Exhibit 10.1

EXECUTION COPY

 

 

NEWSTAR FINANCIAL, INC.

 

 

$200,000,000

TERM LOAN FACILITY

 

 

SECOND AMENDED AND RESTATED NOTE AGREEMENT

 

 

DATED AS OF MAY 13, 2013

 

 

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Table of Contents

 

     Page   ARTICLE I.  

DEFINITIONS AND ACCOUNTING TERMS

     1   

1.01

 

Defined Terms

     1   

1.02

 

Other Interpretive Provisions

     26   

1.03

 

Accounting Terms

     27   

1.04

 

Rounding

     27   

1.05

 

References to Agreements and Laws

     27   

1.06

 

Times of Day

     27    ARTICLE II.  

THE LOANS

     27   

2.01

 

Loans

     27   

2.02

 

Prepayments of Loans

     32   

2.03

 

Termination of Initial Term Commitments

     33   

2.04

 

Fees

     33   

2.05

 

Interest

     34   

2.06

 

Payment Records

     34   

2.07

 

Payments Generally

     35   

2.08

 

Sharing of Payments

     35   

2.09

 

Incremental Loans

     36    ARTICLE III.  

TAXES, YIELD PROTECTION AND ILLEGALITY

     38   

3.01

 

Taxes

     38   

3.02

 

Illegality

     39   

3.03

 

Inability to Determine Rates

     39   

3.04

 

Increased Cost and Reduced Return; Capital Adequacy

     39   

3.05

 

Funding Losses

     40   

3.06

 

Matters Applicable to all Requests for Compensation

     40   

3.07

 

Survival

     40   

3.08

 

Substitution of Holders

     41    ARTICLE IV.  

CONDITIONS PRECEDENT

     41   

4.01

 

Conditions to Effectiveness of this Agreement and Initial Borrowing

     41   

4.02

 

Conditions to all Borrowings

     43   

4.03

 

Delayed Draw Term Loans

     43    ARTICLE V.  

REPRESENTATIONS AND WARRANTIES

     43   

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Table of Contents

continued

 

         Page  

5.01

 

Existence, Qualification and Power; Compliance with Laws

     43   

5.02

 

Authorization; No Contravention

     44   

5.03

 

No Consent or Other Action

     44   

5.04

 

Binding Effect

     44   

5.05

 

Financial Statements; No Material Adverse Effect

     44   

5.06

 

Litigation

     44   

5.07

 

No Default

     44   

5.08

 

Insurance

     45   

5.09

 

Taxes

     45   

5.10

 

ERISA Compliance

     45   

5.11

 

Company Information; Subsidiaries, Etc.

     46   

5.12

 

Purpose of Loans; Margin Regulations; Investment Company Act

     46   

5.13

 

Disclosure

     46   

5.14

 

Compliance with Laws

     46   

5.15

 

Business and Location

     46   

5.16

 

Perfected Security Interest

     47   

5.17

 

Title; Sufficiency; No Liens

     47   

5.18

 

[Reserved]

     47   

5.19

 

Capitalization; Solvency

     47   

5.20

 

Brokers and Financial Advisors

     47    ARTICLE VI.  

AFFIRMATIVE COVENANTS

     48   

6.01

 

Financial Statements

     48   

6.02

 

Certificates; Other Information

     48   

6.03

 

Notices

     49   

6.04

 

Payment of Obligations

     49   

6.05

 

Preservation of Existence, Etc.

     50   

6.06

 

Maintenance of Insurance

     50   

6.07

 

Compliance with Laws

     50   

6.08

 

Books and Records

     50   

6.09

 

Inspection Rights

     50   

6.10

 

Banks and Payments

     51   

 

- ii -

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Table of Contents

continued

 

         Page  

6.11

 

Securities and Investments

     51   

6.12

 

Additional Subsidiary Guarantors

     52   

6.13

 

Use of Proceeds

     52   

6.14

 

Consolidated Net Worth

     52   

6.15

 

Unencumbered Assets

     52   

6.16

 

Pledge Restrictions

     53   

6.17

 

Delivery of CLO Note

     53    ARTICLE VII.  

NEGATIVE COVENANTS

     53   

7.01

 

Indebtedness

     53   

7.02

 

Liens

     54   

7.03

 

Fundamental Changes

     54   

7.04

 

Dispositions

     55   

7.05

 

Restricted Payments

     55   

7.06

 

Change in Nature of Business

     55   

7.07

 

Transactions with Affiliates

     56   

7.08

 

Burdensome Agreements

     56   

7.09

 

Use of Proceeds

     56   

7.10

 

Special Operating Subsidiary Restrictions.

     56    ARTICLE VIII.  

INTENTIONALLY OMITTED

     57    ARTICLE IX.  

EVENTS OF DEFAULT AND REMEDIES

     57   

9.01

 

Events of Default

     57   

9.02

 

Remedies Upon Event of Default

     59   

9.03

 

Application of Funds

     60    ARTICLE X.  

RIGHT TO CURE; POST-DEFAULT POWER OF ATTORNEY

     61   

10.01

 

Right to Cure

     61   

10.02

 

Power of Attorney

     61    ARTICLE XI.  

ADMINISTRATIVE AGENT

     62   

11.01

 

Appointment and Authorization of Administrative Agent

     62   

11.02

 

Delegation of Duties

     62   

11.03

 

Liability of Administrative Agent

     62   

11.04

 

Reliance by Administrative Agent

     63   

 

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Table of Contents

continued

 

         Page  

11.05

 

Notice of Default

     63   

11.06

 

Credit Decision; Disclosure of Information by Administrative Agent

     63   

11.07

 

Indemnification of Administrative Agent

     64   

11.08

 

Administrative Agent in its Individual Capacity

     64   

11.09

 

Successor Administrative Agent

     65   

11.10

 

Administrative Agent May File Proofs of Claim

     65   

11.11

 

Collateral Matters

     66   

11.12

 

Duties in the Case of Enforcement

     66    ARTICLE XII.  

MISCELLANEOUS

     67   

12.01

 

Amendments, Etc.

     67   

12.02

 

Notices and Other Communications; Facsimile Copies

     68   

12.03

 

No Waiver; Cumulative Remedies

     68   

12.04

 

Attorney Costs, Expenses and Taxes

     69   

12.05

 

Indemnification by the Company

     69   

12.06

 

Payments Set Aside

     70   

12.07

 

Successors and Assigns

     70   

12.08

 

Confidentiality

     72   

12.09

 

Set-off

     73   

12.10

 

Interest Rate Limitation

     73   

12.11

 

Counterparts

     73   

12.12

 

Integration

     74   

12.13

 

Survival of Representations and Warranties

     74   

12.14

 

Severability

     74   

12.15

 

Tax Forms

     74   

12.16

 

Governing Law; Consent to Jurisdiction

     76   

12.17

 

Waiver of Right to Trial by Jury and Other Rights

     77   

12.18

 

Time of the Essence

     77   

12.19

 

ENTIRE AGREEMENT

     77   

12.20

 

Amendment and Restatement; Continuation.

     77   

 

- iv -

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SCHEDULES     

1.01(a)

    

Excluded Collateral

1.01(b)

    

Total Debt Calculation

1.01(c)

    

Excluded Subsidiaries

2.01

    

Commitments

5.06

    

Litigation

5.11(a)

    

Legal names, Federal Taxpayer Identification Numbers, States of Formation, Prior
Legal Names and Mailing Addresses for the Note Parties

5.11(b)

    

Mergers, etc.; Subsidiaries; Other Equity Investments

5.19(a)

    

Capitalization

5.20

    

Brokers and Financial Advisors

6.10

    

Deposit Accounts

6.11

    

Securities Accounts

7.01(a)(ii)

    

Existing Indebtedness

7.02(b)

    

Existing Liens

12.02

    

Administrative Agent’s Office; Certain Addresses for Notices

 

EXHIBITS  

A-1

 

Form of Initial Term Note

A-2

 

Form of Delayed Draw Term A Note

A-3

 

Form of Delayed Draw Term B Note

A-4

 

Form of Delayed Draw Term A-1 Note

A-5

 

Form of Delayed Draw Term B-1 Note

B

 

Form of Assignment and Assumption

C

 

Reserved

D

 

Reserved

E

 

Form of Compliance Certificate

F

 

Form of Incremental Equivalent Debt Intercreditor Agreement

G

 

Form of Delayed Draw Term Loan Borrowing Request

 

- v -

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SECOND AMENDED AND RESTATED NOTE AGREEMENT

This SECOND AMENDED AND RESTATED NOTE AGREEMENT (this “Agreement”) is entered
into as of May 13, 2013, by and among NEWSTAR FINANCIAL, INC., a Delaware
corporation (the “Company”), THE HOLDERS FROM TIME TO TIME PARTY HERETO,
FORTRESS CREDIT CORP. (“Fortress”), as Administrative Agent (as hereinafter
defined), and, solely for purposes of Sections 2.01(a)(i) and 2.01(a)(ii) and
Section 12.21, FORTRESS CREDIT FUNDING IV LP (the “Departing Holder”).

WHEREAS, the Company, Fortress Credit Opportunities I LP (“Fortress
Opportunities”), Fortress Credit Funding III LP (“Fortress Funding III” and,
together with Fortress Opportunities, the “Continuing Holders”, and the
Continuing Holders, together with the Departing Holder, the “Existing Holders”)
and the Departing Holder, as holders, and the Administrative Agent are parties
to that certain Amended and Restated Note Agreement dated as of August 31, 2010,
as amended by the First Amendment to Amended and Restated Note Agreement dated
as of January 27, 2012, the Consent and Second Amendment to Amended and Restated
Note Agreement dated as of November 5, 2012 and the Third Amendment to Amended
and Restated Note Agreement dated as of December 4, 2012 (as so amended, the
“Existing Note Agreement”), pursuant to which the holders party thereto
established a $125,000,000 credit facility in favor of the Company, comprised of
a $100,000,000 term loan facility (the “Existing Term Loan Facility”) and a
$25,000,000 revolving credit facility (the “Existing Revolving Credit
Facility”), which Existing Note Agreement amended and restated in its entirety
that certain Note Agreement dated as of January 5, 2010 among the Company, the
holders party thereto and the Administrative Agent, as amended by that certain
Amendment to Note Agreement dated as of April 6, 2010 (as so amended, the
“Original Note Agreement”); and

WHEREAS, the parties hereto wish to amend and restate the terms and provisions
of the Existing Note Agreement in their entirety in order to, among other things
(a) terminate the Existing Revolving Credit Facility, (b) increase the Existing
Term Loan Facility from $100,000,000 to $200,000,000, (c) extend the maturity
date of the term loan facility hereunder as hereinafter set forth and (d) make
certain other amendments to the Existing Note Agreement, all as more
particularly set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto hereby agree that the Existing Note Agreement is
hereby amended and restated in its entirety by this Agreement and further
covenant and agree as follows:

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:

“30/360 Basis” means on the basis of a 360-day year consisting of 12 months of
30 days each.

“Acquisition” means any transaction or series of related transactions for the
purposes of or resulting in (a) the acquisition of all or substantially all of
the assets of a Person, or of any business or division of a Person, (b) the
acquisition of in excess of 50% of the Capital Stock of any Person (other than a
Person that is a Subsidiary) or (c) a merger or consolidation of any other
combination with another Person (other than a Subsidiary).

“Actual/360 Basis” means on the basis of a 360-day year and charged on the basis
of actual days elapsed for any period for which interest is calculated.

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“Administrative Agent” means Fortress Credit Corp., in its capacity as
contractual representative of the Holders to the extent and in the manner
provided in Article XI, or any successor in such capacity appointed pursuant to
Section 11.09.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 12.02, or such other address or
account as the Administrative Agent may from time to time notify the Company and
the Holders.

“Affiliate” means, with respect to any Person, (i) any Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified, including any Person that is
a manager, director or officer of, general partner in, or trustee of, the
specified Person, or (ii) any Person who, directly or indirectly, is the legal
or beneficial owner of or Controls 10% or more of any class of Capital Stock of
the specified Person.

“Agent-Related Persons” means the Administrative Agent, together with its
Affiliates, and the officers, directors, employees, counsel, agents and
attorneys-in-fact of the Administrative Agent and such Affiliates.

“Agreement” means this Second Amended and Restated Note Agreement.

“Amendment Closing Date” means the first date all of the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 4.01.

“Applicable Margin” means (a) with respect to the Initial Term Loans, 4.50%,
(b) with respect to the Delayed Draw Term A Loans, 4.50%, (c) with respect to
the Delayed Draw Term B Loans, 3.75%, (d) with respect to the Delayed Draw Term
A-1 Loans, 4.50% and (e) with respect to the Delayed Draw Term B-1 Loans, 3.75%.

“Assignment and Assumption” means an Assignment and Assumption substantially in
the form attached hereto as Exhibit B.

“Attorney Costs” means and includes, subject to any limits with respect thereto,
all reasonable and documented fees, out-of-pocket expenses and disbursements of
any law firm or other external counsel.

“Bankruptcy Code” means title 11, United States Code.

“Business” means any financial services, including (i) the making, holding,
purchase and trading of direct or indirect investments, loans and other
extensions of credit, (ii) finance leasing, (iii) the purchase, sale and
brokerage of securities, shares and commodities, (iv) issuing shares, securities
and investment units, (v) buying and selling commodities, (vi) the management
and acquisition of loan and other debt portfolios, CLOs, CDOs and assets related
to any of the foregoing, (vii) the arrangement and syndication of loan
facilities, in each case as conducted by the Company and its Subsidiaries from
time to time and (viii) any other business involving the origination, management
or servicing of loans or credit-related investment products or business lines
ancillary to any of the foregoing that are not otherwise specifically mentioned
in the foregoing clauses (i) through (vii).

“Business Day” means any day which is not a Saturday or Sunday or a legal
holiday and on which banks are not required or permitted by law or other
governmental action to close (i) in New York, New York, and (ii) in the case of
a Business Day which relates to the LIBO Rate, in London, England.

 

- 2 -

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“Capital Expenditures” means, for any period, the sum of the aggregate amount of
expenditures made or liabilities incurred during such period (including the
aggregate amount of Capital Lease obligations incurred during such period) to
acquire or construct fixed assets, plant and equipment (including renewals,
improvements and replacements, but excluding repairs) computed in accordance
with GAAP, provided that such term shall not include (a) any such expenditures
in connection with any replacement or repair of property affected by a casualty
event, to the extent of insurance proceeds therefor received by the Company and
its Subsidiaries, (b) the purchase price paid by the Company or any Subsidiary
for any Acquisition, and (c) expenditures to the extent reimbursable by a
landlord for leasehold improvements in connection with any real property leased
by the Company or any Subsidiary.

“Capital Lease” means, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in accordance
with GAAP, is or should be accounted for as a capital lease on the balance sheet
of that Person.

“Capital Stock” means shares of capital stock (whether denominated as common
stock or preferred stock), beneficial, partnership or membership interests,
trust certificates, participations or other equivalents (regardless of how
designated) of or in a corporation, partnership, limited liability company,
trust or equivalent entity, whether voting or non-voting, and any warrant or
other option to purchase any of the above.

“Cash” means Money or a credit balance in a Deposit Account.

“Cash Equivalents” means, as of any date of determination (i) marketable
securities issued or fully guaranteed or insured by the United States federal
government or any agency thereof, (ii) certificates of deposit, eurodollar time
deposits, overnight bank deposits and bankers’ acceptances of any commercial
bank organized under the laws of the United States, any state thereof, the
District of Columbia, any foreign bank, or its branches or agencies (fully
protected against currency fluctuations) that, at the time of acquisition, are
rated at least “A-1” by S&P or “P-1” by Moody’s, (iii) commercial paper of an
issuer rated at least “A-1” by S&P or “P-1” by Moody’s, (iv) repurchase
obligations rated at least “A-1” by S&P or “P-1” by Moody’s, (v) any negotiable
instruments or securities or other investments subject to the satisfaction of at
least an “A-1” rating by S&P or a “P-1” rating by Moody’s, and (vi) shares of
any money market fund that (a) has net assets whose Dollar equivalent exceeds
$500,000,000, and (b) is rated at least “AAAm” or “AAAm-G” by S&P or “Aaa” by
Moody’s.

“CDO Subsidiary” means a Subsidiary that (a) is engaged as its sole business in
issuing CDOs, or (b) is engaged as its sole business in acting as a trust
depositor in connection with CDOs.

“CDOs” means securitized interests in a pool of assets consisting of loans or
other debt instruments, which interests are commonly referred to as
“collateralized debt obligations”.

“Change in Law” means the occurrence, after the date of this Agreement (or with
respect to any Holder, if later, the date on which such Holder becomes a
Holder), of any of the following: (a) the adoption or taking effect of any law,
rule, regulation or treaty, (b) any change in any law, rule, regulation or
treaty or in the administration, interpretation or application thereof by any
Governmental Authority, or (c) the making or issuance of any request, rules,
guideline, requirement or directive (whether or not having the force of law) by
any Governmental Authority; provided however, that notwithstanding anything
herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines, requirements and directives
thereunder, issued in connection therewith or in implementation thereof, and
(ii) all requests, rules, guidelines, requirements and directives 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, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law” regardless of the date enacted,
adopted, issued or implemented.

 

- 3 -

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“Change of Control” means an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding (i) Permitted Holders, and
(ii) any employee benefit plan of such person or its subsidiaries, and any
person or entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
person or group shall be deemed to have “beneficial ownership” of all securities
that such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time (such right, an
“option right”)), directly or indirectly, of 40% or more of the equity
securities of the Company entitled to vote for members of the board of directors
or equivalent governing body of the Company on a fully-diluted basis (and taking
into account all such securities that such person or group has the right to
acquire pursuant to any option right);

(b) during any period of 12 consecutive months commencing after the Closing
Date, a majority of the members of the board of directors or other equivalent
governing body of the Company cease to be composed of individuals (i) who were
members of that board or equivalent governing body on the first day of such
period, (ii) whose election or nomination to that board or equivalent governing
body was approved by individuals referred to in clause (i) above constituting at
the time of such election or nomination at least a majority of that board or
equivalent governing body or by Permitted Holders holding 51% or more of the
voting Capital Stock of the Company, or (iii) whose election or nomination to
that board or other equivalent governing body was approved by individuals
referred to in clauses (i) and (ii) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body (excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a member of
that board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of
one or more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors); or

(c) any Person or two or more Persons (other than Permitted Holders) acting in
concert shall have acquired by contract or otherwise, or shall have entered into
a contract or arrangement that, upon consummation thereof, will result in its or
their acquisition of the power to exercise, directly or indirectly, a
controlling influence over the management or policies of the Company, or control
over the equity securities of the Company entitled to vote for members of the
board of directors or equivalent governing body of the Company on a
fully-diluted basis (and taking into account all such securities that such
Person or group has the right to acquire pursuant to any option right)
representing 40% or more of the combined voting power of such securities.

“CLO Note” means a note issued by a CLO Subsidiary to the Company or to any
Subsidiary Guarantor.

“CLO Subsidiary” means any Subsidiary (a) that is engaged as its sole business
in issuing CLOs, or (b) that is engaged as its sole business in acting as a
trust depositor in connection with CLOs.

“CLOs” means securitized interests in a pool of loans, which interests are
commonly referred to as “collateralized loan obligations”.

“Closing Date” means January 5, 2010.

 

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“Code” means the Internal Revenue Code of 1986.

“Collateral” has the meaning specified in the Security Agreement; provided that
the term Collateral shall not include any of the Excluded Collateral. For
avoidance of doubt, any property constituting Collateral that is sold,
transferred or otherwise disposed of in a manner not prohibited by Section 7.04
shall automatically cease to constitute Collateral upon the consummation of such
sale, transfer or other disposition.

“Commitment” with respect to any Holder, such Holder’s Term Commitment.

“Company” has the meaning specified in the introductory paragraph hereto.

“Compliance Certificate” has the meaning specified in Section 6.02(a).

“Conflict” or “Conflicting” means, with respect to any Contractual Obligation,
Organizational Document, Requirement of Law, Consent or Other Action or any
other item, any conflict with, breach of or default under, or any triggering of
any remedial rights, benefits, or obligations under or in connection with, the
terms of such item.

“Consent(s) and/or Other Action” means any consent, authorization, Judgment,
directive, approval, license, certificate, registration, permit, exemption,
filing, notice, declaration or other action by, with or to any Person.

“Consolidated Net Worth” means, as to the Company as of any date of
determination, (a) the amount which would be included under stockholders’ equity
on a consolidated balance sheet of the Company determined on a consolidated
basis in accordance with GAAP, plus (b) to the extent deducted in calculating
stockholders’ equity, (i) the aggregate amount, if any, by which the assets
designated on the Company’s consolidated balance sheet as “deferred income
taxes, net” and “deferred financing costs, net” have been reduced from the
amounts thereof shown on the Company’s audited consolidated balance sheet as of
December 31, 2012 and (ii) the aggregate amount of any increases in loan loss
reserves resulting from the implementation of changes in FASB rules after the
Amendment Closing Date.

“Continuing Holders” has the meaning set forth in the recitals to this
Agreement.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise, and the
terms “Controlling” and “Controlled” shall have meanings correlative thereto.

“Control Collateral” means all Collateral with respect to which a security
interest may be perfected by the secured party’s obtaining “control” of such
collateral within the meaning of the UCC.

“Cumulative Retained Excess Cash Flow” means, at any date of determination, an
amount, not less than zero in the aggregate, determined on a cumulative basis
equal to the sum of (i) the aggregate Excess Cash Flow (but not less than zero)
for each fiscal year of the Company ending after the Amendment Closing Date and
prior to such date plus (ii) the aggregate amount of proceeds received by the
Company from all issuances of Capital Stock of the Company from and after the
Amendment Closing Date.

 

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“Customary Permitted Liens” means, with respect to any Person, any of the
following Liens:

(a) Liens with respect to the payment of taxes, assessments or governmental
charges in each case that are not yet due or that are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained to the extent required by
GAAP;

(b) Liens of landlords arising by statute and liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other liens imposed by law
created in the ordinary course of business for amounts not yet due or that are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves or other appropriate provisions are being maintained to
the extent required by GAAP;

(c) deposits made in the ordinary course of business in connection with workers’
compensation, unemployment insurance or other types of social security benefits
or to secure the performance of bids, tenders, sales, contracts (other than for
the repayment of borrowed money) and surety, appeal, customs or performance
bonds;

(d) encumbrances arising by reason of zoning restrictions, easements, licenses,
reservations, covenants, rights-of-way, utility easements, building restrictions
and other similar encumbrances on the use of real property not materially
detracting from the value of such real property or not materially interfering
with the ordinary conduct of the business conducted and proposed to be conducted
at such real property;

(e) encumbrances arising under leases or subleases of real property that do not,
in the aggregate, materially detract from the value of such real property or
interfere with the ordinary conduct of the business conducted and proposed to be
conducted at such real property; and

(f) financing statements with respect to a lessor’s rights in and to personal
property leased to such Person in the ordinary course of such Person’s business
other than through a Capital Lease.

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.

“Default” means any event or condition that, with the giving of any notice, the
passage of time, or both, would be an Event of Default.

“Defaulting Holder” means any Holder that, as reasonably determined by the
Administrative Agent, has (a) failed to (i) fund any portion of its Term
Commitment or (ii) pay over to the Administrative Agent or any other Holder any
other amount required to be paid by it hereunder (“Holder Funding Obligations”)
within two (2) Business Days of the date required to be funded by it hereunder
unless, in the case of clause (i) above, such Holder notifies the Administrative
Agent in writing that such failure is the result of such Holder’s good faith
determination that a condition precedent to funding (specifically identified and
including the particular Default or Event of Default, if any) has not been
satisfied, (b) notified the Company, the Administrative Agent or any Holder in
writing, or has otherwise indicated through a public statement, that it does not
intend to comply with its Holder Funding Obligations (unless such writing or
public statement indicates that such position is based on such Holder’s good
faith determination that a condition precedent to funding a Term Loan under this
Agreement (specifically identified and including the particular Default or Event
of Default, if any) cannot be satisfied) or generally under agreements in which
it commits to extend credit, (c) failed, within three (3) Business

 

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Days after receipt of a written request from the Administrative Agent or the
Company, to confirm that it will comply with the terms of this Agreement
relating to Holder Funding Obligations, provided that such Holder shall cease to
be a Defaulting Holder pursuant to this clause (c) upon receipt of such
certification by the Administrative Agent and the Company, or (d) become (or has
a Parent Company that has become) the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee, custodian,
administrator, examiner, liquidator, assignee for the benefit of creditors or
similar Person charged with reorganization or liquidation of its business
appointed for it, provided that a Holder shall not qualify as a Defaulting
Holder solely as a result of the acquisition or maintenance of an ownership
interest in such Holder or Parent Company, or the exercise of control over such
Holder or any Person controlling such Holder, by a Governmental Authority so
long as such ownership interest or exercise of control does not result in or
provide such Holder 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 Holder (or such governmental authority or instrumentality)
to reject, repudiate, disavow or disaffirm any contracts or agreements made with
such Holder.

“Default Rate” means, as of any date of determination, a rate per annum equal to
the sum of the Interest Rate in effect as of such date plus 2.00%.

“Delayed Draw Term A and Term B Availability Period” means the period commencing
on the Fortress Delayed Draw Availability Commencement Date and ending on the
Delayed Draw Term Availability Termination Date.

“Delayed Draw Term Availability Termination Date” means September 9, 2013.

“Delayed Draw Term A Commitment” means, with respect to each Delayed Draw Term A
Holder, the agreement of such Holder to fund its portion of the Delayed Draw
Term A Loans to the Company during the Delayed Draw Term A and Term B
Availability Period. The initial maximum amount of each Delayed Draw Term A
Holder’s Delayed Draw Term A Commitment is set forth on Schedule 2.01, or in the
Assignment and Assumption pursuant to which such Holder shall have assumed its
Delayed Draw Term A Commitment, as applicable. As of the Amendment Closing Date,
the aggregate original amount of the Delayed Draw Term A Commitments is
$5,000,000.

“Delayed Draw Term A Funding Date” means any date during the Delayed Draw Term A
and Term B Availability Period on which the Delayed Draw Term A Loans are funded
by the Delayed Draw Term A Holders under Section 2.01(a)(iii).

“Delayed Draw Term A Holder” means (a) initially, a Holder holding a Delayed
Draw Term A Commitment in the amount set forth opposite its name on Schedule
2.01 and (b) thereafter, the Holders from time to time holding Delayed Draw Term
A Loans and Delayed Draw Term A Commitments, after giving effect to any
assignments permitted by Section 12.07.

“Delayed Draw Term A Loans” means up to $5,000,000 in aggregate principal amount
of the term loans which may be made by the Delayed Draw Term A Holders pursuant
to Section 2.01(a)(iii) during the Delayed Draw Term A and Term B Availability
Period, subject to the terms and conditions of this Agreement.

“Delayed Draw Term A Loan Maturity Date” means the Scheduled Delayed Draw Term A
Maturity Date or, if earlier, the date on which the Delayed Draw Term A Loans
become due and payable in full, by acceleration or otherwise.

 

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“Delayed Draw Term A Note” means a promissory note made by the Company in favor
of a Delayed Draw Term A Holder evidencing the Delayed Draw Term A Loans made by
such Delayed Draw Term A Holder, substantially in the form of Exhibit A-2
hereto.

“Delayed Draw Term A-1 Availability Period” means the period commencing on the
first date on which any Fortress Holder assigns a portion of its Delayed Draw
Term A Commitment to an Eligible Holder which is not a Fortress Holder and
ending on the Delayed Draw Availability Termination Date.

