Exhibit 10.1

 

EXECUTION COPY

 

LOAN AND SECURITY AGREEMENT

 

dated as of

 

August 26, 2016

 

among

 

34th Street Funding, LLC

 

The Lenders Party Hereto

 

The Collateral Administrator, Collateral Agent and Securities Intermediary Party
Hereto

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

as Administrative Agent

 

and

 

CĪON Investment Management, LLC,
as Portfolio Manager

 

  

 

 

 

Table of Contents

 

  Page     ARTICLE I   THE PORTFOLIO INVESTMENTS       SECTION 1.01. Purchases
of Portfolio Investments 17 SECTION 1.02. Procedures for Purchases and Related
Advances. 18 SECTION 1.03. Conditions to Purchases 18 SECTION 1.04. Sales of
Portfolio Investments 19 SECTION 1.05. Certain Assumptions relating to Portfolio
Investments. 21 SECTION 1.06. Deposits and Contributions by Parent. 21    
ARTICLE II   THE FINANCINGS       SECTION 2.01. Financing Commitments 22 SECTION
2.02. First Advance; Additional Advances 22 SECTION 2.03. Advances; Use of
Proceeds. 22 SECTION 2.04. Other Conditions to Advances 24     ARTICLE III  
ADDITIONAL TERMS APPLICABLE TO THE FINANCINGS       SECTION 3.01. The Advances.
25 SECTION 3.02. Sub-Adviser 28 SECTION 3.03. Taxes 29     ARTICLE IV  
COLLECTIONS AND PAYMENTS       SECTION 4.01. Interest Proceeds 32 SECTION 4.02.
Principal Proceeds 32 SECTION 4.03. Principal and Interest Payments;
Prepayments; Commitment Fee. 33 SECTION 4.04. Market Value Cure Account 34
SECTION 4.05. Priority of Payments 35 SECTION 4.06. Payments Generally 36
SECTION 4.07. Termination or Reduction of Financing Commitments 36     ARTICLE V
  [RESERVED]       SECTION 5.01. [Reserved] 37     ARTICLE VI   REPRESENTATIONS,
WARRANTIES AND COVENANTS       SECTION 6.01. Representations and Warranties 37
SECTION 6.02. Covenants of the Company and the Portfolio Manager 40 SECTION
6.03. Amendments of Portfolio Investments, Etc. 46

 

 

 

 

ARTICLE VII   EVENTS OF DEFAULT       ARTICLE VIII   ACCOUNTS; COLLATERAL
SECURITY       SECTION 8.01. The Accounts; Agreement as to Control 49 SECTION
8.02. Collateral Security; Pledge; Delivery 51     ARTICLE IX   THE AGENTS      
SECTION 9.01. Appointment of Administrative Agent and Collateral Agent 54
SECTION 9.02. Additional Provisions Relating to the Collateral Agent, the
Collateral Administrator and the Securities Intermediary. 57     ARTICLE X  
MISCELLANEOUS       SECTION 10.01. Lenders' Representations; Non-Petition;
Limited Recourse 60 SECTION 10.02. Notices 61 SECTION 10.03. No Waiver 61
SECTION 10.04. Expenses; Indemnity; Damage Waiver; Right of Setoff 61 SECTION
10.05. Amendments 62 SECTION 10.06. Successors; Assignments 63 SECTION 10.07.
Governing Law; Submission to Jurisdiction; Etc. 65 SECTION 10.08. Interest Rate
Limitation 65 SECTION 10.09. PATRIOT Act 65 SECTION 10.10. Counterparts 65
SECTION 10.11. Headings 66 SECTION 10.12. Acknowledgement and Consent to Bail-In
of EEA Financial Institutions. 66

 

Schedules       Schedule 1 Transaction Schedule Schedule 2 Contents of Notice of
Acquisition Schedule 3 Eligibility Criteria Schedule 4 Concentration Limitations
Schedule 5 Portfolio Investments Schedule 6 Participation Interests Schedule 7
Moody's Industry Classifications     Exhibit       Exhibit A Form of Request for
Advance Exhibit B Form of Reports Exhibit C Forms of U.S. Tax Compliance
Certificates

 

- ii -

 

 

LOAN AND SECURITY AGREEMENT dated as of August 26, 2016 (this "Agreement") among
34th Street Funding, LLC, as borrower (the "Company"); CĪON Investment
Management, LLC (the "Portfolio Manager"); the Lenders party hereto; the
Collateral Agent party hereto (in such capacity, the "Collateral Agent"); the
Collateral Administrator party hereto (in such capacity, the "Collateral
Administrator"); the Securities Intermediary party hereto (in such capacity, the
"Securities Intermediary"); and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as
administrative agent for the Lenders hereunder (in such capacity, the
"Administrative Agent").

 

The Company, a newly formed special purpose vehicle wholly owned by CĪON
Investment Corp. (the "Parent"), which is managed by the Portfolio Manager and
sub-advised by Apollo Investment Management, L.P. (the "Sub-Adviser"), wishes to
accumulate certain corporate loans and other corporate debt securities (the
"Portfolio Investments"), all on and subject to the terms and conditions set
forth herein.

 

The Company and the Portfolio Manager have entered into a Portfolio Management
Agreement, dated as of the date hereof (the "Portfolio Management Agreement"),
pursuant to which the Portfolio Manager will perform certain investment
management and administrative services on behalf of the Company.

 

Furthermore, the Company intends to enter into a Sale and Contribution Agreement
(the "Sale Agreement"), dated on or about the date hereof, between the Company
and the Parent, pursuant to which the Company shall acquire certain Portfolio
Investments listed on Schedule 5 hereto on the date hereof and from time to time
acquire additional Portfolio Investments from the Parent.

 

Furthermore, the Company intends to acquire Participation Interests with
elevation in certain Portfolio Investments listed on Schedule 6 hereto pursuant
to a Master Participation Agreement (the "Master Participation Agreement"),
dated on or about the date hereof, between the Company and Parent.

 

On and subject to the terms and conditions set forth herein, JPMorgan Chase
Bank, National Association ("JPMCB") and its respective successors and permitted
assigns (together with JPMCB, the "Lenders") have agreed to make advances to the
Company ("Advances") hereunder to the extent specified on the transaction
schedule attached as Schedule 1 hereto (the "Transaction Schedule").

 

Accordingly, the parties hereto agree as follows:

 

Certain Defined Terms

 

"Accounts" has the meaning set forth in Section 8.01(a).

 

"Additional Distribution Date" has the meaning set forth in Section 4.05.

 

"Adjusted Applicable Margin" means the stated Applicable Margin for Advances set
forth on the Transaction Schedule plus 2% per annum.

 

"Adverse Proceeding" means any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation or arbitration (whether or
not purportedly on behalf of Company) at law or in equity, or before or by any
Governmental Authority, whether pending, active or, to the Company's or the
Portfolio Manager's knowledge, threatened against or affecting the Company or
the Portfolio Manager or their respective property that would reasonably be
expected to result in a Material Adverse Effect.

 

 

 

 

"Affiliate" means, with respect to any Person, any Person directly or indirectly
controlling, controlled by, or under common control with, such former Person
but, which shall not, with respect to the Company, include the obligors under
any Portfolio Investment. For the purposes of this definition, control of a
Person shall mean the power, direct or indirect, (i) to vote more than 50% of
the securities having ordinary voting power for the election of directors of any
such Person or (ii) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.

 

"Agent" has the meaning set forth in Section 9.01.

 

"Agent Business Day" means any day on which commercial banks settle payments in
each of New York City and the city in which the corporate trust office of the
Collateral Agent is located (which shall initially be Boston).

 

"Amendment" has the meaning set forth in Section 6.03.

 

"Anti-Corruption Laws" means all laws, rules, and regulations of any
jurisdiction applicable to the Company from time to time concerning or relating
to bribery or corruption.

 

"Applicable Law" means, for any Person, all existing and future laws, rules,
regulations (including temporary and final income tax regulations), statutes,
treaties, codes, ordinances, permits, certificates, orders, licenses of and
interpretations by any Governmental Authority applicable to such Person and
applicable judgments, decrees, injunctions, writs, awards or orders of any
court, arbitrator or other administrative, judicial, or quasi-judicial tribunal
or agency of competent jurisdiction.

 

"Base Rate" means, for any day, a rate per annum equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 0.50%. Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively. In the event that the Base Rate is below
zero at any time during the term of this Agreement, it shall be deemed to be
zero until it exceeds zero again.

 

"Borrowing Base Test" means a test that will be satisfied on any date of
determination if the following is true:

 

[tpg05.jpg]

 

Where:

 

AR = 45%.

 

"Business Day" means any day on which commercial banks are open in each of New
York City and the city in which the corporate trust office of the Collateral
Agent is located; provided that, with respect to any LIBOR related provisions
herein, "Business Day" shall be deemed to exclude any day on which banks are
required or authorized to be closed in London, England.

 

 - 2 - 

 

 

"Calculation Period" means the quarterly period from and including the date on
which the first Advance is made hereunder to but excluding the first Calculation
Period Start Date following the date of such Advance and each successive
quarterly period from and including a Calculation Period Start Date to but
excluding the immediately succeeding Calculation Period Start Date (or, in the
case of the last Calculation Period, if the last Calculation Period does not end
on the last calendar day of February, May, August or November, the period from
and including the related Calculation Period Start Date to but excluding the
Maturity Date).

 

"Calculation Period Start Date" means the last calendar day of February, May,
August or November of each year (or, if any such date is not a Business Day, the
immediately succeeding Business Day), commencing in November 2016.

 

"Change in Law" means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that all requests, rules, guidelines or
directives concerning liquidity and capital adequacy issued by any United States
regulatory authority (i) under or in connection with the implementation of the
Dodd-Frank Wall Street Reform and Consumer Protection Act and (ii) in connection
with the implementation of the recommendations of the Bank for International
Settlements or the Basel Committee on Banking Regulations and Supervisory
Practices (or any successor or similar authority) shall be deemed to have
occurred after the date of this Agreement for purposes of this definition,
regardless of the date adopted, issued, promulgated or implemented.

 

"Change of Control" means an event or series of events by which (A) the Parent
or its Affiliates, collectively, (i) shall cease to possess, directly or
indirectly, the right to elect or appoint (through contract, ownership of voting
securities, or otherwise) managers that at all times have a majority of the
votes of the board of managers (or similar governing body) of the Company or to
direct the management policies and decisions of the Company or (ii) cease,
directly or indirectly, to own and control legally and beneficially all of the
equity interests of the Company or (B) CĪON Investment Management, LLC or its
Affiliates shall cease to be the investment advisor of the Parent.

 

"Charges" has the meaning set forth in Section 10.08.

 

"Code" means the Internal Revenue Code of 1986, as amended.

 

"Collateral" has the meaning set forth in Section 8.02(a).

 

"Collateral Principal Amount" means on any date of determination (A) the
aggregate principal balance of the Portfolio, including the funded and unfunded
balance on any Delayed Funding Term Loan, as of such date plus (B) the amounts
on deposit in the Accounts (including cash and Eligible Investments)
representing Principal Proceeds as of such date minus (C) the aggregate
principal balance of all Ineligible Investments as of such date.

 

"Collection Account" has the meaning set forth in Section 8.01(a).

 

"Concentration Limitation Excess" means, on any date of determination, without
duplication, all or the portion of the principal amount of any Portfolio
Investment that exceeds any Concentration Limitation as of such date; provided
that the Portfolio Manager shall select in its sole discretion which Portfolio
Investment(s) constitute part of the Concentration Limitation Excess; provided
further that with respect to any Delayed Funding Term Loan, the Portfolio
Manager shall select any term Portfolio Investment from the same obligor and/or
any funded portion of the aggregate commitment amount of such Delayed Funding
Term Loan before selecting any unfunded portion of such aggregate commitment
amount; provided, further, that, if the Portfolio Manager does not so select any
Portfolio Investment(s), the applicable portion of the Portfolio Investment(s)
determined by the Administrative Agent shall make up the Concentration
Limitation Excess.

 

 - 3 - 

 

 

"Concentration Limitations" has the meaning set forth in Schedule 4.

 

"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.

 

"Credit Risk Party" has the meaning set forth in Article VII.

 

"Custodial Account" has the meaning set forth in Section 8.01(a)

 

"Delayed Funding Term Loan" means any Loan that (a) requires the holder thereof
to make one or more future advances to the obligor under the underlying
instruments relating thereto, (b) specifies a maximum amount that can be
borrowed on one or more fixed borrowing dates, and (c) does not permit the
re-borrowing of any amount previously repaid by the obligor thereunder; but any
such Loan will be a Delayed Funding Term Loan only until all commitments by the
holders thereof to make advances to the obligor thereon expire or are terminated
or reduced to zero.

 

"Deliver" has the meaning set forth in Section 8.02(b).

 

"Designated Email Notification Address" means
"CIONAgentNotices@iconinvestments.com" with a copy to the Portfolio Manager at
"CIONAgentNotices@iconinvestments.com", provided that, so long as no Event of
Default shall have occurred and be continuing and no Market Value Event shall
have occurred, the Company may, upon at least five (5) Business Day's written
notice to the Administrative Agent, the Collateral Administrator and the
Collateral Agent, designate any other email address as the Designated Email
Notification Address.

 

"Designated Independent Broker-Dealer" means J.P. Morgan Securities LLC;
provided that, so long as no Market Value Event shall have occurred and no Event
of Default shall have occurred and be continuing, the Portfolio Manager may,
upon at least five (5) Business Day's written notice to the Administrative
Agent, the Collateral Administrator and the Collateral Agent, designate another
Independent Broker-Dealer as the Designated Independent Broker-Dealer.

 

"EBITDA" means, with respect to the last four full fiscal quarters with respect
to any Portfolio Investment, the meaning of "EBITDA", "Adjusted EBITDA" or any
comparable definition in the underlying instruments for each such Portfolio
Investment, and in any case that "EBITDA", "Adjusted EBITDA" or such comparable
definition is not defined in such underlying instruments, an amount, for the
obligor on such Portfolio Investment and any parent that is obligated pursuant
to the underlying instruments for such Portfolio Investment (determined on a
consolidated basis without duplication in accordance with GAAP) equal to
earnings from continuing operations for such period plus (a) interest expense,
(b) income taxes, (c) depreciation and amortization for such four fiscal quarter
period (to the extent deducted in determining earnings from continuing
operations for such period), (d) amortization of intangibles (including, but not
limited to, goodwill, financing fees and other capitalized costs), other
non-cash charges and organization costs, (e) extraordinary losses, (f) one-time,
non-recurring, unusual or non-cash charges consistent with the applicable
compliance statements and financial reporting packages provided by such obligor,
and (g) any other item the Portfolio Manager and the Administrative Agent
mutually deem to be appropriate; provided that with respect to any obligor for
which four full fiscal quarters of economic data are not available, EBITDA shall
be determined for such obligor based on annualizing the economic data from the
reporting periods actually available.

 

 - 4 - 

 

 

"Effective Date" has the meaning set forth in Section 2.04.

 

"Eligibility Criteria" has the meaning set forth in Section 1.03.

 

"Eligible Investments" has the meaning set forth in Section 4.01.

 

"ERISA" means the United States Employee Retirement Income Security Act of 1974,
as amended.

 

"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with the Company or the Parent, as applicable, within the
meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the
Code for purposes of provisions relating to Section 412, 430 or 431 of the
Code).

 

"ERISA Event" means that (1) any of the Company or the Parent has underlying
assets which constitute "plan assets" within the Plan Asset Rules or (2) any of
the Company, the Parent or any ERISA Affiliate sponsors, maintains, contributes
to, is required to contribute to or has any material liability with respect to
any Plan.

 

"Event of Default" has the meaning set forth in Article VII.

 

"Excess Funded Amount" means, on any date of determination, the amount (if any)
by which (x) the aggregate outstanding principal amount of the Advances on such
date exceeds (y) the Minimum Funding Amount on such date.

 

"Excess Interest Proceeds" means, at any time of determination, the excess of
(1) amounts then on deposit in the Accounts representing Interest Proceeds over
(2) the sum of (x) the projected amount required to be paid pursuant to Section
4.05(b) on the next Interest Payment Date, the next Additional Distribution Date
or the Maturity Date, as applicable, and (y) the Expense Cap Amount applicable
on the next Interest Payment Date, in the case of clause (1) and clause (2)(x),
as determined by the Company in good faith and in a commercially reasonable
manner and, in the case of clause (1), verified by the Collateral Agent and, in
the case of clause (2)(x), verified by the Administrative Agent (which
verification shall be deemed to be given upon the written confirmation (or
deemed confirmation) of the Administrative Agent to a Permitted Distribution or
Permitted Tax Distribution, as applicable).

 

"Excluded Taxes" means any of the following Taxes imposed on or with respect to
a Secured Party or required to be withheld or deducted from a payment to a
Secured Party, (a) Taxes imposed on or measured by net income (however
denominated), franchise Taxes and branch profits Taxes, in each case, (i)
imposed as a result of such Secured Party being organized under the laws of, or
having its principal office or, in the case of any Lender, its applicable
lending office located in, the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of
a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for
the account of such Lender with respect to an applicable interest in a Financing
Commitment or Advance pursuant to a law in effect on the date on which (i) such
Lender acquires such interest in the Financing Commitment or Advance or (ii)
such Lender changes its lending office, except in each case to the extent that,
pursuant to Section 3.03, amounts with respect to such Taxes were payable either
to such Lender's assignor immediately before such Lender became a party hereto
or to such Lender immediately before it changed its lending office, (c) Taxes
attributable to such Secured Party's failure to comply with Section 3.03(f) and
(d) any U.S. federal withholding Taxes imposed under FATCA.

 

 - 5 - 

 

 

"FATCA" means Sections 1471 through 1474 of the Code as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof, any intergovernmental
agreements thereunder, similar or related non-U.S. law that corresponds to
Sections 1471 to 1474 of the Code, any agreements entered into pursuant to
Section 1471(b)(1) of the Code, any intergovernmental agreement entered into in
connection with the implementation of such sections of the Code and any U.S. or
non-U.S. fiscal or regulatory law, legislation, rules, guidance, notes or
practices adopted pursuant to such intergovernmental agreement.

 

"Federal Funds Effective Rate" means, for any day, the rate per annum equal to
the rates on overnight Federal funds transactions with members of the Federal
Reserve System (as determined in such manner as the Federal Reserve Bank of New
York shall set forth on its public website from time to time), 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.

 

"Financing Commitment" means, with respect to each Lender, the commitment of
such Lender to provide Advances to the Company hereunder in an amount up to but
not exceeding the amount set forth opposite such Lender's name on the
Transaction Schedule that is held by such Lender at such time.

 

"Foreign Lender" means a Lender that is not a U.S. Person.

 

"GAAP" means generally accepted accounting principles in the effect from time to
time in the United States, as applied from time to time by the Company.

 

"Governmental Authority" means the government of the United States of America or
any other nation, or of 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 (including any supra-national bodies such as the European Union or
the European Central Bank).

 

"Indebtedness" as applied to any Person, means, without duplication, as
determined in accordance with GAAP, (i) all indebtedness of such Person for
borrowed money; (ii) all obligations of such Person evidenced by bonds,
debentures, notes, deferrable securities or other similar instruments; (iii) all
obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable and accrued expenses arising in the
ordinary course of business; (iv) that portion of obligations with respect to
capital leases that is properly classified as a liability on a balance sheet;
(v) all non-contingent obligations of such Person to reimburse or prepay any
bank or other Person in respect of amounts paid under a letter of credit,
banker's acceptance or similar instrument; (vi) all debt of others secured by a
Lien on any asset of such Person, whether or not such debt is assumed by such
Person; and (vii) all debt, lease obligations or similar obligations to repay
money of others guaranteed by such Person or for which such Person acts as
surety and other contingent obligations to purchase, to provide funds for
payment, to supply funds to invest in any Person or otherwise to assure a
creditor against loss. Notwithstanding the foregoing, "Indebtedness" shall not
include a commitment arising in the ordinary course of business to purchase a
future Portfolio Investment in accordance with the terms of this Agreement.

 

"Indemnified Person" has the meaning specified in Section 5.03(b).

 

 - 6 - 

 

 

"Indemnified Taxes" means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Company under any Loan Document and (b) to the extent not otherwise described in
(a), Other Taxes.

 

"Indemnitee" has the meaning set forth in Section 10.04(b).

 

"Independent Broker-Dealer" means any of the following (as such list may be
revised from time to time by mutual agreement of the Company and the
Administrative Agent): Bank of America/Merrill Lynch, Barclays Bank, BMO Capital
Markets, BNP Paribas, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs,
Jeffries, JPMorgan, Morgan Stanley, Nomura, RBC Capital Markets, UBS, Wells
Fargo and any Affiliate of any of the foregoing, but in no event including the
Company or any Affiliate of the Company.

 

"Ineligible Investment" means any Portfolio Investment that fails, at any time,
to satisfy the Eligibility Criteria; provided, that, with respect to any
Portfolio Investment for which the Administrative Agent has waived one or more
of the criteria set forth on Schedule 3, the Eligibility Criteria in respect of
such Portfolio Investment shall be deemed not to include such waived criteria at
any time after such waiver and such Portfolio Investment shall not be considered
an "Ineligible Investment" by reason of its failure to meet such waived
criteria; provided, further, that any Portfolio Investment (other than an
Initial Portfolio Investment) which has not been approved by the Administrative
Agent pursuant to Section 1.02 on or prior to its Trade Date will be deemed to
be an Ineligible Investment until such later date (if any) on which such
Portfolio Investment is so approved; provided further that any Participation
Interest granted under the Sale Agreement that has not been elevated to an
absolute assignment on or prior to the 30th calendar day following the Effective
Date shall constitute an Ineligible Investment until the date on which such
elevation has occurred.

 

"Initial Portfolio Investments" means the Portfolio Investments listed in
Schedule 5 and Schedule 6 on the date of this Agreement.

 

"Interest Payment Date" has the meaning set forth in Section 4.03(b).

 

"Interest Proceeds" means all payments of interest received in respect of the
Portfolio Investments and Eligible Investments acquired with the proceeds of
Portfolio Investments (in each case other than accrued interest purchased using
Principal Proceeds, but including proceeds received from the sale of interest
accrued after the date on which the Company acquired the related Portfolio
Investment), all other payments on the Eligible Investments acquired with the
proceeds of Portfolio Investments (for the avoidance of doubt, such other
payments shall not include principal payments (including, without limitation,
prepayments, repayments or sale proceeds) with respect to Eligible Investments
acquired with Principal Proceeds) and all payments of fees, dividends and other
similar amounts received in respect of the Portfolio Investments or deposited
into any of the Accounts (including closing fees, commitment fees, facility
fees, late payment fees, amendment fees, waiver fees, prepayment fees and
premiums, ticking fees, delayed compensation, customary syndication or other
up-front fees and customary administrative agency or similar fees); provided,
however, that for the avoidance of doubt, Interest Proceeds shall not include
amounts or Eligible Investments in the MV Cure Account or the Unfunded Exposure
Account or, in neither case, any proceeds therefrom.

 

"Investment" means (a) the purchase of any debt or equity security of any other
Person, or (b) the making of any loan or advance to any other Person, or (c)
becoming obligated with respect to a contingent obligation in respect of
obligations of any other Person.

 

"IRS" means the United States Internal Revenue Service or any successor thereto.

 

 - 7 - 

 

 

"Lender" has the meaning set forth in Section 2.01.

 

"Lender Participant" has the meaning set forth in Section 10.06(c).

 

"Liabilities" has the meaning set forth in Section 5.03.

 

"LIBO Rate" means, for each Calculation Period relating to an Advance, the rate
appearing on the Reuters Screen at approximately 11:00 a.m., London time, two
(2) Business Days prior to the commencement of such Calculation Period, as the
rate for U.S. dollar deposits with a maturity of three months. If such rate is
not available at such time for any reason, then the LIBO Rate for such
Calculation Period shall be equal to the rate that results from interpolating on
a linear basis between (a) the rate appearing on the Reuters Screen for the
longest period available that is shorter than three months and (b) the rate
appearing on the Reuters Screen that is the shortest period available that is
longer than three months. The LIBO Rate shall be determined by the
Administrative Agent (and notified in writing to the Collateral Administrator
and the Portfolio Manager), and such determination shall be conclusive absent
manifest error. Notwithstanding anything in the foregoing to the contrary, if
the LIBO Rate as calculated for any purpose under this Agreement is below zero,
the LIBO Rate will be deemed to be zero for such purpose until such time as it
exceeds zero again.

 

"Lien" means any security interest, lien, charge, pledge, preference, equity or
encumbrance of any kind, including tax liens, mechanics' liens and any liens
that attach by operation of law.

 

"Loan" means any obligation for the payment or repayment of borrowed money that
is documented by a term loan agreement or other similar credit agreement.

 

"Loan Documents" means this Agreement, the Portfolio Management Agreement, the
Performance Guarantee, the Master Participation Agreement and the Sale
Agreement.

 

"Margin Stock" has the meaning provided such term in Regulation U of the Board
of Governors of the Federal Reserve Board.

 

"Market Value" means, on any date of determination, (i) with respect to any
Senior Secured Loan or Second Lien Loan, the average indicative bid-side price
determined by Markit Group Limited or LoanX, Inc. (or, if the Administrative
Agent determines in its sole discretion that such bid price is not available or
is not indicative of the actual current market value, the market value of such
Senior Secured Loan or Second Lien Loan as determined by the Administrative
Agent in good faith and in a commercially reasonable manner) and (ii) with
respect to any other Portfolio Investment, the market value of such Portfolio
Investment as determined by the Administrative Agent in good faith and in a
commercially reasonable manner, in each case, expressed as a percentage of par.

 

So long as no Market Value Event has occurred or Event of Default has occurred
and is continuing, the Portfolio Manager shall have the right to initiate a
dispute of the Market Value of certain Portfolio Investments as set forth below;
provided that the Portfolio Manager provides the bid or valuation set forth
below no later than 12:00 p.m. New York City time on the Business Day
immediately following the related date of determination.

 

 - 8 - 

 

 

If the Portfolio Manager disputes the determination of Market Value with respect
to any Portfolio Investment whose Market Value is not determined by the
Administrative Agent using Markit Group Limited or LoanX, Inc., the Portfolio
Manager may, with respect to up to three such Portfolio Investments in each
calendar quarter, engage a Nationally Recognized Valuation Provider, at the
expense of the Company, to provide a valuation of the applicable Portfolio
Investments and submit evidence of such valuation to the Administrative Agent.
With respect to any Portfolio Investment whose Market Value is determined by the
Administrative Agent using Markit Group Limited or LoanX, Inc., the Portfolio
Manager may, at the expense of the Company, obtain a written executable bid from
an Independent Broker-Dealer for the full principal amount (or, in the case of a
Portfolio Investment with a par amount greater than $10,000,000, such executable
bid shall be for at least two-thirds of the par amount of such Portfolio
Investment) of such Portfolio Investment and submit evidence of such bid to the
Administrative Agent.

