Exhibit 10.1

 

EXECUTION VERSION

 

 

 

CREDIT AND SECURITY AGREEMENT

Dated as of March 29, 2017

 

among

Flatiron Funding II, LLC,
as Borrower,

 

CION Investment Management, LLC,
as Collateral Manager,

 

CION Investment Corporation,

as Equityholder,

 

THE LENDERS FROM TIME TO TIME PARTIES HERETO,

 

CITIBANK, N.A.,
as Administrative Agent,

 

and

U.S. Bank National Association,

as Custodian, Collateral Agent, and Collateral Administrator

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page       ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION; COMPUTATIONS 1    
  Section 1.01. Definitions 1 Section 1.02. Rules of Construction 47 Section
1.03. Computation of Time Periods 47 Section 1.04. Collateral Value Calculation
Procedures 47       ARTICLE II ADVANCES 49       Section 2.01. Revolving Credit
Facility; Approval Requests 49 Section 2.02. Making of the Advances 50 Section
2.03. Evidence of Indebtedness; Notes 51 Section 2.04. Payment of Amounts 51
Section 2.05. Prepayment of Advances 52 Section 2.06. Changes of Commitments 53
Section 2.07. Maximum Lawful Rate 54 Section 2.08. Several Obligations 54
Section 2.09. Increased Costs 54 Section 2.10. Compensation; Breakage Payments
56 Section 2.11. Illegality; Inability to Determine Rates 57 Section 2.12. Fees
57 Section 2.13. Rescission or Return of Payment 58 Section 2.14. Default
Interest 58 Section 2.15. Payments Generally 58 Section 2.16. Replacement of
Lenders 59 Section 2.17. Defaulting Lenders. 60 Section 2.18. Right of Setoff 61
Section 2.19. Contractual Currency 61 Section 2.20. Lending Offices; Changes
Thereto 62 Section 2.21. [Reserved]. 62 Section 2.22. [Reserved]. 62 Section
2.23. Recourse Against Certain Parties. 62       ARTICLE III CONDITIONS
PRECEDENT 62       Section 3.01. Conditions Precedent to Initial Advances 62
Section 3.02. Conditions Precedent to Subsequent Advances 65       ARTICLE IV
REPRESENTATIONS AND WARRANTIES 65       Section 4.01. Representations and
Warranties of the Borrower 65 Section 4.02. Additional Representations and
Warranties of the Borrower 69 Section 4.03. Representations and Warranties of
the Equityholder and the Collateral Manager 71 Section 4.04. Representations and
Warranties of the Collateral Agent, Custodian and Collateral Administrator. 73  
    ARTICLE V COVENANTS 74       Section 5.01. Affirmative Covenants of the
Borrower 74 Section 5.02. Negative Covenants of the Borrower 81

 

 i

 

 

TABLE OF CONTENTS
(continued)

 

    Page       Section 5.03. Affirmative Covenants of the Equityholder and the
Collateral Manager 83 Section 5.04. Negative Covenant of the Equityholder and
the Collateral Manager 86 Section 5.05. Certain Undertakings Relating to
Separateness 86       ARTICLE VI EVENTS OF DEFAULT 87       Section 6.01. Events
of Default 87 Section 6.02. Remedies. 90 Section 6.03. Power of Attorney. 91    
  ARTICLE VII PLEDGE OF COLLATERAL; RIGHTS OF THE COLLATERAL AGENT 91      
Section 7.01. Grant of Security 91 Section 7.02. Release of Security Interest 93
Section 7.03. Rights and Remedies 93 Section 7.04. Remedies Cumulative 94
Section 7.05. Related Documents 94 Section 7.06. Borrower Remains Liable 94
Section 7.07. Protection of Collateral 95       ARTICLE VIII ACCOUNTS,
ACCOUNTINGS AND RELEASES 96       Section 8.01. Collection of Money 96 Section
8.02. Collection Account 96 Section 8.03. [Reserved.] 96 Section 8.04.
[Reserved.] 97 Section 8.05. The Unfunded Reserve Account; Fundings 97 Section
8.06. [Reserved]. 97 Section 8.07. Account Control Agreement. 97 Section 8.08.
Funds in Covered Accounts; Reports by Collateral Agent 98 Section 8.09.
Accountings 98 Section 8.10. Release of Collateral 99 Section 8.11. Reports by
Independent Accountants 100       ARTICLE IX APPLICATION OF FUNDS 101      
Section 9.01. Disbursements of Funds from Collection Account 101       ARTICLE X
SALE OF COLLATERAL LOANS; PURCHASE OF ADDITIONAL COLLATERAL LOANS 104      
Section 10.01. Sales of Collateral Loans 104 Section 10.02. Purchase of
Additional Collateral Loans 105 Section 10.03. [Reserved]. 105 Section 10.04.
Conditions Applicable to All Sale and Purchase Transactions 105 Section 10.05.
Additional Equity Contributions 106       ARTICLE XI THE AGENTS 106      
Section 11.01. Authorization and Action 106 Section 11.02. Delegation of Duties
109 Section 11.03. Agents’ Reliance, Etc. 109 Section 11.04. Indemnification 111
Section 11.05. Successor Agents 111

 

 ii

 

  

TABLE OF CONTENTS
(continued)

 

    Page       Section 11.06. Merger, Conversion, Consolidation or Succession to
Business of Agents 112 Section 11.07. Titles 112       ARTICLE XII MISCELLANEOUS
113       Section 12.01. No Waiver; Modifications in Writing 113 Section 12.02.
Notices, Etc. 113 Section 12.03. Taxes 115 Section 12.04. Costs and Expenses;
Indemnification 118 Section 12.05. Execution in Counterparts 121 Section 12.06.
Assignability 121 Section 12.07. Governing Law 123 Section 12.08. Severability
of Provisions 124 Section 12.09. Confidentiality 124 Section 12.10. Merger 125
Section 12.11. Survival 125 Section 12.12. Submission to Jurisdiction; Waivers;
Etc. 125 Section 12.13. IMPORTANT WAIVERS 126 Section 12.14. PATRIOT Act Notice
127 Section 12.15. Legal Holidays 127 Section 12.16. Non-Petition 127 Section
12.17. Waiver of Setoff 128 Section 12.18. Special Provisions Applicable to CP
Lenders. 128 Section 12.19. [Reserved]. 129 Section 12.20. [Reserved]. 129
Section 12.21. [Reserved]. 129 Section 12.22. Acknowledgment and Consent to
Bail-In of EEA Financial Institutions 129       ARTICLE XIII CUSTODIAN 130      
Section 13.01. Appointment of Custodian 130 Section 13.02. Duties of Custodian
131 Section 13.03. Delivery of Collateral Loans to Custodian. 131 Section 13.04.
Release of Documents/Control By Agents. 132 Section 13.05. Records. 132 Section
13.06. Reporting 132 Section 13.07. Certain General Terms 132 Section 13.08.
Compensation and Reimbursement of Custodian 134 Section 13.09. Responsibility of
Custodian 134 Section 13.10. Resignation and Removal; Appointment of Successor
137 Section 13.11. Acceptance and Appointment by Successor 138 Section 13.12.
Merger, Conversion, Consolidation or Succession to Business of Custodian 138    
  ARTICLE XIV COLLATERAL MANAGEMENT 139       Section 14.01. Designation of the
Collateral Manager 139 Section 14.02. Duties of the Collateral Manager 139
Section 14.03. Authorization of the Collateral Manager 140 Section 14.04.
Separateness Provisions of the Borrower. 141

 

 iii

 

 

TABLE OF CONTENTS
(continued)

 

    Page       Section 14.05. Compensation 141 Section 14.06. Expenses;
Indemnification 141 Section 14.07. The Collateral Manager Not to Resign;
Assignment 143 Section 14.08. Appointment of Successor Collateral Manager 143  
    ARTICLE XV THE COLLATERAL ADMINISTRATOR 144       Section 15.01. Designation
of Collateral Administrator 144 Section 15.02. Certain Duties and Powers 144
Section 15.03. Certain Rights of Collateral Administrator 147 Section 15.04.
Compensation and Reimbursement of Collateral Administrator 149 Section 15.05.
Resignation and Removal; Appointment of Successor 149 Section 15.06. Acceptance
and Appointment by Successor 150 Section 15.07. Merger, Conversion,
Consolidation or Succession to Business of Collateral Administrator 151 Section
15.08. Certain Duties of Collateral Administrator Related to Delayed Payment of
Proceeds 151 Section 15.09. Indemnification 151

 

 iv

 

 

SCHEDULES

 

Schedule 1 Initial Commitments and Percentages Schedule 2 Contents of Monthly
Report Schedule 3 Contents of Payment Date Report Schedule 4 Information
Obligations Schedule 5 Moody’s Industry Classifications Schedule 6 Closing Date
Collateral Loans Schedule 7 Approved Broker Dealers Schedule 8 Notice
Information Schedule 9 Authorized Persons Schedule 10 Diversity Score
Calculations Schedule 11 Credit and Collection Policy Schedule 12 Loan Tape
Information

 

EXHIBITS

 

Exhibit A Form of Note Exhibit B Form of Notice of Borrowing (with attached form
of Borrowing Base Calculation Statement) Exhibit C Form of Notice of Prepayment
Exhibit D Form of Assignment and Acceptance Exhibit E Forms of Tax Compliance
Certificates

  

 v

 

 

CREDIT AND SECURITY AGREEMENT

 

CREDIT AND SECURITY AGREEMENT, dated as of March 29, 2017, by and among FLATIRON
FUNDING II, LLC, a Delaware limited liability company, as borrower
(the “Borrower”), CION Investment Management, LLC, a Delaware limited liability
company, in its capacity as Collateral Manager, CION INVESTMENT CORPORATION, a
Maryland corporation, in its capacity as Equityholder, the LENDERS from time to
time party hereto, CITIBANK, N.A. (“Citibank”), as administrative agent for the
Secured Parties (as hereinafter defined) (in such capacity, the “Administrative
Agent”), and U.S. Bank National Association, as collateral agent for the Secured
Parties (in such capacity, the “Collateral Agent”), as collateral custodian for
the Secured Parties (in such capacity, the “Custodian”), and as collateral
administrator (in such capacity, the “Collateral Administrator”).

 

WITNESSETH:

 

WHEREAS, the Borrower desires that the Lenders make advances on a revolving
basis to the Borrower on the terms and subject to the conditions set forth in
this Agreement; and

 

WHEREAS, each Lender is willing to make such advances to the Borrower on the
terms and subject to the conditions set forth in this Agreement.

 

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

 

ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION; COMPUTATIONS

 

Section 1.01.         Definitions

 

As used in this Agreement, the following terms shall have the meanings
indicated:

 

“Account Control Agreement” means the Account Control Agreement, dated as of the
Closing Date, by and among the Borrower, the Collateral Manager, the Collateral
Agent and U.S. Bank National Association, as the Securities Intermediary, as the
same may be amended, modified, waived, supplemented or restated from time to
time.

 

“Accredited Investor” has the meaning assigned to such term in Section 12.06(e).

 

“Adjusted Eurodollar Rate” means, for any Interest Accrual Period, an interest
rate per annum equal to the greater of (a) a fraction, expressed as a
percentage, (i) the numerator of which is equal to the LIBOR Rate for such
Interest Accrual Period and (ii) the denominator of which is equal to 100% minus
the Eurodollar Reserve Percentage for such Interest Accrual Period and (b) 0.0%.

 

“Administrative Agent” has the meaning assigned to such term in the introduction
to this Agreement.

 

“Administrative Agent Fee Letter” means that certain fee letter, dated as of the
Closing Date, by and among Citigroup Global Markets Inc. and the Borrower
setting forth the amounts payable by the Borrower to the Administrative Agent in
connection with the transactions contemplated by this Agreement, as the same may
be amended, modified, waived, supplemented or restated from time to time.

 

 

 

  

“Administrative Expense Cap” means, for any Payment Date, an amount equal (when
taken together with any Administrative Expenses paid during the period since the
preceding Payment Date or, in the case of the first Payment Date, the Closing
Date) to $200,000 per annum, pro-rated for the related Interest Accrual Period
on the basis of a 360-day year and the actual number of days elapsed.

 

“Administrative Expenses” means the reasonable and documented fees and expenses
(including indemnities) and other amounts of the Borrower due or accrued with
respect to any Payment Date and payable to the Collateral Administrator, the
Collateral Agent, the Securities Intermediary and the Custodian, the Collateral
Administration and Agency Fee, and any other amounts and indemnities payable to
the Collateral Administrator, the Collateral Agent, the Securities Intermediary
or the Custodian, as applicable, pursuant to the terms hereof and any other
Facility Documents; provided that, for the avoidance of doubt, (1) amounts that
are expressly payable to any Person under the Priority of Payments in respect of
an amount that is stated to be payable as an amount other than as Administrative
Expenses shall not constitute Administrative Expenses and (2) expenses paid for
on the Closing Date with proceeds of the Advances comprising the initial
Borrowing shall not constitute Administrative Expenses.

 

“Advance” has the meaning assigned to such term in Section 2.01(c).

 

“Advance Rate” means, as of any date of determination with respect to each
Eligible Collateral Loan, the corresponding percentage for the type of such
Eligible Collateral Loan:

 

Type of Eligible Collateral Loan

Advance Rate Standard First Lien Loans 75% Second Lien Loans 40% Eligible
Collateral Loans that have a Moody’s Rating of Caa2 or below or an S&P Rating of
CCC or below

First Lien Loans: 40%

 

Second Lien Loans: 20%

All other Eligible Collateral Loans Case-by-case as determined by the
Administrative Agent in its sole discretion

 

“Advances Outstanding” means, as of any date of determination, the aggregate
principal amount of all Advances outstanding on such date, after giving effect
to all repayments of Advances made on or prior to such date and any new Advances
made on such date.

 

“Affected Person” means (a) the Administrative Agent, each Lender and each of
their respective Affiliates and (b) any assignee or participant of any Lender
(unless the benefit of any particular provision hereof to any such Affected
Person is otherwise expressly excluded herein).

 

 2

 

  

“Affiliate” means, in respect of a referenced Person, another Person
Controlling, Controlled by or under common Control with such referenced Person;
provided that a Person shall not be deemed to be an “Affiliate” of an Obligor
solely because it is under the common ownership or Control of the same financial
sponsor or affiliate thereof as such Obligor (except if any such Person or
Obligor provides collateral for, guarantees or otherwise supports the
obligations of the other such Person or Obligor).

 

“Agents” means, collectively, the Administrative Agent and the Collateral Agent.

 

“Aggregate Funded Spread” means, as of any date, the sum (for all Eligible
Collateral Loans) of, in the case of each Eligible Collateral Loan that bears
interest at a spread over an index (including any London interbank offered rate
based index), (i) the stated interest rate spread over such index multiplied by
(ii) the Principal Balance of such Eligible Collateral Loan; provided that, with
respect to any Floor Obligation, the stated interest rate spread on such
Eligible Collateral Loan over such index shall be deemed to be equal to the sum
of (x) the stated interest rate spread over such index and (y) the excess, if
any, of the specified “floor” rate relating to such Collateral Loan over the
LIBOR Rate as in effect.

 

“Aggregate Principal Balance” means, when used with respect to all or a portion
of the Collateral Loans, the sum of the Principal Balances of all or of such
portion of such Collateral Loans (other than Ineligible Collateral Loans).

 

“Aggregate Unfunded Spread” means, as of any date, the sum of the products
obtained by multiplying (a) for each Delayed Drawdown Collateral Loan and
Revolving Collateral Loan, the related commitment fee or other analogous fees
(expressed at a per annum rate) then in effect for such Delayed Drawdown
Collateral Loan or Revolving Collateral Loan as of such date and (b) the
unfunded commitments of each such Delayed Drawdown Collateral Loan and Revolving
Collateral Loan as of such date.

 

“Agreement” means this Credit and Security Agreement.

