Exhibit 10.1

EXECUTION VERSION

 

 

 

SENIOR SECURED

REVOLVING CREDIT AGREEMENT

dated as of

June 16, 2014

among

FIDUS INVESTMENT CORPORATION,

as Borrower,

The Lenders Party Hereto

and

ING CAPITAL LLC

as Administrative Agent,

Arranger and Bookrunner

 

 

 

 

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TABLE OF CONTENTS

 

          Page   ARTICLE I    DEFINITIONS   

SECTION 1.01.

   Defined Terms      1   

SECTION 1.02.

   Classification of Loans and Borrowings      27   

SECTION 1.03.

   Terms Generally      27   

SECTION 1.04.

   Accounting Terms; GAAP      28    ARTICLE II    THE CREDITS   

SECTION 2.01.

   The Commitments      28   

SECTION 2.02.

   Loans and Borrowings      28   

SECTION 2.03.

   Requests for Borrowings      29   

SECTION 2.04.

   Funding of Borrowings      30   

SECTION 2.05.

   Interest Elections      31   

SECTION 2.06.

   Termination, Reduction or Increase of the Commitments      32   

SECTION 2.07.

   Repayment of Loans; Evidence of Debt      35   

SECTION 2.08.

   Prepayment of Loans      36   

SECTION 2.09.

   Fees      37   

SECTION 2.10.

   Interest      38   

SECTION 2.11.

   Eurocurrency Borrowing Provisions      39   

SECTION 2.12.

   Increased Costs      40   

SECTION 2.13.

   Break Funding Payments      41   

SECTION 2.14.

   Taxes      42   

SECTION 2.15.

   Payments Generally; Pro Rata Treatment: Sharing of Set-offs      46   

SECTION 2.16.

   Defaulting Lenders      48   

SECTION 2.17.

   Mitigation Obligations; Replacement of Lenders      48    ARTICLE III   
REPRESENTATIONS AND WARRANTIES   

SECTION 3.01.

   Organization; Powers      49   

SECTION 3.02.

   Authorization; Enforceability      49   

SECTION 3.03.

   Governmental Approvals; No Conflicts      50   

SECTION 3.04.

   Financial Condition; No Material Adverse Effect      50   

SECTION 3.05.

   Litigation      51   

SECTION 3.06.

   Compliance with Laws and Agreements      51   

SECTION 3.07.

   Taxes      51   

SECTION 3.08.

   ERISA      52   

 

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SECTION 3.09.

   Disclosure      52   

SECTION 3.10.

   Investment Company Act; Margin Regulations      52   

SECTION 3.11.

   Material Agreements and Liens      53   

SECTION 3.12.

   Subsidiaries and Investments      53   

SECTION 3.13.

   Properties      54   

SECTION 3.14.

   Solvency      54   

SECTION 3.15.

   Affiliate Agreements      54   

SECTION 3.16.

   No Default      54   

SECTION 3.17.

   Use of Proceeds      54   

SECTION 3.18.

   Security Documents      54   

SECTION 3.19.

   Compliance with Sanctions      55   

SECTION 3.20.

   Anti-Money Laundering Program      55   

SECTION 3.21.

   Capitalization      55   

SECTION 3.22.

   [Intentionally Omitted]      55   

SECTION 3.23.

   [Intentionally Omitted]      55   

SECTION 3.24.

   Foreign Corrupt Practices Act      56    ARTICLE IV    CONDITIONS   

SECTION 4.01.

   Effective Date      56   

SECTION 4.02.

   Each Credit Event      59    ARTICLE V    AFFIRMATIVE COVENANTS   

SECTION 5.01.

   Financial Statements and Other Information      60   

SECTION 5.02.

   Notices of Material Events      63   

SECTION 5.03.

   Existence; Conduct of Business      63   

SECTION 5.04.

   Payment of Obligations      63   

SECTION 5.05.

   Maintenance of Properties; Insurance      63   

SECTION 5.06.

   Books and Records; Inspection and Audit Rights      64   

SECTION 5.07.

   Compliance with Laws and Agreements      64   

SECTION 5.08.

   Certain Obligations Respecting Subsidiaries; Further Assurances      65   

SECTION 5.09.

   Use of Proceeds      67   

SECTION 5.10.

   Status of RIC and BDC      68   

SECTION 5.11.

   Investment Policies      68   

SECTION 5.12.

   Portfolio Valuation and Diversification Etc.      68   

SECTION 5.13.

   Calculation of Borrowing Base      74   

SECTION 5.14

   Taxes      84   

 

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ARTICLE VI    NEGATIVE COVENANTS   

SECTION 6.01.

   Indebtedness      85   

SECTION 6.02.

   Liens      86   

SECTION 6.03.

   Fundamental Changes      87   

SECTION 6.04.

   Investments      88   

SECTION 6.05.

   Restricted Payments      89   

SECTION 6.06.

   Certain Restrictions on Subsidiaries      90   

SECTION 6.07.

   Certain Financial Covenants      90   

SECTION 6.08.

   Transactions with Affiliates      91   

SECTION 6.09.

   Lines of Business      91   

SECTION 6.10.

   No Further Negative Pledge      91   

SECTION 6.11.

   Modifications of Indebtedness and Affiliate Agreements      92   

SECTION 6.12.

   Payments of Longer-Term Indebtedness      92   

SECTION 6.13.

   Modification of Investment Policies      92   

SECTION 6.14.

   SBIC Guarantee      92   

SECTION 6.15.

   Derivative Transactions      93    ARTICLE VII    EVENTS OF DEFAULT   
ARTICLE VIII   

THE ADMINISTRATIVE AGENT

  

SECTION 8.01.

   Appointment of the Administrative Agent      96   

SECTION 8.02.

   Capacity as Lender      96   

SECTION 8.03.

   Limitation of Duties; Exculpation      96   

SECTION 8.04.

   Reliance      97   

SECTION 8.05.

   Sub-Agents      97   

SECTION 8.06.

   Resignation; Successor Administrative Agent      97   

SECTION 8.07.

   Reliance by Lenders      98   

SECTION 8.08.

   Modifications to Loan Documents      98    ARTICLE IX    MISCELLANEOUS   

SECTION 9.01.

   Notices; Electronic Communications      99   

SECTION 9.02.

   Waivers; Amendments      100   

SECTION 9.03.

   Expenses; Indemnity; Damage Waiver      103   

SECTION 9.04.

   Successors and Assigns      104   

SECTION 9.05.

   Survival      109   

 

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SECTION 9.06.

   Counterparts; Integration; Effectiveness; Electronic Execution      109   

SECTION 9.07.

   Severability      109   

SECTION 9.08.

   Right of Setoff      109   

SECTION 9.09.

   Governing Law; Jurisdiction; Etc.      110   

SECTION 9.10.

   WAIVER OF JURY TRIAL      110   

SECTION 9.11.

   Judgment Currency      111   

SECTION 9.12.

   Headings      111   

SECTION 9.13.

   Treatment of Certain Information; Confidentiality      111   

SECTION 9.14.

   USA PATRIOT Act      113   

SECTION 9.15.

   Termination      113   

 

SCHEDULE 1.01(a) -    Approved Dealers and Approved Pricing Services SCHEDULE
1.01(b) -    Commitments SCHEDULE 1.01(c)-    Industry Classification Groups
SCHEDULE 1.01(d) -    Eligibility Criteria SCHEDULE 3.11(a) -    Material
Agreements SCHEDULE 3.11(b) -    Liens SCHEDULE 3.12(a) -    Subsidiaries
SCHEDULE 3.12(b) -    Investments SCHEDULE 3.21 -    Capitalization SCHEDULE
6.08 -    Certain Affiliate Transactions

 

EXHIBIT A    -    Form of Assignment and Assumption EXHIBIT B    -    Form of
Borrowing Base Certificate EXHIBIT C    -    Form of Promissory Note EXHIBIT D
   -    Form of Borrowing Request

 

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SENIOR SECURED REVOLVING CREDIT AGREEMENT dated as of June 16, 2014 (this
“Agreement”), among FIDUS INVESTMENT CORPORATION, a Maryland corporation (the
“Borrower”), the LENDERS party hereto, and ING CAPITAL LLC, as Administrative
Agent.

WHEREAS, the Borrower has requested that the Lenders (as defined herein) extend
credit to the Borrower from time to time pursuant to the commitments as set
forth herein and the Lenders have agreed to extend such credit upon the terms
and conditions hereof.

NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have
the meanings specified below and the terms defined in Section 5.13 have the
meanings assigned thereto in such section:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans constituting such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

“Accretive Value” shall mean, with respect to Preferred Stock, the dollar amount
equal to the accretion to the Liquidation Preference, including accrued or
declared and unpaid dividends, dividends paid in kind or other amounts
(including any multiple payable on capital) otherwise owing to the holder
thereof in excess of the initial Liquidation Preference.

“Adjusted Borrowing Base” means the Borrowing Base minus the aggregate amount of
Cash and Cash Equivalents included in the Borrowing Base.

“Adjusted Covered Debt Balance” means, on any date, the aggregate Covered Debt
Amount on such date minus the aggregate amount of Cash and Cash Equivalents
included in the Borrowing Base.

“Adjusted LIBO Rate” means, for the Interest Period for any Eurocurrency
Borrowing, an interest rate per annum (rounded upwards, if necessary, to the
next 1/16 of 1%) equal to the greater of (i) (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate for such Interest Period and
(ii) zero.

“Administrative Agent” means ING, in its capacity as administrative agent for
the Lenders hereunder.

“Administrative Agent’s Account” means an account designated by the
Administrative Agent in a notice to the Borrower and the Lenders.

 

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“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Advance Rate” has the meaning assigned to such term in Section 5.13.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. Anything
herein to the contrary notwithstanding, the term “Affiliate” of an Obligor shall
not include any Person that constitutes an Investment held by any Obligor in the
ordinary course of business.

“Affiliate Agreements” means, collectively, (a) the Investment Advisory and
Management Agreement, dated on or about April 29, 2011, by and between the
Borrower and the Investment Advisor, and (b) the Administrative Agreement, dated
on or about April 29, 2011, by and between the Borrower and the Investment
Advisor.

“Affiliate Investment” means any Investment in a Person in which the Borrower or
any of its Subsidiaries owns or controls more than 25% of the Equity Interests.

“Agency Account” has the meaning assigned to such term in Section 5.08(c)(v).

“Agreement” has the meaning assigned to such term in the preamble of this
Agreement.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate for such day plus 1/2 of 1% and (c) the LIBO Rate for deposits in U.S.
dollars for a period of three (3) months plus 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or
such LIBO Rate shall be effective from and including the effective date of such
change in the Prime Rate, the Federal Funds Effective Rate, or such LIBO Rate,
as the case may be.

“Applicable Commitment Fee Rate” means, with respect to any day during the
period commencing on the Effective Date and ending on the date the Commitments
are terminated, a rate per annum equal to (x) 1.00%, if the utilized portion of
the aggregate Commitments as of the close of business on such day (after giving
effect to Borrowings, prepayments and Commitment reductions on such day) is less
than or equal to an amount equal to thirty-five percent (35%) of such aggregate
Commitments and (y) 0.50% if the utilized portion of the aggregate Commitments
as of the close of business on such day (after giving effect to Borrowings,
prepayments and Commitment reductions on such day) is greater than an amount
equal to thirty-five percent (35%) of such aggregate Commitments.

For purposes of determining the Applicable Commitment Fee Rate, the Commitments
shall be deemed to be utilized to the extent of the outstanding Loans of all
Lenders.

 

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“Applicable External Value” shall mean with respect to any Unquoted Investment,
the most recent Borrower External Unquoted Value determined with respect to such
Unquoted Investment; provided, however, if an IVP External Unquoted Value with
respect to such Unquoted Investment is more recent than such Borrower External
Unquoted Value, then the term “Applicable External Value” shall mean the most
recent IVP External Unquoted Value obtained with respect to such Unquoted
Investment.

“Applicable Margin” means, (a) with respect to any ABR Loan, 2.50% per annum;
and (b) with respect to any Eurocurrency Loan, 3.50% per annum.

“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitments. If the Commitments
have terminated or expired, the Applicable Percentages shall be determined based
upon the Commitments most recently in effect, giving effect to any assignments
pursuant to Section 9.04(b).

“Approved Dealer” means (a) in the case of any Eligible Portfolio Investment
that is not a U.S. Government Security, a bank or a broker-dealer registered
under the Securities Exchange Act of 1934 of nationally recognized standing or
an Affiliate thereof as set forth on Schedule 1.01(a), (b) in the case of a U.S.
Government Security, any primary dealer in U.S. Government Securities as set
forth on Schedule 1.01(a), or (c) any other bank or broker-dealer acceptable to
the Administrative Agent in its reasonable determination.

“Approved Pricing Service” means (a) a pricing or quotation service as set forth
in Schedule 1.01(a) or (b) any other pricing or quotation service (i) approved
by the Board of Directors of the Borrower, (ii) designated in writing by the
Borrower to the Administrative Agent (which designation shall be accompanied by
a copy of a resolution of the Board of Directors of the Borrower that such
pricing or quotation service has been approved by the Borrower), and
(iii) acceptable to the Administrative Agent in its reasonable determination.

“Approved Third-Party Appraiser” means any Independent nationally recognized
third-party appraisal firm (a) designated by the Borrower in writing to the
Administrative Agent (which designation shall be accompanied by a copy of a
resolution of the Board of Directors of the Borrower that such firm has been
approved by the Borrower for purposes of assisting the Board of Directors of the
Borrower in making valuations of portfolio assets to determine the Borrower’s
compliance with the applicable provisions of the Investment Company Act) and
(b) reasonably acceptable to the Administrative Agent, provided that, in each
case to the extent such Approved Third-Party Appraiser requests or requires a
non-reliance letter, confidentiality agreement or similar agreement prior to
allowing the Administrative Agent to review the written valuation report of the
Approved Third-Party Appraiser referred to in the first sentence of
Section 5.12(b)(ii)(B)(y), such Administrative Agent and such Approved
Third-Party Appraiser shall have entered into a letter or agreement on customary
and reasonable terms. Subject to the foregoing, it is understood and agreed that
Houlihan Lokey, Duff & Phelps LLC, Murray, Devine and Company, Lincoln Partners
Advisors, LLC, Valuation Research Corporation and their respective Affiliates
that provide valuation services are acceptable to the Administrative Agent
solely to the extent they are not serving as the Independent Valuation Provider.

 

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“Asset Coverage Ratio” means, on a consolidated basis (and without duplication)
for Borrower and its Subsidiaries, the ratio which the value of total assets,
less all liabilities and indebtedness not represented by Senior Securities,
bears to the aggregate amount of Senior Securities representing indebtedness of
the Borrower and its Subsidiaries plus the aggregate of the involuntary
liquidation preference of any Equity Interests of the Borrower or any if its
Subsidiaries that are Senior Securities (all as determined pursuant to the
Investment Company Act and any orders of the SEC issued to the Borrower
thereunder). For clarity, the calculation of the Asset Coverage Ratio shall be
made in accordance with any exemptive order issued by the Securities and
Exchange Commission under Section 6(c) of the Investment Company Act relating to
the exclusion of any Indebtedness of any SBIC Subsidiary from the definition of
Senior Securities only so long as (a) such order is in effect, and (b) no
obligations have become due and owing pursuant to the terms of any Permitted
SBIC Guarantee.

“Asset Sale” means a sale, lease or sub lease (as lessor or sublessor), sale and
leaseback, assignment, conveyance, transfer or other disposition to, or any
exchange of property with, any Person, in one transaction or a series of
transactions, of all or any part of any Obligor’s assets or properties of any
kind, whether real, personal, or mixed and whether tangible or intangible,
whether now owned or hereafter acquired; provided, however, the term “Asset
Sale” as used in this Agreement shall not include the disposition of Portfolio
Investments originated by the Borrower and promptly transferred to an SBIC
Subsidiary pursuant to the terms of Section 6.03(e) hereof.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04(b)), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.

“Assuming Lender” has the meaning assigned to such term in Section 2.06(f).

“Bank Loan” has the meaning assigned to such term in Section 5.13.

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

“Board of Directors” means, with respect to any person, (a) in the case of any
corporation, the board of directors of such person, (b) in the case of any
limited liability company, the board of managers of such person, or if there is
none, the Board of Directors of the managing member of such Person, (c) in the
case of any partnership, the Board of Directors of the general partner of such
person and (d) in any other case, the functional equivalent of the foregoing.

“Borrower” has the meaning assigned to such term in the preamble to this
Agreement.

“Borrower Internal Policy Unquoted Value” shall mean, with respect to any
Unquoted Investment that is not a Borrower Tested Asset that the Borrower has
requested an

 

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Approved Third-Party Appraiser to assist the Board of Directors of the Borrower
in determining the fair market value of such Unquoted Investment as of the
applicable Valuation Testing Date, the value determined by such Approved Third
Party Appraiser.

“Borrowing” means Loans of the same Type made, converted or continued on the
same date and, in the case of Eurocurrency Loans, that have the same Interest
Period.

“Borrowing Base” has the meaning assigned to such term in Section 5.13.

“Borrowing Base Certificate” means a certificate of a Financial Officer of the
Borrower, substantially in the form of Exhibit B and appropriately completed.

“Borrowing Base Deficiency” means, at any date on which the same is determined,
the amount, if any, that (a) the aggregate Covered Debt Amount as of such date
exceeds (b) the Borrowing Base as of such date.

“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03, substantially in the form of Exhibit D hereto or
such other form as is reasonably acceptable to the Administrative Agent.

“Business Day” means any day (a) that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed and (b) if such day relates to a borrowing of, a payment or
prepayment of principal of or interest on, a continuation or conversion of or
into, or the Interest Period for, a Eurocurrency Borrowing, or to a notice by
the Borrower with respect to any such borrowing, payment, prepayment,
continuation, conversion, or Interest Period, that is also a day on which
dealings in deposits denominated in Dollars are carried out in the London
interbank market.

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

“Cash” means any immediately available funds in Dollars or in any currency other
than Dollars (measured in terms of the Dollar Equivalent thereof) which is a
freely convertible currency.

“Cash Equivalents” means investments (other than Cash) that are one or more of
the following obligations:

(a) Short-Term U.S. Government Securities (as defined in Section 5.13);

(b) investments in commercial paper maturing within 180 days from the date of
acquisition thereof and having, at such date of acquisition, a credit rating of
at least A-1 from S&P and at least P-1 from Moody’s;

 

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(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 180 days from the date of acquisition thereof
(i) issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any commercial bank organized under
the laws of the United States of America or any State thereof, provided that
such certificates of deposit, banker’s acceptances and time deposits are held in
a securities account (as defined in the Uniform Commercial Code) through which
the Collateral Agent can perfect a security interest therein and (ii) having, at
such date of acquisition, a credit rating of at least A-1 from S&P and at least
P-1 from Moody’s;

(d) fully collateralized repurchase agreements with a term of not more than 30
days from the date of acquisition thereof for U.S. Government Securities and
entered into with (i) a financial institution satisfying the criteria described
in clause (c) of this definition or (ii) an Approved Dealer having (or being a
member of a consolidated group having) at such date of acquisition, a credit
rating of at least A-1 from S&P and at least P-1 from Moody’s; and

(e) investments in money market funds and mutual funds which invest
substantially all of their assets in Cash or assets of the types described in
clauses (a) through (d) above;

provided, that (i) in no event shall Cash Equivalents include any obligation
that provides for the payment of interest alone (for example, interest-only
securities or “IOs”); (ii) if any of Moody’s or S&P changes its rating system,
then any ratings included in this definition shall be deemed to be an equivalent
rating in a successor rating category of Moody’s or S&P, as the case may be;
(iii) Cash Equivalents (other than U.S. Government Securities, certificates of
deposit or repurchase agreements) shall not include any such investment
representing more than 25% of total assets of the Obligors in any single issuer;
and (iv) in no event shall Cash Equivalents include any obligation that is not
denominated in Dollars.

“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the SEC
thereunder as in effect on the date hereof), of shares representing more than
35% of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of the Borrower; (b) occupation of a majority of the
seats (other than vacant seats) on the Board of Directors of the Borrower by
Persons who were neither (i) nominated by the requisite members of the Board of
Directors of the Borrower nor (ii) appointed by a majority of the directors so
nominated; (c) the acquisition of direct or indirect Control of the Borrower by
any Person or group other than the Investment Advisor; or (d) Edward Ross shall
cease to be the Chief Executive Officer of the Borrower (or, if he retains such
title, his role is diminished in any material respect) and he is not replaced by
a person reasonably satisfactory to the Required Lenders within 90 days.

“Change in Law” means (a) the adoption of any law, rule or regulation or treaty
after the Effective Date affecting any Lender, (b) any change in any law, rule
or regulation or treaty binding upon any Lender or in the interpretation,
implementation or application thereof by

 

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any Governmental Authority, after the Effective Date or (c) compliance by any
Lender (or, for purposes of Section 2.12(b) and Section 2.17(b), by such
Lender’s holding company, if any, or by any lending office of such Lender) with
any request, guideline or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the Effective Date and affecting
any Lender, provided that, notwithstanding anything herein to the contrary,
(I) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, guidelines or directives in connection therewith and (II) all
requests, rules, guidelines or directives promulgated by the Bank For
International Settlements, the Basel Committee on Banking Regulation and
Supervisory Practices (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, promulgated or implemented.

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

“Collateral” has the meaning assigned to such term in the Guarantee and Security
Agreement.

“Collateral Agent” means ING in its capacity as Collateral Agent under the
Guarantee and Security Agreement, and includes any successor Collateral Agent
thereunder.

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Loans, as such commitment may be (a) reduced or increased from time to
time pursuant to Sections 2.06 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04. The
aggregate amount of each Lender’s Commitment as of the Effective Date is set
forth on Schedule 1.01(b), or in the Assignment and Assumption pursuant to which
such Lender shall have assumed its Commitment, as applicable. The aggregate
amount of the Lenders’ Commitments as of the Effective Date is $30,000,000.

“Commitment Increase” has the meaning assigned to such term in Section 2.06(f).

“Commitment Increase Date” has the meaning assigned to such term in
Section 2.06(f).

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Consolidated Adjusted Interest Expense” means, for any period with respect to
the Borrower and its Subsidiaries on a consolidated basis, the sum of (x) cash
interest paid in respect of the stated rate of interest (including any default
rate of interest, if applicable) applicable to any Indebtedness plus (y) the net
amount (after giving effect to any netting agreements) paid in cash (or minus
the net amount received in cash) under Hedging Agreements permitted under
Section 6.04 relating to interest during such period and to the extent not
already taken into account under clause (x) plus (z) cash dividends or
distributions payable pursuant to Section 6.05(e).

 

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“Consolidated EBIT” means, for any period with respect to the Borrower and its
Subsidiaries on a consolidated basis, income after deduction of all expenses
(including, without limitation, fees and other amounts actually paid to the
Investment Advisor) and other proper charges other than Taxes, Consolidated
Interest Expense and non-cash employee stock options expense and excluding
(a) net realized gains or losses, (b) net change in unrealized appreciation or
depreciation, (c) gains on re-purchases of Indebtedness, (d) the amount of
interest paid-in-kind to the Borrower or any of its Subsidiaries (“PIK”) to the
extent such amount exceeds the sum of (i) PIK interest collected in cash
(including any amortization payments on such applicable debt instrument up to
the amount of PIK interest previously capitalized thereon) and (ii) realized
gains collected in cash (net of realized losses); provided that the amount
determined pursuant to this clause (d)(ii) shall not be less than zero, all as
determined in accordance with GAAP, and (e) other non-cash charges and gains
(including non-cash capital gains incentive fee charges but net of capital gains
incentive fees actually paid) to the extent included to calculate income.

“Consolidated Interest Coverage Ratio” means the ratio as of the last day of any
fiscal quarter of the Borrower of (a) Consolidated EBIT for the four fiscal
quarter period then ending, taken as a single accounting period, to
(b) Consolidated Adjusted Interest Expense for such four fiscal quarter period.

“Consolidated Interest Expense” means, with respect to a Person and for any
period, the sum of (x) the total consolidated interest expense (including
capitalized interest expense and interest expense attributable to Capital Lease
Obligations) of such Person and in any event shall include all interest expense
with respect to any Indebtedness in respect of which such Person is wholly or
partially liable plus (y) the net amount (after giving effect to any netting
agreements) payable (or minus the net amount receivable) under Hedging
Agreements permitted under Section 6.04 relating to interest during such period
(whether or not actually paid or received during such period) and to the extent
not already taken into account under clause (x) plus (z) cash dividends or
distributions payable pursuant to Section 6.05(e).

“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.
“Controlling” and “Controlled” have meanings correlative thereto.

“Control Account” has the meaning assigned to such term in Section 5.08(c)(ii).

“Covered Debt Amount” means, on any date, the sum of all of the Revolving Credit
Exposures of all Lenders on such date plus any Indebtedness for borrowed money
of the Borrower or any Subsidiary (other than an SBIC Subsidiary) that is not
secured by any asset of any Obligor and that does not constitute Unsecured
Longer-Term Indebtedness.

 

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“Covered Taxes” means (i) Taxes, other than Excluded Taxes, imposed on or with
respect to any payment made by or on account of any obligation of the Borrower
under any Loan Document and (ii) to the extent not otherwise described in (i),
Other Taxes.

“Custodian” means U.S. Bank National Association, or any other financial
institution mutually agreeable to the Collateral Agent and the Borrower, as
custodian holding documentation for Portfolio Investments, and accounts of the
Obligors holding Portfolio Investments, on behalf of the Obligors and, pursuant
to the Custodian Agreement, the Collateral Agent. The term “Custodian” includes
any agent or sub-custodian acting on behalf of the Custodian.

“Custodian Account” means an account subject to a Custodian Agreement.

“Custodian Agreement” means a control agreement entered into by and among an
Obligor, the Collateral Agent and a Custodian, in form and substance reasonably
acceptable to the Collateral Agent.

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

“Defaulting Lender” means any Lender that has (a) failed to fund any portion of
its Loans within three (3) Business Days of the date required to be funded by it
hereunder, unless, in the case of any Loans, such Lender’s failure is based on
such Lender’s reasonable determination that the conditions precedent to funding
such Loan under this Agreement have not been met, such conditions have not
otherwise been waived in accordance with the terms of this Agreement and such
Lender has advised the Administrative Agent in writing (with reasonable detail
of those conditions that have not been satisfied) prior to the time at which
such funding was to have been made, (b) notified the Borrower, the
Administrative Agent, or any other Lender in writing that it does not intend to
comply with any of its funding obligations under this Agreement or has made a
public statement that it does not intend to comply with its funding obligations
under this Agreement (unless such writing or public statement states that such
position is based on such Lender’s determination that one or more conditions
precedent to funding (which conditions precedent, together with the applicable
default, if any, shall be specifically identified in such writing) cannot be
satisfied), (c) failed, within three (3) Business Days after request by the
Administrative Agent to confirm in writing that it will comply with the terms of
this Agreement relating to its obligations to fund prospective Loans (provided
that such Lender shall cease to be a Defaulting Lender pursuant to this clause
(c) upon receipt of such written confirmation by the Administrative Agent),
(d) otherwise failed to pay over to the Administrative Agent or any other Lender
any other amount (other than a de minimis amount) required to be paid by it
hereunder within three (3) Business Days of the date when due, unless the
subject of a good faith dispute, or (e) other than via an Undisclosed
Administration, either (i) has been adjudicated as, or determined by any
Governmental Authority having regulatory authority over such Person or its
assets to be, insolvent or has a parent company that has been adjudicated as, or
determined by any Governmental Authority having regulatory authority over such
Person or its assets to be, insolvent or (ii) become the subject of a bankruptcy
or insolvency proceeding, or has had a receiver, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person charged
with reorganization or liquidation of its business or custodian, appointed for
it, or has a parent company that has become the subject of a bankruptcy or
insolvency

 

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proceeding, or has had a receiver, conservator, trustee, administrator, assignee
for the benefit of creditors or similar Person charged with reorganization or
liquidation of its business or custodian appointed for it (unless in the case of
any Lender referred to in this clause (e) the Borrower and the Administrative
Agent shall be satisfied in the exercise of their respective reasonable
discretion that such Lender intends, and has all approvals required to enable
it, to continue to perform its obligations as a Lender hereunder); provided that
a Lender shall not qualify as a Defaulting Lender solely as a result of the
acquisition or maintenance of an ownership interest in such Lender or its parent
company, or of the exercise of control over such Lender or any Person
controlling such Lender, by a Governmental Authority or instrumentality thereof,
or solely as a result of an Undisclosed Administration, so long as such
ownership interest or Undisclosed Administration does not result in or provide
such Lender with immunity from the jurisdiction of courts within the United
States or from the enforcement of judgments or writs of attachment on its assets
or permit such Lender (or such Governmental Authority) to reject, repudiate,
disavow or disaffirm any contracts or agreements made with such Lender.

“Disqualified Equity Interests” means Equity Interests of the Borrower that
after issuance are subject to any agreement between the holder of such Equity
Interests and the Borrower where the Borrower is required to purchase, redeem,
retire, acquire, cancel or terminate such Equity Interests, other than (x) as a
result of a Change of Control, or (y) in connection with any purchase,
redemption, retirement, acquisition, cancellation or termination with, or in
exchange for, shares of Equity Interests that are not Disqualified Equity
Interests.

“Dollar Equivalent” means, on any date of determination, with respect to an
amount denominated in any currency other than Dollars, the amount of Dollars
that would be required to purchase such amount of such currency on the date two
Business Days prior to such date, based upon the spot selling rate at which the
Administrative Agent offers to sell such currency for Dollars in the London
foreign exchange market at approximately 11:00 a.m., London time, for delivery
two Business Days later.

“Dollars” or “$” refers to lawful money of the United States of America.

“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“Eligible Liens” means, any right of offset, banker’s lien, security interest or
other like right against the Portfolio Investments held by the Custodian
pursuant to or in connection with its rights and obligations relating to the
Custodian Account, provided that such rights are subordinated, pursuant to the
terms of the Custodian Agreement, to the first priority perfected security
interest in the Collateral created in favor of the Collateral Agent, except to
the extent expressly provided therein.

“Eligible Portfolio Investment” means any Portfolio Investment held by any
Obligor (and solely for purposes of determining the Borrowing Base and
Section 5.12(b)(ii)(B),

 

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Cash and Cash Equivalents held by any Obligor) that, in each case, meets all of
the criteria set forth on Schedule 1.01(d) hereto; provided, that no Portfolio
Investment, Cash or Cash Equivalent shall constitute an Eligible Portfolio
Investment or be included in the Borrowing Base if the Collateral Agent does not
at all times maintain a first priority, perfected Lien (subject to no other
Liens other than Eligible Liens) on such Portfolio Investment, Cash or Cash
Equivalent or if such Portfolio Investment, Cash or Cash Equivalent has not been
or does not at all times continue to be Delivered (as defined in the Guarantee
and Security Agreement). Without limiting the generality of the foregoing, it is
understood and agreed that any Portfolio Investments that have been contributed
or sold, purported to be contributed or sold or otherwise transferred to any
SBIC Subsidiary, or held by any SBIC Subsidiary, or which secure obligations of
any SBIC Subsidiary, shall not be treated as Eligible Portfolio Investments
until distributed, sold or otherwise transferred to the Borrower free and clear
of all Liens (other than Eligible Liens). Notwithstanding the foregoing, nothing
herein shall limit the provisions of Section 5.12(b)(i), which provide that, for
purposes of this Agreement, all determinations of whether an Investment is to be
included as an Eligible Portfolio Investment shall be determined on a
settlement-date basis (meaning that any Investment that has been purchased will
not be treated as an Eligible Portfolio Investment until such purchase has
settled, and any Eligible Portfolio Investment which has been sold will not be
excluded as an Eligible Portfolio Investment until such sale has settled),
provided that no such Investment shall be included as an Eligible Portfolio
Investment to the extent it has not been paid for in full.

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest. As used in this Agreement, “Equity Interests” shall not include
convertible debt unless and until such debt has been converted to capital stock.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower or any of its Subsidiaries, is treated as a
single employer under Section 414(b) or (c) of the Code, or, solely for purposes
of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.

“ERISA Event” means (a) any “reportable event,” as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) with respect to any
Plan that is intended to qualify under Section 401(a) of the Code, the
notification by the Internal Revenue Service of its intent to disqualify the
Plan; (c) with respect to any Plan, the failure to satisfy the applicable
minimum funding standard (as defined in Sections 412 and 430 of the Code or
Sections 302 and 303 of ERISA), whether or not waived; (d) the filing pursuant
to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (e) the
incurrence by the Borrower, any of its Subsidiaries or any of their respective
ERISA Affiliates of any liability under Title IV of ERISA with respect to the
termination of any

 

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Plan; (f) the receipt by the Borrower, any of its Subsidiaries or any of their
respective ERISA Affiliates from the PBGC or a plan administrator of any notice
relating to an intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (g) the incurrence by the Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates of any Withdrawal
Liability; (h) the occurrence of any nonexempt prohibited transaction within the
meaning of Section 4975 of the Code or Section 406 of ERISA with respect to any
Plan which could result in liability to the Borrower, any of its Subsidiaries or
a Lender; (i) the failure to make any required contribution to a Multiemployer
Plan or failure to make by its due date any required contribution to any Plan;
(j) the receipt by the Borrower, any of its Subsidiaries or any of their
respective ERISA Affiliates of any notice, or the receipt by any Multiemployer
Plan from the Borrower, any of its Subsidiaries or any of their respective ERISA
Affiliates of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA; or (k) the
incurrence, with respect to any “employee benefit plan” as defined in
Section 3(3) of ERISA that is sponsored, or maintained or contributed to by the
Borrower or any of its Subsidiaries or with respect to which the Borrower or any
of its Subsidiaries has any liability, of any material liability for
post-retirement health or welfare benefits, except as may be required by 4980B
of the Code or similar laws; (l) a determination that any Plan is, or is
expected to be, in “at risk” status (as defined in Section 430 of the Code or
Section 303 of ERISA); (m) a determination that any Multiemployer Plan is, or is
expected to be, in “critical” or “endangered” status under Section 432 of the
Code or Section 305 of ERISA; (n) the imposition of a Lien pursuant to
Section 430(k) of the Code or Section 303(k) of ERISA or a violation of
Section 436 of the Code with respect to any Plan; or (o) any other event or
condition with respect to a Plan or Multiemployer Plan that could result in
liability of the Borrower or any of its Subsidiaries (other than any required
premium payments to the PBGC).

“Eurocurrency”, when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans constituting such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate. For
clarity, a Loan or Borrowing bearing interest by reference to clause (c) of the
definition of the Alternate Base Rate shall not be a Eurocurrency Loan or
Eurocurrency Borrowing.

“Event of Default” has the meaning assigned to such term in Article VII.

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

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured
by) its net income (however denominated) (i) by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, or (ii) Other
Connection Taxes, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which the
Borrower is located, (c) in the case of a Foreign Lender (other than an assignee
pursuant to a request by the Borrower under Section 2.17(b)), any United

 

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States federal withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office) or is attributable to such Foreign Lender’s
failure or inability (other than as a result of a Change in Law) to comply with
Section 2.14(e), except to the extent, other than in a case of failure to comply
with Section 2.14(e), that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts from the Borrower with respect to such withholding
tax pursuant to Section 2.14(a) and (d) any United States federal withholding
taxes imposed on amounts payable to such Foreign Lender as a result of such
Foreign Lender’s failure to comply with FATCA to establish a complete exemption
from withholding thereunder.

