement or the other Loan
Documents relating to the Collateral and the exercise by Agent of its powers set
forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.

 

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16.17 Field Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information. By becoming a party to this Agreement,
each Lender:

(a) is deemed to have requested that Agent furnish such Lender, promptly after
it becomes available, a copy of each field audit or examination report (each a
“Report” and collectively, “Reports”) prepared by or at the request of Agent,
and Agent shall so furnish each Lender with such Reports,

(b) expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report,

(c) expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that Agent or other party performing any audit or
examination will inspect only specific information regarding Borrower and will
rely significantly upon the Books, as well as on representations of Borrower’s
personnel,

(d) agrees to keep all Reports and other material, non-public information
regarding Borrower and its Subsidiaries and their operations, assets, and
existing and contemplated business plans in a confidential manner in accordance
with Section 17.7, and

(e) without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold Agent and any other Lender
preparing a Report harmless from any action the indemnifying Lender may take or
fail to take or any conclusion the indemnifying Lender may reach or draw from
any Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to Borrower, or the indemnifying
Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or
loans of Borrower, and (ii) to pay and protect, and indemnify, defend and hold
Agent, and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including, attorneys’ fees and costs) incurred by Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.

In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrower to Agent that has not been contemporaneously
provided by Borrower to such Lender, and, upon receipt of such request, Agent
promptly shall provide a copy of same to such Lender, (y) to the extent that
Agent is entitled, under any provision of the Loan Documents, to request
additional reports or information from Borrower, any Lender may, from time to
time, reasonably request Agent to exercise such right as specified in such
Lender’s notice to Agent, whereupon Agent promptly shall request of Borrower the
additional reports or information reasonably specified by such Lender, and, upon
receipt thereof from Borrower, Agent promptly shall provide a copy of same to
such Lender, and (z) any time that Agent renders to Borrower a statement
regarding the Loan Account, Agent shall send a copy of such statement to each
Lender.

 

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16.18 Several Obligations; No Liability. Notwithstanding that certain of the
Loan Documents now or hereafter may have been or will be executed only by or in
favor of Agent in its capacity as such, and not by or in favor of the Lenders,
any and all obligations on the part of Agent (if any) to make any credit
available hereunder shall constitute the several (and not joint) obligations of
the respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to exceed, in principal
amount, at any one time outstanding, the amount of their respective Commitments.
Nothing contained herein shall confer upon any Lender any interest in, or
subject any Lender to any liability for, or in respect of, the business, assets,
profits, losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Loan
Documents to the extent any such notice may be required, and no Lender shall
have any obligation, duty, or liability to any Participant of any other Lender.
Except as provided in Section 16.7, no member of the Lender Group shall have any
liability for the acts of any other member of the Lender Group. No Lender shall
be responsible to Borrower or any other Person for any failure by any other
Lender to fulfill its obligations to make credit available hereunder, nor to
advance for it or on its behalf in connection with its Commitment, nor to take
any other action on its behalf hereunder or in connection with the financing
contemplated herein.

16.19 Bank Product Providers. Each Bank Product Provider shall be deemed a third
party beneficiary hereof and of the provisions of the other Loan Documents for
purposes of any reference in a Loan Document to the parties for whom Agent is
acting. Agent hereby agrees to act as agent for such Bank Product Providers and,
by virtue of entering into a Bank Product Agreement, the applicable Bank Product
Provider shall be automatically deemed to have appointed Agent as its agent and
to have accepted the benefits of the Loan Documents, and to have provided Agent
with the same authorizations, representations, acknowledgments and consents made
by each Lender under the preceding Sections 16.1 through 16.18; it being
understood and agreed that the rights and benefits of each Bank Product Provider
under the Loan Documents consist exclusively of such Bank Product Provider’s
being a beneficiary of the Liens and security interests (and, if applicable,
guarantees) granted to Agent and the right to share in payments and collections
out of the Collateral as more fully set forth herein. In addition, each Bank
Product Provider, by virtue of entering into a Bank Product Agreement, shall be
automatically deemed to have agreed that Agent shall have the right, but shall
have no obligation, to establish, maintain, relax, or release reserves in
respect of the Bank Product Obligations and that if reserves are established
there is no obligation on the part of Agent to determine or insure whether the
amount of any such reserve is appropriate or not. In connection with any such
distribution of payments or proceeds of Collateral, Agent shall be entitled to
assume no amounts are due or owing to any Bank Product Provider unless such Bank
Product Provider has provided a written certification (setting forth a
reasonably detailed calculation) to Agent as to the amounts that are due and
owing to it and such written certification is received by Agent a reasonable
period of time prior to the making of such distribution. Agent shall have no
obligation to calculate the amount due and payable with respect to any Bank
Products, but may rely upon the written certification of the amount due and
payable from the relevant Bank Product Provider. In the absence of an updated
certification, Agent shall be entitled to assume that the amount due and payable
to the relevant Bank Product Provider is the amount last certified to Agent by
such Bank Product Provider as being due and payable (less any distributions made
to such Bank Product Provider on account thereof). Borrower may obtain Bank
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Bank Product Provider, although Borrower is not required to do so. Borrower
acknowledges and agrees that no Bank Product Provider has committed to provide
any Bank Products and that the providing of Bank Products by any Bank Product
Provider is in the sole and absolute discretion of such Bank Product Provider.
Notwithstanding anything to the contrary in this Agreement or any other Loan
Document, no provider or holder of any Bank Product shall have any voting or
approval rights hereunder (or be deemed a Lender) solely by virtue of its status
as the provider or holder of such agreements or products or the Obligations
owing thereunder, nor shall the consent of any such provider or holder be
required (other than in their capacities as Lenders, to the extent applicable)
for any matter hereunder or under any of the other Loan Documents (except the
Bank Product Agreements of the applicable Bank Product Provider), including as
to any matter relating to the Collateral or the release of Collateral or
Guarantors.