 

The market value of any Portfolio Investment determined in accordance with the
immediately preceding paragraph will be the Market Value for the applicable
Portfolio Investment from and after (but not earlier than) the Business Day
following receipt of notice of such valuation by the Administrative Agent until
the Administrative Agent has made a good faith and commercially reasonable
determination that the Market Value of such Portfolio Investment has changed, in
which case the Administrative Agent may determine another Market Value (in
accordance with the definition of Market Value).

 

Notwithstanding anything to the contrary herein, (A) the Market Value for any
Portfolio Investment shall not be greater than the par amount thereof, (B) the
Market Value of any Ineligible Investment shall be deemed to be zero and (C) the
Administrative Agent shall be entitled to disregard as invalid any bid submitted
by the Portfolio Manager from any Independent Broker-Dealer if, in the
Administrative Agent's good faith judgment: (i) such Independent Broker-Dealer
is ineligible to accept assignment or transfer of the relevant Portfolio
Investment or portion thereof, as applicable, substantially in accordance with
the then-current market practice in the principal market for such Portfolio
Investment, as reasonably determined by the Administrative Agent; or (ii) such
firm bid or such firm offer is not bona fide due to the insolvency of the
Independent Broker-Dealer.

 

The Administrative Agent shall notify the Company, the Portfolio Manager and the
Collateral Administrator in writing of the then-current Market Value of each
Portfolio Investment in the Portfolio no later than the 5th day of each calendar
month or upon the reasonable request of the Portfolio Manager (but no more
frequently than three requests per calendar month). Any notification from the
Administrative Agent to the Company that the events set forth in clause (A)(i)
of the definition of the term Market Value Event have occurred and are
continuing shall be accompanied by a written statement showing the then-current
Market Value of each Portfolio Investment.

 

"Market Value Cure" means, on any date of determination, (i) with the prior
written consent of the Administrative Agent, the contribution by the Parent of
additional Portfolio Investments and the pledge and Delivery thereof by the
Company to the Collateral Agent pursuant to the terms hereof, (ii) the
contribution by the Parent of cash to the Company and the pledge and Delivery
thereof by the Company to the Collateral Agent pursuant to the terms hereof
(which amounts shall be deposited in the MV Cure Account), (iii) the prepayment
by the Company of an aggregate principal amount of Advances (together with
accrued and unpaid interest thereon) or (iv) any combination of the foregoing
clauses (i), (ii) and (iii), in each case during the Market Value Cure Period,
at the option of the Portfolio Manager (subject to the consent of the
Administrative Agent set forth in clause (i)), and in an amount such that the
Net Asset Value exceeds the product of (a) the Market Value Cure Trigger
specified on the Transaction Schedule and (b) the Net Advances; provided that,
any Portfolio Investment contributed to the Company in connection with the
foregoing must meet all of the applicable Eligibility Criteria (unless otherwise
consented to by the Administrative Agent) and the Concentration Limitations
shall be satisfied after such contribution. For the purposes of any request for
consent of the Administrative Agent pursuant to clause (i) in the immediately
preceding sentence, if the Company notifies the Administrative Agent on the day
on which the events set forth in clause (A)(i) of the definition of the term
Market Value Event has occurred and is continuing of its intention to contribute
a Portfolio Investment to the Company to cure such event and requests the
related consent thereto, the Administrative Agent shall respond to such request
no later than one (1) Business Day after such notice is received. In connection
with any Market Value Cure, a Portfolio Investment shall be deemed to have been
contributed to the Company if there has been a valid, binding and enforceable
contract for the assignment of such Portfolio Investment to the Company and, in
the reasonable judgment of the Portfolio Manager, such assignment will settle,
in the case of a Loan, within fifteen (15) Business Days thereof and, in the
case of any other Portfolio Investment, within four (4) Business Days thereof.
The Portfolio Manager shall use its commercially reasonable efforts to effect
any such assignment within such time period.

 

 - 9 - 

 

 

"Market Value Cure Failure" means the failure by the Company to effect a Market
Value Cure as set forth in the definition of such term.

 

"Market Value Cure Period" means the period commencing on the Business Day on
which the Portfolio Manager receives notice from the Administrative Agent (which
if received after 2:00 p.m., New York City time, on any Business Day, shall be
deemed to have been received on the next succeeding Business Day) of the
occurrence of the events set forth in clause (A)(i) of the definition of the
term Market Value Event and ending at (x) the close of business in New York two
(2) Business Days thereafter or (y) such later date and time as may be agreed to
by the Administrative Agent in its sole discretion.

 

"Market Value Event" means (A) the occurrence of both of the following events
(i) the Administrative Agent shall have determined and notified the Portfolio
Manager in writing (with a copy to the Collateral Agent) as of any date that the
Net Asset Value does not equal or exceed the product of (a) the Market Value
Trigger specified on the Transaction Schedule and (b) the Net Advances and (ii)
a Market Value Cure Failure or (B) if in connection with any Market Value Cure,
a Portfolio Investment sold, contributed or deemed to have been contributed to
the Company shall fail to settle within (i) in the case of a Loan, fifteen (15)
Business Days from the related Trade Date thereof and (ii) in the case of any
other Portfolio Investment, four (4) Business Days from the related Trade Date
thereof.

 

"Material Adverse Effect" means a material adverse effect on (a) the business,
assets, operations or condition, financial or otherwise, of the Company or the
Portfolio Manager, taken as a whole, (b) the ability of the Company, the Parent
or the Portfolio Manager to perform its obligations under this Agreement or any
of the other Loan Documents or (c) the rights or remedies available to the
Administrative Agent or the Lenders under this Agreement or any of the other
Loan Documents.

 

"Material Amendment" has the meaning set forth in Section 10.06(c).

 

"Maturity Date" means the date that is the earliest of (1) the Scheduled
Termination Date set forth on the Transaction Schedule, (2) the date on which
the Secured Obligations become due and payable upon the occurrence of an Event
of Default under Article VII and the acceleration of the Secured Obligations,
(3) the date on which the principal amount of the Advances is irrevocably
reduced to zero as a result of one or more prepayments and the Financing
Commitments are irrevocably terminated and (4) the date after a Market Value
Event on which all Portfolio Investments have been sold and the proceeds
therefrom have been received by the Company.

 

"Maximum Rate" has the meaning set forth in Section 10.08.

 

"Mezzanine Obligation" means a Portfolio Investment which is unsecured,
subordinated debt of a company that represents a claim on such company's assets
which is senior only to that of the equity securities of such company.

 

 - 10 - 

 

 

"Minimum Funding Amount" means, on any date of determination, the amount set
forth in the table below:

 

Period Start Date  Period End Date  Minimum Funding Amount (U.S.$)          
Effective Date  To and including, September, 30, 2016   57,000,000           
From and excluding September, 30, 2016  To and including March 31, 2017 
 100,000,000            From and excluding March 31, 2017  Last day of
Reinvestment Period   125,000,000 

 

"MV Cure Account" has the meaning set forth in Section 8.01(a).

 

"Nationally Recognized Valuation Provider" means (i) Lincoln International LLC
(f/k/a Lincoln Partners LLC), (ii) Valuation Research Corporation, (iii) Alvarez
& Marsal, (iv) Duff & Phelps Corp., (v) Murray Devine and (vi) Hilco Capital;
provided that any independent entity providing professional asset valuation
services may be added to this definition by the Company (with the consent of the
Administrative Agent) or added to this definition by the Administrative Agent
from time to time by notice thereof to the Company and the Portfolio Manager;
provided, further, that the Administrative Agent may remove any provider from
this definition by written notice to the Company and the Portfolio Manager so
long as, after giving effect to such removal, there are at least three providers
designated pursuant to this definition.

 

"Net Advances" means the principal amount of the outstanding Advances (inclusive
of requisite Advances for any outstanding Purchase Commitments which have traded
but not settled) minus the amounts then on deposit in the Accounts (including
cash and Eligible Investments) representing Principal Proceeds.

 

"Net Asset Value" means, on any date of determination the sum of (A) the sum,
with respect to each Portfolio Investment (both owned by the Company and in
respect of which there is an outstanding Purchase Commitment that has not
settled) other than the unfunded commitment amount of the Delayed Funding Term
Loan, of the product of (x) the Market Value of such Portfolio Investment
multiplied by (y) the funded principal amount of such Portfolio Investment plus
(B) the amounts then on deposit in the Unfunded Exposure Account (including cash
and Eligible Investments); provided that, for the avoidance of doubt, (1) the
Concentration Limitation Excess, (2) any Portfolio Investment for which a
pending Purchase Commitment remains unsettled, as of such date of determination,
for a period longer than (x) in the case of a Loan, fifteen (15) Business Days
from the related Trade Date thereof and (y) in the case of any other Portfolio
Investment, four (4) Business Days from the related Trade Date thereof and (3)
any Ineligible Investments will be excluded from the calculation of the Net
Asset Value and assigned a value of zero for such purposes.

 

"Non-Call Period" means the period beginning on, and including, the Effective
Date and ending on, but excluding, August 23, 2018.

 

"Notice of Acquisition" has the meaning set forth in Section 1.02.

 

 - 11 - 

 

 

"Other Connection Taxes" means, with respect to any Secured Party, Taxes imposed
as a result of a present or former connection between such Secured Party and the
jurisdiction imposing such Tax (other than connections arising from such Secured
Party 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 Advance or Loan Document).

 

"Other Taxes" means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, 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
made pursuant to Section 3.01(f) relating to the replacement of Lenders).

 

"Participant Register" has the meaning specified in Section 10.06(d).

 

"Participation Interest" means a participation interest in a Loan or a debt
security.

 

"PATRIOT Act" has the meaning set forth in Section 2.04(f).

 

"Performance Guarantee" means the performance guarantee, dated as of the date
hereof, issued by the Parent with respect to the Portfolio Manager's obligations
under the Portfolio Management Agreement and this Loan Agreement.

 

"Permitted Distribution" means, on any Business Day, distributions of Interest
Proceeds (at the discretion of the Company) to the Parent (or other permitted
equity holders of the Company); provided that amounts may be distributed
pursuant to this definition only to the extent of available Excess Interest
Proceeds and only so long as (i) no Event of Default has occurred and is
continuing (or would occur after giving effect to such Permitted Distribution),
(ii) no Market Value Event shall have occurred (or would occur after giving
effect to such Permitted Distribution), (iii) the Borrowing Base Test is
satisfied (and will be satisfied after giving effect to such Permitted
Distribution), (iv) the Company gives at least two (2) Business Days' prior
written notice thereof to the Administrative Agent, the Collateral Agent and the
Collateral Administrator, (v) not more than three Permitted Distributions are
made in any single Calculation Period and (vi) the Administrative Agent confirms
in writing (which may be by email) to the Collateral Agent and the Collateral
Administrator that the conditions to a Permitted Distribution set forth herein
are satisfied; provided that, if the Administrative Agent does not notify the
Collateral Agent and the Collateral Administrator in writing (which may be by
email) that it does or does not confirm that such conditions are satisfied
within two (2) Business Days following delivery of written notice (which may be
by email) of a proposed Permitted Distribution requesting such confirmation and
addressed to each of the employees of the Administrative Agent identified on
Schedule 2 hereto (as modified by the Administrative Agent from time to time in
writing), the Administrative Agent will be deemed to have confirmed that such
conditions are satisfied.

 

"Permitted Lien" means any of the following: (a) Liens for Taxes if such Taxes
shall not at the time be due and payable or if a Person shall currently be
contesting the validity thereof in good faith by appropriate proceedings and
with respect to which reserves in accordance with GAAP have been provided on the
books of such Person, (b) Liens imposed by law, such as materialmen's,
warehousemen's, mechanics', carriers', workmen's and repairmen's Liens and other
similar Liens, arising by operation of law in the ordinary course of business
for sums that are not overdue or are being contested in good faith, (c) with
respect to any collateral underlying a Portfolio Investment, the Lien in favor
of the Company and Liens permitted under the related underlying instruments, (d)
as to agented Portfolio Investments, Liens in favor of the agent on behalf of
all the lenders of the related obligor, and (e) Liens granted pursuant to or by
the Loan Documents.

 

 - 12 - 

 

 

"Permitted PM Successor" means an Affiliate of the Portfolio Manager that (i)
utilizes principal personnel performing the duties required under the Loan
Documents who are substantially the same individuals who would have performed
the duties required under the Loan Documents had the assignment not occurred,
(ii) has an ability to professionally and competently perform duties similar to
those imposed on the Portfolio Manager under the Loan Documents and (iii) is
legally qualified to act as Portfolio Manager and whose appointment as Portfolio
Manager will not cause the Borrower to violate Applicable Law.

 

"Permitted Sub-Adviser Successor" means an Affiliate of the Sub-Adviser that (i)
utilizes principal personnel performing the duties required under the investment
sub-advisory agreement between the Parent and the Sub-Adviser who are
substantially the same individuals who would have performed the duties required
under the investment sub-advisory agreement between the Parent and the
Sub-Adviser had the assignment not occurred, (ii) has an ability to
professionally and competently perform duties similar to those imposed on the
Sub-Adviser under the investment sub-advisory agreement between the Parent and
the Sub-Adviser and (iii) is legally qualified to act as Sub-Adviser and whose
appointment as Sub-Adviser will not cause the Borrower to violate Applicable
Law.

 

"Permitted Tax Distribution" means distributions to the Parent (from the
Accounts or otherwise) to the extent required to allow the Parent to make
sufficient distributions to qualify as a regulated investment company, and to
otherwise eliminate federal or state income or excise taxes payable by the
Parent in or with respect to any taxable year of the Parent (or any calendar
year, as relevant); provided that (A) the amount of any such payments made in or
with respect to any such taxable year (or calendar year, as relevant) of the
Parent shall not exceed 115% of the amounts that the Company would have been
required to distribute to the Parent to: (i) allow the Company to satisfy the
minimum distribution requirements that would be imposed by Section 852(a) of the
Code (or any successor thereto) to maintain its eligibility to be taxed as a
regulated investment company for any such taxable year, (ii) reduce to zero for
any such taxable year the Company's liability for federal income taxes imposed
on (x) its investment company taxable income pursuant to Section 852(b)(1) of
the Code (or any successor thereto), or (y) its net capital gain pursuant to
Section 852(b)(3) of the Code (or any successor thereto), and (iii) reduce to
zero the Company's liability for federal excise taxes for any such calendar year
imposed pursuant to Section 4982 of the Code (or any successor thereto), in the
case of each of (i), (ii) or (iii), calculated assuming that the Company had
qualified to be taxed as a regulated investment company under the Code and (B)
amounts may be distributed pursuant to this definition only from Excess Interest
Proceeds and so long as (i) the Borrowing Base Test is satisfied, (ii) the
Company gives at least two (2) Business Days prior notice thereof to the
Administrative Agent, the Collateral Agent and the Collateral Administrator,
(iii) if any such Permitted Tax Distributions are made after the occurrence and
during the continuance of an Event of Default, the amount of Permitted Tax
Distributions made in any 90 calendar day period shall not exceed U.S.$1,500,000
and (iv) the Administrative Agent confirms in writing (which may be by email) to
the Collateral Agent and the Collateral Administrator that the conditions to a
Permitted Tax Distribution set forth herein are satisfied; provided that, if the
Administrative Agent does not notify the Collateral Agent and the Collateral
Administrator in writing (which may be by email) that it does or does not
confirm that such conditions are satisfied within two (2) Business Days
following delivery of written notice (which may be by email) of a proposed
Permitted Tax Distribution requesting such confirmation and addressed to each of
the employees of the Administrative Agent identified on Schedule 2 hereto (as
modified by the Administrative Agent from time to time in writing), the
Administrative Agent will be deemed to have confirmed that such conditions are
satisfied.

 

 - 13 - 

 

 

"Person" means any natural person, corporation, partnership, trust, limited
liability company, association, Governmental Authority or unit, or any other
entity, whether acting in an individual, fiduciary or other capacity.

 

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

 

"Plan Asset Rules" means the regulations issued by the United States Department
of Labor at Section 2510.3-101 of Part 2510 of Chapter XXV, Title 29 of the
United States Code of Federal Regulations, as modified by Section 3(42) of
ERISA.

 

"Portfolio" means all Portfolio Investments Purchased hereunder and not
otherwise sold or liquidated.

 

"Possessory Collateral" has the meaning set forth in Section 8.02(b).

 

"Prime Rate" means the rate of interest per annum publicly announced from time
to time by JPMCB as its prime rate in effect at its principal office in New York
City; each change in the Prime Rate shall be effective from and including the
date such change is publicly announced as being effective.

 

"Principal Proceeds" means (i) all amounts received with respect to the
Portfolio Investments or any other Collateral, and all amounts otherwise on
deposit in the Accounts (including cash contributed to or deposited by the
Company and Advances made pursuant to Section 2.03(e)), in each case other than
Interest Proceeds or amounts (or Eligible Investments) in the Unfunded Exposure
Account (or any proceeds therefrom) and (ii) all amounts received pursuant to
the Performance Guarantee; provided that amounts received pursuant to the
Performance Guarantee shall only be used to repay Advances until all Secured
Obligations have been paid in full.

 

"Priority of Payments" has the meaning set forth in Section 4.05.

 

"Proceeding" has the meaning set forth in Section 10.07(b).

 

"Purchase" means each acquisition of a Portfolio Investment hereunder.

 

"Purchase Commitment" has the meaning set forth in Section 1.02.

 

"Ramp-Up Period" means the period from and including the Effective Date to, but
excluding, May 23, 2017.

 

"Register" has the meaning set forth in Section 10.06(b).

 

"Reinvestment Period" means the period beginning on, and including, the
Effective Date and ending on, but excluding, the earliest of (i) August 23,
2019, (ii) the date on which a Market Value Event occurs, (iii) the date on
which the principal amount of the Advances is irrevocably reduced to zero as a
result of one or more prepayments and the Financing Commitments are irrevocably
terminated and (iv) the date on which an Event of Default occurs.

 

"Related Party" has the meaning set forth in Section 9.01.

 

 - 14 - 

 

 

"Repayment Event" means an event that occurs on any date of determination if (i)
during the 12 calendar months preceding such date of determination the Company
has properly delivered at least ten (10) Notices of Acquisition during such
period, so long as each such Notice of Acquisition contains and/or is
accompanied by all information required pursuant to Section 1.02(b) and would
otherwise have satisfied all conditions set forth in this Agreement and (ii) the
Administrative Agent has not approved at least 50% of the Notices of Acquisition
properly made during the 12 calendar months preceding such date of determination
and which contain and/or are accompanied by such information specified in clause
(i) and would otherwise have satisfied all conditions set forth in this
Agreement.

 

"Required Lenders" means Lenders with respect to 50.1% or more of the sum of (i)
the aggregate principal amount of the outstanding Advances plus (ii) the
aggregate undrawn amount of the outstanding Financing Commitments.

 

"Responsible Officer" means with respect to the Collateral Agent or the
Collateral Administrator or the Securities Intermediary, any officer of the
Collateral Agent customarily performing functions with respect to corporate
trust matters and, with respect to a particular corporate trust matter under
this Agreement, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject in each
case, having direct responsibility for the administration of this Agreement.

 

"Restricted Payment" means (i) any dividend or other distribution (including,
without limitation, a distribution of non-cash assets), direct or indirect, on
account of any shares or other equity interests in the Company now or hereafter
outstanding; (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, by the Company of
any shares or other equity interests in the Company now or hereafter
outstanding; and (iii) any payment made to retire, or to obtain the surrender
of, any outstanding warrants, options or other rights to acquire shares or other
equity interests in the Company now or hereafter outstanding.

 

"Reuters Screen" means Reuters Screen LIBOR 01 Page on the Bloomberg Financial
Markets Commodities News (or on any successor or substitute page of such
service, or any successor to or substitute for such service, providing rate
quotations comparable to those currently provided on such page of such service,
as determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to U.S. dollar deposits in the
London interbank market).

 

"Revolving Loan" means any Loan (other than a Delayed Funding Term Loan, but
including funded and unfunded portions of revolving credit lines not backed by
cash and letter of credit facilities, unfunded commitments under specific
facilities and other similar loans and investments) that under the underlying
instruments relating thereto may require one or more future advances to be made
to the obligor by a creditor, but any such Loan will be a Revolving Loan only
until all commitments by the holders thereof to make advances to the obligor
thereon expire or are terminated or are irrevocably reduced to zero.

 

"Sanctioned Country" means, at any time, a country, region or territory which is
itself the subject or target of any Sanctions (at the time of this Agreement,
Cuba, Iran, North Korea, Sudan, Syria and Crimea).

 

"Sanctioned Person" means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury or the U.S. Department of
State, or by the United Nations Security Council, the European Union or any EU
member state, (b) any Person operating, organized or resident in a Sanctioned
Country or (c) any Person owned or controlled by any such Person or Persons
described in the foregoing clauses (a) or (b).

 

 - 15 - 

 

 

"Sanctions" means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including
those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State, or (b) the United
Nations Security Council, the European Union or Her Majesty's Treasury of the
United Kingdom.

 

"Second Lien Loan" means a Loan (i) that is secured by a pledge of collateral,
which security interest is validly perfected and second priority (subject to
liens for Senior Secured Loans and liens for Taxes or regulatory charges and any
other liens permitted under the related underlying instruments that are
reasonable and customary for similar loans) under Applicable Law and (ii) the
Portfolio Manager determines in good faith that the value of the collateral
securing the Loan (including based on enterprise value) on or about the time of
origination or acquisition by the Company equals or exceeds the outstanding
principal balance thereof plus the aggregate outstanding balances of all other
loans of equal or higher seniority secured by the same collateral.

 

"Secured Party" has the meaning set forth in Section 8.02(a).

 

"Secured Obligation" has the meaning set forth in Section 8.02(a).

 

"Senior Secured Loan" means any interest in a Loan, including any assignment of
or participation in or other interest in a Loan, that (i) is not (and is not
expressly permitted by its terms to become) subordinate in right of payment to
any obligation of the obligor in any bankruptcy, reorganization, arrangement,
insolvency, moratorium or liquidation proceedings (other than pursuant to a
Permitted Working Capital Lien and customary waterfall provisions contained in
the applicable loan agreement), (ii) is secured by a pledge of collateral, which
security interest is (a) validly perfected and first priority under Applicable
Law (subject to liens permitted under the applicable credit agreement that are
reasonable for similar loans, and liens accorded priority by law in favor of any
Governmental Authority) or (b)(1) validly perfected and second priority in the
accounts, documents, instruments, chattel paper, letter-of-credit rights,
supporting obligations, deposit accounts, investments accounts and any other
assets securing any Working Capital Revolver under applicable law and proceeds
of any of the foregoing (a first priority lien on such assets a "Permitted
Working Capital Lien") and (2) validly perfected and first priority (subject to
liens for Taxes or regulatory charges and any other liens permitted under the
related underlying instruments that are reasonable and customary for similar
loans) in all other collateral under Applicable Law, and (iii) the Portfolio
Manager determines in good faith that the value of the collateral for such loan
(including based on enterprise value) on or about the time of acquisition equals
or exceeds the outstanding principal balance of the loan plus the aggregate
outstanding balances of all other loans of equal or higher seniority secured by
a first priority Lien over the same collateral. For the avoidance of doubt,
debtor-in-possession loans shall constitute Senior Secured Loans.

 

"Settlement Date" has the meaning set forth in Section 1.03.

 

"Solvent" means, with respect to any entity, that as of the date of
determination, (a) the sum of such entity's debt (including contingent
liabilities) does not exceed the present fair value of such entity's present
assets; (b) such entity's capital is not unreasonably small in relation to its
business as contemplated on the date of this Agreement; and (c) such entity has
not incurred debts beyond its ability to pay such debts as they become due
(whether at maturity or otherwise). For purposes of this definition, the amount
of any contingent liability at any time shall be computed as the amount that, in
light of all of the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.

 

 - 16 - 

 

 

"Subsidiary" of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person.

 

"Taxes" means 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.

 

"Trade Date" has the meaning set forth in Section 1.03.

 

"UCC" has the meaning set forth in Section 8.01(b).

 

"Unfunded Exposure Account" has the meaning set forth in Section 8.01(a).

 

"Unfunded Exposure Amount" means, on any date of determination, with respect to
any Delayed Funding Term Loan, an amount equal to the aggregate amount of the
unfunded commitments of the Company under such Delayed Funding Term Loan.

 

"Unfunded Exposure Shortfall" means, on any date of determination following the
last day of the Reinvestment Period, an amount equal to the greater of (x) 0 and
(y) the Unfunded Exposure Amount minus the amounts on deposit in the Unfunded
Exposure Account.

 

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

 

"U.S. Tax Compliance Certificate" has the meaning set forth in Section 3.03(f).

 

"Withholding Agent" means the Company (or, to the extent the Company is a
disregarded entity, its regarded owner) and the Administrative Agent.

 

"Working Capital Revolver" means a revolving lending facility secured by all or
a portion of the current assets of the related obligor, which current assets
subject to such security interest do not constitute a material portion of the
obligor's total assets.

 

ARTICLE I
THE PORTFOLIO INVESTMENTS

 

SECTION 1.01. Purchases of Portfolio Investments. On the Effective Date, the
Company may acquire the Initial Portfolio Investments from the Parent pursuant
to the Sale Agreement or the Master Participation Agreement, as applicable,
subject to the conditions specified in this Agreement. From time to time during
the Reinvestment Period, the Company may Purchase additional Portfolio
Investments, or request that Portfolio Investments be Purchased for the
Company's account, all on and subject to the terms and conditions set forth
herein.

 

 - 17 - 

 

 

SECTION 1.02. Procedures for Purchases and Related Advances.

 

(a)          Timing of Notices of Acquisition. No later than three (3) Agent
Business Days (or such shorter period as the Administrative Agent may agree in
its sole discretion) before the date on which the Company proposes that a
binding commitment to acquire any Portfolio Investment (other than an Initial
Portfolio Investment) be made by it or for its account (a "Purchase
Commitment"), the Portfolio Manager, on behalf of the Company, shall deliver to
the Administrative Agent a notice of acquisition (a "Notice of Acquisition").

 

(b)          Contents of Notices of Acquisition. Each Notice of Acquisition
shall consist of one or more electronic submissions to the Administrative Agent
(in such format and transmitted in such a manner as the Administrative Agent,
the Portfolio Manager and the Company may reasonably agree (which shall
initially be the format and include the information regarding such Portfolio
Investment identified on Schedule 2)), and shall be accompanied by such other
information as the Administrative Agent may reasonably request.

 

(c)          Eligibility of Portfolio Investments. The Administrative Agent
shall have the right, on behalf of all Lenders, to reasonably request additional
information regarding any proposed Portfolio Investment. The Administrative
Agent shall notify the Portfolio Manager and the Company (including via e-mail
or other customary electronic messaging system) of its approval or failure to
approve each Portfolio Investment proposed to be acquired pursuant to a Notice
of Acquisition (and, if approved, an initial determination of the Market Value
for such Portfolio Investment) no later than the fifth (5th) Agent Business Day
succeeding the date on which it receives such Notice of Acquisition and any
information reasonably requested in connection therewith); provided that any
Initial Portfolio Investment shall be deemed to be approved by the
Administrative Agent. Any Portfolio Investment so approved shall be deemed to
remain approved for a period of ten (10) Business Days. Notwithstanding anything
to the contrary in this Section 1.02 or Section 1.03, the Company may acquire
any Portfolio Investment, from time to time, pursuant to the Sale Agreement or,
subject to the conditions set forth in Section 1.03 otherwise, without the prior
approval of the Administrative Agent; provided, that any Portfolio Investment
not so approved prior to its date of acquisition shall be deemed to be an
Ineligible Investment until such later date (if any) on which such Portfolio
Investment is so approved.