 

“Amortization Period” means the period beginning on the Commitment Termination
Date and ending on the date on which all Obligations are Paid in Full.

 

“Applicable Law” means any Law of any Governmental Authority, including all
federal and state banking or securities laws, to which the Person in question is
subject or by which it or any of its assets or properties are bound.

 

“Applicable Margin” means (a) during the Reinvestment Period, 2.00% per annum
and (b) during the Amortization Period, 3.00% per annum; provided that upon the
occurrence and during the continuance of an Event of Default, the Applicable
Margin in effect at such time shall be increased by an additional 2.00% per
annum.

 

“Approval Request” has the meaning assigned to such term in Section 2.01(a).

 

“Approved Broker Dealer” means each qualified broker-dealer listed on Schedule 7
hereto or approved by the Administrative Agent in its absolute discretion.

 

“Asset Value” means, with respect to any Collateral Loan on the relevant date of
determination, the amount (determined by the Administrative Agent and reported
to the Collateral Administrator) equal to:

 

(a)          the lower of (i) the par amount of such Collateral Loan and (ii)
the quoted bid-side price from MarkIt Partners, Loan Pricing Corp. or another
independent nationally recognized loan pricing service selected by the
Administrative Agent in its sole discretion, expressed as a dollar amount by
multiplying such price by such Collateral Loan’s Principal Balance; provided
that, if the Administrative Agent determines reasonably and in good faith that
the quote of any such loan pricing service is not current or accurate, the
Administrative Agent may reject such price; and otherwise

 

 3

 

 

(b)          the Administrative Agent’s commercially reasonable determination of
the net cash proceeds that would be received from the sale of such Collateral
Loan.

 

If the Collateral Manager disputes the Asset Value of any Collateral Loan
determined pursuant to the foregoing clauses (a) or (b), then the Collateral
Manager may (at the sole expense of the Borrower) obtain Firm Bids (expressed as
a dollar amount by multiplying such price by such Collateral Loan’s Principal
Balance) from at least two Approved Broker Dealers trading in such Collateral
Loan. The Asset Value of such Collateral Loan shall be the highest of such Firm
Bids.

 

“Assigned Documents” has the meaning assigned to such term in Section 7.01(c).

 

“Assignment and Acceptance” means an Assignment and Acceptance in substantially
the form of Exhibit D hereto, entered into by a Lender, an assignee, the
Administrative Agent and, if applicable, the Borrower.

 

“Authorized Person(s)” has the meaning assigned to such term in Section
13.07(d)(i).

 

“Automatic Commitment Reduction” has the meaning assigned to such term in
Section 2.06(a)(ii).

 

“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, (a) with respect to any EEA Member Country
implementing Article 55 of the Bank Recovery and Resolution Directive, the
implementing law for such EEA Member Country from time to time which is
described in the EU Bail-In Legislation Schedule and (b) the then-applicable
Commission Delegated Regulation (if any) supplementing the Bank Recovery and
Resolution Directive in relation to Article 55 thereof.

 

“Bank Recovery and Resolution Directive” means Directive 2014/59/EU of the
European Parliament and of the Council of the European Union.

 

“Bankruptcy Code” means the United States Bankruptcy Code.

 

“Base Rate” means, on any date, a fluctuating interest rate per annum equal to
the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 1.50% or (c)
the LIBOR Rate for a three-month period plus 1.0%. The Base Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer of any Agent or any Lender. Interest calculated pursuant to
clauses (a), (b) and (c) above will be determined based on a year of 360 days
and actual days elapsed.

 

“Block Notice” has the meaning assigned to such term in Section 13.04(b).

 

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

 

“Borrower Information” has the meaning assigned to such term in Section 12.09.

 

“Borrowing” has the meaning assigned to such term in Section 2.01.

 

 4

 

 

 

“Borrowing Base” means, at any date of determination, the least of:

 

(a)          the Facility Amount minus the Unfunded Exposure Amount (net of the
aggregate amount on deposit in the Unfunded Reserve Account), in each case, as
of such date;

 

(b)          (i) the aggregate sum of the product of (A) the applicable Advance
Rate for each Eligible Collateral Loan as of such date and (B) the Original
Asset Value of such Eligible Collateral Loan (less the portion, if any, of such
Eligible Collateral Loan allocated by the Borrower to the Excess Concentration
Amount as of such date), plus (ii) the Principal Proceeds and Eligible
Investments made with Principal Proceeds on deposit in the Collection Account as
of such date, minus (iii) the Unfunded Exposure Amount (net of the aggregate
amount on deposit in the Unfunded Reserve Account), in each case, as of such
date; and

 

(c)          (i) the aggregate Original Asset Value of all Eligible Collateral
Loans as of such date (less the portion, if any, of such Eligible Collateral
Loan allocated by the Borrower to the Excess Concentration Amount) minus (ii)
the Minimum Equity Amount, plus (iii) the amount of Principal Proceeds and
Eligible Investments made with Principal Proceeds on deposit in the Collection
Account as of such date, minus (iv) the Unfunded Exposure Amount (net of the
aggregate amount on deposit in the Unfunded Reserve Account), in each case, as
of such date.

 

“Borrowing Base Calculation Statement” means a statement in substantially the
form attached to the form of Notice of Borrowing attached hereto as Exhibit B,
as such form of Borrowing Base Calculation Statement may be modified by the
Administrative Agent from time to time to the extent such form does not, in the
good faith opinion of the Administrative Agent, accurately reflect the
calculation of the Coverage Tests required hereunder.

 

“Borrowing Base Deficiency” means a condition occurring on any day on which the
Borrowing Base Test is not satisfied.

 

“Borrowing Base Test” means a test that will be satisfied at any time if (a)
Advances Outstanding are less than or equal to (b) the Borrowing Base at such
time.

 

“Borrowing Date” means the date of a Borrowing.

 

“Broadly Syndicated Loan” means, as of any date of determination, any Collateral
Loan that (a) greater than 85% of the original outstanding principal or
commitment amount thereof has been syndicated to lenders other than the Borrower
and its Affiliates, (b) is not (and cannot by its terms become) subordinate in
right of payment to any obligation of the Obligor in any bankruptcy,
reorganization, arrangement, insolvency, moratorium or liquidation proceedings,
(c) is secured by a pledge of collateral, which security interest is validly
perfected and first-priority under Applicable Law (subject to liens permitted
under the Underlying Loan Agreement that are reasonable and customary for
similar loans, and liens accorded priority by law in favor of the United States
or any State or agency) and (d) the Collateral Manager determines in good faith
in accordance with the Collateral Management Standard that the value of the
collateral securing such Collateral Loan (or the enterprise value of the
underlying business) on or about the time of origination equals or exceeds the
Principal Balance of such Collateral Loan plus the aggregate outstanding
balances of all other loans of equal or higher seniority secured by the same
collateral.

 

 5

 

 

“Business Day” means any day of the year except a Saturday, Sunday or other day
on which commercial banks in New York City or the city in which the Corporate
Trust Office is located are authorized or required by law to close; provided
that when used in connection with any interest rate setting as to an Advance
determined by reference to the LIBOR Rate, any fundings, disbursements,
settlements and payments in respect of any such Advance, or any other dealings
to be carried out pursuant to this Agreement in respect of any such Advance (or
any Advance determined by reference to the Base Rate as to which such Base Rate
is determined by reference to the LIBOR Rate), the term “Business Day” shall
exclude any day on which banks are not open for dealings in deposits in Dollars
in the London interbank market.

 

“Caa/CCC Loan” means at any time, a Collateral Loan with a Moody’s Rating of
“Caa1” or lower or an S&P Rating of “CCC+” or lower (based on tranche rating not
corporate family rating).

 

“Cash” means Dollars immediately available on the day in question.

 

“Cash Interest Coverage Ratio” means, with respect to any Collateral Loan at any
time, either (a) the meaning of “Cash Interest Coverage Ratio” or comparable
term set forth in the Related Documents for such Collateral Loan, or (b) in the
case of any Collateral Loan with respect to which the Related Documents do not
include a definition of “Cash Interest Coverage Ratio” or comparable term, the
ratio obtained by dividing (i) EBITDA by (ii) Cash Interest Expense of the
related Obligor as of the Relevant Test Period, as calculated by the Collateral
Manager in accordance with the Collateral Management Standard using information
from and calculations consistent with the relevant compliance statements and
financial reporting packages provided by the relevant Obligor as per the
requirements of the Related Documents.

 

“Cash Interest Expense” means, with respect to any Obligor for any period, the
amount which, in conformity with GAAP, would be set forth opposite the caption
“interest expense” or any like caption reflected on the most recent financial
statements delivered by such Obligor to the Borrower for such period, but
excluding any non-cash item to the extent included under such caption.

 

“Certificated Security” has the meaning specified in Section 8-102(a)(4) of the
UCC.

 

“Change in Law” means (a) the adoption of any law, rule or regulation after the
Closing Date, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
Closing Date or (c) compliance by any Lender (or, for purposes of Section
2.09(b), by any lending office of such Lender or by such Lender’s holding
company, if any) with any request, guideline or directive (whether or not having
the force of law) of any Governmental Authority made or issued after the Closing
Date; provided that, notwithstanding anything herein to the contrary, (x) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines, requirements or directives thereunder or issued in connection
therewith or in implementation thereof and (y) all requests, rules, guidelines,
requirements or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed to be a “Change in
Law” regardless of the date enacted, adopted or issued.

 

“Change of Control” means, at any time, the occurrence of any of the following
events:

 

(a)          the Equityholder ceases, at any time, to directly own 100% of the
Borrower free and clear of any and all Liens or other encumbrances;

 

(b)          the Equityholder fails to be managed by the Collateral Manager;

 

 6

 

 

(c) the Equityholder fails to be subadvised by Apollo Investment Management,
L.P. (or a replacement subadvisor approved by the Lenders in their sole
discretion) pursuant to the Investment Sub-Advisory Agreement dated June 26,
2012 by and among the Collateral Manager, the Equityholder and Apollo Investment
Management, L.P. (or a replacement investment sub-advisory agreement approved by
the Lenders in their sole discretion);

 

(d)          the Collateral Manager (or a replacement investment adviser
approved by the Lenders in their sole discretion) ceases to be the investment
adviser to the Equityholder pursuant to the Investment Advisory Agreement dated
June 19, 2012 by and among the Equityholder and the Collateral Manager (or a
replacement investment advisory agreement approved by the Lenders in their sole
discretion); or

 

(e)          CION Investment Group, LLC ceases, at any time, to hold 100% of the
Series A Membership Interests and NOIC Ventures LLC ceases, at any time, to hold
100% of the Series B Membership Interests (as such terms are defined in the
operating agreement of the Collateral Manager in effect on the Closing Date) of
the Collateral Manager, free and clear of any and all Liens or other
encumbrances.

 

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

 

“Clearing Agency” means an organization registered as a “clearing agency”
pursuant to Section 17A of the Exchange Act.

 

“Clearing Corporation” means each entity included within the meaning of
“clearing corporation” under Section 8-102(a)(5) of the UCC.

 

“Clearing Corporation Security” means securities which are in the custody of or
maintained on the books of a Clearing Corporation or a nominee subject to the
control of a Clearing Corporation and, if they are Certificated Securities in
registered form, properly endorsed to or registered in the name of the Clearing
Corporation or such nominee.

 

“Closing Date” means March 29, 2017.

 

“Closing Date Participation Agreement” means each of (x) the Master
Participation Agreement, dated as of the Closing Date, by and between 15th
Street Loan Funding LLC, as transferor, and the Borrower, as transferee and (y)
the Master Participation Agreement, dated as of the Closing Date, by and between
15th Street Loan Funding 2 LLC, as transferor, and the Borrower, as transferee,
in each case relating to the Closing Date Participation Interests.

 

“Closing Date Participation Interests” means the undivided 100% participation
interests granted by 15th Street Loan Funding LLC and 15th Street Loan Funding 2
LLC, as applicable, to the Borrower in and to each Collateral Loan identified on
Annex A to the Closing Date Participation Agreement and in which a Lien is
granted therein by the Borrower to the Collateral Agent pursuant to this
Agreement.

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” has the meaning assigned to such term in Section 7.01(a).

 

“Collateral Administrator” has the meaning assigned to such term in the
introduction to this Agreement.

 

 7

 

 

“Collateral Administration and Agency Fees” means the fees payable to the
Collateral Administrator, the Collateral Agent, the Custodian and the Securities
Intermediary pursuant to the Collateral Administration and Agency Fee Letter.

 

“Collateral Administration and Agency Fee Letter” means the fee letter, dated on
or about March 29, 2017, by and among the Borrower and U.S. Bank National
Association, as the Collateral Administrator, Collateral Agent, Custodian and
Securities Intermediary setting forth the amounts payable by the Borrower to the
Collateral Administrator, the Collateral Agent, the Custodian and the Securities
Intermediary in connection with the transactions contemplated by this Agreement.

 

“Collateral Agent” has the meaning assigned to such term in the introduction to
this Agreement.

 

“Collateral Loan” means a commercial loan, debt obligation or a Closing Date
Participation Interest owned or acquired by the Borrower.

 

“Collateral Management Fee” means the fee to the Collateral Manager for services
rendered and performance of its obligations under this Agreement, in arrears on
each Payment Date (subject to availability of funds and the Priority of
Payments), in an amount equal to 0.50% per annum of the Fee Basis Amount;
measured as of the Determination Date immediately preceding such Payment Date
(calculated on the basis of a 360-day year and the actual number of days
elapsed).

 

“Collateral Management Standard” means, with respect to any Collateral Loan
included in the Collateral, to service and administer such Collateral Loan (on
behalf of the Borrower for the benefit of the Secured Parties) in accordance
with Applicable Law, the Related Documents, the Facility Documents and all
customary and usual servicing practices (a) which are consistent with the higher
of: (i) the degree of skill and care no less than that exercised by prudent
managers of national standing relating to assets of the nature and character of
the Collateral Loans, and (ii) the same care, skill, prudence and diligence with
which the Collateral Manager services and administers comparable assets for its
own account or for the account of others having similar investment objectives
and restrictions; (b) with a view to maximize the value of the Collateral Loans;
and (c) without regard to: (i) any relationship that the Collateral Manager or
any Affiliate of the Collateral Manager may have with any Obligor or any
Affiliate of any Obligor, (ii) the Collateral Manager’s right to receive
compensation for its services hereunder or with respect to any particular
transaction, (iii) the ownership by the Collateral Manager or any Affiliate of
any Retained Interest or any Loan, (iv) the ownership, servicing or management
for others by the Collateral Manager of any other Collateral Loans or property
by the Collateral Manager or (v) any relationship that the Collateral Manager or
any Affiliate of the Collateral Manager may have with any holder of other loans
of the Obligor with respect to such Collateral Loans.

 

“Collateral Manager” has the meaning assigned to such term in Section 14.01(a).