“Delayed Draw Term A-1 Commitment” means, with respect to each Delayed Draw Term
A-1 Holder, the agreement of such Holder to fund its portion of the Delayed Draw
Term A-1 Loans to the Company during the Delayed Draw Term A-1 Availability
Period, which agreement shall become effective automatically upon the
consummation of any assignment of a portion of a Delayed Draw Term A Commitment
by a Fortress Holder to such Holder and the conversion of Delayed Draw Term A
Commitment to a Delayed Draw Term A-1 Commitment pursuant to Section 2.01(a)(v).
The initial maximum amount of each Delayed Draw Term A-1 Holder’s Delayed Draw
Term A-1 Commitment is set forth in the Assignment and Assumption pursuant to
which the applicable Fortress Holder shall have assigned a portion of its
Delayed Draw Term A Commitment to such Delayed Draw Term A-1 Holder.

“Delayed Draw Term A-1 Funding Date” means any date during the Delayed Draw Term
A-1 Availability Period on which the Delayed Draw Term A-1 Loans are funded by
the Delayed Draw Term A-1 Holders under Section 2.01(a)(v).

“Delayed Draw Term A-1 Holder” means the Holders from time to time holding
Delayed Draw Term A-1 Loans and Delayed Draw Term A-1 Commitments, after giving
effect to any assignments permitted by Section 12.07.

“Delayed Draw Term A-1 Loans” means the term loans which may be made by the
Delayed Draw Term A-1 Holders pursuant to Section 2.01(a)(v) during the Delayed
Draw Term A-1 Availability Period, subject to the terms and conditions of this
Agreement.

“Delayed Draw Term A-1 Loan Maturity Date” means the Scheduled Delayed Draw Term
A-1 Maturity Date or, if earlier, the date on which the Delayed Draw Term A-1
Loans become due and payable in full, by acceleration or otherwise.

“Delayed Draw Term A-1 Note” means a promissory note made by the Company in
favor of a Delayed Draw Term A-1 Holder evidencing the Delayed Draw Term A-1
Loans made by such Delayed Draw Term A-1 Holder, substantially in the form of
Exhibit A-4 hereto.

“Delayed Draw Term B Commitment” means, with respect to each Delayed Draw Term B
Holder, the agreement of such Holder to fund its portion of the Delayed Draw
Term B Loans to the Company during the Delayed Draw Term A and Term B
Availability Period. The initial maximum amount of each Delayed Draw Term B
Holder’s Delayed Draw Term Commitment is set forth on Schedule 2.01, or in the
Assignment and Assumption pursuant to which such Holder shall have assumed its
Delayed Draw Term B Commitment, as applicable. As of the Amendment Closing Date,
the aggregate original amount of the Delayed Draw Term B Commitments is
$25,000,000.

“Delayed Draw Term B Funding Date” means any date during the Delayed Draw Term A
and Term B Availability Period on which the Delayed Draw Term B Loans are funded
by the Delayed Draw Term B Holders under Section 2.01(a)(iv).

“Delayed Draw Term B Holder” means (a) initially, a Holder holding a Delayed
Draw Term B Commitment in the amount set forth opposite its name on Schedule
2.01 and (b) thereafter, the Holders from time to time holding Delayed Draw Term
B Loans and Delayed Draw Term B Commitments, after giving effect to any
assignments permitted by Section 12.07.

 

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“Delayed Draw B Term Loans” means up to $25,000,000 in aggregate principal
amount of the term loans which may be made by the Delayed Draw Term B Holders
pursuant to Section 2.01(a)(iv) during the Delayed Draw Term A and Term B
Availability Period, subject to the terms and conditions of this Agreement.

“Delayed Draw Term B Loan Maturity Date” means the Scheduled Delayed Draw Term B
Maturity Date or, if earlier, the date on which the Delayed Draw Term B Loans
become due and payable in full, by acceleration or otherwise.

“Delayed Draw Term B Note” means a promissory note made by the Company in favor
of a Delayed Draw Term B Holder evidencing the Delayed Draw Term B Loans made by
such Delayed Draw Term B Holder, substantially in the form of Exhibit A-3
hereto.

“Delayed Draw Term B-1 Availability Period” means the period commencing on the
first date on which any Fortress Holder assigns a portion of its Delayed Draw
Term B Commitment to an Eligible Holder which is not a Fortress Holder and
ending on the Delayed Draw Availability Termination Date.

“Delayed Draw Term B-1 Commitment” means, with respect to each Delayed Draw Term
B-1 Holder, the agreement of such Holder to fund its portion of the Delayed Draw
Term B-1 Loans to the Company during the Delayed Draw Term B-1 Availability
Period, which agreement shall become effective automatically upon the
consummation of any assignment of a portion of a Delayed Draw Term B Commitment
by a Fortress Holder to such Holder and the conversion of such Delayed Draw Term
B Commitment to a Delayed Draw Term B-1 Commitment pursuant to
Section 2.01(a)(vi). The initial maximum amount of each Delayed Draw Term B-1
Holder’s Delayed Draw Term B-1 Commitment is set forth in the Assignment and
Assumption pursuant to which the applicable Fortress Holder shall have assigned
a portion of its Delayed Draw Term B Commitment to such Delayed Draw Term B-1
Holder.

“Delayed Draw Term B-1 Funding Date” means any date during the Delayed Draw Term
B-1 Availability Period on which the Delayed Draw Term B-1 Loans are funded by
the Delayed Draw Term B-1 Holders under Section 2.01(a)(vi).

“Delayed Draw Term B-1 Holder” means the Holders from time to time holding
Delayed Draw Term B-1 Loans and Delayed Draw Term B-1 Commitments, after giving
effect to any assignments permitted by Section 12.07.

“Delayed Draw Term B-1 Loans” means the term loans which may be made by the
Delayed Draw Term B-1 Holders pursuant to Section 2.01(a)(v) during the Delayed
Draw Term B-1 Availability Period, subject to the terms and conditions of this
Agreement.

“Delayed Draw Term B-1 Loan Maturity Date” means the Scheduled Delayed Draw Term
B-1 Maturity Date or, if earlier, the date on which the Delayed Draw Term B-1
Loans become due and payable in full, by acceleration or otherwise.

“Delayed Draw Term B-1 Note” means a promissory note made by the Company in
favor of a Delayed Draw Term B-1 Holder evidencing the Delayed Draw Term B-1
Loans made by such Delayed Draw Term B-1 Holder, substantially in the form of
Exhibit A-5 hereto.

 

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“Delayed Draw Term Commitments” means, collectively, the Delayed Draw Term A
Commitments, the Delayed Draw Term B Commitments, the Delayed Draw Term A-1
Commitments and the Delayed Draw Term B-1 Commitments.

“Delayed Draw Term Funding Date” means a Delayed Draw Term A Funding Date, a
Delayed Draw Term B Funding Date, a Delayed Draw Term A-1 Funding Date or a
Delayed Draw Term B-1 Funding Date, as the context may require.

“Delayed Draw Term Holders” means, collectively, the Delayed Draw Term A
Holders, the Delayed Draw Term B Holders, the Delayed Draw Term A-1 Holders and
the Delayed Draw Term B-1 Holders.

“Delayed Draw Term Loan Borrowing Request” shall have the meaning set forth in
Section 2.01(a)(iii).

“Delayed Draw Term Loans” means, collectively, the Delayed Draw Term A Loans,
the Delayed Draw Term B Loans, the Delayed Draw Term A-1 Loans and the Delayed
Draw Term B-1 Loans.

“Departing Holder” has the meaning set forth in the preamble of this Agreement.

“Deposit Account” shall have the meaning accorded to such term in the UCC.

“Deposit Account Control Agreement” means, with respect to any Deposit Account,
any control agreement or other similar agreement between each applicable
depositary bank, the applicable Note Party and the Administrative Agent, as the
Administrative Agent shall deem necessary in its reasonable discretion, in form
and substance reasonably acceptable to the Administrative Agent, providing for
such depositary bank’s agreement to comply with the instructions of the
Administrative Agent with respect to such Deposit Account without the further
consent of, or notice to, the Company, which instructions shall be delivered by
the Administrative Agent only so long as an Event of Default shall have occurred
and be continuing.

“Disposition” or “Dispose” means, with respect to any property, assets,
obligations or other items, the sale, assignment, conveyance, transfer, license,
lease, gift, abandonment or other disposition (including any sale and leaseback
transaction) thereof by any Person, including any sale, assignment, transfer or
other disposal, with or without recourse, of any notes or accounts receivable or
any rights and claims associated therewith; provided that cash payments made by
such Person in satisfaction of payment obligations for reasonable and customary
costs and expenses incurred in the ordinary course of business and in connection
with maintaining its business operations shall not constitute a “Disposition”.

“Disqualified Capital Stock” means, with respect to any Person as of any date of
determination, any class or series of Capital Stock of such Person that, by its
terms or otherwise, (a) is required to be redeemed or repurchased or is
redeemable or subject to repurchase at the option of any holder or holders of
such class or series of Capital Stock (whether pursuant to any sinking fund
obligation, or upon the occurrence of specified events, or otherwise) at any
time on or prior to the date which is 180 days after the Scheduled Maturity
Date, or (b) is convertible into or exchangeable at the option of the holder or
holders thereof for (whether upon the occurrence of specified events or
otherwise) either Capital Stock of the type referred to in the preceding clause
(a) or any Indebtedness; provided that the foregoing shall not be construed to
prohibit rights to receive dividends and distributions in preference to those
paid on any other class of Capital Stock of such Person. Notwithstanding the
foregoing, any Capital Stock that would otherwise constitute Disqualified
Capital Stock solely because the holders of such Capital Stock have the right to
require such Person to repurchase such Capital Stock upon the occurrence of a
Change of Control will not constitute Disqualified Capital Stock if the terms of
such Capital Stock provided that such Person may not repurchase or redeem any
such Capital Stock pursuant to such provisions prior to the termination of the
Commitments and the payment in full of all Obligations.

 

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“Disqualified Institution” means those institutions identified by the Company in
writing to the Administrative Agent and the Holders (i) on or prior to the
Amendment Closing Date or (ii) with the consent of the Administrative Agent (not
to be unreasonably withheld, it being understood that the consent of the
Administrative Agent shall be deemed to have been given if the Administrative
Agent does not object within ten (10) Business Days after identification of an
institution), from time to time thereafter, and, in the case of each of the
foregoing clauses (i) and (ii), their known Affiliates.

“Dollar” and “$” mean lawful money of the United States.

“Domestic Subsidiary” means a Subsidiary organized under the laws of the United
States of America, any state thereof or the District of Columbia.

“EBITDA” means, for any period, (a) the net income of the Company and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP) for such period, plus (b) to the extent deducted in
calculating net income, the sum of the following (calculated without duplication
in accordance with GAAP): (i) income taxes during such period, (ii) interest
expense during such period, (iii) depreciation and amortization for such period
and (iv) all other non-cash charges and losses (including without limitation,
extraordinary non-cash losses but excluding non-cash charges arising from any
provisions to loan loss reserves) for such period, minus (c) to the extent such
items were added in calculating net income, all non-cash income or gains
(including without limitation, extraordinary non-cash gains but excluding
non-cash gains arising from any reduction in provisions to loan loss reserves)
for such period; provided, however, that (A) for purposes of determining EBITDA
for any period during which any Acquisition is consummated, EBITDA shall be
adjusted in a manner consistent with Regulation S-X promulgated under the
Securities Act to give effect to the consummation of such Acquisition on a
pro-forma basis, as if such Acquisition occurred on the first day of such period
and (B) for purposes of determining the net income of the Company and its
Subsidiaries for any period, the net income (or loss) of any Excluded Term
Securitization Debt Issuer for such period shall be excluded, except to the
extent that any such income is actually received by the Company or any
Subsidiary which is not an Excluded Term Securitization Debt Issuer in the form
of dividends or similar distributions (which dividends and distributions shall
be included in the calculation of the net income of the Company and its
Subsidiaries for such period).

“Eligible Holder” means (i) an existing Holder or an Affiliate or Fund Affiliate
of an existing Holder and (ii) any other Person approved by the Administrative
Agent and, unless an Event of Default has occurred and is continuing at the time
any assignment is effected pursuant to Section 12.07, the Company, each such
approval not to be unreasonably withheld or delayed, subject to the terms of
Section 12.07 hereof; provided, however, that in no event shall any of the
following constitute an Eligible Holder: (A) a Disqualified Institution, (B) the
Company, any Subsidiary Controlled by the Company or any Managed Fund, (C) any
Defaulting Holder or any of its Subsidiaries or any Person who, upon becoming a
Holder hereunder, would constitute any of the foregoing Persons described in
this clause (C) or (D) a natural person.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Company within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

 

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“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Company or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Company or any ERISA Affiliate.

“Event of Default” has the meaning specified in Section 9.01.

“Excess Cash Flow” means, for any fiscal year (a) EBITDA of the Company and its
Subsidiaries for such fiscal year minus (b) to the extent not deducted in
computing EBITDA, the sum (without duplication) of (i) the aggregate amount of
Non-Financed Capital Expenditures during such period, (ii) the aggregate amount
paid in cash or withheld by the Company and its Subsidiaries in respect of
income taxes for such period, (iii) the aggregate amount of interest expense
paid in cash by the Company and its Subsidiaries during such period, and
(iv) the aggregate amount of all principal payments of subordinated Indebtedness
of the Company and the Subsidiary Guarantors during such fiscal year (but
excluding payments made with the proceeds of any Indebtedness permitted
hereunder).

“Excluded Collateral” means (i) any Capital Stock or other Investment held by
the Company in any Subsidiary of the Company in existence as of the date hereof
to the extent such Subsidiary is listed on Schedule 1.01(a) hereto, (ii) any
Capital Stock or other Investment held by the Company or any Subsidiary Grantor
in Investment Vehicles hereafter existing, formed or acquired (other than as set
forth in clause (i) above) or in any other Person (other than a natural Person),
in each case to the extent and for so long as the grant of a security interest
therein would Conflict with any Contractual Obligation, any Organizational
Document of an Investment Vehicle, or any Requirement of Law, except, if and to
the extent the terms of any Contractual Obligation, other document or
Requirement of Law prohibiting such grant of a security interest is ineffective
under Article 9 of the UCC or other applicable law or if such Conflict is waived
or otherwise consented to by the related counterparty or the waiver of such
Conflict does not require the consent of any party other than the Company or an
Affiliate thereof, (iii) any rights under Capital Leases, documents evidencing
purchase money financing transactions and any equipment financed under any of
the foregoing, to the extent (A) such Capital Leases and documents evidencing
purchase money financing transactions are permitted under Section 7.01 hereof
and (B) the creation of a security interest therein in favor of the
Administrative Agent would Conflict with the terms of such Capital Lease or
documents and such prohibition is not rendered ineffective under Article 9 of
the UCC or other applicable law, (iv) rights of a party under licenses and
Contractual Obligations, in each case to the extent (and only to the extent
that) and for so long as the grant of a security interest therein would Conflict
with such Contractual Obligation, other document or Requirement of Law, except,
if and to the extent the terms of any such Contractual Obligation, other
document or Requirement of Law prohibiting such grant of a security interest is
ineffective under Article 9 of the UCC or other applicable law or if such
Conflict is waived or otherwise consented to by the related counterparty or the
waiver of such Conflict does not require the consent of any party other than the
Company or an Affiliate thereof, (v) any Deposit Account not required pursuant
to Section 6.10 to be subject to the Administrative Agent’s control, (vi) any
Securities Account not required pursuant to Section 6.11 to be subject to the
Administrative Agent’s control and (vii) any other assets not excluded in
clauses (i)-(vi) above which have a book value of less than $1,000,000 in the
aggregate and are identified in writing from time to time by the Company or a
Subsidiary Grantor to the Administrative Agent as being Excluded Collateral

 

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pursuant to this clause (vii); provided that the term “Excluded Collateral”
shall not include any dividend, income or other distribution arising from any
Excluded Collateral or any Proceeds received by the Company or any Subsidiary
Grantor with respect to the Company’s or such Subsidiary Grantor’s rights or
interests in such Excluded Collateral. For avoidance of doubt, all assets of
each Subsidiary other than the Subsidiary Grantors shall constitute “Excluded
Collateral”.

“Excluded Subsidiary” means any Subsidiary other than (a) the NewStar Collateral
Subsidiary, the REO Subsidiary Guarantors, NewStar Business Credit and NewStar
Equipment Finance and (b) any other wholly-owned Domestic Subsidiary of the
Company constituting an Operating Subsidiary existing, formed or acquired after
the Amendment Closing Date; provided, however, that any Subsidiary that is
prohibited by any Requirement of Law or any Contractual Obligation with an
unaffiliated third party from providing a guaranty of the Obligations shall
constitute an Excluded Subsidiary. For the avoidance of doubt, each Excluded
Subsidiary as of the Amendment Closing Date is set forth on Schedule 1.01(c)
attached hereto.

“Excluded Term Securitization Debt Issuer” means any Person (a) that has issued
Term Securitization Debt, (b) that is included in the consolidated balance sheet
of the Company in accordance with GAAP, and (c) the Capital Stock of which that
is owned by the Company, beneficially or of record, directly or indirectly,
constitutes 25% or less of the total outstanding Capital Stock of such Person.

“Existing Holders” has the meaning set forth in the recitals to this Agreement.

“Existing Note Agreement” has the meaning specified in the recitals to this
Agreement.

“Existing Revolving Credit Facility” has the meaning specified in the recitals
to this Agreement.

“Existing Term Loan” has the meaning set forth in Section 2.01(a)(ii).

“Existing Term Loan Facility” has the meaning set forth in the recitals to this
Agreement.

“Facility” means each of (a) the Initial Term Commitments and the Initial Term
Loans, (b) the Delayed Draw Term A Commitments and Delayed Draw Term A Loans,
(c) the Delayed Draw Term B Commitments and Delayed Draw Term B Loans, (d) the
Delayed Draw Term A-1 Commitments and Delayed Draw Term A-1 Loans, (e) the
Delayed Draw Term B-1 Commitments and the Delayed Draw Term B-1 Loans and
(f) each Tranche of New Term Loans and the related New Term Commitments.

“FASB” means the Financial Accounting Standards Board, or any entity succeeding
to its principal functions.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.

“Federal Funds Rate” means, for any day, the weighted average (rounded upwards,
if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, 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 that
is a Business Day, the average (rounded upwards, if necessary, to the next 1/100
of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.

 

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“Filing Collateral” means all Collateral with respect to which a security
interest may be perfected by the filing of financing statements under the UCC.

“Financing Statement” means the UCC financing statement naming the Company or
the applicable Subsidiary Grantor, as debtor, and the Administrative Agent, as
secured party, and describing the Collateral of the Company or such Subsidiary
Grantor, as applicable, as the collateral as contemplated by the Security
Agreement.

“Foreign Holder” has the meaning set forth in Section 12.15(a)(i).

“Fortress Delayed Draw Availability Commencement Date” means August 12, 2013.

“Fortress Holders” means, as of any date of determination, each Affiliate of
Fortress Credit Corp. which is a Holder as of such date. As of the Amendment
Closing Date, the Fortress Holders are the Holders set forth on Schedule 2.01.

“FRB” means the Board of Governors of the Federal Reserve System of the United
States or any successor thereto performing similar functions.

“Fund Affiliate” means, with respect to any Holder that is a fund that invests
in commercial loans, any other fund that invests in commercial loans and is
advised or managed by such Holder or an Affiliate of such Holder or by the same
investment advisor as such Holder or by an Affiliate of such investment advisor.

“Fund” means any Person (other than a natural Person) that is or will be engaged
in making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business.

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the FASB or such other principles as may be approved by a
significant segment of the accounting profession in the United States, that are
applicable to the circumstances as of the date of determination, consistently
applied.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank, public office,
court, arbitration or mediation panel, or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of government.

“Grant” or “Grants” or “Granting” shall include to grant, assign, pledge,
transfer, convey, set over and dispose.

“Guaranty Obligation” means, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of such Person with respect to any
Indebtedness of another Person, if the purpose or intent of such Person in
incurring the Guaranty Obligation is to provide assurance to the obligee of such
Indebtedness that such Indebtedness will be paid or discharged.

“Holder” means a Term Holder.

“Increased Amount Date” has the meaning set forth in Section 2.09.

“Incremental Equivalent Debt” means Indebtedness incurred by the Company which
satisfies each of the following criteria: (a) the aggregate principal amount of
such Indebtedness incurred during

 

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the term of this Agreement (or, in the case of any such Indebtedness incurred
under a revolving credit facility, the aggregate amount of the revolving credit
commitments established under such revolving credit facility) plus the aggregate
principal amount of any New Term Loans made under Section 2.09 during the term
of this Agreement does not exceed $100,000,000, (b) such Indebtedness is
permitted by Section 7.01, (c) such Indebtedness is secured by substantially the
same collateral, and guaranteed by the same Subsidiaries, as the Term Loans and
does not benefit from any additional collateral or guaranties, (d) if the
maturity date of such Indebtedness is earlier than the Scheduled Maturity Date
of any Facility, this Agreement shall have been amended in a manner reasonably
satisfactory to the Administrative Agent to shorten the Scheduled Maturity Date
of such Facility to a date which is no later than the maturity date of such
Indebtedness, (e) if such Indebtedness (other than any such Indebtedness
incurred under a revolving credit facility) has any amortization of principal
prior to the Scheduled Maturity Date of any Facility (as determined prior to
giving effect to the foregoing clause (d)), this Agreement shall have been
amended in a manner reasonably satisfactory to the Administrative Agent to
provide for the amortization of principal of the Term Loans of such Facility
such that the weighted average life to maturity of such Term Loans shall be
equal to or less than that of such Indebtedness, (f) if the initial “spread”
(for purposes of this clause (f), the “spread” with respect to any loan shall be
calculated as the sum of the applicable interest rate margin on the relevant
loan plus any original issue discount or upfront fees in lieu of original issue
discount (other than any arranging fees, underwriting fees and commitment fees)
(based on an assumed four-year average life for the applicable credit facilities
(e.g., 100 basis points in original issue discount or upfront fees equals 25
basis points of interest rate margin))) relating to such Indebtedness exceeds
the spread then in effect with respect to the Term Loans of any Facility by more
than 0.50%, the Applicable Margin relating to such Term Loans shall be adjusted
so that the spread relating to such Indebtedness does not exceed the then
existing spread applicable to such Term Loans by more than 0.50%; provided that
if such Indebtedness includes an interest rate floor greater than the interest
rate floor applicable to the Term Loans of any Facility, such increased amount
shall be equated to the applicable interest rate margin for purposes of
determining whether an increase to the Applicable Margin for such Term Loans
shall be required, to the extent an increase in the interest rate floor for such
Term Loans would cause an increase in the interest rate then in effect
thereunder, and in such case the interest rate floor (but not the Applicable
Margin) applicable to such Term Loans shall be increased by such amount, (g) the
Company has designated such Indebtedness as “Incremental Equivalent Debt” for
purposes of this Agreement in a written notice by the Company to the
Administrative Agent, and (h) no Event of Default has occurred and is continuing
as of the date such Indebtedness is Incurred. Any Permitted Refinancing
Indebtedness with respect to any Indebtedness described in the foregoing
sentence that satisfies clauses (b) through (h) of the foregoing sentence shall
also constitute Incremental Equivalent Debt.

“Incremental Equivalent Debt Intercreditor Agreement” has the meaning set forth
in Section 11.11.

“Incremental Equivalent Debt Percentage” means, with respect to any prepayment
of principal of Incremental Equivalent Debt (which, in the case of a revolving
credit facility, is accompanied by a corresponding permanent reduction of the
revolving credit commitments thereunder), an amount (expressed as a percentage)
equal to (a) the principal amount of such prepayment divided by (b) the
outstanding principal balance of such Incremental Equivalent Debt (as determined
prior to giving effect to such prepayment).

“Incur” means, with respect to any Indebtedness, to directly or indirectly
create, incur, issue, assume or guaranty, or otherwise become directly or
indirectly liable (contingently or otherwise) with respect to, such
Indebtedness, and the terms “Incurred” and “Incurrence” shall have meanings
correlative thereto; provided, that the assumption by the Company or any of its
Subsidiaries (such Person, the “Assuming Party”) of Indebtedness owing to
another Person by the Company or any Subsidiary shall not constitute an
additional Incurrence of Indebtedness by the Assuming Party for purposes of
calculating compliance with Section 7.01.

 

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“Indebtedness” means, as applied to any Person, (i) all indebtedness for
borrowed money, including senior and subordinated indebtedness and corporate
debt and any working capital, liquidity or subscription agreement facilities,
(ii) all notes payable, bonds, debentures or similar instruments and drafts
accepted representing extensions of credit whether or not representing
obligations for borrowed money, (iii) any obligation owed for all or any part of
the deferred purchase price of property or services, which purchase price is
(a) due more than six months from the date of Incurrence of the obligation in
respect thereof or (b) evidenced by a note or similar written instrument,
(iv) all Capital Lease obligations and the present value of all future rental
payments under all synthetic leases, (v) obligations under any traditional
repurchase agreement financings, (vi) all Guaranty Obligations, and (vii) all
net obligations under Swap Agreements. The amount of any net obligations under
any Swap Agreement of any Person shall, at any time of determination for
purposes of this Agreement, equal the net amount (after taking into account any
netting agreements) that such Person would be required to pay if the instruments
or agreements giving rise to such obligations were terminated at such time
giving effect to the current market conditions notwithstanding any contrary
treatment in accordance with GAAP.

“Indemnified Liabilities” has the meaning set forth in Section 12.05.

“Indemnitees” has the meaning set forth in Section 12.05.

“Initial Term Commitment” means, with respect to each Initial Term Holder, the
commitment of such Initial Term Holder to make Initial Term Loans hereunder on
the Amendment Closing Date. The initial maximum amount of each Initial Term
Holder’s Initial Term Commitment is set forth on Schedule 2.01. The aggregate
maximum amount of the Initial Term Commitments as of the Amendment Closing Date
is equal to $170,000,000.

“Initial Term Holder” means the Persons listed as an Initial Term Holder on
Schedule 2.01 and any other Person that shall have become an Initial Term Holder
party hereto pursuant to an Assignment and Assumption, other than any such
Person that ceases to be an Initial Term Holder party hereto pursuant to an
Assignment and Assumption.

“Initial Term Loan” means (a) a loan funded on the Amendment Closing Date
pursuant to Section 2.01(a)(ii) that utilizes the Initial Term Commitments and
(b) each Existing Term Loan which is rolled over into and classified as an
Initial Term Loan hereunder pursuant to Section 2.01(a)(ii).

“Initial Term Loan Maturity Date” means Scheduled Initial Term Maturity Date or,
if earlier, the date on which the Initial Term Loans become due and payable in
full, by acceleration or otherwise.

“Initial Term Note” means a promissory note made by the Company in favor of an
Initial Term Holder evidencing the Initial Term Loans made by such Initial Term
Holder, substantially in the form of Exhibit A-1 hereto.

“Insurance Requirements” has the meaning set forth in Section 6.06.

“Interest Accrual Period” means, with respect to any Loan, (i) in the case of
the initial such Interest Accrual Period, the period commencing on the date of
the making of such Loan and ending on the last Business Day of the first
calendar month ending thereafter, and (ii) in the case of any subsequent such
Interest Accrual Period, the period commencing on the last day of the
immediately preceding Interest Accrual Period with respect to such Loan and
ending on the last Business Day of the first calendar month ending thereafter.

“Interest Rate” means, for any day, a rate per annum equal to the sum of (i) the
greater of (a) the LIBO Rate and (b) 1.00% plus (ii) the Applicable Margin in
effect on such day.

 

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“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (i) the purchase or other
acquisition of Capital Stock or other securities of another Person, (ii) a loan,
advance or capital contribution to, or purchase or other acquisition of any
other Indebtedness of or equity participation or interest in, another Person,
including any partnership or Investment Vehicle interest in such other Person or
(iii) the purchase or other acquisition (in one transaction or a series of
transactions) of assets of another Person that constitute a business unit.

“Investment Vehicle” means a CDO Subsidiary, CLO Subsidiary, Warehouse
Subsidiary or any other limited liability company, limited partnership, or other
entity created or acquired by the Company for the purpose of (i) issuing CDOs or
CLOs, (ii) providing or participating in “warehouse” lending or borrowing or
repurchase facilities or (iii) engaging in similar securitization or loan,
receivable or other asset-backed backed financing transactions of any kind.
“Investment Vehicle” shall not include any Workout Subsidiary or REO Subsidiary.