“External Quoted Value” has the meaning set forth in Section 5.12(b)(ii)(A).

“External Unquoted Value” means (i) with respect to Borrower Tested Assets, the
Borrower External Unquoted Value and (ii) with respect to IVP Tested Assets, the
IVP External Unquoted Value.

“FATCA” means sections 1471 through 1474 of the Code, as of the Effective Date
(or any amended or successor version that is substantively comparable and not
materially more onerous to comply with) and any current or future regulations or
official interpretations thereof or any law implementing an intergovernmental
agreement with respect thereto whether currently in effect or as published and
amended from time to time.

“FCPA” has the meaning assigned to such term in Section 3.24.

“Federal Funds Effective 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.

“Financial Officer” means the chief executive officer, president, chief
financial officer, principal accounting officer or treasurer of the Borrower.

“Foreign Lender” means any Lender that is not (a) a citizen or resident of the
United States, (b) a corporation, partnership or other entity created or
organized in or under the laws of the United States (or any jurisdiction
thereof) or (c) any estate or trust that is subject to U.S. federal income
taxation regardless of the source of its income.

“GAAP” means generally accepted accounting principles in the United States of
America.

 

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“Governmental Authority” means the government of the United States of America,
or of any other nation, or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business or customary
indemnification agreements entered into in the ordinary course of business in
connection with obligations that do not constitute Indebtedness. The amount of
any Guarantee at any time shall be deemed to be an amount equal to the maximum
stated or determinable amount of the primary obligation in respect of which such
Guarantee is incurred, unless the terms of such Guarantee expressly provide that
the maximum amount for which such Person may be liable thereunder is a lesser
amount (in which case the amount of such Guarantee shall be deemed to be an
amount equal to such lesser amount).

“Guarantee and Security Agreement” means that certain Guarantee, Pledge and
Security Agreement, dated as of the Effective Date, among the Borrower, the
Subsidiary Guarantors from time to time party thereto, the Administrative Agent
and the Collateral Agent, as the same shall be amended, restated, modified and
supplemented from time to time.

“Guarantee Assumption Agreement” means a Guarantee Assumption Agreement
substantially in the form of Exhibit B to the Guarantee and Security Agreement
among the Collateral Agent and an entity that pursuant to Section 5.08 is
required to become a “Subsidiary Guarantor” under the Guarantee and Security
Agreement (with such changes as the Administrative Agent shall request
consistent with the requirements of Section 5.08).

“Hedging Agreement” means any interest rate protection agreement, foreign
currency exchange protection agreement or other interest or currency exchange
rate hedging arrangement entered into in the ordinary course of business and not
for speculative purposes. For the avoidance of doubt, in no event shall a
Hedging Agreement include a total return swap.

“Increasing Lender” has the meaning assigned to such term in Section 2.06(f).

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits, loans or advances of
any kind, (b) all obligations of such Person evidenced by bonds, debentures,
notes or similar debt

 

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instruments, (c) all obligations of such Person under conditional sale or other
title retention agreements relating to property acquired by such Person, (d) all
obligations of such Person in respect of the deferred purchase price of property
or services (other than trade accounts payable and accrued expenses in the
ordinary course of business not past due for more than 90 days after the date on
which such trade account payable was due), (e) all Indebtedness of others
secured by any Lien on property owned or acquired by such Person, whether or not
the Indebtedness secured thereby has been assumed (with the value of such debt
being the lower of the outstanding amount of such debt and the fair market value
of the property subject to such Lien), (f) all Guarantees by such Person of
Indebtedness of others, (g) all Capital Lease Obligations of such Person,
(h) all obligations, contingent or otherwise, of such Person as an account party
in respect of letters of credit and letters of guaranty, (i) the amount (after
giving effect to any netting agreements) such Person would be obligated for
under any Hedging Agreement if such Hedging Agreement was terminated at the time
of determination, (j) all obligations, contingent or otherwise, with respect to
Disqualified Equity Interests and (k) all obligations, contingent or otherwise,
of such Person in respect of bankers’ acceptances. The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor (or such Person is
not otherwise liable for such Indebtedness). Notwithstanding the foregoing,
“Indebtedness” shall not include (x) purchase price holdbacks arising in the
ordinary course of business in respect of a portion of the purchase price of an
asset or Investment to satisfy unperformed obligations of the seller of such
asset or Investment or (y) a commitment arising in the ordinary course of
business to make a future Portfolio Investment.

“Independent” when used with respect to any specified Person means the more
restrictive of the following: (a) that such Person (i) does not have any direct
financial interest or any material indirect financial interest in the Borrower
or any of its Subsidiaries or Affiliates (including its investment adviser or
any Affiliate thereof) other than ownership of publicly traded stock of the
Borrower or any such Subsidiary or Affiliate with a market value not to exceed
$1,000,000 and (ii) is not an officer, employee, promoter, underwriter, trustee,
partner, director or a Person performing similar functions of the Borrower or of
its Subsidiaries or Affiliates (including its investment advisor or any
Affiliate thereof) or (b) that such person is not an “interested person” as
defined in section 2(a)(19) of the Investment Company Act.

“Independent Valuation Provider” means any of Duff & Phelps LLC, Murray, Devine
and Company, Lincoln Advisors, Houlihan Lokey and Valuation Research
Corporation, or any other Independent nationally recognized third-party
appraisal firm selected by the Administrative Agent.

“Industry Classification Group” means any industry groups mutually agreeable to
the Required Lenders and the Borrower specified on Schedule 1.01(c) (as the same
may be amended from time to time).

“ING” means ING Capital LLC.

 

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“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.05.

“Interest Payment Date” means (a) with respect to any ABR Loan, each Quarterly
Date and (b) with respect to any Eurocurrency Loan, the last day of each
Interest Period therefor and, in the case of any Interest Period of more than
three months’ duration, each day prior to the last day of such Interest Period
that occurs at three-month intervals after the first day of such Interest
Period.

“Interest Period” means, for any Eurocurrency Loan or Borrowing, the period
commencing on the date of such Loan or Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter; provided, that (a) if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, and (b) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Loan initially shall be the
date on which such Loan is made and thereafter shall be the effective date of
the most recent conversion or continuation of such Loan, and the date of a
Borrowing comprising Loans that have been converted or continued shall be the
effective date of the most recent conversion or continuation of such Loans.

“Internal Value” has the meaning set forth in Section 5.12(b)(ii)(C).

“Investment” means, for any Person: (a) Equity Interests, bonds, notes,
debentures or other securities of any other Person (including convertible
securities) or any agreement to acquire any Equity Interests, bonds, notes,
debentures or other securities of any other Person (including any “short sale”
or any sale of any securities at a time when such securities are not owned by
the Person entering into such sale); (b) deposits, advances, loans or other
extensions of credit made to any other Person (including purchases of property
from another Person subject to an understanding or agreement, contingent or
otherwise, to resell such property to such Person); or (c) Hedging Agreements.

“Investment Advisor” means Fidus Investment Advisors, LLC, a Delaware limited
liability company, or, except as such term is used in Section 3.21, an Affiliate
thereof.

“Investment Advisor Departure Event” means any of the following events:

(a) the Investment Advisor shall cease to be the investment advisor of the
Borrower;

(b) (i) if any three of Edward Ross, John Ross, Thomas Lauer, Andrew Worth or
Cary Schaefer are no longer actively engaged in the business of the Investment
Advisor in their current capacities, or (ii) Edward Ross and John Ross are no
longer actively engaged in the business of the Investment Advisor in their
current capacities; or

 

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(c) Edward Ross is no longer actively engaged in his current capacity as
chairman of the Investment Advisor’s investment committee and he is not replaced
by a person reasonably satisfactory to the Required Lenders within 90 days;

(d) the acquisition of ownership, directly or indirectly, beneficially or of
record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the SEC thereunder as in effect on the date
hereof), of shares representing more than 35% of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of the Investment
Advisor, other than by Edward Ross, John Ross, Thomas Lauer, Andrew Worth or
Cary Schaefer; and

(e) a majority of the Board of Directors of the Investment Advisor does not
consist of any of the following persons: Edward Ross, John Ross, Thomas Lauer,
Andrew Worth or Cary Schaefer.

“Investment Company Act” means the Investment Company Act of 1940, as amended
from time to time.

“Investment Policies” means the Borrower’s investment objectives, policies,
restrictions and limitations and the Borrower’s investment allocation policy
between affiliated investment vehicles managed directly or indirectly by the
Investment Advisor, as in existence on the Effective Date and delivered to the
Administrative Agent pursuant to Section 4.1(i) hereof, and as amended from time
to time by a Permitted Policy Amendment.

“IVP External Unquoted Value” means the IVP Unquoted Value; provided, however,
that if for any reason as of any Valuation Testing Date both a Borrower Internal
Policy Unquoted Value and an IVP Unquoted Value are obtained with respect to any
Unquoted Investment as of such date, then the “IVP External Unquoted Value” of
such Unquoted Investment shall be such value as of such date that has the range
with the lowest midpoint.

“IVP Tested Assets” has the meaning assigned to such term in
Section 5.12(b)(ii)(B)(x).

“IVP Unquoted Value” has the meaning assigned to such term in
Section 5.12(B)(ii)(B)(y).

“Largest Industry Classification Group” means, as of any date of determination,
the single Industry Classification Group that the greatest portion of the
Borrowing Base has been assigned to such Industry Classification Group pursuant
to Section 5.12(a).

“Lenders” means the Persons listed on Schedule 1.01(b) as having Commitments and
any other Person that shall have become a party hereto pursuant to an Assignment
and Assumption that provides for it to assume a Commitment or to acquire
Revolving Credit Exposure, other than any such Person that ceases to be a party
hereto pursuant to an Assignment and Assumption.

 

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“LIBO Rate” means, for any Interest Period, the Intercontinental Exchange
Benchmark Administration Ltd. LIBO Rate (or the successor thereto if the
Intercontinental Exchange Benchmark Administration Ltd. is no longer making such
rates available) per annum for deposits in U.S. dollars for a period equal to
the Interest Period appearing on the display designated as Reuters Screen LIBO01
Page (or such other page on that service or such other service designated by the
Intercontinental Exchange Benchmark Administration Ltd. LIBO Rate (or the
successor thereto if the Intercontinental Exchange Benchmark Administration Ltd.
is no longer making such rates available) for the display of such
Administration’s Interest Settlement Rates for deposits in U.S. dollars) as of
11:00 a.m., London time on the day that is two Business Days prior to the first
day of the Interest Period (or if such Reuters Screen LIBO01 Page is unavailable
for any reason at such time, the rate which appears on the Reuters Screen ISDA
Page as of such date and such time); provided, that if the Administrative Agent
determines that the relevant foregoing sources are unavailable for the relevant
Interest Period, LIBO Rate for purposes of this definition shall mean the rate
of interest determined by the Administrative Agent to be the average (rounded
upward, if necessary, to the nearest 1/100th of 1%) of the rates per annum at
which deposits in U.S. dollars are offered to the Administrative Agent two
(2) business days preceding the first day of such Interest Period by leading
banks in the London interbank market as of 11:00 a.m. for delivery on the first
day of such Interest Period, for the number of days comprised therein and in an
amount comparable to the amount of the Administrative Agent’s portion of the
relevant Eurocurrency Borrowing.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities, except in favor
of the issuer thereof (and, in the case of Portfolio Investments that are equity
securities, excluding customary drag-along, tag-along, right of first refusal
and other similar rights in favor of other equity holders of the same issuer).

“Liquidation Preference” shall mean, with respect to Preferred Stock, the dollar
amount required to be paid to the holder thereof upon any voluntary or
involuntary liquidation, dissolution or winding up of the issuer of such
Preferred Stock or the distribution of assets of such issuer that represents a
return of capital or the purchase price paid for such Preferred Stock at the
time of issuance of such Preferred Stock by such issuer.

“Loan Documents” means, collectively, this Agreement, any promissory notes
delivered pursuant to Section 2.07(f) and the Security Documents.

“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.

 

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“Margin Stock” means “margin stock” within the meaning of Regulations T, U and
X.

“Material Adverse Effect” means a material adverse effect on (a) the business,
Portfolio Investments of the Obligors (taken as a whole) and other assets,
liabilities (actual or contingent), operations or condition (financial or
otherwise) of the Borrower and its Subsidiaries (other than the SBIC
Subsidiaries), taken as a whole, or (b) the validity or enforceability of any of
the Loan Documents or the rights or remedies of the Administrative Agent and the
Lenders thereunder or the ability of the Obligors to perform their respective
obligations thereunder.

“Material Indebtedness” means (a) Indebtedness (other than the Loans and Hedging
Agreements), of any one or more of the Borrower and its Subsidiaries (including
any SBIC Subsidiary) in an aggregate principal amount exceeding $2,000,000 and
(b) obligations in respect of one or more Hedging Agreements under which the
maximum aggregate amount (after giving effect to any netting agreements) that
the Borrower and its Subsidiaries would be required to pay if such Hedging
Agreement(s) or other swap or derivative transactions were terminated at such
time would exceed $2,000,000.

“Maturity Date” means the date that is the four (4) year anniversary of the
Effective Date, unless extended with the consent of each Lender in its sole and
absolute discretion.

“Moody’s” means Moody’s Investors Service, Inc. or any successor thereto.

“Multiemployer Plan” means a multiemployer plan as defined in Section 3(37) or
4001(a)(3) of ERISA.

“Non-Consenting Lender” has the meaning assigned to such term in
Section 9.02(d).

“Non-Pledged SBIC Subsidiary” means, with respect to any SBIC Subsidiary, the
Equity Interest of such SBIC Subsidiary is not subject to a first priority
perfected security interest in favor of the Collateral Agent securing the
Secured Obligations under and as defined in the Guarantee and Security
Agreement.

“Obligors” means, collectively, the Borrower and the Subsidiary Guarantors.

“Obligors’ Net Worth” means, at any date, the Stockholders’ Equity at such date,
minus the stockholders’ equity of any non-Obligor Subsidiary held by an Obligor.

“OFAC” has the meaning assigned to such term in Section 3.19.

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

 

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“Other Permitted Indebtedness” means (a) accrued expenses and current trade
accounts payable incurred in the ordinary course of any Obligor’s business that
are overdue for a period of more than 90 days and which are not being contested
in good faith by appropriate proceedings, (b) Indebtedness in respect of
judgments or awards that have been in force for less than the applicable period
for taking an appeal so long as such judgments or awards do not constitute an
Event of Default under clause (k) of Article VII and (c) other Indebtedness not
to exceed $12,500,000 in the aggregate.

“Other Taxes” means all present or future stamp, court, documentary, intangible,
recording or filing Taxes or any other excise or property taxes, charges or
similar levies arising from any payment made under any Loan Document or from the
execution, delivery, performance, enforcement or registration of, from the
receipt or perfection of a security interest under, or otherwise with respect
to, any Loan Document, except any such Taxes that are Other Connection Taxes
imposed with respect to an assignment (other than an assignment pursuant to a
request by the Borrower under Section 2.17(b)).

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

“Permitted Liens” means (a) Liens imposed by any Governmental Authority for
taxes, assessments or charges not yet due or that are being contested in good
faith and by appropriate proceedings if adequate reserves with respect thereto
are maintained on the books of the Borrower in accordance with GAAP; (b) Liens
of clearing agencies, broker-dealers and similar Liens incurred in the ordinary
course of business, provided that such Liens (i) attach only to the securities
(or proceeds) being purchased or sold and (ii) secure only obligations incurred
in connection with such purchase or sale, and not any obligation in connection
with margin financing; (c) Liens imposed by law, such as materialmen’s,
mechanics’, carriers’, workmens’, storage, landlord, and repairmen’s Liens and
other similar Liens arising in the ordinary course of business and securing
obligations (other than Indebtedness for borrowed money) not yet due or that are
being contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained on the books of the Borrower in
accordance with GAAP; (d) Liens incurred or pledges or deposits made to secure
obligations incurred in the ordinary course of business under workers’
compensation laws, unemployment insurance or other similar social security
legislation (other than in respect of employee benefit plans subject to
ERISA) or to secure public or statutory obligations; (e) Liens securing the
performance of, or payment in respect of, bids, insurance premiums, deductibles
or co-insured amounts, tenders, government or utility contracts (other than for
the repayment of borrowed money), surety, stay, customs and appeal bonds and
other obligations of a similar nature incurred in the ordinary course of
business; (f) Liens arising out of judgments or awards that have been in force
for less than the applicable period for taking an appeal so long as such
judgments or awards do not constitute an Event of Default; (g) customary rights
of setoff and liens upon (i) deposits of cash in favor of banks or other
depository institutions in which such cash is maintained in the ordinary course
of business, (ii) cash and financial assets held in securities accounts in favor
of banks and other

 

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financial institutions with which such accounts are maintained in the ordinary
course of business and (iii) assets held by a custodian in favor of such
custodian in the ordinary course of business, in the case of each of clauses
(i) through (iii) above, securing payment of fees, indemnities, charges for
returning items and other similar obligations; (h) Liens arising solely from
precautionary filings of financing statements under the Uniform Commercial Code
of the applicable jurisdictions in respect of operating leases entered into by
the Borrower or any of its Subsidiaries in the ordinary course of business;
(i) zoning restrictions, easements, licenses, or other restrictions on the use
of any real estate (including leasehold title), in each case which do not
interfere with or affect in any material respect the ordinary course conduct of
the business of the Borrower and its Subsidiaries; (j) deposits of money
securing leases to which Borrower is a party as lessee made in the ordinary
course of business; and (k) Eligible Liens.

“Permitted Policy Amendment” means an amendment, modification, termination or
restatement of the Investment Policies, that either is (a) approved in writing
by the Administrative Agent (with the consent of the Required Lenders),
(b) required by applicable law or Governmental Authority, or (c) not material
and adverse (individually or in the aggregate with all other amendments,
modifications, terminations or restatements following the Effective Date) to the
Administrative Agent or any of the Lenders.

“Permitted SBIC Guarantee” means a guarantee by the Borrower of SBA Indebtedness
of an SBIC Subsidiary on SBA’s then applicable form; provided that the recourse
to the Obligors thereunder is expressly limited only to periods after the
occurrence of an event or condition that is an impermissible change in the
control of such SBIC Subsidiary (it being understood that, as provided in clause
(q) of Article VII, it shall be an Event of Default hereunder if any such event
or condition giving rise to such recourse occurs).

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

“Plan” means any employee pension benefit plan within the meaning of
Section 3(2) of ERISA (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Sections 412 and 430 of the Code or
Sections 302 and 303 of ERISA, and in respect of which the Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates is (or would under
Section 4069 of ERISA be deemed to be), or, within the preceding six years,
was, an “employer” as defined in Section 3(5) of ERISA.

“Portfolio Company” means the issuer or obligor under any Portfolio Investment
held by any Obligor.

“Portfolio Investment” means any Investment held by the Borrower and its
Subsidiaries in their asset portfolio.

“Prime Rate” means the rate of interest quoted in The Wall Street Journal, Money
Rates Section, as the “U.S. Prime Rate” (or its successor), as in effect from
time to time. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to any customer. The
Administrative Agent or any Lender may make commercial loans or other loans at
rates of interest at, above, or below the Prime Rate.

 

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“Quarterly Dates” means the last Business Day of March, June, September and
December in each year, commencing on June 30, 2014.

“Quoted Investments” has the meaning set forth in Section 5.12(b)(ii)(A).

“Register” has the meaning set forth in Section 9.04(c).

“Regulations T, U and X” means, respectively, Regulations T, U and X of the
Board of Governors of the Federal Reserve System (or any successor), as the same
may be modified and supplemented and in effect from time to time.

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, partners, officers, employees, agents
and advisors of such Person and such Person’s Affiliates.

“Required Lenders” means, at any time, subject to Section 2.16(b), Lenders
having Revolving Credit Exposures and unused Commitments representing more than
50% of the sum of the total Revolving Credit Exposures and unused Commitments at
such time; provided, that, (a) if there are only three (3) Lenders at such time,
“Required Lenders” shall mean Lenders having Revolving Credit Exposures and
unused Commitments representing two-thirds of the sum of the total Revolving
Credit Exposures and unused Commitments at such time and (b) if there are only
two (2) Lenders at such time, “Required Lenders” shall mean all Lenders;
provided, further, that with respect to (A) any change adverse to the Lenders
affecting the provisions of this Agreement relating to the Borrowing Base
(including the definitions used therein), or the provisions of
Section 5.12(b)(ii), and (B) any release of any material portion of the
Collateral other than for fair value or as otherwise permitted hereunder or
under the other Loan Documents, “Required Lenders” means, at any time, subject
to Section 2.16(b), Lenders having Revolving Credit Exposures and unused
Commitments representing more than two-thirds of the sum of the total Revolving
Credit Exposures and unused Commitments at such time; provided that, with
respect to any such change or release, if there are only two (2) Lenders at such
time, “Required Lenders” shall mean all Lenders.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any shares of any class of capital
stock of the Borrower or any of its Subsidiaries, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares of capital stock of the Borrower
or any option, warrant or other right to acquire any such shares of capital
stock of the Borrower, provided, for clarity, neither the conversion of
convertible debt into capital stock, nor the purchase, redemption, retirement,
acquisition, cancellation or termination of convertible debt made solely with
capital stock nor the issuance of capital stock upon the exercise of warrants,
options or similar rights shall be a Restricted Payment hereunder.

 

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“Revalue Percent” means 10%.

“Revalue Right” has the meaning set forth in Section 5.12(b)(ii)(H).

“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Loans at such time.

“Revolving Percentage” means, as of any date of determination, the result,
expressed as a percentage, of the aggregate Revolving Credit Exposure on such
date divided by the aggregate outstanding Covered Debt Amount on such date.

“RIC” means a person qualifying for treatment as a “regulated investment
company” under Subchapter M of the Code.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc., a New York corporation, or any successor thereto.

“SBA” means the United States Small Business Administration or any Governmental
Authority succeeding to any or all of the functions thereof.

“SBIC Subsidiary” means any Subsidiary of the Borrower (or such Subsidiary’s
general partner or manager entity) that is (x) either (i) a “small business
investment company” licensed by the SBA (or that has applied for such a license
and is actively pursuing the granting thereof by appropriate proceedings
promptly instituted and diligently conducted) under the Small Business
Investment Act of 1958, as amended, or (ii) any wholly-owned, direct or
indirect, Subsidiary of an entity referred to in clause (x)(i) of this
definition, and (y) designated in writing by the Borrower (as provided below) as
an SBIC Subsidiary, so long as:

(a) other than pursuant to a Permitted SBIC Guarantee or the requirement by the
SBA that the Borrower make an equity or capital contribution to the SBIC
Subsidiary in connection with its incurrence of SBA Indebtedness (provided that
such contribution is permitted by Section 6.03(e) and is made substantially
contemporaneously with such incurrence), no portion of the Indebtedness or any
other obligations (contingent or otherwise) of such Person (i) is Guaranteed by
the Borrower or any of its Subsidiaries (other than any SBIC Subsidiary),
(ii) is recourse to or obligates the Borrower or any of its Subsidiaries (other
than any SBIC Subsidiary) in any way, or (iii) subjects any property of the
Borrower or any of its Subsidiaries (other than any SBIC Subsidiary) to the
satisfaction thereof;

(b) other than pursuant to a Permitted SBIC Guarantee, neither the Borrower nor
any of its Subsidiaries has any material contract, agreement, arrangement or
understanding with such Person other than on terms no less favorable to the
Borrower or such Subsidiary than those that might be obtained at the time from
Persons that are not Affiliates of the Borrower or such Subsidiary;

 

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(c) neither the Borrower nor any of its Subsidiaries (other than any SBIC
Subsidiary) has any obligation to such Person to maintain or preserve its
financial condition or cause it to achieve certain levels of operating results;
and

(d) such Person has not Guaranteed or become a co-borrower under, and has not
granted a security interest in any of its properties to secure, and the Equity
Interests it has issued are not pledged to secure, in each case, any
indebtedness, liabilities or obligations of any one or more of the Obligors.

Any designation by the Borrower under clause (y) above shall be effected
pursuant to a certificate of a Financial Officer delivered to the Administrative
Agent, which certificate shall include a statement to the effect that, to the
best of such Financial Officer’s knowledge, such designation complied with the
foregoing conditions.

“SEC” means the United States Securities and Exchange Commission or any
Governmental Authority succeeding to any or all of the functions thereof.

“Security Documents” means, collectively, the Guarantee and Security Agreement,
the Custodian Agreement, all Uniform Commercial Code financing statements filed
with respect to the security interests in personal property created pursuant to
the Guarantee and Security Agreement, and all other assignments, pledge
agreements, security agreements, control agreements and other instruments
executed and delivered at any time by any of the Obligors pursuant to the
Guarantee and Security Agreement or otherwise providing or relating to any
collateral security for any of the Secured Obligations under and as defined in
the Guarantee and Security Agreement.

“Senior Securities” means senior securities (as such term is defined and
determined pursuant to the Investment Company Act and any orders of the SEC
issued to the Borrower thereunder).

“Significant Unsecured Indebtedness Event” means that the aggregate principal
amount of Unsecured Longer-Term Indebtedness plus the aggregate amount of Other
Permitted Indebtedness exceeds, at any time of determination, the sum of (A) the
excess of the Borrowing Base over the Covered Debt Amount plus (B) 30% of
Stockholders’ Equity over Obligors’ Net Worth.

“Solvent” means, with respect to any Obligor, that as of the date of
determination, both (a) (i) the sum of such Obligor’s debt and liabilities
(including contingent liabilities) does not exceed the present fair saleable
value of such Person’s present assets, (ii) such Obligor’s capital is not
unreasonably small in relation to its business as contemplated on the Effective
Date and reflected in any projections delivered to the Lenders or with respect
to any transaction contemplated or undertaken after the Effective Date, and
(iii) such Obligor has not incurred and 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 (whether at maturity or otherwise); and
(b) such Obligor is “solvent” within the meaning given to such term and similar
terms under applicable laws relating to fraudulent transfers and conveyances.
For purposes of this definition,

 

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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 (irrespective of whether such contingent liabilities meet
the criteria for accrual under Statement of Financial Accounting Standard
No. 5).

“Special Equity Interest” means any Equity Interest that is subject to a Lien in
favor of creditors of the issuer or issuer’s affiliates of such Equity Interest,
provided that (a) such Lien was created to secure Indebtedness owing by such
issuer to such creditors, (b) such Indebtedness was (i) in existence at the time
the Obligors acquired such Equity Interest, (ii) incurred or assumed by such
issuer substantially contemporaneously with such acquisition or (iii) already
subject to a Lien granted to such creditors and (c) unless such Equity Interest
is not intended to be included in the Collateral, the documentation creating or
governing such Lien does not prohibit the inclusion of such Equity Interest in
the Collateral.

“Statutory Reserve Rate” means, for the Interest Period for any Eurocurrency
Borrowing, a fraction (expressed as a decimal), the numerator of which is the
number one and the denominator of which is the number one minus the arithmetic
mean, taken over each day in such Interest Period, of the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by the Board to which
the Administrative Agent is subject for eurocurrency funding (currently referred
to as “Eurocurrency liabilities” in Regulation D). Such reserve percentages
shall include those imposed pursuant to Regulation D. Eurocurrency Loans shall
be deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under Regulation D or any
comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

“Stockholders’ Equity” means, at any date, the amount determined on a
consolidated basis, without duplication, in accordance with GAAP, of
stockholders’ equity (including preferred equity that is not Disqualified Equity
Interests) for the Borrower and its Subsidiaries at such date.

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent. Anything herein to the
contrary notwithstanding, the term “Subsidiary” shall not include any Person
that constitutes an Investment held by any Obligor in the ordinary course of
business and that is not, under GAAP, consolidated on the financial statements
of the Borrower and its Subsidiaries. Unless otherwise specified, “Subsidiary”
means a Subsidiary of the Borrower.

 

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“Subsidiary Guarantor” means any Subsidiary that is or is required to be a
Guarantor under the Guarantee and Security Agreement. It is understood and
agreed that, subject to Section 5.08(a), no SBIC Subsidiary shall be required to
be a Subsidiary Guarantor as long as it remains an SBIC Subsidiary as defined
and described herein.

“Taxes” means any and all present or future taxes levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.

“Termination Date” means the date on which the Commitments have expired or been
terminated and the principal of and accrued interest on each Loan and all fees
and other amounts payable hereunder shall have been paid in full (excluding, for
the avoidance of doubt, any amount in connection with any contingent, unasserted
indemnification obligations).

“Transactions” means the execution, delivery and performance by the Borrower of
this Agreement and other Loan Documents, the borrowing of Loans, and the use of
the proceeds thereof.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans constituting such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

“Undisclosed Administration” means, in relation to a Lender, the appointment of
an administrator, provisional liquidator, conservator, receiver, trustee,
custodian or other similar official by a supervisory authority or regulator
under or based on the law in the country where such Lender is subject to home
jurisdiction supervision if applicable law requires that such appointment is not
to be publicly disclosed and such appointment has not been publicly disclosed
(including, without limitation, under the Dutch Financial Supervision Act 2007
(as amended from time to time and including any successor legislation)).

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

“Unquoted Investments” has the meaning set forth in Section 5.12(b)(ii)(B).

“Unsecured Longer-Term Indebtedness” means any Indebtedness for borrowed money
of the Borrower that (a) has no amortization, or mandatory redemption,
repurchase or prepayment prior to, and a final maturity date not earlier than,
six months after the Maturity Date, (b) is incurred pursuant to terms that are
substantially comparable to market terms for substantially similar debt of other
similarly situated borrowers as reasonably determined in good faith by the
Borrower and which shall be no more restrictive upon the Borrower and the other
Obligors, while any commitments or Loans are outstanding, than those set forth
in this Agreement and (c) is not secured by any assets of any Obligor.

 

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“U.S. Government Securities” means securities that are direct obligations of,
and obligations the timely payment of principal and interest on which is fully
guaranteed by, the United States or any agency or instrumentality of the United
States the obligations of which are backed by the full faith and credit of the
United States and in the form of conventional bills, bonds, and notes.

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

“USA PATRIOT Act” has the meaning assigned to such term in Section 3.20.

“Value” has the meaning assigned to such term in Section 5.13.

“wholly owned Subsidiary” of any person shall mean a Subsidiary of such person,
all of the Equity Interests of which (other than directors’ qualifying shares or
nominee or other similar shares required pursuant to applicable law) are owned
by such person and/or one or more wholly owned Subsidiaries of such person.
Unless the context otherwise requires, “wholly owned Subsidiary Guarantor” shall
mean a wholly owned Subsidiary that is a Subsidiary Guarantor.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Type (e.g., an “ABR
Loan”). Borrowings also may be classified and referred to by Type (e.g., an “ABR
Borrowing”).

SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof’ and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

 

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SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the Effective Date in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), then Borrower, Administrative Agent and the Lenders agree to
enter into negotiations in good faith in order to amend such provisions of the
Agreement so as to equitably reflect such change to comply with GAAP with the
desired result that the criteria for evaluating the Borrower’s financial
condition shall be the same after such change to comply with GAAP as if such
change had not been made; provided, however, until such amendments to equitably
reflect such changes are effective and agreed to by Borrower, Administrative
Agent and the Required Lenders, the Borrower’s compliance with such financial
covenants shall be determined on the basis of GAAP as in effect and applied
immediately before such change in GAAP becomes effective. Notwithstanding the
foregoing or anything herein to the contrary, the Borrower covenants and agrees
with the Lenders that whether or not the Borrower may at any time adopt
Financial Accounting Standard No. 159 or Accounting Standard Codification 825,
all determinations relating to fair value accounting for liabilities or
compliance with the terms and conditions of this Agreement shall be made on the
basis that the Borrower has not adopted Financial Accounting Standard No. 159 or
Accounting Standard Codification 825.

ARTICLE II

THE CREDITS

SECTION 2.01. The Commitments. Subject to the terms and conditions set forth
herein, each Lender agrees to make Loans to the Borrower from time to time prior
to the Maturity Date in an aggregate principal amount that will not result in
(a) such Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment,
(b) the aggregate Revolving Credit Exposure of all of the Lenders exceeding the
aggregate Commitments or (c) the total Covered Debt Amount exceeding the
Borrowing Base then in effect. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Loans.

SECTION 2.02. Loans and Borrowings.

(a) Obligations of Lenders. Each Loan shall be made as part of a Borrowing
consisting of Loans of the same Type made by the Lenders ratably in accordance
with their respective Commitments. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender’s failure to make Loans as
required.

 

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(b) Type of Loans. Subject to Section 2.11, each Borrowing shall be constituted
entirely of ABR Loans or of Eurocurrency Loans as the Borrower may request in
accordance herewith. Each Loan shall be denominated in Dollars. Each Lender at
its option may make any Eurocurrency Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that (i) any
exercise of such option shall not affect the obligation of the Borrower to repay
such Loan in accordance with the terms of this Agreement and (ii) in exercising
such option, such Lender shall use reasonable efforts to minimize any increased
costs to the Borrower resulting therefrom (which obligation of the Lender shall
not require it to take, or refrain from taking, actions that it determines would
result in increased costs for which it will not be compensated hereunder or that
it determines would be otherwise disadvantageous to it and in the event of such
request for costs for which compensation is provided under this Agreement, the
provisions of Section 2.12 shall apply).

(c) Minimum Amounts. Each Borrowing shall be in an aggregate amount of
$1,000,000 or a larger multiple of $100,000 in excess thereof; provided that an
ABR Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments. Borrowings of more than one Type may be
outstanding at the same time.

(d) Limitations on Interest Periods. Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request any Eurocurrency
Borrowing (or to elect to convert to or continue as a Eurocurrency Borrowing) if
the Interest Period requested therefor would end after the Maturity Date.

SECTION 2.03. Requests for Borrowings.

(a) Notice by the Borrower. To request a Borrowing, the Borrower shall notify
the Administrative Agent of such request by delivery of a signed Borrowing
Request or by telephone or e-mail (followed promptly by delivery of a signed
Borrowing Request) (i) in the case of a Eurocurrency Borrowing, not later than
11:00 a.m., New York City time, three (3) Business Days before the date of the
proposed Borrowing or (ii) in the case of an ABR Borrowing, not later than 11:00
a.m., New York City time, one Business Day before the date of the proposed
Borrowing. Each such request for a Borrowing shall be irrevocable.

(b) Content of Borrowing Requests. Each request for a Borrowing (whether a
written Borrowing Request, a telephonic request or e-mail request) shall specify
the following information in compliance with Section 2.02:

(i) the aggregate amount of the requested Borrowing;

(ii) the date of such Borrowing, which shall be a Business Day;

(iii) whether such Borrowing is to be an ABR Borrowing or a Eurocurrency
Borrowing;

(iv) in the case of a Eurocurrency Borrowing, the Interest Period therefor,
which shall be a period contemplated by the definition of the term “Interest
Period” and permitted under Section 2.02(d); and

 

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(v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.04.

(c) Notice by the Administrative Agent to the Lenders. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each applicable Lender of the details thereof
and of the amounts of such Lender’s Loan to be made as part of the requested
Borrowing.

(d) Failure to Elect. If no election as to the Type of a Borrowing is specified
in a request for a Borrowing, then the requested Borrowing shall be a
Eurocurrency Borrowing having an Interest Period of one (1) month. If a
Eurocurrency Borrowing is requested but no Interest Period is specified, the
Borrower shall be deemed to have selected an Interest Period of one (1) month’s
duration.