 

“Collateral Manager Default” means any one or more of the following:

 

(a)          any failure by the Collateral Manager to make any payment, transfer
or deposit into any Covered Account as required by this Agreement on the date
that such payment, transfer or deposit is required to be made (after giving
effect to any related grace period or applicable notice period or requirement);

 

(b)          any failure by the Collateral Manager to deliver any report
required to be delivered by it under this Agreement or the other Facility
Documents on or before the date that is three (3) Business Days after the date
that such report is required to be delivered;

 

 8

 

 

(c)          except as otherwise provided in this definition, a default in any
material respect in the performance, or breach in any material respect, of any
covenant or agreement of the Collateral Manager under any Facility Document to
which it is a party, or the failure of any representation or warranty of the
Collateral Manager made in any Facility Document to be correct, in each case, in
all material respects when the same shall have been made, and the continuation
of such default, breach or failure for a period of ten (10) Business Days after
the earlier of (i) the date on which written notice to the Collateral Manager of
such failure, requiring the same to be remedied, shall have been given to the
Collateral Manager by the Administrative Agent, and (ii) the date on which a
Responsible Officer of the Collateral Manager acquires actual knowledge thereof;

 

(d)          an Insolvency Event shall occur with respect to the Collateral
Manager;

 

(e)          the occurrence of an Event of Default;

 

(f)          the rendering of one or more final judgments, decrees or orders by
a court or arbitrator of competent jurisdiction for the payment of money in
excess individually or in the aggregate of $1,000,000 against the Collateral
Manager (exclusive of judgment amounts fully covered by insurance), and the
Collateral Manager shall not have either (i) discharged or provided for the
discharge of any such judgment, decree or order in accordance with its terms or
(ii) perfected a timely appeal of such judgment, decree or order and caused the
execution of same to be stayed during the pendency of the appeal, in each case,
within thirty (30) Business Days from the date of entry thereof;

 

(g)          the failure of the Collateral Manager to make any payment when due
(after giving effect to any related grace period) under one or more agreements
for borrowed money to which it is a party and the indebtedness for borrowed
money thereunder is in an amount in excess of $5,000,000, individually or in the
aggregate, or the occurrence of any event or condition that has resulted in the
acceleration of such indebtedness, whether or not waived;

 

(h)          the Collateral Manager makes any withdrawal from a Covered Account
not in accordance with the terms of this Agreement or the other Facility
Documents;

 

(i)          the occurrence of a Change of Control;

 

(j)          a material change, which is adverse to the interests of the
Lenders, is made with respect to the Credit and Collection Policy of the
Collateral Manager without the prior written consent of the Administrative Agent
in accordance with Section 5.01(m); or

 

(k)          CION Investment Management, LLC ceases to be the Collateral Manager
hereunder.

 

“Collateral Quality Test” means a test that is satisfied if, as of any date of
determination, in the aggregate, the Eligible Collateral Loans owned (or, in
relation to a proposed purchase of an Eligible Collateral Loan, both owned and
proposed to be owned) by the Borrower satisfy each of the tests set forth below,
calculated, in each case, in accordance with Section 1.04:

 

(a)          the Maximum Moody’s Weighted Average Rating Factor Test;

 

(b)          the Minimum Weighted Average Spread Test;

 

(c)          the Maximum Weighted Average Life Test; and

 

(d)          the Minimum Diversity Score Test.

 

 9

 

 

“Collection Account” has the meaning assigned to such term in Section 8.02.

 

“Collection Period” means, with respect to (a) the first Payment Date, the
period from and including the Closing Date to and including the Determination
Date immediately preceding the first Payment Date, and (b) any subsequent
Payment Date, the period from but excluding the Determination Date immediately
preceding the previous Payment Date to and including the Determination Date
immediately preceding the current Payment Date (or, in the case of the final
Payment Date, to and including such Payment Date).

 

“Collections” means all cash collections, distributions, payments or other
amounts received, or to be received, by the Borrower from any Person in respect
of any Collateral Loan constituting Collateral, including all principal,
interest, fees, distributions, recoveries and redemption and withdrawal proceeds
payable to the Borrower under or in connection with any such Collateral Loans
and all Proceeds from any sale or disposition of any such Collateral Loans, but
excluding (a) any amounts received by the Borrower from an Obligor or any other
party obligated to make payments in respect of such Collateral Loan following
the sale of a Collateral Loan by the Borrower that the Borrower is required to
pay to the purchaser of such Collateral Loan so long as such amounts are not
included in the net proceeds reported to be received by the Borrower from such
sale and (b) any amounts in respect of indemnities received by the Borrower but
owing to parties other than the Borrower in accordance with the Related
Documents for any Collateral Loan.

 

“Commercial Paper Notes” means commercial paper notes or secured liquidity notes
issued by a CP Conduit or an entity providing funding to a CP Conduit from time
to time.

 

“Commitment” means, as to each Lender, the obligation of such Lender to make, on
and subject to the terms and conditions hereof, Advances to the Borrower
pursuant to Section 2.01(c) in an aggregate principal amount at any one time
outstanding for such Lender up to but not exceeding the amount set forth
opposite the name of such Lender on Schedule 1 or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Commitment, as
applicable, as such amount may be reduced from time to time pursuant to Section
2.06 or increased or reduced from time to time pursuant to assignments effected
in accordance with Section 12.06(a).

 

“Commitment Fee” has the meaning assigned to such term in Section 2.12(a).

 

“Commitment Fee Rate” means 0.75% per annum; provided that such rate shall
increase to 2.00% per annum if the Borrower elects not to have the Automatic
Commitment Reduction apply in accordance with Section 2.06(a)(ii).

 

“Commitment Termination Date” means the last day of the Reinvestment Period;
provided that, if the Commitment Termination Date would otherwise not be a
Business Day, then the Commitment Termination Date shall be the immediately
succeeding Business Day.

 

“Competitor” means any Person who, in the reasonable determination of the
Administrative Agent, devotes substantially all of its business resources to
middle market cash flow lending, and is in direct or indirect competition with
the Borrower, the Collateral Manager or the Equityholder.

 

“Concentration Limitations” means, as of any date of determination, the
following limitations (as applied to the Aggregate Principal Balance of the
Eligible Collateral Loans owned (or, in relation to a proposed purchase of an
Eligible Collateral Loan, proposed to be owned by the Borrower) by the Borrower,
calculated as a percentage of the Aggregate Principal Balance of the Eligible
Collateral Loans owned (or, in relation to a proposed purchase of an Eligible
Collateral Loan, proposed to be owned) by the Borrower plus the aggregate amount
of Principal Proceeds then on deposit in the Collection Account, and in each
case in accordance with the procedures set forth in Section 1.04):

 

 10

 

 

(a)          not more than 3.0% consists of Collateral Loans of any one (1)
Obligor (and Affiliates thereof), provided that the Collateral Loans of the five
(5) largest single Obligors (and their respective Affiliates) (measured by
Principal Balance) may constitute up to 5.0% each;

 

(b)          not more than 15.0% consists of Collateral Loans with Obligors in
any one Moody’s Industry Classification, with the exception of one (1) Moody’s
Industry Classification, which may constitute 20.0%;

 

(c)          not more than 30.0% consists of Second Lien Loans;

 

(d)          not more than 25.0% consists of Caa/CCC Loans;

 

(e)          not more than 5.0% consists of Fixed Rate Obligations;

 

(f)          not more than 10.0% consists of unfunded commitments under
Revolving Collateral Loans and Delayed Drawdown Collateral Loans;

 

(g)          not more than 5.0% consists of PIK Loans;

 

(h)          not more than 30.0% consists of Collateral Loans or portions
thereof that have an original term to maturity of greater than seven (7.0)
years;

 

(i)          not more than 30.0% consists of Collateral Loans or portions
thereof that have an outstanding Tranche Size of less than $100,000,000 as of
the date of acquisition thereof by the Borrower; and

 

(j)          not more than 5.0% consists of Collateral Loans that provide for
payment of interest in cash less frequently than quarterly.

 

“Conduit Rating Agency” means each nationally recognized investment rating
agency that is then rating the Commercial Paper Notes issued by a CP Conduit at
its request.

 

“Conduit Support Facility” means, with respect to any CP Lender, (i) a liquidity
loan agreement, liquidity asset purchase agreement, swap or other facility that
provides liquidity for Commercial Paper Notes and any guaranty of any such
agreement or facility and (ii) a credit asset purchase agreement, swap or other
similar facility that provides credit support for defaults in respect any assets
of the CP Lender and any guaranty of any such agreement or facility.

 

“Conduit Support Funding” means, with respect to any Advance funded by a CP
Lender, at any time, funding by a CP Lender of all or a portion of the
outstanding principal amount of such Advance with funds provided under a Conduit
Support Facility.

 

“Conduit Support Funding Period” means, with respect to any Advance funded by a
CP Lender, a period of time during which all or a portion of the outstanding
principal amount of such Advance is funded by a Conduit Support Funding.

 

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

 

 11

 

 

“Conduit Trustee” means, with respect to any CP Lender, a trustee or collateral
agent for the benefit of the holders of the Commercial Paper Notes or other
senior indebtedness of such CP Lender appointed pursuant to such CP Lender’s
program documents.

 

“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.

 

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

 

“Contractual Currency” has the meaning assigned to such term in Section 2.19.

 

“Control” means (i) the direct or indirect possession of the power to vote 20%
or more of the voting securities of a Person or direct or cause the direction of
the management or policies of a Person whether through ownership, by contract,
arrangement or understanding, or otherwise or (ii) ownership of 20% or more of
the equity securities of a Person. “Controlled” and “Controlling” have the
meaning correlative thereto.

 

“Corporate Trust Office” means the applicable designated corporate trust office
of the Collateral Agent, the Collateral Administrator, the Securities
Intermediary or the Custodian, as applicable, specified on Schedule 8 hereto, or
such other address within the United States as it may designate from time to
time by notice to the Administrative Agent.

 

“Covenant Lite Loan” means a Collateral Loan that (a) does not contain any
financial covenants or (b) requires the related Obligor to comply with an
Incurrence Covenant, but does not require the related Obligor to comply with a
Maintenance Covenant (regardless of whether compliance with one or more
Incurrence Covenants is otherwise required by the Related Documents).

 

“Coverage Test” means each of the Borrowing Base Test, the Equity Coverage Test
and the Minimum Equity Test.

 

“Covered Account” means each of the Collection Account and the Unfunded Reserve
Account.

 

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

 

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

 

 12

 

 

“CP Rate” means for any Interest Accrual Period for any Advances made by a CP
Lender, the per annum rate equivalent to the weighted average of the per annum
rates paid or payable by such CP Lender from time to time as interest on or
otherwise (by means of interest rate hedges or otherwise) in respect of the
Commercial Paper Notes issued by such CP Lender during such period, as
determined by such CP Lender that are allocated, in whole or in part, by such CP
Lender to fund the purchase or maintenance of Advances during such Interest
Accrual Period as determined by such CP Lender and reported to the Borrower and
the Collateral Manager, which rates shall reflect and give effect to the
commissions of placement agents and dealers in respect of such Commercial Paper
Notes, to the extent such commissions are allocated, in whole or in part, to
such Commercial Paper Notes by such CP Lender, plus (without duplication) any
and all costs and expenses of any issuing and paying agent or other Person
responsible for the administration of any CP Lender’s Commercial Paper Notes
program in connection with the preparation, completion, issuance, delivery or
payment of Commercial Paper Notes issued to fund the purchase or maintenance of
such Advances, plus (without duplication) any other interest and costs allocated
by such CP Lender to fund or maintain the loans associated with the funding by
such CP Lender of small or odd lot amounts that are not funded with Commercial
Paper Notes; provided, however, that that if any component of such rate is a
discount rate, in calculating the “CP Rate” for such Interest Accrual Period the
CP Lender shall for such component use the rate resulting from converting such
discount rate to an interest bearing equivalent rate per annum.

 

“Credit and Collection Policy” means the written credit policies manual of the
Collateral Manager set forth on Schedule 11, as such credit and collection
policy may be as amended or supplemented from time to time in accordance with
Section 5.01(m).

 

“Custodian” has the meaning assigned to such term in the introduction to this
Agreement.

 

“Data File” has the meaning specified in Section 8.09(a).

 

“Data Site” means an electronic password protected data site maintained by the
Borrower (or by the Collateral Manager on behalf of Borrower) at Merrill
Corporation, Intralinks, SyndTrak Online or any other similar electronic
distribution system reasonably acceptable to the Administrative Agent.

 

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

 

“Default Rate” means a rate per annum equal to the rate of interest otherwise in
effect pursuant to this Agreement (or, if no such rate is specified, the Base
Rate) plus 2.00% per annum; provided that such additional margin shall not be
applied pursuant to this definition in any case where it has already been
applied pursuant to the definition of “Applicable Margin.”

 

“Defaulted Loan” means any Collateral Loan:

 

(a)          with respect to which a default as to the payment of principal
and/or interest has occurred and is continuing (without regard to any grace
period applicable thereto, or waiver or forbearance thereof, after the passage
of five (5) Business Days or seven (7) calendar days, whichever is greater, but
in no case beyond the passage of any grace period applicable thereto);

 

(b)          with respect to which a default as to the payment of principal
and/or interest has occurred and is continuing with respect to another full
recourse debt obligation of the same Obligor secured by the same collateral and
which is senior to or pari passu with in right of payment to such Loan (without
regard to any grace period applicable thereto, or waiver or forbearance thereof,
after the passage (in the case of a default that in the Collateral Manager’s
judgment, as certified to the Lender in writing, is not due to credit-related
causes) of five (5) Business Days or seven (7) calendar days, whichever is
greater, but in no case beyond the passage of any grace period applicable
thereto);

 

 13

 

 

(c)          with respect to which the Obligor thereunder or others have
instituted proceedings to have such Obligor adjudicated as bankrupt or insolvent
or placed into receivership and such proceedings have not been stayed or
dismissed or such Obligor has filed for protection under the Bankruptcy Code;

 

(d)          that has an S&P Rating of “D” or below or “SD” or a Moody’s
probability of default rating (as published by Moody’s) of “D” or “LD” or
previously had such ratings before they were withdrawn by S&P or Moody’s (in
each case based on tranche rating not corporate family rating);

 

(e)          that is pari passu in right of payment as to the payment of
principal and/or interest to another debt obligation of the same Obligor which
has an S&P Rating of “SD” or “D” or lower or a Moody’s probability of default
rating (as published by Moody’s) of “D” or “LD”; provided that both the
Collateral Loan and such other debt obligation are full recourse obligations of
such Obligor;

 

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

 

(g)          with respect to which the Collateral Manager has, in its reasonable
commercial judgment, otherwise declared such debt obligation to be a “Defaulted
Loan”; or

 

(h)          with respect to which there has been effected any distressed
exchange or other distressed debt restructuring where the Obligor of such
Collateral Loan has offered the holder or holders thereof a new security or
package of securities that, in the reasonable business judgment of the
Collateral Manager, amounts to a diminished financial obligation.

 

“Defaulting Lender” means, at any time, any Lender that (a) has failed for two
(2) or more Business Days after a Borrowing Date to fund its portion of an
Advance required pursuant to the terms of this Agreement (other than failures to
fund as a result of a bona fide dispute as to whether the conditions to
borrowing were satisfied on the relevant Borrowing Date (which condition
precedent, together with any applicable default, has been specifically
identified to the Administrative Agent in writing or in any public statement by
such Lender)), (b) has notified the Borrower or the Administrative Agent in
writing that it does not intend to comply with its funding obligations
hereunder, or has made a public statement to that effect (unless such writing or
public statement relates to such Lender’s obligation to fund an Advance
hereunder and states that such position is based on such Lender’s determination
that a condition precedent to funding (which condition precedent, together with
any applicable default, shall be specifically identified in such writing or
public statement) cannot be satisfied), (c) has failed, within two (2) Business
Days after written request by the Administrative Agent or the Borrower, to
confirm in writing to the Administrative Agent and the Borrower that it will
comply with its prospective funding obligations hereunder (provided that such
Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon
receipt of such written confirmation by the Administrative Agent and the
Borrower) or (d) has, or has a direct or indirect parent company that has, (i)
become the subject of a proceeding under the Bankruptcy Code or any other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, receivership, insolvency, reorganization or similar
debtor relief laws of the United States or other applicable jurisdiction, (ii)
had appointed for it a receiver, custodian, conservator, trustee, administrator,
assignee for the benefit of creditors or similar person charged with
reorganization or liquidation of its business or assets, including the Federal
Deposit Insurance Corporation or any other state or federal regulatory authority
acting in such a capacity or (iii) become the subject of a Bail-in Action;
provided that a Lender shall not be a Defaulting Lender solely by virtue of the
ownership or acquisition of any equity interest in that Lender or any direct or
indirect parent company thereof by a Governmental Authority so long as such
ownership interest does not result in or provide such Lender with immunity from
the jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Lender. Any determination by the Administrative
Agent that a Lender is a Defaulting Lender under any one or more of clauses (a)
through (d) shall be conclusive and binding absent manifest error.