 

SECTION 1.03. Conditions to Purchases. No Purchase Commitment or Purchase shall
be entered into unless each of the following conditions is satisfied (or waived
as provided below) as of the date on which such Purchase Commitment is entered
into (such Portfolio Investment's "Trade Date") (and such Portfolio Investment
shall not be Purchased, and any related Advance shall not be required to be made
available to the Company by the Lenders, unless each of the following conditions
is satisfied or waived as of such Trade Date):

 

(1)         the information contained in the Notice of Acquisition accurately
describes, in all material respects, such Portfolio Investment and, unless
waived by the Administrative Agent, such Portfolio Investment satisfies the
eligibility criteria set forth in Schedule 3 (the "Eligibility Criteria");

 

(2)         with respect to a Purchase, the proposed Settlement Date for such
Portfolio Investment is not later than (i) in the case of a Loan, the date that
is fifteen (15) Business Days after such Trade Date or (ii) in the case of any
other Portfolio Investment, the date that is four (4) Business Days after such
Trade Date;

 

 - 18 - 

 

 

(3)         no Market Value Event has occurred and no Event of Default or event
that, with notice or lapse of time or both, would constitute an Event of Default
(a "Default"), in each case, has occurred and is continuing, and the
Reinvestment Period has not otherwise ended;

 

(4)         with respect to any Purchase of a Portfolio Investment in connection
with which an Affiliate of the Company acts as administrative agent or in a
similar capacity, the Administrative Agent shall have received evidence that an
assignment and assumption agreement and/or similar document required for the
assignment and transfer of such Portfolio Investment has been signed by such
Affiliate of the Company in blank; and

 

(5)         after giving pro forma effect to the Purchase of such Portfolio
Investment and the related Advance (if any) or any other Advance requested or
outstanding hereunder and any repayment of Advances, each as contemplated on or
prior to the Settlement Date for such Purchase:

 

(w)          the Borrowing Base Test is satisfied;

 

(x)          the Concentration Limitations (as defined on Schedule 4) shall be
satisfied;

 

(y)          the aggregate principal balance of Advances then outstanding will
not exceed the limit for Advances set forth in the Transaction Schedule; and

 

(z)          in the case of a Purchase, the amount of such Advance (if any)
shall be not less than U.S.$2,000,000; provided that the initial Advance shall
be not less than U.S.$57,000,000.

 

The Administrative Agent, on behalf of the Lenders, may waive any conditions to
a Purchase Commitment or Purchase, as the case may be, specified above in this
Section 1.03 by written notice thereof to the Company, the Collateral
Administrator, the Portfolio Manager and the Collateral Agent.

 

If the above conditions to a Purchase are satisfied or waived, the Portfolio
Manager shall determine, in consultation with the Administrative Agent and with
notice to the Lenders and the Collateral Administrator, the date on which such
Purchase shall settle (the "Settlement Date" for such Portfolio Investment) and
any related Advance shall be provided, subject to Section 2.03. The Lenders
shall not be relieved of their obligation to provide Advances in respect of any
Portfolio Investment for which the conditions to purchase set forth in this
Section 1.03 have been satisfied (or waived) as of the Trade Date therefor
solely due to any failure of such Portfolio Investment to settle on the
Settlement Date proposed therefor.

 

SECTION 1.04. Sales of Portfolio Investments. The Company will not sell,
transfer or otherwise dispose of any Portfolio Investment or any other asset
without the prior consent of the Administrative Agent (acting at the direction
of the Required Lenders), except that, subject to Section 6.02(w), the Company
may sell any Portfolio Investment (including any Ineligible Investment) or other
asset without prior notice to or consent from the Administrative Agent so long
as, (x) after giving effect thereto, no Market Value Event has occurred and no
Default or Event of Default has occurred and is continuing and (y) the sale of
such asset by the Company shall be on an arm's-length basis at fair market value
and in accordance with the Portfolio Manager's standard market practices. In
addition, within ten (10) Business Days of any Delayed Funding Term Loan with an
unfunded commitment becoming an Ineligible Investment, the Company shall either
(a) subject to clauses (x) and (y) in the immediately preceding sentence, sell
such Delayed Funding Term Loan and shall pay to the purchaser any amount payable
in connection with such sale or (b) transfer such Delayed Funding Term Loan to
the Seller and shall pay to the Seller any amount payable in connection with
such transfer (i.e. the negative Market Value of such Delayed Funding Term Loan)
and obtain from the Seller any positive Market Value of such Delayed Funding
Term Loan.

 

 - 19 - 

 

 

 

Notwithstanding anything in this Agreement to the contrary (but subject to this
Section 1.04): (i) following the occurrence and during the continuance of an
Event of Default, neither the Company nor the Portfolio Manager on its behalf
shall have any right to cause the sale, transfer or other disposition of a
Portfolio Investment or any other asset (including, without limitation, the
transfer of amounts on deposit in the Accounts) without the prior written
consent of the Administrative Agent (which consent may be granted or withheld in
the sole discretion of the Administrative Agent), (ii) following the occurrence
of a Market Value Event, the Company shall use commercially reasonable efforts
to sell Portfolio Investments (individually or in lots, including a lot
comprised of all of the Portfolio Investments) at the sole direction of, and in
the manner (including, without limitation, the time of sale, sale price,
principal amount to be sold and purchaser) required by the Administrative Agent
(provided that the Administrative Agent shall only require sales at the
direction of the Required Lenders and at then-current fair market values and in
accordance with the Administrative Agent's standard market practices) and the
proceeds from such sales shall be used to prepay the Advances outstanding
hereunder and (iii) following the occurrence of a Market Value Event, the
Portfolio Manager shall have no right to act on behalf of, or otherwise direct,
the Company, the Administrative Agent, the Collateral Agent or any other Person
in connection with a sale of Portfolio Investments pursuant to any provision of
this Agreement or the Portfolio Management Agreement except with the prior
written consent of the Administrative Agent (which may be by email). Any
prepayments made pursuant to this paragraph shall automatically reduce the
Financing Commitments as provided in Section 4.07(d).

 

In connection with any sale of Portfolio Investments required by the
Administrative Agent following the occurrence of a Market Value Event pursuant
to clause (ii) of the immediately preceding paragraph, the Administrative Agent
or a designee of the Administrative Agent shall:

 

(i)          notify the Company at the Designated Email Notification Address of
its intention to distribute bid solicitations regarding the sale of such
Portfolio Investments and promptly upon distribution of bid solicitations
regarding the sale of such Portfolio Investments; and

 

(ii)         direct the Company to sell such Portfolio Investments to the
Designated Independent Broker-Dealer if the Designated Independent Broker-Dealer
provides the highest bid in the case where bids are received in respect of the
sale of such Portfolio Investments, it being understood that if the Designated
Independent Broker-Dealer provides a bid to the Administrative Agent that is the
highest bona fide bid to purchase a Portfolio Investment on a line-item basis
where such Portfolio Investment is part of a pool of Portfolio Investments for
which there is a bona fide bid on a pool basis proposed to be accepted by the
Administrative Agent (in its sole discretion), then the Administrative Agent
shall accept any such line-item bid only if such line-item bid (together with
any other line-item bids by the Designated Independent Broker-Dealer or any
other bidder for other Portfolio Investments in such pool) is greater than the
bid on a pool basis.

 

For purposes of this paragraph, the Administrative Agent shall be entitled to
disregard as invalid any bid submitted by the Designated Independent
Broker-Dealer if, in the Administrative Agent's judgment (acting reasonably):

 

(A)         either:

 

 - 20 - 

 

 

(x)          the Designated Independent Broker-Dealer is ineligible to accept
assignment or transfer of the relevant Portfolio Investments or any portion
thereof, as applicable, substantially in accordance with the then-current market
practice in the principal market for the relevant Portfolio Investments; or

 

(y)          the Designated Independent Broker-Dealer would not, through the
exercise of its commercially reasonable efforts, be able to obtain any consent
required under any agreement or instrument governing or otherwise relating to
the relevant Portfolio Investments to the assignment or transfer of the relevant
Portfolio Investments or any portion thereof, as applicable, to it; or

 

(B)         such bid is not bona fide, including, without limitation, due to (x)
the insolvency of the Designated Independent Broker-Dealer or (y) the inability,
failure or refusal of the Designated Independent Broker-Dealer to settle the
purchase of the relevant Portfolio Investments or any portion thereof, as
applicable, or otherwise settle transactions in the relevant market or perform
its obligations generally.

 

For the avoidance of doubt, the bid(s) provided by the Designated Independent
Broker-Dealer may be provided on behalf of the Company, the Portfolio Manager,
any Affiliate of the Portfolio Manager or any account or fund managed by the
Portfolio or an Affiliate of the Portfolio Manager if so agreed between the
Designated Independent Broker-Dealer and any such Person.

 

In connection with any sale of a Portfolio Investment directed by the
Administrative Agent pursuant to this Section 1.04 and the application of the
net proceeds thereof, the Company hereby appoints the Administrative Agent as
the Company's attorney-in-fact (it being understood that the Administrative
Agent shall not be deemed to have assumed any of the obligations of the Company
by this appointment), with full authority in the place and stead of the Company
and in the name of the Company to effectuate the provisions of this Section 1.04
(including, without limitation, the power to execute any instrument which the
Administrative Agent or the Required Lenders may deem necessary or advisable to
accomplish the purposes of this Section 1.04 or any direction or notice to the
Collateral Agent in respect to the application of net proceeds of any such
sales). None of the Administrative Agent, the Lenders, the Collateral
Administrator, the Securities Intermediary, the Collateral Agent nor any
Affiliate of any thereof shall incur any liability to the Company, the Portfolio
Manager or any other Person in connection with any sale effected at the
direction of the Administrative Agent in accordance with this Section 1.04,
including, without limitation, as a result of the price obtained for any
Portfolio Investment, the timing of any sale or sales of Portfolio Investments
or the notice or lack of notice provided to any Person in connection with any
such sale, so long as, in the case of the Administrative Agent only, any such
sale does not violate applicable law.

 

SECTION 1.05. Certain Assumptions relating to Portfolio Investments.

 

For purposes of all calculations hereunder, any Portfolio Investment for which
the trade date in respect of a sale thereof by the Company has occurred, but the
settlement date for such sale has not occurred, shall be considered to be owned
by the Company until such settlement date.

 

SECTION 1.06. Deposits and Contributions by Parent.

 

Notwithstanding any other provision of this Agreement, the Parent may, from time
to time in its sole discretion (x) make contributions of cash to the capital of
the Company for deposit in any Account or (y) make contributions of Portfolio
Investments to the Company subject, in each case, to any limitations set forth
in the Sale Agreement or under the "facts and assumptions" section of the
opinion of counsel relating to certain bankruptcy matters provided by the
Company to the Administrative Agent on the Effective Date. All such amounts
contributed will be included as cash or Portfolio Investments of the Company as
provided hereunder.

 

 - 21 - 

 

 

ARTICLE II
THE FINANCINGS

 

SECTION 2.01. Financing Commitments. Subject to the terms and conditions set
forth herein, only during the Reinvestment Period, each Lender hereby severally
agrees to make available to the Company Advances, in U.S. dollars, in an
aggregate amount not exceeding such Lender's Financing Commitment in accordance
with the Transaction Schedule. The Financing Commitments shall terminate on the
earliest of (a) the close of business on the last day of the Reinvestment
Period, (b) the Maturity Date and (c) the occurrence of a Market Value Event
(or, if earlier, the date of termination of the Financing Commitments pursuant
to Article VII).

 

SECTION 2.02. First Advance; Additional Advances 

 

(a)          Subject to the satisfaction or waiver of the conditions set forth
in Sections 2.03 and 2.04, each Lender as of the Effective Date agrees,
severally and not jointly, to make or cause to be made on the Effective Date, an
advance in an aggregate principal amount equal to $57,000,000 subject to the
conditions set forth in this Agreement (the "First Advance"). Each Lender shall
make its portion of the First Advance available to the Company no later than
3:00 p.m. (New York City time) on the Effective Date in accordance with the
terms set forth in Section 3.01.

 

(b)          On any Business Day during the term of the Reinvestment Period,
subject to the conditions set forth in this Agreement, the Company may request,
and the Lenders shall provide, additional Advances.

 

SECTION 2.03. Advances; Use of Proceeds.

 

(a)          Subject to the satisfaction or waiver of the conditions to the
Purchase of a Portfolio Investment set forth in Section 1.03 as of the related
Trade Date and, with respect to Sections 1.03(3) and (5), on the Settlement
Date, the Lenders will make Advances available to the Company on the related
Settlement Date (or otherwise on the related specified borrowing date if no
Portfolio Investment is being acquired on such date) as provided herein. In the
event that, on the Effective Date, the Company has acquired any Portfolio
Investments under the Sale Agreement that will not settle on the Effective Date,
each Lender shall deposit its pro rata share of the portion of the First Advance
that will be used to pay the cash purchase price of each such Portfolio
Investment in the Collection Account as described above and, upon such deposit,
such amounts so deposited will constitute Advances hereunder; provided that such
amounts may not be transferred from the Collection Account except to pay such
cash purchase price on each related Settlement Date upon satisfaction of the
conditions set forth in this Section 2.03(a) (and will be repaid to the Lenders
if any such settlement does not occur as and to the extent set forth in this
Agreement).

 

(b)          Except as expressly provided herein, the failure of any Lender to
make any Advance required hereunder shall not relieve any other Lender of its
obligations hereunder. If any Lender shall fail to provide any Advance to the
Company required hereunder, then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender's obligations hereunder until all such unsatisfied obligations are
fully paid.

 

 - 22 - 

 

 

(c)          Subject to Section 2.03(e), the Company shall use the proceeds of
the Advances received by it hereunder to purchase the Portfolio Investments
identified in the related Notice of Acquisition or to make advances to the
obligor of Delayed Funding Term Loans in accordance with the underlying
instruments relating thereto, provided that, if the proceeds of an Advance are
deposited in the Collection Account as provided in Section 2.03(e) or Section
3.01 prior to or on the Settlement Date for any Portfolio Investment but the
Company is unable to Purchase such Portfolio Investment on the related
Settlement Date, or if there are proceeds of such Advance remaining after such
Purchase or after deposit pursuant to Section 2.03(e), then, upon written notice
from the Portfolio Manager the Collateral Agent shall apply such proceeds (x) to
purchase Portfolio Investments (including to fund unfunded Delayed Funding Term
Loans) prior to the next date on which funds must be applied pursuant to Section
4.05 or (y) as provided in Section 4.05. The proceeds of the Advances shall not
be used for any other purpose.

 

(d)          With respect to any Advance, the Portfolio Manager shall, on behalf
of the Company, submit a request substantially in the form of Exhibit A to the
Lenders and the Administrative Agent, with a copy to the Collateral Agent and
the Collateral Administrator, not later than 2:00 p.m. New York City time, one
(1) Business Day prior to the Business Day specified as the date on which such
Advance shall be made and, upon receipt of such request, the Lenders shall make
such Advances in accordance with the terms set forth in Section 3.01. Any
requested Advance shall be in an amount such that, after giving effect thereto
and the related purchase (if any) of the applicable Portfolio Investment(s), the
Borrowing Base Test is satisfied.

 

(e)          If the aggregate principal amount of the outstanding Advances is
less than the Minimum Funding Amount on any period start date specified in the
definition of the term Minimum Funding Amount, then the Portfolio Manager (on
behalf of the Company) shall be deemed to have requested an Advance on each such
period start date such that, after the funding thereof, the aggregate principal
amount of the outstanding Advances is equal to the Minimum Funding Amount for
such period start date. Unless an Event of Default shall have occurred and is
continuing or a Market Value Event shall have occurred as of such period start
date, the Lenders shall make a corresponding Advance in accordance with Article
III on each such period start date (or, if either such date is not a Business
Day, the next succeeding Business Day) (with written notice to the Collateral
Agent and Collateral Administrator by the Administrative Agent), such that after
the funding thereof, the aggregate principal amount of the outstanding Advances
is equal to the Minimum Funding Amount for such period start date. Advances
funded pursuant to this Section 2.03(e) shall be deposited into the Collection
Account and shall be available to be applied, as directed by the Portfolio
Manager on behalf of the Company, as provided herein.

 

(f)          If on any Business Day up to and including the second Business Day
prior to the end of the Reinvestment Period, the Company has any outstanding
unfunded obligations to make future advances under any Delayed Funding Term
Loan, then the Portfolio Manager, on behalf of the Company, may request (and, to
the extent the Company has any outstanding unfunded obligations to make future
advances under any Delayed Funding Term Loan on the second Business Day prior to
the end of the Reinvestment Period, the Company shall be deemed to have
requested an Advance on such date), and the Lenders shall, subject to the
satisfaction of Sections 1.03(3) and (5) on the date of such request and the
date of such Advance, make a corresponding Advance on the second Business Day
following such request (with written notice to the Collateral Agent and the
Collateral Administrator by the Administrative Agent) in accordance with Article
III in amount equal to the least of (i) the aggregate amount of all such
unfunded obligations, (ii) the Financing Commitments in excess of the aggregate
principal amount of the outstanding Advances and (iii) an amount such that the
Borrowing Base Test is satisfied after giving effect to such Advance; provided
that with respect to any deemed request for an Advance on the second Business
Day prior to the end of the Reinvestment Period, if the Company provides
evidence to the Administrative Agent that it has cash from other sources that is
available in accordance with the terms of this Agreement to make any such future
advances in respect of any Delayed Funding Term Loan, then the amount of any
such Advance shall be reduced by the amount of such funds. After giving effect
to any Advance under this Section 2.03(f), the Company shall cause the proceeds
of such Advance and cash from other sources that is available in accordance with
the terms of this Agreement in an amount equal to the aggregate amount of all
unfunded obligations remaining in respect of any Delayed Funding Term Loans to
be deposited in the Unfunded Exposure Account.

 

 - 23 - 

 

 

(g)          Without limitation to clause (f) above, the Company shall not
acquire any unfunded commitment under any Delayed Funding Term Loan unless, on a
pro forma basis after giving effect to such purchase, the Borrowing Base Test
and item 5 of the Concentration Limitations will each be satisfied.

 

SECTION 2.04. Other Conditions to Advances. Notwithstanding anything to the
contrary herein, the obligations of the Lenders to make Advances shall not
become effective until the date (the "Effective Date") on which each of the
following conditions is satisfied (or waived by the Administrative Agent in its
sole discretion):

 

(a)          Executed Counterparts. The Administrative Agent (or its counsel)
shall have received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence reasonably
satisfactory to the Administrative Agent (which may include electronic
transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement.

 

(b)          Loan Documents. The Administrative Agent (or its counsel) shall
have received reasonably satisfactory evidence that the Loan Documents have been
executed and are in full force and effect, and that the initial sales and
contributions contemplated by the Sale Agreement and the Master Participation
Agreement shall have been consummated in accordance with the terms thereof.

 

(c)          Opinions. The Administrative Agent (or its counsel) shall have
received one or more reasonably satisfactory written opinions of counsel for the
Company and the Parent, covering such matters relating to the transactions
contemplated hereby and by the other Loan Documents as the Administrative Agent
shall reasonably request (including, without limitation, certain bankruptcy
matters) in writing.

 

(d)          Corporate Documents. The Administrative Agent (or its counsel)
shall have received such certificates of resolutions or other action, incumbency
certificates and/or other certificates of officers of the Company, the Parent
and the Portfolio Manager as the Administrative Agent may reasonably require
evidencing the identity, authority and capacity of each officer thereof or other
Person authorized to act in connection with this Agreement and the other Loan
Documents, and 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 Company, the Parent and the Portfolio Manager and any
other legal matters relating to the Company, the Parent, the Portfolio Manager,
this Agreement or the transactions contemplated hereby, all in form and
substance satisfactory to the Administrative Agent and its counsel.

 

 - 24 - 

 

 

(e)          Payment of Fees, Etc. The Administrative Agent, the Lenders, the
Collateral Agent, the Collateral Administrator and the Securities Intermediary
shall have received all fees and other amounts due and payable by the Company in
connection herewith on or prior to the Effective Date, including the fee payable
pursuant to Section 4.03(e) and, to the extent invoiced at least two (2)
Business Days prior to the Effective Date, reimbursement or payment of all
reasonable and documented out-of-pocket expenses (including legal fees and
expenses; provided that the amount of such legal fees and expenses, the payment
of which is required by this Section 2.04(e), shall not exceed $250,000 and any
such fees and expenses in excess of $250,000 shall not be payable by the
Company, the Portfolio Manager or any of their respective affiliates) required
to be reimbursed or paid by the Company hereunder.

 

(f)          Patriot Act, Etc. To the extent requested by the Administrative
Agent or any Lender, the Administrative Agent or such Lender, as the case may
be, shall have received all documentation and other information required by
regulatory authorities under the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the "PATRIOT Act") and other applicable
"know your customer" and anti-money laundering rules and regulations.

 

(g)          Filings. Copies of proper financing statements, as may be necessary
or, in the opinion of the Administrative Agent, desirable under the UCC of all
appropriate jurisdictions or any comparable law to perfect the security interest
of the Collateral Agent on behalf of the Secured Parties in all Collateral in
which an interest may be pledged hereunder.

 

(h)          Certain Acknowledgements. The Administrative Agent shall have
received (i) UCC searches indicating that there are no effective lien notices or
comparable documents that name the Company as debtor and that are filed in the
jurisdiction in which the Company is organized, (ii) a UCC lien search
indicating that there are no effective lien notices or comparable documents that
name the Parent as debtor which cover any of the Portfolio Investments and (iii)
such other searches that the Administrative Agent deems necessary or
appropriate.

 

(i)          Other Documents. Such other documents as the Administrative Agent
may reasonably require.

 

ARTICLE III
ADDITIONAL TERMS APPLICABLE TO THE FINANCINGS

 

SECTION 3.01. The Advances.

 

(a)          Making the Advances. If the Lenders are required to make an Advance
to the Company as provided in Section 2.03, then each Lender shall make such
Advance on the proposed date thereof by wire transfer of immediately available
funds to the Collateral Agent for deposit to the Collection Account. Each Lender
at its option may make any Advance by causing any domestic or foreign branch or
Affiliate of such Lender to make such Advance, provided that any exercise of
such option shall not affect the obligation of the Company to repay such Advance
in accordance with the terms of this Agreement. Subject to the terms and
conditions set forth herein, the Company may, during the Reinvestment Period,
borrow and prepay Advances. Once drawn, Advances may not be reborrowed except to
the extent set forth in Paragraph 1 of the Transaction Schedule.

 

(b)          Interest on the Advances. The outstanding principal amount of each
Advance shall bear interest (from and including the date on which such Advance
is made to but excluding the Maturity Date or, if earlier, the date on which
such Advance is repaid) at a per annum rate equal to the LIBO Rate for each
Calculation Period in effect plus the Applicable Margin for Advances set forth
on the Transaction Schedule; provided that, following the occurrence and during
the continuance of an Event of Default, all outstanding Advances and any unpaid
interest thereon shall bear interest (from and including the date of such Event
of Default to but excluding the Maturity Date or, if earlier, the date on which
such Advance is repaid) at a per annum rate equal to the LIBO Rate for each
Calculation Period in effect plus the Adjusted Applicable Margin.

 

 - 25 - 

 

 

(c)          Evidence of the Advances. Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Company to such Lender resulting from each Advance made by such Lender,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder. The Administrative Agent shall maintain accounts in
which it shall record (1) the amount of each Advance made hereunder, (2) the
amount of any principal or interest due and payable or to become due and payable
from the Company to each Lender hereunder and (3) the amount of any sum received
by the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof. The entries made in the accounts maintained pursuant to
this paragraph (c) shall be prima facie evidence of the existence and amounts of
the obligations recorded therein, provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Company to repay the Advances in
accordance with the terms of this Agreement; provided further that in the event
of a conflict between the accounts of a Lender and the accounts of the
Administrative Agent, the accounts of the Administrative Agent shall control in
the absence of manifest error.

 

Any Lender may request that Advances made by it be evidenced by a promissory
note. In such event, the Company shall prepare, execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if a
registered note is requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent (such approval not
to be unreasonably withheld, conditioned or delayed). Thereafter, the Advances
evidenced by such promissory note and interest thereon shall at all times be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).

 

(d)          Pro Rata Treatment. Except as otherwise provided herein, all
borrowings of, and payments in respect of, the Advances shall be made on a pro
rata basis by or to the Lenders in accordance with their respective portions of
the Financing Commitments in respect of Advances made or held by them.

 

(e)          Illegality. Notwithstanding any other provision of this Agreement,
if any Lender or the Administrative Agent shall notify the Company that the
adoption of any law, rule or regulation, or any change therein or any change in
the interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof, makes it unlawful, or
any Governmental Authority asserts that it is unlawful, for a Lender or the
Administrative Agent to perform its obligations hereunder to fund or maintain
Advances hereunder, then (1) the obligation of such Lender or the Administrative
Agent hereunder shall immediately be suspended until such time as such Lender or
the Administrative Agent determines (in its sole discretion) that such
performance is again lawful, (2) at the request of the Company, such Lender or
the Administrative Agent, as applicable, shall use reasonable efforts (which
will not require such party to incur a loss, other than immaterial, incidental
expenses), until such time as the Advances are required to be prepaid as
required under clause (3) below, to transfer all of its rights and obligations
under this Agreement to another of its offices, branches or Affiliates with
respect to which such performance would not be unlawful, and (3) if such Lender
or the Administrative Agent is unable to effect a transfer under clause (2),
then any outstanding Advances of such Lender shall be promptly paid in full by
the Company (together with all accrued interest and other amounts owing
hereunder) but not later than the earlier of (x) if the Company requests such
Lender or the Administrative Agent to take the actions set forth in clause (2)
above, 20 calendar days after the date on which such Lender the Administrative
Agent notifies the Company in writing that it is unable to transfer its rights
and obligations under this Agreement as specified in such clause (2) and (y)
such date as shall be mandated by law; provided that, to the extent that and
only for so long as any such adoption or change makes it unlawful for the
Advances to bear interest by reference to the LIBO Rate, then the foregoing
clauses (1) through (3) shall not apply and the Advances shall bear interest
(from and after the last day of the Calculation Period ending immediately after
such adoption or change) at a per annum rate equal to the Base Rate plus the
Applicable Margin for Advances set forth on the Transaction Schedule.

 

 - 26 - 

 

 

(f)          Increased Costs.

 

(i)          If any Change in Law shall:

 

(A) impose, modify or deem applicable any reserve, special deposit, liquidity or
similar requirement (including any compulsory loan requirement, insurance charge
or other assessment) against assets of, deposits with or for the account of, or
credit extended by, any Lender;

 

(B) impose on any Lender or the London interbank market any other condition,
cost or expense (other than Taxes) affecting this Agreement or Advances made by
such Lender; or

 

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

 

and the result of any of the foregoing shall be to increase the cost to such
Lender or the Administrative Agent of making, continuing, converting or
maintaining any Advance or to reduce the amount of any sum received or
receivable by such Lender or the Administrative Agent hereunder (whether of
principal, interest or otherwise), then, upon request by such Lender or the
Administrative Agent, the Company will pay to such Lender or the Administrative
Agent, as the case may be, such additional amount or amounts as will compensate
such Lender or the Administrative Agent, as the case may be, for such additional
costs incurred or reduction suffered.