“Investment Vehicle Net Equity Value” means, with respect to any Investment
Vehicle as of any date of determination, an amount equal to (a) the aggregate
outstanding principal balance of all Obligor Loans held by such Investment
Vehicle as of such date minus (b) an amount equal to (i) the aggregate principal
balance of all Indebtedness of such Investment Vehicle as of such date minus
(ii) the aggregate amount of all Principal Cash of such Investment Vehicle as of
such date.

“IRS” means the United States Internal Revenue Service.

“Joinder Agreement” means, with respect to any New Term Commitments established
by any New Term Holders pursuant to Section 2.09, an agreement among the
Company, the Administrative Agent and such New Term Holders pursuant to which
such New Term Holders shall become a party to this Agreement as Holders
hereunder and setting forth the terms of such New Term Commitments and the New
Term Loans made thereunder, which agreement shall be reasonably satisfactory in
form and substance to the Company, the Administrative Agent and such New Term
Holders.

“Judgment” means any judgment, order, writ, decision, decree, award or
injunction of any Governmental Authority.

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority.

“LIBO Rate” means, for any Interest Accrual Period with respect to any Loan, the
rate per annum (rounded upward, if necessary, to the nearest 1/100 of 1%) equal
to the rate published by Bloomberg (or, if such rate is not available as
published by Reuters) as one-month LIBOR on the date which is two Business Days
prior to the first day of such Interest Accrual Period or, if such rate shall
not be so quoted, the rate per annum at which (as determined by the
Administrative Agent) Wells Fargo Bank, National Association is offered Dollar
deposits at or about 11:00 A.M., London time, on such date by prime banks in the
interbank eurodollar market for delivery on such day for a period of one month
and in an amount comparable to the amount of such Loan. In the event that such
rate does not appear or is not quoted as provided above, the LIBO Rate for the
purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying one-month LIBOR as selected
by an agreement between the Company and the Administrative Agent. The LIBO Rate
for any Loan with an initial Interest Accrual Period that is less than a full
calendar month in duration shall be calculated on the basis of the one-month
LIBOR in effect on the date which is two Business Days prior to the requested
date for the making of such Loan and shall be recalculated based on the
one-month LIBOR on the date which is two Business Days prior to the first day of
the immediately succeeding calendar month.

 

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“License” means any license, permit, directive, authorization, approval or
stipulation required to operate the Business at any location.

“Lien” means (i) any mortgage, pledge, hypothecation, assignment for security,
encumbrance, lien (statutory or other), charge, or other security interest of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement, and any financing lease having substantially the same
economic effect as any of the foregoing), and (ii) any right of set off or
offset, or other liens (including federal or state tax liens).

“Litigation” means any action, proceeding, litigation, investigation,
arbitration, mediation, claim or Judgment.

“Loan” means a Term Loan.

“Managed Fund” means a fund that meets all of the following criteria: (a) such
fund invests in commercial loans, (b) such fund is not a Subsidiary and (c) such
fund is advised or managed by (i) the Company or (ii) any Subsidiary Controlled
by the Company.

“Margin Stock” shall have the meaning accorded to such term in Regulation U, T
or X of the Board of Governors of the Federal Reserve System, as amended.

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent) or financial condition of the Company and its Subsidiaries, taken
as a whole, (b) a material impairment of the ability of the Company to perform
its payment obligations under any Note Document or (c) a material adverse effect
upon the legality, validity, binding effect or enforceability against any Note
Party of any Note Document to which it is a party.

“Maturity Date” means the Initial Term Loan Maturity Date, the Delayed Draw Term
A Loan Maturity Date, the Delayed Draw Term B Loan Maturity Date, the Delayed
Draw Term A-1 Loan Maturity Date or the Delayed Draw Term B-1 Loan Maturity
Date, as the context may require.

“Money” shall have the meaning accorded to such term in the UCC.

“Moody’s” means Moody’s Investors Service, Inc.

“Mortgaged Property” means the underlying real property and any improvements
thereon on which a Lien is granted to secure a Real Estate Loan.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

“New Term Commitments” has the meaning set forth in Section 2.09(b).

“New Term Holder” has the meaning set forth in Section 2.09(b).

“New Term Loans” has the meaning set forth in Section 2.09(b).

 

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“New Term Note” means a promissory note made by the Company in favor of a New
Term Holder evidencing the New Term Loans made by such New Term Holder, which
promissory note shall be reasonably satisfactory in form and substance to the
Company and such New Term Holder.

“NewStar Business Credit” means NewStar Business Credit LLC, a Delaware limited
liability company.

“NewStar Collateral Subsidiary” means NewStar Loan Funding, LLC, a Delaware
limited liability company.

“NewStar Equipment Finance” means NewStar Equipment Finance I LLC, a Delaware
limited liability company.

“Non-Defaulting Holder” means any Holder other than a Defaulting Holder.

“Non-Financed Capital Expenditures” means Capital Expenditures paid in cash and
not financed with Indebtedness for borrowed money.

“Note Documents” means this Agreement, the Security Agreement, each Note, the
Subsidiary Guaranty, and each Incremental Equivalent Debt Intercreditor
Agreement, together with any and all other notes, security agreements, pledge
agreements, control agreements, guarantees of the Company’s Obligations,
collateral assignments, and any and all other instruments, agreements and other
documents executed and delivered from time to time by any Note Party to or in
favor of the Administrative Agent or any Holder in connection with this
Agreement and the transactions contemplated hereby, as the same may be
supplemented, amended, restated or otherwise modified from time to time.

“Note Party” means the Company, each Subsidiary Guarantor and each other
Subsidiary, if any, which becomes a party to any Note Document.

“Note” means a Term Note.

“Obligations” means all Loans to, and debts, liabilities and obligations of, the
Company or any other Note Party arising under or in connection with any Note
Document, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising,
and any future advances thereon, renewals, extensions, modifications,
amendments, substitutions and consolidations thereof, including the Company’s
obligations to pay (or reimburse Administrative Agent and Holders for) for costs
and expenses payable by the Company pursuant to Section 12.04 and Section 12.05
hereof and fees payable by the Company as provided under Section 2.04 hereof,
and including interest and fees that accrue after the commencement by or against
the Company of any proceeding under any Debtor Relief Laws naming the Company as
the debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding.

“Obligor” means, with respect to any Obligor Loan, any Person or Persons which
is a borrower or guarantor with respect thereto.

“Obligor Loan” means any loan to an Obligor owned by the Company or any of its
Subsidiaries.

“Obligor Loan Payment Collateral” means Collateral consisting of cash payments
on, or cash proceeds of dispositions of, Obligor Loans held by the Company or
any Subsidiary Grantor.

“Obligor Senior Leverage Ratio” means, with respect to any Obligor Loan as of
date of determination, the ratio of (a) the senior Indebtedness of such Obligor
as of such date (as reflected in the Company’s internal performance tracking
system) to (b) the EBITDA of such Obligor for the period of

 

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twelve consecutive calendar months ending on or most recently ended prior to
such date for which financial statements of such Obligor are available (as
reflected in the Company’s internal performance tracking system).

“Operating Subsidiary” means any Subsidiary of the Company other than (a) an
Investment Vehicle, REO Subsidiary or Workout Subsidiary, (b) a special purpose
entity formed or acquired by the Company or any other Subsidiary to hold assets
of any Investment Vehicle, REO Subsidiary or Workout Subsidiary in connection
with the establishment, management, operation or servicing of such Investment
Vehicle, REO Subsidiary or Workout Subsidiary or (c) any Subsidiary which does
not engage in any material activities or operations or hold assets having a fair
market value in excess of $10,000,000 in the aggregate.

“Organizational Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

“Original Note Agreement” has the meaning set forth in the recitals to this
Agreement.

“Other Taxes” has the meaning set forth in Section 3.01(b).

“Parent Company” means, with respect to a Holder, the bank holding company (as
defined in FRB Regulation Y), if any, of such Holder, and/or any Person owning,
beneficially or of record, directly or indirectly, a majority of the economic or
voting equity interests of such Holder.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Company or
any ERISA Affiliate or to which the Company or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.

“Permitted Encumbrances” means those Liens permitted by Section 7.02 and any
Customary Permitted Liens.

“Permitted Holders” means (i) any of Corsair Capital, LLC and Capital Z
Partners, Ltd., or (ii) any Person or group of Persons that Controls, is
Controlled by, or is under common Control with, any of the foregoing, including
without limitation, any fund that is an Affiliate of Corsair Capital, LLC or
Capital Z Partners, Ltd. and/or managed by Corsair Capital, LLC or Capital Z
Partners, Ltd. or any of their Affiliates.

“Permitted Refinancing Indebtedness” means any Indebtedness of the Company or
any of its Subsidiaries issued in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund other Indebtedness
of the Company or any such Subsidiary; provided that: (i) the principal amount
of such Permitted Refinancing Indebtedness does not exceed the principal amount

 

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of, plus accrued interest on, the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses incurred
in connection therewith); (ii) such Permitted Refinancing Indebtedness has a
final maturity date later than the final maturity date of, and has a weighted
average life to maturity equal to or greater than the weighted average life to
maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Loans, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is expressly subordinated in right of
payment to, the Loans on terms at least as favorable to the Holders as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) if such Permitted
Refinancing Indebtedness is secured, such Permitted Refinancing Indebtedness is
secured by the same collateral as the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.

“Permitted Use” means, with respect to the proceeds of a Loan made at any time
on or after the Amendment Closing Date, any lawful purpose.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by the Company or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

“Possessory Collateral” means all Collateral with respect to which a security
interest may be perfected by the secured party taking possession of such
Collateral within the meaning of the UCC.

“Principal Cash” means, with respect to any Investment Vehicle as of any date of
determination, the aggregate amount of all restricted cash held by such
Investment Vehicle in its principal and revolving credit reserve accounts
related to its Indebtedness as of such date, but excluding any restricted cash
held in any interest reserve accounts.

“Proceeds” shall have the meaning accorded to such term in the UCC and shall
include any and all insurance proceeds and loss proceeds in respect of the
Collateral.

“Pro Rata Share” means

(a) when used with respect to each Holder at any time, such Holder’s pro rata
share of the aggregate Total Outstandings and aggregate undrawn Commitments at
such time;

(b) when used with respect to each Initial Term Holder in relation to all
Initial Term Holders at any time, such Holder’s pro rata share of the aggregate
outstanding principal balance of the Initial Term Loans at such time;

(c) when used with respect to each Delayed Draw Term A Holder in relation to all
Delayed Draw Term A Holders at any time, such Holder’s pro rata share of the
aggregate Delayed Draw Term A Commitments (or, if the Delayed Draw Term A Loans
have been funded at such time, the aggregate outstanding principal balance of
the Delayed Draw Term A Loans) at such time;

(d) when used with respect to each Delayed Draw Term B Holder in relation to all
Delayed Draw Term B Holders at any time, such Holder’s pro rata share of the
aggregate Delayed Draw Term B Commitments (or, if the Delayed Draw Term B Loans
have been funded at such time, the aggregate outstanding principal balance of
the Delayed Draw Term B Loans) at such time;

 

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(e) when used with respect to each Delayed Draw Term A-1 Holder in relation to
all Delayed Draw Term A-1 Holders at any time, such Holder’s pro rata share of
the aggregate undrawn Delayed Draw Term A-1 Commitments and the aggregate
outstanding principal balance of the Delayed Draw Term A-1 Loans at such time;

(f) when used with respect to each Delayed Draw Term B-1 Holder in relation to
all Delayed Draw Term B-1 Holders at any time, such Holder’s pro rata share of
the aggregate undrawn Delayed Draw Term B-1 Commitments and the aggregate
outstanding principal balance of the Delayed Draw Term B-1 Loans at such time;
and

(g) when used with respect to each New Term Holder in relation to all New Term
Holders at any time, such Holder’s pro rata share of the aggregate outstanding
principal balance of the New Term Loans at such time.

“Real Estate Loan” means any Obligor Loan for which the underlying Related
Property consists primarily of commercial real estate owned by the Obligor.

“Register” has the meaning set forth in Section 12.07(c).

“Related Property” means, with respect to any Obligor Loan, any property or
assets designated and pledged or mortgaged as collateral to secure repayment of
such Obligor Loan (including Mortgaged Property and/or a pledge of the equity
interests of such Obligor), including all proceeds from any sale or other
disposition of such property or assets.

“REO Acquisition” means the acquisition by the Company, any Investment Vehicle
or any REO Affiliate on behalf of the Company or any Investment Vehicle of any
Mortgaged Property through foreclosure or by deed in lieu of foreclosure.

“REO Affiliate” means a corporation, limited partnership, limited liability
company or business trust organized under the laws of any state of the United
States which is wholly owned by the Company or any Subsidiary and acquires title
to any REO Property.

“REO Property” means a Mortgaged Property acquired by REO Acquisition.

“REO Subsidiary” means any REO Affiliate that is a direct wholly-owned
subsidiary of the Company or a Subsidiary Guarantor. As of the Amendment Closing
Date, the term “REO Subsidiary” shall include, without limitation, each REO
Subsidiary Guarantor.

“REO Subsidiary Guarantor” means each of FQ NS Six Holding, LLC, a Delaware
limited liability company, and I-295 NS Eight Holding, LLC, a Delaware limited
liability company.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Required Holders” means, as of any date of determination, a Holder or Holders
having Loans and unused Commitments representing more than 50% of the sum of the
Total Outstandings and unused Commitments of all Holders at such time; provided,
however, that the calculation of Required Holders shall not include any
Defaulting Holder for any purposes of this Agreement (including without
limitation, Section 12.01).

“Requirement of Law” or “Requirements of Law” means any requirement, direction,
policy or procedure of any Law or License, Judgment, or Consent or Other Action.

 

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“Responsible Officer” means, in the case of any Person, the chief executive
officer, president, chief financial officer, treasurer, controller or chief
investment officer of such Person, or, in the case of a limited partnership, the
general partner of such Person. Any document delivered hereunder that is signed
by a Responsible Officer of a Person shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of such Person and such Responsible Officer shall be conclusively presumed
to have acted on behalf of such Person.

“Restricted Payment” means, with respect to any Person, (i) any dividend or
other distribution (whether direct or indirect, and whether in cash, securities
or other property) with respect to any class of Capital Stock of such Person now
or hereafter outstanding, other than a dividend payable to the holders of any
class of Capital Stock solely in shares of Capital Stock of such Person (other
than Disqualified Capital Stock) and (ii) any payment (whether direct or
indirect, and whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, full or partial
redemption, full or partial withdrawal, retirement, acquisition, cancellation or
termination of any such Capital Stock or of any option, warrant or other right
to acquire any such Capital Stock.

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business.

“Scheduled Maturity Date” means the Scheduled Initial Term Maturity Date, the
Scheduled Delayed Draw Term A Maturity Date, the Scheduled Delayed Draw Term B
Maturity Date, the Scheduled Delayed Draw Term A-1 Maturity Date or the
Scheduled Delayed Draw Term B-1 Maturity Date, as the context may require.

“Scheduled Delayed Draw Term A Maturity Date” means May 11, 2018.

“Scheduled Delayed Draw Term A-1 Maturity Date” means May 11, 2018.

“Scheduled Delayed Draw Term B Maturity Date” means May 12, 2017.

“Scheduled Delayed Draw Term B-1 Maturity Date” means May 12, 2017.

“Scheduled Initial Term Maturity Date” means May 11, 2018.

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Securities Account” shall have the meaning accorded to such term in the UCC.

“Securities Account Collateral” means Collateral consisting of (a) security
entitlements and CLO Notes owned by the Company or any Subsidiary Grantor and
held by a securities intermediary in a Securities Account of the Company or such
Subsidiary Grantor, (b) cash payments on, or cash proceeds from the disposition
of, CLO Notes owned by the Company or any Subsidiary Grantor or (c) dividends or
distributions paid in cash to the Company or any Subsidiary Grantor, in each
case, by its wholly-owned Subsidiaries.

“Securities Account Control Agreement” means, with respect to any Securities
Account, any control agreement or other similar agreement between each
institution maintaining a Securities Account, the applicable Note Party and the
Administrative Agent as the Administrative Agent shall deem necessary in its
reasonable discretion, in form reasonably acceptable to the Administrative
Agent, providing for such institution’s agreement to accept entitlement orders
from the Administrative Agent as to the disposition of Investments held in the
applicable Securities Account, which entitlement orders shall be issued by the
Administrative Agent only so long as an Event of Default shall have occurred and
be continuing.

 

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“Securities Act” means the Securities Act of 1933, as amended from time to time,
and the rules and regulations promulgated thereunder, as from time to time in
effect.

“Security Agreement” means the Second Amended and Restated Pledge and Security
Agreement of even date herewith executed by the Company, the Subsidiary
Guarantors party thereto and the Administrative Agent, as the same is amended or
otherwise modified from time to time.

“Solvent” means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person’s then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person’s
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
Incur, or believe (nor should it reasonably believe) that it will Incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
“solvent” within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of the Company.

“Subsidiary Grantor” means (a) the NewStar Collateral Subsidiary and (b) any
other Subsidiary that becomes a “Grantor” under and as defined in the Security
Agreement after the Amendment Closing Date. For avoidance of doubt, no
Subsidiary of the Company other than the NewStar Collateral Subsidiary shall be
required to become a Subsidiary Grantor on or after the Amendment Closing Date.

“Subsidiary Guarantor” means, collectively, the NewStar Collateral Subsidiary,
each REO Subsidiary Guarantor, NewStar Business Credit, NewStar Equipment
Finance and each other Subsidiary of the Company that becomes a party to the
relevant Note Documents as a Subsidiary Guarantor after the Amendment Closing
Date. For avoidance of doubt, except as otherwise provided in Section 6.12, no
Subsidiary of the Company that is not a Subsidiary Guarantor as of the Amendment
Closing Date shall be required to become a Subsidiary Guarantor after the
Amendment Closing Date.

“Subsidiary Guaranty” means the Amended and Restated Subsidiary Guaranty of even
date herewith, executed by each Subsidiary Guarantor and the Administrative
Agent.

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions.

 

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“Taxes” shall have the meaning accorded to such term in Section 3.01(a).

“Tax Party” shall have the meaning accorded to such term in Section 5.09.

“Term Commitments” means, collectively, the Initial Term Commitments, the
Delayed Draw Term Commitments and any New Term Commitments.

“Term Holders” means, collectively, the Initial Term Holders, the Delayed Draw
Term Holders and the New Term Holders.

“Term Loans” means, collectively, the Initial Term Loans, the Delayed Draw Term
Loans and any New Term Loans.

“Term Notes” means, collectively, the Initial Term Notes, the Delayed Draw Term
A Notes, the Delayed Draw Term B Notes, the Delayed Draw Term A-1 Notes, the
Delayed Draw Term B-1 Notes and the New Term Notes.

“Term Securitization Debt” means Indebtedness of an Investment Vehicle.

“Total Debt” means, as of any date of determination, an amount equal to the
aggregate amount of Indebtedness of the Company and its Subsidiaries (determined
on a consolidated basis in accordance with GAAP) described in clauses (i),
(ii) and (iv) of the definition of “Indebtedness” outstanding as of such date of
determination; provided, however, that any Term Securitization Debt which is
issued by an Excluded Term Securitization Debt Issuer shall be excluded from
Total Debt. For illustrative purposes, Schedule 1.01(b) attached hereto sets
forth a calculation of Total Debt as of December 31, 2012.

“Total Leverage Ratio” means, as of any date of determination thereof, the ratio
of (a) Total Debt as of such date to (b) Consolidated Net Worth as of such date.

“Total Outstandings” means, as of any date of determination, the aggregate
outstanding principal amount of all Term Loans as of such date.

“Tranche” has the meaning specified in Section 2.09(b).

“UCC” or “Uniform Commercial Code” means the Uniform Commercial Code as in
effect from time to time as adopted in the State of New York; provided, however,
that, if by reason of mandatory provisions of law, any of the attachment,
perfection or priority of the Administrative Agent’s security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the terms “UCC” and “Uniform
Commercial Code” shall mean the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions related to
such provisions.

“Unapplied Cash” means (i) Cash received by the Company or any Subsidiary
Grantor for the sole purpose of holding such funds in escrow for the benefit of
an identifiable third party until a separate escrow deposit account is
established and maintained, which account shall be promptly established,
provided that the escrowed funds described in this clause (i) shall at no time
exceed $1,000,000 in the aggregate for any single borrower, (ii) Cash in the
nature of an overpayment of an Obligor Loan received by the Company or any
Subsidiary Grantor in its capacity as a lender or as the administrative or
collateral agent for a syndicate of lenders for so long as such amounts
constitute an overpayment, and/or (iii) Cash in the form of unidentified wires
until such wires can be properly identified for transfer to the appropriate
deposit account.

 

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“Unencumbered Assets” means Obligor Loans owned by the Company or any Subsidiary
and not subject to any Lien securing Indebtedness (other than Liens securing the
Obligations and Incremental Equivalent Debt).

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding that Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

“United States” and “U.S.” mean the United States of America.

“Warehouse Subsidiary” means a Subsidiary that is engaged as its sole business
in acquiring loans or other debt instruments for purposes of transferring such
loans or debt instruments to a CDO Subsidiary or a CLO Subsidiary or
participating in other loan, receivable or other asset-backed financing
transactions.

“Workout Assets” means assets obtained in connection with any repossession or
foreclosure proceeding, a consensual or voluntary settlement or workout
proceeding, or any similar proceeding in connection with the exercise of
creditors’ rights and remedies.

“Workout Subsidiary” means any Subsidiary of the Company which is formed or
acquired solely in connection with repossession, foreclosure, insolvency,
workout, settlement or other similar proceedings in respect of Workout Assets.

1.02 Other Interpretive Provisions. With reference to this Agreement and each
other Note Document, unless otherwise specified herein or in such other Note
Document:

(a) The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms.

(b) (i) The words “herein,” “hereto,” “hereof’ and “hereunder” and words of
similar import, when used in any Note Document, shall refer to such Note
Document as a whole and not to any particular provision thereof.

(i) Article, Section, Exhibit and Schedule references are to the Note Document
in which such reference appears.

(ii) The terms “include” and “including” are by way of example and not
limitation.

(iii) The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

(c) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

(d) Section headings herein and in the other Note Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Note Document.

 

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1.03 Accounting Terms.

(a) All accounting terms not specifically or completely defined herein shall be
construed in conformity with, and all financial data (including financial ratios
and other financial calculations) required to be submitted pursuant to this
Agreement shall be prepared in conformity with, GAAP applied on a consistent
basis, as in effect from time to time, applied in a manner consistent with that
used in preparing the financial statements referred to in Section 5.05, except
as otherwise specifically prescribed herein.

(b) If any change in GAAP used in the preparation of the most recent financial
statements referred to in Section 5.05 is hereafter required or permitted by the
rules, regulations, pronouncements and opinions of FASB or the American
Institute of Certified Public Accountants (or any successors thereto) and such
change is adopted by the Company and results in a change in any of the
calculations under Article VI or any financial ratio set forth in any Note
Documents (to the extent required to be calculated in accordance with GAAP) that
would not have resulted had such accounting change not occurred, the parties
hereto agree that, for purposes of this Agreement, such change shall not be
given effect and the calculations required to measure compliance with any
financial covenant set forth in Article VI or financial ratio under any Note
Document shall be performed as if such change had not occurred.

1.04 Rounding. Any financial ratios required to be maintained by the Company
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding- up if there is no nearest
number). Any interest rate calculated in accordance with the terms of this
Agreement shall be rounded upward to the nearest whole multiple of one
thousandth of one percent (0.001%).

1.05 References to Agreements and Laws. Unless otherwise expressly provided
herein, (a) references to Organizational Documents, agreements (including the
Note Documents) and other contractual instruments shall be deemed to include all
subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Note Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.

1.06 Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Eastern time (daylight or standard, as applicable).

ARTICLE II.

THE LOANS

2.01 Loans.

(a) Commitments.

(i) Termination of Existing Revolving Credit Facility. The Company and the
Existing Holders hereby agree that, effective on the Amendment Closing Date, the
Revolving Commitments (as defined in the Existing Note Agreement) of the
Existing Holders under the Existing Note Agreement are terminated. The
Administrative Agent and the Existing Holders hereby waive (A) any requirement
under the Existing Note Agreement or otherwise that the Company provide any
prior notice of such termination and (B) any obligation of the Company to

 

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pay and any right of the Administrative Agent or the Existing Holders to receive
any fee, premium or other amount under the Existing Note Agreement or otherwise
in connection with such termination.

(ii) Initial Term Commitments. Pursuant to the Existing Note Agreement, the
Existing Holders made Term Loans (as defined in the Existing Note Agreement)
(the “Existing Term Loans”) to the Company in the full amount of their Term
Commitments (as defined in the Existing Note Agreement), whereupon such Term
Commitments automatically terminated. As of the Amendment Closing Date, the
aggregate outstanding principal balance of the Existing Term Loans is
$100,000,000 and the outstanding principal balance of the Existing Term Loans
held by each Existing Holder is as follows: (I) Fortress Opportunities,
$75,000,000, (II) Fortress Funding III, $20,000,000 and (III) Fortress Funding
IV LP, $5,000,000. Subject to the terms and conditions set forth herein, on the
Amendment Closing Date, (A) the Existing Term Loans held by the Continuing
Holders in the aggregate principal amount of $95,000,000 under the Existing Note
Agreement shall be rolled over into and shall constitute Initial Term Loans
hereunder, (B) each Continuing Holder holding an Existing Term Loan as of the
Amendment Closing Date shall constitute an Initial Term Holder hereunder,
(C) each Initial Term Holder severally agrees to make an Initial Term Loan to
the Company in a single drawing on the Amendment Closing Date in an amount equal
to (x) the full amount of its Initial Term Commitment minus (y) the outstanding
principal balance of the Existing Term Loan, if any, held by such Initial Term
Holder and (D) a portion of the proceeds of the Initial Term Loans funded under
the foregoing clause (C) in the amount of $5,000,000 plus the amount of any
accrued interest on Existing Term Loan held by the Departing Holder shall be
remitted to the Departing Holder and applied to repay such Existing Term Loan
and accrued interest in full. The Existing Holders hereby (1) consent to the
repayment of the Existing Term Loan held by the Departing Holder and waive any
requirement under the Existing Note Agreement or otherwise that such repayment
be applied ratably to the Obligations (as defined in the Existing Note
Agreement) held by all of the Existing Holders, (2) waive any requirement under
the Existing Note Agreement or otherwise that the Company provide any prior
notice of such repayment and (3) waive any obligation of the Company to pay and
any right of the Administrative Agent or the Existing Holders to receive any
fee, premium or other amount under the Existing Note Agreement or otherwise in
connection with such repayment. Upon any payment or prepayment of an Initial
Term Loan in whole or in part, the Company shall have no right to reborrow the
amount so paid or prepaid.

(iii) Delayed Draw Term A Commitments. Subject to the terms and conditions set
forth herein, each Delayed Draw Term A Holder agrees to make Delayed Draw Term A
Loans to the Company in an aggregate principal amount equal to the full amount
of its Delayed Draw Term A Commitment in a single drawing during the Delayed
Draw Term A and Term B Availability Period. To request the funding of the
Delayed Draw Term A Loans hereunder, the Company shall deliver to the
Administrative Agent not later than 1:00 p.m. (New York time) three Business
Days before the date of such proposed Delayed Draw Term A Loans, by facsimile or
electronic mail transmission, a borrowing request substantially in the form of
Exhibit G attached hereto (a “Delayed Draw Term Loan Borrowing Request”) setting
forth the Facility under which such borrowing is requested and all of the other
information required to be included therein. Promptly following receipt of a
Delayed Draw Term Loan Borrowing Request in compliance with this
Section 2.01(a)(iii), the Administrative Agent shall advise each Delayed Draw
Term A Holder of the details thereof, and of the amount of such Holder’s Delayed
Draw Term A Loan to be made as part of such borrowing. So long as no Default or
Event of Default shall have occurred and be continuing or shall result therefrom
and subject to the other terms and conditions of this Agreement, no later than
the third Business Day immediately following the date on which such Delayed Draw
Term Loan Borrowing Request is delivered to the Administrative

 

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Agent, the Delayed Draw Term A Holders shall make Delayed Draw Term A Loans to
the Company in accordance with the terms of Section 2.01(b) and their respective
Pro Rata Shares in an aggregate amount equal to the aggregate Delayed Draw Term
A Loans requested in such Delayed Draw Term Loan Borrowing Request. Upon any
payment or prepayment of a Delayed Draw Term A Loan in whole or in part, the
Company shall have no right to reborrow the amount so paid or prepaid.