SECTION 2.04. Funding of Borrowings.

(a) Funding by Lenders. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 1:00 p.m., New York City time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make such Loans available to the Borrower by
promptly crediting the amounts so received, in like funds, to an account of the
Borrower designated by the Borrower in the applicable Borrowing Request.

(b) Presumption by the Administrative Agent. Unless the Administrative Agent
shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and, in reliance upon such assumption, the
Administrative Agent may (in its sole discretion and without any obligation to
do so) make available to the Borrower a corresponding amount. In such event, if
a Lender has not in fact made its share of the applicable Borrowing available to
the Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the Federal Funds
Effective Rate and (ii) in the case of the Borrower, the interest rate
applicable to ABR Loans. If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender’s Loan included in such
Borrowing. Nothing in this paragraph shall relieve any Lender of its obligation
to fulfill its commitments hereunder, and shall be without prejudice to any
claim the Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.

 

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SECTION 2.05. Interest Elections.

(a) Elections by the Borrower for Borrowings. Subject to Section 2.03(d), the
Loans constituting each Borrowing initially shall be of the Type specified in
the applicable Borrowing Request and, in the case of a Eurocurrency Borrowing,
shall have the Interest Period specified in such Borrowing Request. Thereafter,
subject to Section 2.05(e), the Borrower may elect to convert such Borrowing to
a Borrowing of a different Type or to continue such Borrowing as a Borrowing of
the same Type and, in the case of a Eurocurrency Borrowing, may elect the
Interest Period therefor, all as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders (except as provided under Section 2.11(b)), and the Loans constituting
each such portion shall be considered a separate Borrowing.

(b) Notice of Elections. To make an election pursuant to this Section, the
Borrower shall notify the Administrative Agent of such election by delivery of a
signed Interest Election Request in a form approved by the Administrative Agent
or by telephone (followed promptly, but no later than the close of business on
the date of such request, by a signed Interest Election Request in a form
approved by the Administrative Agent) by the time that a Borrowing Request would
be required under Section 2.03 if the Borrower were requesting a Borrowing of
the Type resulting from such election to be made on the effective date of such
election. Each such telephonic and written notice of election shall be
irrevocable.

(c) Content of Interest Election Requests. Each telephonic and written notice of
election pursuant to Section 2.05(b) shall specify the following information in
compliance with Section 2.02:

(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) of this
paragraph shall be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurocurrency Borrowing; and

(iv) if the resulting Borrowing is a Eurocurrency Borrowing, the Interest Period
therefor after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period” and permitted under
Section 2.02(d), provided that there shall be no more than ten (10) separate
Borrowings outstanding at any one time.

 

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(d) Notice by the Administrative Agent to the Lenders. Promptly following
receipt of an Interest Election Request, the Administrative Agent shall advise
each applicable Lender of the details thereof and of such Lender’s portion of
each resulting Borrowing.

(e) Failure to Elect; Events of Default. If the Borrower fails to deliver a
timely and complete Interest Election Request with respect to a Eurocurrency
Borrowing prior to the end of the Interest Period therefor, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to a Eurocurrency Borrowing having an Interest
Period of one month. Notwithstanding any contrary provision hereof, if an Event
of Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, (i) any Eurocurrency
Borrowing shall, at the end of the applicable Interest Period for such
Eurocurrency Borrowing, be automatically converted to an ABR Borrowing and
(ii) the Borrower shall not be entitled to elect to convert or continue any
Borrowing into or as a Eurocurrency Borrowing.

SECTION 2.06. Termination, Reduction or Increase of the Commitments.

(a) Scheduled Termination. Unless previously terminated in accordance with the
terms of this Agreement, on the Maturity Date the Commitments shall
automatically terminate and be reduced to zero and all outstanding Loans shall
become due and payable in accordance with Section 2.07(a).

(b) Voluntary Termination or Reduction. The Borrower may at any time terminate,
or from time to time reduce, the Commitments; provided that (i) each reduction
of the Commitments pursuant to this Section 2.06(b) shall be in an amount that
is $5,000,000 or a larger multiple of $1,000,000 in excess thereof (or an amount
less than $5,000,000 if the Commitments are being reduced to zero), and (ii) the
Borrower shall not terminate or reduce the Commitments if, after giving effect
to any concurrent prepayment of the Loans in accordance with Section 2.08, the
total Revolving Credit Exposures would exceed the total Commitments.

(c) Notice of Voluntary Termination or Reduction. The Borrower shall notify the
Administrative Agent of any election to terminate or reduce the Commitments
under paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the applicable Lenders of the contents
thereof. Each notice delivered by the Borrower pursuant to this Section shall be
irrevocable; provided that a notice of termination of the Commitments delivered
by the Borrower may state that such notice is conditioned upon the effectiveness
of other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied.

(d) Effect of Termination or Reduction. Any termination or reduction of the
Commitments shall be permanent. Each reduction of the Commitments shall be made
ratably among the Lenders in accordance with their respective Commitments.

(e) [Intentionally omitted].

 

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(f) Increase of the Commitments.

(i) Requests for Increase by Borrower. The Borrower may, at any time prior to
the Maturity Date, and subject to the conditions set forth below in this clause
(i), elect to increase the Commitments hereunder (each such election being a
“Commitment Increase”) by notice to the Administrative Agent specifying each
existing Lender (each an “Increasing Lender”) and/or each additional lender
(each an “Assuming Lender”) that shall have agreed to an additional Commitment
and the date on which such increase is to be effective (the “Commitment Increase
Date”), which date shall be a Business Day at least three Business Days (or such
lesser period as the Administrative Agent may reasonably agree) after delivery
of such notice and at least 30 days prior to the Maturity Date; provided that
each Lender may determine in its sole discretion whether or not it chooses to
participate in a Commitment Increase; and provided, further that, subject to the
foregoing, each Commitment Increase shall become effective only upon
satisfaction of each of the following conditions:

(A) the minimum amount of the Commitment of any Assuming Lender, and the minimum
amount of the increase of the Commitment of any Increasing Lender, as part of
such commitment Increase shall be $3,000,000 or a larger multiple of $1,000,000
in excess thereof (or, in each case, in such other amounts as agreed to by
Administrative Agent),

(B) immediately after giving effect to such Commitment Increase, the total
Commitments of all of the Lenders hereunder shall not exceed the lesser of
(x) $75,000,000 and (y) the Obligors’ Net Worth;

(C) each Assuming Lender shall be consented to by the Administrative Agent
(which consent shall not be unreasonably withheld, delayed or conditioned);

(D) no Default shall have occurred and be continuing on such Commitment Increase
Date or shall result from the proposed Commitment Increase; and

(E) the representations and warranties contained in this Agreement and the other
Loan Documents shall be true and correct in all material respects (other than
any representation or warranty already qualified by materiality or Material
Adverse Effect, which shall be true and correct in all respects) on and as of
the Commitment Increase Date as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date).

(ii) Effectiveness of Commitment Increase by Borrower. On the Commitment
Increase Date for any Commitment Increase, each Assuming Lender part of such
Commitment Increase, if any, shall become a Lender hereunder as of such
Commitment Increase Date with Commitment in the amount set forth in the
agreement referred to in

 

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Section 2.06(f)(ii)(y) and the Commitment of any Increasing Lender part of such
Commitment Increase shall be increased as of such Commitment Increase Date to
the amount set forth in the agreement referred to in Section 2.06(f)(ii)(y);
provided that:

(x) the Administrative Agent shall have received on or prior to 11:00 a.m.,
New York City time, on such Commitment Increase Date (or on or prior to a time
on an earlier date specified by the Administrative Agent) a certificate of a
duly authorized officer of the Borrower stating that each of the applicable
conditions to such Commitment Increase set forth in the foregoing paragraph
(i) has been satisfied; and

(y) each Assuming Lender or Increasing Lender shall have delivered to the
Administrative Agent, on or prior to 11:00 a.m., New York City time on such
Commitment Increase Date (or on or prior to a time on an earlier date specified
by the Administrative Agent), an agreement, in form and substance satisfactory
to the Borrower and the Administrative Agent, pursuant to which such Lender
shall, effective as of such Commitment Increase Date, undertake a Commitment or
an increase of Commitment, as applicable, duly executed by such Assuming Lender
or Increasing Lender, as applicable, and the Borrower and acknowledged by the
Administrative Agent.

Promptly following satisfaction of such conditions, the Administrative Agent
shall notify the Lenders (including any Assuming Lenders) thereof and of the
occurrence of the Commitment Increase Date by facsimile transmission or
electronic messaging system.

(iii) Recordation into Register. Upon its receipt of an agreement referred to in
clause (ii)(y) above executed by an Assuming Lender or any Increasing Lender,
together with the certificate referred to in clause (ii)(x) above, the
Administrative Agent shall, if such agreement has been completed, (x) accept
such agreement, (y) record the information contained therein in the Register and
(z) give prompt notice thereof to the Borrower.

(iv) Adjustments of Borrowings upon Effectiveness of Increase. On each
Commitment Increase Date, the Borrower shall (A) prepay the outstanding Loans
(if any) in full, (B) simultaneously borrow new Loans hereunder in an amount
equal to such prepayment; provided that with respect to subclauses (A) and (B),
(x) the prepayment to, and Borrowing from, any existing Lender shall be effected
by book entry to the extent that any portion of the amount prepaid to such
Lender will be subsequently borrowed from such Lender and (y) the existing
Lenders, the Increasing Lenders and the Assuming Lenders shall make and receive
payments among themselves, in a manner acceptable to the Administrative Agent,
so that, after giving effect thereto, the Loans are held ratably by the Lenders
in accordance with the respective Commitments of such Lenders (after giving
effect to such Commitment Increase) and (C) pay to the Lenders the amounts, if
any, payable under Section 2.13 as a result of any such prepayment.
Notwithstanding the foregoing, unless otherwise consented in writing by the
Borrower, no Commitment Increase Date shall occur on any day other than the last
day of an Interest Period. The

 

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Administrative Agent shall amend Schedule 1.01(b) to reflect the aggregate
amount of each Lender’s Commitments (including Increasing Lenders and Assuming
Lenders). Each reference to Schedule 1.01(b) in this Agreement shall be to
Schedule 1.01(b) as amended pursuant to this Section.

(v) Terms of Loans issued on the Commitment Increase Date. For the avoidance of
doubt, the terms and provisions of any new Loans issued by any Assuming Lender
or Increasing Lender, and the Commitment Increase of any Assuming Lender or
Increasing Lender, shall be identical to the Loans issued by, and the
Commitments of, the Lenders immediately prior to the applicable Commitment
Increase Date.

SECTION 2.07. Repayment of Loans; Evidence of Debt.

(a) Repayment. Subject to, and in accordance with, the terms of this Agreement,
the Borrower hereby unconditionally promises to pay to the Administrative Agent
for account of the Lenders the outstanding principal amount of the Loans on the
Maturity Date.

(b) Manner of Payment. Prior to any repayment or prepayment of any Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be paid and
shall notify the Administrative Agent by telephone (confirmed by telecopy or
e-mail) of such selection not later than the time set forth in Section 2.08(e)
prior to the scheduled date of such repayment; provided that each repayment of
Borrowings shall be applied to repay any outstanding ABR Borrowings before any
other Borrowings. If the Borrower fails to make a timely selection of the
Borrowing or Borrowings to be repaid or prepaid, such payment shall be applied,
first, to pay any outstanding ABR Borrowings and, second, to other Borrowings in
the order of the remaining duration of their respective Interest Periods (the
Borrowing with the shortest remaining Interest Period to be repaid first). Each
payment of a Borrowing shall be applied ratably to the Loans included in such
Borrowing (except as otherwise provided in Section 2.11(b)).

(c) Maintenance of Records by Lenders. Each Lender shall maintain in accordance
with its usual practice records evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.

(d) Maintenance of Records by the Administrative Agent. The Administrative Agent
shall maintain records in which it shall record (i) the amount of each Loan made
hereunder, the Type thereof and each Interest Period therefor, (ii) the amount
of any principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder and (iii) the amount of any sum received
by the Administrative Agent hereunder for account of the Lenders and each
Lender’s share thereof.

(e) Effect of Entries. The entries made in the records maintained pursuant to
paragraph (c) or (d) of this Section shall be prima facie evidence, absent
manifest error, of the existence and amounts of the obligations recorded
therein; provided that the failure of any Lender or the Administrative Agent to
maintain such records or any error therein shall not in any

 

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manner affect the obligation of the Borrower to repay the Loans in accordance
with the terms of this Agreement. In the event of any conflict between the
accounts and records maintained by any Lender 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.

(f) Promissory Notes. Any Lender may request that Loans made by it be evidenced
by a promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to such Lender (or, if
requested by such Lender, to such Lender and its permitted registered
assigns) and in a form attached hereto as Exhibit C. Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the payee named therein (or, if
such promissory note is a registered note, to such payee and its permitted
registered assigns).

SECTION 2.08. Prepayment of Loans.

(a) Optional Prepayments. The Borrower shall have the right at any time and from
time to time to prepay any Borrowing in whole or in part, without premium or fee
(but subject to Section 2.13), subject to the requirements of this Section. Each
prepayment in part under this Section 2.08(a) shall be in a minimum amount of
$1,000,000 or a larger multiple of $100,000 (or an amount less than $1,000,000
if the aggregate amount of any Borrowing is being paid in full).

(b) Mandatory Prepayments due to Borrowing Base Deficiency. In the event that
the amount of total Revolving Credit Exposure exceeds the total Commitments, the
Borrower shall prepay Loans in such amounts as shall be necessary so that the
amount of total Revolving Credit Exposure does not exceed the total Commitments.
In the event that at any time any Borrowing Base Deficiency shall exist,
promptly (but in no event later than 5 Business Days), the Borrower shall prepay
and reduce (or cause to be prepaid and reduced) the Covered Debt Amount so that
the Borrowing Base Deficiency is promptly cured; provided, that if within such 5
Business Day period, the Borrower shall present to the Administrative Agent a
reasonably feasible plan which plan is reasonably satisfactory to the
Administrative Agent that will enable any such Borrowing Base Deficiency to be
cured within 30 Business Days of the occurrence of such Borrowing Base
Deficiency (which 30-Business Day period shall include the 5 Business Days
permitted for delivery of such plan), then such prepayment or reduction shall be
effected in accordance with such plan (subject, for the avoidance of doubt, to
the limitations as to the allocation of such prepayments set forth above in this
Section 2.08(b)). Notwithstanding the foregoing, the Borrower shall pay interest
in accordance with Section 2.10(c) for so long as the Covered Debt Amount
exceeds the Borrowing Base during such 30-Business Day Period. For clarity, in
the event that the Borrowing Base Deficiency is not cured prior to the end of
such 5 Business Day period (or, if applicable, such 30- Business Day period), it
shall constitute an Event of Default under clause (a) of Article VIII.

(c) [Intentionally Omitted]

 

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(d) [Intentionally Omitted]

(e) Notices, Etc. The Borrower shall notify the Administrative Agent in writing
or by telephone (followed promptly by written confirmation) of any prepayment
hereunder (i) in the case of prepayment of a Eurocurrency Borrowing under
Section 2.08(a), not later than 11:00 a.m., New York City time, three Business
Days before the date of prepayment or (ii) in the case of prepayment of an ABR
Borrowing under Section 2.08(a), or any prepayment under Section 2.08(b), not
later than 11:00 a.m., New York City time, one Business Day before the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date, the principal amount of each Borrowing or portion thereof to be
prepaid and, in the case of a mandatory prepayment, a reasonably detailed
calculation of the amount of such prepayment; provided, that, if a notice of
prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.06(c), then such notice of
prepayment may be revoked if such notice of termination is revoked in accordance
with Section 2.06(c). Promptly following receipt of any such notice relating to
a Borrowing, the Administrative Agent shall advise the Lenders of the contents
thereof. Each prepayment of a Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.10 and shall be made in the manner
specified in Section 2.07(b).

SECTION 2.09. Fees.

(a) Commitment Fee. The Borrower agrees to pay to the Administrative Agent for
account of each Lender a commitment fee, which shall accrue at the Applicable
Commitment Fee Rate on the unused amount of the Commitment of such Lender, if
any, on each day during the period from and including the Effective Date to the
earlier of the date the Commitments terminate and the Maturity Date. Accrued
commitment fees shall be payable in arrears (x) within one Business Day after
each Quarterly Date and (y) on the earlier of the date the Commitments terminate
and the Maturity Date, commencing on the first such date to occur after the
Effective Date. All commitment fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). For purposes of computing commitment
fees, the Commitments shall be deemed to be used to the extent of the
outstanding Loans of all Lenders.

(b) Administrative Agent Fees. The Borrower agrees to pay to the Administrative
Agent, for its own account, fees payable in the amounts and at the times
separately agreed upon between the Borrower and the Administrative Agent.

(c) Payment of Fees. All fees payable hereunder shall be paid on the dates due,
in Dollars and immediately available funds, to the Administrative Agent for
distribution, in the case of facility fees and participation fees, to the
Lenders entitled thereto. Fees paid shall not be refundable under any
circumstances absent manifest error.

 

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SECTION 2.10. Interest.

(a) ABR Loans. The Loans constituting each ABR Borrowing shall bear interest at
a rate per annum equal to the Alternate Base Rate plus the Applicable Margin.

(b) Eurocurrency Loans. The Loans constituting each Eurocurrency Borrowing shall
bear interest at a rate per annum equal to the Adjusted LIBO Rate for the
related Interest Period for such Borrowing plus the Applicable Margin.

(c) Default Interest. Notwithstanding the foregoing, (A) if any Event of Default
resulting from a breach of Section 6.07 or any Event of Default described in
clause (a), (b), (h), (i) or (j) of Article VII of this Agreement has occurred
and is continuing, (B) upon demand of the Administrative Agent or the Required
Lenders if an Event of Default described in any other clause of Article VII has
occurred and is continuing, or (C) if the Covered Debt Amount exceeds the
Borrowing Base during the 30-Business Day period referred to in Section 2.08(b),
in each case the interest applicable to Loans shall accrue, and any fee or other
amount payable by the Borrower hereunder shall bear interest, after as well as
before judgment, at a rate per annum equal to (i) in the case of principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided above,
or (ii) in the case of any fee or other amount, 2% plus the rate applicable to
ABR Loans as provided in paragraph (a) of this Section.

(d) Payment of Interest. Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan in Dollars and upon
termination of the Commitments; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan
prior to the Maturity Date), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and
(iii) in the event of any conversion of any Eurocurrency Borrowing prior to the
end of the Interest Period therefor, accrued interest on such Borrowing shall be
payable on the effective date of such conversion.

(e) Computation. All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent and such
determination shall be conclusive absent manifest error.

 

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SECTION 2.11. Eurocurrency Borrowing Provisions.

(a) Alternate Rate of Interest. If prior to the commencement of the Interest
Period for any Eurocurrency Borrowing:

(i) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate for such Interest Period; or

(ii) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their respective Loans
included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone, telecopy or e-mail as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower and the Lenders that
the circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or the
continuation of any Borrowing as, a Eurocurrency Borrowing and such Borrowing
(unless prepaid) shall be continued as, or converted to, an ABR Borrowing and
(ii) if any Borrowing Request requests a Eurocurrency Borrowing, such Borrowing
shall be made as an ABR Borrowing.

(b) Illegality. Without duplication of any other rights that any Lender has
hereunder, if any Lender determines that any law has made it unlawful, or that
any Governmental Authority has asserted that it is unlawful for any Lender to
make, maintain or fund Loans whose interest is determined by reference to the
LIBO Rate, or to determine or charge interest rates based upon the LIBO Rate, or
any Governmental Authority has imposed material restrictions on the authority of
such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to the Borrower and the
Administrative Agent, (i) any obligation of such Lender to make or continue
Eurocurrency Borrowings or to convert ABR Borrowings to Eurocurrency Borrowings
shall be suspended, and (ii) if such notice asserts the illegality of such
Lender making or maintaining Eurocurrency Borrowings the interest rate on which
is determined by reference to the LIBO Rate component of the Alternate Base
Rate, the interest rate on which ABR Borrowings of such Lender shall, if
necessary to avoid such illegality, be determined by the Administrative Agent
without reference to the LIBO Rate component of the Alternate Base Rate, in each
case until such Lender notifies the Administrative Agent and the Borrower that
the circumstances giving rise to such determination no longer exist. Upon
receipt of such notice, (x) all Eurocurrency Borrowings of such Lender shall
automatically convert to ABR Borrowings (the interest rate which ABR Borrowings
of such Lender shall, if necessary to avoid such illegality, be determined by
the Administrative Agent without reference to the LIBO Rate component of the
Alternate Base Rate), either on the last day of the Interest Period therefor, if
such Lender may lawfully continue to maintain such Eurocurrency Borrowings to
such day, or immediately, if such Lender may not lawfully continue to maintain
such Eurocurrency Borrowings and (y) if such notice asserts the illegality of
such Lender determining or charging interest rates based upon the LIBO Rate, the
Administrative Agent shall during the period of such suspension compute the
Alternate Base Rate applicable to such Lender without reference to the LIBO Rate
component thereof until the Administrative Agent is advised in writing by such
Lender that it is no longer illegal for such Lender to determine or charge
interest rates based upon the LIBO Rate. Upon any such conversion, the Borrower
shall also pay accrued interest on the amount so converted.

 

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SECTION 2.12. Increased Costs.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate);

(ii) subject any Lender to any Taxes (other than (A) Covered Taxes,
(B) Connection Income Taxes and (C) Taxes described in clauses (b) through
(d) of the definition of Excluded Taxes) on its loans, loan principal, letters
of credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or

(iii) impose on any Lender or the London interbank market any other condition,
cost or expense (other than Taxes) affecting this Agreement or Eurocurrency
Loans made by such Lender or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lenders of making or maintaining any Eurocurrency Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender, in Dollars, such
additional amount or amounts as will compensate such Lender for such additional
costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender determines that any Change in Law
regarding capital or liquidity requirements has or would have the effect of
reducing the rate of return on such Lender’s capital or on the capital of such
Lender’s holding company, if any, as a consequence of this Agreement or the
Loans made by such Lender, to a level below that which such Lender or such
Lender’s holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s policies and the policies of such Lender’s
holding company with respect to capital adequacy or liquidity position), by an
amount deemed to be material by such Lender, then from time to time the Borrower
will pay to such Lender, in Dollars, such additional amount or amounts as will
compensate such Lender or such Lender’s holding company for any such reduction
suffered.

(c) Certificates from Lenders. A certificate of a Lender setting forth (i) the
amount or amounts, in Dollars, necessary to compensate such Lender or its
holding company, as the case may be, and (ii) an explanation, prepared in
reasonable detail, of the facts, events or circumstances giving rise to such
increased costs, as specified in paragraph (a) or (b) of this Section (except
that in no event shall any Lender be required to provide any information or
detail that it believes in good faith is confidential) shall be promptly
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.

 

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(d) Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s right to demand such compensation; provided that no Obligor shall be
required to compensate a Lender pursuant to the foregoing provisions of this
Section for any increased costs incurred or reductions suffered more than six
months prior to the date that such Lender notifies the Borrower in writing of
any such Change in Law giving rise to such increased costs or reductions.

SECTION 2.13. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurocurrency Loan other than on the last day of an Interest
Period therefor (including as a result of an Event of Default), (b) the
conversion of any Eurocurrency Loan other than on the last day of an Interest
Period therefor, (c) the failure to borrow, convert, continue or prepay any Loan
on the date specified in any notice delivered pursuant hereto (regardless of
whether such notice is permitted to be revocable under Section 2.08(e) and is
revoked in accordance herewith), or (d) the assignment as a result of a request
by the Borrower pursuant to Section 2.17(b) of any Eurocurrency Loan other than
on the last day of an Interest Period therefor, then, in any such event, the
Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurocurrency Loan, the loss to any
Lender attributable to any such event shall be deemed to include an amount
determined by such Lender to be equal to the excess, if any, of

(i) the amount of interest that such Lender would pay for a deposit equal to the
principal amount of such Loan referred to in clauses (a), (b), (c) or (d) of
this Section 2.13 denominated in Dollars for the period from the date of such
payment, conversion, failure or assignment to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or continue, the duration of the Interest Period that would have resulted from
such borrowing, conversion or continuation) if the interest rate payable on such
deposit were equal to the Adjusted LIBO Rate for Dollars for such Interest
Period, over

(ii) the amount of interest that such Lender would earn on such principal amount
for such period if such Lender were to invest such principal amount for such
period at the interest rate that would be bid by such Lender (or an affiliate of
such Lender) for deposits denominated in Dollars from other banks in the
Eurocurrency market at the commencement of such period.

Payments under this Section shall be made upon written request of a Lender
delivered not later than five Business Days following the payment, conversion,
or failure to borrow, convert, continue or prepay that gives rise to a claim
under this Section accompanied by a written certificate of such Lender setting
forth in reasonable detail the amount or amounts that such Lender is entitled to
receive pursuant to this Section, which certificate shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.

 

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SECTION 2.14. Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Taxes, unless otherwise
required by applicable law; provided that if the Borrower shall be required to
deduct or withhold any Taxes from such payments, then (i) the Borrower shall
make such deductions or withholdings, (ii) the Borrower shall timely pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law and (iii) if such Tax is a Covered Tax, the sum payable shall be
increased as necessary so that after making all required deductions and
withholdings (including deductions and withholdings applicable to additional
sums payable under this Section 2.14) the Administrative Agent or Lender
receives an amount equal to the sum it would have received had no such
deductions or withholdings been made.

(b) Payment of Other Taxes by the Borrower. In addition, the Borrower shall pay
any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.

(c) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent and each Lender for and, within 10 Business Days after
written demand therefor, pay the full amount of any Covered Taxes or Other Taxes
(including Covered Taxes or Other Taxes imposed or asserted on or attributable
to amounts payable under this Section 2.14) payable or paid by the
Administrative Agent or such Lender, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Covered Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

(d) Indemnification of the Administrative Agent. To the extent required by any
applicable law, the Administrative Agent may withhold from any payment to any
Lender an amount equivalent to any applicable withholding tax. Without limiting
the provisions of Section 2.14(a) or (c), each Lender shall, and does hereby,
agree to indemnify the Administrative Agent, and shall make payable in respect
thereof within 30 days after demand therefor, against any and all Taxes and any
and all related losses, claims, liabilities and expenses (including fees,
charges and disbursements of any counsel for the Administrative Agent)
(i) incurred by or asserted against the Administrative Agent by the Internal
Revenue Service or any other Governmental Authority as a result of the failure
of the Administrative Agent to properly withhold tax from amounts paid to or for
the account of such Lender for any reason (including, without limitation,
because the appropriate form was not delivered or not property executed, or
because such Lender failed to notify the Administrative Agent of a change in
circumstance that rendered the exemption from, or reduction of withholding tax
ineffective) and (ii) attributable to such Lender’s failure to comply with the
provisions of Section 9.04 relating to the maintenance of a Participant
Register. A certificate as to the amount of such payment or liability delivered
to any Lender by the Administrative Agent shall be conclusive absent manifest
error. Each Lender hereby authorizes the Administrative Agent to set off and
apply any and all amounts at any time owing to such Lender under this Agreement
or any other Loan Document against any amount

 

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due the Administrative Agent under this paragraph. The agreements in this
paragraph shall survive the resignation and/or replacement of the Administrative
Agent, any assignment of rights by, or the replacement of, a Lender, the
termination of the Commitments and the repayment, satisfaction or discharge of
all other obligations.

(e) Evidence of Payments. As soon as practicable after any payment of Taxes by
the Borrower to a Governmental Authority pursuant to this Section 2.14, the
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent. If the Borrower fails to
pay any Taxes when due to the appropriate Governmental Authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent and
each Lender for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or such Lender as a result of such failure.

(f) Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
tax under the law of the jurisdiction in which the Borrower is located, or any
treaty to which such jurisdiction is a party, with respect to payments under
this Agreement shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law or reasonably
requested by the Borrower, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate. In addition, any Lender, if requested by the
Borrower or the Administrative Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by the Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements. Notwithstanding anything to the contrary in
the preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in Section 2.14(f)(ii)(A)
and (B) or Section 2.14(f) below) shall not be required if in the Lender’s
reasonable judgment such completion, execution or submission would subject such
Lender to any material unreimbursed cost or expense or would materially
prejudice the legal or commercial position of such Lender.

(ii) Without limiting the generality of the foregoing, if the Borrower is a
resident for U.S. federal income tax purposes in the United States,

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower), executed originals of IRS Form W-9
certifying that such Lender is exempt from U.S. federal backup withholding tax;

 

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(B) each Foreign Lender shall (to the extent it is legally entitled to do so)
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent,) whichever of the following is applicable:

 

  (1) duly completed executed originals of Internal Revenue Service Form W-8BEN
or Internal Revenue Service Form W-8BEN-E, as applicable, or any successor form
claiming eligibility for benefits of an income tax treaty to which the United
States is a party,

 

  (2) duly completed executed originals of Internal Revenue Service Form W-8ECI
or any successor form certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business in
the United States,

 

  (3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (A) a certificate, signed
under penalties of perjury, to the effect that such Foreign Lender is not (1) a
“bank” within the meaning of Section 881(c)(3)(A) of the Code, (2) a “10 percent
shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the
Code, or (3) a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code and (B) duly completed executed originals of
Internal Revenue Service Form W-8BEN or Internal Revenue Service Form W-8BEN-E,
as applicable (or any successor form) certifying that the Foreign Lender is not
a United States Person, or

 

  (4) any other form including Internal Revenue Service Form W-8IMY, as
prescribed by applicable law as a basis for claiming exemption from or a
reduction in United States Federal withholding tax duly completed together with
such supplementary documentation as may be prescribed by applicable law to
permit the Borrower to determine the withholding or deduction required to be
made.

(C) In addition, each Foreign Lender shall deliver such forms promptly upon the
expiration or invalidity of any form previously delivered by such Foreign
Lender, provided it is legally able to do so at the time. Each Foreign Lender
shall promptly notify the Borrower and the Administrative Agent at any time that
it becomes aware that it no longer satisfies the legal requirements to provide
any previously delivered form or certificate to the Borrower (or any other form
or certification adopted by the U.S. or other taxing authorities for such
purpose).

 

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In addition, the Administrative Agent shall deliver to the Borrower, at the time
or times reasonably requested by the Borrower, with respect to any payments
received by the Administrative Agent, such documentation as a Lender would be
required to deliver hereunder, and each Lender and the Administrative Agent, as
applicable, agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower in writing of its legal
inability to do so.

(g) If a payment made to a Lender under this Agreement would be subject to U.S.
federal withholding Tax imposed by FATCA if such Lender 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 Lender shall
deliver to the Administrative Agent and the Borrower 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 Administrative Agent or the Borrower, at the time or
times prescribed by law and at such time or times reasonably requested by the
Administrative Agent or the Borrower, as may be necessary for the Administrative
Agent and the Borrower to comply with their obligations under FATCA and to
determine that such Lender has complied with such Lender’s obligations under
FATCA or to determine the amount to deduct and withhold from any such payment.
Solely for purposes of this clause (g), “FATCA” shall include any amendments
made to FATCA after the date of this Agreement.

(h) Treatment of Certain Refunds. If the Administrative Agent or any Lender
determines, in its sole discretion exercised in good faith, that it has received
a refund of any Covered Taxes or Other Taxes as to which it has been indemnified
by the Borrower or with respect to which the Borrower has paid additional
amounts pursuant to this Section 2.14, it shall pay to the Borrower an amount
equal to such refund (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section with respect to the
Covered Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or any Lender, as the case
may be, and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund), provided that the Borrower,
upon the request of the Administrative Agent or any Lender, agrees to repay the
amount paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent or
any Lender in the event the Administrative Agent or any Lender is required to
repay such refund to such Governmental Authority. Notwithstanding anything to
the contrary in this paragraph (h), in no event will the Administrative Agent or
any Lender be required to pay any amount to the Borrower pursuant to this
paragraph (h) the payment of which would place the Administrative Agent or such
Lender in a less favorable net position after-Taxes than the Administrative
Agent or such Lender would have been in if the indemnification payments or
additional amounts giving rise to such refund had never been paid. This
subsection shall not be construed to require the Administrative Agent or any
Lender to make available its tax returns or its books or records (or any other
information relating to its taxes that it deems confidential) to the Borrower or
any other Person.

 

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(i) Defined Term. For purposes of this Section 2.14, the term “applicable law”
includes FATCA.

SECTION 2.15. Payments Generally; Pro Rata Treatment: Sharing of Set-offs.

(a) Payments by the Borrower. The Borrower shall make each payment required to
be made by it hereunder (whether of principal, interest, fees, or under
Sections 2.12, 2.13 or 2.14, or otherwise) or under any other Loan Document
(except to the extent otherwise provided therein) prior to 12:00 noon, New York
City time, on the date when due, in immediately available funds, without
set-off, deduction or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
the Administrative Agent’s Account, except as otherwise expressly provided in
the relevant Loan Document and except payments pursuant to Sections 2.12, 2.13,
2.14 and 9.03, which shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day and, in the case of any payment accruing interest, interest thereon
shall be payable for the period of such extension.

All amounts owing under this Agreement (including commitment fees, payments
required under Sections 2.12 and 2.13 or under any other Loan Document (except
to the extent otherwise provided therein)) are payable in Dollars.

(b) Application of Insufficient Payments. If at any time insufficient funds are
received by and available to the Administrative Agent to pay fully all amounts
of principal, interest and fees then due hereunder, such funds shall be applied
(i) first, to pay interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, to pay principal then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal then due to such parties.

(c) Pro Rata Treatment. Except to the extent otherwise provided herein: (i) each
Borrowing shall be made from the Lenders, each payment of commitment fee under
Section 2.09 shall be made for account of the Lenders, and each termination or
reduction of the amount of the Commitments under Section 2.06, Section 2.08 or
otherwise shall be applied to the respective Commitments of the Lenders, pro
rata according to the amounts of their respective Commitments; (ii) each
Borrowing shall be allocated pro rata among the Lenders according to the amounts
of their respective Commitments (in the case of the making of Loans) or their
respective Loans that are to be included in such Borrowing (in the case of
conversions and continuations of Loans); (iii) each payment or prepayment of
principal of Loans by the Borrower shall be made for account of the Lenders pro
rata in accordance with the respective unpaid principal amounts of the Loans
held by them; and (iv) each payment of interest on Loans by the Borrower shall
be made for account of the Lenders pro rata in accordance with the amounts of
interest on such Loans then due and payable to the respective Lenders.

 

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(d) Sharing of Payments by Lenders. If any Lender shall, by exercising any right
of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans, resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Loans, and
accrued interest thereon then due than the proportion received by any other
Lender, then the Lender receiving such greater proportion shall purchase (for
cash at face value) participations in the Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee,
other than to the Borrower or any Subsidiary or Affiliate thereof (as to which
the provisions of this paragraph shall apply). The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

(e) Presumptions of Payment. Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Administrative Agent for account of the Lenders hereunder that the Borrower will
not make such payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent at the Federal Funds Effective Rate.

(f) Certain Deductions by the Administrative Agent. If any Lender shall fail to
make any payment required to be made by it pursuant to Section 2.04(a) or (b) or
2.15(e), then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are fully
paid.