 

(ii) 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 Advances 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 and liquidity) by an amount deemed by such Lender to be
material (which demand shall be accompanied by a statement setting forth the
basis for such demand), then from time to time the Company will pay to such
Lender such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.

 

(iii) A certificate of a Lender setting forth the amount or amounts necessary to
compensate such Lender or its holding company, as the case may be, as specified
in paragraph (i) or (ii) of this Section 3.01(f) shall be delivered to the
Company and shall be conclusive absent manifest error. The Company shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.

 

 - 27 - 

 

 

(iv)        Failure or delay on the part of any Lender to demand compensation
pursuant to this Section 3.01(f) shall not constitute a waiver of such Lender's
right to demand such compensation; provided that the Company shall not be
required to compensate a Lender pursuant to this Section 3.01(f) for any
increased costs or reductions incurred more than 180 days prior to the date that
such Lender notifies the Company of the Change in Law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 180-day period
referred to above shall be extended to include the period of retroactive effect
thereof.

 

(v)         Each Lender agrees that it will take such commercially reasonable
actions as the Company may reasonably request that will avoid the need to pay,
or reduce the amount of, any increased amounts referred to in this Section
3.01(f); provided that no Lender shall be obligated to take any actions that
would, in the reasonable opinion of such Lender, be disadvantageous to such
Lender (including, without limitation, due to a loss of money). In no event will
the Company be responsible for increased amounts referred to in this Section
3.01(f) which relates to any other entities to which any Lender provides
financing.

 

(vi)        If any Lender (A) provides notice of unlawfulness or requests
compensation under clause (e) above or this clause (f) or (B) defaults in its
obligation to make Advances hereunder, then the Company may, at its sole expense
and effort, upon written notice to such Lender and the Administrative Agent, (i)
prepay the Advances on a pro rata basis in accordance with Section 4.03(c)(i) or
(ii) require such Lender to assign and delegate, without recourse (in accordance
with and subject to the restrictions contained in, and consents required by,
Section 10.06), all of its interests, rights and obligations under this
Agreement and the related transaction documents to an assignee identified by the
Company that shall assume such obligations (whereupon such Lender shall be
obligated to so assign), provided that (x) such Lender shall have received
payment of an amount equal to the outstanding principal of its Advances, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder
through the date of such assignment and (y) a Lender shall not be required to
make any such assignment or delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Company to
require such assignment and delegation cease to apply. No prepayment fee that
may otherwise be due hereunder shall be payable to a defaulting Lender in
connection with any such prepayment or assignment.

 

(g)          No Set-off or counterclaim. Subject to Section 3.03, all payments
to be made hereunder by the Company in respect of the Advances shall be made
without set-off or counterclaim and in such amounts as may be necessary in order
that every such payment (after deduction or withholding for or on account of any
present or future taxes, levies, imposts, duties or other charges of whatever
nature imposed by the jurisdiction in which the Company is organized or any
political subdivision or taxing authority therein or thereof) shall not be less
than the amounts otherwise specified to be paid under this Agreement.

 

SECTION 3.02. Sub-Adviser

 

If the Company or the Portfolio Manager request in writing that the
Administrative Agent consent to an assignment of the obligations of the
Sub-Adviser under the investment sub-advisory agreement between the Parent and
the Sub-Adviser to a Person other than a Permitted Sub-Adviser Successor, the
Administrative Agent shall use commercially reasonable efforts to respond to
such request within ten (10) Business Days following its receipt of such
request. The Administrative Agent shall have no liability for any failure to
respond to any such request.

 

 - 28 - 

 

 

SECTION 3.03. Taxes.

 

(a)          Payments Free of Taxes. All payments to be made hereunder by the
Company in respect of the Advances shall be made without deduction or
withholding for any Taxes, except as required by applicable law (including
FATCA). If any applicable law (as determined in the good faith discretion of the
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by the applicable Withholding Agent shall be increased as necessary so that
after such deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section) the
applicable Lender receives an amount equal to the sum it would have received had
no such deduction or withholding been made.

 

(b)          Payment of Other Taxes by the Company. The Company shall timely pay
to the relevant Governmental Authority in accordance with applicable law, or at
the option of the Administrative Agent timely reimburse it for the payment of,
any Other Taxes.

 

(c)          Indemnification by the Company. The Company shall indemnify each
Lender, within 10 days after demand therefor, for the full amount of any
Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section) payable or paid by such
Lender or required to be withheld or deducted from a payment to such Lender and
any reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified 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 Company by a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

 

(d)          Indemnification by the Lenders. Each Lender shall indemnify the
Administrative Agent, within 10 days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that the
Company has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Company to do so),
(ii) any Taxes attributable to such Lender's failure to comply with the
provisions of 10.06 relating to the maintenance of a Participant Register and
(iii) any Excluded Taxes attributable to such Lender, in each case, that are
payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such 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 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 any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (d).

 

(e)          Evidence of Payments. As soon as practicable after any payment of
Taxes by the Company to a Governmental Authority pursuant to this Section 3.03,
the Company 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.

 

 - 29 - 

 

 

(f)          Status of Secured Parties. (i) Any Secured Party that is entitled
to an exemption from or reduction of withholding Tax with respect to payments
made under any Loan Document shall deliver to the Company and the Administrative
Agent, at the time or times reasonably requested by the Company or the
Administrative Agent, such properly completed and executed documentation
reasonably requested by the Company or the Administrative Agent as will permit
such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if reasonably requested by the Company or
the Administrative Agent, shall deliver such other documentation prescribed by
applicable law or reasonably requested by the Company or the Administrative
Agent as will enable the Company 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 3.03(f)
(ii)(A), (ii)(B) and (ii)(D) 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,

 

(A) any Lender that is a U.S. Person shall deliver to the Company 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 Company or the Administrative Agent), an executed IRS
Form W-9 certifying that such Lender is exempt from U.S. federal backup
withholding tax;

 

(B) any Foreign Lender shall deliver to the Company and the Administrative Agent
(in such number of copies as shall be reasonably 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
Company or the Administrative Agent, but only if the Foreign Lender is legally
entitled to do so), whichever of the following is applicable:

 

(i) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, an executed IRS Form W-8BEN, IRS Form W-8BEN-E
or applicable successor form establishing an exemption from, or reduction of,
U.S. federal withholding Tax pursuant to the "interest" article of such tax
treaty and (y) with respect to any other applicable payments under any Loan
Document, an IRS Form W-8BEN or IRS Form W-8BEN-E or any applicable successor
form establishing an exemption from, or reduction of, U.S. federal withholding
Tax pursuant to the "business profits" or "other income" article of such tax
treaty;

 

(ii) an executed IRS Form W-8ECI;

 

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit C-1 to the effect that such Foreign Lender
is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, is not a
"10 percent shareholder" of the Company within the meaning of Section
881(c)(3)(B) of the Code, and is not a "controlled foreign corporation"
described in Section 881(c)(3)(C) of the Code (a "U.S. Tax Compliance
Certificate") and (y) an executed IRS Form W-8BEN, IRS Form W-8BEN-E or
applicable successor form; or

 

 - 30 - 

 

 

(iv) to the extent a Foreign Lender is not the beneficial owner, an executed IRS
Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E
or applicable successor form, a U.S. Tax Compliance Certificate substantially in
the form of Exhibit C-2 or Exhibit C-3, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate substantially in the form
of Exhibit C-4 on behalf of each such direct and indirect partner;

 

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Company and the Administrative Agent (in such number of copies as
shall be reasonably 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 Company or the Administrative
Agent), executed originals of any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit the Company or the Administrative Agent
to determine the withholding or deduction required to be made; and

 

(D) if a payment made to a Lender under any Loan Document would be subject to
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
Company and the Administrative Agent at the time or times prescribed by law and
at such time or times reasonably requested by the Company or the Administrative
Agent such documentation prescribed by applicable law (including as prescribed
by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Company or the Administrative Agent as may be
necessary for the Company and the Administrative Agent to comply with their
obligations under FATCA and to determine that such Lender has complied with such
Lender's obligations under FATCA or to determine the amount to deduct and
withhold from such payment. Solely for purposes of this clause (D), "FATCA"
shall include any amendments made to FATCA after the date of this Agreement.

 

Each Lender 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 Company and the Administrative
Agent in writing of its legal inability to do so.

 

(E) The Administrative Agent shall deliver to the Company an electronic copy of
a duly completed and executed IRS Form W-9 upon becoming a party under this
Agreement. The Administrative Agent represents to the Company that it is a "U.S.
person" and a "financial institution" within the meaning of Treasury Regulations
Section 1.1441-1 and a "U.S. financial institution" within the meaning of
Treasury Regulations Section 1.1471-3T and that it will comply with its
obligations to withhold under Section 1441 and FATCA.

 

(g)          Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 3.03 (including by
the payment of additional amounts pursuant to this Section 3.03), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (g) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (g), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (g) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the indemnification
payments or additional amounts giving rise to such refund had never been paid.
This paragraph shall not be construed to require any indemnified party to make
available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to the indemnifying party or any other Person.

 

 - 31 - 

 

 

(h)          Survival. Each party's obligations under this Section 3.03 shall
survive the resignation or replacement of the Administrative Agent or any
assignment of rights by, or the replacement of, a Lender, the termination of the
Advances, and the repayment, satisfaction or discharge of all obligations under
any Loan Document.

 

ARTICLE IV
COLLECTIONS AND PAYMENTS

 

SECTION 4.01. Interest Proceeds. The Company shall notify the obligor with
respect to each Portfolio Investment to remit all amounts that constitute
Interest Proceeds to the Collection Account. To the extent Interest Proceeds are
received other than by deposit into the Collection Account, the Company shall
cause all Interest Proceeds on the Portfolio Investments to be deposited in the
Collection Account or remitted to the Collateral Agent, and the Collateral Agent
shall credit (or cause to be credited) to the Collection Account all Interest
Proceeds received by it immediately upon receipt thereof in accordance with the
written direction of the Portfolio Manager.

 

Interest Proceeds shall be retained in the Collection Account and invested (and
reinvested) at the written direction of the Company (or the Portfolio Manager on
its behalf) delivered to the Collateral Agent in dollar-denominated high-grade
investments selected by the Portfolio Manager (unless an Event of Default has
occurred and is continuing or a Market Value Event has occurred, in which case,
selected by the Administrative Agent) ("Eligible Investments"). Eligible
Investments shall mature no later than the end of the then-current Calculation
Period.

 

Interest Proceeds on deposit in the Collection Account shall be withdrawn by the
Collateral Agent at the written direction of the Company or the Portfolio
Manager on its behalf (subject to Section 8.01(b)) and applied (i) to make
payments in accordance with this Agreement or (ii) to make Permitted
Distributions or Permitted Tax Distributions in accordance with Section 6.02(t)
and the definition of such term.

 

SECTION 4.02. Principal Proceeds. The Company shall notify the obligor with
respect to each Portfolio Investment to remit all amounts that constitute
Principal Proceeds to the Collection Account. To the extent Principal Proceeds
are received other than by deposit into the Collection Account, the Company
shall cause all Principal Proceeds received on the Portfolio Investments to be
deposited in the Collection Account or remitted to the Collateral Agent, and the
Collateral Agent shall credit (or cause to be credited) to the Collection
Account all Principal Proceeds received by it immediately upon receipt thereof
in accordance with the written direction of the Portfolio Manager.

 

All Principal Proceeds shall be retained in the Collection Account and invested
at the written direction of the Administrative Agent in overnight Eligible
Investments selected by the Portfolio Manager (unless an Event of Default has
occurred and is continuing or a Market Value Event has occurred, in which case,
selected by the Administrative Agent). All investment income on such Eligible
Investments shall constitute Interest Proceeds.

 

 - 32 - 

 

 

Principal Proceeds on deposit in the Collection Account shall be withdrawn by
the Collateral Agent at the written direction of the Company or the Portfolio
Manager on its behalf (subject to Section 8.01(b)) and applied (i) to make
payments in accordance with this Agreement, (ii) towards the purchase price of
Portfolio Investments purchased in accordance with this Agreement or (iii) to be
deposited into the Unfunded Exposure Account in accordance with this Agreement,
in each case with prior notice to the Administrative Agent. For the avoidance of
doubt, Principal Proceeds received in connection with the sale of any Portfolio
Investment pursuant to Section 1.04 following a Market Value Event shall be used
to prepay Advances as set forth therein at the written direction of the
Administrative Agent.

 

SECTION 4.03. Principal and Interest Payments; Prepayments; Commitment Fee.

 

(a) The Company shall pay the unpaid principal amount of the Advances (together
with accrued interest thereon) to the Administrative Agent for the account of
each Lender on the Maturity Date in accordance with the Priority of Payments and
any and all cash in the Accounts shall be applied to the satisfaction of the
Secured Obligations on the Maturity Date and on each Additional Distribution
Date in accordance with the Priority of Payments.

 

(b) Accrued interest on the Advances shall be payable in arrears on each
Interest Payment Date, each Additional Distribution Date and on the Maturity
Date in accordance with the Priority of Payments; provided that (i) interest
accrued pursuant to the proviso to Section 3.01(b) shall be payable on demand
and (ii) in the event of any repayment or prepayment of any Advances, accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment. "Interest Payment Date" means the 5th Business
Day after the last day of each Calculation Period.

 

(c)

 

(i)          Subject to the requirements of this Section 4.03(c), the Company
shall have the right from time to time to prepay outstanding Advances in whole
or in part (A) on any Business Day that JPMorgan Chase Bank, National
Association ceases to act as Administrative Agent or JPMorgan Chase Bank,
National Associate or its Affiliate ceases to be the sole Required Lender, (B)
in connection with a Market Value Cure, (C) subject to the payment of the
premium described in clause (ii) below, up to but not more than three times
during any Calculation Period, (D) upon the occurrence of a Repayment Event or
(E) following (1) notice from a Lender of unlawfulness or a request from a
Lender of compensation, in each case, as provided in Section 3.01(e) or (f) or
(2) a default by a Lender in its obligation to make Advances hereunder; provided
that, the Company may not prepay any outstanding Advances pursuant to Section
4.03(c)(i)(C) during the Non-Call Period in an amount that would cause the
aggregate outstanding principal amount of the Advances to be below the Minimum
Funding Amount; provided, further, that the Company may not prepay outstanding
Advances pursuant to Section 4.03(c)(i)(E)(2) if such default is not continuing
on the date of prepayment specified by the Company pursuant to the immediately
succeeding sentence. The Company shall notify the Administrative Agent, the
Collateral Agent and the Collateral Administrator by electronic mail of an
executed document (attached as a .pdf or similar file) of any prepayment
pursuant to Section 4.03(c)(i)(A), Section 4.03(c)(i)(C), Section 4.03(c)(i)(D)
of Section 4.03(c)(i)(E) not later than 2:00 p.m., New York City time, two (2)
Business Days before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
the Advances to be prepaid. Promptly following receipt of any such notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Except in
connection with a Market Value Cure, each partial prepayment of outstanding
Advances shall be in an amount not less than U.S.$2,000,000 (or, if less, the
remaining outstanding principal amount of an Advance). Prepayments shall be
accompanied by accrued and unpaid interest.

 

 - 33 - 

 

 

(ii)         Each prepayment or commitment reduction pursuant to Section
4.03(c)(i)(C) and Section 4.07(a) that is made after the Non-Call Period and
during the Reinvestment Period, whether in full or in part, shall be accompanied
by a premium equal to 1% of the principal amount of such prepayment or
commitment reduction; provided that no such premium shall be payable with
respect to any prepayment (or portion thereof) that does not exceed the Excess
Funded Amount. No other prepayment or repayment of Secured Obligations or any
commitment reduction hereunder shall be subject to any premium.

 

(d) The Company agrees to pay to the Administrative Agent, for the account of
each Lender (other than a Lender that has defaulted in its obligation to make
Advances hereunder), a commitment fee in accordance with the Priority of
Payments which shall accrue at 1.00% per annum (or, during the Ramp-Up Period,
0.50% per annum) on the average daily unused amount of the Financing Commitment
of such Lender during the period from and including the date of this Agreement
to but excluding the last day of the Reinvestment Period. Accrued commitment
fees shall be payable in arrears on each Interest Payment Date, and on the date
on which the Financing Commitments terminate. 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).

 

(e) The Company agrees to pay the Administrative Agent on the date of this
Agreement, for the ratable account of each Lender, an upfront fee on the date
hereof in an aggregate amount equal to U.S.$1,500,000. Once paid, such fees or
any part thereof shall not be refundable under any circumstances.

 

(f) Without limiting Section 4.03(c), the Company shall have the obligation from
time to time to prepay outstanding Advances in whole or in part on any date with
proceeds from sales of Portfolio Investments directed by the Administrative
Agent pursuant to Section 1.04. Prepayments shall be accompanied by accrued and
unpaid interest.

 

SECTION 4.04. Market Value Cure Account

 

(a)          The Company shall cause all cash received by it in connection with
an Market Value Cure to be deposited in the MV Cure Account or remitted to the
Collateral Agent, and the Collateral Agent shall credit to the MV Cure Account
such amounts received by it (and identified in writing as such) immediately upon
receipt thereof. Prior to the Maturity Date, all cash amounts in the MV Cure
Account shall be invested in overnight Eligible Investments at the written
direction of the Administrative Agent (as directed by the Required Lenders). All
amounts contributed to the Company by Parent in connection with an Market Value
Cure shall be paid free and clear of any right of chargeback or other equitable
claim.

 

 - 34 - 

 

 

(b)          Amounts on deposit in the MV Cure Account may be withdrawn by the
Collateral Agent at the written direction of the Company or the Portfolio
Manager on its behalf (subject to Section 8.01(b)) and remitted to the Company
with three (3) Business Days' prior notice to the Administrative Agent (or,
following the occurrence and during the continuance of an Event of Default and
the declaration of the Advances then outstanding to be due and payable pursuant
to Article VII or following the occurrence of a Market Value Event, to the
Lenders for prepayment of Advances and reduction of Financing Commitment);
provided that the Company may not direct any withdrawal from the MV Cure Account
if the Borrowing Base Test is not satisfied (or would not be satisfied after
such withdrawal); provided further that the Administrative Agent confirms in
writing (which may be by email) to the Collateral Agent that the conditions to a
withdrawal from the MV Cure Account set forth herein are satisfied; provided,
further that if the Administrative Agent does not notify the Collateral Agent in
writing (which may be by email) that it does or does not confirm that such
conditions are satisfied within two (2) Business Days following delivery of
written notice (which may be by email) of a proposed withdrawal from the MV Cure
Account requesting such confirmation and addressed to each of the employees of
the Administrative Agent identified on Schedule 2 hereto (as modified by the
Administrative Agent from time to time in writing), the Administrative Agent
will be deemed to have confirmed that such conditions are satisfied. Upon the
receipt of the Administrative Agent's confirmation in accordance with the
immediately preceding sentence, the Collateral Agent shall cause the amounts
specified in the direction of the Company or the Portfolio Manager on its behalf
to be withdrawn and remitted as specified in such direction into the accounts
designated by the Company or the Portfolio Manager on its behalf on the next
Agent Business Day after receipt of the Administrative Agent's confirmation in
accordance with the immediately preceding sentence. Neither the Collateral Agent
nor the Securities Intermediary shall have any obligation to determine whether
the Borrowing Base Test is satisfied.

 

SECTION 4.05.   Priority of Payments On (w) each Interest Payment Date, (x) the
Maturity Date, (y) any date after the occurrence of a Market Value Event and (z)
any date after the Maturity Date following an Event of Default and the
declaration of the Secured Obligations as due and payable (each date set forth
in clauses (y) and (z) above, an "Additional Distribution Date"), the Collateral
Agent shall distribute all amounts in the Collection Account in the following
order of priority (the "Priority of Payments"):

 

(a)          Using Interest Proceeds to pay (i) first, amounts due or payable to
the Collateral Agent, the Collateral Administrator and the Securities
Intermediary hereunder (including fees, out-of-pocket expenses and indemnities
and fees and expenses of counsel), (ii) any other accrued and unpaid fees and
out-of-pocket expenses (other than the commitment fee payable to the Lenders,
but including Lender indemnities) due hereunder and under the Sale Agreement and
the Master Participation Agreement (other than such amounts payable to the
Portfolio Manager) and (iii) any accrued and unpaid fees and out-of-pocket
expenses (including indemnities) payable to the Portfolio Manager hereunder and
under the Portfolio Management Agreement, up to a maximum amount under this
clause (a) of U.S.$100,000 on each Interest Payment Date and U.S.$250,000 on
each Additional Distribution Date and the Maturity Date (the "Expense Cap
Amount") (in the case of any Additional Distribution Date or the Maturity Date,
after giving effect to all payments of such amounts on any other Additional
Distribution Date or Interest Payment Date occurring in the same calendar
quarter).

 

(b)          Using Interest Proceeds to pay interest due in respect of the
Advances and commitment fees payable to the Lenders (pro rata based on amounts
due);

 

(c)          Using Interest Proceeds or Principal Proceeds to pay (i) on each
Interest Payment Date, all prepayments of the Advances permitted or required
under this Agreement (including any applicable premium) and (ii) on the Maturity
Date (and, if applicable, any Additional Distribution Date), principal of the
Advances until the Advances are paid in full;

 

(d)          Prior to the end of the Reinvestment Period, at the direction of
the Portfolio Manager, to fund the Unfunded Exposure Account using Principal
Proceeds up to the Unfunded Exposure Amounts;

 

(e)          To pay all amounts set forth in clause (a) above not paid due to
the limitation set forth therein using Interest Proceeds and, on the Maturity
Date and any Additional Distribution Date, Principal Proceeds;

 

 - 35 - 

 

 

(f)          To make any Permitted Distributions using Interest Proceeds or
Permitted Tax Distributions using Excess Interest Proceeds each as directed
pursuant to this Agreement; and

 

(g)          (i) On any Interest Payment Date other than the Maturity Date, to
deposit any remaining Principal Proceeds into the Collection Account as
Principal Proceeds and any remaining Interest Proceeds into the Collection
Account as Interest Proceeds and (ii) on the Maturity Date and any Additional
Distribution Date, any remaining amounts to the Company.

 

SECTION 4.06. Payments Generally. All payments to the Lenders or the
Administrative Agent shall be made to the Administrative Agent at the account
designated in writing to the Company and the Collateral Agent for further
distribution by the Administrative Agent (if applicable). The Administrative
Agent shall give written notice to the Collateral Agent and the Collateral
Administrator (on which the Collateral Agent and the Collateral Administrator
may conclusively rely) and the Portfolio Manager of the calculation of amounts
payable to the Lenders in respect of the Advances and the amounts payable to the
Portfolio Manager. At least two (2) Business Days prior to each Interest Payment
Date, the Administrative Agent shall deliver an invoice to the Portfolio
Manager, the Collateral Agent and the Collateral Administrator in respect of the
interest due on such Interest Payment Date. All payments not made to the
Administrative Agent for distribution to the Lenders shall be made as directed
in writing by the Administrative Agent. Subject to Section 3.03 hereof, all
payments by the Company hereunder shall be made without setoff or counterclaim.
All payments hereunder shall be made in U.S. dollars. All interest hereunder
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).

 

SECTION 4.07. Termination or Reduction of Financing Commitments.

 

(a) After the Non-Call Period, the Company shall be entitled at its option,
subject to the payment of the premium described in Section 4.03(c)(ii), and upon
three (3) Business Days' prior written notice to the Administrative Agent (with
a copy to the Collateral Agent and the Collateral Administrator) to either (i)
terminate the Financing Commitments in whole upon payment in full of all
Advances, all accrued and unpaid interest, all applicable premium and all other
Secured Obligations (other than unmatured contingent indemnification and
reimbursement obligations) or (ii) reduce in part the portion of the Financing
Commitments that exceeds the sum of the outstanding Advances. In addition, the
Financing Commitments shall be reduced by the amount of any prepayment of
Advances pursuant to Section 4.03(c)(i)(C) that exceeds the Excess Funded
Amount.

 

(b) If (1) JPMorgan Chase Bank, National Association ceases to act as
Administrative Agent or JPMorgan Chase Bank, National Associate or its Affiliate
ceases to be the sole Required Lender or (2) a Lender (x) has provided notice of
unlawfulness or a request for compensation, in each case, as provided in Section
3.01(e) or (f) or (y) has defaulted in its obligation to make Advances
hereunder, the Company shall be entitled at its option, upon three (3) Business
Days' prior written notice to the Administrative Agent (with a copy to the
Collateral Agent and the Collateral Administrator) to either (i) terminate the
Financing Commitments in whole upon payment in full of all Advances, all accrued
and unpaid interest, all applicable premium and all other Secured Obligations
(other than unmatured contingent indemnification and reimbursement obligations)
or (ii) reduce in part the portion of the Financing Commitments that exceeds the
sum of the outstanding Advances.

 

(c) The Financing Commitments shall be automatically reduced on the date of any
prepayment made in accordance with the definition of "Market Value Cure" in an
amount equal to the amount of such prepayment.

 

 - 36 - 

 

 

(d) The Financing Commitments shall be irrevocably reduced by all amounts that
are used to prepay or repay Advances following the occurrence of a Market Value
Event or an Event of Default.

 

(e) All unused Financing Commitments as of the last day of the Reinvestment
Period shall automatically be terminated.

 

(f) The Financing Commitments shall be irrevocably reduced by the amount of any
repayment or prepayment of Advances following the last day of the Reinvestment
Period.

 

Notwithstanding anything else in this Section 4.07 to the contrary, each
reduction of Financing Commitments pursuant to this Section 4.07 shall be deemed
to apply, first, to the portion of the Financing Commitments that may not be
reborrowed until all such Financing Commitments have been reduced to zero and,
second, to the portion of the Financing Commitments that may be reborrowed
pursuant to Section 3.01(a) until all such Financing Commitments have been
reduced to zero.