(iv) Delayed Draw Term B Commitments. Subject to the terms and conditions set
forth herein, each Delayed Draw Term B Holder agrees to make Delayed Draw Term B
Loans to the Company in an aggregate principal amount equal to the full amount
of its Delayed Draw Term B Commitment in a single drawing during the Delayed
Draw Term A and Term B Availability Period. To request the funding of the
Delayed Draw Term B Loans hereunder, the Company shall deliver to the
Administrative Agent not later than 1:00 p.m. (New York time) three Business
Days before the date of such proposed Delayed Draw Term B Loan, by facsimile or
electronic mail transmission, a Delayed Draw Term Loan Borrowing Request setting
forth the Facility under which such borrowing is requested and all of the other
information required to be included therein. Promptly following receipt of such
Delayed Draw Term Loan Borrowing Request in compliance with this
Section 2.01(a)(iv), the Administrative Agent shall advise each Delayed Draw
Term B Holder of the details thereof, and of the amount of such Holder’s Delayed
Draw Term B Loan to be made as part of such borrowing. So long as no Default or
Event of Default shall have occurred and be continuing or shall result therefrom
and subject to the other terms and conditions of this Agreement, no later than
the third Business Day immediately following the date on which such Delayed Draw
Term Loan Borrowing Request is delivered to the Administrative Agent, the
Delayed Draw Term B Holders shall make Delayed Draw Term B Loans to the Company
in accordance with the terms of Section 2.01(b) and their respective Pro Rata
Shares in an aggregate amount equal to the aggregate Delayed Draw Term B Loans
requested in such Delayed Draw Term Loan Borrowing Request. Upon any payment or
prepayment of a Delayed Draw Term B Loan in whole or in part, the Company shall
have no right to reborrow the amount so paid or prepaid

(v) Delayed Draw Term A-1 Commitments. If any Fortress Holder assigns any
portion of its Delayed Draw Term A Commitment (the “Assigned Delayed Draw Term A
Commitment Portion”) to any Eligible Holder which is not a Fortress Holder prior
to the Fortress Delayed Draw Availability Commencement Date, then, effective
automatically upon such assignment (A) the Assigned Delayed Draw Term A
Commitment Portion shall be deemed to be converted into a Delayed Draw Term A-1
Commitment in the amount of the Assigned Delayed Draw Term A Commitment Portion,
(B) such assignee shall constitute a Delayed Draw Term A-1 Holder holding a
Delayed Draw Term A-1 Commitment hereunder in the amount of the Assigned Delayed
Draw Term A Commitment Portion and (C) the Delayed Draw Term A Commitment of
such Fortress Holder shall be equal to the Delayed Draw Term A Commitment of
such Fortress Holder immediately prior to giving effect to such assignment minus
the Assigned Delayed Draw Term A Commitment Portion. Subject to the terms and
conditions set forth herein, each Delayed Draw Term A-1 Holder agrees to make
Delayed Draw Term A-1 Loans to the Company in an aggregate principal amount
equal to the full amount of its Delayed Draw Term A-1 Commitment during the
Delayed Draw Term A-1 Availability Period; provided that each Delayed Draw Term
A-1 Loan shall be not less than $500,000 and shall be in an amount which is an
integral multiple of $250,000. The Company shall be permitted to request Delayed
Draw Term A-1 Loans on one or more occasions during the Delayed Draw Term A-1
Availability Period. To request the funding of Delayed Draw Term A-1 Loans
hereunder, the Company shall deliver to the Administrative Agent not later than
1:00 p.m. (New York time) one Business Day before the date of such proposed
Delayed Draw Term A-1 Loans, by facsimile or electronic mail transmission, a
Delayed Draw Term Loan Borrowing Request setting forth the Facility under which
such

 

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borrowing is requested and all of the other information required to be included
therein. Promptly following receipt of such a Delayed Draw Term Loan Borrowing
Request in compliance with this Section 2.01(a)(v), the Administrative Agent
shall advise each Delayed Draw Term A-1 Holder of the details thereof, and of
the amount of such Holder’s Delayed Draw Term A-1 Loan to be made as part of
such borrowing. So long as no Default or Event of Default shall have occurred
and be continuing or shall result therefrom and subject to the other terms and
conditions of this Agreement, no later than the Business Day immediately
following the date on which such a Delayed Draw Term Loan Borrowing Request is
delivered to the Administrative Agent, the Delayed Draw Term A-1 Holders shall
make Delayed Draw Term A-1 Loans to the Company in accordance with the terms of
Section 2.01(b) and their respective Pro Rata Shares in an aggregate amount
equal to the aggregate Delayed Draw Term A-1 Loans requested in such Delayed
Draw Term Loan Borrowing Request. Upon any payment or prepayment of a Delayed
Draw Term A-1 Loan in whole or in part, the Company shall have no right to
reborrow the amount so paid or prepaid.

(vi) Delayed Draw Term B-1 Commitments. If any Fortress Holder assigns any
portion of its Delayed Draw Term B Commitment (the “Assigned Delayed Draw Term B
Commitment Portion”) to any Eligible Holder which is not a Fortress Holder prior
to the Fortress Delayed Draw Availability Commencement Date, then, effective
automatically upon such assignment (A) the Assigned Delayed Draw Term B
Commitment Portion shall be deemed to be converted into a Delayed Draw Term B-1
Commitment in the amount of the Assigned Delayed Draw Term B Commitment Portion,
(B) such assignee shall constitute a Delayed Draw Term B-1 Holder holding a
Delayed Draw Term B-1 Commitment hereunder in the amount of the Assigned Delayed
Draw Term B Commitment Portion and (C) the Delayed Draw Term B Commitment of
such Fortress Holder shall be equal to the Delayed Draw Term B Commitment of
such Fortress Holder immediately prior to giving effect to such assignment minus
the Assigned Delayed Draw Term B Commitment Portion. Subject to the terms and
conditions set forth herein, each Delayed Draw Term B-1 Holder agrees to make
Delayed Draw Term B-1 Loans to the Company in an aggregate principal amount
equal to the full amount of its Delayed Draw Term B-1 Commitment during the
Delayed Draw Term B-1 Availability Period; provided that each Delayed Draw Term
B-1 Loan shall be not less than $500,000 and shall be in an amount which is an
integral multiple of $250,000. The Company shall be permitted to request Delayed
Draw Term B-1 Loans on one or more occasions during the Delayed Draw Term B-1
Availability Period. To request the funding of Delayed Draw Term B-1 Loans
hereunder, the Company shall deliver to the Administrative Agent not later than
1:00 p.m. (New York time) one Business Day before the date of such proposed
Delayed Draw Term B-1 Loans, by facsimile or electronic mail transmission, a
Delayed Draw Term Loan Borrowing Request setting forth the Facility under which
such borrowing is requested and all of the other information required to be
included therein. Promptly following receipt of such a Delayed Draw Term Loan
Borrowing Request in compliance with this Section 2.01(a)(vi), the
Administrative Agent shall advise each Delayed Draw Term B-1 Holder of the
details thereof, and of the amount of such Holder’s Delayed Draw Term B-1 Loan
to be made as part of such borrowing. So long as no Default or Event of Default
shall have occurred and be continuing or shall result therefrom and subject to
the other terms and conditions of this Agreement, no later than the Business Day
immediately following the date on which such a Delayed Draw Term Loan Borrowing
Request is delivered to the Administrative Agent, the Delayed Draw Term B-1
Holders shall make Delayed Draw Term B-1 Loans to the Company in accordance with
the terms of Section 2.01(b) and their respective Pro Rata Shares in an
aggregate amount equal to the aggregate Delayed Draw Term B-1 Loans requested in
such Delayed Draw Term Loan Borrowing Request. Upon any payment or prepayment of
a Delayed Draw Term B-1 Loan in whole or in part, the Company shall have no
right to reborrow the amount so paid or prepaid.

 

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(b) Funding of Borrowings. Each Holder shall make the proceeds of its respective
Loan on the proposed date thereof by wire transfer of immediately available
funds by 12:00 Noon, New York time, to the account of the Administrative Agent
most recently designated by it for such purpose by notice to the Holders. The
Administrative Agent will make such Loans available to the Company by wire
transfer of the proceeds of such Loans to such account as the Company may
specify. The failure of any Holder to make the proceeds of any Loan required to
be made by it hereunder shall not relieve any other Holder of its obligation to
make the proceeds of its Loan required to be made by it hereunder.

(c) Repayment of Initial Term Loans and Delayed Draw Term Loans.

(i) Repayment of Initial Term Loans. The Company unconditionally promises to pay
(and such amount shall be required to be paid) to the Administrative Agent for
the account of each Initial Term Holder the then unpaid principal amount of such
Holder’s Initial Term Loans on the Initial Term Loan Maturity Date.

(ii) Repayment of Delayed Draw Term A Loans. The Company unconditionally
promises to pay (and such amount shall be required to be paid) to the
Administrative Agent for the account of each Delayed Draw Term A Holder the then
unpaid principal amount of such Holder’s Delayed Draw Term A Loans on the
Delayed Draw Term A Loan Maturity Date.

(iii) Repayment of Delayed Draw Term B Loans. The Company unconditionally
promises to pay (and such amount shall be required to be paid) to the
Administrative Agent for the account of each Delayed Draw Term B Holder the then
unpaid principal amount of such Holder’s Delayed Draw Term B Loans on the
Delayed Draw Term B Loan Maturity Date.

(iv) Repayment of Delayed Draw Term A-1 Loans. The Company unconditionally
promises to pay (and such amount shall be required to be paid) to the
Administrative Agent for the account of each Delayed Draw Term A-1 Holder the
then unpaid principal amount of such Holder’s Delayed Draw Term A-1 Loans on the
Delayed Draw Term A-1 Loan Maturity Date.

(v) Repayment of Delayed Draw Term B-1 Loans. The Company unconditionally
promises to pay (and such amount shall be required to be paid) to the
Administrative Agent for the account of each Delayed Draw Term B-1 Holder the
then unpaid principal amount of such Holder’s Delayed Draw Term B-1 Loans on the
Delayed Draw Term B-1 Loan Maturity Date.

(d) Notes.

(i) Initial Term Notes. On the Amendment Closing Date, the Company shall execute
and deliver to each Initial Term Holder an Initial Term Note in the principal
amount of such Holder’s Initial Term Commitment. Each Initial Term Holder shall
return to the Company all Revolving Notes (as defined in the Existing Note
Agreement) and Term Notes (as defined in the Existing Note Agreement) issued by
the Company to such Holder under the Existing Note Agreement marked “cancelled”.

(ii) Delayed Draw Term A Notes. On the Delayed Draw Term A Loan Funding Date,
the Company shall execute and deliver to each Delayed Draw Term A Holder a
Delayed Draw Term A Note in the principal amount of the Delayed Draw Term A
Loans made by such Holder on such date.

(iii) Delayed Draw Term B Notes. On the Delayed Draw Term B Loan Funding Date,
the Company shall execute and deliver to each Delayed Draw Term B Holder a
Delayed Draw Term B Note in the principal amount of the Delayed Draw Term B
Loans made by such Holder on such date.

 

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(iv) Delayed Draw Term A-1 Notes. On the Delayed Draw Term A-1 Loan Funding
Date, the Company shall execute and deliver to each Delayed Draw Term A-1 Holder
a Delayed Draw Term A-1 Note in the principal amount of the Delayed Draw Term
A-1 Loans made by such Holder on such date.

(v) Delayed Draw Term B-1 Notes. On the Delayed Draw Term B-1 Loan Funding Date,
the Company shall execute and deliver to each Delayed Draw Term B-1 Holder a
Delayed Draw Term B-1 Note in the principal amount of the Delayed Draw Term B-1
Loans made by such Holder on such date.

2.02 Prepayments of Loans.

(a) Optional Prepayments. The Company shall have the right at any time and from
time to time to prepay Term Loans in each case in whole or in part, subject to
prior written notice in accordance with Section 2.02(c), and subject to the
payment of any amounts due under Section 2.04(a) and payment in full of any
other fees, expenses and Attorney Costs of the Administrative Agent.

(b) Mandatory Prepayments.

(i) Change of Control. Within five Business Days after the occurrence of a
Change of Control, the Company shall prepay all Term Loans then outstanding;
provided, however, that no such prepayment shall be required in the case of a
Change of Control occurring prior to November 13, 2014 so long as, after giving
effect to such Change of Control, and the Incurrence of any Indebtedness
Incurred by the Company and its Subsidiaries in connection therewith, (i) the
Total Leverage Ratio is not greater than 4.50 to 1.00 and (ii) no Event of
Default under (A) Section 9.01(b) arising from a breach of Section 6.14 or
(B) Sections 9.01(a) or (g) has occurred and is continuing. The Company shall
provide written notice to the Administrative Agent of any Change of Control that
will not result in a prepayment pursuant to this paragraph (b) not less than
five (5) Business Days prior to the consummation of such Change of Control,
together with a certificate of a Responsible Officer of the Company (i) showing
in reasonable detail the calculations used in determining (A) the Consolidated
Net Worth for demonstrating compliance with Section 6.14 and (B) the Total
Leverage Ratio and (ii) stating that, as of the date thereof and after giving
effect to such Change of Control and the Incurrence of any Indebtedness Incurred
by the Company and its Subsidiaries in connection therewith, no Event of Default
under (A) Section 9.01(b) arising from a breach of Section 6.14 or (B) Sections
9.01(a) or (g) has occurred and is continuing.

(ii) Prepayments of Incremental Equivalent Debt. Substantially contemporaneously
with (A) any prepayment of principal of Incremental Equivalent Debt under a
revolving credit facility to the extent such prepayment is accompanied by a
corresponding permanent reduction in the revolving credit commitments thereunder
or (B) any prepayment of principal of Incremental Equivalent Debt other than
under a revolving credit facility, the Company shall prepay the Term Loans in a
principal amount equal to the product of (x) the Incremental Equivalent Debt
Percentage with respect to such prepayment multiplied by (y) the then
outstanding principal balance of the Term Loans (as determined prior to giving
effect to such prepayment).

(c) Notification of Certain Prepayments. The Company shall notify the
Administrative Agent by telephone (confirmed by facsimile or email transmission)
of any voluntary prepayment of the Loans under Section 2.02(a) not later than
12:00 Noon, New York time, one Business Day before the date of such prepayment.
The Company shall provide written notice to the Administrative

 

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Agent of any mandatory prepayment of the Loans pursuant to Section 2.02(b) not
less than five (5) Business Days prior to such prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Loan or portion thereof to be prepaid. Promptly following receipt
of any such notice, the Administrative Agent shall advise each Holder of the
contents thereof, and of the amount of such Holder’s Pro Rata Share of such
prepayment. Each such prepayment shall be applied (a) to the Initial Term Loans,
Delayed Draw Term A Loans, Delayed Draw Term B Loans, Delayed Draw Term A-1
Loans, Delayed Draw Term B-1 Loans and the New Term Loans (if any) ratably in
accordance with the aggregate outstanding principal balance of each such
Facility and (b) with respect to each Facility, to the Loans of such Facility
held by the Holders in accordance with their respective Pro Rata Shares. The
Company shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.

(d) Prepayments Accompanied by Interest. All prepayments of the Loans pursuant
to this Section 2.02 shall be accompanied by accrued interest through the date
of prepayment, together with any amounts payable pursuant to Section 3.05.

2.03 Termination of Initial Term Commitments and Delayed Draw Term Commitments.
The Initial Term Commitments shall terminate automatically on the Amendment
Closing Date immediately after the making of the Initial Term Loans. The Delayed
Draw Term A Commitments shall terminate automatically on the earlier of (a) the
applicable Delayed Draw Term A Loan Funding Date immediately after the making of
Delayed Draw Term A Loans in an aggregate principal amount equal to the total
Delayed Draw Term A Commitments and (b) the end of the Delayed Draw Term A and
Term B Availability Period. The Delayed Draw Term B Commitments shall terminate
automatically on the earlier of (i) the applicable Delayed Draw Term B Loan
Funding Date immediately after the making of Delayed Draw Term B Loans in an
aggregate principal amount equal to the total Delayed Draw Term B Commitments
and (ii) the end of the Delayed Draw Term A and Term B Availability Period. The
Delayed Draw Term A-1 Commitments shall terminate automatically on the earlier
of (A) the applicable Delayed Draw Term A-1 Loan Funding Date immediately after
the making of Delayed Draw Term A-1 Loans in an aggregate principal amount equal
to the total Delayed Draw Term A-1 Commitments and (B) the end of the Delayed
Draw Term A-1 Availability Period. The Delayed Draw Term B-1 Commitments shall
terminate automatically on the earlier of (x) the applicable Delayed Draw Term
B-1 Loan Funding Date immediately after the making of Delayed Draw Term B-1
Loans in an aggregate principal amount of the total Delayed Draw Term B-1
Commitments and (y) the end of the Delayed Draw Term B-1 Availability Period

2.04 Fees.

(a) Prepayment Fee. At any time the Company makes an optional prepayment of the
Initial Term Loans and the Delayed Draw Term Loans under Section 2.02(a) prior
to the first anniversary of the Amendment Closing Date with the proceeds of a
refinancing (other than a refinancing in connection with a Change of Control, in
which case, no such fee shall be payable), the Company shall pay to the
Administrative Agent, for the account of the Initial Term Holders and the
Delayed Draw Term Holders, concurrently with such prepayment, a fee equal to 1%
of the principal amount so prepaid.

(b) Liquidated Damages. The Company agrees that the fee described in paragraph
(a) above represents reasonable liquidated damages and is a reasonable
calculation of the Holders’ lost profits in view of the difficulties and
impracticality of determining actual damages resulting from an early prepayment
of the Initial Term Loans and the Delayed Draw Term Loans.

(c) Other Fees. The Company agrees to pay to Fortress fees in the amounts and at
the times separately agreed upon in writing between the Company and Fortress.

 

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(d) Limitation on Future Fees. Notwithstanding anything herein or in any other
Note Document to the contrary, in no event shall the Company be required to pay
any fee or to pay interest on any Loan at a rate of interest higher than the
rate theretofore in effect in connection with any amendment or waiver to this
Agreement or any other Note Document after the Amendment Closing Date unless
such amendment or waiver would have a material adverse effect on the overall
credit risk assumed by the Holders in respect of the Facilities, taken as a
whole. Nothing in this paragraph (d) shall obligate the Administrative Agent or
any Holder to agree to any amendment or waiver to this Agreement or any other
Note Document.

2.05 Interest.

(a) Subject to the provisions of Section 2.05(b), interest on the outstanding
principal balance of the Initial Term Loans, the Delayed Draw Term A Loans, the
Delayed Draw Term B Loans, the Delayed Draw Term A-1 Loans and the Delayed Draw
Term B-1 Loans will accrue for each day at the Interest Rate. All calculations
of interest shall be computed on an Actual/360 Basis (which results in more
interest being paid than if computed on a 30/360 Basis).

(b) Anything contained herein to the contrary notwithstanding, automatically
without notice upon the occurrence and during the continuation of any Event of
Default under Section 9.01(g), and upon written notice from the Administrative
Agent, at the direction of the Required Holders upon the occurrence and during
the continuance of any Event of Default under Section 9.01(a), (i) interest
(including post-petition interest in any proceeding under any Debtor Relief Law)
on the Loans will accrue and be charged on the outstanding principal balance
thereof for each day at the Default Rate and (ii) to the fullest extent
permitted by applicable Laws, interest (including post-petition interest in any
proceeding under any Debtor Relief Law) will accrue and be charged for each day
at the Default Rate on any payments of interest that are not paid when due and
any fees and other amounts that are then due and payable hereunder. Accrued and
unpaid interest on past due amounts (including interest on past due interest)
shall be due and payable upon demand. The Company acknowledges and agrees that
payment or acceptance of interest at the Default Rate is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of the
Administrative Agent or any Holder.

(c) Except as otherwise provided in Section 2.05(b), interest on the Initial
Term Loans, the Delayed Draw Term A Loans, the Delayed Draw Term B Loans, the
Delayed Draw Term A-1 Loans and the Delayed Draw Term B-1 Loans shall be due and
payable in arrears on the last Business Day of each Interest Accrual Period, on
the date of any prepayment of all or any portion of the outstanding principal
amount of such Loans (on the outstanding principal amount so prepaid) and on the
Maturity Date. Interest hereunder and under the Notes shall be due and payable
in accordance with the terms hereof before and after judgment, and before and
after the commencement of any proceeding under any Debtor Relief Law.

(d) Interest shall accrue on each Loan for the day on which such Loan is first
made hereunder and for each day on which such Loan remains outstanding
thereunder, provided that any Loan that is repaid on the same day on which such
Loan is made shall, subject to Section 2.05(b), bear interest for one day.

2.06 Payment Records. All payments of interest and fees made by the Company
under this Agreement and the Notes shall be evidenced by one or more accounts or
records maintained by the Administrative Agent and each applicable Holder in the
ordinary course of business. Such accounts or records shall be conclusive,
absent manifest error, of the amount of such interest and fees paid by the
Company. Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligation of the Company hereunder to pay any
amount owing with

 

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respect to the Obligations. In the event of any conflict between the accounts
and records maintained by any Holder and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error. Each Holder
may attach schedules to any of its Notes and endorse thereon the date and amount
of any payments with respect thereto.

2.07 Payments Generally.

(a) All payments to be made by the Company in respect of the Obligations shall
be made without condition or deduction for any counterclaim, defense, recoupment
or setoff. Except as otherwise expressly provided herein, all payments by the
Company in respect of the Obligations shall be made to the Administrative Agent,
for its own account or for the account of the respective Holders to which such
payment is owed, as the case may be, via wire transfer of Dollars in immediately
available funds on the date such payment is due and payable by 1:00 p.m., New
York time. The Administrative Agent will promptly distribute to each Holder its
Pro Rata Share (or other applicable share as provided herein) of such payment in
like funds as received by wire transfer to the account of such Holder notified
to the Administrative Agent from time to time. All payments received by the
Administrative Agent after 1:00 p.m., New York time, on the date such payments
are due and payable shall be deemed to have been received on the next succeeding
Business Day, and any applicable interest or fees shall continue to accrue
thereon until such Business Day.

(b) If any payment to be made by the Company in respect of the Obligations shall
come due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall be reflected in
computing any applicable interest or fees.

(c) Unless the Company shall have notified the Administrative Agent, prior to
the date any payment is required to be made by it to the Administrative Agent
hereunder, that the Company will not make such payment, the Administrative Agent
may assume that the Company will timely make such payment and may (but shall not
be so required to), in reliance thereon, make available a corresponding amount
to the Person entitled thereto. If and to the extent that such payment is not in
fact made to the Administrative Agent in a timely manner in immediately
available funds, then each Holder shall forthwith on demand repay to the
Administrative Agent the portion of such assumed payment that was made available
to such Holder, in immediately available funds, together with interest thereon
in respect of each day from the date such amount was made available by the
Administrative Agent to such Holder to the date such amount is repaid to the
Administrative Agent at the Federal Funds Rate from time to time in effect. A
notice of the Administrative Agent to any Holder with respect to any amount
owing under this Section 2.07(c) shall be conclusive, absent manifest error.

(d) Nothing herein shall be deemed to obligate any Holder to obtain the funds to
make any Loan in any particular place or manner or to constitute a
representation by any Holder that it has obtained or will obtain the funds to
make Loans in any particular place or manner.

(e) All obligations of the Holders pursuant to this Agreement (including
obligations to make Loans) are several and not joint. The failure of any Holder
to make any Loan on any date required hereunder shall not relieve any other
Holder of its corresponding obligation to do so on such date, and no Holder
shall be responsible for the failure of any other Holder to so make its Loan or
to purchase its participation.

2.08 Sharing of Payments. If, other than as expressly provided elsewhere herein,
any Holder shall obtain, on account of any Note held by it, any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Holder shall immediately (a) notify the

 

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Administrative Agent of such fact, and (b) purchase from the other Holders that
would otherwise be entitled to such payment such participations in the related
Notes held by them as shall be necessary to cause such purchasing Holder to
share the excess payment in respect of such related Note pro rata with each of
them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Holder under any of the circumstances
described in Section 12.06 (including pursuant to any settlement entered into by
the purchasing Holder in its discretion), such purchase shall to that extent be
rescinded and each other related Holder shall repay to the purchasing Holder the
purchase price paid therefor, together with an amount equal to such paying
Holder’s ratable share (according to the proportion of (i) the amount of such
paying Holder’s required repayment to (ii) the total amount so recovered from
the purchasing Holder) of any interest or other amount paid or payable by the
purchasing Holder in respect of the total amount so recovered, without further
interest thereon. The Company agrees that any Holder so purchasing a
participation from another Holder may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off), but subject
to Section 12.07 with respect to such participation as fully as if such Holder
were the direct creditor of the Company in the amount of such participation. The
Administrative Agent will keep records (which shall be conclusive and binding in
the absence of manifest error) of participations purchased under this
Section 2.08 and will in each case notify the Holders following any such
purchases or repayments. Each Holder that purchases a participation pursuant to
this Section 2.08 shall from and after such purchase have the right to give all
notices, requests, demands, directions and other communications under this
Agreement with respect to the portion of the Obligations purchased to the same
extent as though the purchasing Holder were the original owner of the
Obligations purchased.

2.09 Incremental Loans.

(a) The Company may by written notice to the Administrative Agent elect to
request the establishment of one or more new commitments (the “New Term
Commitments”) to make additional term loans (the “New Term Loans”); provided
that the sum of (i) the aggregate principal amount of all such New Term Loans
made during the term of this Agreement and (ii) the aggregate principal amount
of all Incremental Equivalent Debt Incurred (or, in the case of any Incremental
Equivalent Debt Incurred under a revolving credit facility, the aggregate
principal amount of all revolving credit commitments established thereunder)
during the term of this Agreement shall not exceed $100,000,000; provided,
further, that each lender of New Term Loans (each, a “New Term Holder”) shall be
an Eligible Holder. Each such notice shall specify the date (each, an “Increased
Amount Date”) on which the Company proposes that the New Term Commitments shall
be effective; provided that any Holder offered or approached to provide all or a
portion of any New Term Commitments may elect or decline, in its sole
discretion, to provide such New Term Commitments.