16.20 Acknowledgment and Consent to Bail-In of EEA Financial Institutions.
Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Loan Document may be subject to the write-down and conversion powers
of an EEA Resolution Authority and agrees and consents to, and acknowledges and
agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if
applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent entity,
or a bridge institution that may be issued to it or otherwise conferred on it,
and that such shares or other instruments of ownership will be accepted by it in
lieu of any rights with respect to any such liability under this Agreement or
any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

17. GENERAL PROVISIONS.

17.1 Effectiveness. This Agreement shall be binding and deemed effective when
executed by Borrower, Agent, and each Lender whose signature is provided for on
the signature pages hereof.

17.2 Section Headings. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Agreement.

 

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17.3 Interpretation. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed against the Lender Group or Borrower, whether under
any rule of construction or otherwise. On the contrary, this Agreement has been
reviewed by all parties and shall be construed and interpreted according to the
ordinary meaning of the words used so as to accomplish fairly the purposes and
intentions of all parties hereto.

17.4 Severability of Provisions. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.

17.5 Counterparts; Electronic Execution. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.

17.6 Revival and Reinstatement of Obligations. If the incurrence or payment of
the Obligations by Borrower or any Guarantor or the transfer to the Lender Group
of any property should for any reason subsequently be declared to be void or
voidable under any state or federal law relating to creditors’ rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (each, a “Voidable Transfer”), and if the Lender Group is required to
repay or restore, in whole or in part, any such Voidable Transfer, or elects to
do so upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that the Lender Group is required or elects to
repay or restore, and as to all reasonable costs, expenses, and attorneys’ fees
of the Lender Group related thereto, the liability of Borrower or such Guarantor
automatically shall be revived, reinstated, and restored and shall exist as
though such Voidable Transfer had never been made.

17.7 Confidentiality.

(a) Agent and the Lenders each individually (and not jointly or jointly and
severally) agree that material, non-public information regarding Borrower and
its Subsidiaries, their operations, assets, and existing and contemplated
business plans shall be treated by Agent and the Lenders in a confidential
manner, and shall not be disclosed by Agent and the Lenders to Persons who are
not parties to this Agreement, except: (i) to attorneys for and other advisors,
accountants, auditors, and consultants to any member of the Lender Group,
(ii) to Subsidiaries and Affiliates of any member of the Lender Group (including
the Bank Product Providers), provided that any such Subsidiary or Affiliate
shall have agreed to receive such information hereunder subject to the terms of
this Section 17.7, (iii) as may be required by statute, decision, or judicial or
administrative order, rule, or regulation, (iv) as may be agreed to in advance
by

 

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Borrower or as requested or required by any Governmental Authority pursuant to
any subpoena or other legal process, (v) as to any such information that is or
becomes generally available to the public (other than as a result of prohibited
disclosure by Agent or the Lenders), (vi) in connection with any assignment,
prospective assignment, sale, prospective sale, participation or prospective
participations, or pledge or prospective pledge of Agent’s or such Lender’s
interest under this Agreement, provided that any such assignee, prospective
assignee, purchaser, prospective purchaser, participant, prospective
participant, pledgee, or prospective pledgee shall have agreed in writing to
receive such information hereunder subject to the terms of this Section 17.7(a),
and (vii in connection with any litigation or other adversary proceeding
involving parties hereto which such litigation or adversary proceeding involves
claims related to the rights or duties of such parties under this Agreement or
the other Loan Documents. The provisions of this Section 17.7(a) shall survive
for two (2) years after the payment in full of the Obligations.