 

ARTICLE V
[RESERVED]

 

SECTION 5.01. [Reserved]

 

ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS

 

SECTION 6.01. Representations and Warranties. The Company (and, with respect to
clauses (a) through (e), (l), (o), (t) through (w) and (aa), the Portfolio
Manager) represents to the other parties hereto solely with respect to itself
that as of the date hereof and each Trade Date (or as of such other date as
maybe expressly set forth below):

 

(a)          it is duly organized or incorporated, as the case may be, and
validly existing under the laws of the jurisdiction of its organization or
incorporation and has all requisite power and authority to execute, deliver and
perform this Agreement and each other Loan Document to which it is or may become
a party and to consummate the transactions herein and therein contemplated;

 

(b)          the execution, delivery and performance of this Agreement and each
such other Loan Document, and the consummation of the transactions contemplated
herein and therein have been duly authorized by it and this Agreement and each
other Loan Document to which it is or may become a party constitutes its legal,
valid and binding obligation enforceable against it in accordance with its terms
(subject to (A) bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally and (B) equitable
limitations on the availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law);

 

(c)          the execution, delivery and performance of this Agreement and each
other Loan Document to which it is or may become a party and the consummation of
such transactions do not conflict with the provisions of its governing
instruments and will not violate in any material way any provisions of
Applicable Law or regulation or any applicable order of any court or regulatory
body and will not result in the material breach of, or constitute a default, or
require any consent, under any material agreement, instrument or document to
which it is a party or by which it or any of its property may be bound or
affected;

 

(d)          it is not subject to any Adverse Proceeding;

 

 - 37 - 

 

 

(e)          it has obtained all consents and authorizations (including all
required consents and authorizations of any Governmental Authority) that are
necessary or advisable to be obtained by it in connection with the execution,
delivery and performance of this Agreement and each other Loan Document to which
it is or may become a party and each such consent and authorization is in full
force and effect except where the failure to do so would not reasonably be
expected to have a Material Adverse Effect;

 

(f)          it is not required to register as an "investment company" as
defined in the Investment Company Act of 1940, as amended;

 

(g)          it has not issued any securities that are or are required to be
registered under the Securities Act of 1933, as amended, and it is not a
reporting company under the Securities Exchange Act of 1934, as amended;

 

(h)          the Company has no Indebtedness other than (i) Indebtedness
incurred under the terms of the Loan Documents and (ii) Indebtedness incurred
pursuant to certain ordinary business expenses arising pursuant to the
transactions contemplated by this Agreement and the other Loan Documents;

 

(i)          (x) it does not have underlying assets which constitute "plan
assets" within the Plan Asset Rules; and (y) neither it nor any ERISA Affiliate
has within the last six years sponsored, maintained, contributed to, or been
required to contribute to and does not have any liability with respect to any
Plan;

 

(j)          as of the date of this Agreement it is, and after giving effect to
any Advance it will be, Solvent and it is not entering into this Agreement or
any other Loan Document or consummating any transaction contemplated hereby or
thereby with any intent to hinder, delay or defraud any of its creditors;

 

(k)          it is not in default under any other contract to which it is a
party except where such default would not reasonably be expected to have a
Material Adverse Effect;

 

(l)          it has complied with all Applicable Laws, judgments, agreements
with governmental authorities, decrees and orders with respect to its business
and properties and the Portfolio, except where noncompliance would not
reasonably be expected to have a Material Adverse Effect;

 

(m)          it does not have any Subsidiaries or own any Investments in any
Person other than the Portfolio Investments or Investments (i) constituting
Eligible Investments (as measured at their time of acquisition), (ii) acquired
by the Company with the approval of the Administrative Agent, or (iii) those the
Company shall have acquired or received as a distribution in connection with a
workout, bankruptcy, foreclosure, restructuring or similar process or proceeding
involving a Portfolio Investment or any issuer thereof;

 

(n) (x) it has disclosed to the Administrative Agent all agreements, instruments
and corporate or other restrictions to which it is subject, and all other
matters actually known to it that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and (y) no
information (other than projections, forward-looking information, general
economic data, industry information or information relating to third parties)
heretofore furnished by or on behalf of the Company in writing to the
Administrative Agent or any Lender in connection with this Agreement or any
transaction contemplated hereby (after taking into account all updates,
modifications and supplements to such information) contains (or, to the extent
any such information was furnished by a third party, to the Company's knowledge
contains), when taken as a whole, as of its delivery date, any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;

 

 - 38 - 

 

 

(o)          all of the conditions to the acquisition of the Portfolio
Investments specified in Section 1.03 have been satisfied or waived;

 

(p)          the Company has timely filed all Tax returns required by Applicable
Law to have been filed by it; all such Tax returns are true and correct in all
material respects; and the Company has paid or withheld (as applicable) all
Taxes owing or required to be withheld by it (if any), except any such Taxes
which are being contested in good faith by appropriate proceedings and (i) for
which adequate reserves shall have been set aside in accordance with GAAP on its
books and records and (ii) in the case of a Tax which has or may become a Lien
against any of the Collateral, such contest proceedings conclusively operate to
stay the sale of any portion of the Collateral to satisfy such Taxes;

 

(q)          the Company is and will be treated as a disregarded entity or
partnership for U.S. federal income tax purposes;

 

(r)          the Company is and will be wholly owned by the Parent, which is a
U.S. Person;

 

(s)          prior to the date hereof, the Company has not engaged in any
business operations or activities other than as an ownership entity for
Portfolio Investments and similar loan or debt obligations and activities
incidental thereto;

 

(t)          neither it nor any of its Affiliates is (i) a country, territory,
organization, person or entity named on an Office of Foreign Asset Control
(OFAC) list; (ii) a Person that resides or has a place of business in a country
or territory named on such lists or which is designated as a "Non-Cooperative
Jurisdiction" by the Financial Action Task Force on Money Laundering, or whose
subscription funds are transferred from or through such a jurisdiction; (iii) a
"Foreign Shell Bank" within the meaning of the PATRIOT Act, i.e., a foreign bank
that does not have a physical presence in any country and that is not affiliated
with a bank that has a physical presence and an acceptable level of regulation
and supervision; or (iv) a person or entity that resides in or is organized
under the laws of a jurisdiction designated by the United States Secretary of
the Treasury under Sections 311 or 312 of the PATRIOT Act as warranting special
measures due to money laundering concerns. It is in compliance with all
applicable OFAC rules and regulations and also in compliance with all applicable
provisions of the PATRIOT Act;

 

(u)          the Company has implemented and maintains in effect policies and
procedures designed to ensure compliance by the Company, its agents and their
respective directors, managers, officers and employees (as applicable) with
Anti-Corruption Laws and applicable Sanctions, and the Company and its officers
and, to its knowledge, its directors, members and agents are in compliance with
Anti-Corruption Laws and applicable Sanctions in all material respects and are
not knowingly engaged in any activity that would reasonably be expected to
result in the Company being designated as a Sanctioned Person. None of (i) the
Company or its officers or (ii) to the knowledge of the Company, any director,
manager or agent of the Company that will act in any capacity in connection with
or benefit from the credit facility established hereby, is a Sanctioned Person;

 

 - 39 - 

 

 

(v)         the Loan Documents represent all of the material agreements between
the Portfolio Manager and the Parent, on the one hand, and the Company, on the
other. The Company has good and marketable title to all Portfolio Investments
and other Collateral free of any Liens (other than Liens in favor of the Secured
Parties pursuant to the Loan Documents, Permitted Liens and inchoate liens
arising by operation of law) and no effective financing statement (other than
with respect to Permitted Liens) or other instrument similar in effect naming or
purportedly naming the Company as debtor and covering all or any part of the
Collateral is on file in any recording office, except such as may have been
filed in favor of the Collateral Agent as "Secured Party" pursuant hereto, as
necessary or advisable in connection with the Sale Agreement or which has been
terminated;

 

(w)          the Company is not relying on any advice (whether written or oral)
of any Lender, the Administrative Agent or any of their Affiliates in connection
with this Agreement, the other Loan Documents or the transactions contemplated
hereby or thereby and the Company has its own advisors in connection therewith;

 

(x)          there are no judgments for Taxes with respect to the Company and no
claim is being asserted with respect to the Taxes of the Company except to the
extent that any such claim is being contested in compliance with clause (p)
above;

 

(y)          upon the making of each Advance, the Collateral Agent, for the
benefit of the Secured Parties, will have acquired a perfected, first priority
and valid security interest (except, as to priority, for any Permitted Liens) in
the Collateral acquired with the proceeds of such Advance, free and clear of any
adverse claim (other than Permitted Liens) or restrictions on transferability,
to the extent (as to perfection and priority) that a security interest in said
Collateral may be perfected under the applicable UCC;

 

(z)          the Parent has elected to be treated a business development
corporation for purposes of the Investment Company Act of 1940, as amended;

 

(aa)         the Portfolio Manager is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended;

 

(bb)         no ERISA Event has occurred; and

 

(cc)         all proceeds of the Advances will be used by the Company only in
accordance with the provisions of this Agreement. No part of the proceeds of any
Advance will be used by the Company to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying Margin Stock.

 

SECTION 6.02. Covenants of the Company and the Portfolio Manager. The Company
(and, with respect to clauses (e), (g)(C), (k), (n), (o) and (gg), the Portfolio
Manager):

 

(a)          shall at all times: (i) maintain at least one independent manager
or director (who is in the business of serving as an independent manager or
director); (ii) maintain its own separate books and records and bank accounts;
(iii) hold itself out to the public and all other Persons as a legal entity
separate from any other Person; (iv) have a board of managers separate from that
of any other Person; (v) file its own Tax returns, except to the extent that the
Company is treated as a "disregarded entity" for Tax purposes and is not
required to file any Tax returns under Applicable Law, and pay any Taxes so
required to be paid under Applicable Law, except for those Taxes being contested
in good faith by appropriate proceedings and in respect of which the Company has
established proper reserves on its books in accordance with GAAP; (vi) not
commingle its assets with assets of any other Person; (vii) conduct its business
in its own name and comply with all organizational formalities to maintain its
separate existence; (viii) maintain separate financial statements; (ix) pay its
own liabilities only out of its own funds; (x) maintain an arm's length
relationship with the Parent and each of its other Affiliates; (xi) not hold out
its credit or assets as being available to satisfy the obligations of others;
(xii) allocate fairly and reasonably any overhead expenses that are shared with
an Affiliate, including for shared office space; (xiii) use separate stationery,
invoices and checks; (xiv) except as expressly permitted by this Agreement, not
pledge its assets as security for the obligations of any other Person; (xv)
correct any known misunderstanding regarding its separate identity; (xvi)
maintain adequate capital in light of its contemplated business purpose,
transactions and liabilities and pay its operating expenses and liabilities from
its own assets; (xvii) not acquire the obligations or any securities of its
Affiliates; (xviii) cause the managers, officers, agents and other
representatives of the Company to act at all times with respect to the Company
consistently and in furtherance of the foregoing and in the best interests of
the Company; and (xix) maintain at least one special member, who, upon the
dissolution of the sole member or the withdrawal or the disassociation of the
sole member from the Company, shall immediately become the member of the Company
in accordance with its organizational documents.

 

 - 40 - 

 

 

(b)          shall not (i) engage, directly or indirectly, in any business,
other than the actions required or permitted to be performed under the preceding
clause (a), including, other than with respect to any warrants received in
connection with a Portfolio Investment, controlling the decisions or actions
respecting the daily business or affairs of any other Person except as otherwise
permitted hereunder (which, for the avoidance of doubt, shall not prohibit the
Company from taking, or refraining to take, any action under or with respect to
a Portfolio Investment); (ii) fail to be Solvent; (iii) release, sell, transfer,
convey or assign any Portfolio Investment unless in accordance with the Loan
Documents; (iv) except for contributions of cash or assets to the Company or
capital distributions not prohibited under the terms and conditions of this
Agreement and properly reflected on the books and records of the Company, enter
into any transaction with an Affiliate of the Company except on commercially
reasonable terms similar to those available to unaffiliated parties in an
arm's-length transaction; (v) identify itself as a department or division of any
other Person; or (vi) own any asset or property other than the Collateral and
the related assets and incidental personal property necessary for the ownership
or operation of these assets.

 

(c)          shall take all actions consistent with and shall not take any
action contrary to the "Facts and Assumptions" sections in the opinions of
counsel to the Borrower, dated the date hereof, relating to certain true sale
and non-consolidation matters;

 

(d)          shall not create, incur, assume or suffer to exist any Indebtedness
other than (i) Indebtedness incurred under the terms of the Loan Documents and
(ii) Indebtedness incurred pursuant to certain ordinary business expenses
arising pursuant to the transactions contemplated by this Agreement and the
other Loan Documents;

 

(e)          shall comply with all Anti-Corruption Laws and applicable Sanctions
and shall maintain in effect and enforce policies and procedures designed to
ensure compliance by the Company and its directors, managers, officers and
agents with Anti-Corruption Laws and applicable Sanctions;

 

(f)          shall not, without the prior written consent of the Administrative
Agent to the extent such consent is required therein, amend any of its
constituent documents or any document to which it is a party in any manner that
would reasonably be expected to adversely affect the Lenders in any material
respect;

 

(g)          shall not (A) permit the validity or effectiveness of this
Agreement or any grant hereunder to be impaired, or permit the Lien of this
Agreement to be amended, hypothecated, subordinated, terminated or discharged,
or permit any Person to be released from any covenants or obligations with
respect to this Agreement or the Advances, except as may be expressly permitted
hereby, (B) permit any Lien (including any preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
or otherwise, other than the lien of this Agreement) to be created on or extend
to or otherwise arise upon or burden the Collateral or any part thereof, any
interest therein or the proceeds thereof, in each case, other than Permitted
Liens, or (C) take any action that would cause the Lien of this Agreement not to
constitute a valid perfected security interest in the Collateral that is of
first priority, free of any adverse claim or the legal equivalent thereof, as
applicable, except as may be expressly permitted hereby (or in connection with a
disposition of Collateral required hereby);

 

 - 41 - 

 

 

(h)          shall not, without the prior consent of the Administrative Agent
(acting at the direction of the Required Lenders), which consent may be withheld
in the sole and absolute discretion of the Required Lenders, enter into any
hedge agreement;

 

(i)          shall not change its name, identity or corporate structure in any
manner that would make any financing statement or continuation statement filed
by the Company (or by the Collateral Agent on behalf of the Company) in
accordance with subsection (a) above materially misleading or change its
jurisdiction of organization, unless the Company shall have given the
Administrative Agent and the Collateral Agent at least 30 days prior written
notice thereof, and shall promptly file, or authorize the filing of, appropriate
amendments to all previously filed financing statements and continuation
statements (and shall provide a copy of such amendments to the Collateral Agent
and Administrative Agent together with written confirmation to the effect that
all appropriate amendments or other documents in respect of previously filed
statements have been filed);

 

(j)          shall do or cause to be done all things reasonably necessary to (i)
preserve and keep in full force and effect its existence as a limited liability
company and take all reasonable action to maintain its rights, franchises,
licenses and permits material to its business in the jurisdiction of its
formation and (ii) qualify and remain qualified as a limited liability company
in good standing in each jurisdiction where such qualification is material to
its business;

 

(k)          shall comply with all Applicable Law (whether statutory, regulatory
or otherwise), except where the failure to do so, individually or in the
aggregate, would not reasonably be expected to result in a Material Adverse
Effect;

 

(l)          shall not merge into or consolidate with any Person or dissolve,
terminate or liquidate in whole or in part, in each case, without the prior
written consent of the Administrative Agent;

 

(m)          except for Investments permitted by Section 6.02(u)(C) and without
the prior written consent of the Administrative Agent, shall not form, or cause
to be formed, any Subsidiaries; or make or suffer to exist any loans or advances
to, or extend any credit to, or make any investments (by way of transfer of
property, contributions to capital, purchase of stock or securities or evidences
of indebtedness, acquisition of the business or assets, or otherwise) in, any
Affiliate or any other Person except investments as otherwise permitted herein
and pursuant to the other Loan Documents;

 

(n)          shall ensure that (i) its affairs are conducted so that its
underlying assets do not constitute "plan assets" within the meaning of the Plan
Asset Rules, and (ii) neither it nor any ERISA Affiliate sponsors, maintains,
contributes to or is required to contribute to or has any liability with respect
to any Plan;

 

(o)          except for the security interest granted hereunder and as otherwise
permitted hereunder, shall not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien on the
Collateral or any interest therein (other than Liens in favor of the Secured
Parties pursuant to the Loan Documents and Permitted Liens), and the Company
shall defend the right, title, and interest of the Collateral Agent (for the
benefit of the Secured Parties) and the Lenders in and to the Collateral against
all claims of third parties claiming through or under the Company (other than
Liens in favor of the Secured Parties pursuant to the Loan Documents and
Permitted Liens);

 

 - 42 - 

 

 

(p)          shall promptly furnish to the Administrative Agent, and the
Administrative Agent shall furnish to the Lenders, copies of the following
financial statements, reports and information with respect to the Parent and it
consolidated Subsidiaries (in each case, to the extent prepared by the Parent): 
(i) as soon as available, but in any event within 120 days after the end of each
fiscal year of the Parent, a copy of the audited consolidated balance sheet of
the Parent and its consolidated Subsidiaries (which shall include an indication
of the assets owned by the Company) as at the end of such year, the related
consolidated statements of income for such year and the related consolidated
statements of changes in net assets and of cash flows for such year, setting
forth in each case in comparative form the figures for the previous year;
provided, that the financial statements required to be delivered pursuant to
this clause (i) which are made available via EDGAR, or any successor system of
the Securities Exchange Commission, in the Parent's annual report on Form 10-K,
shall be deemed delivered to the Administrative Agent on the date such documents
are made so available; (ii) as soon as available and in any event within 45 days
after the end of each fiscal quarter of each fiscal year (other than the last
fiscal quarter of each fiscal year), an unaudited consolidated balance sheet of
the Parent and its consolidated Subsidiaries (which shall include an indication
of the assets owned by the Company) as of the end of such fiscal quarter and
including the prior comparable period (if any), and the unaudited consolidated
statements of income of the Parent and its consolidated Subsidiaries for such
fiscal quarter and for the period commencing at the end of the previous fiscal
year and ending with the end of such fiscal quarter, and the unaudited
consolidated statements of cash flows of the Parent and its consolidated
Subsidiaries for the period commencing at the end of the previous fiscal year
and ending with the end of such fiscal quarter; provided, that the financial
statements required to be delivered pursuant to this clause (ii) which are made
available via EDGAR, or any successor system of the Securities Exchange
Commission, in Parent's quarterly report on Form 10-Q, shall be deemed delivered
to the Administrative Agent on the date such documents are made so available;
and (iii) from time to time, such other information or documents (financial or
otherwise) as the Administrative Agent or the Required Lenders may reasonably
request;

 

(q)          shall pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, all Taxes levied or imposed upon the Company
or upon the income, profits or property of the Company; provided that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such Tax the amount, applicability or validity of which is being
contested in good faith by appropriate proceedings and (i) for which disputed
amounts adequate reserves in accordance with GAAP have been made and (ii) in the
case of a Tax which has or may become a Lien against any of the Collateral, such
contest proceedings conclusively operate to stay the sale of any portion of the
Collateral to satisfy such Taxes;

 

(r)          shall permit representatives of the Administrative Agent at any
time and from time to time as the Administrative Agent shall reasonably request
(A) to inspect and make copies of and abstracts from its records relating to the
Portfolio Investments and (B) to visit its properties in connection with the
collection, processing or managing of the Portfolio Investments for the purpose
of examining such records, and to discuss matters relating to the Portfolio
Investments or such Person's performance under this Agreement and the other Loan
Documents with any officer or employee or auditor (if any) of such Person having
knowledge of such matters. The Company agrees to render to the Administrative
Agent such clerical and other assistance as may be reasonably requested with
regard to the foregoing; provided that such assistance shall not interfere in
any material respect with the Company's or the Portfolio Manager's business and
operations. So long as no Event of Default has occurred and is continuing and no
Market Value Event has occurred, such visits and inspections shall occur only
(i) upon five (5) Business Days' prior written notice, (ii) during normal
business hours and (iii) no more than once in any calendar year. Following the
occurrence of a Market Value Event or following the occurrence and during the
continuance of an Event of Default, there shall be no limit on the timing or
number of such inspections and only one (1) Business Day' prior notice will be
required before any inspection provided that any such inspection must occur
during normal business hours;

 

 - 43 - 

 

 

(s)          shall not use any part of the proceeds of any Advance, whether
directly or indirectly, for any purpose that entails a violation of any of the
regulations of the Board of Governors of the Federal Reserve System of the
United States of America, including Regulations T, U and X;

 

(t)          shall not make any Restricted Payments without the prior written
consent of the Administrative Agent; provided that the Company may make
Permitted Distributions on any Business Day in accordance with the definition of
the term "Permitted Distribution" and Permitted Tax Distributions on any
Business Day in accordance with the definition of the term "Permitted Tax
Distribution";

 

(u)          shall not make or hold any Investments, except the Portfolio
Investments or Investments (A) constituting Eligible Investments (measured at
the time of acquisition), (B) that have been consented to by the Administrative
Agent or (C) those the Company shall have acquired or received as a distribution
in connection with a workout, bankruptcy, foreclosure, restructuring or similar
process or proceeding involving a Portfolio Investment or any issuer thereof;

 

(v)         shall not request any Advance, and the Company shall not directly,
or to the knowledge of the Company, indirectly, use, and shall procure that its
agents shall not directly, or to the knowledge of the Company, indirectly, use,
the proceeds of any Advance (A) in furtherance of an offer, payment, promise to
pay, or authorization of the payment or giving of money, or anything else of
value, to any Person in violation of any Anti-Corruption Laws, (B) for the
purpose of funding, financing or facilitating any activities, business or
transaction of or with any Sanctioned Person, or in any Sanctioned Country, or
(C) in any manner that would result in the violation of any Sanctions applicable
to any party hereto;

 

(w)          other than pursuant to the Sale Agreement, shall not transfer to
any of its Affiliates any Portfolio Investment purchased from any of its
Affiliates (other than sales to Affiliates conducted on terms and conditions
consistent with those of an arm's length transaction and at fair market value);

 

(x)          shall post on a password protected website maintained by the
Portfolio Manager to which the Administrative Agent will have access or deliver
via email to the Administrative Agent, with respect to each obligor in respect
of a Portfolio Investment, within five (5) Business Days of the receipt thereof
by the Company or the Portfolio Manager, without duplication of any other
reporting requirements set forth in this Agreement or any other Loan Document,
any management discussion and analysis provided by such obligor and any
financial reporting packages with respect to such obligor and with respect to
each Portfolio Investment for such obligor (including any attached or included
information, statements and calculations). The Company shall cause the Portfolio
Manager to provide such other information as the Administrative Agent may
reasonably request with respect to any Portfolio Investment or obligor (to the
extent reasonably available to the Portfolio Manager);

 

(y)          shall not elect to be classified as other than a disregarded entity
or partnership for U.S. federal income tax purposes, nor shall the Company take
any other action or actions that would cause it to be classified, taxed or
treated as a corporation or publicly traded partnership taxable as a corporation
for U.S. federal income tax purposes (including transferring interests in the
Company on or through an established securities market or secondary market (or
the substantial equivalent thereof), within the meaning of Section 7704(b) of
the Code (and Treasury regulations thereunder);

 

(z)          shall only have partners or owners that are treated as U.S. Persons
or that are disregarded entities owned by a U.S. Person and shall not recognize
the transfer of any interest in the Company that constitutes equity for U.S.
federal income tax purposes to a person that is not a U.S. Person;

 

 - 44 - 

 

 

(aa)         shall from time to time execute and deliver all such supplements
and amendments hereto and all such financing statements, continuation
statements, instruments of further assurance and other instruments, and shall
take such other action, in each case, as may be reasonably necessary to secure
the rights and remedies of the Secured Parties hereunder and to grant more
effectively all or any portion of the Collateral, maintain or preserve the
security interest (and the priority thereof) of this Agreement or to carry out
more effectively the purposes hereof, perfect, publish notice of or protect the
validity of any grant made or to be made by this Agreement, preserve and defend
title to the Collateral and the rights therein of the Collateral Agent and the
Secured Parties in the Collateral and the Collateral Agent against the claims of
all persons and parties, pay any and all Taxes levied or assessed upon all or
any part of the Collateral and use its commercially reasonable efforts to
minimize Taxes and any other costs arising in connection with its activities or
give, execute, deliver, file and/or record any financing statement, notice,
instrument, document, agreement or other papers that may be necessary or
desirable to create, preserve, perfect or validate the security interest granted
pursuant to this Agreement or to enable the Collateral Agent to exercise and
enforce its rights hereunder with respect to such pledge and security interest,
and hereby authorizes the Collateral Agent to file a UCC financing statement
listing 'all assets of the debtor' (or substantially similar language) in the
collateral description of such financing statement;

 

(bb)         shall use all commercially reasonable efforts to elevate all
Participation Interests granted under the Master Participation Agreement to
absolute assignments within the applicable then-current standard settlement
timeframes set forth in LSTA guidelines;

 

(cc)         shall not hire any employees;

 

(dd)         shall not maintain any bank accounts or securities accounts other
than the Accounts;

 

(ee)         except as otherwise expressly permitted herein, shall not cancel or
terminate any of the underlying instruments in respect of a Portfolio Investment
to which it is party or beneficiary (in any capacity), or consent to or accept
any cancellation or termination of any of such agreements unless (in each case)
the Administrative Agent shall have consented thereto in writing in its sole
discretion;

 

(ff)         shall not make or incur any capital expenditures except as
reasonably required to perform its functions in accordance with this Agreement;

 

(gg)         shall not act on behalf of, a country, territory, entity or
individual of prohibited countries, territories, entities and individuals listed
on, among other places, the OFAC website, and none of the Company, the Portfolio
Manager or any of their respective Affiliates, owners, directors or officers is
a natural person or entity with whom dealings with U.S. persons or persons under
the jurisdiction of the United States are prohibited under any OFAC regulation
or other applicable federal law or acting on behalf of such a Person or entity.
The Company does not own and will not acquire, and the Portfolio Manager will
not cause the Company to own or acquire, any security issued by, or interest in,
any country, territory, or entity whose direct ownership by U.S. persons or
persons under the jurisdiction of the U.S. would be or is prohibited under any
OFAC regulation or other applicable federal law; and

 

(hh)         shall give notice to the Administrative Agent and the Collateral
Agent promptly in writing upon the occurrence of any of the following:

 

(1)         any Adverse Proceeding;

 

 - 45 - 

 

 

(2)         any Default or Event of Default; and

 

(3)         any adverse claim asserted against the Collateral Agent's Lien over
any of the Portfolio Investments, the Accounts or any other Collateral or the
interests of the Secured Parties with respect to the same.

 

SECTION 6.03. Amendments of Portfolio Investments, Etc. If the Company or the
Portfolio Manager receives any notice or other communication concerning any
amendment, supplement, consent, waiver or other modification of any Portfolio
Investment or any related underlying instrument or rights thereunder (each, an
"Amendment") with respect to any Portfolio Investment or any related underlying
instrument, or makes any affirmative determination to exercise or refrain from
exercising any rights or remedies thereunder, it will give prompt (and in any
event, not later than three (3) Business Days') notice thereof to the
Administrative Agent (with a copy to the Collateral Agent); provided that the
Company or the Portfolio Manager, as applicable, shall not be required to give
prior notice of an Amendment to the Administrative Agent unless an Event of
Default has occurred and is continuing or a Market Value Event has occurred if
such Amendment is not material. In any such event, the Company shall exercise
all voting and other powers of ownership relating to such Amendment or the
exercise of such rights or remedies as the Portfolio Manager shall deem
appropriate under the circumstances. If an Event of Default has occurred and is
continuing or a Market Value Event has occurred, the Company will exercise all
voting and other powers of ownership as the Administrative Agent (acting at the
direction of the Required Lenders) shall instruct (it being understood that if
the terms of the related underlying instrument expressly prohibit or restrict
any such rights given to the Administrative Agent, then such right shall be
limited to the extent necessary so that such prohibition or restriction is not
violated). In any such case, following the Company's receipt thereof, the
Company shall promptly provide to the Administrative Agent copies of all
executed amendments to underlying instruments, executed waiver or consent forms
or other documents executed or delivered in connection with any Amendment.