(b) Such New Term Commitments shall become effective and the related New Term
Loans shall be made as of such Increased Amount Date; provided that (i) the
conditions set forth in Section 4.02 were satisfied or waived by the Required
Holders on such Increased Amount Date before or after giving effect to such New
Term Commitments and to the making of any New Term Loans pursuant thereto and
after giving effect to any transaction consummated in connection therewith and
the Administrative Agent shall have received a certificate to that effect dated
such date and executed by a Responsible Officer of the Company; (ii) after
giving effect to such New Term Commitments and the making of the New Term Loans
thereunder and after giving effect to any transaction consummated in connection
therewith, the Total Leverage Ratio shall be less than or equal to 4.50 to 1.00
on a pro forma basis; (iii) the proceeds of any New Term Loans shall be used for
a Permitted Use; (iv) the New Term Loans shall share ratably in the Collateral
and shall benefit ratably from the guarantees under the Subsidiary Guaranty;
(v) the New Term Loans shall share no greater than ratably in any mandatory
prepayments of the Initial Term Loans and the Delayed Draw Term Loans; (vi) if
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Scheduled Maturity Date of any then existing Facility, this Agreement shall have
been amended in a manner reasonably satisfactory to the Administrative Agent to
shorten the Scheduled Maturity Date of such Facility to a date which is no later
than the maturity date of the New Term Loans, (vii) if the New Term Loans have
any amortization of principal prior to the Scheduled Maturity Date of any then
existing Facility (in each case, as determined prior to giving effect to the
foregoing clause (vi)), this Agreement shall have been amended in an manner
reasonably satisfactory to the Administrative Agent to provide for the
amortization of principal of the Term Loans of such Facility such that the
weighted average life to maturity of such Term Loans shall be equal to or less
than that of the New Term Loans; (viii) such New Term Loans or New Term
Commitments shall be effected pursuant to one or more Joinder Agreements
executed and delivered by the Company, the Administrative Agent and one or more
New Term Holders; (ix) the Company shall deliver or cause to be delivered any
customary corporate resolutions, corporate documentation, legal opinions,
reaffirmations or other documents reasonably requested by Administrative Agent
in connection with any such transaction, including any supplements or amendments
to the Security Agreement providing for such New Term Loans to be secured
thereby; and (x) the terms of the New Term Loans shall be substantially the same
as (and in any event no more favorable to the New Term Holders than the terms of
the Initial Term Loans are to the Initial Term Holders and the terms of the
Delayed Draw Term Loans are to the Delayed Draw Term Holders) the Initial Term
Loans and the Delayed Draw Term Loans, provided that

(A) the terms and conditions applicable to any New Term Loans maturing after the
latest Scheduled Maturity Date may provide for material additional or different
financial or other covenants applicable only during periods after such Scheduled
Maturity Date; and

(B) the applicable interest rate margins and (subject to the foregoing clauses
(vi) and (vii)), the maturity date and amortization schedule applicable to any
New Term Loans shall be determined by the Company and the New Term Holders and
shall be set forth in the applicable Joinder Agreements, provided that, if the
initial “spread” (for purposes of this Section 2.09, the “spread” with respect
to any Loan shall be calculated as the sum of the Applicable Margin on the
relevant Loan plus any original issue discount or upfront fees in lieu of
original issue discount (other than any arranging fees, underwriting fees and
commitment fees) (based on an assumed four-year average life for the applicable
Facilities (e.g., 100 basis points in original issue discount or upfront fees
equals 25 basis points of interest rate margin))) relating to the New Term Loans
exceeds the spread then in effect with respect to the Term Loans of any then
existing Facility by more than 0.50%, the Applicable Margin relating to the Term
Loans of such Facility shall be adjusted so that the spread relating to such New
Term Loans does not exceed the then existing spread applicable to such Term
Loans by more than 0.50%; provided further that if the New Term Loans include an
interest rate floor greater than the interest rate floor applicable to the Term
Loans of any Facility, such increased amount shall be equated to the applicable
interest rate margin for purposes of determining whether an increase to the
Applicable Margin for the Term Loans of any then existing Facility shall be
required, to the extent an increase in the interest rate floor for the such Term
Loans would cause an increase in the interest rate then in effect thereunder,
and in such case the interest rate floor (but not the Applicable Margin)
applicable to such Term Loans shall be increased by such amount.

Any New Term Loans made on an Increased Amount Date that have terms and
provisions that differ from those of the Term Loans outstanding on the date on
which such New Term Loans are made shall be designated as a separate tranche (a
“Tranche”) of Term Loans for all purposes of this Agreement, except as the
relevant Joinder Agreement otherwise provides.

(c) On any Increased Amount Date on which any New Term Commitments becomes
effective, subject to the foregoing terms and conditions, each lender with a New
Term Commitment shall become a Holder hereunder with respect to such New Term
Commitment.

 

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(d) The terms and provisions of the New Term Commitments of any Tranche shall
be, except as otherwise set forth in the relevant Joinder Agreement, identical
to those of the applicable Term Loans and for purposes of this Agreement, any
New Term Loans or New Term Commitments, when funded, shall be deemed to be Term
Loans. Each Joinder Agreement may, without the consent of any other Holders,
effect such amendments to this Agreement and the other Loan Documents as may be
necessary or appropriate, in the opinion of the Administrative Agent, to effect
the provisions of this Section 2.09.

ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.

(a) Any and all payments by the Company to or for the account of the
Administrative Agent or any Holder under any Note Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding (i) in the case of
the Administrative Agent and each Holder, taxes imposed on or measured by its
overall net income, and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
Laws of which the Administrative Agent or such Holder, as the case may be, is
organized or, in the case of each Holder, maintains a lending office, (ii) any
United States withholding taxes payable with respect to payments under the Note
Documents under laws (including any statute, treaty or regulation) in effect on
the Closing Date (or, in the case of an Eligible Holder, the date of the
Assignment and Assumption) and (iii) any United States withholding taxes imposed
under FATCA applicable to such Holder or the Administrative Agent, as the case
may be, but not excluding any United States withholding taxes payable as a
result of any change in such laws, or in the interpretation or application
thereof by any applicable taxing authority, occurring after the Closing Date (or
the date of such Assignment and Assumption) (all such non-excluded taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and liabilities being hereinafter referred to as “Taxes”). If the
Company shall be required by any Laws to deduct any Taxes from or in respect of
any sum payable under any Note Document to the Administrative Agent or any
Holder, (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section), each of the Administrative Agent and such Holder
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Company shall make such deductions, (iii) the
Company shall pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable Laws, and (iv) within 30 days
after the date of such payment, the Company shall furnish to the Administrative
Agent (which shall forward the same to such Holder) the original or a certified
copy of a receipt, or other documentation reasonably satisfactory to the
Administrative Agent, evidencing payment thereof.

(b) In addition, the Company agrees to pay any and all present or future stamp,
court or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under any Note Document or from
the execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, any Note Document (hereinafter referred to as “Other
Taxes”).

(c) The Company agrees to indemnify the Administrative Agent and each Holder for
(i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable under this Section)
paid by the Administrative Agent and such Holder and (ii) any liability
(including additions to tax, penalties, interest and expenses) arising therefrom
or with respect thereto, in each case whether or not such Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. Payment under this subsection (c) shall be made within 30 days after
the date the Holder or the Administrative Agent makes a demand therefor.

 

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(d) If a payment made to a Holder under this Agreement would be subject to
United States federal withholding tax imposed by FATCA if such Holder were to
fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Holder shall deliver to the Company and the Administrative Agent at the time or
times prescribed by law and at such time or times reasonably requested by the
Company or the Administrative Agent such documentation prescribed by applicable
law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Company or the
Administrative Agent as may be necessary for the Company and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Holder has complied with such Holder’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
paragraph (d), “FATCA” shall include any amendments made to FATCA after the date
of this Agreement.

3.02 Illegality. If any Holder determines that any Law has made it unlawful, or
that any Governmental Authority has asserted that it is unlawful, for such
Holder to continue to make Loans or to determine or charge interest rates based
upon the LIBO Rate, such Holder shall give notice thereof to the Company through
the Administrative Agent. Upon receipt of such notice, the Company shall, upon
demand from such Holder (with a copy to the Administrative Agent), either, at
the Company’s option (i) prepay in full all Loans, either on the last day of the
current Interest Accrual Period in respect of thereof, if such Holder may
lawfully continue to maintain Loans until such date, or immediately, if such
Holder may not lawfully continue to do so, or (ii) pay interest on such Holder’s
Loans at a rate per annum, as determined by such Holder, that will provide a
corresponding yield to such Holder compared to the yield that such Holder would
have been realized if its Loans had continued to accrue interest at a rate based
upon the LIBO Rate (taking into account any increased cost to such Holder of
continuing to maintain Loans). Upon any such prepayment, the Company shall also
pay accrued interest on the amount so prepaid. Each Holder agrees make Loans
through a different office of such Holder if such designation will avoid the
need for such notice and will not, in the good faith judgment of such Holder,
otherwise be materially disadvantageous to such Holder.

3.03 Inability to Determine Rates. If the Administrative Agent determines that
for any reason adequate and reasonable means do not exist for determining the
Interest Rate based upon the LIBO Rate for any period for any Loans, or that the
Interest Rate with respect to any period for any Loans does not adequately and
fairly reflect the cost to the Holders of maintaining such Loans, the
Administrative Agent will promptly so notify the Company and each Holder.
Thereafter, the Company shall pay to each Holder such additional amount or
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Holder shall determine) as may be
necessary to compensate such Holder for the cost of maintaining such Loans.

3.04 Increased Cost and Reduced Return; Capital Adequacy.

(a) If any Holder determines that, as a result of a Change in Law, there shall
be any increase in the cost to such Holder of funding or maintaining Loans at
the Interest Rate based upon the LIBO Rate or a reduction in the amount received
or receivable by such Holder in connection with any of the foregoing (excluding,
for purposes of this Section 3.04(a), any such increased costs or reduction in
amount resulting from (i) Taxes or Other Taxes (as to which Section 3.01 shall
govern), or (ii) changes in the basis of taxation of overall net income or
overall gross income (or franchise taxes imposed (in lieu of net income taxes))
by the United States or any foreign jurisdiction or any political subdivision of
either thereof under the Laws of which such Holder is organized or maintains its
Loans), or any acquisition of

 

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funds by such Holder (or its parent corporation), then from time to time upon
demand of such Holder (with a copy of such demand to the Administrative Agent),
the Company shall pay to such Holder such additional amounts as will compensate
such Holder for such increased cost or reduction.

(b) If any Holder determines that any Change in Law regarding capital adequacy
or liquidity requirements has the effect of reducing the rate of return on the
capital of such Holder or any corporation controlling such Holder as a
consequence of such Holder’s obligations hereunder or the making or maintaining
by such Holder of its Loans (taking into consideration its policies with respect
to capital adequacy or liquidity and such Holder’s desired return on capital),
then from time to time upon demand of such Holder (with a copy of such demand to
the Administrative Agent), the Company shall pay to such Holder such additional
amounts as will compensate such Holder for such reduction.

3.05 Funding Losses. Upon demand of any Holder (with a copy to the
Administrative Agent) from time to time, the Company shall promptly compensate
such Holder for, and hold such Holder harmless from, any loss (other than any
loss of anticipated profits) and any cost or expense incurred by it as a result
of:

(a) any failure by the Company to satisfy the conditions precedent to the making
of any Loan after having delivered a borrowing request with respect thereto; or

(b) any payment or prepayment of any Loan (whether by reason of acceleration or
otherwise) on a day other than on the last day of its Interest Accrual Period,
the Maturity Date, on the date specified in a notice of prepayment issued in
accordance with Section 2.02(c), or on a date specified therefor in
Section 2.03;

including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to purchase, hold or make Loans or from fees payable to
terminate the deposits from which such funds were obtained, but excluding any
loss of anticipated profits. For purposes of calculating amounts payable by the
Company to any Holder under this Section 3.05, such Holder shall be deemed to
have funded Loans at the Interest Rate applicable thereto by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not the Loans were in fact so
funded; in each case, provided that such Holder delivers to the Company a
certificate showing in reasonable detail the calculations used in determining
the amounts payable by the Company under this Section 3.05.

3.06 Matters Applicable to all Requests for Compensation.

(a) Any Holder claiming any additional amounts payable pursuant to this Article
III shall use its reasonable efforts (consistent with its internal policies and
Requirements of Law) to change the jurisdiction of its lending or purchasing
office if the making of such a change would avoid the need for, or reduce the
amount of, any such additional amounts that would be payable or may thereafter
accrue and would not, in the reasonable determination of such Holder, be
otherwise disadvantageous to such Holder.

(b) A certificate of the Administrative Agent or any Holder claiming
compensation under this Article III and setting forth the additional amount or
amounts to be paid to it hereunder and accompanied by a reasonably detailed
invoice therefor and supporting calculations shall be conclusive in the absence
of manifest error. In determining such amount, the Administrative Agent or such
Holder may use any reasonable averaging and attribution methods.

3.07 Survival. All of the Company’s obligations under this Article III shall
survive the termination of the Commitments and the repayment of all Obligations
hereunder.

 

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3.08 Substitution of Holders.

(a) In the event that (i) any Holder makes a claim under Section 3.04, (ii) it
becomes illegal for any Holder to continue to make Loans or to determine or
charge interest rates based upon the LIBO Rate and such Holder so notifies the
Company pursuant to Section 3.02, (iii) any Holder is required to make any
payment pursuant to Section 3.01, (iv) any Holder becomes a Defaulting Holder or
(v) any Holder has refused to consent to any waiver or amendment with respect to
any Note Document that requires such Holder’s consent and has been consented to
by the Required Holders (any such Holder, an “Affected Holder”), the Company may
substitute any other Eligible Holder (a “Substitute Institution”) for such
Affected Holder hereunder, after delivery of a written notice (a “Substitution
Notice”) by the Company to the Administrative Agent and the Affected Holder
within a reasonable time (in any case not to exceed 90 days) following the
occurrence of any of the events described above that the Company intends to make
such substitution.

(b) If the Substitution Notice was properly issued under this Section 3.08, the
Affected Holder shall sell, and the Substitute Institution shall purchase, all
rights and claims of such Affected Holder under the Note Documents, and the
Substitute Institution shall assume, and the Affected Holder shall be relieved
of all prior unperformed obligations of the Affected Holder under the Note
Documents (other than in respect of any damages (other than exemplary or
punitive damages, to the extent permitted by applicable law) in respect of any
such unperformed obligations). Such purchase and sale (and the corresponding
assignment of all rights and claims hereunder) shall be effective on (and not
earlier than) the later of (i) the receipt by the Affected Holder of its Pro
Rata Share of the Total Outstandings owed to it pursuant to the Note Documents,
together with any other Obligations owing to it, (ii) the receipt by the
Administrative Agent of an agreement in form and substance satisfactory to it
and the Company whereby the Substitute Institution shall agree to be bound by
the terms hereof and (iii) the payment in full to the Affected Holder in cash of
all fees, unreimbursed costs and expenses and indemnities accrued and unpaid
through such effective date. Upon the effectiveness of such sale, purchase and
assumption, the Substitute Institution shall become a “Holder” hereunder for all
purposes of this Agreement.

(c) Each Holder agrees that, if it becomes an Affected Holder and its rights and
claims are assigned hereunder to a Substitute Institution pursuant to this
Section 3.08, it shall execute and deliver to the Administrative Agent an
Assignment and Assumption to evidence such assignment, together with any Note
held by it; provided that the failure of any Affected Holder to execute an
Assignment and Assumption or deliver such Notes shall not render such assignment
invalid.

ARTICLE IV.

CONDITIONS PRECEDENT

4.01 Conditions to Effectiveness of this Agreement and Initial Borrowing. The
effectiveness of this Agreement and the obligation of the Holders to make the
Initial Term Loans hereunder is subject to the prior or concurrent satisfaction
of the following conditions precedent:

(a) The Administrative Agent’s receipt of the following, each of which shall be
originals or facsimiles (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing
Person, each dated the Amendment Closing Date (or, in the case of certificates
of governmental officials, a recent date before the Amendment Closing Date) and
each in form and substance satisfactory to the Administrative Agent and its
legal counsel:

(i) executed counterparts of this Agreement, the Security Agreement, the Initial
Term Notes, the Subsidiary Guaranty and the other Note Documents, sufficient in
number for distribution to the Administrative Agent, each Holder and the
Company;

 

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(ii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Note Party as the
Administrative Agent may reasonably require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Note
Documents to which such Note Party is a party;

(iii) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Note Party is duly organized or formed,
and that each Note Party is validly existing, in good standing and qualified to
engage in business in each jurisdiction where its ownership, lease or operation
of properties or the conduct of its business requires such qualification, except
to the extent that the failure to be so qualified in any such jurisdiction other
than the jurisdiction of such Note Party’s organization or formation could not
reasonably be expected to result in a Material Adverse Effect;

(iv) a certificate of a Responsible Officer of the Company stating that no
consent, license or approval is required in connection with the execution,
delivery and performance by any Note Party and the validity against such Note
Party of the Note Documents to which it is a party, other than those consents,
licenses and approvals that have already been obtained; and

(v) a certificate signed by a Responsible Officer of the Company certifying that
(A) the representations and warranties of the Company contained in Article V or
any other Note Document, or which are contained in any document furnished under
or in connection herewith or therewith, shall be true and correct in all
material respects on and as of the Amendment Closing Date, except to the extent
that such representations and warranties specifically refer to an earlier date,
in which case they shall be true and correct as of such earlier date; (B) no
Default or Event of Default shall have occurred and be continuing as of the
Amendment Closing Date, or would result from the occurrence thereof; (C) there
shall be no Law or Judgment binding on any Note Party which would be reasonably
expected to impose or result in the imposition of a Material Adverse Effect; and
(D) there has been no event or circumstance since December 31, 2012 that has had
or could be reasonably expected to have, either individually or in the
aggregate, a Material Adverse Effect.

(b) The Administrative Agent shall be satisfied that all actions have been taken
that are necessary in order for the Administrative Agent to have a valid,
perfected, first priority security interest in all of the Collateral, subject
only to Permitted Encumbrances.

(c) The Administrative Agent shall have received one or more favorable written
opinions of counsel to the Note Parties, dated the Amendment Closing Date and
addressed to the Administrative Agent and the Holders, as to such matters
concerning the Note Parties, the Note Documents and the validity and perfection
of the security interests of the Administrative Agent in the Collateral as the
Administrative Agent may reasonably request.

(d) Any fees required to be paid on or before the Amendment Closing Date shall
have been paid or will be paid in accordance with this Agreement.

(e) Concurrently with the funding of the Initial Term Loans hereunder, the
Company shall pay to the Administrative Agent for the account of the Existing
Holders all interest and fees which have accrued under the Existing Note
Agreement in respect of the Existing Term Loans and the Existing Revolving
Credit Facility but remain unpaid as of the Amendment Closing Date.

 

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(f) The Administrative Agent shall have received such other assurances,
certificates, documents, consents or opinions as the Administrative Agent may
reasonably require.

4.02 Conditions to all Borrowings. The obligation of each Holder to make a Loan
on any occasion (including without limitation, on the Amendment Closing Date, on
each Delayed Draw Term Loan Funding Date and on each Increased Amount Date) is
subject to the satisfaction of the following conditions precedent as of the
applicable borrowing date of such Loan:

(a) The representations and warranties of the Note Parties contained in Article
V or any other Note Document, or which are contained in any document furnished
at any time under or in connection herewith or therewith, shall be true and
correct in all material respects on and as of such borrowing date, except to the
extent that such representations and warranties specifically refer to an earlier
date, in which case they shall be true and correct as of such earlier date, and
except that for purposes of this Section 4.02, the representations and
warranties contained in Section 5.05(a) shall be deemed to refer to the most
recent financial statements furnished pursuant to clauses (a) and (b),
respectively, of Section 6.01.

(b) No Default or Event of Default shall have occurred and be continuing, or
would result from the making of such Loan.

Each borrowing request submitted by the Company, and the receipt and acceptance
by the Company of the proceeds of each Loan, shall be deemed to be a
representation and warranty by the Company that the conditions specified in this
Section 4.02 will be or have been satisfied on and as of the applicable
borrowing date, as the case may be.

4.03 Delayed Draw Term Loans. The obligation of each Delayed Draw Term Holder to
make a Delayed Draw Term Loan under the applicable Facility on each Delayed Draw
Term Loan Funding Date with respect to such Facility shall be subject to the
condition that the Administrative Agent shall have received a Delayed Draw Term
Loan Borrowing Request in accordance with Section 2.01(a)(iii), 2.01(a)(iv),
2.01(a)(v) or 2.01(a)(vi), as applicable.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

The Company represents and warrants to the Administrative Agent and the Holders
that:

5.01 Existence, Qualification and Power; Compliance with Laws. Each Note Party
(a) is a corporation, partnership or limited liability company duly organized or
formed, validly existing and in good standing under the Laws of the jurisdiction
of its incorporation or organization, (b) has all requisite power and authority
and all requisite governmental licenses, authorizations, consents and approvals
to (i) own its assets and carry on its business, except to the extent that the
failure to obtain such governmental licenses, authorizations, consents or
approvals could not reasonably be expected to result in a Material Adverse
Effect and (ii) execute, deliver and perform its obligations under the Note
Documents to which it is a party, (c) is duly qualified and is licensed and in
good standing under the Laws of each jurisdiction where any Collateral is
located and in each other jurisdiction where its ownership, lease or operation
of properties or the conduct of its business requires such qualification or
license, except to the extent that the failure to be so qualified could not
reasonably be expected to result in a Material Adverse Effect and (d) is in
compliance with all Laws except to the extent that the failure to so comply
could not reasonably be expected to result in a Material Adverse Effect.

 

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5.02 Authorization; No Contravention. The execution, delivery and performance by
each Note Party of each Note Document to which it is a party have been duly
authorized by all necessary corporate or other organizational action, and do not
and will not (with the passage of time, the giving of notice or otherwise)
(a) contravene or Conflict with the terms of any of such Person’s Organizational
Documents; (b) Conflict with, or result in the creation of any Lien under,
(i) any material Contractual Obligation to which such Person is a party or
(ii) any Judgment or any arbitral award to which such Person or its property is
subject; or (c) violate any Law, except, in the case of the foregoing clauses
(b) and (c), to the extent that such Conflict or violation could not reasonably
be expected to result in a Material Adverse Effect.

5.03 No Consent or Other Action. No Consent or Other Action by, from, with or to
any other Person is required prior to or otherwise in connection with (a) the
Company’s ownership of the Collateral and conduct of its Business, except those
Consents the failure to obtain which could not reasonably be expected to result
in a Material Adverse Effect, (b) any Note Party’s execution and delivery of,
and performance of its obligations under, the Note Documents to which it is a
party, (c) the Grant of any Lien granted under the Security Agreement, or
(d) the validity, perfection and maintenance of any Lien created under the
Security Agreement, except for (i) those consents already obtained and (ii) in
the case of the foregoing clauses (c) and (d), the filing of the Financing
Statements with the applicable filing offices.

5.04 Binding Effect. This Agreement has been, and each other Note Document, when
delivered hereunder, will have been, duly executed and delivered by or on behalf
of each Note Party that is a party thereto. This Agreement constitutes, and each
other Note Document when so delivered will constitute, a legal, valid and
binding obligation of each Note Party that is a party thereto, enforceable
against such Note Party in accordance with its terms, subject to applicable
Debtor Relief Laws and general principles of equity, regardless of whether
considered in a proceeding in equity or at law.

5.05 Financial Statements; No Material Adverse Effect.

(a) The audited financial statements of the Company for the fiscal year ended
December 31, 2012, copies of which have been made available to the
Administrative Agent, (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (ii) fairly present the financial condition of the Company
and its Subsidiaries as of the date thereof and their results of operations for
the period covered thereby in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein.

(b) Since December 31, 2012, there has been no event or circumstance, either
individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.

5.06 Litigation. Except as set forth on Schedule 5.06 attached hereto, there is
no Litigation pending or, to the knowledge of the Company, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, (i) against the Company or any of its Subsidiaries or any of the
Collateral that could reasonably be expected to result in a Material Adverse
Effect, or (ii) pertaining to this Agreement or any other Note Document, or any
of the transactions contemplated hereby.

5.07 No Default. Neither the Company nor any of its Subsidiaries is in default
under any Contractual Obligation that could, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. No Default
or Event of Default has occurred and is continuing or would result from the
consummation of the transactions contemplated by this Agreement or any other
Note Document.

 

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5.08 Insurance. The Company is in compliance with the Insurance Requirements.

5.09 Taxes. The Company, its Subsidiaries and each Person which might have tax
liabilities for which the Company or any Subsidiary is or may be liable (each, a
“Tax Party”) (a) have filed, or caused to be filed, in a timely manner all
Federal, state and other material tax returns and reports required to be filed,
(b) have paid all Federal, state and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets, (c) have paid or caused to be paid all taxes due and payable
or claimed due and payable in any assessment received by them, and (d) have
collected, deposited and remitted, in accordance with all Requirements of Law,
all sales and/or use taxes applicable to the conduct of their respective
businesses, except, in each case, taxes the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and
available to the applicable Tax Party and with respect to which adequate
reserves have been set aside on its books. There are no Liens on any properties
or assets of the Company or any of its Subsidiaries imposed or arising as a
result of the delinquent payment or the nonpayment of any tax, assessment, fee
or other governmental charge. No Tax Party has given or consented to any waiver
of the statute of limitations with respect to its tax liabilities for any fiscal
year. Except as reflected in the most recent financial statements provided to
the Administrative Agent, the Company does not know of any transaction or matter
which might or could result in additional tax assessments to any Tax Party.

5.10 ERISA Compliance.

(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best
knowledge of the Company, nothing has occurred which would prevent, or cause the
loss of, such qualification. The Company and each ERISA Affiliate have made all
required contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.

(b) There are no pending or, to the best knowledge of the Company, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.

(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) neither the Company nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither the Company
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Company
nor any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA.

 

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5.11 Company Information; Subsidiaries, Etc.

(a) As of the Amendment Closing Date, the legal names, federal taxpayer
identification numbers, states of formation, prior legal names, organizational
identification numbers and mailing addresses, as applicable, for each Note Party
are accurately set forth on Schedule 5.11(a) attached hereto.

(b) Except as disclosed in part (a) of Schedule 5.11(b) attached hereto, as of
the Amendment Closing Date, the Company has not merged, consolidated, acquired
all or substantially all of the assets of any Person or used any other name
(whether in connection with the Business or the Collateral or for other
business, obtaining credit or financing or otherwise) since May 13, 2008. As of
the Amendment Closing Date, the Company does not have any Subsidiaries or
Investments in the Capital Stock of any Person other than those owned by the
Company that are set forth in part (b) of Schedule 5.11(b) attached hereto. Part
(c) of Schedule 5.11(b) sets forth as of the Amendment Closing Date each
Subsidiary of the Company which is an Investment Vehicle, a Workout Subsidiary
or an REO Subsidiary.

(c) The fair market value of the assets held by the Subsidiaries listed on
Schedule 1.01(c) (other than NewStar Concentration LLC) does not exceed
(i) $10,000,000 for any one such Subsidiary individually or (ii) $25,000,000 for
all such Subsidiaries in the aggregate.

5.12 Purpose of Loans; Margin Regulations; Investment Company Act.

(a) The Company intends to use the proceeds of Loans solely as provided in
Section 6.13 and does not intend to (and will not) use all or any portion of the
proceeds of any Loan for any purpose that would constitute a violation of
Regulation T, U or X of the FRB.

(b) The Company is not, and is not required to be, registered as an “investment
company” under the Investment Company Act of 1940.

5.13 Disclosure. No report, financial statement, certificate or other written
information furnished by or on behalf of any Note Party to the Administrative
Agent or any Holder in connection with the transactions contemplated hereby and
the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Company represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

5.14 Compliance with Laws. The Company and each Subsidiary is in compliance in
all material respects with the requirements of all Laws and all Judgments
applicable to it or to its properties, except in such instances in which
(a) such requirement of Law or Judgment is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

5.15 Business and Location. On the Amendment Closing Date, the Company’s chief
executive office address is located at 500 Boylston Street, Suite 1250, Boston,
MA 02116. The Company does not conduct any business or operations other than the
Business and activities reasonably related or incidental thereto. Accurate and
complete records of all Collateral are maintained at the Company’s chief
executive office.

 

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5.16 Perfected Security Interest. The execution and delivery of this Agreement
and the Security Agreement and the Grant of the Lien in favor of the
Administrative Agent under the Security Agreement create a valid, enforceable
Lien in the Collateral and the Proceeds thereof. Following the filing of the
Financing Statements in the applicable filing office and subject to Permitted
Encumbrances, the Lien of the Administrative Agent, on behalf of Holders, in all
Filing Collateral (including all Securities Accounts) is a first priority
perfected security interest. Following the Administrative Agent’s obtaining
“control” within the meaning of the UCC, and subject to Permitted Encumbrances,
the Lien of the Administrative Agent, on behalf of Holders, in all Control
Collateral that does not also constitute Filing Collateral is a first priority
perfected security interest. Upon delivery into the Administrative Agent’s
possession of all Possessory Collateral that does not also constitute Filing
Collateral, the Lien therein of the Administrative Agent, on behalf of Holders,
will be a first priority perfected security interest.