 

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SECTION 2.16. Defaulting Lenders.

Notwithstanding any provision of this Agreement to the contrary, if any Lender
becomes a Defaulting Lender, then the following provisions shall apply for so
long as such Lender is a Defaulting Lender:

(a) commitment fees pursuant to Section 2.09(a) shall cease to accrue on the
unfunded portion of the Commitment of such Defaulting Lender to the extent, and
during the period, such Lender is a Defaulting Lender and the Borrower shall not
be required to pay any such fee that would have accrued but for the foregoing;

(b) the Commitment and Revolving Credit Exposure of such Defaulting Lender shall
not be included in determining whether all Lenders, two-thirds of the Lenders or
the Required Lenders have taken or may take any action hereunder or under any
other Loan Document (including any consent to any amendment or waiver pursuant
to Section 9.02, except for any amendment or waiver described in
Section 9.02(b)(i), (ii) or (iii)), provided that any waiver, amendment or
modification requiring the consent of all Lenders, two-thirds of the Lenders or
each affected Lender which affects such Defaulting Lender differently than other
Lenders or affected Lenders (as applicable) shall require the consent of such
Defaulting Lender.

In the event that the Administrative Agent and the Borrower each agrees that a
Defaulting Lender has adequately remedied all matters that caused such Lender to
be a Defaulting Lender, then, on such date such Lender shall purchase at par the
portion of the Loans of the other Lenders as the Administrative Agent shall
determine may be necessary in order for such Lender to hold such Loans in
accordance with its Applicable Percentage.

SECTION 2.17. Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender exercises its
rights under Section 2.11(b) or requests compensation under Section 2.12, or if
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for account of any Lender pursuant to Section 2.14, then
such Lender shall use reasonable efforts (subject to overall policy
considerations of such Lender) to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if in the sole
judgment of such Lender, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Section 2.12 or 2.14, as the case may be, in
the future, or eliminate the circumstance giving rise to such Lender exercising
its rights under Section 2.11(b) and (ii) would not subject such Lender to any
cost or expense not required to be reimbursed by the Borrower and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.

(b) Replacement of Lenders. If any Lender exercises its rights under
Section 2.11(b) or requests compensation under Section 2.12, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for account of any Lender pursuant to Section 2.14, or if any Lender
becomes a Defaulting Lender, or if any Lender

 

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becomes a Non-Consenting Lender, then the Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent which consent shall not be
unreasonably withheld or delayed, (ii) such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under
Section 2.12 or payments required to be made pursuant to Section 2.14, such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.

(c) Defaulting Lenders. If any Lender shall fail to make any payment required to
be made by it pursuant to Sections 2.04 or 9.03(c), then the Administrative
Agent may, in its discretion and notwithstanding any contrary provision hereof,
(i) apply any amounts thereafter received by the Administrative Agent for the
account of such Lender for the benefit of the Administrative Agent to satisfy
such Lender’s obligations under such Sections until all such unsatisfied
obligations are fully paid, and/or (ii) hold any such amounts in a segregated
account as cash collateral for, and application to, any future funding
obligations of such Lender under such Sections, in the case of each of clauses
(i) and (ii) above, in any order as determined by the Administrative Agent in
its discretion.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lenders that:

SECTION 3.01. Organization; Powers. Each of the Borrower and its Subsidiaries,
as applicable, is duly organized or incorporated, validly existing and in good
standing under the laws of the jurisdiction of its organization or
incorporation, has all requisite power and authority to carry on its business as
now conducted and is qualified to do business in, and is in good standing in,
every jurisdiction where the failure to do so could not reasonably be expected
to result in a Material Adverse Effect. There is no existing default under any
charter, by-laws or other organizational documents of Borrower or its
Subsidiaries or any event which, with the giving of notice or passage of time or
both, would constitute a material default by any party thereunder.

SECTION 3.02. Authorization; Enforceability. The Transactions are within the
Borrower’s corporate powers and have been duly authorized by all necessary
corporate and, if

 

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required, by all necessary stockholder action. The Board of Directors of the
Borrower and its Subsidiaries have approved the Transactions. This Agreement has
been duly executed and delivered by the Borrower and constitutes, and each of
the other Loan Documents to which it is a party when executed and delivered will
constitute, a legal, valid and binding obligation of the Borrower, enforceable
in accordance with its terms, except as such enforceability may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium or similar laws of
general applicability affecting the enforcement of creditors’ rights and (b) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, or registration or filing with, or any other
action by, any Governmental Authority, except for (i) such as have been or will
be obtained or made and are in full force and effect and (ii) filings and
recordings in respect of the Liens created pursuant to the Security Documents,
(b) will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of the Borrower or any of its Subsidiaries or any
order of any Governmental Authority (including the Investment Company Act and
the rules, regulations and orders issued by the SEC thereunder), (c) will not
violate or result in a default in any material respect under any indenture,
agreement or other instrument binding upon the Borrower or any of its
Subsidiaries or assets, or give rise to a right thereunder to require any
material payment to be made by any such Person, and (d) except for the Liens
created pursuant to the Security Documents, will not result in the creation or
imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.

SECTION 3.04. Financial Condition; No Material Adverse Effect.

(a) Financial Statements. The financial statements delivered to the
Administrative Agent and the Lenders by the Borrower pursuant to Section 4.01(c)
present fairly, in all material respects, the consolidated financial position,
assets and liabilities, results of operations, changes in net assets, cash flows
and investments of the Borrower and its consolidated Subsidiaries as of such
date and for such period in accordance with GAAP, subject, in the case of
unaudited financial statements, to year-end audit adjustments and the absence of
footnotes. As of the Effective Date, the Borrower and its Subsidiaries, taken as
a whole, do not have any material contingent liabilities, material liabilities
for taxes, material unusual forward or material long-term commitments or
material unrealized or anticipated losses from any unfavorable commitments not
reflected in the financial statements referred to above.

(b) The financial statements delivered to the Administrative Agent and the
Lenders by the Borrower pursuant to Sections 5.01(a) and (b) present fairly, in
all material respects, the consolidated financial position, assets and
liabilities, results of operations, changes in net assets, cash flows and
investments of the Borrower and its consolidated Subsidiaries in accordance with
GAAP, in each case, as of the end of the period covered by such financial
statements and subject, in the case of unaudited financial statements, to
year-end audit adjustments and the absence of footnotes. As of the end of the
period covered by the most recent financial statements referred to in this
clause (b), the Borrower and its Subsidiaries, taken as a whole, do not have any
material contingent liabilities, material liabilities for taxes, material
unusual forward or material long-term commitments which are not reflected in
such financial statements.

 

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(c) No Material Adverse Effect. Since December 31, 2013, there has not been any
event, development or circumstance that has had or could reasonably be expected
to have a Material Adverse Effect.

SECTION 3.05. Litigation. There are no actions, suits, investigations or
proceedings by or before any arbitrator or Governmental Authority now pending
against or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any of its Subsidiaries (a) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect or (b) that involve this Agreement or the Transactions.

SECTION 3.06. Compliance with Laws and Agreements. Each of the Borrower and its
Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. Neither the Borrower nor any of
its Subsidiaries is subject to any contract or other arrangement, the
performance of which by the Borrower could reasonably be expected to result in a
Material Adverse Effect. Neither the Borrower nor its Subsidiaries is in default
in any manner under any provision of any agreement or instrument to which it is
a party or by which it or any of its property is or may be bound, and no
condition exists which, with the giving of notice or the lapse of time or both,
would constitute such a default, in each case where such default could
reasonably be expected to result in a Material Adverse Effect.

SECTION 3.07. Taxes. Each of the Borrower and its Subsidiaries has timely filed
or has caused to be timely filed all material U.S. federal, state and local Tax
returns that are required to be filed by it and all other material Tax returns
that are required to be filed by it and has paid all material Taxes for which it
is directly or indirectly liable and any assessments made against it or any of
its property and all other material Taxes, fees or other charges imposed on it
or any of its property by any Governmental Authority, except such Taxes, fees or
other charges that are being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with GAAP have been provided on
the books of the Borrower or its Subsidiaries, as the case may be. The charges,
accruals and reserves on the books of the Borrower and any of its Subsidiaries
in respect of Taxes and other governmental charges are adequate in accordance
with GAAP. Neither the Borrower nor any of its Subsidiaries has given or been
requested to give a waiver of the statute of limitations relating to the payment
of any federal, state, local and foreign Taxes or other impositions, and no Tax
lien has been filed with respect to the Borrower or any of its Subsidiaries.
There is no proposed Tax assessment against the Borrower or any of its
Subsidiaries, and there is no basis for such assessment. The period within which
U.S. federal income Taxes may be assessed against any of the Borrower or any of
its Subsidiaries has expired for all taxable years ending on or before
December 31, 2006.

 

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SECTION 3.08. ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, alone or together with any other ERISA Events that have occurred or
are reasonably expected to occur, could reasonably be expected to result in
liability of the Borrower or any of its Subsidiaries in an aggregate amount
exceeding $2,500,000.

SECTION 3.09. Disclosure.

(a) None of the written reports, financial statements, certificates or other
written information (exclusive of all projected financial information, other
forward looking information relating to third parties and information of a
general economic or general industry nature, all of which are covered in clause
(b) below) that have been delivered to the Administrative Agent or any Lender by
or on behalf of the Borrower in connection with the Transactions or delivered
under any Loan Document (after giving effect to all written updates provided by
the Borrower to the Administrative Agent or all Lenders from time to time),
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained therein at the time
made and taken as a whole not misleading in light of the circumstances under
which such statements were made; and

(b) All financial projections, pro forma financial information and other
forward-looking information which has been delivered to the Administrative Agent
or any Lender by or on behalf of Borrower in connection with the transactions
contemplated by this Agreement or delivered under any Loan Document are based
upon good faith assumptions and, in the case of financial projections and pro
forma financial information, good faith estimates, in each case, believed to be
reasonable at the time made, it being recognized that (i) such financial
information as it relates to future events is subject to significant uncertainty
and contingencies (many of which are beyond the control of the Borrower) and are
therefore not to be viewed as fact, and (ii) actual results during the period or
periods covered by such financial information may differ materially and
adversely from the results set forth therein.

SECTION 3.10. Investment Company Act; Margin Regulations.

(a) Status as Business Development Company. The Borrower is an “investment
company” that has elected to be regulated as a “business development company”
within the meaning of the Investment Company Act and has elected to be treated
as a RIC (and has qualified as a RIC in each taxable year since the taxable year
ended December 31, 2011).

(b) Compliance with Investment Company Act. The business and other activities of
the Borrower and its Subsidiaries do not result in a violation or breach of the
provisions of the Investment Company Act or any rules, regulations or orders
issued by the SEC thereunder, except where such breaches or violations,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

(c) Investment Policies. The Borrower is in compliance in all material respects
with the Investment Policies.

 

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(d) Use of Credit. Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose, whether immediate, incidental or ultimate, of buying or
carrying Margin Stock, and no part of the proceeds of any extension of credit
hereunder will be used to buy or carry any Margin Stock. On the Effective Date,
neither the Borrower nor any of its Subsidiaries own any Margin Stock.

SECTION 3.11. Material Agreements and Liens.

(a) Material Agreements. Schedule 3.11(a) is a complete and correct list of each
credit agreement, loan agreement, indenture, note purchase agreement, guarantee,
letter of credit or other arrangement providing for or otherwise relating to any
Indebtedness or any extension of credit (or commitment for any extension of
credit) to, or guarantee by, the Borrower or any of its Subsidiaries outstanding
on the Effective Date, other than such Indebtedness, extensions of credit or
guarantees which, in the aggregate, do not exceed $50,000, and the aggregate
principal or face amount outstanding or that is, or may become, outstanding
under each such arrangement is correctly described in Schedule 3.11(a).

(b) Liens. Schedule 3.11(b) is a complete and correct list of each Lien securing
Indebtedness of any Person outstanding on the Effective Date covering any
property of the Borrower or any of its Subsidiaries, and the aggregate principal
amount of such Indebtedness secured (or that may be secured) by each such Lien
and the property covered by each such Lien as of the Effective Date is correctly
described in Schedule 3.11(b).

SECTION 3.12. Subsidiaries and Investments.

(a) Subsidiaries. Set forth in Schedule 3.12(a) is a complete and correct list
of all of the Subsidiaries of the Borrower as of the Effective Date together
with, for each such Subsidiary, (i) the jurisdiction of organization of such
Subsidiary, (ii) each Person holding ownership interests in such Subsidiary and
(iii) the nature of the ownership interests held by each such Person and the
percentage of ownership of such Subsidiary represented by such ownership
interests. Except as disclosed in Schedule 3.12(a), as of the Effective Date,
(x) the Borrower owns, free and clear of Liens, and has the unencumbered right
to vote, all outstanding ownership interests in each Subsidiary shown to be held
by it in Schedule 3.12(a), and (y) all of the issued and outstanding capital
stock of each such Subsidiary organized as a corporation is validly issued,
fully paid and nonassessable.

(b) Investments. Set forth in Schedule 3.12(b) is a complete and correct list of
all Investments (other than Investments of the types referred to in clauses (b),
(c), (d) and (e) of Section 6.04) held by the Borrower or any of its
Subsidiaries in any Person on the Effective Date and, for each such Investment,
(i) the identity of the Person or Persons holding such Investment, (ii) the
nature of such Investment, (iii) the amount of such Investment, as of the date
made, and (iv) the rate of interest charged for such Investment. Except as
disclosed in Schedule 3.12(b), as of the Effective Date each of the Borrower and
its Subsidiaries owns, free and clear of all Liens (other than Liens permitted
pursuant to Section 6.02), all such Investments.

 

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SECTION 3.13. Properties.

(a) Title Generally. Each of the Borrower and its Subsidiaries has good title
to, or valid leasehold interests in, all its real and personal property material
to its business, except for minor defects in title that do not interfere with
its ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.

(b) Intellectual Property. Each of the Borrower and its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

SECTION 3.14. Solvency . On the Effective Date, and upon the incurrence of any
extension of credit hereunder, on any date on which this representation and
warranty is made, (a) the Borrower will be Solvent on an unconsolidated basis,
and (b) each Obligor will be Solvent on a consolidated basis with the other
Obligors.

SECTION 3.15. Affiliate Agreements. As of the Effective Date, the Borrower has
heretofore delivered to the Administrative Agent and each of the Lenders true
and complete copies of each of the Affiliate Agreements (including any schedules
and exhibits thereto, and any amendments, supplements or waivers executed and
delivered thereunder). As of the Effective Date, other than the Affiliate
Agreements, there is no contract, agreement or understanding between the
Borrower or any of its Subsidiaries on one hand, and any Affiliate of the
Borrower or any of its Subsidiaries on the other hand. As of the Effective Date,
the Affiliate Agreements are in full force and effect.

SECTION 3.16. No Default. No Default or Event of Default has occurred and is
continuing under this Agreement.

SECTION 3.17. Use of Proceeds. The proceeds of the Loans shall be used for the
general corporate purposes of the Borrower and its Subsidiaries (other than SBIC
Subsidiaries except as expressly permitted under Section 6.03(e)), in the
ordinary course of its business, making of distributions not prohibited by this
Agreement and the acquisition and funding (either directly or through one or
more wholly-owned Subsidiary Guarantors) of leveraged loans, mezzanine loans,
high yield securities, and other Portfolio Investments, but excluding, for
clarity, the buying or carrying of Margin Stock.

SECTION 3.18. Security Documents. The Guarantee and Security Agreement is
effective to create in favor of the Collateral Agent for the benefit of the
Secured Parties (as defined in the Guarantee and Security Agreement), legal,
valid and enforceable Liens on, and security interests in, the Collateral and,
when (i) all appropriate filings or recordings are made in the appropriate
offices as may be required under applicable law and, as applicable, (ii) upon
the taking of possession or control by the Collateral Agent of the Collateral
with respect to which a security interest may be perfected by possession or
control (which possession or control shall be given to the Collateral Agent to
the extent possession or control by the Collateral Agent is

 

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required by the Guarantee and Security Agreement), the Liens created by the
Guarantee and Security Agreement shall constitute fully perfected Liens on, and
security interests in, all right, title and interest of the grantors in the
Collateral (other than such Collateral in which a security interest cannot be
perfected under the UCC as in effect at the relevant time in the relevant
jurisdiction), in each case subject to no Liens other than Liens permitted by
Section 6.02.

SECTION 3.19. Compliance with Sanctions. Neither the Borrower nor any Affiliate
of the Borrower is subject to sanctions administered by the United States
Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the
European Union, Her Majesty’s Treasury, the United Nations Security Council, or
any other relevant sanctions authority. Furthermore, no part of the proceeds of
a loan will be used, directly or indirectly, by the Borrower or any Affiliate of
the Borrower to finance or facilitate a transaction with a person subject to
sanctions administered by OFAC, the European Union, Her Majesty’s Treasury, the
United Nations Security Council, or any other relevant sanctions authority.

SECTION 3.20. Anti-Money Laundering Program. The Borrower has implemented an
anti-money laundering program to the extent required by the Uniting And
Strengthening America By Providing Appropriate Tools Required To Intercept And
Obstruct Terrorism, as amended (the “USA PATRIOT Act”), and the rules and
regulations thereunder.

SECTION 3.21. Capitalization.

(a) As of the Effective Date, the authorized and outstanding Equity Interests of
the Borrower are set forth on Schedule 3.21. All of the outstanding Equity
Interests of the Borrower are validly issued, fully paid and non-assessable and
are owned as of the Effective Date by the equity holders and in the amounts set
forth on Schedule 3.21. As of the Effective Date, none of the outstanding Equity
Interests of the Borrower was issued in violation of any law (including, without
limitation, state and federal securities laws) and there are no Liens on or with
respect to any such Equity Interests.

(b) As of the Effective Date, except as set forth on Schedule 3.21, there are no
outstanding (i) securities convertible into or exchangeable for Equity Interests
of the Borrower; (ii) options, warrants or other rights to purchase or subscribe
for Equity Interests of the Borrower or (iii) contracts, commitments,
agreements, understandings or arrangements of any kind relating to the issuance
of any Equity Interests of the Borrower. As of the Effective Date, except as set
forth on Schedule 3.21, there is no outstanding right, option or other agreement
of any kind to purchase or otherwise to receive from the Borrower or any equity
holder of the Borrower, any ownership interest in the Borrower, and there is no
outstanding right or security of any kind convertible into such ownership
interest. As of the Effective Date, there are no voting trusts, proxies or other
similar agreements or understandings with respect to the Equity Interests of the
Borrower.

SECTION 3.22. [Intentionally Omitted]

SECTION 3.23. [Intentionally Omitted]

 

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SECTION 3.24. Foreign Corrupt Practices Act. Neither the Borrower nor any
Affiliate of the Borrower and, to the Borrower’s knowledge, any director,
officer, agent, employee, affiliate or other person associated with or acting on
behalf of the Borrower or any Affiliate the Borrower has: (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity or to influence official action;
(ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment; or
(iv) violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations thereunder (the
“FCPA”); and each of the Borrower and any Affiliate of the Borrower have
conducted their businesses in compliance with the FCPA and have instituted and
maintained policies and procedures designed to ensure, and which are reasonably
expected to continue to ensure, compliance therewith.

ARTICLE IV

CONDITIONS

SECTION 4.01. Effective Date. The effectiveness of this Agreement and of the
obligations of the Lenders to make Loans hereunder shall not become effective
until completion of each of the following conditions precedent (unless a
condition shall have been waived in accordance with Section 9.02):

(a) Documents. Administrative Agent shall have received each of the following
documents, each of which shall be reasonably satisfactory to the Administrative
Agent (and to the extent specified below to each Lender) in form and substance:

(i) Executed Counterparts. From each party hereto either (1) a counterpart of
this Agreement signed on behalf of such party or (2) written evidence
satisfactory to the Administrative Agent (which may include telecopy or e-mail
transmission of a signed signature page to this Agreement) that such party has
signed a counterpart of this Agreement.

(ii) Guarantee and Security Agreement; Custodian Agreement. The Guarantee and
Security Agreement and a Custodian Agreement with respect to the Borrower’s
Custodian Account, each duly executed and delivered by each of the parties
thereto, and all other documents or instruments required to be delivered by the
Guarantee and Security Agreement and such Custodian Agreement in connection with
the execution thereof.

(iii) Opinion of Counsel to the Borrower. A favorable written opinion (addressed
to the Administrative Agent and the Lenders and dated the Effective Date) of
Morrison & Foerster LLP, counsel for the Borrower, in form and substance
reasonably acceptable to the Administrative Agent and covering such matters as
the Administrative Agent may reasonably request (and the Borrower hereby
instructs such counsel to deliver such opinion to the Lenders and the
Administrative Agent).

 

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(iv) Corporate Documents. The Administrative Agent shall have received a
certificate of the secretary or assistant secretary of each Obligor, dated the
Effective Date, certifying that attached thereto are (1) true and complete
copies of the organizational documents of each Obligor certified as of a recent
date by the appropriate governmental official, (2) signature and incumbency
certificates of the officers of such Person executing the Loan Documents to
which it is a party, (3) true and complete resolutions of the Board of Directors
of each Obligor approving and authorizing the execution, delivery and
performance of this Agreement and the other Loan Documents to which it is a
party or by which it or its assets may be bound as of the Effective Date and, in
the case of the Borrower, authorizing the borrowings hereunder, and that such
resolutions are in full force and effect without modification or amendment,
(4) a good standing certificate from the applicable Governmental Authority of
each Obligor’s jurisdiction of incorporation, organization or formation and in
each jurisdiction in which it is qualified as a foreign corporation or other
entity to do business, each dated a recent date prior to the Effective Date, and
(5) such other documents and certificates as the Administrative Agent or its
counsel may reasonably request relating to the organization, existence and good
standing of the Obligors, and the authorization of the Transactions, all in form
and substance reasonably satisfactory to the Administrative Agent and its
counsel.

(v) Officer’s Certificate. A certificate, dated the Effective Date and signed by
a Financial Officer of the Borrower, confirming compliance with the conditions
set forth in Sections 4.02(i), (ii), (iii) and (iv).

(b) Liens. The Administrative Agent shall have received results of a recent lien
search in each relevant jurisdiction with respect to the Obligors, confirming
the priority of the Liens in favor of the Collateral Agent created pursuant to
the Security Documents and revealing no liens on any of the assets of the
Borrower or its Subsidiaries except for Liens permitted under Section 6.02 or
Liens to be discharged on or prior to the Effective Date pursuant to
documentation satisfactory to the Administrative Agent. All UCC financing
statements, control agreements, stock certificates and other documents or
instruments required to be filed or executed and delivered in order to create in
favor of the Collateral Agent, for the benefit of the Administrative Agent and
the Lenders, a first-priority perfected (subject to Eligible Liens) security
interest in the Collateral (to the extent that such a security interest may be
perfected by filing, possession or control under the Uniform Commercial Code and
as required hereunder or under the Guarantee and Security Agreement) shall have
been properly filed (or provided to the Administrative Agent) or executed and
delivered in each jurisdiction required.

(c) Financial Statements. The Administrative Agent and the Lenders shall have
received prior to the execution of this Agreement the final version of the
statement of assets and liabilities and the related statement of operations,
statement of changes in net assets, statement of cash flows and schedule of
investments of the Borrower as of and for the fiscal periods ended December 31,
2013 and March 31, 2014, all certified in writing by a Financial Officer of the
Borrower as presenting fairly in all material respects the financial condition
and

 

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results of operations of the Borrower and its Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes. The Administrative Agent and the
Lenders shall have received any other financial statements of the Borrower and
its Subsidiaries as they shall reasonably request.

(d) Consents. The Borrower shall have obtained and delivered to the
Administrative Agent copies of all consents, approvals, authorizations,
registrations, or filings (other than any filing required under the Exchange Act
or the rules or regulations promulgated thereunder, including, without
limitation, any filing required on Form 8-K) required to be made or obtained by
the Borrower and all guarantors in connection with the Transactions, and such
consents, approvals, authorizations, registrations, filings and orders shall be
in full force and effect and all applicable waiting periods shall have expired
and no investigation or inquiry by any Governmental Authority regarding the
Transactions or any transaction being financed with the proceeds of the Loans
shall be ongoing.

(e) No Litigation. There shall not exist any action, suit, investigation,
litigation or proceeding or other legal or regulatory developments pending or
threatened in any court or before any arbitrator or Governmental Authority that
relates to the Transactions or that could reasonably be expected to have a
Material Adverse Effect.

(f) Solvency Certificate. On the Effective Date, the Administrative Agent shall
have received a solvency certificate of a Financial Officer of the Borrower
dated as of the Effective Date and addressed to the Administrative Agent and the
Lenders, and in form, scope and substance reasonably satisfactory to
Administrative Agent, with appropriate attachments and demonstrating that both
before and after giving effect to the Transactions, (a) the Borrower will be
Solvent on an unconsolidated basis and (b) each Obligor will be Solvent on a
consolidated basis with the other Obligors.

(g) Default. No Default shall have occurred and be continuing under this
Agreement.

(h) USA PATRIOT Act. The Administrative Agent shall have received all
documentation and other information required by bank regulatory authorities
under applicable “know your customer” and anti-money laundering rules and
regulations, including the USA PATRIOT Act, as reasonably requested by the
Administrative Agent.

(i) Investment Policies. The Administrative Agent shall have received the
Investment Policies as in effect on the Effective Date in form and substance
satisfactory to the Lender.

(j) [Intentionally Omitted].

(k) Other Documents. The Administrative Agent shall have received such other
documents, instruments, certificates, opinions and information as the
Administrative Agent may reasonably request in form and substance satisfactory
to the Administrative Agent.

 

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(l) Fees and Expenses. The Borrower shall have paid in full, to the extent not
paid pursuant to Section 2.09 hereof, to the Administrative Agent and the
Lenders all fees and expenses related to this Agreement owing on the Effective
Date, including any up-front fee due to any Lender on the Effective Date.

SECTION 4.02. Each Credit Event. The obligation of each Lender to make any Loan,
including any Loans on the Effective Date is additionally subject to the
satisfaction of the following conditions:

(i) the representations and warranties of the Borrower set forth in this
Agreement and in the other Loan Documents shall be true and correct in all
material respects (other than any representation or warranty already qualified
by materiality or Material Adverse Effect, which shall be true and correct in
all respects) on and as of the date of such Loan, or, as to any such
representation or warranty that refers to a specific date, as of such specific
date;

(ii) at the time of and immediately after giving effect to such Loan, no Default
shall have occurred and be continuing;

(iii) either (i) the aggregate Covered Debt Amount (after giving effect to such
Loan) shall not exceed the Borrowing Base reflected on the Borrowing Base
Certificate most recently delivered to the Administrative Agent or (ii) the
Borrower shall have delivered an updated Borrowing Base Certificate
demonstrating that the Covered Debt Amount (after giving effect to such
Loan) shall not exceed the Borrowing Base after giving effect to such Loan as
well as any concurrent acquisitions of Portfolio Investments by the Borrower;

(iv) after giving effect to such Loan, the Borrower shall be in pro forma
compliance with each of the covenants set forth in Sections 6.07(a), (b), (d),
(e) and (f);

(v) the Custodian Agreement shall have been duly executed and delivered by the
Borrower, the Collateral Agent and the Custodian and all other control
arrangements required at the time by Section 5.08(c)(ii) with respect to the
Obligors’ other deposit accounts and securities accounts shall have been entered
into; and

(vi) in the case of the first Borrowing, the Administrative Agent shall have
received (i) a Borrowing Base Certificate dated as of the date of the Borrowing
Request, showing a calculation of the Borrowing Base as of the date thereof in
form and substance reasonably satisfactory to the Administrative Agent and
(ii) a certificate from the Borrower’s insurance broker or other evidence
reasonably satisfactory to it that all insurance required to be maintained
pursuant to the Loan Documents is in full force and effect.

Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in the preceding
sentence.

 

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ARTICLE V

AFFIRMATIVE COVENANTS

Until the Termination Date, the Borrower covenants and agrees with the Lenders
that:

SECTION 5.01. Financial Statements and Other Information. The Borrower will
furnish to the Administrative Agent for distribution to each Lender:

(a) within 90 days after the end of each fiscal year of the Borrower (commencing
with the fiscal year ending December 31, 2014), the audited consolidated
statement of assets and liabilities and the related statement of operations,
statement of changes in net assets, statement of cash flows and schedule of
investments of the Borrower and its Subsidiaries as of the end of and for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year (to the extent full fiscal year information is available),
all reported on by McGladrey LLP or other independent public accountants of
recognized national standing to the effect that such consolidated financial
statements present fairly in all material respects the financial condition and
results of operations of the Borrower and its Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied (which report shall be
unqualified as to going concern and scope of audit and shall not contain any
explanatory paragraph or paragraph of emphasis with respect to going concern);
provided that the requirements set forth in this clause (a) may be fulfilled by
providing to the Administrative Agent for distribution to each Lender the report
filed by the Borrower with the SEC on Form 10-K for the applicable fiscal year;

(b) within 45 days after the end of each of the first three fiscal quarters of
each fiscal year of the Borrower (commencing with the fiscal quarter ending
June 30, 2014), the consolidated statement of assets and liabilities and the
related statements of operations, statement of changes in net assets, statement
of cash flows and schedule of investments of the Borrower and its Subsidiaries
as of the end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for (or,
in the case of the statement of assets and liabilities, as of the end of) the
corresponding period or periods of the previous fiscal year (to the extent such
information is available for the previous fiscal year), all certified by a
Financial Officer of the Borrower as presenting fairly in all material respects
the financial condition and results of operations of the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes; provided that the requirements set forth in this clause (b) may be
fulfilled by providing to the Administrative Agent for distribution to each
Lender the report filed by the Borrower with the SEC on Form 10-Q for the
applicable quarterly period;

(c) concurrently with any delivery of financial statements under clause (a) or
(b) of this Section, a certificate of a Financial Officer of the Borrower (i) to
the extent the requirements in clause (a) and (b) are not fulfilled by the
Borrower delivering the applicable report delivered to (or filed with) the SEC,
certifying that such statements are consistent with the

 

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financial statements filed by the Borrower with the SEC, (ii) certifying as to
whether the Borrower has knowledge that a Default has occurred and, if a Default
has occurred, specifying the details thereof and any action taken or proposed to
be taken with respect thereto, (iii) setting forth reasonably detailed
calculations demonstrating compliance with Sections 6.01, (c), (d), and (e),
6.02(f), 6.04(c) and (i), 6.05(b) and 6.07 during the period reported on,
(iv) stating whether any change in GAAP as applied by (or in the application of
GAAP by) the Borrower has occurred since the Effective Date (but only if the
Borrower has not previously reported such change to the Administrative Agent)
and, if any such change has occurred (and has not been previously reported to
the Administrative Agent), specifying the effect of such change on the financial
statements accompanying such certificate, (v) attaching a list of Subsidiaries
as of the date of delivery of such certificate or a confirmation that there is
no change in such information since the date of the last such list and
(vi) providing a reconciliation of any difference between the assets and
liabilities of the Borrower and its consolidated Subsidiaries presented in such
financing statements and the assets and liabilities of the Borrower and its
Subsidiaries for purposes of calculating the financial covenants in
Section 6.07;

(d) as soon as available and in any event not later than twenty (20) calendar
days after the end of each monthly accounting period (ending on the last day of
each calendar month) of the Borrower and its Subsidiaries, a Borrowing Base
Certificate as of the last day of such accounting period;

(e) promptly but no later than two Business Days after any Financial Officer of
the Borrower shall at any time have knowledge that there is a Borrowing Base
Deficiency or knowledge that the Borrowing Base has declined by more than 15%
from the Borrowing Base stated in the Borrowing Base Certificate last delivered
by the Borrower to the Administrative Agent, a Borrowing Base Certificate as at
the date such Financial Officer has knowledge of such Borrowing Base Deficiency
or decline indicating the amount of the Borrowing Base Deficiency or decline as
at the date such Financial Officer obtained knowledge of such deficiency and the
amount of the Borrowing Base Deficiency or decline as of the date not earlier
than two Business Days prior to the date the Borrowing Base Certificate is
delivered pursuant to this paragraph;

(f) promptly upon receipt thereof copies of all significant written reports
submitted to the management or board of directors of the Borrower by the
Borrower’s independent public accountants in connection with each annual,
interim or special audit or review of any type of the financial statements or
related internal control systems of the Borrower or any of its Subsidiaries
delivered by such accountants to the management or board of directors of the
Borrower;

(g) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials sent to stockholders and
filed by the Borrower or any of its Subsidiaries with the SEC or with any
national securities exchange, as the case may be;

(h) within 45 days after the end of each fiscal quarter of the Borrower, all
internal and external valuation reports relating to the Eligible Portfolio
Investments (including all valuation reports delivered by the Approved
Third-Party Appraiser in connection with the

 

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quarterly appraisals of Unquoted Investments in accordance with
Section 5.12(b)(ii)(B)) and all underwriting memoranda (or, if no underwriting
memorandum has been prepared, all materials similar to underwriting memorandum
that are in a form reasonably satisfactory to the Administrative Agent) for all
Eligible Portfolio Investments included in such valuation reports, and any other
information relating to the Eligible Portfolio Investments as reasonably
requested by the Administrative Agent or any Lender; provided that the
underwriting memoranda or such other materials for a particular Eligible
Portfolio Investment of an Obligor shall only be required to be delivered within
30 days of the initial closing of such Eligible Portfolio Investment and at no
other time;

(i) to the extent not otherwise provided by the Custodian, within thirty
(30) days after the end of each month, updated copies of custody reports
(including (i) activity reports with respect to cash and Cash Equivalents
included in the calculation of the Borrowing Base and (ii) to the extent
available, an itemized list of each Portfolio Investment held in any Custodian
Account owned by the Borrower or any Subsidiary) with respect to any Custodian
Account owned by the Borrower or any of its Subsidiaries;

(j) within 45 days after the end of each fiscal quarter of the Borrower, a
certificate of a Financial Officer of the Borrower certifying that attached
thereto is a complete and correct description of all Portfolio Investments as of
the date thereof, including, with respect to each such Portfolio Investment, the
name of the Borrower or Subsidiary holding such Portfolio Investment and the
name of the issuer of such Portfolio Investment;

(k) to the extent such information is not otherwise available in the financial
statements delivered pursuant to clause (a) or (b) of this Section 5.01, within
5 Business Days of the due date set forth in clauses (a) or (b) of this Section
for any quarterly or annual financial statements, as the case may be, a schedule
prepared in accordance with GAAP setting forth in reasonable detail with respect
to each Portfolio Investment where there has been a realized gain or loss in the
most recently completed fiscal quarter, (i) the cost basis of such Portfolio
Investment, (ii) the realized gain or loss associated with such Portfolio
Investment, (iii) the associated reversal of any previously unrealized gains or
losses associated with such Portfolio Investment, (iv) the proceeds received
with respect to such Portfolio Investment representing repayments of principal,
and (v) any other amounts received with respect to such Portfolio Investment
representing exit fees or prepayment penalties; and

(l) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of the Borrower or any
of its Subsidiaries (including any information concerning any Plan or
Multiemployer Plan), or compliance with the terms of this Agreement and the
other Loan Documents, as the Administrative Agent or any Lender may reasonably
request.