 

 14

 

 

“Delayed Drawdown Collateral Loan” means a Collateral Loan that (a) requires the
Borrower to make one or more future advances to the Obligor under the Related
Documents, (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; provided that any such Collateral
Loan will be a Delayed Drawdown Collateral Loan only to the extent of unfunded
commitments and solely until all commitments by the Borrower to make advances on
such Collateral Loan to the Obligor under the Related Documents expire or are
terminated or are reduced to zero.

 

“Deliver” or “Delivered” or “Delivery” means the taking of the following steps:

 

(a)          with respect to such of the Collateral as constitutes an
instrument, causing the Custodian to take and continuously maintain possession
of such instrument indorsed to the Collateral Agent or in blank by an effective
indorsement;

 

(b)          with respect to such of the Collateral as constitutes a
Certificated Security, (A) causing the delivery of such Certificated Security to
the Custodian registered in the name of the Collateral Agent or its affiliated
nominee or endorsed to the Collateral Agent or in blank, (B) causing the
Custodian to continuously identify on its books and records that such
Certificated Security is credited to the appropriate Covered Account and (C)
causing the Custodian to maintain continuous possession of such Certificated
Security;

 

(c)          with respect to such of the Collateral as constitutes an
Uncertificated Security, either (i) causing the issuer of such Uncertificated
Security to register the Collateral Agent as the registered owner of such
Uncertificated Security or (ii) causing the issuer of such Uncertificated
Security to agree to comply with instructions of the Collateral Agent without
further consent of the Borrower, upon original issue or registration of transfer
by the issuer of such Uncertificated Security;

 

(d)          with respect to such of the Collateral as constitutes a Security
Entitlement, causing the Custodian as Securities Intermediary to indicate by
book entry that the Financial Asset relating to such Security Entitlement has
been credited to the appropriate Covered Account;

 

(e)          with respect to such of the Collateral as constitutes a deposit
account, causing such deposit account to be maintained in the name of the
Collateral Agent and causing the bank with which such deposit account is
maintained to agree in writing with the parties hereto that (i) such bank shall
comply with instructions originated by the Collateral Agent directing
disposition of the funds in the deposit account without further consent of any
other Person, (ii) such bank will not agree with any Person other than the
Collateral Agent to comply with instructions originated by any Person other than
the Collateral Agent, (iii) such deposit account and the funds on deposit
therein shall not be subject to any Lien or right of set-off in favor of such
bank or anyone claiming through it (other than the Collateral Agent), (iv) such
agreement shall be governed by the laws of the State of New York, and (v) with
respect to such bank, the State of New York shall be the “bank’s jurisdiction”
for purposes of Article 9 of the UCC;

 

 15

 

 

(f)          with respect to such of the Collateral as constitutes an account or
a general intangible or is not otherwise described in the foregoing clauses
(a)-(e), causing to be filed with the Delaware Secretary of State a properly
completed UCC financing statement that names the Borrower as debtor and the
Collateral Agent as secured party and that describes such Collateral (which
financing statement may have been previously filed) or any equivalent filing in
any applicable jurisdiction; or

 

(g)          in the case of each of clauses (a) through (f) above, such
additional or alternative procedures as may hereafter become appropriate to
perfect the security interest granted to the Collateral Agent hereunder in such
items of the Collateral, consistent with Applicable Law.

 

In addition, the Collateral Manager on behalf of the Borrower will obtain any
and all consents required by the Related Documents relating to any Instruments,
accounts or general intangibles for the transfer of ownership and/or pledge
hereunder (except to the extent that the requirement for such consent is
rendered ineffective under Section 9-406 of the UCC).

 

“Determination Date” means, with respect to any Payment Date, the fifth (5th)
Business Day prior to such Payment Date; provided that, with respect to the
final Payment Date, the Determination Date shall be such Payment Date.

 

“DIP Loan” means a Collateral Loan made to a debtor-in-possession pursuant to
Section 364 of the Bankruptcy Code having the priority allowed by either Section
364(c) or 364(d) of the Bankruptcy Code and fully secured by senior liens on
which the related Obligor is required to pay interest and/or principal on a
current basis.

 

“Disqualified Person” means any financial institutions or other entities that
are Competitors to the Collateral Manager, Equityholder or Borrower and are
identified by name in writing delivered by the Collateral Manager to the
Administrative Agent on or prior to the Closing Date; provided that, in no event
shall Disqualified Persons include any commercial bank, investment bank,
insurance company, pension plan, pension fund, pension advisory firm, mutual
fund, government entity or plan or institution substantially similar to any of
the foregoing.

 

“Disruption Event” means the occurrence of any of the following: (a) any Lender
shall have notified the Administrative Agent of the commercially reasonable
determination of such Lender that it would be contrary to Law or to the
directive of any central bank or other governmental authority (whether or not
having the force of law) to obtain Dollars to fund any Advance, (b) the
Administrative Agent shall have notified the Borrower, each Lender of the
inability, acting in a commercially reasonable manner, to determine the Adjusted
Eurodollar Rate, (c) the Required Lenders shall have notified the Administrative
Agent of the commercially reasonable determination by such Lenders that the rate
at which deposits of Dollars are being offered to such Lenders does not
accurately reflect the cost to such Lenders of making, funding or maintaining
any Advance or (d) any Lender shall have notified the Administrative Agent of
the inability of such Lender, acting in a commercially reasonable manner, to
obtain Dollars to make, fund or maintain any Advance.

 

“Document Checklist” means an electronic or hard copy list delivered by the
Borrower (or by the Collateral Manager on behalf of the Borrower) to the
Custodian that identifies each of the documents contained in each Loan File and
whether such document is an original or a copy and whether a hard copy or
electronic copy will be delivered to the Custodian related to a Collateral Loan
and includes the name of the Obligor with respect to such Collateral Loan, in
each case as of the related date of Advance or acquisition by the Borrower.

 

 16

 

 

“Diversity Score” means, as of any day, a single number that indicates
Collateral Loan concentration in terms of both Obligor and industry
concentration, calculated as set forth in Schedule 10 hereto, as such diversity
scores shall be updated at the option of the Administrative Agent if Moody’s
publishes revised criteria.

 

“Dollars”, “USD” and “$” mean lawful money of the United States of America.

 

“Due Date” means each date on which any payment is due on a Collateral Loan in
accordance with its terms.

 

“EBITDA” means, with respect to any Relevant Test Period (or other period set
forth herein) and any Collateral Loan, the meaning of the term “Adjusted
EBITDA”, the term “EBITDA” or any comparable term in the Related Documents for
such period and Collateral Loan (or, in the case of a Collateral Loan for which
the Related Documents have not been executed, as set forth in the relevant
marketing materials or financial model in respect of such Collateral Loan, until
the first testing period after the Related Documents have been executed),
together with all add-backs and exclusions as designated in such Related
Documents, and in any case that the term “Adjusted EBITDA”, the term “EBITDA”
or such comparable term is not defined in such Related Document or marketing
materials, an amount, for the principal Obligor thereunder and any of its
parents or Subsidiaries that are obligated as guarantor or co-borrower pursuant
to the Related Documents for such Collateral Loan (determined on a consolidated
basis without duplication in accordance with GAAP (and also on a pro forma basis
as determined in good faith by the Collateral Manager in accordance with the
Collateral Management Standard in case of any acquisitions)) equal to earnings
from continuing operations for such period plus interest expense, income taxes,
unallocated depreciation and amortization for such period (to the extent
deducted in determining earnings from continuing operations for such period),
and any other item the Collateral Manager and the Administrative Agent deem to
be appropriate.

 

“EEA Financial Institution” means (a) any credit institution or investment firm
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 financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

 

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

 

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

 

“Eligible Collateral Loan” means a Collateral Loan that (1) has been approved by
the Administrative Agent prior to the acquisition thereof by the Borrower and
(2) satisfies each of the following eligibility requirements on any date of
determination (unless otherwise expressly waived by the Administrative Agent):

 

(a)          is a First Lien Loan, a Second Lien Loan or (prior to the date that
is sixty (60) days after the Closing Date (or such longer period to which the
Administrative Agent may agree in its sole discretion)) a Closing Date
Participation Interest;

 

 17

 

 

(b)          is denominated and payable in USD and does not permit the currency
in which such loan is payable or the place of payment to be changed;

 

(c)          the Primary Obligor with respect to such Collateral Loan is
organized or incorporated in the United States (or any state thereof);

 

(d)          the Related Documents for which are governed by the laws of the
United States (or any state thereof);

 

(e)          has an original term to maturity of not more than eight (8.0)
years;

 

(f)          has a Moody’s Rating of greater than or equal to Caa2 (Moody’s) and
an S&P Rating of greater than or equal to CCC, on the date of acquisition (based
on tranche rating not corporate family rating);

 

(g)          if it is a PIK Loan, it provides for a minimum cash spread of at
least 2.50%;

 

(h)          was acquired for a Purchase Price of at least 85% of its Principal
Balance unless otherwise agreed to in writing by the Administrative Agent;

 

(i)          has a Tranche Size of at least $75,000,000 on the date such
Collateral Loan is purchased by the Borrower;

 

(j)          has at least one bid quotation from a nationally recognized
independent dealer in the related loan as reported by an independent nationally
recognized pricing service;

 

(k)          is not an obligation (other than a Delayed Drawdown Collateral Loan
or a Revolving Collateral Loan) pursuant to which any future advances or
payments to the Obligor may be required to be made by the Borrower and will not
result in the imposition of any other present or future, actual or contingent,
monetary liabilities or obligations;

 

(l)          does not constitute Margin Stock;

 

(m)         is not an Equity Security or a component thereof and does not
provide for mandatory or optional conversion or exchange into an Equity
Security; provided that Equity Securities may be received by the Borrower in
exchange for a Collateral Loan or a portion thereof in connection with an
Insolvency Event, reorganization, debt restructuring or workout of the Obligor
thereof that would be considered “received in lieu of debts previously
contracted with respect to” such Collateral Loan under the Volcker Rule;

 

(n)         is a Broadly Syndicated Loan and is not a bilateral loan;

 

(o)         is not a Defaulted Loan and is otherwise a Collateral Loan as to
which no payment default or breach in any material respect of any other term or
covenant set forth in the Related Documents exists;

 

(p)         the related Obligor on the Loan is not insolvent and there are no
proceedings pending (or, to the best knowledge of any Responsible Officer of the
Borrower or the Collateral Manager, threatened) wherein the Obligor on such
Collateral Loan or any other party or any governmental entity (i) has asserted
insolvency of the related Obligor on such Collateral Loan, or (ii) has alleged
that such Collateral Loan or any of the underlying loan documents which create
such loan is illegal or unenforceable and such Collateral Loan is not subject to
any pending or threatened litigation or right or claim of rescission, set-off,
counterclaim or defense on the part of the related Obligor;

 

 18

 

 

(q)          the underlying assets securing such Collateral Loan have not been
used by the related Obligor (or any parent entity, subsidiary or Affiliate
thereof) in any manner or for any purpose that would result in any material risk
of liability being imposed upon the Administrative Agent, Borrower, the
Collateral Manager or any Secured Party under any Applicable Law;

 

(r)          the acquisition thereof will not violate any Applicable Law or, to
the actual knowledge of a Responsible Officer of the Borrower, cause the
Administrative Agent or any Lender to fail to comply with any request or
directive from any banking authority or governmental entity having jurisdiction
over the Administrative Agent or such Lender;

 

(s)         (i) except for Permitted Liens, the Borrower has good and marketable
title to, and is the sole owner of, such Collateral Loan and the Related
Security (other than the Collateral Loans and Related Security securing
Collateral Loans related to the Collateral Participation Interests, until any
such Collateral Participation Interest is elevated to a full assignment) or,
with respect to any Related Security securing such Collateral Loan, the Borrower
has the benefit of a valid security interest therein of the priority required by
the Related Documents free and clear of all Liens and (ii) the Borrower has
granted to the Administrative Agent for the benefit of the Secured Parties, a
valid and perfected first-priority security interest in such Collateral Loan;

 

(t)          such Collateral Loan and the Related Documents for such Collateral
Loan constitute the legal, valid and binding obligations of the related Obligor
thereunder and each guarantor thereof, enforceable against such Person in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors’ rights generally or general principles of
equity, regardless of whether considered in a proceeding in equity or at law;

 

(u)         none of the Collateral Manager, Equityholder or Apollo Investment
Management, L.P. is an Affiliate of the related Obligor on such Collateral Loan;

 

(v)         provides for a fixed amount of principal to be payable in cash no
later than its stated maturity;

 

(w)        the related Obligor on such Collateral Loan (i) is a business entity
(and not a natural person) duly organized and validly existing under the laws of
its jurisdiction of organization, (ii) is a legal operating entity or holding
company, and (iii) is not a governmental entity;

 

(x)          the proceeds of which are not permitted primarily to be used for
personal, family or household purposes;

 

(y)          is capable of being transferred to and owned by the Borrower
(whether directly or by means of a security entitlement) and of being pledged,
assigned or novated by the owner thereof or of an interest therein, subject to
customary restrictions for assets of the type constituting the Collateral Loans
(i) to the Collateral Agent, (ii) to any assignee of the Collateral Agent
permitted or contemplated under this Agreement, (iii) to any Person at any
foreclosure or strict foreclosure sale or other disposition initiated by a
secured creditor in furtherance of its security interest and (iv) to commercial
banks, financial institutions, offshore and other funds (in each case, including
transfer permitted by operation of the UCC);

 

 19

 

 

(z)          does not contain restrictions on transfer which materially limits
potential transferees, other than any such restrictions customary for assets of
the type constituting the Collateral Loans;

 

(aa)        does not contain confidentiality restrictions that would prohibit
the Administrative Agent, the Collateral Agent or the Lenders from accessing or
receiving all material obligor information with regards to such Collateral Loan
(subject to customary confidentiality provisions);

 

(bb)        is not a Structured Finance Obligation, an unsecured loan, a bridge
loan or a bond;

 

(cc)        does not subject the Borrower to withholding tax, fee or
governmental charge unless the Obligor is required to make “gross-up” payments
constituting 100% of such withholding tax, fee or governmental charge on an
after-tax basis;

 

(dd)       is in “registered” form and constitutes indebtedness for U.S. federal
income tax purposes;

 

(ee)        the Loan File with respect to such Collateral Loan has been
delivered to the Custodian or the time period for such delivery under Section
13.03(a) has not yet expired;

 

(ff)         the audited financial statements of the related Obligor have been
delivered to the Administrative Agent in accordance with Section 5.01(d)(iv);

 

(gg)       the acquisition of such loan will not cause (x) the Borrower or the
pool of Collateral to be required to register as an “investment company” under
Section 8 of the Investment Company Act or (y) cause the Lenders to hold an
“ownership interest” in a “covered fund” under the Volcker Rule;

 

(hh)       is not a letter of credit (other than a Revolving Collateral Loan
that includes a letter of credit sub-facility as long as the Borrower is not the
letter of credit issuer with respect thereto);

 

(ii)          is not a Participation Interest (other than the Closing Date
Participation Interests);

 

(jj)          the Borrower has all necessary Governmental Authorizations and
Private Authorizations necessary to purchase and own such Collateral Loan and
enter into the Related Documents with respect to such Collateral Loan;

 

(kk)        contains no rights of first refusal, rights of first offer, last
looks, drag along rights or tag along rights (in each case however designated or
defined, and whether in the Related Documents governing such obligation, in any
intercreditor agreement or agreement among lenders relating to such obligation
or otherwise) exist in favor of any other holder of such obligation or any other
Person;

 

(ll)          requires the related Obligor to comply with one or more
Maintenance Covenants (other than Covenant Lite Loans);

 

(mm)      provides for scheduled payments of interest in cash at least
semi-annually;

 

(nn)         all information provided by the Borrower or the Collateral Manager
to the Administrative Agent in writing with respect to such Collateral Loan is
true and correct in all material respects as of the date such information is
provided; provided that, to the extent any such information was furnished to the
Borrower or the Collateral Manager, as applicable, by a related obligor or any
other third party, such information is true and correct to the knowledge (after
due inquiry under the circumstances) of the Responsible Officers of the Borrower
or of the Collateral Manager, as applicable;

 

 20

 

 

(oo)       is not (i) underwritten as a real estate loan or principally secured
by real property; (ii) a construction loan, or (iii) a project finance loan; and

 

(pp)       the transfer thereof is effected pursuant to either (i) in the case
of a Collateral Loan other than a Closing Date Participation Interest, an LSTA
Par/Near Par Trade Confirmation, subject to Standard Terms and Condition for
Par/Near Par Trade Confirmations, as published by The Loan Syndications and
Trading Association, Inc. or (ii) in the case of a Closing Date Participation
Interest, the Closing Date Participation Agreement;

 

“Eligible Investments” means any Dollar-denominated investment that, at the time
it is Delivered, is Cash or money market funds that have, at all times, ratings
in the highest credit rating category by Moody’s and S&P (based on tranche
rating not corporate family rating).