 

ARTICLE VII
EVENTS OF DEFAULT

 

If any of the following events (each an "Event of Default") shall occur:

 

(a)          the Company shall fail to pay any amount owing by it in respect of
the Secured Obligations (whether for principal, interest, fees or other amounts)
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 and, solely in
the case of amounts other than principal and interest, such failure continues
for a period of one (1) Business Day following the earlier of (x) the Company
becoming aware of such failure or (y) receipt of written notice by the Company
and the Portfolio Manager of such failure;

 

(b)          any representation or warranty made or deemed made by or on behalf
of the Company, the Portfolio Manager or the Parent (collectively, the "Credit
Risk Parties") herein or in any Loan Document or any amendment or modification
thereof or waiver thereunder, or in any report, certificate, or other document
(other than projections, forward-looking information, general economic data,
industry information or information relating to third parties) furnished
pursuant hereto or in connection herewith or any amendment or modification
thereof or waiver thereunder, shall prove to have been incorrect in any material
respect when made or deemed made (it being understood that the failure of a
Portfolio Investment to satisfy the Eligibility Criteria after the date of its
purchase shall not constitute a failure) and if such failure is capable of being
remedied, such failure shall continue for a period of 30 days following the
earlier of (i) receipt by such Credit Risk Party of written notice of such
inaccuracy from the Administrative Agent and (ii) an officer of such Credit Risk
Party becoming aware of such inaccuracy;

 

 - 46 - 

 

 

(c)(A) the Company shall fail to observe or perform any covenant, condition or
agreement contained in Section 6.02(a)(i) through (vii), (xi), (xiv) or (xix),
(b)(i) through (iv), (d), (f), (h), (i), (l), (m), (o), (t), (v), (w) or (cc) or
(B) any Credit Risk Party shall fail to observe or perform any other covenant,
condition or agreement contained herein (it being understood that the failure of
a Portfolio Investment to satisfy the Eligibility Criteria after the date of its
purchase shall not constitute such a failure) or in any other Loan Document and,
in the case of this clause (B), if such failure is capable of being remedied,
such failure shall continue for a period of 30 days following the earlier of (i)
receipt by such Credit Risk Party of written notice of such failure from the
Administrative Agent and (ii) an officer of such Credit Risk Party becoming
aware of such failure;

 

(d) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of any Credit Risk Party or the Sub-Adviser 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 any Credit Risk Party or the Sub-Adviser or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for thirty (30) days or an order or decree
approving or ordering any of the foregoing shall be entered;

 

(e) any Credit Risk Party or the Sub-Adviser 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 (d) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for such Credit Risk Party or the Sub-Adviser 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;

 

(f) any Credit Risk Party or the Sub-Adviser shall become unable, admit in
writing its inability or fail generally to pay its debts as they become due;

 

(g) the passing of a resolution by the equity holders of the Company in respect
of the winding up on a voluntary basis of the Company;

 

(h) any final judgments or orders (not subject to appeal or otherwise
non-appealable) by one or more courts of competent jurisdiction for the payment
of money in an aggregate amount in excess of U.S.$1,000,000 (after giving effect
to insurance, if any, available with respect thereto) shall be rendered against
the Company, and the same shall remain unsatisfied, unvacated, unbonded or
unstayed for a period of thirty (30) days after the date on which the right to
appeal has expired;

 

(i) an ERISA Event occurs;

 

(j) a Change of Control occurs;

 

 - 47 - 

 

 

(k) the Company, shall become required to register as an "investment company"
within the meaning of the Investment Company Act of 1940, as amended;

 

(l) (x) the Portfolio Manager resigns or is terminated as Portfolio Manager
under the Portfolio Management Agreement or (y) the Portfolio Manager assigns
any of its obligations or duties as Portfolio Manager under this Agreement or
the Portfolio Management Agreement to a person other than a Permitted PM
Successor and the Administrative Agent has not consented to the assignee
thereunder within ten (10) Business Days of receipt of notice of such
assignment;

 

(m) the Net Asset Value is less than the product of (1) the Net Advances
multiplied by (2) 156.25% and such deficit is not remedied within two (2)
Business Days;

 

(n) (x) the Sub-Adviser or an Affiliate of the Sub-Adviser meeting the criteria
specified in the investment sub-advisory agreement between the Parent and the
Sub-Adviser as in effect on the Effective Date resigns or is terminated as the
investment sub-advisor of the Parent or (y) the obligations of the Sub-Adviser
under such investment sub-advisory agreement are assigned to a person other than
a Permitted Sub-Adviser Successor and the Administrative Agent has not consented
to the assignee thereunder within ten (10) Business Days of receipt of notice of
such assignment; or

 

(o) (i) failure of the Company to fund the Unfunded Exposure Account when
required in accordance with Section 2.03(f) other than in the case that any
Lender fails to make the Advance required in accordance with Section 2.03(f) or
(ii) failure of the Company to satisfy its obligations in respect of unfunded
obligations with respect to any Delayed Funding Term Loan (including the payment
of any amount in connection with the sale thereof to the extent required under
this Agreement); provided that the failure of the Company to undertake any
action set forth in this clause (o) is not remedied within two (2) Business
Days;

 

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

 

 - 48 - 

 

 

ARTICLE VIII
ACCOUNTS; COLLATERAL SECURITY

 

SECTION 8.01. The Accounts; Agreement as to Control.

 

(a) Establishment and Maintenance of Accounts. The Company hereby appoints U.S.
Bank National Association as Securities Intermediary and has directed and the
Securities Intermediary hereby acknowledges that it has established (1) an
account designated as the "Custodial Account", (2) an account designated as the
"Collection Account", (3) an account designated as the "MV Cure Account" and (4)
an account designated as the "Unfunded Exposure Account" (the Unfunded Exposure
Account, together with the Collection Account, the Custodial Account, the MV
Cure Account and any successor accounts established in connection with the
resignation or removal of the Securities Intermediary, the "Accounts"), and the
account numbers for the Accounts are set forth on the Transaction Schedule. The
Securities Intermediary agrees to maintain each of the Accounts as a securities
intermediary in the name of the Company subject to the lien of the Collateral
Agent under this Agreement and (y) agrees not to change the name or account
number of any Account without the prior consent of the Collateral Agent. The
Securities Intermediary hereby certifies that it is a bank or trust company that
in the ordinary course of business maintains securities accounts for others and
in that capacity has established the Accounts in the name of the Company. For
administrative purposes the Securities Intermediary may establish a subaccount
of the Collection Account for the purpose of holding Interest Proceeds and a
subaccount of the Collection Account for the purpose of holding Principal
Proceeds.

 

(b) Collateral Agent in Control of Securities Accounts. Each of the parties
hereto hereby agrees that (1) each Account shall be deemed to be a "securities
account" (within the meaning of Section 8-501(a) of the Uniform Commercial Code
in effect in the State of New York (the "UCC")), (2) all property credited to
any Account shall be treated as a financial asset for purposes of Article 8 of
the UCC and (3) except as otherwise expressly provided herein, the Collateral
Agent will be exclusively entitled to exercise the rights that comprise each
financial asset credited to each Account. Subject to the immediately succeeding
two sentences, the Securities Intermediary will (i) act on entitlement orders or
other instructions with respect to the Accounts originated by the Portfolio
Manager on behalf of the Company without the further consent of the Collateral
Agent or any other Person and (ii) act on entitlement orders or other
instructions with respect to the Accounts originated by the Collateral Agent
without the further consent of the Company, the Portfolio Manager or any other
Person. In the event of a conflict between an entitlement order or instruction
originated by the Collateral Agent and an entitlement order or instruction
originated by the Portfolio Manager, the entitlement order originated by the
Collateral Agent shall govern. Notwithstanding anything in this Agreement or any
other Loan Document to the contrary, following the Securities' Intermediary's
receipt of a notice regarding the occurrence and during the continuance of an
Event of Default and following the occurrence of any Market Value Event, the
Securities Intermediary shall act solely on entitlement orders and other
instructions with respect to the Accounts originated by the Collateral Agent
without the consent of any other Person and shall not accept any entitlement
order or other instruction from the Portfolio Manager. The parties hereto agree
that the Collateral Agent, for the benefit of the Secured Parties, shall have
control over each Account. The only permitted withdrawals from the Accounts
shall be in accordance with the provisions of this Agreement.

 

(c) Subordination of Lien, Etc. If the Securities Intermediary has or
subsequently obtains by agreement, operation of law or otherwise a security
interest in any Account or any security entitlement credited thereto, the
Securities Intermediary hereby agrees that such security interest shall be
subordinate to the security interest of the Collateral Agent. The property
credited to any Account will not be subject to deduction, set-off, banker's
lien, or any other right in favor of any Person other than the Collateral Agent
(except that the Securities Intermediary may set-off (1) all amounts due to the
Securities Intermediary in respect of its reasonable fees and expenses for the
routine maintenance and operation of the Accounts, and (2) the face amount of
any checks which have been credited to any Account but are subsequently returned
unpaid because of uncollected or insufficient funds).

 

 - 49 - 

 

 

(d) Property Registered, Indorsed, etc. to Securities Intermediary. All
securities or other property represented by a promissory note or an instrument
underlying any financial assets credited to any Account shall be registered in
the name of the Securities Intermediary, indorsed to the Securities Intermediary
in blank or credited to another securities account maintained in the name of the
Securities Intermediary, and in no case will any financial asset credited to any
Account be registered in the name of the Company, payable to the order of the
Company or specially indorsed to the Company except to the extent the foregoing
have been specially indorsed to the Securities Intermediary or in blank.

 

(e) Jurisdiction; Governing Law of Accounts. The establishment and maintenance
of each Account and all interests, duties and obligations related thereto shall
be governed by the law of the State of New York and the "securities
intermediary's jurisdiction" (within the meaning of Section 8-110 of the UCC)
shall be the State of New York. Terms used in this Section 8.01 without
definition have the meanings given to them in the UCC.

 

(f) No Duties. The parties hereto acknowledge and agree that the Securities
Intermediary shall not have any additional duties under this Agreement other
than those expressly set forth in this Section 8.01, and the Securities
Intermediary shall satisfy those duties expressly set forth in this Section 8.01
so long as it acts without gross negligence or willful misconduct. Without
limiting the generality of the foregoing, the Securities Intermediary shall not
be subject to any fiduciary or other implied duties, and the Securities
Intermediary shall not have any duty to take any discretionary action or
exercise any discretionary powers. The Securities Intermediary shall be subject
to all of the rights, protections and immunities given to the Collateral Agent
hereunder, including indemnities.

 

(g) Investment of Funds on Deposit in the Unfunded Exposure Account. All amounts
on deposit in the Unfunded Exposure Account shall be invested (and reinvested)
at the written direction of the Company (or the Portfolio Manager on its behalf)
delivered to the Collateral Agent in Eligible Investments; provided that,
following the occurrence and during the continuance of an Event of Default or
following a Market Value Event, all amounts on deposit in the Unfunded Exposure
Account shall be invested, reinvested and otherwise disposed of at the written
direction of the Administrative Agent delivered to the Collateral Agent in
accordance with the terms hereof, including the Priority of Payments.

 

(h) Unfunded Exposure Account.

 

(i)          Amounts may be deposited into the Unfunded Exposure Account from
time to time (x) in accordance with Section 4.05, (y) as set forth in Section
2.03(f) or (z) to the extent constituting capital contributions made to the
Company, as directed by the Company.

 

(ii)         While no Event of Default has occurred and is continuing and no
Market Value Event has occurred and subject to satisfaction of the Borrowing
Base Test (after giving effect to such release), the Portfolio Manager may
direct, by means of an instruction in writing to the Securities Intermediary
(with a copy to the Collateral Agent and the Collateral Administrator), the
release of funds on deposit in the Unfunded Exposure Account (i) for the purpose
of funding the Company's unfunded commitments with respect to Delayed Funding
Term Loans or for deposit into the Collection Account and (ii) so long as no
Unfunded Exposure Shortfall exists or would exist after giving effect to the
withdrawal. Following the occurrence and during the continuance of an Event of
Default and the declaration of the Secured Obligations then outstanding to be
due and payable pursuant to Article VII or following the occurrence of a Market
Value Event, at the written direction of the Administrative Agent (with a copy
to the Collateral Agent and the Collateral Administrator), the Securities
Intermediary shall transfer all amounts in the Unfunded Exposure Account to the
Collection Account to be applied pursuant to Section 4.05. Upon the direction of
the Company by means of an instruction in writing to the Securities Intermediary
(with a copy to the Collateral Administrator, the Collateral Agent and the
Administrative Agent), any amounts on deposit in the Unfunded Exposure Account
in excess of outstanding funding obligations of the Company shall be released to
the Collection Account to prepay the outstanding Advances.

 

 - 50 - 

 

 

SECTION 8.02. Collateral Security; Pledge; Delivery.

 

(a) Grant of Security Interest. As collateral security for the prompt payment in
full when due of all the Company's obligations to the Agents, the Collateral
Administrator, the Securities Intermediary and the Lenders (collectively, the
"Secured Parties") under this Agreement (collectively, the "Secured
Obligations"), the Company hereby pledges to the Collateral Agent and grants a
continuing security interest in favor of the Collateral Agent in all of the
Company's right, title and interest in, to and under (in each case, whether now
owned or existing, or hereafter acquired or arising) all accounts, payment
intangibles, general intangibles, chattel paper, electronic chattel paper,
instruments, deposit accounts, letter-of-credit rights, investment property, and
any and all other property of any type or nature owned by it (all of the
property described in this clause (a) being collectively referred to herein as
"Collateral"), including, without limitation: (1) each Portfolio Investment, (2)
all of the Company's interests in the Accounts and all investments, obligations
and other property from time to time credited thereto, (3) the Sale Agreement,
the Master Participation Agreement, the Portfolio Management Agreement and the
Performance Guarantee and all rights related to each of the foregoing, (4) all
other property of the Company and (5) all proceeds thereof, all accessions to
and substitutions and replacements for, any of the foregoing, and all rents,
profits and products of any thereof.

 

(b) Delivery and Other Perfection. In furtherance of the collateral arrangements
contemplated herein, the Company shall (1) Deliver to the Collateral Agent the
Collateral hereunder as and when acquired by the Company; (2) if any of the
securities, monies or other property pledged by the Company hereunder are
received by the Company, forthwith take such action as is necessary to ensure
the Collateral Agent's continuing perfected security interest in such Collateral
(including Delivering such securities, monies or other property to the
Collateral Agent); and (3) upon the reasonable request of the Administrative
Agent, deliver to the Administrative Agent, the Lenders and the Collateral
Agent, at the expense of the Company, legal opinions from the Company's counsel
or other counsel reasonably acceptable to the Administrative Agent and the
Lenders, as to the perfection and priority of the Collateral Agent's security
interest in any of the Collateral.

 

"Deliver" (and its correlative forms) means the taking of the following steps by
the Company or the Portfolio Manager:

 

(1) in the case of Portfolio Investments and Eligible Investments and amounts on
deposit in the MV Cure Account, by (x) causing the Securities Intermediary to
indicate by book entry that a financial asset comprised thereof has been
credited to the applicable Account and (y) causing the Securities Intermediary
to agree that it will comply with entitlement orders originated by the
Collateral Agent with respect to each such security entitlement without further
consent by the Company;

 

(2) in the case of each general intangible, by notifying the obligor thereunder
of the security interest of the Collateral Agent;

 

 - 51 - 

 

 

(3) in the case of Portfolio Investments consisting of money or instruments (the
"Possessory Collateral") that do not constitute a financial asset forming the
basis of a security entitlement delivered to the Collateral Agent pursuant to
clause (1) above, by causing (x) the Collateral Agent to obtain possession of
such Possessory Collateral in the State of New York or the Commonwealth of
Massachusetts, or (y) a Person other than the Company and a securities
intermediary (A)(I) to obtain possession of such Possessory Collateral in the
State of New York or the Commonwealth of Massachusetts, and (II) to then
authenticate a record acknowledging that it holds possession of such Possessory
Collateral for the benefit of the Collateral Agent or (B)(I) to authenticate a
record acknowledging that it will take possession of such Possessory Collateral
for the benefit of the Collateral Agent and (II) to then acquire possession of
such Possessory Collateral in the State of New York or the Commonwealth of
Massachusetts;

 

(4) in the case of any account which constitutes a "deposit account" under
Article 9 of the UCC, by causing the Securities Intermediary to continuously
identify in its books and records the security interest of the Collateral Agent
in such account and, except as may be expressly provided herein to the contrary,
establishing dominion and control over such account in favor of the Collateral
Agent; and

 

(5) in all cases, by filing or causing the filing of a financing statement with
respect to such Collateral with the Delaware Secretary of State.

 

(c) Remedies, Etc. During the period in which an Event of Default shall have
occurred and be continuing and the Advances then outstanding shall have been
declared due and payable in accordance with Article VII, the Collateral Agent
shall (but only if and to the extent directed in writing by the Required
Lenders, with a copy to the Company and the Portfolio Manager) do any of the
following:

 

(1) Exercise in respect of the Collateral, in addition to other rights and
remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party under the UCC (whether or not the UCC applies to the
affected Collateral) and also may, without notice except as specified below,
sell the Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Collateral Agent's or its designee's offices or
elsewhere, for cash, on credit or for future delivery, and upon such other terms
as the Collateral Agent or a designee of the Collateral Agent (acting at the
direction of the Required Lenders) may deem commercially reasonable. The Company
agrees that, to the extent notice of sale shall be required by law, at least ten
(10) calendar days' prior notice to the Company of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Collateral Agent shall not be obligated
to make any sale of the Collateral regardless of notice of sale having been
given. The Collateral Agent or its designee may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned.

 

(2) Transfer all or any part of the Collateral into the name of the Collateral
Agent or a nominee thereof.

 

(3) Enforce collection of any of the Collateral by suit or otherwise, and
surrender, release or exchange all or any part thereof, or compromise or extend
or renew for any period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto.

 

(4) Endorse any checks, drafts, or other writings in the Company's name to allow
collection of the Collateral.

 

(5) Take control of any proceeds of the Collateral.

 

 - 52 - 

 

 

(6) Execute (in the name, place and stead of any of the Company) endorsements,
assignments, stock powers and other instruments of conveyance or transfer with
respect to all or any of the Collateral.

 

(7) Perform such other acts as may be reasonably required to do to protect the
Collateral Agent's rights and interest hereunder.

 

In connection with any sale of the Collateral, or any part thereof, pursuant to
this clause (c), the Portfolio Manager and its Affiliates may enter one or more
bids through the Designated Independent Broker-Dealer.

 

(d) Compliance with Restrictions. The Company and the Portfolio Manager agree
that in any sale of any of the Collateral, the Collateral Agent or its designee
are hereby authorized to comply with any limitation or restriction in connection
with such sale as it may be advised by counsel in writing is necessary in order
to avoid any violation of applicable law (including compliance with such
procedures as may restrict the number of prospective bidders and purchasers,
require that such prospective bidders and purchasers have certain
qualifications, and restrict such prospective bidders and purchasers to Persons
who will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such
Collateral), or in order to obtain any required approval of the sale or of the
purchaser by any governmental regulatory authority or official, and the Company
and the Portfolio Manager further agree that such compliance shall not, in and
of itself, result in such sale being considered or deemed not to have been made
in a commercially reasonable manner, nor shall the Collateral Agent be liable or
accountable to the Company or the Portfolio Manager for any discount allowed by
the reason of the fact that such Collateral is sold in good faith compliance
with any such limitation or restriction.

 

(e) Private Sale. The Collateral Agent shall incur no liability as a result of a
sale of the Collateral, or any part thereof, at any private sale pursuant to
clause (c) above conducted in a commercially reasonable manner. The Company and
the Portfolio Manager hereby waive any claims against each Agent and Lender
arising by reason of the fact that the price at which the Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale.

 

(f) Collateral Agent Appointed Attorney-in-Fact. The Company hereby appoints the
Collateral Agent as the Company's attorney-in-fact (it being understood that the
Collateral Agent shall not be deemed to have assumed any of the obligations of
the Company by this appointment), with full authority in the place and stead of
the Company and in the name of the Company, from time to time in the Collateral
Agent's discretion (exercised at the written direction of the Administrative
Agent or the Required Lenders, as the case may be), after the occurrence and
during the continuation of an Event of Default, to take any action and to
execute any instrument which the Administrative Agent or the Required Lenders
may deem necessary or advisable to accomplish the purposes of this Agreement.
The Company hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this clause is irrevocable during the term of this Agreement
and is coupled with an interest.

 

(g) Further Assurances. The Company covenants and agrees that, from time to time
upon the request of the Collateral Agent (as directed by the Administrative
Agent), the Company will execute and deliver such further documents, and do such
other acts and things as the Collateral Agent (as directed by the Administrative
Agent) may reasonably request in order fully to effect the purposes of this
Agreement and to protect and preserve the priority and validity of the security
interest granted hereunder or to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral;
provided that no such document may alter the rights and protections afforded to
the Company or the Portfolio Manager herein.

 

 - 53 - 

 

 

(h) Termination. Upon the payment in full of all Secured Obligations and
termination of the Financing Commitments, the security interest granted herein
shall automatically (and without further action by any party) terminate and all
rights to the Collateral shall revert to the Company. Upon any such termination,
the Collateral Agent will, at the Company's sole expense, deliver to the
Company, or cause the Securities Intermediary to deliver, without any
representations, warranties or recourse of any kind whatsoever, all certificates
and instruments representing or evidencing all of the Collateral held by the
Securities Intermediary hereunder, and execute and deliver to the Company or its
nominee such documents as the Company shall reasonably request to evidence such
termination.

 

ARTICLE IX
THE AGENTS

 

SECTION 9.01. Appointment of Administrative Agent and Collateral Agent. Each of
the Lenders hereby irrevocably appoints each of the Administrative Agent and the
Collateral Agent (each, an "Agent" and collectively, the "Agents") as its agent
and authorizes such Agents to take such actions on its behalf and to exercise
such powers as are delegated to such Agent by the terms hereof, together with
such actions and powers as are reasonably incidental thereto. Anything contained
herein to the contrary notwithstanding, each Agent and each Lender hereby agree
that no Lender shall have any right individually to realize upon any of the
Collateral hereunder, it being understood and agreed that all powers, rights and
remedies hereunder with respect to the Collateral shall be exercised solely by
the Collateral Agent for the benefit of the Secured Parties at the direction of
the Administrative Agent.

 

Each financial institution serving as an Agent hereunder shall have the same
rights and powers in its capacity as a Lender (if applicable) as any other
Lender and may exercise the same as though it were not an Agent, and such
financial institution and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with the Company as if it were not
an Agent hereunder.

 

No Agent, the Collateral Administrator or the Securities Intermediary shall have
any duties or obligations except those expressly set forth herein. Without
limiting the generality of the foregoing, (a) no Agent shall be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) no Agent shall have any duty to take any discretionary
action or exercise any discretionary powers, except that the foregoing shall not
limit any duty expressly set forth in this Agreement to include such rights and
powers expressly contemplated hereby that such Agent is required to exercise as
directed in writing by (i) in the case of the Collateral Agent (A) in respect of
the exercise of remedies under Section 8.02(c), the Required Lenders, or (B) in
all other cases, the Administrative Agent or (ii) in the case of any Agent, the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided herein), and (c) except as
expressly set forth herein, no Agent shall have any duty to disclose, and shall
not be liable for the failure to disclose, any information relating to the
Company that is communicated to or obtained by the financial institution serving
in the capacity of such Agent or any of its Affiliates in any capacity. No Agent
shall be liable for any action taken or not taken by it in the absence of its
own gross negligence or willful misconduct or with the consent or at the request
or direction of the Administrative Agent (in the case of the Collateral
Administrator, the Collateral Agent and the Securities Intermediary only) or the
Required Lenders (or such other number or percentage of the Lenders that shall
be permitted herein to direct such action or forbearance). None of the
Collateral Agent, the Collateral Administrator or the Securities Intermediary
shall be deemed to have knowledge of any Default, Event of Default, Market Value
Event or failure of the Borrowing Base Test unless and until a Responsible
Officer has received written notice thereof from the Company, a Lender or the
Administrative Agent. None of the Collateral Agent, the Collateral
Administrator, the Securities Intermediary or the Administrative Agent shall 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,
(ii) the contents of any certificate, report or other document delivered
hereunder or in connection herewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein,
(iv) the validity, enforceability, effectiveness, genuineness, value or
sufficiency of this Agreement, any other agreement, instrument or document or
the Collateral, or (v) the satisfaction of any condition set forth herein, other
than to confirm receipt of items expressly required to be delivered to such
Agent. None of the Collateral Agent, the Collateral Administrator, the
Securities Intermediary or the Administrative Agent shall be required to risk or
expend its own funds in connection with the performance of its obligations
hereunder if it reasonably believes it will not receive reimbursement therefor
hereunder.

 

 - 54 - 

 

 

Each Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
direction, opinion, document or other writing believed by it to be genuine and
to have been signed or sent by the proper person. Each 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. Each
Agent may consult with legal counsel (who may be counsel for the Company),
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.

 

In the event the Collateral Agent, the Collateral Administrator or the
Securities Intermediary shall receive conflicting instruction from the
Administrative Agent and the Required Lenders, the instruction of the Required
Lenders shall govern. None of the Collateral Administrator, the Collateral Agent
and the Securities Intermediary shall have any duties or obligations under or in
respect of any other agreement (including any agreement that may be referenced
herein) to which it is not a party. The grant of any permissive right or power
to the Collateral Agent hereunder shall not be construed to impose a duty to
act.

 

It is expressly acknowledged and agreed that none of the Collateral
Administrator , the Securities Intermediary and the Collateral Agent shall be
responsible for, and shall not be under any duty to monitor or determine,
compliance with the Eligibility Criteria (Schedule 3), the conditions to any
purchase of sale of Collateral , the Borrowing Base Test or the Concentration
Limitations (Schedule 4) in any instance, to determine if the conditions of
"Deliver" have been satisfied or otherwise to monitor or determine compliance by
any other Person with the requirements of this Agreement.

 

Each 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 it. No Agent shall be
responsible for any misconduct or negligence on the part of any sub-agent or
attorney appointed by such Agent with due care. Each Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Affiliates and the respective directors, officers,
employees, agents and advisors of such Person and its Affiliates (the "Related
Parties") for such Agent. The exculpatory provisions of the preceding paragraphs
shall apply to any such sub-agent and to the Related Parties of each 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 or Collateral Agent, as the case may be.