(b) Anything in this Agreement to the contrary notwithstanding, Agent may
provide information concerning the terms and conditions of this Agreement and
the other Loan Documents to loan syndication and pricing reporting services.

17.8 Lender Group Expenses. Borrower agrees to pay any and all Lender Group
Expenses promptly after demand therefor by Agent and agrees that its obligations
contained in this Section 17.8 shall survive payment or satisfaction in full of
all other Obligations.

17.9 USA Patriot Act. Each Lender that is subject to the requirements of the USA
PATRIOT Improvement and Reauthorization Act of 2005 (Pub. L. 109-177) (the
“Patriot Act”) hereby notifies Borrower that pursuant to the requirements of the
Patriot Act, such Lender is required to obtain, verify and record information
that identifies Borrower, which information includes the name and address of
Borrower and other information that will allow such Lender to identify Borrower
in accordance with the Patriot Act. In addition, if Agent is required by law or
regulation or internal policies to do so, it shall have the right to
periodically conduct (a) Patriot Act searches, OFAC/PEP searches, and customary
individual background checks for HTGC or Borrower and (b) OFAC/PEP searches and
customary individual background checks for the senior management and key
principals of HTGC or Borrower, and Borrower agrees to cooperate in respect of
the conduct of such searches and further agrees that the reasonable costs and
charges for such searches shall constitute Lender Expenses hereunder and be for
the account of Borrower.

17.10 Integration. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof. The foregoing to
the contrary notwithstanding, all Bank Product Agreements, if any, are
independent agreements governed by the written provisions of such Bank Product
Agreements, which will remain in full force and effect, unaffected by any
repayment, prepayments, acceleration, reduction, increase, or change in the
terms of any credit extended hereunder, except as otherwise expressly provided
in such Bank Product Agreement.

[Signature pages to follow.]

 

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

 

HERCULES FUNDING II LLC,

a Delaware limited liability, as Borrower

By: 

   

Name:

  Manuel A. Henriquez Title:   President

 

WELLS FARGO CAPITAL FINANCE, LLC,

a Delaware limited liability company formerly

known as Wells Fargo Foothill, LLC,

as Agent and as a Lender

By: 

   

Name:

 

AharonTami TarnavskyBarrows

Title:

  Senior Vice President

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

Revised Exhibit B-1

FORM OF BORROWING BASE CERTIFICATE

Date : January 7, 2019

BORROWING BASE CERTIFICATE

Pursuant to the Amended and Restated Loan and Security Agreement, as of June 29,
2015, as amended from time to time (the “A&R Loan Agreement”), by and among
Hercules Funding II LLC and Wells Fargo Capital Finance, LLC, the undersigned
certifies that as of the close of business on the date set forth above, the
Borrowing Base is computed as set forth below:

 

Borrower: Hercules Funding II LLC

Commitment Amount: $ 75,000,000

  

Lender: Wells Fargo Capital Finance, LLC

 

LOANS RECEIVABLE ROLL FORWARD

     

1.  Loans Receivable Book Value as of the last bbc

        December 31, 2018              0.00  

2.  Plus: New Fundings

           0.00  

3.  Plus: Other (PIK)

           0.00      Total Additions (#2 plus #3)         0.00  

4.  Less: Principal Collections

           0.00  

5.  Less: Capitalized Costs

           0.00  

6.  Less: Pay-offs

           0.00  

7.  Less: Other(ineligible or Removal from BB)

           0.00      Total Deductions (#4 plus #5, #6, #7)         0.00        
  

 

 

 

8.  TOTAL NOTES RECEIVABLE

   January 7, 2019

 

     0.00  

LOANS RECEIVABLE DEDUCTIONS (without duplication)

                       Comments  

9.  Note Receivable that do not evidence commercial loan where less than 15% is
owned by PEG’s or VC’s (a)

     0.00     

10.  Note Receivable does not representa valid and binding obligation
enforceable in accordance with its terms (b)

     0.00     

Note Receivable that is not in confirmance with the required procedures or is
not evidenced by HTGC’s standard loan documents for loans to be sold to

     

11.  Borrower and financed under this Agreement c)

        0.00     

12.  Note Receivable that is rated 4 or 5 in accordance with the required
procedures (d)

     0.00     

13.  Note Receivable where Account Debtor does not have sufficient unrestricted
cash on hand (e)

     0.00     

14.  Note Receivable that does not represent a valid first lien loan (f)

     0.00     

15.  Note Receivable with remaining term that exceeds 60 months (g)

     0.00     

16.  Note Receivable with remaining term that exceeds 42 months unless rated
Investment

    Grade 1 or Investment Grade 2 (h)