5.17 Title; Sufficiency; No Liens. The Company has good title to the Collateral
free of all Liens (other than the Lien granted to the Administrative Agent, on
behalf of the Holders, hereunder and Permitted Encumbrances). Except with
respect to filings reflecting Permitted Encumbrances, there is no effective
financing statement (or similar statement, agreement, pledge, deed of trust,
mortgage, notice or registration), Lien, or, to the Company’s knowledge,
Judgment filed with, registered, indexed or recorded in any Governmental
Authority, directly or indirectly identifying or encumbering or covering or
involving any Collateral or which could reasonably be expected to have a
Material Adverse Effect.

5.18 [Reserved].

5.19 Capitalization; Solvency.

(a) As of the Amendment Closing Date, the Company’s authorized capital stock
consists of 145,000,000 shares of common stock, par value $0.01 per share, and
5,000,000 shares of preferred stock, par value $0.01 per share, all of which
preferred stock is undesignated. The Company’s common stock beneficially owned
as of March 25, 2013 by each person or group who is known by the Company to own
beneficially more than 5% of its common stock based solely upon reports filed
with the Securities and Exchange Commission is described on Schedule 5.19(a)
attached hereto. As of March 25, 2013, the issued and outstanding shares of
common stock and of preferred stock are set forth on Schedule 5.19(a) hereto and
all outstanding shares are duly and validly issued, fully paid and
nonassessable.

(b) The Company is Solvent and will continue to be Solvent after giving effect
to each Loan hereunder, the security interests of Administrative Agent, on
behalf of Holders, and the other transactions contemplated hereunder.

5.20 Brokers and Financial Advisors. Other than as set forth on Schedule 5.20,
no brokers or finders were used by the Company in connection with the financing
contemplated hereby and the Company hereby agrees to indemnify and hold the
Administrative Agent and the Holders harmless from and against any and all
liabilities, costs and expenses (including reasonable attorney’s fees and court
costs) suffered or incurred by the Administrative Agent or any such Holder as a
result of any Person claiming to have acted as a broker or finder on behalf of
the Company in connection with the transaction contemplated hereby. The
provisions of this Section shall survive the expiration and termination of this
Agreement and the payment of the Obligations.

 

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ARTICLE VI.

AFFIRMATIVE COVENANTS

So long as any Commitment remains in effect or any Loan or other Obligation
hereunder (other than, following the termination of this Agreement in accordance
with its terms, any Obligation as to which no claim has been made) shall remain
unpaid or unsatisfied, the Company shall:

6.01 Financial Statements. Deliver to the Administrative Agent and, except as
indicated below, each Holder, in form and detail reasonably satisfactory to the
Administrative Agent:

(a) As soon as available, but in any event within 45 days after the end of each
fiscal quarter of the Company (except the last fiscal quarter of each fiscal
year of the Company), consolidated balance sheets of the Company and its
Subsidiaries as of the end of such fiscal quarter, together with consolidated
statements of income and cash flows for such fiscal quarter and for the period
beginning with the first day of such fiscal year and ending on the last day of
such fiscal quarter, certified by the chief financial officer, the controller or
the treasurer of the Company; and

(b) As soon as available, but in any event within 120 days after the end of each
fiscal year of the Company, consolidated balance sheets of the Company and its
Subsidiaries as at the end of such fiscal year, and the related consolidated
statements of income, cash flows and stockholders’ equity for such fiscal year,
all in reasonable detail and prepared in accordance with GAAP, audited and
accompanied by a report and opinion of an independent certified public
accountant of nationally recognized standing, which report and opinion shall be
prepared in accordance with generally accepted auditing standards and shall not
be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit.

Notwithstanding the foregoing, the obligations of the Company in paragraphs
(a) and (b) of this Section 6.01 shall be deemed to be satisfied with respect to
any financial statements of the Company upon the filing by the Company of the
Company’s Form 10-K or 10-Q, as applicable, with the SEC and the posting thereof
on the SEC’s website within the time periods specified in such paragraphs.

6.02 Certificates; Other Information. Deliver to the Administrative Agent:

(a) Concurrently with (or, in the case of financial statements deemed to be
delivered in accordance with the last paragraph of Section 6.01, within five
(5) Business Days after) the delivery of the financial statements referred to in
Sections 6.01(a) and (b) above, a certificate of a Responsible Officer of the
Company substantially in the form attached hereto as Exhibit E (each, a
“Compliance Certificate”) (i) showing in reasonable detail the calculations used
in determining (A) the Consolidated Net Worth for demonstrating compliance with
Section 6.14 and (B) the Total Leverage Ratio, (ii) setting forth, in each case,
as of the last day of the measurement period covered by such Compliance
Certificate (A) the aggregate outstanding principal balance of all Obligor Loans
held by the Company and the Subsidiary Grantors, (B) the Investment Vehicle Net
Equity Value with respect to each Investment Vehicle and (C) each CLO Note held
by the Company or any Subsidiary Grantor and (iii) stating that no Default or
Event of Default has occurred and is continuing or, if a Default or an Event of
Default has occurred and is continuing, stating the nature thereof and the
action that the Company proposes to take with respect thereto;

(b) Promptly after the same are available, copies of each annual report, proxy
or financial statement or other report or communication sent to the stockholders
of the Company, and copies of all annual, regular, periodic and special reports
and registration statements which the Company may file or be required to file
with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934,
and not otherwise required to be delivered to the Administrative Agent pursuant
hereto;

 

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(c) Promptly following the Administrative Agent’s request (but in no event more
frequently than twice in any fiscal year), a schedule showing the Obligor Senior
Leverage Ratio with respect to each Obligor Loan held by the Company or a
Subsidiary Grantor (other than Obligor Loans which are second lien loans,
subordinated loans or Real Estate Loans) as of the last day of the then most
recent fiscal quarter of the Company for which such information is available;
and

(d) Promptly, such additional information regarding the business, financial or
corporate affairs of the Company or any Subsidiary, or compliance with the terms
of the Note Documents, as the Administrative Agent may from time to time
reasonably request.

Notwithstanding the foregoing, the obligations of the Company in paragraph
(b) of this Section 6.02 shall be deemed to be satisfied with respect to any of
the items referred to in such paragraph (b) upon the filing thereof by the
Company with the SEC and the posting thereof on the SEC’s website within the
time periods specified in such paragraph. Any documents, schedules, invoices or
other papers delivered to the Administrative Agent or the Holders may (but shall
not be required to) be destroyed or otherwise disposed of by the Administrative
Agent or the Holders at any time after the same are delivered to the
Administrative Agent or the Holders, except as otherwise designated by the
Company to the Administrative Agent in writing, but shall at all times be
subject to the confidentiality provisions of Section 12.08 hereof.

The Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by the Company with any such request for
delivery, and each Holder shall be solely responsible for requesting delivery to
it or maintaining its copies of such documents.

6.03 Notices. Promptly notify the Administrative Agent and each Holder:

(a) of the occurrence of any Default or Event of Default;

(b) of any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect, including, to the extent applicable, (i) breach or
non-performance of, or any default under, a Contractual Obligation of the
Company or any Subsidiary; (ii) any dispute or Litigation between the Company or
any Subsidiary and any Governmental Authority; (iii) the commencement of, or any
material development in, any Litigation affecting the Company or any Subsidiary;
or (iv) any material loss, damage, or Litigation relating to the Collateral;

(c) of the occurrence of any ERISA Event; and

(d) of any material change in accounting policies or financial reporting
practices by the Company requiring the Company to restate any of its financial
statement previously delivered to the Administrative Agent pursuant to
Section 6.01.

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Company setting forth details of the occurrence
referred to therein and stating what action the Company has taken and proposes
to take with respect thereto. Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Note Document that have been breached.

6.04 Payment of Obligations. Pay and discharge, as the same shall become due and
payable, all its obligations and liabilities, including (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in

 

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accordance with GAAP are being maintained by the Company; (b) all lawful claims
which, if unpaid, would by law become a Lien (other than a Permitted
Encumbrance) upon any property of the Company; and (c) all Indebtedness of the
Company, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness.

6.05 Preservation of Existence, Etc. Except as otherwise permitted under
Section 7.03, (a) preserve, renew and maintain in full force and effect its
legal existence and good standing under the Laws of the jurisdiction of its
organization; and (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except (in the case of this clause (b)) to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect.

6.06 Maintenance of Insurance. At the Company’s sole cost and expense,
(a) maintain policies of insurance for director, officer and company liability
with the insurance companies providing such policies to the Company as of the
Amendment Closing Date, or such other financially sound and reputable insurance
companies acceptable to the Administrative Agent, in amounts not less than the
amounts of the Company’s policies existing as of the Amendment Closing Date, and
in each case, which policies are otherwise consistent with sound business
practice for entities with lines of business substantially similar to those
lines of business conducted by the Company, and the Company will furnish to the
Administrative Agent upon request full information as to the insurance carried,
(b) timely pay all premiums, fees and charges required in connection with all of
its insurance policies and otherwise continue to maintain such policies in full
force and effect; and (c) promptly notify the Administrative Agent of any loss
in excess of $2,000,000 covered by or claim under or notice made in connection
with any such insurance policies (collectively, the “Insurance Requirements”).

6.07 Compliance with Laws. Comply in all material respects with the requirements
of all Laws and all Judgments applicable to it or its business or property,
except in such instances in which (a) such requirement of Law or Judgment is
being contested in good faith by appropriate proceedings diligently conducted;
or (b) the failure to comply therewith could not reasonably be expected to have
a Material Adverse Effect.

6.08 Books and Records. Maintain (a) proper books of record and account, in
which full, true and correct entries in accordance with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Company and its Subsidiaries; and (b) such books of
record and account in material conformity with all applicable requirements of
any Governmental Authority having regulatory jurisdiction over the Company or
its Subsidiaries.

6.09 Inspection Rights. Permit representatives and agents of the Administrative
Agent to visit and inspect any of its properties, to examine its corporate,
financial and operating records, and make abstracts therefrom (but not copies
thereof), and to discuss its affairs, finances and accounts with its directors,
officers and independent public accountants (provided that representatives of
the Company may be present at any such discussion) and at such reasonable times
during normal business hours and as often as may be reasonably desired, upon a
reasonable advance written notice to the Company; provided that (a) no more than
one such inspection per calendar year shall be reimbursable by the Company
pursuant to Sections 12.04 or 12.05 unless an Event of Default shall have
occurred and be continuing and (b) when an Event of Default exists, the
Administrative Agent (or any of representative or agent thereof) may do any of
the foregoing at the expense of the Company at any time during normal business
hours and without advance notice.

 

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6.10 Banks and Payments. Cause all Obligor Loan Payment Collateral to be
deposited (x) into that certain account of NewStar Concentration LLC held at
Wells Fargo Bank, National Association the last four digits of which are 5215 or
any replacement or successor account (the “Concentration Account”), and to
further cause all such Obligor Loan Payment Collateral to be transferred out of
such Concentration Account and into an account listed on Schedule 6.10 or 6.11
attached hereto within two Business Days of the deposit thereof into such
Concentration Account, or (y) directly into Deposit Accounts listed on Schedule
6.10 or Securities Accounts listed on Schedule 6.11 attached hereto, which
Schedule 6.10 or Schedule 6.11 may be updated by the Company from time to time
by delivering to the Administrative Agent a revised Schedule 6.10 or Schedule
6.11, as applicable, reflecting any changes with respect to the Deposit Accounts
or Securities Accounts maintained by the Company or any Subsidiary Grantor into
which the Company or such Subsidiary Grantor intends to deposit or deposits any
Obligor Loan Payment Collateral. With respect to any new Deposit Account
reflected on a revised Schedule 6.10 or new Securities Account reflected on a
revised Schedule 6.11 delivered after the Amendment Closing Date, prior to
depositing any Obligor Loan Payment Collateral into such new account, the
Company or the relevant Subsidiary Grantor, as applicable, shall enter into a
Deposit Account Control Agreement with respect to such Deposit Account or
Securities Account Control Agreement with respect to such Securities Account, as
applicable. For the avoidance of doubt, no Deposit Account of the Company or any
Subsidiary shall be required to be subject to a Deposit Account Control
Agreement, or otherwise subject to the Administrative Agent’s control other than
those Deposit Accounts of the Company or any Subsidiary Grantor into which the
Company or such Subsidiary Grantor deposits Obligor Loan Payment Collateral.
Notwithstanding anything in this Section 6.10 or in the other Note Documents to
the contrary, the Administrative Agent agrees that (a) it shall not give
instructions to any depository bank pursuant to any Deposit Account Control
Agreement unless an Event of Default shall have occurred and be continuing, and
(b) if it shall have given instructions to any depositary bank pursuant to any
Deposit Account Control Agreement and the Event of Default related thereto shall
be cured to the satisfaction of the Administrative Agent or waived in accordance
with Section 12.01, the Administrative Agent shall, upon the request of the
Company, withdraw such instruction. Each Deposit Account Control Agreement shall
constitute a present grant of control to the Administrative Agent and shall
provide the Administrative Agent, for the benefit of the Holders, a first
priority security interest in the affected Deposit Account. Notwithstanding
anything in this Section 6.10 to the contrary, the Company and the Subsidiary
Grantors shall be permitted to maintain the following Deposit Accounts not
subject to the Administrative Agent’s control: (i) accounts of the Company or
the Subsidiary Grantors established and maintained for the purpose of holding
funds in escrow for the benefit of third parties, (ii) accounts of the Company
established and maintained for the purpose of clearing amounts (A) held in the
Company’s capacity as the administrative or collateral agent for a syndicate of
lenders (but excluding for the avoidance of doubt any syndicate of lenders
composed entirely of Note Parties), and/or (B) owed to Investment Vehicles that
are not Note Parties in connection with their ordinary course financing
transactions, (iii) that certain account of the Company held at Bank of America,
N.A. the last four digits of which are 6695 or any replacement or successor
account used solely for payroll, employee bonuses, taxes, accounts payable and
other miscellaneous finance-related payments, (iv) that certain account of the
Company held at Wells Fargo Bank, N.A. the last four digits of which are 6272 or
any replacement or successor account generally used for making disbursements,
and (v) provided that no Default or Event of Default shall have occurred and be
continuing, those other accounts of the Company or any Subsidiary Grantor
expressly designated on Schedule 6.10 attached hereto so long as the total
amount of funds on deposit in such designated accounts (excluding Unapplied
Cash) does not exceed $500,000 in the aggregate at any given time.

6.11 Securities and Investments. Cause all Securities Account Collateral to be
deposited to one of the Securities Accounts listed on Schedule 6.11 attached
hereto, which Schedule may be

 

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updated by the Company from time to time by delivering to the Administrative
Agent a revised Schedule 6.11 reflecting any changes with respect to the
Securities Accounts maintained by the Company or any Subsidiary Grantor in which
the Company or such Subsidiary Grantor deposits any Collateral consisting of
Securities Account Collateral. With respect to any new Securities Account
reflected on a revised Schedule 6.11 delivered after the Amendment Closing Date,
prior to causing any Collateral consisting of Securities Account Collateral to
be held in any such new Securities Account, the Company or the applicable
Subsidiary Grantor shall enter into a Securities Account Control Agreement with
respect to such Securities Account. For the avoidance of doubt, no Securities
Account of the Company or any Subsidiary shall be required to be subject to a
Securities Account Control Agreement, or otherwise subject to the Administrative
Agent’s control other than those Securities Accounts of the Company or any
Subsidiary Grantor into which the Company or such Subsidiary Grantor deposits
any Collateral consisting of Securities Account Collateral or Obligor Loan
Payment Collateral. Notwithstanding anything in this Section 6.11 or in the
other Note Documents to the contrary, the Administrative Agent agrees that
(a) it shall not give instructions to any institution maintaining a Securities
Account pursuant to a Securities Account Control Agreement unless an Event of
Default shall have occurred and be continuing, and (b) if it shall have given
instructions to any institution maintaining a Securities Account pursuant to any
Securities Account Control Agreement and the Event of Default related thereto
shall be cured to the satisfaction of the Administrative Agent or waived in
accordance with Section 12.01, the Administrative Agent shall, upon the request
of the Company, withdraw such instruction. Each such Securities Account Control
Agreement shall constitute a present grant of control to the Administrative
Agent and shall provide the Administrative Agent, for the benefit of the
Holders, a first priority security interest in the affected Securities Account.
Notwithstanding anything in this Section 6.11 to the contrary, the Company shall
be permitted to maintain not subject to the Administrative Agent’s control that
certain Securities Account of the Company held at Wells Fargo Bank, National
Association the last four digits of which are 0631 (or any successor or
replacement account) used solely for the purpose of holding the Company’s
treasury stock.

6.12 Additional Subsidiary Guarantors. At such time, if any, as the Company
acquires or creates a new Subsidiary which is not an Excluded Subsidiary
(including, for the purposes of this Section 6.12 any existing Subsidiary that
ceases to be an Excluded Subsidiary), the Company shall (if such Subsidiary is
not already a Subsidiary Guarantor), within ten Business Days thereafter,
(i) cause such Subsidiary to become a party to the Subsidiary Guaranty in the
manner contemplated by each such document, and (ii) deliver to the
Administrative Agent all such documents, certificates, resolutions, opinions and
other items pertaining to such Subsidiary as would be required to be delivered
to the Administrative Agent on the Amendment Closing Date with respect to any
Subsidiary Guarantor that would be an initial party to the Subsidiary Guaranty.
For avoidance of doubt, notwithstanding anything herein or in any other Note
Document to the contrary, in no event shall any Subsidiary or Subsidiary
Guarantor other than the NewStar Collateral Subsidiary be required to be or
become a Subsidiary Grantor.

6.13 Use of Proceeds. The Company shall use the proceeds of Loans only for a
Permitted Use or Uses.

6.14 Consolidated Net Worth. The Company and its Subsidiaries shall at all times
maintain a Consolidated Net Worth of at least $475,000,000.

6.15 Unencumbered Assets. The Company shall cause all Unencumbered Assets to
constitute assets of the Company or a Subsidiary Guarantor, provided that
(a) Unencumbered Assets may be transferred to and held by Subsidiaries which are
not Subsidiary Guarantors (each a “Non-Subsidiary Guarantor”) in connection with
the establishment, servicing, maintenance, operation, wind-down or termination
of any loan, receivable, securitization or other asset-backed financing facility
in favor of an Investment Vehicle so long as each such Non-Subsidiary Guarantor
to which any such Unencumbered

 

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Asset is transferred (i) is an Investment Vehicle which has granted or intends
to grant a Lien on such assets to secure Indebtedness of such Investment Vehicle
or (ii) promptly transfers such Unencumbered Asset to (A) an Investment Vehicle
which has granted or intends to grant a Lien on such assets to secure
Indebtedness of such Investment Vehicle or (B) the Company or a Subsidiary
Guarantor and (b) in addition to the Unencumbered Assets referred to in the
foregoing clause (a), Unencumbered Assets may be held by Non-Subsidiary
Guarantors so long as the aggregate fair market value of all such Unencumbered
Assets held by such Non-Subsidiary Guarantors pursuant to this clause (b) does
not exceed $10,000,000.

6.16 Pledge Restrictions. With respect to each Subsidiary formed by the Company
or any Subsidiary Grantor after the Amendment Closing Date and constituting a
wholly-owned Subsidiary of the Company or such Subsidiary Grantor, the Company
shall use commercially reasonable efforts to ensure that the Organizational
Documents and any Contractual Obligations of such Subsidiary do not contain any
provision which would expressly prohibit the Company or any Subsidiary Grantor
from pledging the Capital Stock of such Subsidiary to the Administrative Agent
as security for the Obligations.

6.17 Delivery of CLO Note. Within 30 days after the Amendment Closing Date, the
Company deliver or cause to be delivered to the Administrative Agent the
original Class E Note issued by NewStar Commercial Loan Funding 2012-2 LLC and
held by the Company (the “Class E Note”), together with a transfer power,
undated and duly endorsed in blank. Notwithstanding anything to the contrary
herein or in any other Note Document, the Company shall not be required to
deliver (and makes no representation as to the delivery of) the Class E Note to
the Administrative Agent prior to the date which is 30 days after the Amendment
Closing Date.

ARTICLE VII.

NEGATIVE COVENANTS

So long as any Commitment remains in effect or any Loan or other Obligation
hereunder (other than, following the termination of this Agreement in accordance
with its terms, any Obligation as to which no claim has been made) shall remain
unpaid or unsatisfied, the Company shall not:

7.01 Indebtedness.

(a) Subject to Section 7.06, Incur, or permit any Subsidiary to Incur any
Indebtedness after the Amendment Closing Date, if on the date of such Incurrence
and after giving effect thereto on a pro forma basis, the Total Leverage Ratio
would be greater than 4.50 to 1.00; provided, however, that, notwithstanding the
foregoing, the Company and its Subsidiaries may Incur the following
Indebtedness:

(i) Indebtedness created under any Note Document;

(ii) Indebtedness existing on or Incurred after the date of this Agreement
pursuant to commitments existing on the date of this Agreement in respect of the
credit facilities disclosed on Schedule 7.01(a)(ii) and any Permitted
Refinancing Indebtedness with respect thereto;

(iii) Indebtedness of (A) the Company to any Subsidiary, (B) any Subsidiary to
the Company or (C) any Subsidiary to any other Subsidiary; provided that any
Indebtedness of (x) the Company to any Subsidiary or (y) any Subsidiary
Guarantor to the Company or any Subsidiary shall be expressly subordinated to
the Loans in writing on terms reasonably satisfactory to the Administrative
Agent; and

(iv) Indebtedness of the Company or any Subsidiary existing or arising under
Swap Agreements permitted by Section 7.01(b).

 

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(b) Incur, or permit any Subsidiary to Incur, any Indebtedness under Swap
Agreements other than Swap Agreements entered into in the ordinary course of
business either (i) entered into for bona fide hedging purposes and not for
speculative purposes or (ii) entered into in connection with the provision of
interest rate hedging facilities to the Company’s or any Subsidiary’s borrowers.

7.02 Liens. Directly or indirectly create, incur, assume or suffer to exist, or
permit any Subsidiary, directly or indirectly, to create, incur, assume or
suffer to exist, any Lien on any of the Company’s or such Subsidiary’s
properties or assets of any kind, in each case whether now owned or hereafter
acquired, except for the following:

(a) Liens pursuant to any Note Document;

(b) Liens existing on the date hereof and listed on Schedule 7.02(b) and any
renewal, extension, refinancing or refunding thereof which does not encumber
additional property;

(c) Customary Permitted Liens;

(d) Liens securing any Indebtedness (including any Permitted Refinancing
Indebtedness) that is not prohibited under Section 7.01; provided that (i) no
such Indebtedness (other than Incremental Equivalent Debt) shall be secured by
Liens on the Collateral and (ii) no such Indebtedness shall be secured by Liens
on any Obligor Loans held by any Subsidiary Guarantor;

(e) Liens on Cash or Cash Equivalents pledged to secure obligations under Swap
Agreements that are not prohibited under Section 7.01;

(f) Liens securing judgments (including, without limitation, pre-judgment
attachments) but only to the extent for an amount and for a period not resulting
in an Event of Default under Section 9.01(i) hereof;

(g) Liens consisting of bankers’ liens and rights of setoff, in each case,
arising by operation of law, and Liens on documents presented in letter of
credit drawings;

(h) Liens on property of a Person existing at the time such Person is merged
into or consolidated with the Company; provided that such Liens were not created
in contemplation of such merger, consolidation or Investment and do not extend
to any assets other than those of the Person merged into or consolidated with
the Company or acquired by the Company; and

(i) Liens not otherwise permitted by the foregoing clauses of this Section 7.02
securing obligations or other liabilities; provided, however, that the aggregate
outstanding amount of all such obligations and liabilities shall not exceed
$500,000 at any time.

7.03 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into
another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, or permit any Subsidiary
Guarantor to do any of the foregoing provided that (a) any Subsidiary Guarantor
may merge or consolidate with, or dispose of all or substantially all of its
assets to or in favor of the Company or any other Subsidiary Guarantor; (b) any
Subsidiary Guarantor with assets having a book value of less than $1,000,000 may
liquidate, dissolve or merge or consolidate with the Company or any other
Subsidiary Guarantor of the Company, so long as, in the cases of clauses (a)

 

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and (b) above, if the Company is party to any such transaction, it shall be the
surviving or continuing Person after the consummation thereof; (c) any REO
Subsidiary may sell, transfer or otherwise dispose of any REO Property, and upon
the consummation of any such sale, transfer or disposition, such REO Subsidiary
may be merged, dissolved, liquidated or consolidated without into another
Person; and (d) the Company may merge or consolidate with, or Dispose of all or
substantially all of its assets to or in favor of any Person so long as
(i) either (A) the Company is the surviving or continuing Person after such
merger or consolidation or (B) the surviving or continuing Person after such
merger or consolidation, or the Person to which such Disposition is made, as the
case may be, is incorporated or organized under the laws of any State of the
United States and such corporation expressly assumes all obligations of Company
under this Agreement and the other Note Documents pursuant to written agreements
reasonably satisfactory to the Administrative Agent, (ii) after giving effect to
such transaction, the Company or such other corporation, as the case may be, has
a Consolidated Net Worth at least equal to the Consolidated Net Worth of the
Company prior to giving effect to such transaction, (iii) no Default or Event of
Default has occurred and is continuing either prior to or after giving effect to
such transaction and (iv) prior to and after giving effect to such transaction,
the Company is in compliance with the financial covenant set forth under
Section 6.14 hereto on a pro forma basis.

7.04 Dispositions. Dispose, or permit any Subsidiary Guarantor to dispose, of
any CLO Note held by the Company or any Subsidiary Guarantor unless such
Disposition is consummated on an arms-length basis.

7.05 Restricted Payments. Directly or indirectly declare, pay or make any
Restricted Payment, or set aside or otherwise deposit or invest any sums for
such purpose, or agree to do any of the foregoing; provided that the Company may
declare, pay or make any Restricted Payment if, at the time of and after giving
effect to such Restricted Payment:

(a) no Event of Default shall have occurred and be continuing or shall be caused
thereby; and

(b) the aggregate amount of such Restricted Payments made in Cash during the
term of this Agreement does not exceed the sum of (i) $50,000,000 plus
(ii) Cumulative Retained Excess Cash Flow.

7.06 Change in Nature of Business. (a) Without the Administrative Agent’s prior
consent, engage, or permit any Subsidiary to engage, in any material line of
business substantially different from the Business.

(b) Notwithstanding anything to the contrary in Article VII, the Company shall
not permit any of the following:

(i) NewStar Concentration LLC to incur any Indebtedness or to engage in any
activity other than the holding of the Concentration Account and the management,
clearing and disbursement of funds held in the Concentration Account;

(ii) (x) the NewStar Collateral Subsidiary to incur any Indebtedness other than
Indebtedness owed to the Administrative Agent or to engage in any other activity
other than the holding, management and administration of Unencumbered Assets or
(y) any REO Subsidiary that is a Subsidiary Guarantor to incur any Indebtedness
other than Indebtedness owed to the Administrative Agent or to engage in any
other activity other than the holding, management and administration of the REO
Property held by such REO Subsidiary on the Amendment Closing Date; or

(iii) the Subsidiaries set forth on Schedule 1.01(c) (other than NewStar
Concentration LLC) to hold assets having a fair market value exceeding
(A) $10,000,000 in the case of any one such Subsidiary individually or
(B) $25,000,000 in the case of all such Subsidiaries in the aggregate.