 

“Enforcement Action” means the commencement of any enforcement action against,
or the taking of possession or control of, or the exercise of any remedies with
respect to, the Collateral or any portion thereof.

 

“Environmental Laws” means any and all foreign, federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or any other Official Body, relating to the
protection of human health or the environment, including requirements pertaining
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transportation, handling, reporting, licensing, permitting, investigation or
remediation of Hazardous Materials. Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601 et
seq.), the Hazardous Material Transportation Act (49 U.S.C. § 331 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Federal
Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42
U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et
seq.), the Safe Drinking Water Act (42 U.S.C. § 300, et seq.), the Environmental
Protection Agency’s regulations relating to underground storage tanks (40 C.F.R.
Parts 280 and 281), and the Occupational Safety and Health Act (29 U.S.C. § 651
et seq.), and the rules and regulations thereunder.

 

“Equity Coverage Deficiency” means, as of any date of determination, an amount
equal to the positive difference, if any, of (a) the Equity Coverage Requirement
and (ii) the Net Equity Amount.

 

“Equity Coverage Requirement” means, as of any date of determination, an amount
equal to the aggregate sum, for all Eligible Collateral Loans, of the product of
(a) (i) (100% - the applicable Advance Rate for each such Eligible Collateral
Loan) minus (ii) 5% for each such Eligible Collateral Loan as of such date
multiplied by (b) the sum of (i) the Original Asset Value of such Eligible
Collateral Loan (including any premium paid by the Borrower in connection with
the purchase thereof) minus (ii) the Excess Concentration Amount of such
Eligible Collateral Loan.

 

“Equity Coverage Test” means a test that will be satisfied if at any date of
determination no Equity Coverage Deficiency exists.

 

“Equityholder” means CION Investment Corporation.

 

“Equity Security” means any stock or similar security, certificate of interest
or participation in any profit sharing agreement, reorganization certificate or
subscription, transferable share, voting trust certificate or certificate of
deposit for an equity security, limited partnership interest, interest in a
joint venture, or certificate of interest in a business trust; any security
future on any such security; or any security convertible, with or without
consideration into such a security, or carrying any warrant (other than a
detachable warrant) or right to subscribe to or purchase such a security; or any
such warrant or right.

 

 21

 

 

“ERISA” means the Employee Retirement Income Security Act of 1974 and the
regulations promulgated and rulings issued thereunder.

 

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

 

“ERISA Event” means (a) any “reportable event,” as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the thirty (30) day notice requirement is waived); (b) the
failure with respect to any Plan to satisfy the “minimum funding standard” (as
defined in Section 412 of the Code or Section 302 of ERISA); (c) the filing
pursuant to Section 412(c) of the Code or Section 302 of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) a
determination that any Plan is, or is expected to be, in “at risk” status (as
defined in Section 430 of the Code or Section 303 of ERISA); (e) the incurrence
by the Borrower or any member of its ERISA Group of any liability under Title IV
of ERISA with respect to the termination of any Plan; (f) (i) the receipt by the
Borrower or any member of its ERISA Group from the PBGC of a notice of
determination that the PBGC intends to seek termination of any Plan or to have a
trustee appointed for any Plan, or (ii) the filing by the Borrower or any member
of its ERISA Group of a notice of intent to terminate any Plan; (g) the
incurrence by the Borrower or any member of its ERISA Group of any liability (i)
with respect to a Plan pursuant to Sections 4063 and 4064 of ERISA, (ii) with
respect to a facility closing pursuant to Section 4062(e) of ERISA, or (iii)
with respect to the withdrawal or partial withdrawal from any Multiemployer
Plan; (h) the receipt by the Borrower or any member of its ERISA Group of any
notice concerning the imposition of Withdrawal Liability or a determination that
a Multiemployer Plan is, or is expected to be, in endangered status or critical
status, within the meaning of Section 432 of the Code or Section 305 of ERISA or
is or is expected to be insolvent or in reorganization, within the meaning of
Title IV of ERISA; or (i) the failure of the Borrower or any member of its ERISA
Group to make any required contribution to a Multiemployer Plan.

 

“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.

 

“Eurocurrency Liabilities” is defined in Regulation D of the Board of Governors
of the Federal Reserve System, as in effect from time to time.

 

“Eurodollar Reserve Percentage” means, for any period, the percentage, if any,
applicable during such period (or, if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such period
during which any such percentage shall be so applicable) under regulations
issued from time to time by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement (including
any basic, emergency, supplemental, marginal or other reserve requirements) with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities having a term of one month.

 

“Event of Default” has the meaning assigned to such term in Section 6.01.

 

“Excess Concentration Amount” means, at any time in respect of which any one or
more of the Concentration Limitations are exceeded, the portions (calculated
without duplication) of each Collateral Loan that cause such Concentration
Limitations to be exceeded, as calculated by the Collateral Manager and
certified to as required hereunder.

 

 22

 

 

“Excess Interest Proceeds” means, on any date of determination, the excess of
(1) amounts then on deposit in the Collection Account representing Interest
Proceeds over (2) the sum of the projected amounts required to be paid pursuant
to Sections 9.01(a)(i)(A) through (H) on the next succeeding Payment Date or the
Final Maturity Date, as applicable, as determined by the Borrower (in the case
of clause (1) and clause (2)) 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), verified by the Administrative Agent (which verification
shall be deemed to be given upon the written confirmation of the Administrative
Agent to a Permitted Tax Distribution).

 

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

 

“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), or that are franchise Taxes or branch profits Taxes, in each case,
(i) imposed by the jurisdiction (or any political subdivision thereof) under the
laws of which such Secured Party is organized or in which its principal office
is located, or in the case of any Lender, in which its applicable lending office
is located or (ii) 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 Commitment pursuant
to a Law in effect on the date on which (i) such Lender acquires such interest
in the Commitment (other than pursuant to an assignment request by the Borrower
under Sections 2.16 or 12.03(g)) or (ii) such Lender designates a new lending
office (a “New Lending Office”), except in each case to the extent that,
pursuant to Section 12.03, 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
12.03(f), and (d) U.S. federal withholding Taxes imposed by FATCA.

 

“Facility Amount” means during the Reinvestment Period, $325,000,000 (as such
amount may be reduced from time to time pursuant to Section 2.06); provided that
following the Commitment Termination Date, the Facility Amount will equal the
Advances Outstanding as of the applicable date of determination.

 

“Facility Documents” means this Agreement, the Notes, the Account Control
Agreement, the Administrative Agent Fee Letter, the Collateral Administration
and Agency Fee Letter, the Closing Date Participation Agreement and any other
security agreements and other instruments entered into or delivered by or on
behalf of the Borrower in favor of the Administrative Agent or any Lender from
time to time pursuant to this Agreement.

 

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

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it.

 

 23

 

 

“Fee Basis Amount” means, for any Payment Date, the quotient of (a) the sum on
each day during the related Interest Accrual Period of (i) the Aggregate
Principal Balance of all Eligible Collateral Loans plus (ii) the Principal
Proceeds and Eligible Investments made with Principal Proceeds on deposit in the
Collection Account, divided by (b) the number of days during such Interest
Accrual Period.

 

“Final Maturity Date” means the earliest to occur of (i) the date designated by
the Borrower (or the Collateral Manager on its behalf) as the Final Maturity
Date upon not less than ten (10) Business Days’ prior notice to the
Administrative Agent, the Collateral Agent, the Lenders, the Collateral
Administrator and the Custodian; (ii) the first anniversary of the Commitment
Termination Date; and (iii) the date on which the Administrative Agent provides
notice of the declaration of the Final Maturity Date after the occurrence and
during the continuance of an Event of Default; provided, that, in the case of
the foregoing clauses (i) and (ii), if such day is not a Business Day, then the
Final Maturity Date shall be the next succeeding Business Day.

 

“Financial Asset” has the meaning specified in Section 8-102(a)(9) of the UCC.

 

“Firm Bid” means with respect to any Collateral Loan, a good and irrevocable bid
for value, to purchase the par amount of such Collateral Loan, expressed as a
percentage of the par amount of such Collateral Loan and exclusive of accrued
interest and premium, for scheduled settlement substantially in accordance with
the then-current market practice in the principal market for such Collateral
Loan, as determined by the Administrative Agent, submitted as of 11:00 a.m. on
the date of determination or as soon as practicable thereafter.

 

“First Lien Loan” means any Collateral Loan that meets the following criteria:
(i) is not (and is not expressly permitted by its terms to become) subordinate
in right of payment to any other obligation for borrowed money of the obligor of
such loan; (ii) is secured by a valid first-priority perfected Lien in, to or on
specified collateral securing the Obligor’s obligations under such Collateral
Loan (whether or not such Collateral Loan is also secured by any lower priority
Lien on other collateral) subject to customary Liens; (iii) is secured, pursuant
to such first-priority perfected Lien, by collateral having a value (determined
in good faith by the Collateral Manager in accordance with the Collateral
Management Standard) not less than the outstanding Principal Balance of such
Collateral Loan plus the aggregate outstanding Principal Balances of all other
loans of equal seniority secured by a first Lien in the same collateral and (iv)
is not a loan which is secured solely or primarily by the common stock of its
Obligor or any of its Affiliates.

 

The determination as to whether clause (iii) of this definition is satisfied
shall be based on the Collateral Manager’s good faith judgment at the time the
Collateral Loan is acquired by the Borrower (which value may include an
assessment of the Obligor’s cash flow, enterprise value, general financial
condition and other attributes). The limitation set forth in clause (iv) above
shall not apply with respect to a Collateral Loan made to a parent entity that
is secured solely or primarily by the stock of one or more of the subsidiaries
of such parent entity to the extent that the granting by any such subsidiary of
a Lien on its own property would (1) in the case of a subsidiary that is not
part of the same consolidated group as such parent entity for U.S. Federal
income tax purposes, result in a deemed dividend by such subsidiary to such
parent entity for such tax purposes, (2) violate Law applicable to such
subsidiary (whether the obligation secured is such Collateral Loan or any other
similar type of indebtedness owing to third parties) or (3) cause such
subsidiary to suffer adverse economic consequences under capital adequacy,
liquidity coverage or other similar rules, in each case, so long as (x) such
subsidiary does not have any indebtedness (other than current accounts payable
in the ordinary course of business, capitalized leases or other similar
indebtedness payable in the ordinary course of business) or the Related
Documents limit the incurrence of indebtedness by such subsidiary and (y) the
aggregate amount of all such indebtedness is not material relative to the
aggregate value of the assets of such subsidiary.

 

 24

 

 

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

 

“Floor Obligation” means, as of any date:

 

(a)          a Collateral Loan (i) for which the Related Documents provides for
a Libor rate option and that such Libor rate is calculated as the greater of a
specified “floor” rate per annum and the London interbank offered rate for the
applicable Interest Accrual Period and (ii) that, as of such date, bears
interest based on such Libor rate option, but only if as of such date the London
interbank offered rate for the applicable Interest Accrual Period is less than
such floor rate; and

 

(b)          a Collateral Loan (i) for which the Related Documents provides for
a base or prime rate option and such base or prime rate is calculated as the
greater of a specified “floor” rate per annum and the base or prime rate for the
applicable Interest Accrual Period and (ii) that, as of such date, bears
interest based on such base or prime rate option, but only if as of such date
the base or prime rate for the applicable Interest Accrual Period is less than
such floor rate.

 

“Fundamental Amendment” means any amendment, modification, waiver or supplement
(as determined by the Required Lenders) of or to this Agreement that would (a)
increase or extend the term of the Commitments or change the Final Maturity
Date, (b) extend the date fixed for the payment of principal of or interest on
any Advance or any fee hereunder, (c) reduce the amount of any scheduled payment
of principal or the amount of any other payment due to any Lender, (d) reduce
the rate at which interest is payable thereon or any fee is payable hereunder
(other than any waiver or rescission of the Default Rate), (e) release any
material portion of the Collateral, except in connection with dispositions
expressly permitted hereunder, (f) alter the terms of Section 9.01 or Section
12.01(b) or, for purposes of Sections 9.01 or 12.01(b), alter any defined term
or alter any other provision of this Agreement to the extent such alteration
would alter the order of application of proceeds or the pro rata sharing of
payments required thereby, (g) modify the definitions of the terms “Required
Lenders” or “Fundamental Amendment” or modify in any other manner the number or
percentage of the Lenders required to make any determinations or waive any
rights hereunder or to modify any provision hereof, (h) extend the Reinvestment
Period, (i) modify the definition of the term “Concentration Limits” or any
defined terms used in such definition that has the effect of reducing the Excess
Concentration Amount, (j) modify the definition of the term “Eligible Collateral
Loan” that has the effect of making such eligibility criteria less restrictive,
(k) modify the definition of the term “Borrowing Base” in a manner that would
have a material adverse effect on the calculation thereof or (l) modify the
definitions of the terms “Collateral Quality Test,” “Equity Coverage Test,”
“Minimum Equity Test” or “Minimum Diversity Score Test” or any defined terms
used in calculating such terms.

 

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

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, administrative tribunal, central bank, public office, court,
arbitration or mediation panel, or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of government, including the SEC, the stock exchanges, any federal, state,
territorial, county, municipal or other government or governmental agency,
arbitrator, board, body, branch, bureau, commission, court, department,
instrumentality, master, mediator, panel, referee, system or other political
unit or subdivision or other entity of any of the foregoing, whether domestic or
foreign.

 

 25

 

 

“Governmental Authorizations” means all franchises, permits, licenses,
approvals, consents and other authorizations of all Governmental Authorities.

 

“Governmental Filings” means all filings, including franchise and similar tax
filings, and the payment of all fees, assessments, interests and penalties
associated with such filings with all Governmental Authorities.

 

“Hazardous Materials” means all materials subject to any Environmental Law,
including materials listed in 49 C.F.R. § 172.101, materials defined as
hazardous pursuant to § 101(14) of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, flammable, explosive or radioactive
materials, hazardous or toxic wastes or substances, lead based materials,
petroleum or petroleum distillates or asbestos or material containing asbestos,
polychlorinated biphenyls, radon gas, urea formaldehyde and any substances
classified as being “in inventory”, “usable work in process” or similar
classification that would, if classified as unusable, be included in the
foregoing definition.

 

“Incurrence Covenant” means a covenant by any Obligor to comply with one or more
financial covenants only upon the occurrence of certain actions of such Obligor,
including a debt issuance, dividend payment, share purchase, merger, acquisition
or divestiture.

 

“Indemnified Party” has the meaning assigned to such term in Section 12.04(b).

 

“Independent Accountants” has the meaning assigned to such term in Section
8.11(a).