     0.00     

17.  Note Receivable that is subject to insolvency proceedings (i)

     0.00     

18.  Note Receivable where the debtor is not required to submit FS as per (j)

     0.00     

19.  Note Receivable that has not been originated by a lender as per (k)

     0.00     

20.  Note Receivable that has not been originated by a lender as per (l)

     0.00     

21.  Note Receivable that does not require current full interest payments in
cash per (m)

     0.00     

22.  Note Receivable that is or has been a Delinquent or a Defaulted note
receivable unless approved by Agent (n)

     0.00     

23.  Note Receivable from an Account Debtor who is in the nuclear waste, natural
resource, utility, or fishing vessel industry (o)

     0.00     

24.  Note Receivable the proceeds of which were used for personal, family, or
household purposes (p)

     0.00     

25.  Syndicated Note Receivable where the Borrower does not have sufficient
control (q)

     0.00     

26.  Note Receivable from an Affiliate, shareholder, employee, or agent of the
Borrower (r)

     0.00     

27.  Note Receivable not payable in dollars (s)

     0.00     

28.  Account Debtor does not maintain its chief executive office or principal
residence in the United States or is not in accordance with (t)

     0.00     

29.  Note Receivable from a governmental agency (u)

     0.00     

30.  Note Receivable from a creditor of the Borrower which is subject to an
offset (v)

     0.00     

31.  Note Receivable where the Collateral Custodian is not in possession of all
the required documents (w)

     0.00     

32.  Note Receivable where the Agent has not received a copy of HTCG’s
investment memorandum (x)

     0.00     

33.  Note Receivable is not subject to a valid and perfected first-priority Lien
of Agent (y)

     0.00     

34.  Note Receivable that has been extended/modified not in compliance with the
required procedures (z)

     0.00     

35.  Note Receivable with outstanding balance exceeding $25,000,000 and has not
been raised or waived by Agent (aa)

     0.00     

36.  Note Receivable that is split-funded, unless it is an Eligible Split-Funded
Note Receivable (bb)

     0.00     

37.  Note Receivable with respect to which Wells Fargo or Affiliate is a
co-lender unless approved by Agent (cc)

     0.00     

38.  Other

     0.00     

39.  TOTAL ELIGIBLE NOTES RECEIVABLE DEDUCTIONS

        0.00           

 

 

 

40.  Total Preliminary Eligible Loans Receivable (#8 minus #39)

        0.00  

41.  Note Receivable that has been materially modified in compliance with the
required procedures and exceeds 10% of the Preliminary Eligible Notes Receivable
#40 (1)

     

42.  Notes Receivable from the same VC and Lead Investor exceeding 25% of #40
(2)

        0.00  

43.  Note Receivable to obligors exceeding 60% of Technology Industry, 60% of
Healthcare Industry and 60% of Life Science Industry or in the same NAIC
classification exceeding 35% of #40 (3)

        0.00  

44.  Note Receivable to obligors with Investment Grade 3 exceeding 40% of #40,
provided, that, at least twenty-five percent (25%) of such Account Debtors are
rated Investment Grade 3 “positive” in accordance with Borrower’s Required
Procedures (4)

        0.00  

45.  The portion of #40 consisting of the aggregate outstanding principal amount
of all Eligible Notes Receivable with respect to which a revolving line of
credit described in clause (f) exists, that exceeds ten percent of #40 (5)

        0.00  

46.  The portion of #40 with remaining term in excess of 42 months that exceed
30% of #40 (6)

        0.00  

47.  Notes Receivables not originated by HTGC that exceed 20% of #40 (7)

        0.00  

48.  Notes Receivable that are Eligible Split-Funded Notes Receivable in excess
of 45% of #40 (8)

     

49.  TOTAL LOAN RECEIVABLE EXCLUSIONS (without duplication)

        0.00  

50.  Eligible Loans Receivable (#40 minus #49)

        0.00  

51.  Advance Rate

           55 % 

52.  Availability (#50 x #51)

           0.00  

53.  P-Card Reserve

                 

 

 

 

54.  Available to Borrow (the lesser of 75,000,000 or #52 minus #53

        0.00           

 

 

 

BALANCES

        