 

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7.07 Transactions with Affiliates. Enter into, or permit any Subsidiary to enter
into, any transaction of any kind with any Affiliate of the Company, whether or
not in the ordinary course of business, other than (a) transactions (i) among
the Company and its Subsidiaries, (ii) among the Subsidiaries or (iii) among the
Company or its Subsidiaries and any Managed Funds, (b) transactions pursuant to
Contractual Obligations in effect on the Amendment Closing Date, (c) Restricted
Payments that are not prohibited hereunder, (d) issuances of Capital Stock by
the Company and/or any non-wholly owned Subsidiaries to Affiliates (other than
wholly-owned Subsidiaries), (e) payment of reasonable fees, compensation or
employee benefit arrangements, and any indemnity provided for the benefit of
directors of the Company in the ordinary course of business and consistent with
industry practice, (f) other transactions with Affiliates otherwise expressly
permitted by the terms of this Agreement, and (g) transactions with Affiliates
conducted on fair and reasonable terms substantially as favorable to the Company
and any Subsidiary, as the case may be, as would be obtainable by the Company or
such Subsidiary at the time in a comparable arm’s length transaction with a
Person other than an Affiliate; provided that any transactions described in this
clause (g) involving amounts in excess of $2,000,000 individually and
$10,000,000 in the aggregate shall be approved in advance by the board of
directors of the Company.

7.08 Burdensome Agreements. Enter into, or permit any Subsidiary to enter into,
any Contractual Obligation (other than this Agreement or any other Note
Document) that limits the ability of:

(a) any Subsidiary or any Investment Vehicle to make Restricted Payments to the
Company or to otherwise transfer property to the Company, other than (i) in the
case of any Investment Vehicle existing on the date hereof, the limitations set
forth in the Organizational Documents or in the underlying agreements to which
such Investment Vehicle is a party (as such Organizational Documents or
underlying agreements are in effect on the date hereof and as the same may be
amended, restated, supplemented or otherwise modified from time to time),
(ii) in the case of any Investment Vehicle formed or acquired after the date
hereof, such limitations as are of a type customarily set forth in the
Organizational Documents of CLOs, CDOs or “warehouse” lending or borrowing
facilities or in the underlying agreements for Investments of the type being
made by any such Investment Vehicle, or (iii) such limitations as are reasonable
and customary in connection with a financing entered into by any non-wholly
owned Subsidiary or Investment Vehicle; or

(b) the Company or any Subsidiary Grantor to create, incur or assume Liens on
any Collateral in favor of the Administrative Agent to secure the Obligations.

7.09 Use of Proceeds. Use, or permit any Subsidiary to use, the proceeds of
Loans for any purpose that (a) constitutes a violation of Regulations T, U or X
promulgated by the FRB or (b) is not otherwise permitted by Section 6.13.

7.10 Special Operating Subsidiary Restrictions. Notwithstanding anything herein
to the contrary, permit any Operating Subsidiary (other than a Subsidiary
Grantor) to Incur any Indebtedness, except for the following:

(b) Indebtedness under the Note Documents;

 

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(c) Indebtedness under Swap Agreements permitted by Section 7.01(b);

(d) Indebtedness of any Operating Subsidiary to the Company or any other
Subsidiary, provided that, if such Operating Subsidiary is a Subsidiary
Guarantor, any such Indebtedness of such Operating Subsidiary shall be expressly
subordinated to the obligations of such Operating Subsidiary under the
Subsidiary Guaranty in writing on terms reasonably satisfactory to the
Administrative Agent;

(e) Guaranty Obligations in respect of Indebtedness of Warehouse Subsidiaries,
provided that (i) such Indebtedness of such Warehouse Subsidiaries is not
prohibited by Section 7.01 and (ii) no such guaranty of the Indebtedness of a
Warehouse Subsidiary constitutes a guaranty of more than 10% of the aggregate
principal amount of the outstanding Indebtedness of such Warehouse Subsidiary;

(f) Guaranty Obligations in respect of Indebtedness of Warehouse Subsidiaries
(other than the Guaranty Obligations referred to in the foregoing clause (d) of
this Section 7.10), provided that (i) such Indebtedness of such Warehouse
Subsidiaries is not prohibited by Section 7.01, (ii) the principal amount of
Indebtedness guaranteed by all Operating Subsidiaries in reliance on this
Section 7.10(e) shall not exceed $50,000,000 in the aggregate and (iii) such
Indebtedness of such Warehouse Subsidiaries shall be Incurred under “warehouse”
borrowing facilities established for the primary purpose of seasoning Obligor
Loans prior to the ultimate transfer of such Obligor Loans;

(g) Guaranty Obligations in respect of Indebtedness of Investment Vehicles so
long as each such guaranty entered into in reliance on this clause (f) is
limited to losses arising from bad faith, gross negligence, willful misconduct,
fraud, failure to maintain separateness or bankruptcy remoteness, the
commencement of any voluntary bankruptcy or insolvency proceeding by such
Investment Vehicle in violation of the applicable Organizational Documents or
Contractual Obligations or other acts or omissions of the type customarily
giving rise to liability under a performance or “bad boy” guaranty;

(h) Guaranty Obligations not otherwise permitted by the foregoing clauses of
this Section 7.10 so long as the Administrative Agent has consented thereto in
writing; and

(i) Indebtedness not otherwise permitted by the foregoing clauses of this
Section 7.10, provided that the aggregate principal amount of such Indebtedness
under this clause (h) shall not exceed $5,000,000 at any one time outstanding.

ARTICLE VIII.

Intentionally Omitted

ARTICLE IX.

EVENTS OF DEFAULT AND REMEDIES

9.01 Events of Default. Any of the following shall constitute an Event of
Default:

(a) Non-Payment. The Company fails to pay (i) when and as required to be paid as
set forth herein, any payment of principal or (ii) within five days after the
same becomes due, any interest, fee or other amount (other than principal) due
hereunder or under any other Note Document; or

(b) Specific Covenants. The Company fails to perform or observe (i) any term,
covenant or agreement contained in any of Section 6.05(a), Section 6.14 or
Article VII, or (ii) any term, covenant or agreement contained in any of
Section 6.01, 6.02, 6.03, 6.10, 6.11, 6.12 or 6.13 and such failure continues
for 10 Business Days; provided that, with respect to any Default under
Section 6.01 or Section 6.02, if such Default occurred as a result of
extraordinary circumstances without any fault on the part of the Company, such
cure period shall be extended by such additional time as may be reasonably
requested by the Company, which request shall not be unreasonably withheld; or

 

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(c) [Reserved]; or

(d) Other Defaults. The Company or any other Note Party fails to perform or
observe any other covenant or agreement (not specified in subsection (a) or
(b) above) contained in any Note Document on its part to be performed or
observed and such failure continues for 30 days; or

(e) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of any Note Party
herein, in any other Note Document, or in any document delivered in connection
herewith or therewith shall be incorrect or misleading in any material respect
when made or deemed made; or

(f) Payment Default under Other Instruments. A default shall occur under any
Indebtedness owing by the Company (other than the Obligations), which default
(i) is caused by a failure by the Company to pay any principal on such
Indebtedness at final maturity (a “Payment Default”) or (ii) results in the
acceleration of such Indebtedness prior to its express maturity and, in each
case, (A) the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$20,000,000 or more and (B) such Payment Default has not been cured, or such
acceleration has not been rescinded, as the case may be, within 30 days after
the occurrence or declaration thereof; provided, that such 30 day period shall
be deemed to have terminated upon the commencement of the exercise of remedies
by the holders of such Indebtedness; or

(g) Insolvency Proceedings, Etc. The Company or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 consecutive calendar days; or any proceeding under any Debtor
Relief Law relating to any such Person or to all or any material part of its
property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 consecutive calendar days, or an order for relief
is entered in any such proceeding; or

(h) Inability to Pay Debts; Attachment. (i) The Company becomes unable or admits
in writing its inability or fails generally to pay its debts as they become due,
or (ii) any writ or warrant of attachment or execution or similar process is
issued or levied against all or any material part of the property of the Company
and is not released, vacated or fully bonded within 30 days after its issue or
levy; or

(i) Judgments. There is entered against the Company or any of its Subsidiaries
(i) a final judgment or order of a court of competent jurisdiction for the
payment of money in an aggregate amount exceeding $20,000,000 (to the extent not
covered by independent third-party insurance as to which the insurer does not
dispute coverage), or (ii) any one or more non-monetary final judgments that
have, or could reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) such judgment or
order remains undischarged, unpaid, unstayed, unbonded or undismissed as of the
earlier to occur of (x) 30 consecutive days after such judgment or order is
entered and (y) the date such judgment or order becomes non-appealable; or

 

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(j) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Company under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $5,000,000,
or (ii) the Company or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of $5,000,000; or

(k) Invalidity of Note Documents. (i) Any Note Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect; or any Note Party denies in writing the validity or
enforceability of any Note Document to which it is a party; or any Note Party
denies in writing that it has any or further liability or obligation under any
Note Document to which it is a party, or purports in writing to revoke,
terminate or rescind any such Note Document; or (ii) any holder of Incremental
Equivalent Debt denies in writing that it has any or further liability or
obligation under any Incremental Equivalent Debt Intercreditor Agreement to
which it is a party, or purports in writing to revoke, terminate or rescind any
such Incremental Equivalent Debt Intercreditor Agreement;

(l) Collateral Documents. Any Lien on any material portion of the Collateral
created by any Note Document shall cease for any reason (other than by reason of
the express release thereof pursuant to Section 11.11) to be enforceable and of
the same effect and priority purported to be created thereby, provided that
there shall be no Event of Default under this clause (l) to the extent that any
Lien ceases to be enforceable or to have the effect and priority purported to be
created by the applicable Note Document by reason of (i) the resignation of the
Administrative Agent or (ii) the negligence or willful misconduct of the
Administrative Agent following a reasonable written request from the Company to
execute any document or take any other action relating to such Note Document or
the Liens granted thereunder; or

(m) Fundamental Changes. The Company or any other Note Party shall attempt to
terminate, revoke or disclaim any Obligation to the Administrative Agent or any
Holder (except strictly in accordance with its terms).

9.02 Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, subject to Section 11.12, at the
request of, or may, with the consent of, the Required Holders, take any or all
of the following actions:

(a) declare the Commitments to be terminated, whereupon the Commitments shall be
terminated;

(b) declare the unpaid aggregate principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Note Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Company;

(c) exercise on behalf of itself and the Holders all rights and remedies
available to it and the Holders under the Note Documents (subject to any
limitations on such rights and remedies set forth in the Security Agreement) or
under applicable law, which shall include the rights, powers and remedies
(i) granted to secured parties under the UCC or other applicable Uniform
Commercial Code; (ii) granted to the Administrative Agent or the Holders under
any other applicable Law; or (iii) granted to the Administrative Agent or the
Holders under this Agreement, the Notes or any other Note Document or any other
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(d) direct the Company (i) to cause Unencumbered Assets to be sold through a
competitive market sales process at fair market value, and/or (ii) to the extent
not prohibited by an applicable Contractual Obligation, Organizational Document
or Requirement of Law, to sell Obligor Loans owned by any Warehouse Subsidiary
in a commercially reasonable manner through a competitive market sales process
at fair market value, and the Company hereby agrees to follow any such
directions; or

(e) exercise its rights under the Security Agreement;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Company under the Bankruptcy Code, the
Commitments shall automatically terminate, the unpaid outstanding principal
amount of all Loans and all interest and other amounts as aforesaid shall
automatically become due and payable, without further act of the Administrative
Agent or any Holder.

All such rights, powers and remedies shall be cumulative and not alternative and
enforceable, in Required Holders’ discretion, alternatively, successively, or
concurrently on any one or more occasions, and shall include the right to apply
to a court of equity for an injunction to restrain a breach or threatened breach
by any Note Party of this Agreement or any of the other Note Documents. Any
single or partial exercise of, or forbearance, failure or delay in exercising
any right, power or remedy shall not be, nor shall any such single or partial
exercise of, or forbearance, failure or delay be deemed to be a limitation,
modification or waiver of any right, power or remedy and shall not preclude the
further exercise thereof; and every right, power and remedy of the
Administrative Agent or the Holders shall continue in full force and effect
until such right, power and remedy is specifically waived by an instrument in
writing executed and delivered with respect to each such waiver by such parties.

9.03 Application of Funds. After the exercise of remedies provided for in
Section 9.02 (or after the Loans and other Obligations have automatically become
immediately due and payable), any amounts received on account of the Obligations
shall be applied by the Administrative Agent in the following order:

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article III) payable to the Administrative Agent in its capacity
as such and including all costs and expenses (including Attorney Costs, trustee
fees and court costs) incurred in connection with any collection, receipt,
recovery, appropriation, foreclosure or realization, or from any use, operation,
sale, assignment, lease, pledge, transfer, delivery or disposition of all or any
of the Collateral, or with respect to the care, safekeeping, custody,
maintenance, protection, administration or otherwise of any and all of the
Collateral or in any way relating to the rights of the Administrative Agent and
the Holders under this Agreement;

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Holders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans, ratably among the Holders in proportion to the
respective amounts described in this clause Third payable to them;

Fourth, to payment of that portion of the Obligations constituting the unpaid
principal amount of the Loans, ratably among the Holders in proportion to the
respective amounts described in this clause Fourth held by them;

 

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Fifth, to the payment, satisfaction or discharge of any other Indebtedness or
Obligations (including any reimbursement, subrogation, contribution or other
obligation to any Person), or otherwise as may be permitted or as required by
any law, rule or regulation (including Section 9-615(a)(3) of the UCC); and

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Company or as otherwise required by Law.

ARTICLE X.

RIGHT TO CURE; POST-DEFAULT POWER OF ATTORNEY

10.01 Right to Cure. The Administrative Agent, on behalf of the Holders, may, at
its option but without any obligation, after an Event of Default that is
continuing, after consultation with the Company, cure any default by any Note
Party under any Contractual Obligation when due or pay or bond on appeal any
judgment entered against any Note Party; discharge taxes or other Liens at any
time levied on or existing with respect to the Collateral; and pay any amount,
incur any expense or perform any act which, in the Administrative Agent’s
reasonable judgment, after consultation with the Company, is necessary or
appropriate to preserve, protect, insure or maintain the Collateral and the
rights of the Administrative Agent or the Holders with respect thereto. The
Administrative Agent may add any amounts so expended to the Obligations, such
amounts to be repayable by the Company on demand. The Administrative Agent shall
be under no obligation to effect such cure, payment or bonding and shall not, by
doing so, be deemed to have assumed any obligation or liability of any Note
Party. Any payment made or other action taken by the Administrative Agent under
this Section shall be without prejudice to any right to assert an Event of
Default hereunder and to proceed accordingly.

10.02 Power of Attorney. Subject to the terms of Sections 7.2, 8.15, 8.17 and
8.18 of the Security Agreement, each Note Party hereby, or by executing and
delivering the Subsidiary Guaranty, as the case may be, irrevocably constitutes
and appoints, effective during the continuance of an Event of Default, the
Administrative Agent acting through any authorized officer or agent thereof,
with full power of substitution, as such Note Party’s true and lawful
attorney-in-fact with full irrevocable power and authority in such Note Party’s
place and stead and in such Note Party’s name or in its own name, from time to
time in the Administrative Agent’s reasonable discretion, to receive and open
mail addressed to such Note Party, to take any and all action, to do all things,
to execute, endorse, deliver and file any and all writings, documents,
instruments, notices, statements (including financing statements and writings to
correct any ambiguity in any Note Document), checks, drafts, acceptances, money
orders, or other evidence of payment or Proceeds with respect to the Collateral,
which may be or become necessary or desirable in the discretion of the
Administrative Agent to accomplish the terms, purposes and intent of, or to
fulfill such Note Party’s obligations under the Note Documents to which such
Note Party is a party, including the right to enter into any control agreements
on behalf of the Company in accordance with Sections 6.10 and 6.11, to appear in
and defend any action or proceeding brought with respect to the Collateral, and
to bring any action or proceeding, in the name and on behalf of the Company,
which the Administrative Agent, in its discretion, deems necessary or
appropriate to protect its interest in the Collateral. This power is coupled
with an interest and is irrevocable until the Event of Default is cured or
waived. Each Note Party hereby, or by executing and delivering the Subsidiary
Guaranty, as the case may be, releases the Administrative Agent, the Holders and
their respective officers, directors, members, partners, trustees, debt holders,
employees, representatives, agents and designees from any liabilities arising
from any act or acts under this power of attorney and in furtherance thereof,
whether of omission or commission, except and only to the extent the same
results from the applicable released party’s gross negligence or willful
misconduct as determined pursuant to a final non-appealable order of a court of
competent jurisdiction.

 

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ARTICLE XI.

ADMINISTRATIVE AGENT

11.01 Appointment and Authorization of Administrative Agent. Each Holder hereby
irrevocably appoints, designates and authorizes the Administrative Agent to take
such action as contractual representative on its behalf under the provisions of
this Agreement and each other Note Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Note Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Note Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
trustee or fiduciary relationship with any Holder or participant, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Note Document or otherwise exist
against the Administrative Agent. Without limiting the generality of the
foregoing sentence, the use of the term “agent” herein and in the other Note
Documents with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties. Each Holder hereby
authorizes the Administrative Agent to execute and deliver this Agreement, the
Security Agreement, each Incremental Equivalent Debt Intercreditor Agreement,
membership interest transfer certificates and any and all other Note Documents
from time to time.

11.02 Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement or any other Note Document by or through agents,
employees or attorneys-in- fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney- in-fact that it selects in the absence of
gross negligence or willful misconduct with respect to such selection.

11.03 Liability of Administrative Agent.

(a) No Agent-Related Person shall (i) 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 Note Document or the transactions contemplated hereby (except for its own
gross negligence or willful misconduct in connection with its duties expressly
set forth herein), or (ii) be responsible in any manner to any Holder or
participant for any recital, statement, representation or warranty made by the
Company or any of its Affiliates or any officer thereof, contained herein or in
any other Note Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or any other Note Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Note Document, or for any failure of the Company or any
other Note Party to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Holder or participant
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 Note
Document, or to inspect the properties, books or records of the Company or any
Affiliate thereof.

(b) The Administrative Agent shall have no obligation whatsoever to the Holders
or to any other Person (other than to the Company to the extent set forth in
this Agreement) to assure that the Collateral exists or is owned by the Company,
or is cared for, protected or insured or that the Liens granted to the
Administrative Agent herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise

 

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or to continue exercising at all or in any manner or under any duty of care,
disclosure or fidelity any of the rights, authorities and powers granted or
available to the Administrative Agent hereunder or in any of the Note Documents,
it being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Administrative Agent may act in any
manner it may deem appropriate, in its reasonable discretion, given the
Administrative Agent’s own interest in the Collateral as one of the Holders and
that the Administrative Agent shall have no duty or liability whatsoever to the
Holders, except to the extent resulting from its gross negligence or willful
misconduct.

11.04 Reliance by Administrative Agent.

(a) The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation reasonably 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 the
Company or any of its Affiliates), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under any Note Document
unless it shall first receive such advice or concurrence of the Required Holders
as it deems appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Holders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Note Document in
accordance with a request or consent of the Required Holders (or such greater
number of Holders as may be expressly required hereby in any instance) and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Holders.

(b) For purposes of determining compliance with the conditions specified in
Section 4.01, the Holders shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to
the Holders unless the Administrative Agent shall have received notice from any
Holder prior to the proposed Amendment Closing Date specifying its objection
thereto.

11.05 Notice of Default. The Administrative 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 and fees required
to be paid to the Administrative Agent for the account of the Holders, unless
the Administrative Agent shall have received written notice from a Holder or the
Company referring to this Agreement, describing such Default or Event of Default
and stating that such notice is a “notice of default.” The Administrative Agent
will notify the Holders of its receipt of any such notice. The Administrative
Agent shall take such action with respect to such Default or Event of Default as
may be directed by the Required Holders in accordance with Article IX; provided,
however, that unless and until the Administrative Agent has received any such
direction, the Administrative 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 or in the best interest of the
Holders.

11.06 Credit Decision; Disclosure of Information by Administrative Agent. Each
Holder acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by the Administrative Agent hereafter taken,
including any consent to and acceptance of any assignment or review of the
affairs of the Company or any Affiliate thereof, shall be deemed to constitute
any representation or warranty by any Agent-Related Person to any Holder as to
any matter, including whether Agent-Related Persons have disclosed material
information in their possession. Each Holder represents to the Administrative
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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 the Company and its Affiliates, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Company hereunder. Each Holder 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 Note 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 the Company. Except for notices, reports and other documents
expressly required to be furnished to the Holders by the Administrative Agent
herein, the Administrative Agent shall not have any duty or responsibility to
provide any Holder with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of any of the Company or any of its Affiliates which may come
into the possession of any Agent-Related Person.

11.07 Indemnification of Administrative Agent. Whether or not the transactions
contemplated hereby are consummated, the Holders shall indemnify upon demand
each Agent-Related Person (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro rata,
and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; provided, however, that no Holder shall
be liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities to the extent determined in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person’s own gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of the Required
Holders shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section. Without limitation of the foregoing, each Holder shall
reimburse the Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the
Administrative 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 Note Document, or
any document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Company. The undertaking in this Section shall survive termination of the
Commitments, the payment of all other Obligations and the resignation of the
Administrative Agent.

11.08 Administrative Agent in its Individual Capacity. Fortress Credit Corp. 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
the Company and its Affiliates as though Fortress Credit Corp. were not the
Administrative Agent hereunder and without notice to or consent of the Holders.
The Holders acknowledge that, pursuant to such activities, Fortress Credit Corp.
or its Affiliates may receive information regarding the Company or its
Affiliates (including information that may be subject to confidentiality
obligations in favor of the Company or such Affiliate) and acknowledge that the
Administrative Agent shall be under no obligation to provide such information to
them. With respect to its Notes and its Loans, Fortress Credit Corp. shall have
the same rights and powers under this Agreement as any other Holder and may
exercise such rights and powers as though it were not the Administrative Agent,
and the terms “Holder” and “Holders” include Fortress Credit Corp. in its
individual capacity.

 

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11.09 Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 30 days’ notice to the Holders, which resignation
shall become effective once the successor Administrative Agent succeeds to the
rights, duties and obligations of the Administrative Agent hereunder. If the
Administrative Agent resigns under this Agreement, the Required Holders shall
appoint from among the Holders a successor administrative agent for the Holders,
with the approval of the Company at all times other than during the existence of
a Default or an Event of Default (which approval of the Company shall not be
unreasonably withheld or delayed). If no successor administrative agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Holders
and the Company, a successor administrative agent from among the Holders. Upon
the acceptance of its appointment as successor administrative agent hereunder,
the Person acting as such successor administrative agent shall succeed to all
the rights, powers and duties of the retiring Administrative Agent and the term
“Administrative Agent” means such successor administrative agent and the
retiring Administrative Agent’s appointment, powers and duties as Administrative
Agent shall be terminated. After any retiring Administrative Agent’s resignation
hereunder as the Administrative Agent, the provisions of this Article XI and
Sections 12.04 and 12.05 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Administrative Agent under this
Agreement.

11.10 Administrative Agent May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company, the Administrative Agent (irrespective of whether any amount of any
Loan shall then be due and payable as herein expressed or by declaration or
otherwise and irrespective of whether the Administrative Agent shall have made
any demand on the Company) shall be entitled and empowered, by intervention in
such proceeding or otherwise

(a) to file and prove a claim for the aggregate principal amount and interest
owing and unpaid in respect of the Loans, and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Holders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Holders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Holders and the
Administrative Agent hereunder) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same in accordance with Section 9.03;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Administrative Agent.

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Holder or to authorize the Administrative Agent
to vote in respect of the claim of any Holder in any such proceeding.

 

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11.11 Collateral Matters. The Holders irrevocably authorize the Administrative
Agent, at its option and in its discretion:

(a) to take any action with respect to the Collateral which may be necessary to
perfect and maintain perfected the Liens upon the Collateral granted pursuant to
any of the Note Documents;

(b) to release any Lien on any property granted to or held by the Administrative
Agent under any Note Document (i) upon termination of the Commitments and
payment in full of all Obligations, (ii) that is sold or to be sold as part of
or in connection with any Disposition not prohibited hereunder or under any
other Note Document, (iii) in accordance with any provision for the release
thereof provided for in this Agreement or the other Note Documents, or
(iv) subject to Section 12.01, if approved, authorized or ratified in writing by
the Required Holders;

(c) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Note Document to the holder of any Lien on such
property that is permitted by Section 7.02; and

(d) following any such release or subordination described in the preceding
clauses (b) and (c), to deliver to the Company, at its expense, any Collateral
so released that is then held by the Administrative Agent hereunder and to
execute and deliver to the Company such releases or other documents as the
Company shall reasonably request to evidence or effectuate such release or
subordination of Liens (including UCC termination statements, termination
letters with respect to control agreements in favor of the Administrative Agent
relating to the Company’s Deposit Accounts and Securities Accounts,
intercreditor agreements and collateral agency agreements).

Upon request by the Administrative Agent at any time, the Required Holders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property pursuant to
this Section 11.11.

Notwithstanding anything herein or in any other Note Document to the contrary,
the Holders and the Administrative Agent hereby agree that, in the event the
Company elects to incur any Incremental Equivalent Debt, such Incremental
Equivalent Debt shall rank pari passu in right of payment and security with the
Loans and the Administrative Agent agrees to enter into an intercreditor
agreement with the holders of such Incremental Equivalent Debt substantially in
the form of Exhibit F attached hereto (the “Incremental Equivalent Debt
Intercreditor Agreement”), which intercreditor agreement shall, among other
things, confirm that such Incremental Equivalent Debt and the Loans are secured
by the Collateral on a pari passu basis and shall be on terms reasonably
acceptable to the Administrative Agent.

11.12 Duties in the Case of Enforcement. In case one of more Events of Default
have occurred and shall be continuing, the Administrative Agent shall, if (a) so
requested (or consented to) by the Required Holders and (b) the Holders have
provided to the Administrative Agent such additional indemnities and assurances
against expenses and liabilities as the Administrative Agent may reasonably
request, proceed to enforce the provisions of any Note Documents authorizing the
sale or other disposition of all or any part of the Collateral (or any other
property which is security for the Obligations) and exercise all or any such
other legal and equitable and other rights or remedies as it may have in respect
of such Collateral (or such other property). The Required Holders may direct the
Administrative Agent in writing as to the method and the extent of any such sale
or other disposition to the extent permitted under the terms hereof, the Holders
hereby agreeing to indemnify and hold the Administrative Agent harmless from all
liabilities incurred in respect of all actions taken or omitted in accordance
with such directions, provided that the Administrative Agent need not comply
with any such direction to the extent that the Administrative Agent reasonably
believes the Administrative Agent’s compliance with such direction to be
unlawful or commercially unreasonable in any applicable jurisdiction.

 

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ARTICLE XII.

MISCELLANEOUS

12.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement
or any other Note Document, and no consent to any departure by the Company
therefrom, shall be effective unless in writing signed by the Required Holders
and the Company and acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such amendment,
waiver or consent shall:

(a) waive (i) any condition set forth in Section 4.01(a) without the written
consent of each Initial Term Holder or (ii) any condition set forth in
Section 4.03 without the written consent of each Delayed Draw Term Holder;

(b) extend or increase the Commitment of any Holder without the written consent
of such Holder;

(c) postpone any date fixed for any payment of the principal amount, interest or
fees due to the Holders (or any of them), in each case without the written
consent of each Holder directly affected thereby;

(d) reduce the principal amount of, or the rate of interest specified herein on,
any Loan, or any fees or other amounts payable hereunder or under any other Note
Document, without the written consent of each Holder directly affected thereby;
provided, however, that only the consent of the Required Holders shall be
necessary to amend the definition of “Default Rate” or to waive any obligation
of the Company to pay interest at the Default Rate;

(e) change Section 2.08 or Section 9.03 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each
Holder;

(f) change any provision of this Section or the definition of “Required Holders”
or any other provision hereof specifying the number or percentage of Holders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Holder;

(g) (i) release all or substantially all of the Collateral securing the
Obligations (other than in connection with a transaction permitted hereby) or
(ii) release all or substantially all of the Subsidiary Guarantors from their
obligations under the Subsidiary Guaranty (other than in connection with a
transaction permitted hereby), in each case, without the written consent of each
Holder; or

(h) change any provision of any Note Document in a manner which by its terms
adversely affects the rights in respect of payments due to Holders holding Loans
of any Facility differently than those holding Loans of any other Facility
without the written consent of Holders of each affected Facility representing
more than 50% of the aggregate outstanding principal balance of the Loans in
such Facility (in addition to any other consent required under any other clause
of this Section);

and provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Holders
required above and the Company, affect the rights or duties of the
Administrative Agent under this Agreement or any other Note Document.