 

“Independent Manager” means a trustee of the Borrower who, (a) is an employee
of, or is a special purpose corporation which is an Affiliate of or is operated
by, employees of, or is otherwise provided by, any one of CT Corporation,
Corporation Service Company, Puglisi & Associates, National Registered Agents,
Inc., Wilmington Trust Company, Lord Securities Corporation, The Corporation
Trust Company, or an Affiliate thereof, or, if none of those companies is then
providing professional independent managers, another nationally-recognized
company, in each case that is not an Affiliate of the Borrower and that provides
professional independent managers and other corporate services in the ordinary
course of its business; (b) in the case of any natural person, has (i) prior
experience as an independent director for a corporation, or as an independent
director or independent manager or independent trustee for a limited liability
company or trust, whose organizational documents required the unanimous consent
of all independent directors (or independent managers or independent trustees)
thereof before such corporation or limited liability company or trust could
consent to the institution of bankruptcy or insolvency proceedings against it or
could file a petition seeking relief under any applicable federal or state law
relating to bankruptcy, and (ii) at least three years of employment experience
with one or more entities that provide, in the ordinary course of their
respective businesses, advisory, management or placement services to issuers of
securitization or structured finance instruments, agreements or securities; and
(c) in the case of any natural person, is not, and has not been for a period of
five (5) years prior to his or her appointment as an Independent Manager: (i) a
stockholder (whether direct, indirect or beneficial), customer, advisor,
supplier, director, member, manager, officer, employee, or partner, of (A) the
Collateral Manager, (B) the Equityholder, (C) any principal of the Equityholder
or the Collateral Manager, (D) any Affiliate of the Equityholder or the
Collateral Manager, or (E) any Affiliate of any principal of the Equityholder or
the Collateral Manager (other than his or her service as an Independent Manager
or independent director or independent manager, as applicable, of the Borrower
or any of its Affiliates that are structured to be special purpose entities),
(ii) a spouse, parent, sibling or child of any Person referred to in clause (i)
above, (iii) an individual or other Person controlling or under common control
with any such stockholder, partner, member, manager, Affiliate, supplier,
employee, officer or director (other than in connection with his or her service
as an Independent Manager or independent director or independent manager, as
applicable, of the Borrower or any of its Affiliates that are structured to be
special purpose entities), (iv) a trustee, conservator or receiver for the
Equityholder or any Affiliate (other than an Independent Manager or independent
director or independent manager, as applicable, of the Borrower or any of its
Affiliates that are structured to be special purpose entities) or (v) affiliated
with a tax-exempt entity that receives significant contributions from the
Equityholder, the Collateral Manager or any of their Affiliates (other than in
connection with his or her service as an Independent Manager or independent
director or independent manager, as applicable, of the Borrower or any of its
Affiliates that are structured to be special purpose entities); provided,
however, such Independent Manager may be an independent director, independent
trustee or independent manager of another special purpose entity affiliated with
the Equityholder or the Collateral Manager.

 

 26

 

 

“Ineligible Collateral Loan” means, at any time, a loan or other obligation, or
any portion thereof, that fails to satisfy any criteria of the definition of
“Eligible Collateral Loan”.

 

“Insolvency Event” means, with respect to a specified Person, (a) the filing of
a decree or order for relief by a court having jurisdiction in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under the Bankruptcy Code or any other applicable insolvency law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official for such Person or for any substantial
part of its property, or ordering the winding-up or liquidation of such Person’s
affairs, and such decree or order shall remain unstayed and in effect for a
period of sixty (60) consecutive days; or (b) the commencement by such Person of
a voluntary case under the Bankruptcy Code or any other applicable insolvency
law now or hereafter in effect, or the consent by such Person to the entry of an
order for relief in an involuntary case under any such law, or the consent by
such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due, or the taking
of action by such Person in furtherance of any of the foregoing.

 

“Instrument” has the meaning specified in Section 9-102(a)(47) of the UCC.

 

“Interest” means, for each day during an Interest Accrual Period and each
Advance outstanding by a Lender on such day, the sum of the products (for each
day during such Interest Accrual Period) of:

 

[pg33img1_ex10-1.jpg]

 

where:

 

  IR = the Interest Rate for such Advance on such day;           P = the
principal amount of such Advance on such day; and           D = 360 days.

 

“Interest Accrual Period” means, (a) with respect to the first Payment Date, the
period from and including the Closing Date to but excluding the first Payment
Date, and (b) with respect to any subsequent Payment Date, the period from and
including the preceding Payment Date to but excluding such Payment Date;
provided, that the final Interest Accrual Period hereunder shall end on and
include the day of the Payment in Full of the Advances hereunder.

 

 27

 

 

“Interest Proceeds” means, with respect to any Collection Period or the related
Determination Date, without duplication, the sum of:

 

(a)          all payments of interest and other income received by the Borrower
during such Collection Period on the Collateral Loans (including interest and
other income received on Ineligible Collateral Loans and the accrued interest
received in connection with a sale of any such Collateral Loan during such
Collection Period), less any such amount that represents Principal Financed
Accrued Interest;

 

(b)          all principal and interest payments received by the Borrower during
such Collection Period on Eligible Investments purchased with Interest Proceeds;

 

(c)          all amendment and waiver fees, late payment fees (including
compensation for delayed settlement or trades but not including any fees related
to the extension of maturity), and all protection fees and other fees and
commissions received by the Borrower (except for those in connection with a
Material Modification of the related Collateral Loan) during such Collection
Period unless the Collateral Manager has certified to the Administrative Agent,
the Collateral Administrator and the Collateral Agent in its sole discretion
that such payments are to be treated as Principal Proceeds; and

 

(d)          commitment fees, facility fees, anniversary fees, ticking fees and
other similar fees received by the Borrower during such Collection Period unless
the Collateral Manager has certified to the Administrative Agent, the Collateral
Administrator and the Collateral Agent in its sole discretion that such payments
are to be treated as Principal Proceeds.

 

Any amounts received in respect of any Defaulted Loan will constitute Principal
Proceeds (and not Interest Proceeds) until the aggregate of all Collections in
respect of such Defaulted Loan since it became a Defaulted Loan equals the
outstanding principal balance of such Collateral Loan at the time it became a
Defaulted Loan; thereafter, any such amounts will constitute Interest Proceeds.

 

“Interest Rate” means, for any Interest Accrual Period and for each Advance
outstanding (a) to the extent the relevant Lender is a CP Lender that is funding
the applicable Advance or portion thereof through the issuance of Commercial
Paper Notes, for each day during such Interest Accrual Period, the CP Rate for
such Interest Accrual Period plus the Applicable Margin or (b) to the extent the
relevant Lender is not funding the applicable Advance or portion thereof through
the issuance of Commercial Paper Notes, for each day during such Interest
Accrual Period, the Adjusted Eurodollar Rate for such Interest Accrual Period
plus the Applicable Margin; provided that if a Disruption Event has occurred and
is continuing or an Event of Default has occurred (and has not otherwise been
waived by the Lenders pursuant to the terms hereof), “Interest Rate” means
the Base Rate plus the Applicable Margin.

 

“Investment Company Act” means the Investment Company Act of 1940 and the rules
and regulations promulgated thereunder.

 

“Law” means any action, code, consent decree, constitution, decree, directive,
enactment, finding, guideline, law, injunction, interpretation, judgment, order,
ordinance, policy statement, proclamation, promulgation, regulation,
requirement, rule, rule of law, treaty, rule of public policy, settlement
agreement, statute, or writ, of any Governmental Authority, or any particular
section, part or provision thereof.

 

 28

 

 

“Lender” means each Person listed on Schedule 1 and any other Person that shall
have become a party hereto in accordance with the terms hereof pursuant to an
Assignment and Acceptance, other than any such Person that ceases to be a party
hereto pursuant to an Assignment and Acceptance.

 

“Liabilities” means all liabilities, obligations, losses, claims, damages,
penalties, actions, judgments, suits, costs, expenses (including reasonable and
documented out-of-pocket attorneys’ fees and expenses) and disbursements of any
kind or nature whatsoever, whether or not brought by the Borrower, the
Collateral Manager, the Equityholder or any third party.

 

“LIBOR Rate” means, for any Interest Accrual Period, (i) with respect to any
Advance made or outstanding on the first day of an Interest Accrual Period, a
rate per annum equal to the ICE Benchmark Administration Limited LIBOR Rate
(“ICE LIBOR”), as published by Reuters (or another commercially available source
providing quotations of ICE LIBOR as designated by Administrative Agent from
time to time) at approximately 11:00 a.m. (London time) two (2) Business Days
prior to the commencement of such Interest Period, for Dollar deposits (for
delivery on the first day of such Interest Period) with a term equivalent to
three months and (ii) with respect to any Advance not made or outstanding on the
first day of an Interest Accrual Period, the rate per annum equal to ICE LIBOR,
as published by Reuters (or another commercially available source providing
quotations of ICE LIBOR as designated by Administrative Agent from time to time)
at approximately 11:00 a.m. (London time) two (2) Business Days prior to the
date on which such Advance is made, for Dollar deposits (for delivery on the
date on which such Advance is made) with a term equivalent to three months;
provided that, if no such rate is published by Reuters (or another commercially
available source providing quotations of ICE LIBOR as designated by
Administrative Agent from time to time), the LIBOR Rate shall be the rate per
annum determined by the Administrative Agent using the average of the rates for
London interbank deposits for a three month period in United States dollars at
approximately 11:00 a.m. (London time) on the applicable rate setting day to
prime banks in the London interbank market. If the LIBOR Rate is less than zero
percent then the LIBOR Rate shall be deemed to equal zero percent for all
purposes of this Agreement.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, encumbrance, lien
or security interest (statutory or other), or preference, priority or other
security agreement, charge or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title retention agreement,
any financing lease having substantially the same economic effect as any of the
foregoing, and the filing authorized by the Borrower of any financing statement
under the UCC or comparable law of any jurisdiction).

 

“Loan File” means, with respect to each Collateral Loan delivered to the
Custodian, each of the Required Loan Documents in original or copy as identified
on the related Document Checklist and any other document delivered in connection
therewith.

 

“London Banking Day” means a day on which commercial banks are open for business
(including dealings in foreign exchange and foreign currency deposits) in
London, England.

 

“Losses” has the meaning assigned to such term in Section 13.09(d)(i) and
Section 15.09(a), as applicable.

 

“Maintenance Covenant” means a covenant by any Obligor to comply with one or
more financial covenants during each reporting period (but not more frequently
than quarterly), whether or not such Obligor has taken any specified action.

 

“Mandatory Amortization Advances Outstanding” means the Advances Outstanding as
of the Commitment Termination Date.

 

 29

 

 

“Mandatory Amortization Amount” means, with respect to the applicable Payment
Dates set forth below and regardless of whether sufficient funds are on deposit
in the Collection Account in respect of such Payment Date, an amount sufficient
to reduce Advances Outstanding as of such Payment Date to an amount equal to the
percentage of the Mandatory Amortization Advances Outstanding set forth opposite
such Payment Date.

 

 

Payment Date

Percentage of Mandatory Amortization Advances Outstanding Payment Date falling
nearest the six-month anniversary of the Commitment Termination Date 50.00%
Final Payment Date 0.00%

 

“Margin Stock” has the meaning assigned to such term in Regulation U.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, financial condition or operations of the Borrower, (b) the business,
assets, financial condition or operations of the Collateral Manager or the
Equityholder, (c) the validity or enforceability of this Agreement or any other
Facility Document or the validity, enforceability or collectability of the
Collateral Loans or the Related Documents generally or any material portion of
the Collateral Loans or the Related Documents, (d) the rights and remedies of
the Administrative Agent, the Lenders and the other Secured Parties with respect
to matters arising under this Agreement or any other Facility Document, (e) the
ability of each of the Borrower or the Collateral Manager to perform its
obligations under any Facility Document to which it is a party or (f) the
status, existence, perfection, priority or enforceability of the Collateral
Agent’s Lien on the Collateral.

 

“Material Modification” means, with respect to any Collateral Loan, any
amendment, waiver, consent or modification of, or supplement to or inaction
with, a Related Document with respect thereto executed or effected after the
date on which such Collateral Loan is acquired by the Borrower, that (unless
otherwise consented to by the Administrative Agent prior to or after the
effective date of any such amendment, waiver, consent or modification):

 

(a)          (i) reduces, defers or forgives any principal amount due with
respect to such Collateral Loan or provides for any such principal amount to be
deferred or capitalized and added to the principal amount of such Collateral
Loan (other than any deferral or capitalization already permitted by the terms
of the Related Documents as of the date such Collateral Loan was acquired), (ii)
reduces, waives or forgives any interest payment due with respect to such
Collateral Loan, provides for any such interest to be deferred or capitalized
and added to the principal amount of such Collateral Loan (other than any
deferral or capitalization already permitted by the terms of the Related
Documents as of the date such Collateral Loan was acquired), (iii) reduces the
rate of interest payable on such Collateral Loan or (iv) extends, delays or
waives any scheduled principal installment, any mandatory prepayment of
principal or the stated maturity date of such Collateral Loan;

 

(b)          (i) in the case of a First Lien Loan, contractually or structurally
subordinates such Collateral Loan by operation of a priority of payments,
turnover provisions, the transfer of assets in order to limit recourse to the
related Obligor or the granting of Liens (other than “Permitted Liens” or any
comparable terms or provisions in the Related Documents related to “Permitted
Liens” for such Eligible Collateral Loan) on any of the collateral securing such
Collateral Loan, (ii) in the case of Second Lien Loan, (x) contractually or
structurally subordinates such Collateral Loan to any obligation (other than any
loan which existed on the date the Borrower acquired such Collateral Loan, which
is senior to such Collateral Loan) by operation of a priority of payments,
turnover provisions, the transfer of assets in order to limit recourse to the
related Obligor or the granting of Liens (other than “Permitted Liens” or any
comparable terms or provisions in the Related Documents related to “Permitted
Liens” for such Eligible Collateral Loan) on any of the collateral securing such
Collateral Loan or (y) increases the commitment amount of any loan senior or
pari passu with such Collateral Loan or (iii) in the case of any Collateral
Loan, permits the Obligor thereof to incur any additional debt which was not
previously permitted or in place as of the date the Borrower acquired such
Collateral Loan, which is senior to or pari passu with such Collateral Loan;

 

 30

 

 

(c)          substitutes, alters, releases or terminates all or any material
portion of the underlying assets or any Obligor or guarantor with respect
thereto securing such Collateral Loan;

 

(d)          amends, waives, forbears, supplements or otherwise modifies (x) the
meaning of “Senior Net Leverage Ratio,” “Leverage Ratio,” “EBITDA,” “Cash
Interest Coverage Ratio,” solely with respect to Collateral Loans that are not
First Lien Loans, “Total Net Leverage Ratio,” or “Permitted Liens” or any
respective comparable terms in the Related Documents for such Collateral Loan,
(y) any term or provision of such Related Documents referenced in or utilized in
the calculation of any financial covenant, including “Senior Net Leverage
Ratio,” “Leverage Ratio,” “EBITDA,” “Cash Interest Coverage Ratio,” “Total Net
Leverage Ratio” (only with respect to Collateral Loans that are not First Lien
Loans) or “Permitted Liens” or, solely with respect to Collateral Loans that are
not First Lien Loans, “Total Net Leverage Ratio” or, in each case any respective
comparable terms for such Collateral Loan or (z) any default or event of default
under the Related Documents of such Collateral Loan or any failure, occurrence
or circumstance that would have caused a default or event of default under the
Related Documents of such Collateral Loan or a material adverse effect on the
collectability of such Collateral Loan, in each case under this subclause (z),
that is materially adverse to the interests of the Lenders, as determined by the
Administrative Agent in its sole discretion;

 

(e)          results in any change in the currency or composition of any payment
of interest or principal to any currency other than that in which such
Collateral Loan was originally denominated;

 

(f)          results in any less financial information (in any material respect)
in respect of reporting frequency, scope or otherwise being provided with
respect to the related Obligor or reduces the frequency or total number of any
appraisals required thereunder; or

 

(g)          any other modification to such Collateral Loan (or the Related
Documents for such Collateral Loan) or permitting a modification to the
outstanding indebtedness of the underlying Obligor, in either case, which, in
the absolute discretion of the Administrative Agent, is material to the value of
such Collateral Loan;

 

provided that the Borrower (or the Collateral Manager on its behalf) shall be
permitted, in accordance with the Collateral Management Standard, to reduce one
or more interest payments, extend, waive or postpone any date fixed for any
scheduled payment of principal (including at maturity) or waive, extend or
reduce any mandatory prepayment of principal on a Collateral Loan, in each case,
in connection with a re-pricing, refinancing or request reflecting market terms
then existing at such time (as certified by the Collateral Manager) or otherwise
at the request of the Obligor and not in connection with financial or
operational difficulties affecting, or the credit deterioration of, the related
Obligor (any of the foregoing, a “Permitted Amendment”), in each case, without
such modification constituting a Material Modification hereunder so long as (x)
after giving effect to such modification, each Collateral Quality Test is
satisfied (or, if not satisfied, the level of compliance with such Collateral
Quality Test is maintained or improved), (y) such modification is not made to
avoid (or does not have the effect of avoiding) classification of such
Collateral Loan as a Defaulted Loan, and (z) the Borrower (or the Collateral
Manager on its behalf) shall have delivered to the Administrative Agent (1) an
updated underwriting and credit memo prepared by the Collateral Manager with
respect to such Collateral Loan in accordance to Section 5.01(d)(xi), (2) a duly
completed Borrowing Base Calculation Statement, (3) each of the Required Loan
Documents for such Collateral Loan and (4) the most recent monthly and quarterly
financials for such Obligor and the information required pursuant to Section
5.01(d)(vi).