55.  Loan Amount

           December 31, 2018              0.00  

56.  Payments

           0.00  

57.  Interest, Fees and other adjustments

           0.00  

58.  Monthly Advances

           0.00  

New Advance Request

           0.00  

59.  Ending loan balance

           January 7, 2019              0.00  

60.  Excess Availability (#54 minus #59)

           0.00  

The undersigned represents and warrants that this Borrowing Base Certificate is
true and correct statement of, and that the information contained herein is true
and correct in all material respects regarding the status of Eligible Loans
Receivable and the amounts reflected herein are in compliance with the
provisions of the A&R Loan Agreement and the Exhibits and Schedules thereto. The
undersigned further represents and warrants that, after giving effect to the
waiver letter by and among Hercules Funding II LLC, Hercules Technology Growth
Capital, Inc., and Wells Fargo Capital Finance, LLC, executed in connection with
the A&R Loan Agreement, there is no Default and all representations and
warranties contained in the A&R Loan Agreement and other Loan Documents are true
and correct in all material respects and the Required Procedures have been
completed in calculating the information set forth above. Further, there are no
disputes or claims with respect to the Eligible Loans Receivable. Capitalized
terms are used herein and not otherwise defined herein shall have the meanings
specified in the A&R Loan Agreement.

 

Hercules Funding II, LLC By: Dave Lund Its: Interim Chief Financial Officer

 

By:

Authorized Signer

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

Revised Exhibit C-1

FORM OF COMPLIANCE CERTIFICATE

[on Borrower’s letterhead]

Wells Fargo Capital Finance, LLC, as Agent

14241 Dallas Parkway, Suite 1300

Dallas, Texas 75254

Attn: Loan Portfolio Manager — Hercules Funding II LLC

Re: Compliance Certificate dated _____________

Ladies and Gentlemen:

Reference is made to that certain Amended and Restated Loan and Security
Agreement, dated as of June 29, 2015 (as the same may be amended, supplemented,
restated or otherwise modified from time to time, the “Loan Agreement”), by and
among Hercules Funding II LLC, a Delaware limited liability company
(“Borrower”), the lenders from time to time party thereto (the “Lenders”), and
Wells Fargo Capital Finance, LLC, a Delaware limited liability company, as the
arranger and administrative agent for the Lenders (“Agent”). Capitalized terms
used in this Compliance Certificate have the meanings set forth in the Loan
Agreement unless specifically defined herein.

Pursuant to Section 6.3 of the Loan Agreement, the undersigned, being the Chief
Financial Officer of Borrower and the Chief Financial Officer of Hercules
Capital, Inc., a Maryland corporation (“HTGC”), hereby certifies in such
capacities that:

1. The financial information of HTGC and its Subsidiaries (including Borrower),
or of Borrower and its Subsidiaries, as applicable, furnished in Schedule 1
attached hereto, has been prepared in accordance with GAAP (except for the lack
of footnotes and subject to year-end audit adjustments), and presents fairly in
all material respects the financial condition of HTGC and its Subsidiaries
(including Borrower), or of Borrower and its Subsidiaries, as applicable, as of
the date thereof.

2. Such officer has reviewed the terms of the Loan Agreement and has made, or
caused to be made under his/her supervision, a review in reasonable detail of
the transactions and condition of HTGC and its Subsidiaries (including
Borrower), or of Borrower and its Subsidiaries, as applicable, during the
accounting period covered by the financial statements delivered pursuant to
Section 6.3 of the Loan Agreement and furnished in Schedule 1 attached hereto.

3. Such review has not disclosed the existence on and as of the date hereof, and
the undersigned does not have knowledge of the existence as of the date hereof,
of any event or condition that constitutes a Default or Event of Default, except
for such conditions or events listed on Schedule 2 attached hereto, specifying
the nature and period of existence thereof and what action HTGC and its
Subsidiaries (including Borrower), or Borrower and its Subsidiaries, as
applicable, have taken, are taking, or propose to take with respect thereto.

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

4. The representations and warranties of HTGC and its Subsidiaries (including
Borrower), or of Borrower and its Subsidiaries, as applicable, set forth in the
Loan Agreement and the other Loan Documents to which such Person may be a party
are true and correct in all material respects on and as of the date hereof
(except to the extent they relate to a specified date), except as set forth on
Schedule 3 attached hereto.

5. HTGC and its Subsidiaries (including Borrower), or Borrower and its
Subsidiaries, as applicable, are in compliance with the applicable covenants
contained in Section 7.16 and Section 7.17 of the Loan Agreement as demonstrated
on Schedule 4 hereof.

IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned
this _____ day of _______________.

 

HERCULES FUNDING II LLC,

a Delaware limited liability company

By 

   

Name:

   

Title: Chief Financial Officer

 

HERCULES CAPITAL, INC.,

a Maryland corporation

By 

   

Name:

   

Title: Chief Financial Officer

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

Revised Exhibit L-1

[Reserved]