 

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SECTION 5.02. Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

(a) the occurrence of any Default (provided that if such Default is subsequently
cured within the time periods set forth herein, the failure to provide notice of
such Default shall not itself result in an Event of Default hereunder);

(b) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting the Borrower or
any of its Affiliates that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;

(c) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower or any of its Subsidiaries in an aggregate amount
exceeding $2,500,000 with such notice to include a statement of the Borrower
setting forth details as to such ERISA Event and the action, if any, that the
Borrower proposes to take with respect thereto; and

(d) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

SECTION 5.03. Existence; Conduct of Business. The Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect (x) its legal existence or
(y) its rights, licenses, permits, privileges and franchises, except in the case
of clause (y), as would not reasonably be expected to result in a Material
Adverse Effect; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution not prohibited under Section 6.03.

SECTION 5.04. Payment of Obligations. The Borrower will, and will cause each of
its Subsidiaries to, pay its obligations, including Tax liabilities and material
contractual obligations, that, if not paid, could reasonably be expected to
result in a Material Adverse Effect before the same shall become delinquent or
in default, except where (a) the validity or amount thereof is being contested
in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.

SECTION 5.05. Maintenance of Properties; Insurance. The Borrower will, and will
cause each of its Subsidiaries to, (a) keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted, (b) maintain, with financially sound and reputable
insurance companies, insurance in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar business,
operating in the same or similar locations and (c) after the request of the
Administrative Agent, promptly deliver to the Administrative Agent any
certificate or certificates from the Borrower’s insurance broker or other
documentary evidence, in each case demonstrating the effectiveness of, or any
changes to, such insurance.

 

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SECTION 5.06. Books and Records; Inspection and Audit Rights.

(a) Books and Records; Inspection Rights. The Borrower will, and will cause each
of its Subsidiaries to, keep financial books of record and account in accordance
with GAAP. The Borrower will, and will cause each of its Subsidiaries to, permit
any representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice to the Borrower, at the sole expense of the Borrower, to
(i) visit and inspect its properties, to examine and make extracts from its
books and records, and (ii) discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as often
as reasonably requested, provided that the Borrower or such Subsidiary shall be
entitled to have its representatives and advisors present during any inspection
of its books and records; provided, further, that the Borrower shall not be
required to pay for more than two such visits and inspections in any calendar
year unless an Event of Default has occurred and is continuing at the time of
any subsequent visits and inspections during such calendar year.

(b) Audit Rights. The Borrower will, and will cause each of its Subsidiaries to,
permit any representatives designated by Administrative Agent (including any
consultants, accountants, lawyers and appraisers retained by the Administrative
Agent) to conduct evaluations and appraisals of the Borrower’s computation of
the Borrowing Base and the assets included in the Borrowing Base (including, for
clarity, audits of any Agency Accounts, funds transfers and custody procedures),
all at such reasonable times and as often as reasonably requested. The Borrower
shall pay the reasonable, documented fees and expenses of representatives
retained by the Administrative Agent to conduct any such evaluation or
appraisal; provided that the Borrower shall not be required to pay such fees and
expenses for more than two such evaluations or appraisals during any calendar
year unless an Event of Default has occurred and is continuing at the time of
any subsequent evaluation or appraisal during such calendar year. The Borrower
also agrees to modify or adjust the computation of the Borrowing Base and/or the
assets included in the Borrowing Base, to the extent required by the
Administrative Agent or the Required Lenders as a result of any such evaluation
or appraisal indicating that such computation or inclusion of assets is not
consistent with the terms of this Agreement, provided that if the Borrower
demonstrates that such evaluation or appraisal is incorrect, the Borrower shall
be permitted to re-adjust its computation of the Borrowing Base.

(c) Notwithstanding the foregoing, nothing contained in this Section 5.06 shall
impair or affect the rights of the Administrative Agent under
Section 5.12(b)(ii) in any respect.

SECTION 5.07. Compliance with Laws and Agreements. The Borrower will, and will
cause each of its Subsidiaries to, comply with all laws, rules, regulations,
including the Investment Company Act (if applicable to such Person), and orders
of any Governmental Authority applicable to it (including orders issued by the
SEC) or its property and all indentures, agreements and other instruments,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

 

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SECTION 5.08. Certain Obligations Respecting Subsidiaries; Further Assurances.

(a) Subsidiary Guarantors.

(i) In the event that (1) the Borrower or any of its Subsidiaries shall form or
acquire any new Subsidiary (other than an SBIC Subsidiary), or that any other
Person shall become a “Subsidiary” within the meaning of the definition thereof
or (2) any SBIC Subsidiary shall no longer constitute a “SBIC Subsidiary”
pursuant to the definition thereof (in which case such Person shall be deemed to
be a “new” Subsidiary for purposes of this Section 5.08), the Borrower will, in
each case, on or before thirty (30) days following such Person becoming a
Subsidiary or such SBIC Subsidiary no longer qualifying as such, cause such new
Subsidiary or former SBIC Subsidiary to become a “Subsidiary Guarantor” (and,
thereby, an “Obligor”) under the Guarantee and Security Agreement pursuant to a
Guarantee Assumption Agreement and to deliver such proof of corporate or other
action, incumbency of officers, opinions of counsel and other documents as the
Administrative Agent shall have reasonably requested.

(ii) [Intentionally Omitted]

(iii) The Borrower acknowledges that the Administrative Agent and the Lenders
have agreed to exclude each SBIC Subsidiary as an Obligor only for so long as
such Person qualifies as an “SBIC Subsidiary” pursuant to the definition
thereof, and thereafter such Person shall no longer constitute an “SBIC
Subsidiary” for any purpose of this Agreement or any other Loan Document.

(b) Ownership of Subsidiaries. The Borrower will, and will cause each of its
Subsidiaries to, take such action from time to time as shall be necessary to
ensure that each of its Subsidiaries is a wholly owned Subsidiary; provided that
the foregoing shall not prohibit any transaction permitted under Sections
6.03(a), (b), (c), (f) or (i), so long as after giving effect to such permitted
transaction each of the remaining Subsidiaries is a wholly owned Subsidiary.

(c) Further Assurances. The Borrower will, and will cause each of the Subsidiary
Guarantors to, take such action from time to time as shall reasonably be
requested by the Administrative Agent to effectuate the purposes and objectives
of this Agreement. Without limiting the generality of the foregoing, the
Borrower will, and will cause each of the Subsidiary Guarantors, to:

(i) take such action from time to time (including filing appropriate Uniform
Commercial Code financing statements and executing and delivering such
assignments, security agreements and other instruments) as shall be reasonably
requested by the Administrative Agent to create, in favor of the Collateral
Agent for the benefit of the Lenders (and any Affiliate thereof that is a party
to any Hedging Agreement entered into with the Borrower) perfected
first-priority security interests and Liens in the Collateral; provided that any
such security interest or Lien shall be subject to the relevant requirements of
the Security Documents;

 

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(ii) with respect to each deposit account or securities account of the Obligors
(other than (A) any such accounts which hold solely money or financial assets of
a SBIC Subsidiary, (B) any payroll account so long as such payroll account is
coded as such, (C) withholding tax and fiduciary accounts or any trust account
maintained solely on behalf of a Portfolio Investment, and (D) any account in
which the aggregate value of deposits therein, together with all other such
accounts under this clause (D), does not at any time exceed $75,000, provided
that in the case of each of the foregoing clauses (A) through (D), no other
Person (other than the depository institution at which such account is
maintained) shall have “control” over such account (within the meaning of the
Uniform Commercial Code)), cause each bank or securities intermediary (within
the meaning of the Uniform Commercial Code) to enter into such arrangements with
the Collateral Agent as shall be appropriate in order that the Collateral Agent
has “control” (within the meaning of the Uniform Commercial Code) over each such
deposit account or securities account (each, a “Control Account”) and in that
connection, the Borrower agrees, subject to Sections 5.08(c)(iv) and (v) below,
to cause all cash and other proceeds of Portfolio Investments received by any
Obligor to be immediately deposited into a Control Account (or otherwise
delivered to, or registered in the name of, the Collateral Agent) and, both
prior to and following such deposit, delivery or registration such cash and
other proceeds shall be held in trust by the Borrower for the benefit and as the
property of the Collateral Agent and shall not be commingled with any other
funds or property of such Obligor or any other Person;

(iii) cause the SBIC Subsidiaries to execute and deliver to the Administrative
Agent such certificates and agreements, in form and substance reasonably
satisfactory to the Administrative Agent, as it shall determine are necessary to
confirm that such SBIC Subsidiary qualifies or continues to qualify as an “SBIC
Subsidiary”, as applicable, pursuant to the definitions thereof;

(iv) in the case of any Portfolio Investment consisting of a Bank Loan (as
defined in Section 5.13) that does not constitute all of the credit extended to
the underlying borrower under the relevant underlying loan documents and an SBIC
Subsidiary holds any interest in the loans or other extensions of credit under
such loan documents, (x)(1) cause the interest owned by such SBIC Subsidiary to
be evidenced by a separate note or notes which note or notes are either (A) in
the name of such SBIC Subsidiary or (B) in the name of the Borrower, endorsed in
blank and delivered to the applicable SBIC Subsidiary and beneficially owned by
the SBIC Subsidiary and (2) not permit such SBIC Subsidiary to have a
participation acquired from an Obligor in such underlying loan documents and the
extensions of credit thereunder or any other indirect interest therein acquired
from an Obligor; and (y) ensure that, subject to Section 5.08(c)(v) below, all
amounts owing to any Obligor by the underlying borrower or other obligated party
are remitted by such borrower or obligated party (or the applicable
administrative agents, collateral agents or equivalent Person) directly to the
Custodian Account and no other amounts owing by such underlying borrower or
obligated party are remitted to the Custodian Account;

 

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(v) in the event that any Obligor is acting as an agent or administrative agent
under any loan documents with respect to any Bank Loan (or is acting in an
analogous agency capacity under any agreement related to any Portfolio
Investment) and such Obligor does not hold all of the credit extended to the
underlying borrower or issuer under the relevant underlying loan documents or
other agreements, ensure that (1) all funds held by such Obligor in such
capacity as agent or administrative agent is segregated from all other funds of
such Obligor and clearly identified as being held in an agency capacity (an
“Agency Account”); (2) all amounts owing on account of such Bank Loan or
Portfolio Investment by the underlying borrower or other obligated party are
remitted by such borrower or obligated party to either (A) such Agency Account
or (B) directly to an account in the name of the underlying lender to whom such
amounts are owed (for the avoidance of doubt, no funds representing amounts
owing to more than one underlying lender may be remitted to any single account
other than the Agency Account); and (3) within one (1) Business Day after
receipt of such funds, such Obligor acting in its capacity as agent or
administrative agent shall distribute any such funds belonging to any Obligor to
the Custodian Account (provided that if any distribution referred to in this
clause (c) is not permitted by applicable bankruptcy law to be made within such
one Business Day period as a result of the bankruptcy of the underlying
borrower, such Obligor shall use commercially reasonable efforts to obtain
permission to make such distribution and shall make such distribution as soon as
legally permitted to do so);

(vi) cause the documentation relating to each Investment in Indebtedness
described in paragraph 1 of Schedule 1.01(d) to be delivered to the Custodian as
provided therein; and

(vii) in the case of any Portfolio Investment held by any SBIC Subsidiary,
including any cash collection related thereto, ensure that such Portfolio
Investment shall not be held in any Custodian Account, or any other account of
any Obligor.

SECTION 5.09. Use of Proceeds. The Borrower will use the proceeds of the Loans
only for general corporate purposes of the Borrower and its Subsidiaries (other
than the SBIC Subsidiaries except as expressly permitted under Section 6.03(e))
in the ordinary course of business, including making distributions not
prohibited by this Agreement and the acquisition and funding (either directly or
through one or more wholly-owned Subsidiary Guarantors) of leveraged loans,
mezzanine loans, high-yield securities, preferred stock, common stock and other
Portfolio Investments; provided that neither the Administrative Agent nor any
Lender shall have any responsibility as to the use of any of such proceeds. No
part of the proceeds of any Loan will be used in violation of applicable law or,
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying any Margin Stock. On the first day (if any) an
Obligor acquires any Margin Stock or at any other time requested by the
Administrative Agent or any Lender, the Borrower shall furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-3 or FR Form U-1, as applicable,
referred to in Regulation U. Margin Stock shall be purchased by the Obligors
only with the proceeds of Indebtedness not directly or indirectly secured by
Margin Stock (within the meaning of Regulation U), or with the proceeds of
equity capital of the Borrower.

 

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SECTION 5.10. Status of RIC and BDC. The Borrower shall maintain its status as a
RIC under the Code, and as a “business development company” under the Investment
Company Act.

SECTION 5.11. Investment Policies. The Borrower shall at all times be in
compliance in all material respects with its Investment Policies.

SECTION 5.12. Portfolio Valuation and Diversification Etc.

(a) Industry Classification Groups. For purposes of this Agreement, the Borrower
shall assign each Eligible Portfolio Investment to an Industry Classification
Group as reasonably determined by the Borrower. To the extent that the Borrower
reasonably determines any Eligible Portfolio Investment is not correlated with
the risks of other Eligible Portfolio Investments in an Industry Classification
Group, such Eligible Portfolio Investment may be assigned by the Borrower to an
Industry Classification Group that is more closely correlated to such Eligible
Portfolio Investment.

(b) Portfolio Valuation Etc.

(i) Settlement Date Basis. For purposes of this Agreement, all determinations of
whether a Portfolio Investment is an Eligible Portfolio Investment shall be
determined on a settlement-date basis (meaning that any Portfolio Investment
that has been purchased will not be treated as an Eligible Portfolio Investment
until such purchase has settled, and any Eligible Portfolio Investment which has
been sold will not be excluded as an Eligible Portfolio Investment until such
sale has settled), provided that no such investment shall be included as an
Eligible Portfolio Investment to the extent it has not been paid for in full.

(ii) Determination of Values. The Borrower will conduct reviews of the value to
be assigned to each of its Eligible Portfolio Investments as follows:

(A) Quoted Investments External Review. With respect to Eligible Portfolio
Investments (including Cash Equivalents) for which market quotations are readily
available and are reflective of an actual trade executed within a reasonable
period of such quotation (“Quoted Investments”), the Borrower shall, not less
frequently than once each calendar week, determine the market value of such
Quoted Investments which shall, in each case, be determined in accordance with
one of the following methodologies as selected by the Borrower (each such value,
an “External Quoted Value”):

(w) in the case of public and 144A securities, the average of the bid prices as
determined by two Approved Dealers selected by the Borrower,

(x) in the case of Bank Loans, the average of the bid prices as determined by
two Approved Dealers selected by the Borrower,

 

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(y) in the case of any Quoted Investment traded on an exchange, the closing
price for such Eligible Portfolio Investment most recently posted on such
exchange, and

(z) in the case of any other Quoted Investment, the fair market value thereof as
determined by an Approved Pricing Service; and

(B) Unquoted Investments External Review. With respect to Eligible Portfolio
Investments for which market quotations are not readily available (“Unquoted
Investments”):

(x) Commencing with the quarter ending September 30, 2014, and for each fiscal
quarter thereafter (or such other dates as are reasonably agreed by the Borrower
and the Administrative Agent (provided that such testing dates shall occur not
less than quarterly), each a “Valuation Testing Date”), the Administrative Agent
through an Independent Valuation Provider will test the values as of such
Valuation Testing Date of those Unquoted Investments that are Portfolio
Investments included in the Borrowing Base selected by the Administrative Agent
(such selected assets, the “IVP Tested Assets” and such value, the “IVP Unquoted
Value”); provided that the fair value of such Portfolio Investments tested by
the Independent Valuation Provider as of any Valuation Testing Date shall be
approximately 25% (but in no event shall exceed 30%) of the aggregate value of
the Eligible Portfolio Investments owned by the Obligors (the determination of
fair value for such percentage thresholds shall be based off of the last
determination of value of the Portfolio Investments pursuant to this
Section 5.12 and, for the avoidance of doubt, in the case of any Unquoted
Investments acquired during the calendar quarter, the value shall be as
determined pursuant to clause (E)(2) below); provided, further that the
Administrative Agent shall provide written notice to the Borrower, setting forth
a description of which Unquoted Investments shall be IVP Tested Assets as of
such Valuation Testing Date, not later than 45 days prior to the Valuation
Testing Date. Each such valuation report shall also include the information
required to comply with clause (ii) of paragraph 7 of Schedule 1.01(d) and to
the extent any such report includes a Portfolio Investment that is a Bank Loan
and the Portfolio Company has issued a Permitted Prior Working Capital Lien,
paragraph 21 of Schedule 1.01(d) for an IVP Tested Asset (to the extent such
provisions are applicable).

(y) The Borrower shall request an Approved Third-Party Appraiser to assist the
Board of Directors of the Borrower in determining the fair market value of
certain of the Unquoted Investments in the Borrowing Base that are not IVP
Tested Assets as of each Valuation Testing Date selected by the Borrower (such
assets, the “Borrower Tested Assets” and such value, the “Borrower External
Unquoted Value”);

 

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provided that the fair value of such Portfolio Investments tested by the
Approved Third-Party Appraiser as of any Valuation Testing Date shall be not
less than 10% of the aggregate value of the Eligible Portfolio Investments owned
by the Obligors (the determination of fair value for such 10% threshold shall be
based off of the last determination of value of the Portfolio Investments
pursuant to this Section 5.12 and, for the avoidance of doubt, in the case of
any Unquoted Investments acquired during the calendar quarter, the value shall
be as determined pursuant to clause (E)(2) below), as of each Valuation Testing
Date, and shall provide the Board of Directors (with a copy to the
Administrative Agent) with a written independent valuation report as part of
that assistance each quarter; provided, further that the Borrower shall provide
written notice to the Administrative Agent, setting forth a description of which
Unquoted Investments shall be Borrower Tested Assets as of such Valuation
Testing Date, not later than 15 days prior to the Valuation Testing Date. Each
such valuation report shall also include the information required to comply with
clause (ii) of paragraph 7 of Schedule 1.01(d) and to the extent any such report
includes a Portfolio Investment that is a Bank Loan and the Portfolio Company
has issued a Permitted Prior Working Capital Lien, paragraph 21 of
Schedule 1.01(d) for a Borrower Tested Asset (to the extent such provisions are
applicable). The Borrower shall also provide the Administrative Agent, promptly,
but in no event later than two Business Days of receipt thereof, a copy of each
such valuation report it receives in connection obtaining any Borrower Internal
Policy Unquoted Value.

(C) Internal Review. The Borrower shall conduct internal reviews to determine
the value of all Eligible Portfolio Investments at least once each calendar week
which shall take into account any events of which the Borrower has knowledge
that adversely affect the value of any Eligible Portfolio Investment (each such
value, an “Internal Value”).

(D) Value of Quoted Investments. Subject to clauses (G) and (H) of this
Section 5.12(b)(ii), the “Value” of each Quoted Investment for all purposes of
this Agreement shall be the lowest of (1) the Internal Value of such Quoted
Investment as most recently determined by the Borrower pursuant to
Section 5.12(b)(ii)(C), (2) the External Quoted Value of such Quoted Investment
as most recently determined pursuant to Section 5.12(b)(ii)(A) and (3) if such
Quoted Investment is a debt Investment, the par or face value of such Quoted
Investment (or in the case of Preferred Stock, the Liquidation Preference
thereof without taking into account any Accretive Value).

(E) Value of Unquoted Investments. Subject to clauses (G) and (H) of this
Section 5.12(b)(ii),

 

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(x) if the Internal Value of any Unquoted Investment as most recently determined
by the Borrower pursuant to Section 5.12(b)(ii)(C) falls below the range of the
Applicable External Value of such Unquoted Investment as most recently
determined pursuant to Section 5.12(b)(ii)(B), then the “Value” of such Unquoted
Investment for all purposes of this Agreement shall be deemed to be the lower of
(i) the Internal Value and (ii) if such Unquoted Investment is a debt
Investment, the par or face value of such Unquoted Investment (or in the case of
Preferred Stock, the Liquidation Preference thereof without taking into account
any Accretive Value);

(y) (i) if the Internal Value of any Unquoted Investment as most recently
determined by the Borrower pursuant to Section 5.12(b)(ii)(C) falls above the
range of the Borrower External Unquoted Value of such Unquoted Investment as
most recently determined pursuant to Section 5.12(b)(ii)(B) (and the Applicable
External Value of such Unquoted Investment is such Borrower External Unquoted
Value), then the “Value” of such Unquoted Investment for all purposes of this
Agreement shall be deemed to be the lower of (i) the midpoint of the range of
the Borrower External Unquoted Value and (ii) if such Unquoted Investment is a
debt Investment, the par or face value of such Unquoted Investment (or in the
case of Preferred Stock, the Liquidation Preference thereof without taking into
account any Accretive Value);

(ii) if the Internal Value of any Unquoted Investment as most recently
determined by the Borrower pursuant to Section 5.12(b)(ii)(C) falls more than 5%
above the midpoint of the range of the IVP External Unquoted Value of such
Unquoted Investment as most recently determined pursuant to
Section 5.12(b)(ii)(B) (and the Applicable External Value of such Unquoted
Investment is such IVP External Unquoted Value), then the “Value” of such
Unquoted Investment for all purposes of this Agreement shall be deemed to be the
lower of (i) the midpoint of the range of the IVP External Unquoted Value and
(ii) if such Unquoted Investment is a debt Investment, the par or face value of
such Unquoted Investment (or in the case of Preferred Stock, the Liquidation
Preference thereof without taking into account any Accretive Value); and

(z) if the Internal Value of any Unquoted Investment as most recently determined
by the Borrower pursuant to Section 5.12(b)(ii)(C) is within the range of the
Borrower External Unquoted Value of such Unquoted Investment (and the Applicable
External Value of such Unquoted Investment is such Borrower External Unquoted
Value), or within or not more than 5% above the midpoint of the range of the IVP
External Unquoted Value of such Unquoted Investment (and the Applicable External
Value of such Unquoted Investment is such IVP External Unquoted Value), in each
case as most recently determined pursuant to Section 5.12(b)(ii)(B), then the
“Value” of such Unquoted Investment for all purposes of this Agreement shall be
deemed to be the lower of (i) the Internal Value and (ii) if such Unquoted
Investment is a debt Investment, the par or face value of such Unquoted
Investment (or in the case of Preferred Stock, the Liquidation Preference
thereof without taking into account any Accretive Value);

 

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except that:

(1) with respect to an Unquoted Investment that the most recent Borrower
External Unquoted Value is the Applicable External Value, if the difference
between the highest and lowest Borrower External Unquoted Value in such range
exceeds an amount equal to 6% (or, if such Unquoted Investment is Performing
Common Equity or Preferred Stock, 15%) of the midpoint of such range, the
“Value” of such Unquoted Investment shall instead be deemed to be the lowest of
(i) the lowest Borrower External Unquoted Value in such range, (ii) the Internal
Value determined pursuant to Section 5.12(b)(ii)(C), and (iii) if such Unquoted
Investment is a debt Investment, the par or face value of such Unquoted
Investment (or in the case of Preferred Stock, the Liquidation Preference
thereof without taking into account any Accretive Value); and

(2) if an Unquoted Investment is acquired during a fiscal quarter, the “Value”
of such Unquoted Investment shall be deemed to be equal to the lowest of (i) the
Internal Value of such Unquoted Investment as determined by the Borrower
pursuant to Section 5.12(b)(ii)(C), (ii) the cost of such Unquoted Investment,
until such time as the External Unquoted Value of such Unquoted Investment is
determined in accordance with Section 5.12(b)(ii)(B) as at the Valuation Testing
Date; and (iii) if such Unquoted Investment is a debt Investment, the par or
face value of such Unquoted Investment (or in the case of Preferred Stock, the
Liquidation Preference thereof without taking into account any Accretive Value).

(F) Actions Upon a Borrowing Base Deficiency. If, based upon such weekly
internal review, the Borrower determines that a Borrowing Base Deficiency exists
or that the Borrowing Base has declined by more than 15% from the Borrowing Base
stated in the Borrowing Base Certificate last delivered by the Borrower to the
Administrative Agent, then the Borrower shall, promptly and in any event within
two Business Days as provided in Section 5.01(e), deliver a Borrowing Base
Certificate reflecting the new amount of the Borrowing Base and shall take the
actions, and make the payments and prepayments (if any), all as more
specifically set forth in Section 2.08(b).

(G) Failure to Determine Values. If the Borrower shall fail to determine the
value of any Eligible Portfolio Investment as at any date pursuant to the
requirements (but subject to the exclusions) of the foregoing sub-clauses (A),
(B), (C), (D) or (E), then the “Value” of such Eligible Portfolio Investment as
at such date shall be deemed to be zero. If the Borrower shall fail to provide
timely notice of the Unquoted Investments that it has selected to be Borrower
Tested

 

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Assets for any period pursuant to Section 5.12(b)(ii)(B)(y), then until the
Borrower has complied with such Section, for the next Valuation Date, the
Borrowing Base shall automatically be reduced by 10%. If the Administrative
Agent shall fail to determine the value of any Eligible Portfolio Investment as
at any date pursuant to clause (B)(x), then the “Value” of such Eligible
Portfolio Investment as at such date (subject to clause (H) below) shall be the
lower of (w) the midpoint of the range of the Borrower Internal Policy Unquoted
Value with respect to each such Eligible Portfolio Investment (to the extent
such Eligible Portfolio Investment was identified in the notice the
Administrative Agent is required to deliver pursuant to
Section 5.12(b)(ii)(B)(x)), (x) the Internal Value with respect to such Eligible
Portfolio Investment and (y) if such Eligible Portfolio Investment is a debt
Investment, the par or face value of such Eligible Portfolio Investment (or in
the case of Preferred Stock, the Liquidation Preference thereof without taking
into account any Accretive Value); provided, however, that if an Applicable
External Value has been obtained with respect to such asset for any quarterly
period preceding the current quarterly testing period, then the “Value” of such
Eligible Portfolio Investment will be determined as provided in clause
(E) above.

(H) Adjustment of Values. Notwithstanding anything herein to the contrary, the
Administrative Agent, in its sole and absolute discretion exercised in good
faith, may, and upon the request of Required Lenders, shall, reduce the Value of
any Eligible Portfolio Investment (in which case the “Value” of such Eligible
Portfolio Investment shall for all purposes hereof be deemed to be the Value
assigned by the Administrative Agent) and/or exclude any Eligible Portfolio
Investment from the Borrowing Base entirely (the “Revalue Right”); provided that
the exercise of the Administrative Agent’s Revalue Right shall not result in
more than a Revalue Percent aggregate reduction in the Borrowing Base in any
fiscal quarter.

(I) The documented out-of-pocket costs of any valuation reasonably incurred by
the Administrative Agent under this Section 5.12 (including, without limitation,
under clause (b)(ii)(B)(x)) shall be at the expense of the Borrower.

(J) Notwithstanding anything to the contrary contained herein but subject to
clause (H), from the Effective Date until December 31, 2014, if an Unquoted
Investment has not been valued on or after December 31, 2013 (any such asset
that had not been valued on or after December 31, 2013, a “Stale Asset”),
(x) prior to the Effective Date, by an independent unaffiliated third-party
appraiser selected by the Borrower for purposes of its internal reporting and
valuation requirements, or (y) on or after the Effective date, an Approved Third
Party Appraiser or an Independent Valuation Provider, the Value of such Stale
Asset shall be the lower of (i) the Internal Value of such Stale Asset as
determined by the Borrower pursuant to Section 5.12(b)(ii)(C) and (ii) if such
Stale Asset is a debt Investment, the par or face value of such Stale Asset (or
in the case of Preferred Stock, the Liquidation Preference thereof without
taking into

 

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account any Accretive Value). The Value of any Stale Asset that is not valued by
December 31, 2014 shall be zero until such asset becomes an IVP Tested Asset or
a Borrower Tested Asset.

(c) Investment Company Diversification Requirements. After the Effective Date,
the Borrower (together with its Subsidiaries to the extent required by the
Investment Company Act) will at all times comply with the portfolio
diversification and similar requirements set forth in the Investment Company Act
applicable to business development companies. After the Effective Date, the
Borrower will at all times, subject to applicable grace periods set forth in the
Code, comply with the portfolio diversification and similar requirements set
forth in the Code applicable to RICs.

Section 5.13. Calculation of Borrowing Base. For purposes of this Agreement, the
“Borrowing Base” shall be determined, as at any date of determination, as the
sum of the products obtained by multiplying (x) the Value of each Eligible
Portfolio Investment by (y) the applicable Advance Rate; provided that:

(a) (i) the Advance Rate applicable to the aggregate Value of all Eligible
Portfolio Investments in their entirety shall be 0% at any time when the
Borrowing Base is composed entirely of Eligible Portfolio Investments issued by
less than 12 different issuers of which at least 8 such Eligible Portfolio
Investments are Debt/Preferred Eligible Portfolio Investments; and (ii) the
Advance Rate applicable to the aggregate Value of all Eligible Portfolio
Investments in their entirety shall be 0% at any time when the Borrowing Base is
composed of less than 8 Eligible Portfolio Investments that are Debt/Preferred
Eligible Portfolio Investments provided that in the case of each of the
foregoing clauses (i) and (ii), issuers that are affiliates of each other will
be treated as one issuer (unless the affiliation is solely as a result of direct
or indirect control by a common private equity or similar sponsor);

(b) with respect to all Eligible Portfolio Investments issued by a single
issuer, the Advance Rate applicable to that portion of such Eligible Portfolio
Investments that exceeds 10% of the Obligors’ Net Worth shall be 0%;

(c) the portion of the Borrowing Base attributable to Eligible Portfolio
Investments that are not Cash, Cash Equivalents, Long-Term U.S. Government
Securities, Performing First Lien Bank Loans, Performing Second Lien Bank Loans
or Performing Last Out Loans shall not exceed 80% of the Borrowing Base and the
Borrowing Base shall be reduced by removing Eligible Portfolio Investments
therefrom (but not from the Collateral) to the extent such portion would
otherwise exceed 80% of the Borrowing Base;

(d) the portion of the Borrowing Base attributable to Eligible Portfolio
Investments that are common equity, warrants and Preferred Stock shall not
exceed 25% of the Borrowing Base and the Borrowing Base shall be reduced to the
extent such portion would otherwise exceed 25% of the Borrowing Base; provided,
however, that the portion of the Borrowing Base attributable to Eligible
Portfolio Investments that are

 

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common equity or warrants shall not exceed 20% of the Borrowing Base and the
Borrowing Base shall be reduced by removing Eligible Portfolio Investments
therefrom (but not from the Collateral) to the extent such portion would
otherwise exceed 20% of the Borrowing Base;

(e) the portion of the Borrowing Base attributable to Eligible Portfolio
Investments in the Industry Classification Group that is the Largest Industry
Classification Group shall not exceed 25% of the Borrowing Base and the
Borrowing Base shall be reduced by removing Eligible Portfolio Investments
therefrom (but not from the Collateral) to the extent such portion would
otherwise exceed 25% of the Borrowing Base;

(f) the portion of the Borrowing Base attributable to Eligible Portfolio
Investments in any single Industry Classification Group (other than the Industry
Classification Group that is the Largest Industry Classification Group) shall
not exceed 15% of the Borrowing Base and the Borrowing Base shall be reduced by
removing Eligible Portfolio Investments therefrom (but not from the Collateral)
to the extent such portion would otherwise exceed 15% of the Borrowing Base;

(g) if at any time the weighted average maturity of all Debt/Preferred Eligible
Portfolio Investments (based on the fair value of such Eligible Portfolio
Investments to the extent included in the Borrowing Base) exceeds 5.5 years, the
Borrowing Base shall be reduced by removing Debt/Preferred Eligible Portfolio
Investments therefrom (but not from the Collateral) to the extent necessary to
cause the weighted average maturity of all Debt/Preferred Eligible Portfolio
Investments included in the Borrowing Base to be no greater than 5.5 years
(subject to all other constraints, limitations and restrictions set forth
herein);

(h) the portion of the Borrowing Base attributable to Debt/Preferred Eligible
Portfolio Investments with a maturity greater than 7 years shall not exceed 15%
of the Borrowing Base and the Borrowing Base shall be reduced by removing
Debt/Preferred Eligible Portfolio Investments therefrom (but not from the
Collateral) to the extent such portion would otherwise exceed 15% of the
Borrowing Base;

(i) if at any time the Weighted Average Leverage Ratio is greater than 4.5, the
Borrowing Base shall be reduced by removing Debt/Preferred Eligible Portfolio
Investments therefrom (but not from the Collateral) to the extent necessary to
cause the Weighted Average Leverage Ratio to be no greater than 4.5 (subject to
all other constraints, limitations and restrictions set forth herein);

(j) the portion of the Borrowing Base attributable to PIK Obligations, DIP Loans
and Covenant-Lite Loans shall not exceed 10% of the Borrowing Base and the
Borrowing Base shall be reduced by removing Eligible Portfolio Investments
therefrom (but not from the Collateral) to the extent such portion would
otherwise exceed 10% of the Borrowing Base;

 

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(k) if at any time the Weighted Average Fixed Coupon (after giving effect to any
Hedging Agreement) is less than the greater of (i) 8% and (ii) the one-month
LIBO Rate plus 4.5%, the Borrowing Base shall be reduced by removing
Debt/Preferred Eligible Portfolio Investments therefrom (but not from the
Collateral) to the extent necessary to cause the Weighted Average Fixed Coupon
to be at least equal to the greater of (x) 8% and (y) the one-month LIBO Rate
plus 4.5% (subject to all other constraints, limitations and restrictions set
forth herein);

(l) if at any time the Weighted Average Floating Spread (after giving effect to
any Hedging Agreement) is less than 4.5%, the Borrowing Base shall be reduced by
removing Debt/Preferred Eligible Portfolio Investments therefrom (but not from
the Collateral) to the extent necessary to cause the Weighted Average Floating
Spread to be at least 4.5% (subject to all other constraints, limitations and
restrictions set forth herein); and

(m) the portion of the Borrowing Base attributable to Eligible Portfolio
Investments that are Affiliate Investments shall not exceed 20% of the Borrowing
Base, and the Borrowing Base shall be reduced by removing Affiliate Investments
therefrom (but not from the Collateral) to the extent such portion would
otherwise exceed 20% of the Borrowing Base.

For all purposes of this Section 5.13, all issuers of Eligible Portfolio
Investments that are Affiliates of one another shall be treated as a single
issuer (unless such issuers are Affiliates of one another solely because they
are under the common Control of the same private equity sponsor or similar
sponsor). For the avoidance of doubt, no Portfolio Investment shall be an
Eligible Portfolio Investment unless, among the other requirements set forth in
this Agreement, (i) such Investment is subject only to Eligible Liens and
(ii) such Investment is Transferable. In addition, as used herein, the following
terms have the following meanings:

“Advance Rate” means, as to any Eligible Portfolio Investment and subject to
adjustment as provided above, the following percentages with respect to such
Eligible Portfolio Investment:

 

Eligible Portfolio Investment

   Unquoted     Quoted  

Cash and Cash Equivalents (including Short-Term U.S. Government Securities)

     n/a        100 % 

Long-Term U.S. Government Securities

     n/a        85 % 

Performing First Lien Bank Loans

     60 %      70 % 

Performing Last Out Loans

     55 %      65 % 

Performing Second Lien Bank Loans

     50 %      60 % 

Performing High Yield Securities and Performing Covenant-Lite Loans

     45 %      55 % 

Performing Mezzanine Investments

     40 %      50 % 

Performing PIK Obligations and Performing DIP Loans

     35 %      40 % 

Performing Common Equity

     25 %      30 % 

 

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“Bank Loans” means debt obligations (including, without limitation, term loans,
revolving loans, debtor-in-possession financings, the funded portion of
revolving credit lines and letter of credit facilities and other similar loans
and investments including interim loans, bridge loans and senior subordinated
loans) that are generally provided under a syndicated loan or credit facility or
pursuant to any loan agreement or other similar credit facility, whether or not
syndicated.