 

 31

 

 

“Maximum Moody’s Weighted Average Rating Factor Test” means a test that will be
satisfied on any date of determination if the Weighted Average Moody’s Rating
Factor of the Eligible Collateral Loans as of such date is less than or equal to
3490.

 

“Maximum Weighted Average Life Test” means a test that will be satisfied on any
date of determination if the Weighted Average Life of the Eligible Collateral
Loans as of such date is less than or equal to 5.0 years.

 

“Measurement Date” means (a) the Closing Date, (b) each Borrowing Date, (c) each
Determination Date, (d) each Monthly Report Determination Date, (e) the date on
which a Collateral Loan is acquired or disposed of by the Borrower, (f) the date
that the Asset Value of any Collateral Loan is adjusted, (g) any date the
Commitments of the Lenders are reduced pursuant to Section 2.06(b), (h) the date
of each Notice of Borrowing, (i) the last day of each calendar month, (j) the
Commitment Termination Date, (k) with respect to the Coverage Tests and the Net
Equity Amount, each Business Day and (l) any other dates reasonably requested by
the Borrower or the Administrative Agent.

 

“Minimum Diversity Score Level” means a Diversity Score of 20.

 

“Minimum Diversity Score Test” means a test that will be satisfied on any date
of determination if the Diversity Score as of such date equals or exceeds the
Minimum Diversity Score Level.

 

“Minimum Equity Amount” means, on any date of determination, an amount equal to
the greater of (a) the sum of the Original Asset Values of the Eligible
Collateral Loans representing the four (4) largest Eligible Collateral Loans (by
Asset Value) owned by the Borrower at such time and (b) $32,500,000.

 

“Minimum Equity Test” means a test that will be satisfied if, on any date of
determination, the Net Equity Amount exceeds the Minimum Equity Amount at such
time.

 

“Minimum Weighted Average Spread Test” means a test that will be satisfied on
any date of determination if the Weighted Average Spread (inclusive of any LIBOR
floors in respect of Floor Obligations that are Eligible Collateral Loans)
equals or exceeds 4.00%.

 

“Money” has the meaning specified in Section 1-201(24) of the UCC.

 

“Monthly Report” has the meaning specified in Section 8.09(a).

 

“Monthly Report Determination Date” has the meaning specified in Section
8.09(a).

 

“Monthly Reporting Date” has the meaning specified in Section 8.09(a).

 

 32

 

 

“Moody’s” means Moody’s Investors Service, Inc., together with its successors.

 

“Moody’s Industry Classification” means the industry classifications set forth
in Schedule 5, as such industry classifications shall be updated at the option
of the Administrative Agent if Moody’s publishes revised industry
classifications.

 

“Moody’s Rating” means, with respect to any Collateral Loan, the public rating
issued by Moody’s (based on tranche rating not corporate family rating).

 

“Moody’s Rating Factor” means, for each Collateral Loan, the number set forth in
the table below opposite the Moody’s default probability rating (determined
using then-current market methodology) of such Collateral Loan (based on tranche
rating not corporate family rating):

 

 Moody’s Default
Probability Rating

  Moody’s Rating
Factor   Moody’s Default
Probability Rating   Moody’s Rating
Factor Aaa   1   Ba1   940 Aa1   10   Ba2   1,350 Aa2   20   Ba3   1,766 Aa3  
40   B1   2,220 A1   70   B2   2,720 A2   120   B3   3,490 A3   180   Caa1  
4,770 Baa1   260   Caa2   6,500 Baa2   360   Caa3 or lower   10,000 Baa3   610  
                   

“Multiemployer Plan” means an employee pension benefit plan within the meaning
of Section 4001 (a)(3) of ERISA that is sponsored by the Borrower or a member of
its ERISA Group or to which the Borrower or a member of its ERISA Group is
obligated to make contributions or has any liability.

 

“Net Equity Amount” means, on any date of determination, an amount equal to the
sum of (i) the sum of the Asset Values of all Eligible Collateral Loans, plus
(ii) the amounts on deposit in or credited to the Collection Account, minus
(iii) the Advances Outstanding minus (iv) all other Obligations due and owing on
such date. The Net Equity Amount shall be recalculated by the Collateral Manager
and delivered to the Borrower and the Administrative Agent on each Measurement
Date.

 

“New Lending Office” has the meaning assigned to such term in the definition of
“Excluded Taxes”.

 

“Non-Excluded Taxes” means (a) all Taxes, other than Excluded Taxes, imposed on
or with respect to any payment made by or on account of any obligation of the
Borrower under any Facility Document and (b) to the extent not otherwise
described in (a), Other Taxes.

 

“Non-U.S. Lender” has the meaning assigned to such term in Section
12.03(f)(i)(B).

 

“Note” means each promissory note, if any, issued by the Borrower to a Lender in
accordance with the provisions of Section 2.03, substantially in the form of
Exhibit A hereto.

 

“Noteless Loan” means a Collateral Loan with respect to which (a) the related
loan agreement does not require the Obligor to execute and deliver an Underlying
Note to evidence the indebtedness created under such Collateral Loan and (b) no
Underlying Notes issued to the Borrower are outstanding with respect to the
portion of the Collateral Loan transferred to the Borrower.

 

 33

 

 

“Notice of Borrowing” has the meaning assigned to such term in Section 2.02(a).

 

“Notice of Prepayment” has the meaning assigned to such term in Section 2.05(a).

 

“Obligations” means all indebtedness and all other amounts owed, whether
absolute, fixed or contingent, at any time or from time to time owing by the
Borrower to any Secured Party or any Affected Person solely to the extent
arising under or in connection with this Agreement, the Notes or any other
Facility Document, including all amounts payable by the Borrower in respect of
the Advances, with interest thereon, Administrative Expenses and all other
amounts payable hereunder or thereunder by the Borrower.

 

“Obligor” means, in respect of any Collateral Loan, any Person obligated to pay
Collections in respect of such Collateral Loan, including any applicable
guarantors; provided that, in the case of any Closing Date Participation
Interest, the Obligor thereunder shall be deemed to be the underlying obligor in
respect of the Collateral Loan that is subject of such Closing Date
Participation Interest.

 

“OFAC” has the meaning assigned to such term in Section 4.01(f).

 

“Official Body” means any nation or government, any state or other political
subdivision thereof, or any agency, authority, regulatory body, bureau, central
bank, commission, department or instrumentality of any such government or
political subdivision, any court, tribunal, grand jury or arbitrator, or any
other body or entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, in each case whether
foreign or domestic.

 

“Original Asset Value” means, with respect to any Collateral Loan at any date of
determination, (i) the Purchase Price of such Collateral Loan on the date such
Collateral Loan is or was acquired (or committed to be acquired) by the Borrower
multiplied by (ii) such Collateral Loan’s Principal Balance at such date of
determination (which shall be determined exclusive of accrued interest and
premium).

 

“Other Connection Taxes” means, in the case of any Secured Party, any Taxes
imposed by any jurisdiction by reason of such Secured Party having any present
or former connection with such jurisdiction (other than a connection arising
solely from such Secured Party having executed, delivered, become a party to,
performed its obligations under, received any payment under, received or
perfected a security interest under, engaged in any other transaction pursuant
to or enforced its rights under this Agreement, the Notes or any other Facility
Document or sold or assigned an interest in any Collateral Loan or Facility
Document).

 

“Other Taxes” has the meaning assigned to such term in Section 12.03(b).

 

“Paid in Full” or “Payment in Full” means, with respect to any Obligations (a)
the payment in full in cash of all such Obligations (other than contingent
indemnification obligations to the extent no claim giving rise thereto has been
asserted) and (b) the termination or expiration of all of the Commitments.

 

“Participant” means any bank or other Person to whom a participation is sold as
permitted by Section 12.06(c).

 

“Participant Register” has the meaning assigned to such term in Section
12.06(c)(ii).

 

 34

 

 

“Participation Interest” means a participation interest in a loan, debt
obligation or other obligation that satisfies each of the following criteria:
(i) such loan would constitute a Collateral Loan were it acquired directly, (ii)
the seller of the participation is the lender on the loan, (iii) the aggregate
participation in the loan does not exceed the principal amount or commitment of
such loan, (iv) such participation does not grant, in the aggregate, to the
participant in such participation a greater interest than the seller holds in
the loan or commitment that is the subject of the participation, (v) the entire
purchase price for such participation is paid in full at the time of its
acquisition (or, in the case of a participation in a Revolving Collateral Loan
or Delayed Drawdown Collateral Loan, at the time of the funding of such loan),
and (vi) the participation provides the participant all of the economic benefit
and risk of the whole or part of the loan or commitment that is the subject of
the loan participation. For the avoidance of doubt, a Participation Interest
shall not include a sub-participation interest in any loan.

 

“PATRIOT Act” has the meaning assigned to such term in Section 4.01(f).

 

“Payment Date” means the 15th day of each March, June, September and December,
beginning on June 15, 2017. The Final Maturity Date shall also be a Payment
Date.

 

“Payment Date Report” has the meaning specified in Section 8.09(b).

 

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor agency
or entity performing substantially the same functions.

 

“Percentage” of any Lender means, (a) with respect to any Lender party hereto on
the date hereof, the percentage set forth opposite such Lender’s name on
Schedule 1 hereto, as such amount is reduced by any Assignment and Acceptance
entered into by such Lender with an assignee or increased by any Assignment and
Acceptance entered into by such Lender with an assignor, or (b) with respect to
a Lender that has become a party hereto pursuant to an Assignment and
Acceptance, the percentage set forth therein as such Lender’s Percentage,
as such amount is reduced by an Assignment and Acceptance entered into between
such Lender and an assignee or increased by any Assignment and Acceptance
entered into by such Lender with an assignor.

 

“Permitted Amendment” has the meaning specified in the definition of “Material
Modification.”

 

“Permitted Liens” means any of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding shall have been commenced:
(a) Liens created in favor of the Collateral Agent hereunder or under the other
Facility Documents for the benefit of the Secured Parties; (b) 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; (c) with respect to agented Collateral
Loans, security interests, liens and other encumbrances in favor of the lead
agent, the collateral agent or the paying agent on behalf of all holders of
indebtedness of the related Obligor under the related facility; and (d) any
security interests, liens and other rights or encumbrances granted under any
governing documents or other agreement between or among or binding upon the
Borrower as the holder of equity in an Obligor.

 

 35

 

 

“Permitted Tax Distribution” means distributions to the Equityholder from the
Collection Account to the extent necessary to allow the Equityholder to make
sufficient distributions to qualify as a regulated investment company under the
Code, and to otherwise eliminate federal or state income or excise taxes payable
by the Equityholder in or with respect to any taxable year of the Equityholder
(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 Equityholder shall not exceed an amount reasonably demonstrated
by the Borrower and confirmed by the Administrative Agent (such confirmation not
to be unreasonably withheld or delayed) to be in excess of the amount of taxable
income attributed to Borrower’s assets as determined under the Code (less any
other distributions from Borrower to the Equityholder during such taxable year
of the Equityholder (or any calendar year, as relevant) and (B) amounts may be
distributed pursuant to this definition only from Excess Interest Proceeds and
so long as (i) after giving effect to such distribution, the Borrowing Base Test
is satisfied, (ii) no Default or Event of Default is occurring or continuing,
(iii) the Borrower gives prior written notice thereof to the Administrative
Agent, the Collateral Agent and the Collateral Administrator on or before the
Determination Date preceding the applicable Payment Date, and (iv) the
Administrative Agent confirms in writing (which may be by email) to the
Collateral Agent and the Collateral Administrator that the conditions for a
Permitted Tax Distribution set forth herein are satisfied.

 

“Person” means an individual or a corporation (including a business trust),
partnership, trust, incorporated or unincorporated association, joint stock
company, limited liability company, government (or an agency or political
subdivision thereof) or other entity of any kind.

 

“PIK Loan” means a Collateral Loan that permits the Obligor thereon to defer or
capitalize any portion of the accrued interest thereon.

 

“Plan” means an employee pension benefit plan (other than a Multiemployer Plan)
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code that is sponsored by the Borrower or a
member of its ERISA Group or to which the Borrower or a member of its ERISA
Group is obligated to make contributions or has any liability.

 

“Potential Terminated Lender” has the meaning specified in Section 2.16(a).

 

“Prepayment Fee” has the meaning assigned to such term in Section 2.12(b).

 

“Prepayment Fee Rate” means a rate equal to (x) 0.75% if the Facility Amount is
reduced or terminated on or prior to the one-year anniversary of the Closing
Date or (y) 0.50% if the Facility Amount is reduced or terminated on or prior to
the two-year anniversary of the Closing Date; provided that notwithstanding the
foregoing, the Prepayment Fee Rate otherwise applicable shall be reduced by 12.5
basis points if, during any Collection Period, the Administrative Agent rejects
five (5) or more Collateral Loans that otherwise satisfy the eligibility
criteria set forth in the definition of “Eligible Collateral Loan” hereunder and
meet the following conditions: (A) such loan is a First Lien Loan, (B) such loan
has a Moody’s Rating of B2 or higher and an S&P rating of B or higher, (C) such
loan has an outstanding Tranche Size of at least $250,000,000 on the date of
purchase by the Borrower, (D) such loan is the subject of at least five bid
quotations from nationally recognized independent dealers in the related loan as
reported by an independent nationally recognized pricing service on any date of
determination, (E) such loan is acquired at a purchase price of at least 95% of
par, and (F) transfers of the loan may be effected pursuant to the Standard
Terms and Conditions for Par/Near Par Trade Confirmations as published by The
Loan Syndications and Trading Association, Inc. on the date such loan is
proposed to be purchased by the Borrower.

 

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

 

“Prime Rate” means the rate announced by Citibank from time to time as its prime
rate in the United States, such rate to change as and when such designated rate
changes. The Prime Rate is not intended to be the lowest rate of interest
charged by Citibank in connection with extensions of credit to debtors.