 

 - 55 - 

 

 

Subject to the appointment and acceptance of a successor as provided in this
paragraph, each of the Collateral Administrator, the Collateral Agent, the
Securities Intermediary and the Administrative Agent may resign at any time upon
30 days' notice to each other agent, the Lenders, the Portfolio Manager and the
Company. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty
(30) days after the retiring Collateral Administrator, Collateral Agent,
Securities Intermediary or Administrative Agent, as applicable, gives notice of
its resignation, then the Administrative Agent may, on behalf of the Lenders,
appoint a successor which shall be a financial institution with an office in New
York, New York, or an Affiliate of any such financial institution. If no
successor shall have been so appointed by the Administrative Agent and shall
have accepted such appointment within sixty (60) days after the retiring agent
gives notice of its resignation, such agent may petition a court of competent
jurisdiction for the appointment of a successor. Upon the acceptance of its
appointment as Collateral Administrator, Securities Intermediary, Administrative
Agent or Collateral Agent, as the case may be, hereunder by a successor, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring agent, and the retiring agent shall be
discharged from its duties and obligations hereunder. After the retiring agent's
resignation hereunder, the provisions of this Article and Sections 5.03 and
10.04 shall continue in effect for the benefit of such retiring agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Collateral
Administrator, Securities Intermediary, Administrative Agent or Collateral
Agent, as the case may be.

 

Subject to the appointment and acceptance of a successor as provided in this
paragraph, each of the Collateral Administrator, the Collateral Agent and the
Securities Intermediary may be removed at any time with 30 days' notice by the
Company (with the written consent of the Administrative Agent), with notice to
the Collateral Administrator, the Collateral Agent, the Securities Intermediary,
the Lenders and the Portfolio Manager. Upon any such removal, the Company shall
have the right (with the written consent of the Administrative Agent) to appoint
a successor to the Collateral Agent, the Collateral Administrator and/or the
Securities Intermediary, as applicable. If no successor to any such Person shall
have been so appointed by the Company and shall have accepted such appointment
within thirty (30) days after such notice of removal, then the Administrative
Agent may appoint a successor which shall be a financial institution with an
office in New York, New York, or an Affiliate of any such financial institution.
Upon the acceptance of its appointment as Collateral Administrator, Securities
Intermediary or Collateral Agent, as the case may be, hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the removed agent, and the removed agent shall be
discharged from its duties and obligations hereunder. After the removed agent's
removal hereunder, the provisions of this Article and Sections 5.03 and 10.04
shall continue in effect for the benefit of such removed agent, its sub-agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while it was acting as Collateral Administrator,
Securities Intermediary or Collateral Agent, as the case may be.

 

Upon the request of the Company or the Administrative Agent or the successor
agent, such retiring or removed agent shall, upon payment of its fees, expenses,
indemnities and charges (including the reasonable fees and expenses of counsel)
then due hereunder and unpaid, execute and deliver an instrument transferring to
such successor agent all the rights, powers and trusts of the retiring or
removed agent, and shall duly assign, transfer and deliver to such successor
agent all property and money held by such retiring or removed agent hereunder.
Upon request of any such successor agent, the Company and the Administrative
Agent shall execute any and all instruments for more fully and certainly vesting
in and confirming to such successor agent all such rights, powers and trusts.

 

Each Lender acknowledges that it has, independently and without reliance upon
any 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 any 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 related agreement or any document furnished hereunder or
thereunder.

 

 - 56 - 

 

 

Anything in this Agreement notwithstanding, in no event shall any Agent, the
Collateral Administrator or the Securities Intermediary be liable for special,
punitive, indirect or consequential loss or damage of any kind whatsoever
(including lost profits), even if such Agent, the Collateral Administrator or
the Securities Intermediary, as the case may be, has been advised of such loss
or damage and regardless of the form of action.

 

Each Agent, the Collateral Administrator and the Securities Intermediary shall
not be liable for any error of judgment made in good faith by an officer or
officers of such Agent, the Collateral Administrator or the Securities
Intermediary, unless it shall be conclusively determined by a court of competent
jurisdiction that such Agent, the Collateral Administrator or the Securities
Intermediary was grossly negligent in ascertaining the pertinent facts.

 

Each Agent, the Collateral Administrator and the Securities Intermediary shall
not be responsible for the accuracy or content of any certificate, statement,
direction or opinion furnished to it in connection with this Agreement.

 

Each Agent, the Collateral Administrator and the Securities Intermediary shall
not be bound to make any investigation into the facts stated in any resolution,
certificate, statement, instrument, opinion, report, consent, order, approval,
bond or other document or have any responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder.

 

No Agent, the Collateral Administrator or the Securities Intermediary shall be
responsible for delays or failures in performance resulting from acts beyond its
control. Such acts include but are not limited to acts of God, strikes,
lockouts, riots and acts of war. In connection with any payment, the Collateral
Agent, the Collateral Administrator and the Securities Intermediary are entitled
to rely conclusively on any instructions provided to them by the Administrative
Agent.

 

The rights, protections and immunities given to the Agents in this Section 9.01
shall likewise be available and applicable to the Securities Intermediary and
the Collateral Administrator.

 

SECTION 9.02. Additional Provisions Relating to the Collateral Agent, the
Collateral Administrator and the Securities Intermediary.

 

(a) Collateral Agent May Perform. The Collateral Agent shall from time to time
take such action (at the written direction of the Administrative Agent or the
Required Lenders) for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein, provided that the Collateral
Agent shall have no obligation to take any such action in the absence of such
direction and shall have no obligation to comply with any such direction if it
reasonably believes that the same (1) is contrary to applicable law or (2) is
reasonably likely to subject the Collateral Agent to any loss, liability, cost
or expense, unless the Administrative Agent or the Required Lenders, as the case
may be, issuing such instruction provide indemnity or security satisfactory to
the Collateral Agent for payment of same.

 

 - 57 - 

 

 

With respect to actions which are incidental to the actions specifically
delegated to the Collateral Agent hereunder, the Collateral Agent shall not be
required to take any such incidental action hereunder, but shall be required to
act or to refrain from acting (and shall be fully protected in acting or
refraining from acting) upon the written direction of the Administrative Agent;
provided that the Collateral Agent shall not be required to take any action
hereunder at the request of the Administrative Agent, the Required Lenders or
otherwise if the taking of such action, in the determination of the Collateral
Agent, (1) is contrary to applicable law or (2) is reasonably likely to subject
the Collateral Agent to any loss, liability, cost or expense, unless the
Administrative Agent or the Required Lenders, as the case may be, issuing such
instruction provide indemnity or security satisfactory to the Collateral Agent
for payment of same.

 

If, in performing its duties under this Agreement, the Collateral Agent is
required to decide between alternative courses of action, the Collateral Agent
may request written instructions from the Administrative Agent as to the course
of action desired by it. If the Collateral Agent does not receive such
instructions within five (5) Business Days after it has requested them, the
Collateral Agent may, but shall be under no duty to, take or refrain from taking
any such courses of action and shall have no liability in connection therewith
except as otherwise provided in this Agreement. The Collateral Agent shall act
in accordance with instructions received after such five (5) Business Day period
except to the extent it has already, in good faith, taken or committed itself to
take, action inconsistent with such instructions.

 

(b) Reasonable Care. The Collateral Agent is required to exercise reasonable
care in the custody and preservation of any of the Collateral in its possession,
provided that the Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of any of the Collateral if it takes such
action for that purpose as the Company reasonably requests at times other than
upon the occurrence and during the continuance of any Event of Default (and upon
the occurrence and during the continuance of any Event of Default, the
Collateral Agent shall be deemed to have exercised reasonable care in its
custody and preservation of any of the Collateral if it takes such action for
that purpose as the Administrative Agent reasonably requests), but failure of
the Collateral Agent to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care. The Collateral Agent
will not be responsible for filing any financing or continuation statements or
recording any documents or instruments in any public office at any time or times
or otherwise perfecting or maintaining the perfection of any liens thereon.

 

(c) Collateral Agent Not Liable. Except to the extent arising from the gross
negligence or willful misconduct of the Collateral Agent, the Collateral Agent
shall not be liable by reason of its compliance with the terms of this Agreement
with respect to (1) the investment of funds held thereunder in Eligible
Investments (other than for losses attributable to the Collateral Agent's
failure to make payments on investments issued by the Collateral Agent, in its
commercial capacity as principal obligor and not as collateral agent, in
accordance with their terms) or (2) losses incurred as a result of the
liquidation of any Eligible Investment prior to its stated maturity. It is
expressly agreed and acknowledged that the Collateral Agent is not guaranteeing
performance of or assuming any liability for the obligations of the other
parties hereto or any parties to the Portfolio Investments or other Collateral.

 

(d) Certain Rights and Obligations of the Collateral Agent. Without further
consent or authorization from any Lenders, the Collateral Agent may execute any
documents or instruments necessary to release any lien encumbering any item of
Collateral that is the subject of a sale or other disposition of assets
permitted by this Agreement or as otherwise permitted or required hereunder or
to which the Required Lenders have otherwise consented. Anything contained
herein to the contrary notwithstanding, in the event of a foreclosure by the
Collateral Agent on any of the Collateral pursuant to a public or private sale,
any Agent or Lender may be the purchaser of any or all of such Collateral at any
such sale and the Collateral Agent, as agent for and representative of the
Lenders (but not any Lender in its individual capacity unless the Required
Lenders shall otherwise agree), shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any collateral
payable by the purchaser at such sale.

 

 - 58 - 

 

 

(e) Collateral Agent, Securities Intermediary and Collateral Administrator Fees
and Expenses. The Company agrees to pay to the Collateral Agent, the Securities
Intermediary and the Collateral Administrator such fees as the Administrative
Agent, the Collateral Agent, the Securities Intermediary, the Collateral
Administrator and the Portfolio Manager, may agree in writing, subject to the
Priority of Payments. The Company further agrees to pay to the Collateral Agent,
the Securities Intermediary and the Collateral Administrator, or reimburse the
Collateral Agent, the Securities Intermediary and the Collateral Administrator
for paying, reasonable and documented out-of-pocket expenses, including
attorney's fees, in connection with this Agreement and the transactions
contemplated hereby, subject to the Priority of Payments.

 

(f) Execution by the Collateral Agent, the Collateral Administrator and the
Securities Intermediary. The Collateral Agent, the Collateral Administrator and
the Securities Intermediary are executing this Agreement solely in their
capacity as Collateral Agent, Collateral Administrator and Securities
Intermediary hereunder and in no event shall have any obligation to make any
Advance, provide any Advance or perform any obligation of the Administrative
Agent or the Lenders hereunder.

 

(g) Reports by the Collateral Administrator. The Company hereby appoints U.S.
Bank National Association as Collateral Administrator and directs the Collateral
Administrator to prepare the reports substantially in the form attached hereto
as Exhibit B.

 

(h) Information Provided to Collateral Agent, Collateral Administrator and
Securities Intermediary. Without limiting the generality of any terms of this
Section, the Collateral Agent, the Collateral Administrator and the Securities
Intermediary shall not have liability for any failure, inability or
unwillingness on the part of the Portfolio Manager, the Administrative Agent,
the Company or the Required Lenders to provide accurate and complete information
on a timely basis to the Collateral Agent, the Collateral Administrator or the
Securities Intermediary, as applicable, or otherwise on the part of any such
party to comply with the terms of this Agreement, and shall have no liability
for any inaccuracy or error in the performance or observance on the Collateral
Agent's, Collateral Administrator's or the Securities Intermediary's, as
applicable, part of any of its duties hereunder that is caused by or results
from any such inaccurate, incomplete or untimely information received by it, or
other failure on the part of any such other party to comply with the terms
hereof.

 

(i) Instructions to Collateral Agent, Collateral Administrator and Securities
Intermediary. The Collateral Agent, Collateral Administrator and Securities
Intermediary (each in their respective capacities) agree to accept and act upon
instructions or directions pursuant to this Agreement or any other related
transaction document sent by unsecured email, facsimile transmission or other
similar unsecured electronic methods, provided, however, that any Person
providing such instructions or directions shall provide to the Collateral Agent,
the Collateral Administrator or the Securities Intermediary, as applicable, an
incumbency certificate listing authorized officers designated to provide such
instructions or directions, which incumbency certificate shall be amended
whenever a person is added or deleted from the listing. If such person elects to
give the Collateral Agent, the Collateral Administrator or the Securities
Intermediary, as applicable, email or facsimile instructions (or instructions by
a similar electronic method) and the Collateral Agent, the Collateral
Administrator or the Securities Intermediary, as applicable, in its discretion
elects to act upon such instructions, the Collateral Agent's, the Collateral
Administrator's or the Securities Intermediary's, as applicable, reasonable
understanding of such instructions shall be deemed controlling. The Collateral
Agent, the Collateral Administrator and the Securities Intermediary (each in
their respective capacities) shall not be liable for any losses, costs or
expenses arising directly or indirectly from their reliance upon and compliance
with its reasonable understanding of such instructions notwithstanding such
instructions conflicting with or being inconsistent with a subsequent written
instruction. Any person providing such instructions or directions agrees to
assume all risks arising out of the use of such electronic methods to submit
instructions and directions to the Collateral Agent, the Collateral
Administrator or the Securities Intermediary, including without limitation the
risk of the Collateral Agent, the Collateral Administrator or the Securities
Intermediary, as applicable, acting on unauthorized instructions, and the risk
of interception and misuse by third parties.

 

 - 59 - 

 

 

(j) Anti-Terrorism, Anti-Money Laundering. To help fight the funding of
terrorism and money laundering activities, the Collateral Agent will obtain,
verify and record information that identifies individuals or entities that
establish a relationship or open an account with the Collateral Agent, the
Collateral Administrator or the Securities Intermediary, as applicable. The
Collateral Agent will ask for the name, address, tax identification number and
other information that will allow the Collateral Agent to identify the
individual or entity who is establishing the relationship or opening the
account. The Collateral Agent may also ask for formation documents such as
articles of incorporation, an offering memorandum or other identifying documents
to be provided.

 

ARTICLE X
MISCELLANEOUS

 

SECTION 10.01. Lenders' Representations; Non-Petition; Limited Recourse.

 

(a) Each Lender represents that it is a "qualified purchaser" within the meaning
of Section 2(a)(51) of the Investment Company Act of 1940, as amended

 

(b) Each of the Collateral Agent, the Securities Intermediary, the Collateral
Administrator and the Portfolio Manager hereby agrees not to commence, or join
in the commencement of, any proceedings in any jurisdiction for the bankruptcy,
winding-up or liquidation of the Company or any similar proceedings, in each
case prior to the date that is one year and one day (or if longer, any
applicable preference period plus one day) after the payment in full of all
amounts owing to the parties hereto. The foregoing restrictions are a material
inducement for the parties hereto to enter into this Agreement and are an
essential term of this Agreement. The Administrative Agent or the Company may
seek and obtain specific performance of such restrictions (including injunctive
relief), including, without limitation, in any bankruptcy, winding-up,
liquidation or similar proceedings. The Company shall promptly object to the
institution of any bankruptcy, winding-up, liquidation or similar proceedings
against it and take all necessary or advisable steps to cause the dismissal of
any such proceeding; provided that such obligation shall be subject to the
availability of funds therefor. Nothing in this Section 10.01 shall limit the
right of any party hereto to file any claim or otherwise take any action with
respect to any proceeding of the type described in this Section that was
instituted by the Company or against the Company by any Person other than a
party hereto.

 

(c) Notwithstanding any other provision of this Agreement, no recourse under any
obligation, covenant or agreement of the Company or the Portfolio Manager
contained in this Agreement shall be had against any incorporator, stockholder,
partner, officer, director, member, manager, employee or agent of the Company,
the Portfolio Manager or any of their respective Affiliates (solely by virtue of
such capacity) by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise; it being expressly agreed and
understood that this Agreement is solely a corporate obligation of the Company
and (with respect to the express obligations of the Portfolio Manager hereunder)
the Portfolio Manager and that no personal liability whatever shall attach to or
be incurred by any incorporator, stockholder, officer, director, member,
manager, employee or agent of the Company, the Portfolio Manager or any of their
respective Affiliates (solely by virtue of such capacity) or any of them under
or by reason of any of the obligations, covenants or agreements of the Company
or the Portfolio Manager contained in this Agreement, or implied therefrom, and
that any and all personal liability for breaches by the Company or the Portfolio
Manager of any of such obligations, covenants or agreements, either at common
law or at equity, or by statute, rule or regulation, of every such incorporator,
stockholder, officer, director, member, manager, employee or agent is hereby
expressly waived as a condition of and in consideration for the execution of
this Agreement.

 

 - 60 - 

 

 

SECTION 10.02. Notices. All notices and other communications in respect hereof
(including, without limitation, any modifications hereof, or requests, waivers
or consents hereunder) to be given or made by a party hereto shall be in writing
(including by electronic mail or other electronic messaging system of .pdf or
other similar files) to the other parties hereto at the addresses for notices
specified on the Transaction Schedule (or, as to any such party, at such other
address as shall be designated by such party in a notice to each other party
hereto). All such notices and other communications shall be deemed to have been
duly given when (a) transmitted by facsimile, (b) personally delivered, (c) in
the case of a mailed notice, upon receipt, or (d) in the case of notices and
communications transmitted by electronic mail or any other electronic messaging
system, upon delivery, in each case given or addressed as aforesaid.

 

SECTION 10.03. No Waiver. No failure on the part of any party hereto to exercise
and no delay in exercising, and no course of dealing with respect to, any right,
power or privilege under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege under this
Agreement preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.

 

SECTION 10.04. Expenses; Indemnity; Damage Waiver; Right of Setoff.

 

(a) The Company shall pay (1) all fees and reasonable and documented
out-of-pocket expenses incurred by the Agents, the Collateral Administrator, the
Securities Intermediary and their Related Parties, including the reasonable and
documented fees, charges and disbursements of outside counsel for each Agent,
the Collateral Administrator and the Securities Intermediary, and such other
local counsel as required for the Agents, the Collateral Administrator and the
Securities Intermediary, collectively, in connection with the preparation and
administration of this Agreement and the other Loan Documents or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) and (2) all
reasonable and documented out-of-pocket expenses incurred by the Agents, the
Collateral Administrator, the Securities Intermediary and the Lenders, including
the fees, charges and disbursements of outside counsel for each Agent, the
Collateral Administrator, the Securities Intermediary and such other local
counsel as required for all of them, in connection herewith, including the
enforcement or protection of their rights in connection with this Agreement or
any other Loan Document, including their rights under this Section, or in
connection with the Advances provided by them hereunder, including all such
reasonable and documented out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Advances.

 

 - 61 - 

 

 

(b) The Company shall indemnify the Agents, the Collateral Administrator, the
Securities Intermediary, the Lenders 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, including the fees, charges and disbursements
of outside counsel for each Indemnitee and such other local counsel as required
for any Indemnitees, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (1) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective obligations
(including, without limitation, any breach of any representation or warranty
made by the Company or the Portfolio Manager hereunder or thereunder (for the
avoidance of doubt, after giving effect to any limitation included in any such
representation or warranty relating to materiality or causing a Material Adverse
Effect)) or the exercise of the parties thereto of their respective rights or
the consummation of the transactions contemplated hereby or thereby, (2) any
Advance or the use of the proceeds therefrom, or (3) 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 regardless of whether
any Indemnitee is a party thereto or is pursuing or defending any such action;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
(i) are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence, fraud,
reckless disregard or willful misconduct of such Indemnitee or (ii) with respect
to the Lenders, relate to the performance of the Portfolio Investments. This
Section 10.04(b) shall not apply with respect to Taxes other than any Taxes that
represent losses, claims, damages, etc. arising from any non-Tax claim.

 

(c) To the extent permitted by Applicable Law, neither the Company nor any
Indemnitee shall assert, and each hereby waives, any claim against the Company
or any Indemnitee, as applicable, 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, instrument or transaction contemplated hereby, any Advance or
the use of the proceeds thereof.

 

(d) If an Event of Default shall have occurred and be continuing and the
Advances then outstanding shall have been declared due and payable in accordance
with Article VII, 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 any time owing
by such Lender or Affiliate to or for the credit or the account of the Company
against any of and all the obligations of the Company 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 clause (d)
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.

 

SECTION 10.05. Amendments. No amendment, modification or waiver in respect of
this Agreement will be effective unless in writing (including, without
limitation, a writing evidenced by a facsimile transmission or electronic mail)
and executed by each of the Company, the Agents, the Collateral Administrator,
the Securities Intermediary the Required Lenders and the Portfolio Manager;
provided, however, that any amendment to this Agreement that the Administrative
Agent determines in its commercially reasonable judgment is necessary to
effectuate the purposes of Section 1.04 hereof following the occurrence of a
Market Value Event and which would not result in an increase or decrease in the
rights, duties or liabilities of the Portfolio Manager shall not be required to
be executed by the Portfolio Manager (other than any amendment or modification
to the third through fifth paragraph of Section 1.04, which shall require the
written consent of the Portfolio Manager); provided, further, that the
Administrative Agent may waive any of the Eligibility Criteria and the
requirements set forth in Schedule 3 or Schedule 4 in its sole discretion;
provided, further, that none of the Collateral Agent, the Collateral
Administrator or the Securities Intermediary shall be required to execute any
amendment that affects its rights, duties, protections or immunities.

 

 - 62 - 

 

 

SECTION 10.06. Successors; Assignments.

 

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Company may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Portfolio Manager, the Administrative Agent and each Lender (and any
attempted assignment or transfer by the Company without such consent shall be
null and void). If the Company or the Portfolio Manager request in writing that
the Administrative Agent consent to an assignment of the obligations of the
Portfolio Manager hereunder or under the Portfolio Management Agreement, the
Administrative Agent shall use commercially reasonable efforts to respond to
such request within ten (10) Business Days following its receipt of such
request. The Administrative Agent shall have no liability for any failure to
respond to any such request. Except as expressly set forth herein, nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person any legal or equitable right, remedy or claim under or by reason of this
Agreement.

 

(b) Subject to the conditions set forth below, any Lender may assign to any
other Person, all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Financing Commitment and the
Advances at the time owing to it) with the prior written consent (such consent
not to be unreasonably withheld) of the Administrative Agent; provided that no
consent of the Administrative Agent shall be required for an assignment of any
Financing Commitment to an assignee that is a Lender (or any Affiliate thereof)
with a Financing Commitment immediately prior to giving effect to such
assignment.

 

Assignments shall be subject to the following additional conditions: (A) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender's rights and obligations under this Agreement and (B) the
parties to each assignment shall execute and deliver to the Administrative Agent
an assignment and assumption agreement in form and substance acceptable to the
Administrative Agent.

 

Subject to acceptance and recording thereof below, 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 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 as a Lender but
shall continue to be entitled to the benefits of Sections 5.03 and 10.04).

 

The Administrative Agent, acting for this purpose as an agent of the Company,
shall maintain at one of its offices 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 Financing Commitment of, and principal amount of the
Advances owing to, each Lender pursuant to the terms hereof from time to time
(the "Register"). The entries in the Register shall be conclusive absent
manifest error, and the parties hereto shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Company, any Lender (with
respect to its own interests) and the Portfolio Manager, at any reasonable time
and from time to time upon reasonable prior notice. Upon its receipt of a duly
completed assignment and assumption executed by an assigning Lender and an
assignee, the Administrative Agent shall accept such assignment and assumption
and record the information contained therein in the Register.

 

 - 63 - 

 

 

(c) Any Lender may, without the consent of the Company or the Administrative
Agent, sell participations to one or more banks or other entities (a "Lender
Participant") in all or a portion of such Lender's rights and obligations under
this Agreement (including all or a portion of its Financing Commitment and the
Advances owing to it); provided that (1) such Lender's obligations under this
Agreement shall remain unchanged, (2) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (3) the Company, the Agents 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. 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 to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Lender Participant, agree to any Material Amendment that affects
such Lender Participant. As used herein, "Material Amendment" means any
amendment, modification or supplement to this Agreement that (i) increases the
Financing Commitment of any Lender, (ii) reduces the principal amount of any
Advance or reduces the rate of interest thereon, or reduces any fees payable
hereunder, (iii) postpones the scheduled date of payment of the principal amount
of any Advance, or any interest thereon, or any other amounts payable hereunder,
or reduces the amount of, waives or excuses any such payment, or postpones the
scheduled date of expiration of any Financing Commitment, (iv) changes any
provision in a manner that would alter the pro rata sharing of payments required
hereby, or (v) changes any of the provisions of this Section or the definition
of "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.

 

(d)          Each Lender that sells a participation shall, acting solely for
this purpose as an agent of the Company, maintain a register on which it enters
the name and address of each Lender Participant and the principal amounts (and
stated interest) of each Lender Participant's interest in the Advances or other
obligations under this Agreement (the "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 Lender Participant or any
information relating to a Lender 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 the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary. For the avoidance
of doubt, the Administrative Agent (in its capacity as Administrative Agent)
shall have no responsibility for maintaining a Participant Register. The Company
agrees that each Participant shall be entitled to the benefits of Sections
3.01(e) and 3.03 (subject to the requirements and limitations therein, including
the requirements under Section 3.03(f) (it being understood that the
documentation required under Section 3.03(f) shall be delivered to the Lender
that sells the participation)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (d) of this Section;
provided that such Participant (A) agrees to be subject to the provisions of
Section 3.01(f) relating to replacement of Lenders as if it were an assignee
under paragraph (b) of this Section 10.06; and (B) shall not be entitled to
receive any greater payment under Sections 3.01(e) and 3.03, with respect to any
participation, than the Lender that sells the participation would have been
entitled to receive, except to the extent such entitlement to receive a greater
payment results from a Change in Law that occurs after the Lender or the
Participant acquired the applicable participation. Each Lender that sells a
participation agrees, at the Company's request and expense, to use reasonable
efforts to cooperate with the Company to effectuate the replacement of Lenders
provisions set forth in Section 3.01(f) with respect to any Participant.

 

 - 64 - 

 

 

SECTION 10.07. Governing Law; Submission to Jurisdiction; Etc. 

 

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

 

(b) Submission to Jurisdiction. With respect to any suit, action or proceedings
relating to this Agreement (collectively, "Proceedings"), each party hereto
irrevocably (i) submits to the non-exclusive jurisdiction of the courts of the
State of New York and the United States District Court located in the Borough of
Manhattan in New York City and (ii) waives any objection which it may have at
any time to the laying of venue of any Proceedings brought in any such court,
waives any claim that such Proceedings have been brought in an inconvenient
forum and further waives the right to object, with respect to such Proceedings,
that such court does not have any jurisdiction over such party. Nothing in this
Agreement precludes any party hereto from bringing Proceedings in any other
jurisdiction, nor will the bringing of Proceedings in any one or more
jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

 

(c) Waiver of Jury Trial. EACH OF THE PARTIES HERETO AND THE ADMINISTRATIVE
AGENT ON BEHALF OF THE FINANCING PROVIDERS HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

SECTION 10.08. Interest Rate Limitation Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Advance, together
with all fees, charges and other amounts which are treated as interest on such
Advance under Applicable Law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Advance in accordance
with Applicable Law, the rate of interest payable in respect of such Advance
hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Advance but were not payable as
a result of the operation of this Section 10.08 shall be cumulated and the
interest and Charges payable to such Lender in respect of other Advances or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender.

 

SECTION 10.09. PATRIOT Act Each Lender and Agent that is subject to the
requirements of the PATRIOT Act hereby notifies the Company that pursuant to the
requirements of the PATRIOT Act, it is required to obtain, verify and record
information that identifies the Company, which information includes the name and
address of the Company and other information that will allow such Lender or
Agent to identify the Company in accordance with the PATRIOT Act.