“Capital Stock” of any Person means any and all shares of corporate stock
(however designated) of and any and all other Equity Interests and
participations representing ownership interests (including membership interests
and limited liability company interests) in, such Person.

“Cash” has the meaning assigned to such term in Section 1.01 of this Agreement.

“Cash Equivalents” has the meaning assigned to such term in Section 1.01 of this
Agreement.

“Covenant-Lite Loan” means a Bank Loan that does not contain at least one
financial maintenance covenant that is either (a) a total debt to EBITDA ratio
of no more than 5.5 to 1.0 or (b) a fixed charge coverage ratio of at least 1.0
to 1.0.

“Debt Eligible Portfolio Investment” means an Eligible Portfolio Investment
which is an Investment in Indebtedness.

“Debt/Preferred Eligible Portfolio Investment” means an Eligible Portfolio
Investment which is either a Debt Eligible Portfolio Investment or Preferred
Stock.

“Defaulted Obligation” means (i) any Investment in Indebtedness (a) as to which,
(x) a default as to the payment of principal and/or interest has occurred and is
continuing for a period of thirty two (32) consecutive days with respect to such
Indebtedness (without regard to any grace period applicable thereto, or waiver
thereof) or (y) a default not set forth in clause (x) has occurred and the
holders of such Indebtedness have accelerated all or a portion of the principal
amount thereof as a result of such default; (b) as to which a default as to the
payment of principal and/or interest has occurred and is continuing on another
material debt obligation of the obligor under such Indebtedness which is senior
or pari passu in right of payment to such Indebtedness; (c) as to which the
obligor under such Indebtedness or others have instituted proceedings to have
such obligor adjudicated bankrupt or insolvent or placed into receivership and
such proceedings have not been stayed or dismissed or such obligor has filed for
protection under Chapter 11 of the United States Bankruptcy Code (unless, in the
case of clause (b) or (c), such Indebtedness is a DIP Loan, in which case it
shall not be deemed to be a Defaulted Obligation under such clause); (d) as to
which a default rate of interest has been and continues to be charged for more
than 120 consecutive days, or foreclosure on collateral for such Indebtedness
has been commenced and is being pursued by or on behalf of the holders thereof;
or (e) as to which the Borrower has delivered written notice to the Portfolio
Company declaring such Indebtedness in default or as to which the Borrower
otherwise exercises significant

 

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remedies following a default and (ii) Preferred Stock in respect of which
(A) the issuer has failed to (w) meet any scheduled redemption obligations,
(x) pay its latest declared cash dividend or (y) pay any other amount owing in
connection with such Preferred Stock, in each case after the expiration of any
applicable grace period or (B) the default rate of interest has been and
continues to be charged for more than 120 consecutive days.

“DIP Loan” means a Bank Loan, whether revolving or term, that is originated
after the commencement of a case under Chapter 11 of the Bankruptcy Code by a
Portfolio Company, which is a debtor in possession as described in Section 1107
of the Bankruptcy Code or a debtor as defined in Section 101(13) of the
Bankruptcy Code in such case (a “Debtor”) organized under the laws of the United
States or any state therein and domiciled in the United States, which satisfies
the following criteria: (a) the DIP Loan is duly authorized by a final order of
the applicable bankruptcy court or federal district court under the provisions
of subsection (b), (c) or (d) of 11 U.S.C. Section 364; (b) the Debtor’s
bankruptcy case is still pending as a case under the provisions of Chapter 11 of
Title 11 of the Bankruptcy Code and has not been dismissed or converted to a
case under the provisions of Chapter 7 of Title 11 of the Bankruptcy Code;
(c) the Debtor’s obligations under such loan have not been (i) disallowed, in
whole or in part, or (ii) subordinated, in whole or in part, to the claims or
interests of any other Person under the provisions of 11 U.S.C. Section 510;
(d) the DIP Loan is secured and the Liens granted by the applicable bankruptcy
court or federal district court in relation to the Loan have not been
subordinated or junior to, or pari passu with, in whole or in part, to the Liens
of any other lender under the provisions of 11 U.S.C. Section 364(d) or
otherwise; (e) the Debtor is not in default on its obligations under the loan;
(f) neither the Debtor nor any party in interest has filed a Chapter 11 plan
with the applicable federal bankruptcy or district court that, upon
confirmation, would (i) disallow or subordinate the loan, in whole or in part,
(ii) subordinate, in whole or in part, any Lien granted in connection with such
loan, (iii) fail to provide for the repayment, in full and in cash, of the loan
upon the effective date of such plan or (iv) otherwise impair, in any manner,
the claim evidenced by the loan; (g) the DIP Loan is documented in a form that
is commercially reasonable; and (h) the DIP Loan shall not provide for more than
50% (or a higher percentage with the consent of the Required Lenders) of the
proceeds of such loan to be used to repay prepetition obligations owing to all
or some of the same lender(s) in a “roll-up” or similar transaction. For the
purposes of this definition, an order is a “final order” if the applicable
period for filing a motion to reconsider or notice of appeal in respect of a
permanent order authorizing the Debtor to obtain credit has lapsed and no such
motion or notice has been filed with the applicable bankruptcy court or federal
district court or the clerk thereof.

“EBITDA” means the consolidated net income of the applicable Person (excluding
extraordinary gains and extraordinary losses (to the extent excluded in the
definition of “EBITDA” in the relevant agreement relating to the applicable
Eligible Portfolio Investment)) for the relevant period plus, without
duplication, the following to the extent deducted in calculating such
consolidated net income in the relevant agreement relating to the applicable
Eligible Portfolio Investment for such period: (i) consolidated interest charges
for such period, (ii) the provision for Federal, state, local and foreign income
taxes payable for such period, (iii) depreciation and amortization expense for
such period, and (iv) such other adjustments included in the definition of
“EBITDA” (or similar defined term used for the purposes contemplated

 

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herein) in the relevant agreement relating to the applicable Eligible Portfolio
Investment, provided that such adjustments are usual and customary and
substantially comparable to market terms for substantially similar debt of other
similarly situated borrowers at the time such relevant agreements are entered
into as reasonably determined in good faith by the Borrower.

“Eligible Liens” has the meaning assigned to such term in Section 1.01 of this
Agreement.

“Eligible Portfolio Investment” means any Portfolio Investment meeting the
criteria outlined in Schedule 1.01(d). All determinations of whether an
investment is to be included as an Eligible Portfolio Investment shall be
determined on a settlement-date basis (meaning that any investment that has been
purchased will not be treated as an Eligible Portfolio Investment until such
purchase has settled, and any Eligible Portfolio Investment which has been sold
will not be excluded as an Eligible Portfolio Investment until such sale has
settled); provided that no such investment shall be included as an Eligible
Portfolio Investment to the extent it has not been paid for in full.

“First Lien Bank Loan” means a Bank Loan that is entitled to the benefit of a
first lien and first priority perfected security interest on all or
substantially all of the assets of the respective borrower and guarantors
obligated in respect thereof, and which has the most senior pre-petition
priority in any bankruptcy, reorganization, arrangement, insolvency, or
liquidation proceedings, provided, however, that, in the case of accounts
receivable and inventory (and the proceeds thereof), such lien and security
interest may be second in priority to a Permitted Prior Working Capital Lien;
and further provided and further provided that any portion of such a Bank Loan
which has a total debt to EBITDA ratio above 4.00x will have the advance rates
of a Second Lien Bank Loan applied to such portion. For the avoidance of doubt,
in no event shall a First Lien Bank Loan include a Last Out Loan.

“Fixed Rate Portfolio Investment” means a Debt/Preferred Eligible Portfolio
Investment that bears interest at a Fixed Rate. For the avoidance of doubt, an
OID-Only Investment shall not be a Fixed Rate Portfolio Investment.

“Floating Rate Portfolio Investment” means a Debt/Preferred Eligible Portfolio
Investment that bears interest at a Floating Rate. For the avoidance of doubt,
an OID-Only Investment shall not be a Floating Rate Portfolio Investment.

“High Yield Securities” means debt Securities and Preferred Stock, in each case
(a) issued by public or private issuers, (b) issued pursuant to an effective
registration statement or pursuant to Rule 144A under the Securities Act (or any
successor provision there under) and (c) that are not Cash Equivalents,
Mezzanine Investments or Bank Loans.

 

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“Last Out Loan” shall mean, with respect to any Bank Loan that is a term loan
structured in a first out tranche and a last out tranche (with the first out
tranche entitled to a lower interest rate but priority with respect to
payments), that portion of such Bank Loan that is the last out tranche; provided
that:

(a) such last out tranche is entitled (along with the first out tranche) to the
benefit of a first lien and first priority perfected security interest on all or
substantially all of the assets of the respective borrower and guarantors
obligated in respect thereof, and which has the most senior pre-petition
priority in any bankruptcy, reorganization, arrangement, insolvency, or
liquidation proceedings;

(b) the ratio of (x) the amount of the first out tranche to (y) EBITDA of the
underlying obligor does not at any time exceed 2.00x;

(c) such last out tranche (i) gives the holders of such last out tranche full
enforcement rights during the existence of an event of default (subject to
customary exceptions if the holders of the first out tranche have previously
exercised enforcement rights), (ii) shall have the same maturity date as the
first out tranche, (iii) is entitled to the same representations, covenants and
events of default as the holders of the first out tranche (subject to customary
exceptions), and (iv) provides the holders of such last out tranche with
customary protections (including, without limitation, consent rights with
respect to (1) any increase of the principal balance of the first out tranche by
more than 15%, (2) any increase of the margins (other than as a result of the
imposition of default interest) applicable to the interest rates with respect to
the first out tranche, (3) any reduction of the final maturity of the first out
tranche by additional 2.5%, and (4) amending or waiving any provision in the
underlying loan documents that is specific to the holders of such last out
tranche); and

(d) such first out tranche is not subject to multiple drawings (unless, at the
time of such drawing and after giving effect thereto, the ratio referenced in
clause (b) above is not exceeded).

“Long-Term U.S. Government Securities” means U.S. Government Securities maturing
more than three months from the applicable date of determination.

“Mezzanine Investments” means debt Securities (including convertible debt
Securities (other than the “in-the-money” equity component thereof)) and
Preferred Stock, in each case (a) issued by public or private issuers,
(b) issued without registration under the Securities Act, (c) not issued
pursuant to Rule 144A under the Securities Act (or any successor provision
thereunder), (d) that are not Cash Equivalents and (e) contractually
subordinated in right of payment to other debt of the same issuer.

“OID-Only Investment” means an Eligible Portfolio Investment that was issued at
a discount to par resulting in “original issue discount” and that does not pay
or accrue interest.

“Performing” means with respect to any Eligible Portfolio Investment, such
Eligible Portfolio Investment is not a Defaulted Obligation and does not
represent debt or Capital Stock of an issuer that has issued a Defaulted
Obligation.

“Performing Common Equity” means Capital Stock (other than Preferred Stock) and
warrants of an issuer all of whose outstanding debt is Performing.

 

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“Performing Covenant-Lite Loans” means funded Covenant-Lite Loans that (a) are
not PIK Obligations and (b) are Performing.

“Performing DIP Loans” means funded DIP Loans that (a) are not PIK Obligations
and (b) are not Defaulted Obligations.

“Performing First Lien Bank Loans” means funded First Lien Bank Loans that
(a) are not PIK Obligations, DIP Loans or Covenant-Lite Loans and (b) are
Performing.

“Performing High Yield Securities” means funded High Yield Securities that
(a) are not PIK Obligations and (b) are Performing.

“Performing Last Out Loans” means funded Last Out Loans that (a) are not PIK
Obligations, DIP Loans, Covenant-Lite Loans or Second Lien Bank Loans and
(b) are Performing.

“Performing Mezzanine Investments” means funded Mezzanine Investments that
(a) are not PIK Obligations and (b) are Performing.

“Performing Second Lien Bank Loans” means funded Second Lien Bank Loans that
(a) are not PIK Obligations, DIP Loans, Covenant-Lite Loans or Last Out Loans
and (b) are Performing.

“Permitted Prior Working Capital Lien” means, with respect to an issuer that is
a borrower under a Bank Loan, a security interest to secure a working capital
facility for such issuer in the accounts receivable and inventory (and the
proceeds thereof) of such issuer and any of its subsidiaries that are guarantors
of such working capital facility; provided that (i) such Bank Loan has a second
priority lien on such accounts receivable and inventory, (ii) such working
capital facility is not secured by any other assets (other than a second
priority lien, subject to the first priority lien of the Bank Loan, on any other
assets) and does not benefit from any standstill rights or other agreements with
respect to any other assets and (iii) the maximum principal amount of such
working capital facility is not at any time greater than 15% of the aggregate
enterprise value of the issuer (as determined in accordance with the valuation
methodology for determining the enterprise value of the applicable Portfolio
Company as specified in Paragraph 21 of Schedule 1.01(d).

“PIK Obligation” means (A) an OID-Only Investment or (B) an obligation that
provides that any portion of the interest accrued for a specified period of time
or until the maturity thereof is, or at the option of the obligor may be, added
to the principal balance of such obligation or otherwise deferred and accrued
rather than being paid in cash, provided that any such obligation shall not
constitute a PIK Obligation if it (i) is a fixed rate obligation and requires
payment of interest in cash on an at least semi-annual basis at a rate of not
less than 8% per annum or (ii) is not a fixed rate obligation and requires
payment of interest in cash on an at least semi-annual basis at a rate of not
less than 4.5% per annum in excess of the applicable index.

 

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“Preferred Stock”, as applied to the Capital Stock of any Person, means Capital
Stock of such Person of any class or classes (however designated) that ranks
prior, as to the payment of dividends or as to the distribution of assets upon
any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to any shares (or other interests) of other Capital Stock of such
Person, and shall include, without limitation, cumulative preferred,
non-cumulative preferred, participating preferred and convertible preferred
Capital Stock; provided that such Preferred Stock (i) pays a cash dividend on a
monthly or quarterly basis, (ii) has a maturity date or is subject to mandatory
redemption on a date certain that is not greater than ten (10) years from the
date of initial issuance of such Preferred Stock and (iii) has a Liquidation
Preference.

“Restructured Investment” means, as of any date of determination, (a) any
Portfolio Investment that has been a Defaulted Obligation within the past six
months, or (b) any Portfolio Investment that has in the past six months been
(x) on cash non-accrual, or (y) amended or subject to a deferral or waiver, if
both (1) the effect of which is to (i) change the amount of previously required
scheduled debt amortization (or, in the case of Preferred Stock, required
payments on such Preferred Stock) (other than by reason of repayment thereof) or
(ii) extend the tenor of previously required scheduled debt amortization, in
each case such that the remaining weighted average life of such Portfolio
Investment is extended by more than 20% and (2) the reason for such amendment,
deferral or waiver is related to the deterioration of the credit profile of the
underlying borrower such that, in the absence of such amendment, deferral or
waiver, it is reasonably expected by the Borrower that such underlying borrower
either (x) will not be able to make any such previously required scheduled debt
amortization payment (or, in the case of Preferred Stock, required payments on
such Preferred Stock) or (y) is anticipated to incur a breach of a material
financial covenant. A DIP Loan shall not be deemed to be a Restructured
Investment, so long as it does not meet the conditions of the definition of
Restructured Investment.

“Second Lien Bank Loan” means a Bank Loan (other than a First Lien Bank Loan and
a Last Out Loan) that is entitled to the benefit of a first and/or second lien
and first and/or second priority perfected security interest on all or
substantially all of the assets of the respective borrower and guarantors
obligated in respect thereof.

“Securities” means common and preferred stock, units and participations, member
interests in limited liability companies, partnership interests in partnerships,
notes, bonds, debentures, trust receipts and other obligations, instruments or
evidences of indebtedness, including debt instruments of public and private
issuers and tax-exempt securities (including warrants, rights, put and call
options and other options relating thereto, representing rights, or any
combination thereof) and other property or interests commonly regarded as
securities or any form of interest or participation therein, but not including
Bank Loans.

“Securities Act” means the United States Securities Act of 1933, as amended.

“Short-Term U.S. Government Securities” means U.S. Government Securities
maturing within three (3) months of the applicable date of determination.

 

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“Spread” means, with respect to Floating Rate Portfolio Investments, the cash
interest spread of such Floating Rate Portfolio Investment over the applicable
LIBO Rate; provided, that, in the case of any Floating Rate Portfolio Investment
that does not bear interest by reference to the LIBO Rate, “Spread” shall mean
the cash interest spread of such Floating Rate Portfolio Investment over the
LIBO Rate in effect as of the date of determination for deposits in U.S. dollars
for a period of three (3) months.

“Structured Finance Obligation” means any obligation issued by a special purpose
vehicle and secured directly by, referenced to, or representing ownership of or
investment in, a pool of receivables or other financial assets of any Obligor,
including collateralized loan obligations, collateralized debt obligations and
mortgaged-backed securities. For the avoidance of doubt, if an obligation
satisfies the definition of “Structured Finance Obligation”, such obligation
shall not (a) qualify as any other category of Portfolio Investment and (b) be
included in the Borrowing Base.

“U.S. Government Securities” has the meaning assigned to such term in
Section 1.01 of this Agreement.

“Value” means, with respect to any Eligible Portfolio Investment, the value
thereof determined for purposes of this Agreement in accordance with
Section 5.12(b)(ii).

“Weighted Average Fixed Coupon” means, as of any date of determination, the
number, expressed as a percentage, obtained by summing the products obtained by
multiplying the cash interest coupon of each Fixed Rate Portfolio Investment
included in the Borrowing Base as of such date by the outstanding principal
balance (or, in the case of Preferred Stock, the liquidation preference or fixed
amount (other than interest or fees) owed on account of such Preferred Stock) of
such Fixed Rate Portfolio Investment as of such date, dividing such sum by the
aggregate outstanding principal balance (or, in the case of Preferred Stock, the
liquidation preference or fixed amount (other than interest or fees) owed on
account of such Preferred Stock) of all such Fixed Rate Portfolio Investments
and rounding up to the nearest 0.01%. For the purpose of calculating the
Weighted Average Fixed Coupon, all Fixed Rate Portfolio Investments that are not
currently paying cash interest shall have an interest rate of 0%.

“Weighted Average Floating Spread” means, as of any date of determination, the
number, expressed as a percentage, obtained by summing the products obtained by
multiplying, in the case of each Floating Rate Portfolio Investment included in
the Borrowing Base, on an annualized basis, the Spread of such Floating Rate
Portfolio Investments, by the outstanding principal balance (or, in the case of
Preferred Stock, the liquidation preference or fixed amount (other than interest
or fees) owed on account of such Preferred Stock) of such Floating Rate
Portfolio Investments as of such date and dividing such sum by the aggregate
outstanding principal balance (or, in the case of Preferred Stock, the
liquidation preference or fixed amount (other than interest or fees) owed on
account of such Preferred Stock) of all such Floating Rate Portfolio Investments
and rounding the result up to the nearest 0.01%.

 

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“Weighted Average Leverage Ratio” means, as of any date of determination, the
number obtained by summing the products obtained by multiplying, in the case of
each Debt/Preferred Eligible Portfolio Investment included in the Borrowing
Base, the leverage ratio (expressed as a number) for the Portfolio Company of
such Debt/Preferred Eligible Portfolio Investment of all Indebtedness or, as
applicable, Preferred Stock that has a ranking of payment or lien priority
senior to or pari passu with and including the tranche that includes such
Borrower’s Debt/Preferred Eligible Portfolio Investment, by the fair value of
such Debt/Preferred Eligible Portfolio Investment as of such date and dividing
such sum by the aggregate of the fair values of all such Debt/Preferred Eligible
Portfolio Investments and rounding the result up to the nearest 0.01.

SECTION 5.14 Taxes. Each of the Borrower and its Subsidiaries will timely file
or cause to be timely filed all material U.S. federal, state and local Tax
returns that are required to be filed by it and all other material Tax returns
that are required to be filed by it and will pay all Taxes which are shown as
due and owing on such Tax returns and for which it is directly or indirectly
liable and any assessments made against it or any of its property and all other
material Taxes, fees or other charges imposed on it or any of its property by
any Governmental Authority, except Taxes that are being contested in good faith
by appropriate proceedings, and with respect to which reserves in conformity
with GAAP are provided on the books of the Borrower or its Subsidiaries, as the
case may be. The charges, accruals and reserves on the books of the Borrower and
any of its Subsidiaries in respect of Taxes and other governmental charges will
be adequate in accordance with GAAP.

SECTION 5.15 Anti-Hoarding of Assets at Non-Pledged SBIC Subsidiaries. If any
Non-Pledged SBIC Subsidiary is not prohibited by any law, rule or regulation or
by any contract or agreement relating to indebtedness from distributing all or
any portion of its assets to an Obligor, then such Non-Pledged SBIC Subsidiary
shall, if a Significant Unsecured Indebtedness Event has occurred and is
continuing, distribute to an Obligor the amount of assets held by such
Non-Pledged SBIC Subsidiary that such Non-Pledged SBIC Subsidiary is permitted
to distribute and that, in the good faith judgment of the Borrower, such
Non-Pledged SBIC Subsidiary does not reasonably expect to utilize, in the
ordinary course of business, to obtain or maintain a financing from an
unaffiliated third party; provided, further, however, that if a Significant
Unsecured Indebtedness Event has occurred and is continuing and the value of the
assets owned by such Non-Pledged SBIC Subsidiary significantly exceeds the
amount of indebtedness of such Non-Pledged SBIC Subsidiary, even if such
Non-Pledged SBIC Subsidiary is prohibited by any contract or agreement relating
to indebtedness from distributing all or any portion of its assets to an
Obligor, the Borrower shall use its commercially reasonable efforts to take such
action as is necessary to cause such SBIC Subsidiary to become an Obligor or
distribute assets to an Obligor in an amount equal to the amount of assets held
by such Non-Pledged SBIC Subsidiary that, in the good faith judgment of the
Borrower, such Non-Pledged SBIC Subsidiary does not reasonably expect to
utilize, in the ordinary course of business, to obtain or maintain a financing
from an unaffiliated third party that includes advance rates that are
substantially comparable to market terms for substantially similar debt
financings at such time of determination.

 

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ARTICLE VI

NEGATIVE COVENANTS

Until the Termination Date, the Borrower covenants and agrees with the Lenders
that:

SECTION 6.01. Indebtedness. The Borrower will not nor will it permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Indebtedness,
except:

(a) Indebtedness created hereunder or under any other Loan Document;

(b) Indebtedness owing by the Borrower to any wholly-owned Obligor or
Indebtedness owed by any wholly-owned Obligor to the Borrower or another
wholly-owned Obligor;

(c) Unsecured Longer-Term Indebtedness, so long as (w) Obligors’ Net Worth shall
exceed $125,000,000 at the time of incurrence thereof, (x) no Default exists at
the time of the incurrence thereof (or immediately after the incurrence thereof)
and (y) prior to and immediately after giving effect to the incurrence thereof,
the Borrower is in pro forma compliance with each of the covenants set forth in
Sections 6.07(a), (b), (d), (e) and (f) and within five Business Days after the
date of such incurrence the Borrower delivers to the Administrative Agent a
certificate of a Financial Officer to such effect;

(d) Indebtedness of SBIC Subsidiaries, provided that (i) on the date that such
Indebtedness is incurred (for clarity, with respect to any and all revolving
loan facilities, term loan facilities, staged advance loan facilities or any
other credit facilities, “incurrence” shall be deemed to take place at the time
the definitive documentation for such facility is entered into and at the time
any amendment, modification, supplement, document or other agreement is entered
into that increases the amount that may be borrowed thereunder, and not upon
each (or any) borrowing thereunder), prior to and immediately after giving
effect to the incurrence thereof, the Borrower is in pro forma compliance with
each of the covenants set forth in Sections 6.07(a), (b), (d), (e) and (f) and
within five Business Days after the date of such incurrence Borrower delivers to
the Administrative Agent a certificate of a Financial Officer to such effect,
and (ii) in the case of revolving loan facilities or staged advance loan
facilities, upon each borrowing thereunder, the Borrower is in pro forma
compliance with each of the covenants set forth in Sections 6.07(a), (b), (d),
(e) and (f).

(e) Other Permitted Indebtedness and Indebtedness of any Obligor under any
Hedging Agreement entered into in the ordinary course of such Obligor’s
financial planning and not for speculative purposes; provided that such Other
Permitted Indebtedness and Indebtedness under all outstanding Hedge Agreements
collectively do not exceed an aggregate principal amount equal to $12,500,000
(for clarity, the amount of any Indebtedness under any Hedge Agreement shall be
the amount (after giving effect to any netting agreements) such Obligor would be
obligated for under such Hedge Agreement if such Hedge Agreement was terminated
at the time of determination);

 

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(f) repurchase obligations arising in the ordinary course of business with
respect to U.S. Government Securities;

(g) Indebtedness consisting of Disqualified Equity Interests, which by its
terms, or upon the happening of an event, does not mature and is not mandatorily
redeemable (pursuant to a sinking fund obligation or otherwise) and is not
redeemable at the option of the holder thereof, in whole or in part, prior to a
date that is six months after the Maturity Date;

(h) obligations payable to clearing agencies, brokers or dealers in connection
with the purchase or sale of securities in the ordinary course of business; and

(i) obligations of the Borrower under a Permitted SBIC Guarantee.

SECTION 6.02. Lien. The Borrower will not, nor will it permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or asset (including Equity Interests in any SBIC Subsidiary or any
other Subsidiary) now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof except:

(a) any Lien on any property or asset of the Borrower or any of its Subsidiaries
existing on the Effective Date and set forth in Schedule 3.11(b), provided that
(i) no such Lien shall extend to any other property or asset of the Borrower or
any of its Subsidiaries, and (ii) any such Lien shall secure only those
obligations which it secures on the Effective Date and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;

(b) Liens created pursuant to the Security Documents;

(c) Liens on assets owned by SBIC Subsidiaries;

(d) Liens on Special Equity Interests included in the Portfolio Investments but
only to the extent securing obligations in the manner provided in the definition
of “Special Equity Interests” in Section 1.01;

(e) Permitted Liens;

(f) additional Liens securing Indebtedness not to exceed $5,000,000 in the
aggregate provided such Indebtedness is not otherwise prohibited under
Section 6.01(e) of this Agreement; and

(g) Liens on Equity Interests in any SBIC Subsidiary created in favor of the
SBA.

 

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SECTION 6.03. Fundamental Changes. The Borrower will not, nor will it permit any
of its Subsidiaries to, enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution). The Borrower will not, nor will it permit any of
its Subsidiaries to, acquire any business or property from, or capital stock of,
or be a party to any acquisition of, any Person, except for purchases or
acquisitions of Portfolio Investments and other assets in the normal course of
the day-to-day business activities of the Borrower and its Subsidiaries and not
in violation of the terms and conditions of this Agreement or any other Loan
Document. The Borrower will not, nor will it permit any of its Subsidiaries
(other than SBIC Subsidiaries) to, convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, any part of its
assets (including, without limitation, Cash, Cash Equivalents and Equity
Interests), whether now owned or hereafter acquired, but excluding (x) assets
(including Cash and Cash Equivalents but excluding Portfolio Investments) sold
or disposed of in the ordinary course of business of the Borrower and its
Subsidiaries (including to make expenditures of cash in the normal course of the
day-to-day business activities of the Borrower and its Subsidiaries) and
(y) subject to the provisions of clauses (d) and (e) below, Portfolio
Investments.

Notwithstanding the foregoing provisions of this Section:

(a) any Subsidiary of the Borrower may be merged or consolidated with or into
the Borrower or any other Subsidiary Guarantor; provided that if any such
transaction shall be between a Subsidiary and a wholly owned Subsidiary
Guarantor, the wholly owned Subsidiary Guarantor shall be the continuing or
surviving corporation;

(b) any Subsidiary of the Borrower may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or otherwise) to
the Borrower or any wholly owned Subsidiary Guarantor of the Borrower;

(c) the capital stock of any Subsidiary of the Borrower may be sold, transferred
or otherwise disposed of to the Borrower or any wholly owned Subsidiary
Guarantor of the Borrower;

(d) the Obligors may sell, transfer or otherwise dispose of Portfolio
Investments (other than to a SBIC Subsidiary) so long as prior to and after
giving effect to such sale, transfer or other disposition (and any concurrent
acquisitions of Portfolio Investments or payment of outstanding Loans) the
Covered Debt Amount does not exceed the Borrowing Base;

(e) the Obligors may sell, transfer or otherwise dispose of Portfolio
Investments (other than ownership interests in SBIC Subsidiaries), Cash and Cash
Equivalents to a SBIC Subsidiary so long as (i) prior to and after giving effect
to such sale, transfer or other disposition (and any concurrent acquisitions of
Portfolio Investments or payment of outstanding Loans) the Covered Debt Amount
does not exceed the Borrowing Base and no Default or Event of Default exists,
and the Borrower delivers to the Administrative Agent a certificate of a
Financial Officer to such effect, and (ii) either (x) the amount by which the
Borrowing Base exceeds the Covered Debt Amount immediately prior to such release
is not diminished as a result of such release or (y) the Borrowing Base
immediately after giving effect to such release is at least 120% of the Covered
Debt Amount;

 

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(f) any Subsidiary of the Borrower may be liquidated or dissolved; provided that
(i) in connection with such liquidation or dissolution, any and all of the
assets of such Subsidiary shall be distributed or otherwise transferred to the
Borrower or any wholly owned Subsidiary Guarantor of the Borrower and (ii) the
Borrower determines in good faith that such liquidation is in the best interests
of the Borrower and is not materially disadvantageous to the Lenders;

(g) the Borrower may merge or consolidate with any other Person, so long as
(i) the Borrower is the continuing or surviving entity in such transaction and
(ii) at the time thereof and after giving effect thereto, no Default shall have
occurred or be continuing;

(h) the Borrower and its Subsidiaries may sell, lease, transfer or otherwise
dispose of equipment or other property or assets that do not consist of
Portfolio Investments so long as the aggregate amount of all such sales, leases,
transfer and dispositions does not exceed $5,000,000 in any fiscal year; and

(i) any non-Obligor Subsidiary may be merged or consolidated with or into any
other non-Obligor Subsidiary.

SECTION 6.04. Investments. The Borrower will not, nor will it permit any of its
Subsidiaries to, acquire, make or enter into, or hold, any Investments except:

(a) operating deposit accounts with banks;

(b) Investments by the Borrower and the Subsidiary Guarantors in the Borrower
and Subsidiary Guarantors;

(c) Hedging Agreements entered into in the ordinary course of the Borrower’s
business for financial planning and not for speculative purposes;

(d) Portfolio Investments by the Borrower and its Subsidiaries to the extent
such Portfolio Investments are permitted under the Investment Company Act (to
the extent such applicable Person is subject to the Investment Company Act) and
the Investment Policies;

(e) Equity Interests in (or capital contribution to) SBIC Subsidiaries to the
extent not prohibited by Section 6.03(e);

(f) Investments by any SBIC Subsidiary;

(g) Investments in Cash and Cash Equivalents;

(h) Investments described on Schedule 3.12(b) hereto; and

 

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(i) additional Investments up to but not exceeding $2,500,000 in the aggregate
(for purposes of this clause (i), the aggregate amount of an Investment at any
time shall be deemed to be equal to (A) the aggregate amount of cash, together
with the aggregate fair market value of property loaned, advanced, contributed,
transferred or otherwise invested that gives rise to such Investment (calculated
at the time such Investment is made), minus (B) the aggregate amount of
dividends, distributions or other payments received in cash in respect of such
Investment, provided that in no event shall the aggregate amount of any
Investment be less than zero, and provided further that the amount of any
Investment shall not be reduced by reason of any write-off of such Investment,
nor increased by way of any increase in the amount of earnings retained in the
Person in which such Investment is made that have not been dividended,
distributed or otherwise paid out).

SECTION 6.05. Restricted Payments. The Borrower will not, nor will it permit any
of its Subsidiaries (other than the SBIC Subsidiaries) to, declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payment, except
that:

(a) the Borrower may declare and pay dividends on its Equity Interests payable
solely in additional shares of the Borrower’s common stock;

(b) the Borrower may declare and pay dividends and distributions in either case
in cash or other property (excluding for this purpose the Borrower’s common
stock) in or with respect to any taxable year of the Borrower (or any calendar
year, as relevant) in amounts not to exceed 110% of the amounts that are
required to be distributed to: (i) allow the Borrower to satisfy the minimum
distribution requirements imposed by Section 852(a) of the Code (or any
successor thereto) to maintain its eligibility to be taxed as a RIC for any such
taxable year, (ii) reduce to zero for any such taxable year its liability for
federal income taxes imposed on (y) its investment company taxable income
pursuant to Section 852(b)(1) of the Code (or any successor thereto), or (z) its
net capital gain pursuant to Section 852(b)(3) of the Code (or any successor
thereto), and (iii) reduce to zero its liability for federal excise taxes for
any such calendar year imposed pursuant to Section 4982 of the Code (or any
successor thereto);

(c) the Subsidiaries of the Borrower may make Restricted Payments to the
Borrower or to any Subsidiary Guarantor;

(d) Obligors may make Restricted Payments to repurchase Equity Interests of the
Borrower from officers, directors and employees of the Investment Advisor or the
Borrower or any of its Subsidiaries or their authorized representatives upon the
death, disability or termination of employment of such employees or termination
of their seat on the Board of Directors of the Investment Advisor or the
Borrower or any of its Subsidiaries; provided that (i) no Default or Event of
Default shall have occurred and be continuing or would result therefrom and
(ii) the aggregate amount of all repurchases in any calendar year shall not
exceed $500,000, with unused amounts in any calendar year being carried over to
succeeding calendar years subject to a maximum of $1,000,000 in any calendar
year; and

 

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(e) The Borrower may declare and pay dividends in respect of Equity Interests
consisting of shares of preferred stock issued by the Borrower that are
Disqualified Equity Interests, provided that (i) such dividend is not a “special
dividend” but is a customary dividend that, pursuant to the terms of such
preferred stock, accrues and accumulates on the unpaid liquidation preference of
such preferred stock at a market rate, (ii) no Default or Event of Default shall
have occurred and be continuing or result from the making such payment and
(iii) the Borrower shall be in pro forma compliance with the financial covenants
set forth in Section 6.07 after giving effect to such dividend.

For the avoidance of doubt, the Borrower shall not declare any dividend to the
extent such declaration violates the provisions of the Investment Company Act
applicable to it.