 

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12.02 Notices and Other Communications; Facsimile Copies.

(a) General. Unless otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing or by any
telecommunication device capable of creating a written record (including
electronic mail and facsimile transmission). All such written notices shall be
mailed, e-mailed, faxed or delivered to the applicable address or facsimile
number, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:

(i) if to the Company or the Administrative Agent, to the address, e-mail
address, facsimile number or telephone number specified for such Person on
Schedule 12.02 or to such other address, e-mail address, facsimile number or
telephone number as shall be designated by such party in a notice to the other
parties; and

(ii) if to any Holder, to the address, e-mail address, facsimile number or
telephone number specified from time to time by such Holder to the Company and
the Administrative Agent or to such other address, e-mail address, facsimile
number or telephone number as shall be designated by such party in a notice to
the Company and the Administrative Agent.

All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) the actual receipt thereof by the relevant
party hereto and (ii) (A) if delivered by hand or by courier, when signed for by
or on behalf of the relevant party hereto; (B) if delivered by mail, four
Business Days after deposit in the mails, postage prepaid; and (C) if delivered
by facsimile, when sent and receipt has been confirmed by telephone; provided,
however, that notices and other communications to the Administrative Agent
pursuant to Article II shall not be effective until actually received by the
Administrative Agent. In no event shall a voicemail message be effective as a
notice, communication or confirmation hereunder.

(b) Effectiveness of Facsimile Documents and Signatures. This Agreement may be
transmitted and/or signed by facsimile or electronic mail. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on each
applicable Note Party, the Administrative Agent and the Holders. The
Administrative Agent may also require that any such documents and signatures be
confirmed by a manually-signed original thereof; provided, however, that the
failure to request or deliver the same shall not limit the effectiveness of any
facsimile or electronic mail document or signature.

(c) Reliance by the Administrative Agent and the Holders. The Administrative
Agent and the Holders shall be entitled to rely and act upon any notices given
by or on behalf of the Company even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by any
other form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof, so long as, in each
case, such notice is issued by a Responsible Officer of the Company or by a
person reasonably believed in good faith by the Administrative Agent to be a
Responsible Officer of the Company. The Company shall indemnify each
Agent-Related Person and each Holder from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Company. All telephonic notices to and
other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

12.03 No Waiver; Cumulative Remedies. No failure by any Holder or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any

 

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right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege,
subject to the terms of applicable Law. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.

12.04 Attorney Costs, Expenses and Taxes. The Company agrees (a) to pay or
reimburse the Administrative Agent for all reasonable, out-of-pocket costs and
expenses incurred in connection with the development, preparation, negotiation
and execution of this Agreement and the other Note Documents and any amendment,
waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs and (b) to pay or
reimburse the Administrative Agent and each Holder for all reasonable,
out-of-pocket costs and expenses incurred in connection with the enforcement,
attempted enforcement, or preservation of any rights or remedies under the this
Agreement or the other Note Documents (including all such reasonable,
out-of-pocket costs and expenses incurred during any “workout” or restructuring
in respect of the Obligations and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including obtaining, maintaining,
protecting and preserving the Administrative Agent’s and the Holder’s interest
in the Collateral or security interest therein, foreclosing, retaking, holding,
preparing for sale or lease, selling or otherwise disposing or realizing on the
Collateral or in exercising their rights hereunder or as secured party under the
UCC, any other applicable Law or any Note Document, in each case including all
Attorney Costs. The foregoing costs and expenses shall include all reasonable,
out-of-pocket search, filing, recording, audit and appraisal charges and fees
and taxes related thereto, and other reasonable out-of-pocket expenses incurred
by the Administrative Agent and the cost of independent public accountants and
other outside experts retained by the Administrative Agent or any Holder to the
extent permitted to be retained by the Administrative Agent and reimbursed by
the Company hereunder. All amounts due under this Section 12.04 shall be payable
within five Business Days after written demand therefor to the Company,
accompanied by a reasonably detailed accounting thereof. The agreements in this
Section shall survive the termination of the Commitments and the repayment of
all Obligations.

12.05 Indemnification by the Company. Whether or not the transactions
contemplated hereby are consummated, the Company shall indemnify and hold
harmless each Agent-Related Person, each Holder and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact
(collectively the “Indemnitees”) from and against any and all liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses and disbursements (including Attorney Costs) of any kind
or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising out of or
in connection with (a) the execution, delivery, enforcement, performance or
administration of any Note Document or any other agreement, letter or instrument
delivered in connection with the transactions contemplated thereby or the
consummation of the transactions contemplated thereby, (b) the Commitments, any
Loan, or the use or proposed use of the proceeds therefrom, or (c) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory (including
any investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified
Liabilities”); provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee. No Indemnitee shall be liable for any damages
arising from the use by others of any information or other materials

 

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obtained through any website or other similar information transmission systems
in connection with this Agreement, nor shall any Indemnitee have any liability
for any indirect or consequential damages relating to this Agreement or any
other Note Document or arising out of its activities in connection herewith or
therewith (whether before or after the Amendment Closing Date). All amounts due
under this Section 12.05 shall be payable within ten Business Days after written
demand therefor to the Company, accompanied by a reasonably detailed calculation
thereof. The agreements in this Section shall survive the resignation of the
Administrative Agent, the replacement of any Holder, the termination of the
Commitments and the repayment, satisfaction or discharge of all the Obligations.

12.06 Payments Set Aside. To the extent that any payment by or on behalf of the
Company is made to the Administrative Agent or any Holder, or the Administrative
Agent or any Holder exercises its right of set-off, and such payment or the
proceeds of such set-off or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Administrative Agent or such
Holder in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Holder severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect.

12.07 Successors and Assigns.

(a) Conditions to Assignment by Holders. Except as provided herein, each Holder
may assign all or any portion of its Term Loans or Term Notes and other rights
and obligations to any Eligible Holder; provided that (i) each of the
Administrative Agent and, unless an Event of Default shall have occurred and be
continuing, the Company shall have given its prior written consent to such
assignment, which consents will not be unreasonably withheld or delayed,
provided that the consent of the Company or the Administrative Agent shall not
be required in connection with any assignment by a Holder of all or any portion
of its Commitment, Notes or other rights or obligations to (x) an existing
Holder or (y) an Affiliate or Fund Affiliate of such Holder, so long as, if such
Holder, Affiliate or Fund Affiliate is (or would, if it were a Holder, be) a
Foreign Holder, such Person has complied with the requirements set forth in
Section 12.15 (as though it were a Holder) prior to such assignment, provided,
further, that the otherwise required prior written consent of the Company to an
assignment will be deemed to have been given if the Company has not objected to
such assignment within ten (10) Business Days after a written request for such
consent, (ii) in no event shall a Holder assign any portion of its Term Loans or
Term Note to (A) any Disqualified Institution, (B) the Company, any Subsidiary
Controlled by the Company or any Managed Fund, (C) any Defaulting Holder or any
of its Subsidiaries or any Person who, upon becoming a Holder hereunder, would
constitute any of the foregoing Persons described in this clause (C) or (D) a
natural person, (iii) each such assignment shall be in a minimum principal
amount of $1,000,000 (or, if less, the Commitment of such Holder) or such lesser
amount consented to by the Administrative Agent, and (iv) the parties to such
assignment shall execute and deliver to the Administrative Agent, for recording
in the Register (as hereinafter defined), an Assignment and Assumption. Upon
each such recordation, the assigning Holder agrees to pay to the Administrative
Agent a registration fee in the sum of $3,500. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Assumption, which effective date shall be at least five
(5) Business Days after the execution thereof, (1) the assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and Assumption,
have the rights and obligations of a Holder hereunder, and (2) the assigning
Holder shall, to the extent provided in such Assignment and Assumption and upon
payment to the Administrative Agent of the registration fee referred to in this
Section 12.07(a), be released from its obligations under this Agreement.

 

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(b) Certain Representations and Warranties Limitations; Covenants. By executing
and delivering an Assignment and Assumption, the parties to the assignment
thereunder confirm to and agree with each other and the other parties hereto as
follows:

(i) other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of any
adverse claim, the assigning Holder makes no representation or warranty, express
or implied, 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, the other Note Documents or any other instrument or
document furnished pursuant hereto or the attachment, perfection or priority of
any security interest or mortgage,

(ii) the assigning Holder makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company and its
Subsidiaries or any other Person primarily or secondarily liable in respect of
any of the Obligations, or the performance or observance by the Note Parties or
any other Person primarily or secondarily liable in respect of any of the
Obligations of any of its obligations under this Agreement or any of the other
Note Documents or any other instrument or document furnished pursuant hereto or
thereto;

(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the most recent financial statements referred to in
Section 5.05 and Section 6.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Assumption;

(iv) such assignee will, independently and without reliance upon the assigning
Holder, the Administrative Agent or any other Holder 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 the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Note Documents as are delegated to the Administrative Agent by the
terms hereof or thereof, together with such powers as are reasonably incidental
thereto;

(vi) such assignee agrees that it will perform in accordance with this Agreement
and the other Note Documents all of the obligations that by the terms thereof
are required to be performed by it as a Holder;

(vii) such assignee represents and warrants that it is legally authorized to
enter into such Assignment and Assumption; and

(viii) such assignee acknowledges that it has complied with the provisions of
Section 12.15 to the extent applicable; and

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Company, shall maintain at the Administrative Agent’s Office a copy
of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Holders, and of the principal
amounts of Term Loans owing to, each Holder pursuant to the terms hereof from
time

 

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to time (the “Register”). The entries in the Register shall be conclusive absent
manifest error, and the Company, the Administrative Agent and the Holders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Holder hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Company and any Holder, at any reasonable time and from time to time upon
reasonable prior notice.

(d) New Notes. Upon its receipt of an Assignment and Assumption executed by the
parties to such assignment, the Administrative Agent shall (i) record the
information contained therein in the Register and (ii) give prompt notice
thereof to the Company and the Holders (other than the assigning Holder).
Promptly after the effectiveness of any assignment by any Holder of all or any
portion of such Holder’s Loans, the Company (at its expense) shall execute and
deliver (x) to the assignee Holder, a Note in the amount of the Loans assigned
to such assignee Holder and (y) to the assignor Holder, a Note in the amount, if
any, of its remaining Loans.

(e) Participations. Anything contained herein to the contrary notwithstanding,
any Holder may, from time to time and at any time, sell participations in all or
any portion of such Holder’s rights and obligations under this Agreement
(including all of a portion of its Term Commitments and the related outstanding
principal amount of Term Loans owing to it) to any financial institution that
invests in loans; provided that the terms of any such participation shall not
entitle the participant to direct such Holder as to the manner in which it votes
in connection with any amendment, supplement or other modification of this
Agreement or any waiver or consent with respect to any departure from the terms
hereof, in each case unless and to the extent that the subject matter thereof is
one as to which the consent of all Holders is required in order to approve the
same.

(f) Miscellaneous Assignment Provisions. Any assigning Holder shall retain its
rights to be indemnified pursuant to Section 12.05 with respect to any claims or
actions arising prior to the date of such assignment. Anything contained in this
Section 12.07 to the contrary notwithstanding, any Holder may at any time pledge
or assign a security interest in all or any portion of its interest and rights
under this Agreement (including all or any portion of its Notes) to secure any
obligations of such Holder, including without limitation, obligations to any of
the twelve Federal Reserve Banks organized under §4 of the Federal Reserve Act,
12 U.S.C. §341; provided that no such pledge or assignment of a security
interest shall release a Holder from any of its obligations hereunder or
substitute any such pledgee or assignee for such Holder as a party hereto. Any
foreclosure or similar action by any Person in respect of such pledge or
assignment shall be subject to the other provisions of this Section 12.07. No
such pledge or the enforcement thereof shall release the pledgor Holder from its
obligations hereunder or under any of the other Note Documents, provide any
voting rights hereunder to the pledgee thereof, or affect any rights or
obligations of the Company or the Administrative Agent hereunder, including any
of the provisions of Section 12.08 hereof.

(g) Assignment by the Company. The Company shall not assign or transfer any of
its rights or obligations under this Agreement or any of the other Note
Documents without the prior written consent of the Administrative Agent and each
of the Holders.

12.08 Confidentiality. Each of the Administrative Agent and the Holders agrees
(i) to maintain the confidentiality of the Information (as defined below) and
(ii) to use such Information exclusively for the purposes of administering and
enforcing its rights under the Note Documents (the “Confidential Use”), except
that Information may be disclosed (a) to its and its Affiliates’ directors,
officers, employees and agents, including accountants, legal counsel and other
advisors (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information, its
Confidential Use and instructed to keep such Information confidential and to use
it only for Confidential Uses), (b) to the extent requested by any regulatory
authority having authority over such Person (including any internal or external
self-

 

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regulatory authority), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
hereto, (e) in connection with the exercise of any remedies hereunder or under
any other Note Document or any action or proceeding relating to this Agreement
or any other Note Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to any assignee of or participant in, or prospective
assignee of or participant in, any of its rights or obligations under this
Agreement or under any other Indebtedness or securities of the Company or its
Affiliates, (g) with the consent of the Company or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of
this Section or (y) becomes available to the Administrative Agent or any Holder
on a nonconfidential basis from a source other than the Company that did not
result from the breach of a confidentiality provision with Company.

For purposes of this Section, “Information” means all information received from
the Company relating to the Company or the Business, other than any such
information that is available to the Administrative Agent or any Holder on a
nonconfidential basis prior to disclosure by the Company. Any Person required to
maintain the confidentiality of Information as provided in this Section 12.08
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

12.09 Set-off. In addition to any rights and remedies of the Holders provided by
law, upon the occurrence and during the continuance of any Event of Default,
each Holder is authorized at any time and from time to time, without prior
notice to the Company, any such notice being waived by the Company to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Holder to or for the credit or
the account of the Company against any and all Obligations owing to such Holder
hereunder or under any other Note Document, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Holder shall
have made demand under this Agreement or any other Note Document and although
such Obligations may be denominated in a currency different from that of the
applicable deposit or indebtedness. Each Holder agrees promptly to notify the
Company and the Administrative Agent after any such set-off and application made
by such Holder; provided, however, that the failure to give such notice shall
not affect the validity of such set-off and application.

12.10 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Note Document, the interest paid or agreed to be paid under the
Note Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Holder shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the unpaid outstanding principal amount
of the Loans or, if it exceeds such unpaid outstanding principal amount,
refunded to the Company. In determining whether the interest contracted for,
charged, or received by the Administrative Agent or a Holder exceeds the Maximum
Rate, such Person may, to the extent permitted by applicable Law,
(a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.

12.11 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

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12.12 Integration. This Agreement, together with the other Note Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter. In the event of any conflict between the provisions of
this Agreement and those of any other Note Document, the provisions of this
Agreement shall control; provided that the inclusion of supplemental rights or
remedies in favor of the Administrative Agent or the Holders in any other Note
Document shall not be deemed a conflict with this Agreement. Each Note Document
was drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.

12.13 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Note Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Holder, regardless of any investigation made by
the Administrative Agent or any Holder or on their behalf and notwithstanding
that the Administrative Agent or any Holder may have had notice or knowledge of
any Default or Event of Default at the time any Loan is made, and shall continue
in full force and effect as long as any Loan or any other Obligation hereunder
shall remain unpaid or unsatisfied.

12.14 Severability. If any provision of this Agreement or the other Note
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Note Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

12.15 Tax Forms.

(a) (i) Each Holder that is not a “United States person” within the meaning of
Section 7701(a)(30) of the Code (a “Foreign Holder”) shall deliver to the
Administrative Agent, prior to receipt of any payment subject to withholding
under the Code (or upon accepting an assignment of an interest herein), two duly
signed completed copies of either IRS Form W-8BEN or any successor thereto
(relating to such Foreign Holder and entitling it to an exemption from
withholding tax on all payments to be made to such Foreign Holder by the Company
pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto
(relating to all payments to be made to such Foreign Holder by the Company
pursuant to this Agreement) or, in the case of a Foreign Holder claiming
exemption from U.S. withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of “portfolio interest,” an IRS Form W-8BEN or any
successor thereto (and, if such Foreign Holder delivers an IRS Form W-8, a
certificate representing that such Foreign Holder is not a bank for purposes of
Section 881(c)(3)(A) of the Code, is not a 10-percent shareholder (within the
meaning of Section 871(h)(3)(B) of the Code) of the Company and is not a
controlled foreign corporation related to Company (within the meaning of
Section 864(d)(4) of the Code)) claiming complete exemption from U.S.
withholding tax. Thereafter and from time to time, each such Foreign Holder
shall (A) promptly submit to the Administrative Agent such additional duly
completed and signed copies of one of such forms (or such successor forms as
shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws and
regulations to avoid, or such evidence as is satisfactory to the Company and the
Administrative Agent of any available exemption from United States withholding
taxes in respect of all payments to be made to such Foreign Holder by the
Company pursuant to this Agreement, (B) promptly notify the Administrative Agent
of any change in circumstances

 

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which would modify or render invalid any claimed exemption, and (C) take such
steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Holder, and as may be reasonably necessary to avoid any
requirement of applicable Laws that the Company make any deduction or
withholding for taxes from amounts payable to such Foreign Holder.

(ii) Each Foreign Holder, to the extent it does not act or ceases to act for its
own account with respect to any portion of any sums paid or payable to such
Holder under any of the Note Documents (for example, in the case of a typical
participation by such Holder), shall deliver to the Administrative Agent on the
date when such Foreign Holder ceases to act for its own account with respect to
any portion of any such sums paid or payable, and at such other times as may be
necessary in the determination of the Administrative Agent (in the reasonable
exercise of its discretion), (A) two duly signed completed copies of the forms
or statements required to be provided by such Holder as set forth above, to
establish the portion of any such sums paid or payable with respect to which
such Holder acts for its own account that is not subject to U.S. withholding
tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or any
successor thereto), together with any information such Holder chooses to
transmit with such form, and any other certificate or statement of exemption
required under the Code, to establish that such Holder is not acting for its own
account with respect to a portion of any such sums payable to such Holder.

(iii) The Company shall not be required to pay any additional amount to any
Foreign Holder under Section 3.01: (A) with respect to any Taxes required to be
deducted or withheld on the basis of the information, certificates or statements
of exemption such Holder transmits with an IRS Form W-8IMY pursuant to this
Section 12.15(a) or (B) if such Holder shall have failed to satisfy the
foregoing provisions of this Section 12.15(a); provided that if such Holder
shall have satisfied the requirement of this Section 12.15(a) on the date such
Holder became a Holder or ceased to act for its own account with respect to any
payment under any of the Note Documents, nothing in this Section 12.15(a) shall
relieve the Company of its obligation to pay any amounts pursuant to
Section 3.01 in the event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Holder is no longer
properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Holder or other Person for the
account of which such Holder receives any sums payable under any of the Note
Documents is not subject to withholding.

(iv) The Administrative Agent may, without reduction, withhold any Taxes
required to be deducted and withheld from any payment under any of the Note
Documents with respect to which the Company is not required to pay additional
amounts under this Section 12.15(a).

(b) Upon the request of the Administrative Agent, each Holder that is a “United
States person” within the meaning of Section 7701(a)(30) of the Code shall
deliver to the Administrative Agent two duly signed completed copies of IRS Form
W-9. If such Holder fails to deliver such forms, then the Administrative Agent
may withhold from any interest payment to such Holder an amount equivalent to
the applicable back-up withholding tax imposed by the Code, without reduction.

(c) If any Governmental Authority asserts that the Administrative Agent did not
properly withhold or backup withhold, as the case may be, any tax or other
amount from payments made to or for the account of any Holder, such Holder shall
indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses (including
Attorney Costs) of the Administrative Agent. The obligation of the Holders under
this Section shall survive the termination of the Commitments, repayment of all
other Obligations hereunder and the resignation of the Administrative Agent.

 

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12.16 Governing Law; Consent to Jurisdiction.

(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED TN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH
HOLDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

(b) THE PARTIES HERETO HEREBY CONSENT, UNCONDITIONALLY AND IRREVOCABLY, TO THE
NONEXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS OF THE STATE OF NEW
YORK AND WAIVE ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT
TO ANY PROCEEDING RELATING TO ANY MATTER, CLAIM OR DISPUTE ARISING UNDER THIS
AGREEMENT, THE OTHER NOTE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN
CONTRACT, TORT, EQUITY OR OTHERWISE OTHER THAN PURSUIT OF A JUDGMENT ON A NOTE
WHERE SUIT IS ALSO BROUGHT IN THE STATE WHERE ANY COLLATERAL IS LOCATED TO TAKE
JURISDICTION OF SUCH COLLATERAL. THE COMPANY FURTHER CONSENTS, GENERALLY,
UNCONDITIONALLY AND IRREVOCABLY, TO THE NONEXCLUSIVE JURISDICTION OF THE STATE
AND FEDERAL COURTS OF EACH STATE WHERE ANY COLLATERAL IS LOCATED IN RESPECT OF
ANY PROCEEDING RELATING TO ANY MATTER, CLAIM OR DISPUTE ARISING WITH RESPECT TO
SUCH COLLATERAL INCLUDING BUT NOT LIMITED TO FORECLOSURES, AND THE COMPANY
AGREES THAT ADMINISTRATIVE AGENT AND HOLDERS SHALL HAVE THE RIGHT TO BRING ANY
ACTION OR PROCEEDING AGAINST THE COMPANY OR ITS PROPERTY IN THE COURTS OF ANY
OTHER JURISDICTION WHICH THE ADMINISTRATIVE AGENT OR HOLDERS DEEM NECESSARY OR
APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE
OBLIGATIONS OR TO OTHERWISE ENFORCE ITS RIGHTS AGAINST THE COMPANY’S PROPERTY.
THE COMPANY FURTHER IRREVOCABLY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON IT AND CONSENTS TO THE SERVICE OF PROCESS, GENERALLY, UNCONDITIONALLY AND
IRREVOCABLY, AT THE ADDRESSES SET FORTH HEREIN IN CONNECTION WITH ANY OF THE
AFORESAID PROCEEDINGS IN ACCORDANCE WITH THE RULES APPLICABLE TO SUCH
PROCEEDINGS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY HEREBY
IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW HAVE OR HAVE IN THE FUTURE TO
THE LAYING OF VENUE IN RESPECT OF ANY OF THE AFORESAID PROCEEDINGS BROUGHT IN
THE COURTS REFERRED TO ABOVE AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT AND THE HOLDERS TO SERVE PROCESS IN ANY MANNER PERMITTED BY
LAW OR TO COMMENCE PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY
JURISDICTION. To the extent that the Company has or may hereafter acquire any
immunity from the jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to the Company or the Company’s
property, the Company hereby irrevocably waives such immunity in respect of its
obligations under this Agreement.

 

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12.17 Waiver of Right to Trial by Jury and Other Rights. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES THE RIGHT TO TRIAL BY JURY AND ANY RIGHT OR CLAIM TO ANY
CONSEQUENTIAL DAMAGES, EXEMPLARY DAMAGES, EXPECTANCY DAMAGES, SPECIAL DAMAGES
AND GENERAL DAMAGES IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF ANY PARTY OR ANY
EXERCISE BY ANY PARTY OF ITS RESPECTIVE RIGHTS HEREUNDER OR IN ANY WAY RELATING
TO ANY LOAN, ANY NOTE OR ANY PROPERTY (INCLUDING ANY ACTION TO RESCIND OR CANCEL
THIS AGREEMENT, AND ANY CLAIM OR DEFENSE ASSERTING THAT THIS AGREEMENT WAS
FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A
MATERIAL INDUCEMENT FOR THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT AND TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREUNDER.

12.18 Time of the Essence. For all payments to be made and all obligations to be
performed under the Note Documents, time is of the essence.

12.19 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER NOTE DOCUMENTS EMBODY THE
FINAL, ENTIRE AGREEMENT BETWEEN THE COMPANY, THE ADMINISTRATIVE AGENT AND THE
HOLDERS AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS
AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER
HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS BETWEEN ANY PARTIES
HERETO. EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THERE ARE NO ORAL
AGREEMENTS BETWEEN THE COMPANY AND ANY OTHER PARTY HERETO. EACH OF THE PARTIES
HERETO UNDERSTANDS AND AGREES THAT ORAL AGREEMENTS AND ORAL COMMITMENTS TO LOAN
MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE. THIS AGREEMENT AND THE OTHER NOTE DOCUMENTS REPRESENT THE ENTIRE
UNDERSTANDING OF THE ADMINISTRATIVE AGENT, THE HOLDERS AND THE COMPANY WITH
RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.

12.20 Amendment and Restatement; Continuation. This Agreement amends and
restates in its entirety the Existing Note Agreement, provided that (a) nothing
herein shall impair or adversely affect the continuation of the liability and
obligations of the Company under the Existing Note Agreement, as amended hereby,
and (b) except as otherwise provided in Section 2.01(a)(ii), nothing herein
shall be construed to constitute payment of, or impair, limit, cancel or
extinguish, or constitute a novation in respect of, the Indebtedness and other
obligations and liabilities of the Company under the Existing Note Agreement, as
amended hereby.

12.21 Departing Holder. The Departing Holder hereby consents to the amendment
and restatement of the Existing Note Agreement by this Agreement. The parties
hereto hereby acknowledge and agree that (a) the Departing Holder is entering
into this Agreement solely for purposes of Sections 2.01(a)(i) and 2.01(a)(ii)
and this Section 12.21 and shall not be deemed to be bound by any term or
provision of this Agreement other than Sections 2.01(a)(i) and 2.01(a)(ii) and
this Section 12.21, (b) in no event shall the Departing Holder constitute a
Holder under or for purposes of this Agreement or any other Note Document and
(c) all obligations of the Company under the Existing Note Agreement which by
the terms thereof survive the repayment, satisfaction and discharge of the
Obligations (as defined in the

 

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Existing Note Agreement) shall survive the repayment by the Company of the
Existing Term Loan of the Departing Holder and continue in effect for the
benefit of the Departing Holder in accordance with the Existing Note Agreement.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

NEWSTAR FINANCIAL, INC. By:  

/s/ JOHN KIRBY BRAY

  Name:   John K. Bray   Title:   Chief Financial Officer

FORTRESS CREDIT CORP.,

as Administrative Agent

By:  

/s/ CONSTANTINE M. DAKOLIAS

  Name:   Constantine M. Dakolias   Title:   President

FORTRESS CREDIT OPPORTUNITIES I LP,

as a Holder and a Continuing Holder

By:   Fortress Credit Opportunities I GP LLC, its general partner By:  

/s/ CONSTANTINE M. DAKOLIAS

  Name:   Constantine M. Dakolias   Title:   President

FORTRESS CREDIT FUNDING III LP,

as Holder and a Continuing Holder

By:   Fortress Credit Funding III GP LLC, its general partner By:  

/s/ CONSTANTINE M. DAKOLIAS

  Name:   Constantine M. Dakolias   Title:   President

FORTRESS CREDIT FUNDING V LP,

as Holder

By:   Fortress Credit Funding V GP LLC, its general partner By:  

/s/ CONSTANTINE M. DAKOLIAS

  Name:   Constantine M. Dakolias   Title:   President

[Signature Page to Second Amended and Restated Note Agreement]

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

DRAWBRIDGE SPECIAL OPPORTUNITIES FUND LP as a Holder By:   Drawbridge Special
Opportunities GP LLC,   its general partner By:  

/s/ CONSTANTINE M. DAKOLIAS

  Name:   Constantine M. Dakolias   Title:   President

FORTRESS CREDIT FUNDING IV LP,

as a Departing Holder

By:   Fortress Credit Funding IV GP LLC, its general partner By:  

/s/ CONSTANTINE M. DAKOLIAS

  Name:   Constantine M. Dakolias   Title:   President

 

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