 

SECTION 10.10. Counterparts. This Agreement may be executed in any number of
counterparts by facsimile or other written form of communication, each of which
shall be deemed to be an original as against the party whose signature appears
thereon, and all of which shall together constitute one and the same instrument.

 

 - 65 - 

 

 

SECTION 10.11. 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 10.12. Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in this Agreement or in
any other agreement, arrangement or understanding among any such parties, each
party hereto acknowledges that any liability of any Lender that is an EEA
Financial Institution arising under this Agreement may be subject to the
Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and
consents to, and acknowledges and agrees to be bound by:

 

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any Lender that is an EEA Financial Institution; and

 

(b) the effects of any Bail-In Action on any such liability, including, if
applicable:

 

(1) a reduction in full or in part or cancellation of any such liability;

 

(2) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent entity,
or a bridge institution that may be issued to it or otherwise conferred on it,
and that such shares or other instruments of ownership will be accepted by it in
lieu of any rights with respect to any such liability under this Agreement; or

 

(3) the variation of the terms of such liability in connection with the exercise
of the Write-Down and Conversion Powers of any EEA Resolution Authority.

 

As used herein:

 

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

 

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

 

"EEA Financial Institution" means (a) any institution established in any EEA
Member Country which is subject to the supervision of an EEA Resolution
Authority, (b) any entity established in an EEA Member Country which is a parent
of an institution described in clause (a) of this definition, or (c) any
institution established in an EEA Member Country which is a subsidiary of an
institution described in clauses (a) or (b) of this definition and is subject to
consolidated supervision with its parent.

 

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

 

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

 

 - 66 - 

 

 

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

 

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

 

[remainder of page intentionally blank]

 

 - 67 - 

 

 

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.

 

  34TH STREET FUNDING, LLC, as Company       By /s/ Michael A. Reisner   Name:
Michael A. Reisner   Title: Co-President and Co-CEO       CĪON investment
management, llc, as Portfolio Manager       By /s/ Michael A. Reisner   Name:
Michael A. Reisner   Title: Co-President and Co-CEO

 

   

 

 

  JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as Administrative Agent       By
/s/ Louis Cerrotta   Name: Louis Cerrotta   Title: Executive Director

 

   

 

 

  U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent       By /s/ Gayle Filomia
  Name: Gayle Filomia   Title: Vice President       U.S. BANK NATIONAL
ASSOCIATION, as Securities Intermediary       By /s/ Gayle Filomia   Name: Gayle
Filomia   Title: Vice President       U.S. BANK NATIONAL ASSOCIATION, as
Collateral Administrator       By /s/ Gayle Filomia   Name: Gayle Filomia  
Title: Vice President       The Lenders       JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, as Lender       By /s/ Louis Cerrotta   Name: Louis Cerrotta  
Title: Executive Director

 

   

 

 

SCHEDULE 1

 

Transaction Schedule

 

1. Lenders   Financing Commitment           Lender: JPMorgan Chase Bank,
National Association

U.S.$150,000,000, as reduced from time to time pursuant to Section 4.07,
available as follows:

 

Up to U.S.$125,000,000 may be funded as term Advances in accordance with the
terms hereof; and

 

Up to U.S.$25,000,000 may be funded as revolving Advances in accordance with the
terms hereof

 

2. Scheduled Termination Date: August 23, 2020       3. Interest Rates          
Applicable Margin for Advances:

With respect to interest based on the LIBO Rate, 3.50% per annum (subject to
increase in accordance with Section 3.01(b)).

With respect to interest based on the Base Rate, 3.50% per annum (subject to
increase in accordance with Section 3.01(b)).

      4. Account Numbers           Custodial Account: [*]     Collection
Account: [*]       MV Cure Account: [*]       Unfunded Exposure Account: [*]    
      5. Market Value Trigger: 178.6%       6. Market Value Cure Trigger 192.3%
      7. Purchases of Restricted Securities           Notwithstanding anything
herein to the contrary, no Portfolio Investment may constitute, at the time of
initial purchase, a Restricted Security.  As used herein, "Restricted Security"
means any security that forms part of a new issue of publicly or privately
issued securities (a) with respect to which an Affiliate of any Lender that is a
"broker" or a "dealer", within the meaning of the Securities Exchange Act of
1934, participated in the distribution as a member of a selling syndicate or
group within 30 days of the proposed purchase by the Company and (b) which the
Company proposes to purchase from any such Affiliate of any Lender.  

 

   

 

 

Addresses for Notices

 

The Company:

34th Street Funding, LLC

3 Park Avenue, 36th Floor

New York, New York 10016

Attn: Credit Team

Email: CIONAgentNotices@iconinvestments.com

 

      The Portfolio Manager:

CĪON Investment Management, LLC

3 Park Avenue, 36th Floor

New York, New York 10016

Attn: Keith Franz

Email: Kfranz@iconinvestments.com

 

      The Administrative Agent:

JPMorgan Chase Bank, National Association

c/o JPMorgan Services Inc.

500 Stanton Christiana Rd., 3rd Floor

Newark, Delaware 19713

Attention: Ryan Hanks

Telephone: (302) 634-2030

 

 

       

with a copy to

 

   

JPMorgan Chase Bank, National Association

383 Madison Ave.

New York, New York 10179

Attention: Louis Cerrotta

Telephone: 212-622-7092

Email:

louis.cerrotta@jpmorgan.com

larry.w.wise@jpmorgan.com

Ji.Han@jpmchase.com

ruchira.patel@jpmorgan.com

Jason.E.Adler@jpmchase.com

Allison.Shapiro@jpmorgan.com

Ravi.d.Sarawgi@jpmorgan.com

Arthur.Flynn@jpmorgan.com

ct.financing.requests@jpmorgan.com

de_custom_business@jpmorgan.com

Jacob.s.pollack@jpmorgan.com 

      The Collateral Agent:

U.S. Bank National Association

One Federal Street, 3rd Floor

Boston, Massachusetts 02110

Attention: Gayle Filomia

Telephone: 671-603-6499

Email: gayle.filomia@usbank.com

      The Securities Intermediary:

U.S. Bank National Association

One Federal Street, 3rd Floor

Boston, Massachusetts 02110

Attention: Gayle Filomia

Telephone: 671-603-6499

Email: gayle.filomia@usbank.com

 

 - 2 - 

 

 

The Collateral Administrator:

U.S. Bank National Association

One Federal Street, 3rd Floor

Boston, Massachusetts 02110

Attention: Gayle Filomia

Telephone: 671-603-6499

Email: gayle.filomia@usbank.com

      JPMCB:

JPMorgan Chase Bank, National Association

c/o JPMorgan Services Inc.

500 Stanton Christiana Rd., 3rd Floor

Newark, Delaware 19713

Attention: Robert Nichols

Facsimile: (302) 634-1092

 

with a copy to:

 

JPMorgan Chase Bank, National Association

383 Madison Ave.

New York, New York 10179

 

 

Attention: Louis Cerrotta

Telephone: 212-622-7092

      Each other Lender: The address (or facsimile number or electronic mail
address) provided by it to the Administrative Agent.  

 

 - 3 - 

 

 

SCHEDULE 2

 

Contents of Notices of Acquisition

 

Each Notice of Acquisition shall include the following information for the
related Portfolio Investment(s):

 

JPMorgan Chase Bank, National Association,

as Administrative Agent

c/o JPMorgan Services Inc.

500 Stanton Christiana Rd., 3rd Floor

Attention: Ryan Hanks

Email: ryan.j.hanks@jpmorgan.com

 

JPMorgan Chase Bank, National Association,

as Administrative Agent

383 Madison Avenue

New York, New York 10179

Attention: Louis Cerrotta

Email: louis.cerrotta@jpmorgan.com   larry.w.wise@jpmorgan.com  
Ji.Han@jpmchase.com   ruchira.patel@jpmorgan.com   Jason.E.Adler@jpmchase.com  
Allison.Shapiro@jpmorgan.com   Ravi.d.Sarawgi@jpmorgan.com  
Arthur.Flynn@jpmorgan.com   ct.financing.requests@jpmorgan.com  
de_custom_business@jpmorgan.com   Jacob.s.pollack@jpmorgan.com

 

JPMorgan Chase Bank, National Association,

as Lender

c/o JPMorgan Services Inc.

500 Stanton Christiana Rd., 3rd Floor

Newark, Delaware 19713

Attention: Ryan Hanks

 

   

 

 

cc:

 

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

One Federal Street, 3rd Floor

Boston, Massachusetts 02110

 

U.S. Bank National Association, as Collateral Administrator

One Federal Street, 3rd Floor

Boston, Massachusetts 02110

 

Ladies and Gentlemen:

 

Reference is hereby made to the Loan and Security Agreement, dated as of August
26, 2016 (as amended, the "Agreement"), among 34th Street Funding, LLC, as
borrower (the "Company"), JPMorgan Chase Bank, National Association, as
administrative agent (the "Administrative Agent"), CĪON Investment Management,
LLC, as portfolio manager (the "Portfolio Manager"), the lenders party thereto
and the collateral agent and securities intermediary party thereto. Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings given such terms in the Agreement.

 

Pursuant to the Agreement, the Portfolio Manager hereby [requests approval for
the Company to acquire][notifies the Administrative Agent of the Company's
intention to acquire] the following Portfolio Investment(s):

 

Obligor Identifier
(LoanX) Tranche Type (1st
lien, 2nd
lien) Notional Maturity
Date Fixed Spread LIBOR
Floor Price Moody's Industry
Classification1 Proposed
Settlement Date                                                

 

To the extent available, we have included herewith (1) the material underlying
instruments (including the collateral and security documents) relating to each
such Portfolio Investment, (2) audited financial statement for the previous most
recently ended three years of the obligor of each such Portfolio Investment, (3)
quarterly statements for the previous most recently ended eight fiscal quarters
of the obligor of each such Portfolio Investment, (4) any appraisal or valuation
reports conducted by third parties in connection with the proposed investment by
the Company, (5) applicable "proof of existence" details (if requested by the
Administrative Agent) and (6) the ratio of indebtedness to EBITDA as calculated
by the Portfolio Manager. The Portfolio Manager acknowledges that it will
provide such other information from time to time reasonably requested by the
Administrative Agent.

 

 

1 Per Schedule 7 of the Agreement.

 

 - 2 - 

 

 

We hereby certify that all conditions to the Purchase of such Portfolio
Investment(s) set forth in Section 1.03 of the Agreement are satisfied.

 

  Very truly yours,       CĪON INvestment Management, LLC, as Portfolio Manager
      By     Name:   Title:

 

 - 3 - 

 

 

SCHEDULE 3

 

Eligibility Criteria

 

1.Such obligation is a Loan or a debt security and is not a Synthetic Security,
a Zero-Coupon Security, a Structured Finance Obligation, a Participation
Interest (other than Initial Portfolio Investments), a Revolving Loan, a
Mezzanine Obligation (or, for the avoidance of doubt, any other unsecured
obligation of an obligor) or a Letter of Credit.

 

2.Except in the case of a Delayed Funding Term Loan, such obligation does not
require the making of any future advance or payment by the Company to the issuer
thereof or any related counterparty.

 

3.Such obligation is eligible to be entered into by, sold or assigned to the
Company and pledged to the Collateral Agent.

 

4.Such obligation is denominated and payable in U.S. dollars and purchased at a
price that is at least 80% of the par amount of such obligation.

 

5.Such obligation is issued by a company organized in an Eligible Jurisdiction.

 

6.It is an obligation upon which no payments are subject to deduction or
withholding for or on account of any withholding Taxes imposed by any
jurisdiction unless the related obligor is required to make "gross-up" payments
that cover the full amount of any such withholding Taxes (subject to customary
conditions to such payments which the Company (or the Portfolio Manager on
behalf of the Company) in its good faith reasonable judgment expects to be
satisfied); provided that this clause 6 shall not apply to commitment fees and
other similar fees associated with a Delayed Funding Term Loan.

 

7.Such obligation is not subject to an event of default (as defined in the
underlying instruments for such obligation) in accordance with its terms
(including the terms of its underlying instruments after giving effect to any
grace and/or cure period set forth in the related loan agreement, but not to
exceed five (5) days) and no Indebtedness of the obligor thereon ranking pari
passu with or senior to such obligation is in default with respect to the
payment of principal or interest for which the lenders for such pari passu
Indebtedness have elected to accelerate such Indebtedness, which such default
would trigger a default under the related loan agreement (after giving effect to
any grace and/or cure period set forth in the related loan agreement, but not to
exceed five (5) days) (a "Defaulted Obligation").

 

8.The timely repayment of such obligation is not subject to non-credit-related
risk as determined by the Portfolio Manager in its good faith and reasonable
judgment.

 

9.It is not at the time of purchase or commitment to purchase the subject of an
offer other than an offer pursuant to the terms of which the offeror offers to
acquire a debt obligation in exchange for consideration consisting solely of
cash in an amount equal to or greater than the full face amount of such debt
obligation plus any accrued and unpaid interest.

 

10.Such obligation is not an equity security and does not provide, on the date
of acquisition, for conversion or exchange at any time over its life into an
equity security.

 

11.Such obligation provides for periodic payments of interest thereon in cash at
least semi-annually.

 

   

 

 

12.Such obligation will not cause the Company to be required to register as an
investment company under the Investment Company Act of 1940, as amended.

 

The following capitalized terms used in this Schedule 3 shall have the meanings
set forth below:

 

"Eligible Jurisdictions" means the United States and Canada.

 

"Letter of Credit" means a facility whereby (i) a fronting bank ("LOC Agent
Bank") issues or will issue a letter of credit ("LC") for or on behalf of a
borrower pursuant to an underlying instrument, (ii) if the LC is drawn upon, and
the borrower does not reimburse the LOC Agent Bank, the lender/participant is
obligated to fund its portion of the facility and (iii) the LOC Agent Bank
passes on (in whole or in part) the fees and any other amounts it receives for
providing the LC to the lender/participant.

 

"Structured Finance Obligation" means any obligation issued by a special purpose
vehicle and secured directly by, referenced to, or representing ownership of, a
pool of receivables or other financial assets of any obligor, including
collateralized debt obligations and mortgage-backed securities.

 

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

 

"Zero-Coupon Security" means any debt security that by its terms (a) does not
bear interest for all or part of the remaining period that it is outstanding or
(b) pays interest only at its stated maturity.

 

 - 2 - 

 

 

SCHEDULE 4

 

Concentration Limitations

 

The "Concentration Limitations" shall be satisfied on any date of determination
if, in the aggregate, the Portfolio Investments owned (or in relation to a
proposed purchase of a Portfolio Investment, proposed to be owned) by the
Company comply with all the requirements set forth below:

 

1.Not more than U.S.$16,670,000 aggregate funded principal amount and Unfunded
Exposure Amount, collateralized or uncollateralized, of Portfolio Investments
may be issued by a single obligor and its affiliates; provided that Portfolio
Investments issued by up to two obligors and their respective affiliates may
constitute up to an aggregate funded principal amount and Unfunded Exposure
Amount, collateralized or uncollateralized, equal to U.S.$25,000,000.

 

2.Not less than 50% of the Collateral Principal Amount may consist of cash,
Eligible Investments representing Principal Proceeds and Senior Secured Loans
(funded and unfunded).

 

3.Not more than 20% of the Collateral Principal Amount may consist of Portfolio
Investments (funded and unfunded) whose obligors are organized in Canada.

 

4.Not more than 20% of the Collateral Principal Amount may consist of Portfolio
Investments (funded and unfunded) that are issued by obligors that belong to the
same Moody's Industry Classification. As used herein, "Moody's Industry
Classifications" means the industry classifications set forth in Schedule 7
hereto, as such industry classifications shall be updated at the option of the
Portfolio Manager (with the consent of the Administrative Agent) if Moody's
publishes revised industry classifications.

 

5.The Unfunded Exposure Amount, collateralized or uncollateralized, shall not
exceed 5% of the Collateral Principal Amount.

 

   

 

 

SCHEDULE 5

Portfolio Investments

 

[RESERVED]

 

   

 

 

SCHEDULE 6

Participation Interests

 

[RESERVED]

 

   

 

 

SCHEDULE 7

 

Moody's Industry Classifications

Industry

Code

  Description 1   Aerospace & Defense 2   Automotive 3   Banking, Finance,
Insurance & Real Estate 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  
Forest Products & Paper 15   Healthcare & Pharmaceuticals 16   High Tech
Industries 17   Hotel, Gaming & Leisure 18   Media: Advertising, Printing &
Publishing 19   Media:  Broadcasting & Subscription 20   Media:  Diversified &
Production 21   Metals & Mining 22   Retail 23   Services:  Business 24  
Services:  Consumer 25   Sovereign & Public Finance 26   Telecommunications 27  
Transportation:  Cargo 28   Transportation:  Consumer 29   Utilities:  Electric
30   Utilities:  Oil & Gas 31   Utilities:  Water 32   Wholesale

 

   

 

 

EXHIBIT A

 

Form of Request for Advance

 

JPMorgan Chase Bank, National Association,

as Administrative Agent

c/o JPMorgan Services Inc.

500 Stanton Christiana Rd., 3rd Floor

Attention: Ryan Hanks

JPMorgan Chase Bank, National Association,

as Administrative Agent

383 Madison Avenue

New York, New York 10179

Attention: Louis Cerrotta

Email: louis.cerrotta@jpmorgan.com   larry.w.wise@jpmorgan.com  
Ji.Han@jpmchase.com   ruchira.patel@jpmorgan.com   Jason.E.Adler@jpmchase.com  
Allison.Shapiro@jpmorgan.com   Ravi.d.Sarawgi@jpmorgan.com  
Arthur.Flynn@jpmorgan.com   ct.financing.requests@jpmorgan.com  
de_custom_business@jpmorgan.com   Jacob.s.pollack@jpmorgan.com

 

JPMorgan Chase Bank, National Association,

as Lender

c/o JPMorgan Services Inc.

500 Stanton Christiana Rd., 3rd Floor

Newark, Delaware 19713

Attention: Robert Nichols

 

cc:

 

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

One Federal Street, 3rd Floor

Boston, Massachusetts 02110

 

U.S. Bank National Association, as Collateral Administrator

One Federal Street, 3rd Floor

Boston, Massachusetts 02110

 

Ladies and Gentlemen:

 

Reference is hereby made to the Loan and Security Agreement, dated as of August
26, 2016 (as amended, the "Agreement"), among 34th Street Funding, LLC, as
borrower (the "Company"), JPMorgan Chase Bank, National Association, as
administrative agent (the "Administrative Agent"), CĪON Investment Management,
LLC, as portfolio manager (the "Portfolio Manager"), the lenders party thereto,
and the collateral agent and securities intermediary party thereto. Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings given such terms in the Agreement.

 

   

 

 

Pursuant to the Agreement, you are hereby notified of the following:

 

(1)         The Company hereby requests an Advance under Section 2.03 of the
Agreement to be funded on [____________].

 

(2)         The aggregate amount of the Advance requested hereby is
U.S.$[_________].2

 

(3)         The proposed purchases (if any) relating to this request are as
follows:

 

Security   Par   Price   Purchased Interest (if any)                            

 

We hereby certify that all conditions to the Purchase of such Portfolio
Investment(s) set forth in Section 1.03 of the Agreement have been satisfied or
waived as of the related Trade Date (and shall be satisfied or waived as of the
related Settlement Date).

 

  Very truly yours,       34th Street Funding, LLC       By     Name:   Title:

 

 

2 Note: The requested Financing shall be in an amount such that, after giving
effect thereto and the related purchase of the applicable Portfolio
Investment(s), the Borrowing Base Test is satisfied.

  

   

 

 

EXHIBIT B

 

Form of Reports

 

[RESERVED]

 

   

 

 

EXHIBIT C

 

FORMS OF U.S. TAX COMPLIANCE CERTIFICATES

 

EXHIBIT C-1

 

U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Loan and Security Agreement dated as of August
26, 2016 (as amended, restated, replaced, supplemented or otherwise modified
from time to time, the "Loan and Security Agreement"), among 34th Street
Funding, LLC, as borrower (the "Company"); CĪON Investment Management, LLC (the
"Portfolio Manager"); the Lenders party hereto; the Collateral Agent party
hereto (in such capacity, the "Collateral Agent"); the Collateral Administrator
party hereto (in such capacity, the "Collateral Administrator"); the Securities
Intermediary party hereto (in such capacity, the "Securities Intermediary"); and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as administrative agent for the
Lenders hereunder (in such capacity, the "Administrative Agent"). Capitalized
terms used but not defined herein shall have the meanings given to them in the
Loan and Security Agreement.

 

Pursuant to the provisions of Section 3.03(f)(ii) of the Loan and Security
Agreement, the undersigned hereby certifies that (i) it is the sole record and
beneficial owner of the Advance(s) in respect of which it is providing this
certificate, (ii) it is not a "bank" within the meaning of Section 881(c)(3)(A)
of the Code, (iii) it is not a "10 percent shareholder" of the Company within
the meaning of Section 881(c)(3)(B) of the Code, and (iv) it is not a
"controlled foreign corporation" related to the Company as described in Section
881(c)(3)(C) of the Code.

 

The undersigned has furnished Administrative Agent and the Company with a
certificate of its non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E (or an
applicable successor form). By executing this certificate, the undersigned
agrees that (1) if the information provided on this certificate changes, the
undersigned shall promptly so inform Administrative Agent and the Company, and
(2) the undersigned shall have at all times furnished Administrative Agent and
the Company with a properly completed and currently effective certificate in
either the calendar year in which each payment is to be made to the undersigned,
or in either of the two calendar years preceding such payments.

 

[NAME OF LENDER]       By:       Name:     Title:  

 

Date: ________ __, 20[ ]

 

   

 

 

EXHIBIT C-2

 

U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Loan and Security Agreement dated as of August
26, 2016 (as amended, restated, replaced, supplemented or otherwise modified
from time to time, the "Loan and Security Agreement"), among 34th Street
Funding, LLC, as borrower (the "Company"); CĪON Investment Management, LLC (the
"Portfolio Manager"); the Lenders party hereto; the Collateral Agent party
hereto (in such capacity, the "Collateral Agent"); the Collateral Administrator
party hereto (in such capacity, the "Collateral Administrator"); the Securities
Intermediary party hereto (in such capacity, the "Securities Intermediary"); and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as administrative agent for the
Lenders hereunder (in such capacity, the "Administrative Agent"). Capitalized
terms used but not defined herein shall have the meanings given to them in the
Loan and Security Agreement.

 

Pursuant to the provisions of Section 3.03(f)(ii) of the Loan and Security
Agreement, the undersigned hereby certifies that (i) it is the sole record and
beneficial owner of the participation in respect of which it is providing this
certificate, (ii) it is not a "bank" within the meaning of Section 881(c)(3)(A)
of the Code, (iii) it is not a "10 percent shareholder" of the Company within
the meaning of Section 881(c)(3)(B) of the Code, and (iv) it is not a
"controlled foreign corporation" related to the Company as described in Section
881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8ECI, W-8BEN or W-8BEN-E (or an applicable
successor form). By executing this certificate, the undersigned agrees that (1)
if the information provided on this certificate changes, the undersigned shall
promptly so inform such Lender in writing, and (2) the undersigned shall have at
all times furnished such Lender with a properly completed and currently
effective certificate in either the calendar year in which each payment is to be
made to the undersigned, or in either of the two calendar years preceding such
payments.

 

[NAME OF PARTICIPANT]       By:       Name:     Title:  

 

Date: ________ __, 20[ ]

 

   

 

 

EXHIBIT C-3

 

U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Loan and Security Agreement dated as of August
26, 2016 (as amended, restated, replaced, supplemented or otherwise modified
from time to time, the "Loan and Security Agreement"), among 34th Street
Funding, LLC, as borrower (the "Company"); CĪON Investment Management, LLC (the
"Portfolio Manager"); the Lenders party hereto; the Collateral Agent party
hereto (in such capacity, the "Collateral Agent"); the Collateral Administrator
party hereto (in such capacity, the "Collateral Administrator"); the Securities
Intermediary party hereto (in such capacity, the "Securities Intermediary"); and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as administrative agent for the
Lenders hereunder (in such capacity, the "Administrative Agent"). Capitalized
terms used but not defined herein shall have the meanings given to them in the
Loan and Security Agreement.

 

Pursuant to the provisions of Section 3.03(f)(ii) of the Loan and Security
Agreement, the undersigned hereby certifies that (i) it is the sole record owner
of the participation in respect of which it is providing this certificate, (ii)
its direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect to such participation, neither the undersigned
nor any of its direct or indirect partners/members is a "bank" extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a "10 percent shareholder" of the
Company within the meaning of Section 881(c)(3)(B) the Code, and (v) none of its
direct or indirect partners/members is a "controlled foreign corporation"
related to the Company as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E
(or an applicable successor form), or (ii) an IRS Form W-8IMY accompanied by an
IRS Form W-8ECI, W-8BEN or W-8BEN-E (or an applicable successor form) from each
of such partner's/member's beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform such Lender, and (2) the undersigned shall have at all
times furnished such Lender with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

[NAME OF PARTICIPANT]       By:       Name:     Title:  

 

Date: ________ __, 20[ ]

 

   

 

 

EXHIBIT C-4

 

U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Loan and Security Agreement dated as of August
26, 2016 (as amended, restated, replaced, supplemented or otherwise modified
from time to time, the "Loan and Security Agreement"), among 34th Street
Funding, LLC, as borrower (the "Company"); CĪON Investment Management, LLC (the
"Portfolio Manager"); the Lenders party hereto; the Collateral Agent party
hereto (in such capacity, the "Collateral Agent"); the Collateral Administrator
party hereto (in such capacity, the "Collateral Administrator"); the Securities
Intermediary party hereto (in such capacity, the "Securities Intermediary"); and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as administrative agent for the
Lenders hereunder (in such capacity, the "Administrative Agent"). Capitalized
terms used but not defined herein shall have the meanings given to them in the
Loan and Security Agreement.

 

Pursuant to the provisions of Section 3.03(f)(ii) of the Loan and Security
Agreement, the undersigned hereby certifies that (i) it is the sole record owner
of the Advance(s) in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
Advance(s), (iii) with respect to the extension of credit pursuant to the Loan
and Security Agreement or any other Loan Document, neither the undersigned nor
any of its direct or indirect partners/members is a "bank" extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a "10 percent shareholder" of the
Company within the meaning of Section 881(c)(3)(B) of the Code, and (v) none of
its direct or indirect partners/members is a "controlled foreign corporation"
related to the Company as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished Administrative Agent and the Company with IRS Form
W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or W-8BEN-E (or an applicable successor form), or (ii) an IRS Form
W-8IMY accompanied by an IRS Form W-8ECI, W-8BEN or W-8BEN-E (or an applicable
successor form) from each of such partner's/member's beneficial owners that is
claiming the portfolio interest exemption. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform Administrative Agent and the
Company, and (2) the undersigned shall have at all times furnished
Administrative Agent and the Company with a properly completed and currently
effective certificate in either the calendar year in which each payment is to be
made to the undersigned, or in either of the two calendar years preceding such
payments.

 

[NAME OF LENDER]       By:       Name:     Title:  

 

Date: ________ __, 20[ ]