SECTION 6.06. Certain Restrictions on Subsidiaries. The Borrower will not permit
any of its Subsidiaries (other than SBIC Subsidiaries) to enter into or suffer
to exist any indenture, agreement, instrument or other arrangement (other than
the Loan Documents) that prohibits or restrains, in each case in any material
respect, or imposes materially adverse conditions upon, the incurrence or
payment of Indebtedness, the granting of Liens, the declaration or payment of
dividends, the making of loans, advances, guarantees or Investments or the sale,
assignment, transfer or other disposition of property, except for any
prohibitions or restraints contained in (i) any Indebtedness permitted under
Section 6.01(c), (ii) any Indebtedness permitted under Section 6.01(e) secured
by a Lien permitted under Section 6.02(f) provided that such prohibitions and
restraints are applicable by their terms only to the assets that are subject to
such Lien, (iii) any Indebtedness permitted under Section 6.01(f) or (g) secured
by a Permitted Lien provided that such prohibitions and restraints are
applicable by their terms only to the assets that are subject to such Lien and
(iv) any agreement, instrument or other arrangement pertaining to any sale or
other disposition of any asset permitted by this Agreement so long as the
applicable restrictions (i) only apply to such assets and (ii) do not restrict
prior to the consummation of such sale or disposition the creation or existence
of the Liens in favor of the Collateral Agent pursuant to the Security Documents
or otherwise required by this Agreement, or the incurrence or payment of the
obligations under this Agreement or the ability of the Borrower and its
Subsidiaries to perform any other obligation under any of the Loan Documents.

SECTION 6.07. Certain Financial Covenants.

(a) Minimum Stockholder’s Equity. After the Effective Date, the Borrower will
not permit Stockholders’ Equity as of the last day of any fiscal quarter of the
Borrower to be less than $160,000,000, plus (y) 70% of the aggregate net
proceeds of all sales of Equity Interests by the Borrower and its Subsidiaries
after the Effective Date (other than the proceeds of sales of Equity Interests
by and among the Borrower and its Subsidiaries).

(b) Asset Coverage Ratio. After the Effective Date, the Borrower will not permit
the Asset Coverage Ratio to be less than 2.25 to 1 at any time.

(c) Consolidated Interest Coverage Ratio. After the Effective Date, the Borrower
will not permit the Consolidated Interest Coverage Ratio to be less than 2.50 to
1 as of the last day of any fiscal quarter of the Borrower.

 

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(d) Liquidity Test. After the Effective Date, the Borrower will not permit the
aggregate Value of the Eligible Portfolio Investments that can be converted to
Cash in fewer than 10 Business Days without more than a 5% change in price to be
less than 10% of the Covered Debt Amount for more than 30 Business Days during
any period when the Adjusted Covered Debt Balance is greater than 90% of the
Adjusted Borrowing Base.

(e) Obligors’ Net Worth Test. After Effective Date, the Borrower will not permit
the Obligors’ Net Worth to be less than an amount equal to (i) $50,000,000 plus
(ii) 50% of the aggregate net proceeds of all sales of Equity Interests by the
Borrower and its Subsidiaries after the Effective Date.

(f) Unsecured Indebtedness Test. After the Effective Date, at any time when
Obligor’s Net Worth is less than $175,000,000, unsecured Indebtedness of the
Borrower and its Subsidiaries (other than SBIC Subsidiaries) shall not exceed
the sum of (i) the excess of the Borrowing Base over the Covered Debt Amount
plus (ii) 30% of the excess of Stockholder’s Equity over Obligor’s Net Worth.

SECTION 6.08. Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any transactions with any of its
Affiliates, even if otherwise permitted under this Agreement, except
(i) transactions in the ordinary course of business at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary (or, in the
case of a transaction between an Obligor and a non-Obligor Subsidiary, not less
favorable to such Obligor) than could be obtained at the time on an arm’s-length
basis from unrelated third parties, (ii) transactions between or among the
Obligors not involving any other Affiliate, (iii) transactions between or among
the Obligors and any SBIC Subsidiary or any “downstream affiliate” (as such term
is used under the rules promulgated under the Investment Company Act) company of
an Obligor at prices and on terms and conditions not less favorable to the
Obligors than could be obtained at the time on an arm’s-length basis from
unrelated third parties, (iv) Restricted Payments permitted by Section 6.05,
(v) the transactions provided in the Affiliate Agreements as the same may be
amended in accordance with Section 6.11(b) or (vi) existing transactions with
Affiliates as set forth in Schedule 6.08.

SECTION 6.09. Lines of Business. The Borrower will not, nor will it permit any
of its Subsidiaries to, engage to any material extent in any business other than
in accordance with its Investment Policies.

SECTION 6.10. No Further Negative Pledge. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any agreement, instrument, deed or
lease which prohibits or limits the ability of any Obligor to create, incur,
assume or suffer to exist any Lien upon any of its properties, assets or
revenues, whether now owned or hereafter acquired, or which requires the grant
of any security for an obligation if security is granted for another obligation,
except the following: (a) this Agreement and the other Loan Documents;
(b) covenants in documents creating Liens permitted by Section 6.02 prohibiting
further Liens on the assets encumbered thereby; (c) customary restrictions
contained in leases not subject to a waiver; (d) any other agreement that does
not restrict in any manner (directly or indirectly) Liens created pursuant to
the Loan Documents on any Collateral securing the “Secured Obligations” under
and as defined in the Guarantee and Security Agreement and does not require the
direct or indirect granting of any Lien securing any Indebtedness or other
obligation by virtue of the granting of Liens on or pledge of property of any
Obligor to secure the Loans or any Hedging Agreement and (e) restrictions
imposed by the SBA on the pledge of the equity of any SBIC Subsidiary.

 

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SECTION 6.11. Modifications of Indebtedness and Affiliate Agreements. The
Borrower will not, and will not permit any of its Subsidiaries to, consent to
any modification, supplement or waiver of:

(a) any of the provisions of any agreement, instrument or other document
evidencing or relating to any Unsecured Longer-Term Indebtedness that would
result in such Indebtedness not meeting the requirements of the definition of
“Unsecured Longer-Term Indebtedness”; or

(b) any of the Affiliate Agreements, unless such modification, supplement or
waiver is not materially less favorable to the Borrower than could be obtained
on an arm’s-length basis from unrelated third parties.

The Administrative Agent hereby acknowledges and agrees that the Borrower may,
at any time and from time to time, without the consent of the Administrative
Agent, freely amend, restate, terminate, or otherwise modify any documents,
instruments and agreements evidencing, securing or relating to Indebtedness
permitted pursuant to Section 6.01(d) and (e), including increases in the
principal amount thereof, modifications to the advance rates and/or
modifications to the interest rate, fees or other pricing terms, provided that
no such amendment, restatement or modification shall, unless Borrower complies
with the terms of Section 5.08(a)(i) hereof, cause an SBIC Subsidiary to fail to
be an “SBIC Subsidiary” in accordance with the definition thereof.

SECTION 6.12. Payments of Longer-Term Indebtedness. The Borrower will not, nor
will it permit any of its Subsidiaries to, purchase, redeem, retire or otherwise
acquire for value, or set apart any money for a sinking, defeasance or other
analogous fund for the purchase, redemption, retirement or other acquisition of
or make any voluntary payment or prepayment of the principal of or interest on,
or any other amount owing in respect of, any Unsecured Longer-Term Indebtedness
(other than (i) the refinancing of Unsecured Longer-Term Indebtedness with
Indebtedness permitted under Section 6.01(c) and (ii) regularly scheduled
payments or prepayments of interest in respect thereof required pursuant to the
instruments evidencing such Indebtedness and the payment when due of the types
of fees and expenses that are customarily paid in connection with such
Indebtedness).

SECTION 6.13. Modification of Investment Policies. Other than with respect to
Permitted Policy Amendments, the Borrower will not amend, supplement, waive or
otherwise modify in any material respect the Investment Policies as in effect on
the Effective Date.

SECTION 6.14. SBIC Guarantee. The Borrower will not, nor will it permit any of
its Subsidiaries to, cause or permit the occurrence of any event or condition
that would result in any recourse to any Obligor under any Permitted SBIC
Guarantee.

 

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SECTION 6.15. Derivative Transactions. The Borrower will not, nor will it permit
any of its Subsidiaries (other than SBIC Subsidiaries), to enter into any swap
or derivative transactions or other similar transactions or agreements, except
for Hedging Agreements to the extent permitted pursuant to Section 6.01(e) and
6.04(c).

ARTICLE VII

EVENTS OF DEFAULT

If any of the following events (“Events of Default”) shall occur and be
continuing:

(a) the Borrower shall fail to pay any principal of any Loan (including, without
limitation, any principal payable under Section 2.08(b)) when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

(b) the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in clause (a) of this Article)
payable under this Agreement or under any other Loan Document, when and as the
same shall become due and payable, and such failure shall continue unremedied
for a period of five or more Business Days;

(c) any representation or warranty made or deemed made by or on behalf of the
Borrower or any of its Subsidiaries in or in connection with this Agreement or
any other Loan Document or any amendment or modification hereof or thereof, or
in any report, certificate, financial statement or other document furnished
pursuant to or in connection with this Agreement or any other Loan Document or
any amendment or modification hereof or thereof, shall prove to have been
incorrect when made or deemed made in any material respect (except that such
materiality qualifier shall not be applicable to any representation or warranty
already qualified by materiality or Material Adverse Effect);

(d) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in (i) Section 5.01(e), Section 5.02(a), Section 5.03 (with
respect to the Borrower’s and its Subsidiaries’ existence only, and not with
respect to the Borrower’s and its Subsidiaries’ rights, licenses, permits,
privileges or franchises), Sections 5.08(a) or (b), Section 5.10,
Section 5.12(c) or in Article VI or any Obligor shall default in the performance
of any of its obligations contained in Section 7 of the Guarantee and Security
Agreement or (ii) Section 5.01(f) or Sections 5.02(b), (c) or (d) and, in the
case of this clause (ii), such failure shall continue unremedied for a period of
five or more days after the Borrower has knowledge of such failure;

(e) the Borrower or any Obligor, as applicable, shall fail to observe or perform
any covenant, condition or agreement contained in this Agreement (other than
those specified in clause (a), (b) or (d) of this Article) or any other Loan
Document and such failure shall continue unremedied for a period of 30 or more
days after notice thereof from the Administrative Agent (given at the request of
any Lender) to the Borrower;

 

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(f) the Borrower or any of its Subsidiaries shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and payable, taking
into account any applicable grace period;

(g) any event or condition occurs that (i) results in all or any portion of any
Material Indebtedness becoming due prior to its scheduled maturity or (ii) that
enables or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or agent
on its or their behalf to cause any Material Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity, unless, in the case of this clause (ii), such event or
condition is no longer continuing or has been waived in accordance with the
terms of such Material Indebtedness such that the holder or holders thereof or
any trustee or agent on its or their behalf are no longer enabled or permitted
to cause such Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to (1) secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness; or (2) convertible debt that becomes due as a
result of a contingent mandatory conversion or redemption event provided such
conversion or redemption is effectuated only in capital stock;

(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any of its Subsidiaries or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any of its Subsidiaries or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed and unstayed for a period of 60 or more days
or an order or decree approving or ordering any of the foregoing shall be
entered;

(i) the Borrower or any of its Subsidiaries shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (i) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any of its Subsidiaries or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

(j) the Borrower or any of its Subsidiaries shall become unable, admit in
writing its inability or fail generally to pay its debts as they become due;

 

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(k) one or more judgments for the payment of money in an aggregate amount in
excess of $2,000,000 shall be rendered against the Borrower or any of its
Subsidiaries or any combination thereof and (i) the same shall remain
undischarged for a period of 30 consecutive days following the entry of such
judgment or (ii) any action shall be legally taken by a judgment creditor to
attach or levy upon any assets of the Borrower or any of its Subsidiaries to
enforce any such judgment;

(l) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower or any ERISA Affiliate in an aggregate amount
exceeding $2,500,000;

(m) a Change in Control shall occur;

(n) any SBIC Subsidiary shall become the subject of an enforcement action and be
transferred into liquidation status by the SBA;

(o) the Liens created by the Security Documents shall, at any time with respect
to Portfolio Investments held by Obligors having an aggregate Value in excess of
5% of the aggregate Value of all Portfolio Investments held by Obligors, not be,
valid and perfected (to the extent perfection by filing, registration,
recordation, possession or control is required herein or therein) in favor of
the Collateral Agent (or any Obligor or any Affiliate of an Obligor shall so
assert in writing), free and clear of all other Liens (other than Liens
permitted under Section 6.02 or under the respective Security Documents), except
to the extent that any such loss of perfection results from the failure of the
Collateral Agent to maintain possession of certificates representing securities
pledged under the Guarantee and Collateral Agreement; provided that if such
default is as a result of any action of the Administrative Agent or Collateral
Agent or a failure of the Administrative Agent or Collateral Agent to take any
action within its control, then there shall be no Default or Event of Default
hereunder unless such default shall continue unremedied for a period of ten
(10) consecutive Business Days after the earlier of (i) the Borrower becoming
aware of such default and (ii) the Borrower’s receipt of written notice of such
default thereof from the Administrative Agent, unless, in each case, the
continuance thereof is a result of a failure of the Collateral Agent or
Administrative Agent to take an action within their control (and the Borrower
has requested that the Collateral Agent or Administrative Agent to take such
action);

(p) except for expiration in accordance with its terms, any of the Security
Documents shall for whatever reason be terminated or cease to be in full force
and effect in any material respect, or the enforceability thereof shall be
contested by any Obligor, or there shall be any actual invalidity of any
guaranty thereunder or any Obligor or any Affiliate of an Obligor shall so
assert in writing;

(q) the Borrower or any of its Subsidiaries shall cause or permit the occurrence
of any condition or event that would result in any recourse to any Obligor under
any Permitted SBIC Guarantee; or

(r) an Investment Advisor Departure Event shall occur.

 

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then, and in every such event (other than an event described in clause
(h), (i) or (j) of this Article), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder and
under the other Loan Documents, shall become due and payable immediately,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; and in case of any event described in clause
(h), (i) or (j) of this Article, the Commitments shall automatically terminate
and the principal of the Loans then outstanding, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder and
under the other Loan Documents, shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower.

ARTICLE VIII

THE ADMINISTRATIVE AGENT

SECTION 8.01. Appointment of the Administrative Agent. Each of the Lenders
hereby irrevocably appoints the Administrative Agent as its agent hereunder and
under the other Loan Documents and authorizes the Administrative Agent to take
such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto.

SECTION 8.02. Capacity as Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent, and such Person and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of business with the
Borrower or any Subsidiary or other Affiliate thereof as if it were not the
Administrative Agent hereunder.

SECTION 8.03. Limitation of Duties; Exculpation. The Administrative Agent shall
not have any duties or obligations except those expressly set forth herein and
in the other Loan Documents. Without limiting the generality of the foregoing,
(a) the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent is required to exercise in writing by the Required Lenders,
and (c) except as expressly set forth herein and in the other Loan Documents,
the Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the bank serving
as

 

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Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders or in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until written notice
thereof is given to the Administrative Agent by the Borrower or a Lender, and
the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere herein or therein, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.
Notwithstanding anything to the contrary contained herein, in no event shall the
Administrative Agent be liable or responsible in any way or manner for the
failure to obtain or receive an IVP External Unquoted Value for any asset or for
the failure to send any notice required under Section 5.12(b)(ii)(B)(x).

SECTION 8.04. Reliance. The Administrative Agent shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed or sent by
the proper Person. The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon. The
Administrative Agent may consult with legal counsel, independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts.

SECTION 8.05. Sub-Agents. The Administrative Agent may perform any and all its
duties and exercise its rights and powers by or through any one or more
sub-agents appointed by the Administrative Agent. The Administrative Agent and
any such sub-agent may perform any and all its duties and exercise its rights
and powers through their respective Related Parties. The exculpatory provisions
of the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

SECTION 8.06. Resignation; Successor Administrative Agent. The Administrative
Agent may resign at any time by notifying the Lenders and the Borrower. Upon any
such resignation, the Required Lenders shall have the right, with the consent of
the Borrower not to be unreasonably withheld (provided that no such consent
shall be required if an Event of Default has occurred and is continuing), to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent’s resignation shall nonetheless become effective
and (1) the retiring

 

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Administrative Agent shall be discharged from its duties and obligations
hereunder and (2) the Required Lenders shall perform the duties of the
Administrative Agent (and all payments and communications provided to be made
by, to or through the Administrative Agent shall instead be made by or to each
Lender directly) until such time as the Required Lenders appoint a successor
agent as provided for above in this paragraph. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring (or retired) Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder (if not already discharged therefrom as provided above in this
paragraph). The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent’s
resignation hereunder, the provisions of this Article VIII and Section 9.03
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Administrative Agent.

SECTION 8.07. Reliance by Lenders. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.

SECTION 8.08. Modifications to Loan Documents. Except as otherwise provided in
Section 9.02(b) or 9.02(c) with respect to this Agreement, the Administrative
Agent may, with the prior consent of the Required Lenders (but not otherwise),
consent to any modification, supplement or waiver under any of the Loan
Documents; provided that, without the prior consent of each Lender, the
Administrative Agent shall not (except as provided herein or in the Security
Documents) release all or substantially all of the Collateral or otherwise
terminate all or substantially all of the Liens under any Security Document
providing for collateral security, agree to additional obligations being secured
by all or substantially all of such collateral security, or alter the relative
priorities of the obligations entitled to the benefits of the Liens created
under the Security Documents with respect to all or substantially all of the
Collateral, except that no such consent shall be required, and the
Administrative Agent is hereby authorized, to release any Lien covering property
that is the subject of either a disposition of property permitted hereunder or a
disposition to which the Required Lenders have consented.

 

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ARTICLE IX

MISCELLANEOUS

SECTION 9.01. Notices; Electronic Communications.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy or to the extent permitted by Section 9.01(b) or otherwise
herein, e-mail, as follows:

(i) if to the Borrower, to it at:

Fidus Investment Corporation

1603 Orrington Avenue, Suite 1005

Evanston, Illinois 60201

Attention: Edward H. Ross

Telephone: (847) 859-3940

Fax: (847) 859-3953

With a copy to:

Morrison & Foerster LLP

250 West 55th Street

New York, New York 10019

Attention: Mark Wojciechowski

Telephone: Number: (212) 468-8079

Fax: (212) 468-7900

(ii) if to the Administrative Agent, to it at:

ING Capital LLC

1325 Avenue of the Americas

New York, New York 10019

Attention: Patrick Frisch

Telephone Number: (646) 424-6912

Telecopy Number: (646) 424-6919

with a copy to:

Dechert LLP

1095 Avenue of the Americas

New York, New York 10036

Attention: Jay R. Alicandri, Esq.

Telephone Number: (212) 698-3500

Telecopy Number: (212) 698-3599

(iii) if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.

 

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Any party hereto may change its address, telecopy number or e-mail address for
notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt. Notices delivered through electronic
communications to the extent provided in paragraph (b) below, shall be effective
as provided in said paragraph (b).

(b) Electronic Communications. Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices to
any Lender pursuant to Section 2.04 if such Lender has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices
or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

(c) Documents to be Delivered under Sections 5.01. For so long as a Debtdomain™
or equivalent website is available to each of the Lenders hereunder, the
Borrower may satisfy its obligation to deliver documents to the Administrative
Agent or the Lenders under Sections 5.01 by delivering one hard copy thereof to
the Administrative Agent and either an electronic copy or a notice identifying
the website where such information is located for posting by the Administrative
Agent on Debtdomain™ or such equivalent website, provided that the
Administrative Agent shall have no responsibility to maintain access to
Debtdomain™ or an equivalent website.

SECTION 9.02. Waivers; Amendments.

(a) No Deemed Waivers; Remedies Cumulative. No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
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Agreement or consent to any departure by the Borrower therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent or any Lender may have
had notice or knowledge of such Default at the time.

(b) Amendments to this Agreement. Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Borrower and the Required Lenders or
by the Borrower and the Administrative Agent with the consent of the Required
Lenders; provided that, subject to Section 2.16(b), no such agreement shall

(i) increase the Commitment of any Lender without the written consent of such
Lender,

(ii) reduce the principal amount of any Loan or reduce the rate of interest
thereon, or reduce any fees payable hereunder, without the written consent of
each Lender directly affected thereby,

(iii) postpone the scheduled date of payment of the principal amount of any
Loan, or any interest thereon, or any fees payable to a Lender hereunder, or
reduce the amount or waive or excuse any such payment, or postpone the scheduled
date of expiration of any Commitment, without the written consent of each Lender
directly affected thereby,

(iv) change Section 2.15(b), (c) or (d) in a manner that would alter the pro
rata sharing of payments, or making of disbursements, required thereby without
the written consent of each Lender directly affected thereby,

(v) change any of the provisions of this Section or the percentage in the
definition of the term “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender, or

(vi) permit the assignment or transfer by any Obligor of any of its rights or
obligations under any Loan Document without the consent of each Lender;

provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent hereunder without the prior
written consent of the Administrative Agent.

(c) Amendments to Security Documents. No Security Document nor any provision
thereof may be waived, amended or modified, except to the extent otherwise
expressly contemplated by the Guarantee and Security Agreement, and the Liens
granted under the Guarantee and Security Agreement may not be spread to secure
any additional obligations

 

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(including any increase in Loans hereunder, but excluding any such increase
pursuant to a Commitment Increase under Section 2.06(f)) except to the extent
otherwise expressly contemplated by the Guarantee and Security Agreement and
except pursuant to an agreement or agreements in writing entered into by the
Borrower, and by the Collateral Agent with the consent of the Required Lenders;
provided that, subject to Section 2.16(b), (i) without the written consent of
the holders of not less than two-thirds of the total Revolving Credit Exposures
and unused Commitments, no such waiver, amendment or modification to the
Guarantee and Security Agreement shall (A) release any Obligor representing more
than 10% of the Stockholder’s Equity of the Borrower from its obligations under
the Security Documents, (B) release any guarantor representing more than 10% of
the Stockholder’s Equity of the Borrower under the Guarantee and Security
Agreement from its guarantee obligations thereunder, or (C) amend the definition
of “Collateral” under the Security Documents (except to add additional
collateral) and (ii) without the written consent of each Lender, no such
agreement shall (W) release all or substantially all of the Obligors from their
respective obligations under the Security Documents, (X) release all or
substantially all of the collateral security or otherwise terminate all or
substantially all of the Liens under the Security Documents, (Y) release all or
substantially all of the guarantors under the Guarantee and Security Agreement
from their guarantee obligations thereunder, or (Z) alter the relative
priorities of the obligations entitled to the Liens created under the Security
Documents (except in connection with securing additional obligations equally and
ratably with the Loans and other obligations hereunder) with respect to the
collateral security provided thereby; except that no such consent described in
clause (i) or (ii) above shall be required, and the Administrative Agent is
hereby authorized (and so agrees with the Borrower) to direct the Collateral
Agent under the Guarantee and Security Agreement, to release any Lien covering
property (and to release any such guarantor) that is the subject of either a
disposition of property permitted hereunder or a disposition to which the
Required Lenders or the required number or percentage of Lenders have consented,
or otherwise in accordance with Section 9.15.

(d) Replacement of Non-Consenting Lender. If, in connection with any proposed
amendment, waiver or consent, such proposed amendment, waiver or consent
requires the consent of “each Lender” or “each Lender affected thereby”, and the
consent of the Required Lenders is obtained (provided, that if the definition of
“Required Lenders” provides that the threshold for consent of the Required
Lenders is higher than 50% of the sum of the total Revolving Credit Exposures
and unused Commitments at such time, and in such case the consent of the Lenders
having Revolving Credit Exposures and unused Commitments representing more than
two-thirds of the sum of the total Revolving Credit Exposures and unused
Commitments at such time is obtained, then the consent of the Required Lenders
shall be deemed to have been obtained for purposes of this Section 9.02(d)), but
the consent of other necessary Lenders is not obtained (any such Lender whose
consent is necessary but not obtained being referred to herein as a
“Non-Consenting Lender”), then, provided that no Default or Event of Default
shall have occurred and be continuing, the Borrower shall have the right, at its
sole cost and expense, to replace each such Non-Consenting Lender or Lenders
with one or more replacement Lenders pursuant to Section 2.17(b) so long as at
the time of such replacement, each such replacement Lender consents to the
proposed change, waiver, discharge or termination.

 

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SECTION 9.03. Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrower shall pay (i) all reasonable and documented
out-of-pocket fees, costs and expenses incurred by the Administrative Agent, the
Collateral Agent and their Affiliates, including the reasonable fees, charges
and disbursements of up to one counsel for the Administrative Agent and the
Collateral Agent collectively (other than the allocated costs of internal
counsel), in connection with the syndication of the credit facilities provided
for herein, the preparation and administration (other than internal overhead
charges) of this Agreement and the other Loan Documents and any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
out-of-pocket fees, costs and expenses incurred by the Administrative Agent, the
Collateral Agent or any Lender, including reasonable fees, charges and
disbursements of any counsel for the Administrative Agent, the Collateral Agent
or any Lender, in connection with the enforcement or protection of its rights in
connection with this Agreement and the other Loan Documents, including its
rights under this Section, or in connection with the Loans made, including all
such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect thereof and (iii) and all reasonable and documented
out-of-pocket costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated by any Security Document or any other document
referred to therein.

(b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses (without duplication of an Indemnitee’s rights
to indemnification under Section 2.14(c) hereof), including the fees, charges
and disbursements of any counsel for any Indemnitee (other than the allocated
costs of internal counsel), incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement or any agreement or instrument contemplated hereby,
the performance by the parties hereto of their respective obligations hereunder
or the consummation of the Transactions or any other transactions contemplated
hereby (including, without limitation, any arrangement entered into with an
Independent Valuation Provider), (ii) any Loan or the use of the proceeds
therefrom or (iii) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory and whether brought by the Borrower, any Indemnitee or a third
party and regardless of whether any Indemnitee is a party thereto; provided that
such indemnity shall not as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses are determined by
a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the willful misconduct or gross negligence of such Indemnitee.

The Borrower shall not be liable to any Indemnitee for any special, indirect,
consequential or punitive damages arising out of, in connection with, or as a
result of the Transactions asserted by an Indemnitee against the Borrower or any
other Obligor, provided that the foregoing limitation shall not be deemed to
impair or affect the Obligations of the Borrower under the preceding provisions
of this subsection.

 

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(c) Reimbursement by Lenders. To the extent that the Borrower fails to pay any
amount required to be paid by it to the Administrative Agent under paragraph
(a) or (b) of this Section (and without limiting its obligation to do so), each
Lender severally agrees to pay to the Administrative Agent, as the case may be,
such Lender’s Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent in its capacity as such.

(d) Waiver of Consequential Damages, Etc. To the extent permitted by applicable
law, the Borrower shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of; this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or the use of the
proceeds thereof. No Indemnitee shall be liable for any damages arising from the
use of unintended recipients of any information or other materials distributed
by it through telecommunications, electronic or other information transmission
systems in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby, except to the extent caused by the
willful misconduct or gross negligence of such Indemnitee, as determined by a
final, non-appealable judgment of a court of competent jurisdiction.

(e) Payments. All amounts due under this Section shall be payable promptly after
written demand therefor.

SECTION 9.04. Successors and Assigns.

(a) Assignments Generally. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that (i) the Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
and, to the extent expressly contemplated hereby, the Related Parties of each of
the Administrative Agent and the Lenders) any legal or equitable right, remedy
or claim under or by reason of this Agreement.

 

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(b) Assignments by Lenders.

(i) Assignments Generally. Subject to the conditions set forth in clause
(ii) below, any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld, conditioned or
delayed) of:

(A) the Borrower, provided that (i) no consent of the Borrower shall be required
for an assignment to a Lender, an Affiliate of a Lender, or, if an Event of
Default has occurred and is continuing, any other assignee, and (ii) to the
extent the Borrower is notified in writing of a proposed assignment, the
Borrower shall be deemed to have consented to any such assignment unless it
shall object thereto by written notice to the Administrative Agent within five
(5) Business Days; and

(B) the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment by a Lender to an Affiliate of a
Lender with prior written notice by such Lender to the Administrative Agent.

(ii) Certain Conditions to Assignments. Assignments shall be subject to the
following additional conditions:

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender’s
Commitment or Loans, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than U.S. $1,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent; provided that no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing;

(B) each partial assignment of Commitments or Loans shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement in respect of such Commitments and Loans;

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption in substantially the form of
Exhibit A hereto, together with a processing and recordation fee of U.S. $3,500
(which fee shall not be payable in connection with an assignment to a Lender or
to an Affiliate of a Lender), for which the Borrower and the Guarantors shall
not be obligated (except in the case of an assignment pursuant to
Section 2.17(b)); and

(D) the assignee, if it shall not already be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

(iii) Effectiveness of Assignments. Subject to acceptance and recording thereof
pursuant to paragraph (c) of this Section, from and after the effective date
specified in each Assignment and Assumption the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and

 

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Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.12,
2.13, 2.14 and 9.03 with respect to facts and circumstances occurring prior to
the effective date of such assignment). Any assignment or transfer by a Lender
of rights or obligations under this Agreement that does not comply with this
Section 9.04 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.

(c) Maintenance of Registers by Administrative Agent. The Administrative Agent,
acting solely for this purpose as an agent of the Borrower, shall maintain at
one of its offices in New York City a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitments of, and principal amount and stated interest of
the Loans owing to, each Lender pursuant to the terms hereof from time to time
(the “Registers” and each individually, a “Register”). The entries in the
Registers shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Registers
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Registers shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.

(d) Acceptance of Assignments by Administrative Agent. Upon its receipt of a
duly completed Assignment and Assumption executed by an assigning Lender and an
assignee, the assignee’s completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent
shall accept such Assignment and Assumption and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.

(e) Special Purposes Vehicles. Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting Lender”) may grant to a special
purpose funding vehicle (an “SPC”) owned or administered by such Granting
Lender, identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrower, the option to provide all or any
part of any Loan that such Granting Lender would otherwise be obligated to make;
provided that (i) nothing herein shall constitute a commitment to make any Loan
by any SPC, (ii) if an SPC elects not to exercise such option or otherwise fails
to provide all or any part of such Loan, the Granting Lender shall, subject to
the terms of this Agreement, make such Loan pursuant to the terms hereof,
(iii) the rights of any such SPC shall be derivative of the rights of the
Granting Lender, and such SPC shall be subject to all of the restrictions upon
the Granting Lender herein contained, and (iv) no SPC shall be entitled to the
benefits of Sections 2.12 (or any other increased costs protection provision),
2.13 or 2.14. Each SPC shall be conclusively presumed to have made arrangements
with its Granting Lender for the exercise of voting and other rights hereunder
in a manner which is acceptable to the SPC, the Administrative Agent, the
Lenders and the Borrower, and each of the Administrative Agent, the

 

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Lenders and the Obligors shall be entitled to rely upon and deal solely with the
Granting Lender with respect to Loans made by or through its SPC. The making of
a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender
to the same extent, and as if, such Loan were made by the Granting Lender.

Each party hereto hereby agrees (which agreement shall survive the termination
of this Agreement) that, prior to the date that is one year and one day after
the payment in full of all outstanding senior indebtedness of any SPC, it will
not institute against, or join any other person in instituting against, such
SPC, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or similar proceedings under the laws of the United States or any
State thereof, in respect of claims arising out of this Agreement; provided that
the Granting Lender for each SPC hereby agrees to indemnify, save and hold
harmless each other party hereto for any loss, cost, damage and expense arising
out of their inability to institute any such proceeding against its SPC. In
addition, notwithstanding anything to the contrary contained in this Section,
any SPC may (i) without the prior written consent of the Borrower and the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Loans to its Granting Lender or to any
financial institutions providing liquidity and/or credit facilities to or for
the account of such SPC to fund the Loans made by such SPC or to support the
securities (if any) issued by such SPC to fund such Loans (but nothing contained
herein shall be construed in derogation of the obligation of the Granting Lender
to make Loans hereunder); provided that neither the consent of the SPC or of any
such assignee shall be required for amendments or waivers hereunder except for
those amendments or waivers for which the consent of participants is required
under paragraph (1) below, and (ii) disclose on a confidential basis (in the
same manner described in Section 9.13(b)) any non-public information relating to
its Loans to any rating agency, commercial paper dealer or provider of a surety,
guarantee or credit or liquidity enhancement to such SPC.

(f) Participations. Any Lender may sell participations to one or more banks or
other entities (a “Participant”) in all or a portion of such Lender’s rights and
obligations under this Agreement and the other Loan Documents (including all or
a portion of its Commitments and the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement and the other Loan Documents shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and the other Loan Documents. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and the
other Loan Documents and to approve any amendment, modification or waiver of any
provision of this Agreement or any other Loan Document; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (g) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.12, 2.13 and 2.14
(subject to the requirements and limitations therein, including Sections
2.14(e), (f) and (g) (it being understood that the documentation required under
Sections 2.14(e), (f) and (g) shall be delivered to the participating Lender))
to the same extent as if it were a Lender and had

 

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acquired its interest by assignment pursuant to paragraph (b) of this Section;
provided that such Participant agrees to be subject to the provisions of
Section 2.17 as if it were an assignee under paragraph (b) of this Section. Each
Lender that sells a participation agrees to use reasonable efforts to cooperate
with the Borrower to effectuate the provisions of Section 2.17 with respect to
any Participant. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.15(d) as though it were a
Lender hereunder. Each Lender that sells a participation shall, acting solely
for this purpose as an agent of the Borrower, maintain a register on which it
enters the name and address of each Participant and the principal amounts and
stated interest of each Participant’s interest in the Loans or other obligations
under the Loan Documents (each a “Participant Register”); provided, that no
Lender shall have any obligation to disclose all or any portion of the
Participant Register (including the identity of any Participant or any
information relating to a Participant’s interest in any commitments, loans,
letters of credit or its other obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that
such commitment, loan, letter of credit or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in each Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Administrative Agent (in its capacity as the Administrative Agent)
shall have no responsibility for maintaining a Participant Register.

(g) Limitations on Rights of Participants. A Participant shall not be entitled
to receive any greater payment under Section 2.12 or 2.14 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the entitlement to a greater payment results
from a Change in Law occurring after the sale of the participation.

(h) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any such pledge or assignment to a Federal
Reserve Bank or any other central bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such assignee for such Lender as a party
hereto.

(i) No Assignments or Participations to the Borrower or Affiliates or Certain
Other Persons. Anything in this Section to the contrary notwithstanding, no
Lender may (i) assign or participate any interest in any Commitment or Loan held
by it hereunder to the Borrower or any of its Affiliates or Subsidiaries without
the prior consent of each Lender, or (ii) assign any interest in any Commitment
or Loan held by it hereunder to a natural person or to any Person known by such
Lender at the time of such assignment to be a Defaulting Lender, a Subsidiary of
a Defaulting Lender or a Person who, upon consummation of such assignment would
be a Defaulting Lender.

 

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SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.12, 2.13, 2.14 and 9.03 and Article VIII shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Commitments or the termination of this Agreement or any
provision hereof.

SECTION 9.06. Counterparts; Integration; Effectiveness; Electronic Execution.

(a) Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and any separate letter
agreements with respect to fees payable to the Administrative Agent constitute
the entire contract between and among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. This Agreement shall become
effective when provided in Section 4.01, and thereafter shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. Delivery of an executed counterpart of a signature page to this
Agreement by telecopy or electronic mail shall be effective as delivery of a
manually executed counterpart of this Agreement.

(b) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect validity or enforceability
as a manually executed signature or the use of a paper-based recordkeeping
system, as the case may be, to the extent and as provided for in any applicable
law, including the Federal Electronic Signatures in Global and National Commerce
Act, the New York State Electronic Signatures and Records Act, or any other
similar state laws based on the Uniform Electronic Transactions Act.

SECTION 9.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, 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 and other obligations at

 

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any time owing by such Lender or Affiliate to or for the credit or the account
of any Obligor against any of and all the obligations of any Obligor now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.

SECTION 9.09. Governing Law; Jurisdiction; Etc.

(a) Governing Law. This Agreement shall be construed in accordance with and
governed by the law of the State of New York.

(b) Submission to Jurisdiction. The Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of
New York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against the Borrower or its properties in
the courts of any jurisdiction.

(c) Waiver of Venue. The Borrower hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

(d) Service of Process. Each party to this Agreement (i) irrevocably consents to
service of process in the manner provided for notices in Section 9.01 and
(ii) agrees that service as provided in the manner provided for notices in
Section 9.01 is sufficient to confer personal jurisdiction over such party in
any proceeding in any court and otherwise constitutes effective and binding
service in every respect. Nothing in this Agreement will affect the right of any
party to this Agreement to serve process in any other manner permitted by law.

SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES

 

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THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11. Judgment Currency. This is a loan transaction in which the
specification of Dollars and payment in New York City is of the essence, and
Dollars shall be the currency of account in all events relating to Loans. The
payment obligations of the Borrower under this Agreement shall not be discharged
or satisfied by an amount paid in another currency or in another place, whether
pursuant to a judgment or otherwise, to the extent that the amount so paid on
conversion to Dollars and transfer to New York City under normal banking
procedures does not yield the amount of Dollars in New York City due hereunder.
If for the purpose of obtaining judgment in any court it is necessary to convert
a sum due hereunder into another currency (the “Other Currency”), the rate of
exchange that shall be applied shall be the rate at which in accordance with
normal banking procedures the Administrative Agent could purchase Dollars with
the Other Currency on the Business Day next preceding the day on which such
judgment is rendered. The obligation of the Borrower in respect of any such sum
due from it to the Administrative Agent or any Lender hereunder or under any
other Loan Document (in this Section called an “Entitled Person”) shall,
notwithstanding the rate of exchange actually applied in rendering such
judgment, be discharged only to the extent that on the Business Day following
receipt by such Entitled Person of any sum adjudged to be due hereunder in the
Other Currency such Entitled Person may in accordance with normal banking
procedures purchase and transfer Dollars to New York City with the amount of the
Other Currency so adjudged to be due; and the Borrower hereby, as a separate
obligation and notwithstanding any such judgment, agrees to indemnify such
Entitled Person against, and to pay such Entitled Person on demand, in Dollars,
the amount (if any) by which the sum originally due to such Entitled Person in
Dollars hereunder exceeds the amount of Dollars so purchased and transferred.

SECTION 9.12. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 9.13. Treatment of Certain Information; Confidentiality.

(a) Treatment of Certain Information. The Borrower acknowledges that from time
to time financial advisory, investment banking and other services may be offered
or provided to the Borrower or one or more of its Subsidiaries (in connection
with this Agreement or otherwise) by any Lender or by one or more subsidiaries
or affiliates of such Lender and the Borrower hereby authorizes each Lender to
share any information delivered to such Lender by the Borrower and its
Subsidiaries pursuant to this Agreement, or in connection with the decision of
such Lender to enter into this Agreement, to any such subsidiary or affiliate,
it being understood that any such subsidiary or affiliate receiving such
information shall be bound by the provisions of paragraph (b) of this Section as
if it were a Lender hereunder. Such authorization shall survive the repayment of
the Loan or the termination of this Agreement or any provision

 

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hereof. The Administrative Agent, each Lender and their Affiliates
(collectively, solely for purposes of this paragraph, the “Lender”), may have
economic interests that conflict with those of the Borrower or any of its
Subsidiaries and/or their Affiliates. The Borrower, on behalf of itself and each
of its Subsidiaries, agrees that nothing in the Loan Documents or otherwise will
be deemed to create an advisory, fiduciary or agency relationship or fiduciary
or other implied duty between the Lender, on the one hand, and the Borrower or
any of its Subsidiaries, its stockholders or its Affiliates, on the other. The
Borrower and each of its Subsidiaries each acknowledge and agree that (i) the
transactions contemplated by the Loan Documents (including the exercise of
rights and remedies hereunder and thereunder) are arm’s-length commercial
transactions between the Lender, on the one hand, and the Borrower and its
Subsidiaries, on the other, and (ii) in connection therewith and with the
process leading thereto, (x) the Lender has not assumed an advisory or fiduciary
responsibility in favor of the Borrower or any of its Subsidiaries, any of their
stockholders or Affiliates with respect to the transactions contemplated hereby
(or the exercise of rights or remedies with respect thereto) or the process
leading thereto (irrespective of whether the Lender has advised, is currently
advising or will advise the Borrower or any of its Subsidiaries, their
stockholders or their Affiliates on other matters) or any other obligation to
the Borrower or any of its Subsidiaries except the obligations expressly set
forth in the Loan Documents and (y) the Lender is acting solely as principal and
not as the agent or fiduciary of the Borrower or any of its Subsidiaries, their
management, stockholders, creditors or any other Person. The Borrower and each
of its Subsidiaries each acknowledge and agree that it has consulted its own
legal and financial advisors to the extent it deemed appropriate and that it is
responsible for making its own independent judgment with respect to such
transactions and the process leading thereto. The Borrower and each of its
Subsidiaries each agree that it will not claim that the Lender has rendered
advisory services of any nature or respect, or owes a fiduciary or similar duty
to the Borrower or any of its Subsidiaries, in connection with such transaction
or the process leading thereto.

(b) Confidentiality. Each of the Administrative Agent and the Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents,
advisors and other representatives (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-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 Loan Document or any action or proceeding
relating to this Agreement or any other Loan 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 (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement, or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Borrower and its obligations, (g) with the consent of the
Borrower, (h) on a confidential basis to (i) any rating agency in connection
with rating the Borrower or its Subsidiaries or the Loans and (ii) the CUSIP
Service Bureau or any similar agency in connection with the issuance and
monitoring of

 

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CUSIP numbers with respect to the Loans, (i) 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, any Lender or any
of their respective Affiliates on a nonconfidential basis from a source other
than the Borrower or (j) in connection with the Lenders’ right to grant a
security interest pursuant to Section 9.04(h) to the Federal Reserve Bank or any
other central bank, or subject to an agreement containing provisions
substantially the same as those of this Section, to any other pledgee or
assignee pursuant to Section 9.04(h).

For purposes of this Section, “Information” means all information received from
the Borrower or any of its Subsidiaries relating to the Borrower or any of its
Subsidiaries or any of their respective businesses (including, without
limitation, any Portfolio Investments), other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis
prior to disclosure by the Borrower or any of its Subsidiaries, provided that,
in the case of information received from the Borrower or any of its Subsidiaries
after the Effective Date, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section 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.

SECTION 9.14. USA PATRIOT Act. Each Lender hereby notifies the Borrower that
pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender to
identify the Borrower in accordance with said Act.

SECTION 9.15. Termination. Promptly upon the Termination Date, the
Administrative Agent shall direct the Collateral Agent to, on behalf of the
Administrative Agent, the Collateral Agent and the Lenders, deliver to Borrower
such termination statements and releases and other documents necessary or
appropriate to evidence the termination of this Agreement, the Loan Documents,
and each of the documents securing the obligations hereunder as the Borrower may
reasonably request, all at the sole cost and expense of the Borrower.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

FIDUS INVESTMENT CORPORATION By:  

/s/ Shelby E. Sherard

Name:   Shelby E. Sherard Title:   Chief Financial Officer and Secretary

 

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ING CAPITAL LLC, as Administrative Agent and a Lender By:  

/s/ Patrick Frisch

Name:   Patrick Frisch, CFA Title:   Managing Director By:  

/s/ Kunduck Moon

Name:   Kunduck Moon Title:   Managing Director

 

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Schedule 1.01(a)

APPROVED DEALERS AND APPROVED PRICING SERVICES

APPROVED DEALERS

BNP Paribas Securities Corp.

Banc of America Securities LLC

Barclays Capital Inc.

BMO Capital Markets

BofA Distributors, Inc.

BTIG LLC

Cantor Fitzgerald & Co.

Citigroup Global Markets Inc.

Citicorp Securities Services, Inc.

Courtview Capital

Credit Agricole

Credit Suisse Securities (USA) LLC

Daiwa Capital Markets America Inc.

Deutsche Bank Securities Inc.

FBR Capital Markets & Co.

Fidelity Brokerage Services LLC

Global Hunter Securities LLC

Goldman, Sachs & Co.

Guggenheim Securities LLC

HSBC Securities (USA) Inc.

Imperial Capital LLC

ING Financial Markets LLC

Jeffries & Company, Inc.

J.P. Morgan Securities Inc.

Knight Capital Americas LP

Lazard Freres & Co. LLC

Macquarie Capital USA Inc.

Merrill Lynch Government Securities Inc.

Merrill Lynch, Pierce, Fenner & Smith Incorporated

Mitsubishi UFJ Securities USA Inc.

Mizuho Securities USA Inc.

Morgan Stanley & Co. Incorporated

Morgan Stanley Smith Barney

Nomura Securities International, Inc.

RBC Capital Markets

RBS Securities Inc.

RW Baird

Scotia Bank

Sterne Agee

UBS Financial Services Inc.

UBS Securities LLC

Wells Fargo Advisors, LLC

 

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Wells Fargo Securities, LLC

Wells Fargo Investments, LLC

APPROVED PRICING SERVICES

Bloomberg

FT Interactive Data Corporation

International Data Corporation

Loan Pricing Corporation

Markit

 

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SCHEDULE 1.01(B)

COMMITMENTS

 

Lender

   Commitment Amount  

ING Capital LLC

   $ 30,000,000   

 

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SCHEDULE 1.01(C)

INDUSTRY CLASSIFICATION GROUPS

 

1    Aerospace & Defense 2    Automotive 3    Banking 4    Beverage, Food &
Tobacco 5    Capital Equipment 6    Chemicals, Plastics, & Rubber 7   
Construction & Building 8    Consumer goods: Durable 9    Consumer goods:
Non-durable 10    Containers, Packaging & Glass 11    Energy: Electricity 12   
Energy: Oil & Gas 13    Environmental Industries 14    FIRE: Finance 15    FIRE:
Insurance 16    Forest Products & Paper 17    Healthcare Products &
Pharmaceuticals 18    Healthcare Services 19    High Tech Industries 20   
Hotel, Gaming & Leisure 21    Media: Advertising, Printing & Publishing 22   
Media: Broadcasting & Subscription 23    Media: Diversified & Production 24   
Metals & Mining 25    Retail 26    Services: Business 27    Services: Consumer
28    Sovereign & Public Finance 29    Telecommunications 30    Transportation:
Cargo 31    Transportation: Consumer 32    Utilities: Electric 33    Utilities:
Oil & Gas 34    Utilities: Water 35    Wholesale

 

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SCHEDULE 1.01(d)

ELIGIBILITY CRITERIA

A Portfolio Investment shall not be an Eligible Portfolio Investment on any date
of determination unless it meets all of the following criteria, unless otherwise
consented to by the Required Lenders:

 

  1) (x) If a debt investment, such Portfolio Investment is evidenced by a
promissory note registered in the name of an Obligor and (y) all documentation
evidencing or otherwise relating to such Portfolio Investment has been duly
authorized and executed, is in full force and effect and is the legal, binding
and enforceable obligation of the parties thereto;

 

  2) Such Portfolio Investment, whether originated directly or purchased, was
underwritten and closed or acquired in all material respects in accordance with
the Investment Policies;

 

  3) If the issuer of such Portfolio Investment is a “Debtor” (as defined in the
definition of “DIP Loan”) and such Portfolio Investment is a debt investment,
such Portfolio Investment meets the other criteria set forth in the definition
of DIP Loan;

 

  4) Such Portfolio Investment is Transferable (as defined below);

 

  5) Such Portfolio Investment is not a Defaulted Obligation or a Restructured
Investment;

 

  6) The underlying issuer of such Portfolio Investment does not at any time
have total leverage in excess of 6.0x, as calculated by the Borrower in a
commercially reasonable manner;

 

  7) The underlying issuer of such Portfolio Investment satisfies at least one
of the following two conditions at all times: (i) a trailing 24-month EBITDA of
at least $8,000,000 as calculated by the Borrower in a commercially reasonable
manner or (ii) a loan (through and including (x) in the case of any
Debt/Preferred Eligible Portfolio Investment, the Borrower’s or an Obligor’s
exposure (including Preferred Stock) to the applicable Debt/Preferred Eligible
Portfolio Investment or (y) if the applicable Portfolio Investment is Performing
Common Equity, all debt and preferred equity of the underlying issuer) to
enterprise value ratio of not more than 60%, where enterprise value shall be the
midpoint of the range of the Applicable External Value for such Portfolio
Investment, or, if no such value has been provided in connection with such
Portfolio Investment (or if the Administrative Agent or the Borrower believes
that the enterprise value for such Portfolio Company is less than the midpoint
of the range of such Applicable External Value), then such enterprise value
shall be determined by the Borrower in a commercially reasonable manner and
shall be reasonably acceptable to the Administrative Agent;

 

  8) Such Portfolio Investment does not represent the investment in any SBIC
Subsidiary, investment fund, finance lease or finance company (other than a
company that is in the primary business of providing administrative services for
financial institutions and which is not in the lending or financing business),
Structured Finance Obligation or similar off balance sheet financing vehicle or
any joint venture or other Person that primarily owns or makes investments in
unaffiliated financial assets (including consumer obligations as contemplated
pursuant to paragraph 15);

 

  9) (w) Such Portfolio Investment is owned by the Borrower or any Obligor, free
and clear of any liens and Collateral Agent holds a first priority, perfected
security interest in the Portfolio Investment (subject to no other Lien other
than Eligible Liens), (x) the Collateral Agent or the Custodian as bailee on
behalf of the Collateral Agent is holding all documents evidencing or

 

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  otherwise relating to such Portfolio Investment (which may be copies, except
as required in paragraph (1)(x) above), (y) the other steps to ensure that the
Collateral Agent has “control” or other customary protection of the relevant
Portfolio Investment set forth in Section 5.08 and in the Guarantee and Security
Agreement have been taken and (z) such Portfolio Investment is not a Special
Equity Interest;

 

  10) Such Portfolio Investment and related documents are in compliance, in all
material respects, with applicable laws rules and regulations (including
relating to usury, truth in lending, fair credit billing, fair credit reporting,
equal credit opportunity, fair debt collection practices and privacy, OFAC and
Patriot Act);

 

  11) Such Portfolio Investment is denominated and payable only in US dollars
and the issuer of such Portfolio Investment is organized under the laws of the
United States or any state or commonwealth thereof and is domiciled in the
United States, and its principal operations and any property or other assets of
the issuer thereunder pledged as collateral are primarily located in the United
States and the only place of payment of such loans is the United States;

 

  12) Such Portfolio Investment, if a debt investment (other than an OID-Only
Investment), bears interest which is due and payable no less frequently than
semi-annually, provides for a fixed amount of principal payable on a scheduled
payment date and/or at maturity and does not have a final maturity greater than
10 years;

 

  13) Such Portfolio Investment includes a contractual provision requiring all
payments to be made without set-off, defense or counterclaim, and does not
include a contractual provision granting rights of rescission, set off,
counterclaim or defense in favor of the obligor in respect of such Portfolio
Investment, and no material dispute has been asserted with respect to such
Portfolio Investment;

 

  14) Such Portfolio Investment is not (x) secured primarily by a mortgage, deed
of trust or similar lien on real estate, or (y) issued by a Person whose primary
asset is real estate, or whose value is otherwise primarily derived from real
estate;

 

  15) Such Portfolio Investment does not represent a consumer obligation
(including, without limitation, a mortgage loan, auto loan, credit card loan or
personal loan); it being understood that an interest in a fund or finance
company that invests in consumer obligations will not be deemed to represent a
consumer obligation for purposes of this paragraph (15);

 

  16) No payment in respect of such Portfolio Investment, if a debt investment,
is subject to withholding in respect to taxes of any nature, unless the issuer
is required to make customary and market-based gross-up payments on an after tax
basis for the full amount of such tax;

 

  17) Such Portfolio Investment is not a derivative instrument;

 

  18) The issuer of such Portfolio Investment (or an agent on its behalf) is
required to make payments directly into an account of the Borrower or any
Obligor over which the Collateral Agent has “control” and no other person’s
assets are commingled in such account;

 

  19) If a debt investment, no Person acting as administrative agent, collateral
agent or in a similar capacity shall be an Affiliate of the Borrower unless
(i) such person is an Obligor or an SBIC Subsidiary and (ii) such transaction is
permitted under the Investment Company Act;

 

  20)

Such Portfolio Investment does not represent an investment in any issuer in
which the Investment Advisor or any of its affiliates (other than the Borrower
and any of its Subsidiaries), or any entities advised by any of the foregoing
(other than the Borrower and any of its Subsidiaries), holds any investment
other than an investment that is in the same class as such Portfolio Investment
(and, in the case of multiple classes, such Investment shall represent a ratable
strip of each class) and is (a) made in accordance with the requirements of

 

Fidus — Conformed Final Credit Agreement

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  an effective SEC exemptive order allowing such co-investment or joint
follow-on investment or (b) made in compliance with the Massachusetts Mutual
Life Insurance Co., SEC No Action Letter (pub. Avail. June 7, 2000) or the
Investment Company Act; and

 

  21) If such Portfolio Investment is a Bank Loan and the issuer of such
Portfolio Investment has issued a Permitted Prior Working Capital Lien, for
purposes of the conditions outlined in clause (iii) of the definition of
Permitted Prior Working Capital Lien the enterprise value of such Portfolio
Company shall be the midpoint of the range of Applicable External Value for such
Portfolio Investment, or, if no such value has been provided in connection with
such Portfolio Investment (or if the Administrative Agent or the Borrower
believes that the enterprise value for such Portfolio Company is less than the
midpoint of the range of such Applicable External Value), then such enterprise
value shall be determined by the Borrower in a commercially reasonable manner
and shall be reasonably acceptable to the Administrative Agent.

For purposes of paragraph (4) above, “Transferable” means, in the case of any
Portfolio Investment, both that:

(i) the applicable Obligor may create a security interest in or pledge all of
its rights under and interest in such Portfolio Investment to secure its
obligations under this Agreement or any other Loan Document, and that such
pledge or security interest may be enforced in any manner permitted under
applicable law; and

(ii) such Portfolio Investment (and all documents related thereto) contains no
provision that directly or indirectly restricts the assignment of such
Obligor’s, or any assignee of such Obligor’s, rights under such Portfolio
Investment (including any requirement that any Obligor maintain a minimum
ownership percentage of such Portfolio Investment); provided that, such
Portfolio Investment may contain the following restrictions on customary and
market based terms: (a) restrictions pursuant to which assignments may be
subject to the consent of the obligor or issuer or agent under the Portfolio
Investment so long as the applicable provision also provides that such consent
may not be unreasonably withheld, (b) restrictions on transfer to parties that
are not ‘eligible assignees’ within the customary and market based meaning of
the term, and (c) restrictions on transfer to the applicable obligor or issuer
under the Portfolio Investment or its equity holders or financial sponsor
entities.

 

Fidus — Conformed Final Credit Agreement

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SCHEDULE 3.11(a)

Material Agreements

 

Fidus Mezzanine Capital, L.P.      

SBA Debenture Control #

   Date    Amount  

08000024

   1/11/08    $ 15,250,000   

08000027

   1/11/08    $ 1,000,000   

08000025

   3/4/08    $ 7,000,000   

08000026

   3/4/08    $ 1,500,000   

08000203

   3/14/08    $ 1,000,000   

08000200

   3/14/08    $ 3,500,000   

08000202

   3/14/08    $ 1,200,000   

08000688

   9/8/08    $ 6,250,000   

08000875

   11/24/08    $ 5,000,000   

08000876

   11/24/08    $ 3,250,000   

08000878

   11/24/08    $ 1,500,000   

09000006

   2/24/09    $ 2,000,000   

09000009

   2/24/09    $ 2,000,000   

09000010

   2/24/09    $ 4,000,000   

09000008

   3/6/09    $ 2,000,000   

09000303

   7/23/09    $ 5,000,000   

09000304

   7/23/09    $ 5,000,000   

09000460

   11/9/09    $ 1,250,000   

09000461

   11/9/09    $ 2,500,000   

09000464

   11/9/09    $ 6,500,000   

09000462

   12/8/09    $ 2,750,000   

10000068

   3/30/10    $ 3,500,000   

10000069

   3/30/10    $ 2,000,000   

10000070

   3/30/10    $ 3,000,000   

10000071

   3/30/10    $ 2,000,000   

10000072

   3/30/10    $ 2,000,000   

09000532

   12/29/10    $ 750,000   

09000533

   12/29/10    $ 800,000   

11000022

   4/8/11    $ 1,000,000   

11000023

   4/8/11    $ 750,000   

11000024

   4/8/11    $ 500,000   

11000025

   4/8/11    $ 500,000   

11000026

   4/8/11    $ 500,000   

11000591

   12/28/11    $ 3,250,000   

11000590

   12/28/11    $ 4,000,000   

11000587

   1/6/12    $ 3,500,000   

12000092

   3/5/12    $ 7,500,000   

12000093

   3/5/12    $ 4,000,000   

12000317

   6/26/12    $ 2,250,000   

12000314

   7/6/12    $ 5,500,000   

12000457

   8/7/12    $ 3,250,000   

12000456

   8/7/12    $ 2,500,000   

12000453

   8/16/12    $ 5,000,000   

12000454

   8/16/12    $ 4,000,000   

12000783

   12/21/12    $ 2,000,000   

12000786

   12/21/12    $ 1,000,000         

 

 

 

Total Debentures

      $ 144,500,000   

SBA Unfunded Commitment

      $ 5,500,000         

 

 

 

Total Commitment

      $ 150,000,000         

 

 

 

Fidus Mezzanine Capital II, L.P.

           

Interim Borrowing

   6/5/14    $ 1,000,000   

SBA Unfunded Commitment

      $ 24,000,000         

 

 

 

Total Commitment

      $ 25,000,000         

 

 

 

 

Fidus — Conformed Final Credit Agreement

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SCHEDULE 3.11(b)

Liens

None.

 

Fidus — Conformed Final Credit Agreement

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SCHEDULE 3.12(a)

Subsidiaries

 

Subsidiary

   Jurisdiction
of
Organization   

Person(s) Holding Ownership

Interest

  

Nature of Ownership Interest

and Percentage of Ownership

Held

FCAT Equity Corp.*

   Delaware    Fidus Mezzanine Capital, L.P.    100% Stock Ownership

FCCG Equity Corp.*

   Delaware    Fidus Mezzanine Capital, L.P.    100% Stock Ownership

FCMH Equity Corp.*

   Delaware    Fidus Mezzanine Capital, L.P.    100% Stock Ownership

FCPBS Equity Corp.*

   Delaware    Fidus Mezzanine Capital, L.P.    100% Stock Ownership

Fidus Investment GP, LLC

   Delaware    Fidus Investment Corporation    100% Membership Interest

Fidus Mezzanine Capital, L.P.*

   Delaware    Fidus Investment GP, LLC    0.01% Partnership Interest      
Fidus Investment Corporation    99.99% Partnership Interest

Fidus Mezzanine Capital II, L.P.*

   Delaware    Fidus Investment GP, LLC    0.01% Partnership Interest      
Fidus Investment Corporation    99.99% Partnership Interest

Fidus Investment Holdings, Inc.

   Delaware    Fidus Investment Corporation    100% Stock Ownership

 

* SBIC Subsidiary (as defined in the Senior Secured Revolving Credit Agreement
dated as of June 16, 2014 (the “Credit Agreement”), among Fidus Investment
Corporation, the lenders party thereto, and ING Capital LLC, as Administrative
Agent)

 

Fidus — Conformed Final Credit Agreement

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SCHEDULE 3.12(b)

Investments

 

Accounts:

     

U.S. Bank N.A.

     

Minneapolis, MN

     

ABA# 091000022

     

Main Account #:104790062558

     

Sub Accounts:

     

FIC Principal

     148377-200      

FIC Interest

     148377-201      

FIC Custody

     148377-700      

FMC Principal

     148378-200      

FMC Securities

     148378-201      

FMC II Cash Proceeds

     148378-202      

FMC II Securities

     148378-203      

Other Investments:

     

None

     

 

Fidus — Conformed Final Credit Agreement

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SCHEDULE 3.21

Capitalization

 

Equity Interests of the Borrower

   Shares Authorized      Shares Outstanding  

Common Stock, $0.001 par value

     100,000,000         13,765,642   

 

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SCHEDULE 6.08

Certain Affiliate Transactions

Transactions described in the following agreements, as such agreements are
amended, restated, supplemented or modified from time to time:

 

  1. Agreement of Limited Partnership between Fidus Investment Corporation,
Fidus Investment GP, LLC and Fidus Mezzanine Capital, L.P.

 

  2. Agreement of Limited Partnership between Fidus Investment Corporation,
Fidus Investment GP, LLC and Fidus Mezzanine Capital II, L.P.

 

  3. Limited Liability Company Agreement of Fidus Investment GP, LLC, by and
among Fidus Investment Corporation, the members of the Investment Committee
party thereto and Fidus Investment Advisors, LLC

 

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EXHIBIT A

FORM OF ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
“Credit Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below: (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including any letters of credit and guarantees included in
such facilities) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims and
all claims at law or in equity related to the rights and obligations sold and
assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

 

1.    Assignor:                                                                 
2.    Assignee:                                                                 
      [and is an Affiliate of [identify Lender]1] 3.    Borrower:    Fidus
Investment Corporation 4.    Administrative Agent:    ING Capital LLC, as the
administrative agent under the Credit Agreement.

 

1  Select as applicable.

 

A-13

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5. Credit Agreement: The Senior Secured Revolving Credit Agreement, dated as of
June 16, 2014, among Fidus Investment Corporation, the Lenders from time to time
party thereto and ING Capital LLC, as Administrative Agent.

 

6. Assigned Interest:

 

Aggregate Amount of

Commitment/Loans for all

Lenders

   Amount of
Commitment/Loans
Assigned      Percentage Assigned of
Aggregate Commitment/Loans2  

$

   $           %   

Effective Date:             , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND
WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR [NAME OF ASSIGNOR] By:  

 

Name:   Title:   ASSIGNEE [NAME OF ASSIGNEE] By:  

 

Name:   Title:  

 

2  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

 

A-14

Fidus — Conformed Final Credit Agreement

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Consented to and Accepted:

ING CAPITAL LLC, as

Administrative Agent

By:  

 

Name:   Title:   [Consented to:]3 FIDUS INVESTMENT CORPORATION By:  

 

Name:   Title:  

 

 

3  To be added only when the consent of the Borrower is required by the terms of
the Credit Agreement.

 

A-15

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ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representative and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.

1.2 Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.01 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Foreign Lender,
attached to the Assignment and Assumption is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by the Assignee; and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent, the Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

 

A-1-1

Fidus — Conformed Final Credit Agreement

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2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy, email or other electronic method of transmission shall be effective as
delivery of a manually executed counterpart of this Assignment and Assumption.
This Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of New York.

 

A-1-2

Fidus — Conformed Final Credit Agreement

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EXHIBIT B

FORM OF BORROWING BASE CERTIFICATE

[Monthly accounting period ended             , 20    ]

Reference is made to that certain Senior Secured Revolving Credit Agreement,
dated as of June 16, 2014 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and among FIDUS
INVESTMENT CORPORATION, a Maryland corporation (the “Borrower”), the financial
institutions party thereto as Lenders, and ING CAPITAL LLC, as the
Administrative Agent. Capitalized terms used herein without definition are so
used as defined in the Credit Agreement.

[Pursuant to Section 5.01(d) of the Credit Agreement, the undersigned, the
            of the Borrower, and as such a Financial Officer of the Borrower,
hereby certifies, represents and warrants on behalf of the Borrower that]4
(a) attached hereto is (i) a complete and correct list as at the end of the
monthly accounting period ended             , 20    , of all Portfolio
Investments included in the Collateral as well as a summary of Portfolio
Investment changes from the previous month (including changes in value, new and
liquidated investments from the previously delivered Borrowing Base
Certificate), and (ii) a true and correct calculation of the Borrowing Base as
at the end of such monthly accounting period determined in accordance with the
requirements of the Credit Agreement, (b) without limiting the generality of the
foregoing, all Portfolio Investments included in the calculation of the
Borrowing Base herein are Eligible Portfolio Investments and (c) without
limiting the generality of the foregoing, all Eligible Portfolio Investments
included in the calculation of the Borrowing Base herein have been Delivered (as
defined in the Guarantee and Security Agreement) to the Collateral Agent [and
(d) a true and correct calculation (with reasonable detail) of the amount of the
[Borrowing Base Deficiency][Borrowing Base decline] for such period5.

 

 

4  When there is a Borrowing Base Deficiency or knowledge that the Borrowing
Base has declined by more than 15% from the Borrowing Base stated in the
Borrowing Base Certificate last delivered to the Administrative Agent, replace
the bracketed language with the following: [Pursuant to Section 5.01(e) of the
Credit Agreement, the undersigned, the              of the Borrower, hereby
certifies, represents and warrants on behalf of the Borrower that as of the date
hereof [there is a Borrowing Base Deficiency][the Borrowing Base has declined by
more than 15% from the Borrowing Base stated in the Borrowing Base Certificate
last delivered to the Administrative Agent] and]

5  To be included when a Borrowing Base Certificate is required to be delivered
under Section 5.01(e) of the Credit Agreement.

 

Fidus — Conformed Final Credit Agreement

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IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly
executed as of the             day of             , 20    .

 

FIDUS INVESTMENT CORPORATION By:  

 

Name:   Title:  

 

Fidus — Conformed Final Credit Agreement

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

EXHIBIT C

FORM OF PROMISSORY NOTE

$[        ,        ,        ]

[mm/dd/yy]   New York, New York

For value received, FIDUS INVESTMENT CORPORATION, a Maryland corporation, (the
“Borrower”), promises to pay [LENDER] (the “Payee”) or its registered assigns,
on or before [        ,         ], the lesser of (a) [DOLLARS]
($[        ,        ,        ]) and (b) the aggregate unpaid principal amount of
all Loans of the Payee to the Borrower outstanding under the Credit Agreement
referred to below.

The Borrower also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Senior Secured Revolving Credit Agreement, dated as of June 16, 2014 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among the Borrower, the financial institutions party
thereto as Lenders, and ING CAPITAL LLC, as the Administrative Agent.
Capitalized terms used herein without definition are so used as defined in the
Credit Agreement.

This Promissory Note (this “Note”) is one of the promissory notes referred to in
Section 2.07(f) of the Credit Agreement and is issued pursuant to and entitled
to the benefits of the Credit Agreement, to which reference is hereby made for a
more complete statement of the terms and conditions under which the Loans
evidenced hereby were made and are to be repaid.

All payments of principal and interest in respect of this Note shall be made in
lawful money of the United States of America in immediately available funds to
the Administrative Agent’s Account or as otherwise required by the terms of the
Credit Agreement. Unless and until an Assignment and Assumption effecting the
assignment or transfer of the obligations evidenced hereby shall have been
accepted by Administrative Agent and recorded in the Register, the Borrower, the
Lenders and the Administrative Agent shall be entitled to deem and treat the
Payee as the owner and holder of this Note and the obligations evidenced hereby.
The Payee hereby agrees, by its acceptance hereof, that before disposing of this
Note or any part hereof it will make a notation hereon of all principal payments
previously made hereunder and of the date to which interest hereon has been
paid; provided, the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the obligations of the Borrower hereunder
with respect to payments of principal of or interest on this Note.

This Note is subject to mandatory prepayment and to prepayment at the option of
the Borrower, each as provided in the Credit Agreement.

THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK.

 

Fidus — Conformed Final Credit Agreement

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Upon the occurrence and continuation of an Event of Default that has not been
waived or cured, the unpaid balance of the principal amount of this Note,
together with all accrued and unpaid interest thereon, may become, or may be
declared to be, due and payable in the manner, upon the conditions and with the
effect provided in the Credit Agreement.

The terms of this Note are subject to amendment only in the manner provided in
the Credit Agreement.

No reference herein to the Credit Agreement and no provision of this Note or the
Credit Agreement shall alter or impair the obligations of the Borrower, which
are absolute and unconditional, to pay the principal of and interest on this
Note at the place, at the respective times, and in the currency herein
prescribed.

The Borrower promises to pay all out-of-pocket costs and expenses, including
attorneys’ fees, all as provided in (and subject to the limitations in) the
Credit Agreement, incurred in connection with the collection and enforcement of
this Note. The Borrower and any endorsers of this Note hereby consent to
renewals and extensions of time at or after the maturity hereof, without notice,
and hereby waive diligence, presentment, protest, demand notice of every kind
and, to the full extent permitted by law, the right to plead any statute of
limitations as a defense to any demand hereunder.

[Remainder of page intentionally left blank]

 

Fidus — Conformed Final Credit Agreement

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IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.

 

FIDUS INVESTMENT CORPORATION By:  

 

Name:   Title:  

 

Fidus — Conformed Final Credit Agreement

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EXHIBIT D

FORM OF BORROWING REQUEST

            , 20    

 

To: Patrick Frisch / Dominik Breuer

  ING Capital LLC,

      as Administrative Agent for the Lenders party to

      the Credit Agreement referred to below

  1325 Avenue of the Americas

  New York, NY 10019

 

  Re: Senior Secured Revolving Credit Agreement, dated as of June 16, 2014 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Fidus Investment Corporation (the “Borrower”), the
financial institutions or entities from time to time parties thereto as lenders,
and ING Capital LLC (“ING”), as administrative agent (in such capacity, the
“Administrative Agent”).

Ladies and Gentlemen:

Unless otherwise defined herein, capitalized terms used herein shall have the
meanings attributable thereto in the Credit Agreement. This Borrowing Request is
subject to the terms of the Credit Agreement.

The Borrower hereby gives you irrevocable notice, pursuant to Section 2.03 of
the Credit Agreement, that the Borrower hereby requests that Loans, as specified
below, under the Credit Agreement be made, and in that connection set forth
below is the information related to the proposed borrowing (the “Proposed
Borrowing”) as required by Section 2.03 of the Credit Agreement:

 

  1. The aggregate principal amount of the Proposed Borrowing under the Credit
Agreement shall be $        .

 

  2. The date of the Proposed Borrowing under the Credit Agreement shall be [—],
20    .

 

  3. The Proposed Borrowing under the Credit Agreement shall be a:

Eurocurrency Borrowing

ABR Borrowing

 

  4. If the Borrower has elected to obtain a Eurocurrency Borrowing, the
duration of the Interest Period with respect thereto shall be:

1 month

2 months

3 months

6 months

 

Fidus — Conformed Final Credit Agreement

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  5. The Borrower hereby instructs you to wire the Proposed Borrowing amount to
the following account:

Bank Name:

ABA Routing Number:

Account Number:

Account Name:

Reference:

 

  6. The Borrower hereby certifies that, as of the date hereof and the date of
the Proposed Borrowing, each of the conditions set forth in Section 4.02 of the
Credit Agreement for the making of such Loans has been met.

[Remainder of page intentionally left blank]

 

Fidus — Conformed Final Credit Agreement

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The Borrower has caused this Borrowing Request to be executed and delivered by
its duly authorized officer as of the date first written above.

 

FIDUS INVESTMENT CORPORATION By:  

 

Name:  

 

Title:  

 

 

Fidus — Conformed Final Credit Agreement