 

 36

 

 

“Principal Balance” means, with respect to any loan, as of any date of
determination, the outstanding principal amount of such loan, excluding any
capitalized interest; provided that, other than as expressly set forth herein,
for all purposes of this Agreement and the other Facility Documents (other than
in determining the Asset Value of any Collateral Loan for purposes of
calculating the Borrowing Base or compliance with the Borrowing Base Test), in
determining the Principal Balance of any Delayed Drawdown Collateral Loan or
Revolving Collateral Loan, any unfunded commitments in respect of such Delayed
Drawdown Collateral Loan or Revolving Collateral Loan shall be assumed to have
been fully funded as of such date of determination.

 

“Principal Financed Accrued Interest” means, with respect to any Collateral Loan
purchased after the Closing Date, the amount of Principal Proceeds, if any,
applied towards the purchase of accrued interest on such Collateral Loan;
provided that Principal Financed Accrued Interest shall not include any accrued
interest purchased with Interest Proceeds deemed to be Principal Proceeds as set
forth in the definition of “Interest Proceeds;” provided, further, that once any
Principal Financed Accrued Interest is actually received by the Borrower, it
shall no longer constitute Principal Financed Accrued Interest hereunder.

 

“Principal Proceeds” means, with respect to any Collection Period or the related
Determination Date, all amounts received by the Borrower during such Collection
Period that do not constitute Interest Proceeds, including unapplied proceeds of
the Advances and any amounts received by the Borrower as equity contributions
(unless, in the case of any such equity contribution, designated as Interest
Proceeds by the Collateral Manager pursuant to Section 10.05).

 

“Priority of Payments” has the meaning specified in Section 9.01(a).

 

“Private Authorizations” means all franchises, permits, licenses, approvals,
consents and other authorizations of all Persons (other than Governmental
Authorities).

 

“Proceeds” has, with reference to any asset or property, the meaning assigned to
it under Section 9-102(a)(64) of the UCC and, in any event, shall include, but
not be limited to, any and all amounts from time to time paid or payable under
or in connection with such asset or property.

 

“Program Manager” means the investment manager or administrator of a CP Conduit,
as applicable.

 

“Prohibited Transaction” means a transaction described in Section 406(a) of
ERISA, that is not exempted by a statutory or administrative or individual
exemption pursuant to Section 408 of ERISA.

 

“Proper Instructions” means instructions received by the Custodian from the
Borrower, or the Collateral Manager on behalf of the Borrower, in any of the
following forms acceptable to the Custodian: (a) in writing signed by an
Authorized Person (and delivered by hand, by mail, by overnight courier or by
telecopier); (b) by electronic mail from an Authorized Person; (c) in tested
communication; (d) in a communication utilizing access codes effected between
electro mechanical or electronic devices; or (e) such other means as may be
agreed upon from time to time by the Custodian and the party giving such
instructions.

 

“Purchase Price” means, with respect to any Collateral Loan, the purchase price
paid (expressed as a percentage of par) by the Borrower to purchase such
Collateral Loan.

 37

 

 

“Qualified Institution” means a depository institution or trust company
organized under the laws of the United States of America or any one of the
States thereof or the District of Columbia (or any domestic branch of a foreign
bank), (i) that has either (A) a long-term unsecured debt rating of “BBB” or
better by S&P and “A3” or better by Moody’s or (B) a short-term unsecured debt
rating or certificate of deposit rating of “A-1” or better by S&P or “P-1”
or better by Moody’s, (ii) the parent corporation of which has either (A) a
long-term unsecured debt rating of “BBB” or better by S&P and “A3” or better by
Moody’s or (B) a short-term unsecured debt rating or certificate of deposit
rating of “A-1” or better by S&P and “P-1” or better by Moody’s or (iii) is
otherwise acceptable to the Administrative Agent.

 

“Qualified Purchaser” has the meaning assigned to such term in Section 12.06(e).

 

“Reference Lenders” means up to two Lenders (or, if fewer than two Lenders are
so listed, up to two banks of recognized standing in international lending
markets) listed in Schedule I of the Bank Act (Canada) designated as such by the
Administrative Agent from time to time.

 

“Register” has the meaning assigned to such term in Section 12.06(d).

 

“Regulation T”, “Regulation U” and “Regulation X” mean Regulation T, U and X,
respectively, of the Board of Governors of the Federal Reserve System, as in
effect from time to time.

 

“Reinvestment Period” means the period from and including the Closing Date to
and including the earlier of (a) the date that is two (2) years after the
Closing Date; and (b) the Final Maturity Date.

 

“Related Documents” means, with respect to any Collateral Loan, the Underlying
Loan Agreement, any Underlying Note, and all other agreements or documents
evidencing, securing, governing or giving rise to such Collateral Loan.

 

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

 

“Related Loan” means any Collateral Loan where any Affiliate of the Borrower,
Collateral Manager, or Equityholder owns a Revolving Collateral Loan or Delayed
Drawdown Collateral Loan pursuant to the same Related Documents; provided that
any such asset will cease to be a Related Loan once all commitments by such
Affiliate of the Borrower, Collateral Manager, or Equityholder to make advances
or fund such Revolving Collateral Loan or Delayed Drawdown Collateral Loan, as
applicable, to the related Obligor expire or are irrevocably terminated or
reduced to zero.

 

“Related Property” means, with respect to a Collateral Loan, any property or
other assets designated and pledged or mortgaged as collateral to secure
repayment of such Collateral Loan, including, without limitation, all accounts,
chattel paper, deposit accounts, financial assets, general intangibles,
instruments, investment property, letter-of-credit rights, other supporting
obligations, any pledge of the stock, membership or other ownership interests in
the related Obligor or its subsidiaries, all Warrant Assets with respect to such
Collateral Loan and all proceeds from any sale or other disposition of such
property or other assets.

 

“Related Security” means, with respect to each Collateral Loan:

 

(a)          all Warrant Assets and any Related Property securing a Collateral
Loan, all payments paid to the Borrower in respect thereof and all monies due,
to become due and paid to the Borrower in respect thereof accruing after the
applicable Borrowing Date and all liquidation proceeds thereof;

 

 38

 

 

(b)          all Liens, guaranties, indemnities and warranties, insurance
policies, financing statements and other agreements or arrangements of whatever
character from time to time supporting or securing payment of any such
indebtedness;

 

(c)          all Collections with respect to such Collateral Loan and any of the
foregoing;

 

(d)          any guarantees or similar credit enhancement for an Obligor’s
obligations under any Collateral Loan, all UCC financing statements or other
filings relating thereto, including all rights and remedies, if any, against any
Related Security, including all amounts due and to become due to the Borrower
thereunder and all rights, remedies, powers, privileges and claims of the
Borrower thereunder (whether arising pursuant to the terms of such agreement or
otherwise available to the Borrower at law or in equity);

 

(e)          all records and Related Documents with respect to such Collateral
Loan and any of the foregoing; and

 

(f)          all recoveries and proceeds of the foregoing.

 

“Relevant Test Period” means, with respect to any Collateral Loan, the relevant
test period for the calculation of Senior Net Leverage Ratio, Total Net Leverage
Ratio, Cash Interest Coverage Ratio, or EBITDA, as applicable, for such
Collateral Loan in the applicable Underlying Loan Agreement or, if no such
period is provided for therein, for Obligors delivering monthly financing
statements, each period of the last twelve consecutive reported calendar months,
and for Obligors delivering quarterly financing statements, each period of the
last four consecutive reported fiscal quarters of the principal Obligor on such
Collateral Loan; provided that, with respect to any Collateral Loan for which
the relevant test period is not provided for in the applicable Underlying Loan
Agreement, if an Obligor is a newly-formed entity as to which twelve consecutive
calendar months have not yet elapsed, “Relevant Test Period” shall initially
include the period from the date of formation of such Obligor to the end of the
twelfth calendar month or fourth fiscal quarter (as the case may be) from the
date of formation, and shall subsequently include each period of the last twelve
consecutive reported calendar months or four consecutive reported fiscal
quarters (as the case may be) of such Obligor.

 

“Replacement Lender” has the meaning assigned to such term in Section 2.16(a).

 

“Requested Amount” has the meaning assigned to such term in Section 2.02(c).

 

“Required Lenders” means, as of any date of determination, Lenders whose
aggregate principal amount of Advances Outstanding plus unused Commitments
aggregate more than 50% of the aggregate amount of the Commitments (used and
unused) or, if the Commitments have expired or been terminated or otherwise
reduced to zero, the aggregate principal amount of all Advances Outstanding;
provided, however, that if any Lender shall be a Defaulting Lender at such time,
then there shall be excluded from the determination of Required Lenders any
Advances owing to such Defaulting Lender and such Defaulting Lender’s unfunded
Commitments.

 

 39

 

 

“Required Loan Documents” means, for each Collateral Loan:

 

(a)other than in the case of a Closing Date Participation until the elevation
thereof to an assignment, an executed copy of the assignment from the prior
owner to the Borrower, if applicable, for such Collateral Loan;

 

(b)other than in the case of a Closing Date Participation until the elevation
thereof to an assignment, (i) the original executed promissory note or, in the
case of a lost note, a copy of the executed underlying promissory note
accompanied by an original executed affidavit and indemnity endorsed by the
Borrower in blank (and an unbroken chain of endorsements from each prior holder
of such promissory note to the Borrower) or (ii) if such promissory note is not
issued in the name of the Borrower or such Collateral Loan is a Noteless Loan or
Closing Date Participation Interest, an executed copy of each assignment and
assumption agreement, transfer document or instrument relating to such Loan
evidencing the assignment of such Collateral Loan from any prior third party
owner thereof to the Borrower and from the Borrower in blank;

 

(c)an executed copy of the Underlying Loan Agreement or any other material
agreement related to such Collateral Loan (as determined by the Collateral
Manger in its reasonable discretion), together with a copy of all amendments and
modifications thereto;

 

(d)a Document Checklist; and

 

(e)other than in the case of a Closing Date Participation, the funding memo in
respect of the Collateral Loan.

 

“Responsible Officer” means (a) in the case of (i) a corporation or (ii) a
partnership or limited liability company that, in each case, pursuant to its
Constituent Documents, has officers, any chief executive officer, president,
executive vice president, treasurer, chief financial officer, secretary, or vice
president, (b) without limitation of clause (a), in the case of a limited
partnership, a Responsible Officer of the general partner, acting on behalf of
such general partner in its capacity as general partner, (c) without limitation
of clause (a), in the case of a limited liability company that, pursuant to its
Constituent Documents, does not have officers, any Responsible Officer of the
sole member, administrative manager or managing member, acting on behalf of the
sole member, administrative manager or managing member in its capacity as sole
member, administrative manager or managing member, (d) in the case of a trust,
the Responsible Officer of the trustee, acting on behalf of such trustee in its
capacity as trustee, (e) an “authorized signatory” or “authorized officer” that
has been so authorized pursuant to customary corporate proceedings, limited
partnership proceedings, limited liability company proceedings or trust
proceedings, as the case may be, and that has responsibilities commensurate with
the matter for which it is acting as a Responsible Officer, (f) in the case of
the Administrative Agent, an officer of the Administrative Agent, responsible
for the administration of this Agreement, (g) in the case of a Lender, an
“authorized signatory” or “authorized officer” of such Lender that has been so
authorized pursuant to customary corporate or similar proceedings and that has
responsibilities commensurate with the matter for which such “authorized
signatory” or “authorized officer” is acting as a Responsible Officer on behalf
of such Lender and (h) in the case of the Collateral Agent, the Custodian, the
Collateral Administrator or the Securities Intermediary, any officer within U.S.
Bank National Association’s corporate trust group (or any successor group), as
applicable, authorized to act for and on behalf of the Collateral Agent,
Custodian, the Collateral Administrator or the Securities Intermediary, as
applicable, including any vice president, assistant vice president or officer of
the Collateral Agent, the Custodian, the Collateral Administrator or the
Securities Intermediary customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred within U.S. Bank National
Association’s corporate trust group (or any successor group), because of such
person’s knowledge of and familiarity with the particular subject and in each
case having direct responsibility for the administration of this Agreement.

 

 40

 

 

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

 

“Retained Interest” means (i) with respect to any Collateral Loan, (a) all
duties, obligations and liabilities of the agent or seller thereunder, including
payment and indemnity obligations, (b) all obligations of agents, trustees,
servicers, administrators or other persons under the documentation evidencing
such Collateral Loan, and (c) if any portion of the indebtedness related to such
Collateral Loan is owned by another lender or is being retained by seller in the
interests, rights and obligations under such documentation to the extent they
relate to such portion and (ii) with respect to any Collateral Loan with an
unfunded commitment, all obligations not attributable to the Borrower to provide
additional funding, contributions, payments or credits.

 

“Revolving Collateral Loan” means any Collateral Loan (other than a Delayed
Drawdown Collateral Loan) that is a loan (including revolving loans, including
funded and unfunded portions of revolving credit lines and letter of credit
facilities, unfunded commitments under specific facilities and other similar
loans and investments) that by its terms may require one or more future advances
to be made to the related Obligor by the Borrower; provided that any such
Collateral Loan will be a Revolving Collateral Loan only until all commitments
to make advances to the Obligor expire or are terminated or irrevocably reduced
to zero.

 

“Sanctioned Country” means, at any time, a country or territory which is the
subject or target of any Sanctions.

 

“Sanctioned Person” means, at any time, (i) any Person listed in any
Sanctions-related list of designated Persons maintained by OFAC, the U.S.
Department of State, or by the United Nations Security Council, the European
Union, any EU member state or Canada, (ii) any Person operating, organized or
resident in a Sanctioned Country or (iii) any Person controlled by any such
Person.

 

“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (i) the U.S. government, including
those administered by OFAC or the U.S. Department of State, or (ii) the United
Nations Security Council, the European Union, Canada or Her Majesty’s Treasury
of the United Kingdom.

 

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

 

“S&P Rating” means, with respect to any Collateral Loan, the public rating
issued by S&P (based on tranche rating not corporate family rating).

 

 41

 

 

“Scheduled Distribution” means, with respect to any Collateral Loan, for each
Due Date, the scheduled payment of principal and/or interest and/or fees due on
such Due Date with respect to such Collateral Loan.

 

“SEC” means the Securities and Exchange Commission or any other governmental
authority of the United States of America at the time administrating the
Securities Act, the Investment Company Act or the Exchange Act.

 

“Second Lien Loan” means any Collateral Loan (and not a bond or similar
security) that meets the following criteria:

 

(i)          is not (and is not expressly permitted by its terms to become)
subordinate in right of payment to any other obligation for borrowed money of
the Obligor of such loan (excluding customary terms applicable to a second lien
lender under customary intercreditor provisions, such as with respect to the
liquidation of the Obligor or of specified collateral for such loan);

 

(ii)         is secured by a valid second priority perfected Lien in, to or on
specified collateral securing the Obligor’s obligations under such loan (whether
or not such loan is also secured by any higher or lower priority Lien on other
collateral);

 

(iii)        is secured, pursuant to such second priority perfected Lien,
by collateral having a value (determined as set forth below) not less than the
outstanding principal balance of such loan plus the aggregate outstanding
principal balances of all other loans of equal or higher seniority secured by a
first or second Lien in the same collateral; and

 

(iv)        is not a loan which is secured solely or primarily by the common
stock of its Obligor or any of its Affiliates.

 

The determination as to whether clause (iii) of this definition is satisfied
shall be based on the Collateral Manager’s good faith judgment at the time the
loan is acquired by the Borrower (which value may include an assessment of the
Obligor’s cash flow, enterprise value, general financial condition and other
attributes).

 

“Secured Parties” means the Administrative Agent, the Custodian, the Collateral
Administrator, the Collateral Agent, the Securities Intermediary and the
Lenders.

 

“Secured Party Representative” has the meaning assigned to such term in Section
12.09.

 

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

 

“Securities Intermediary” has the meaning assigned to it in Section 8-102(a)(14)
of the UCC. Initially, the Securities Intermediary shall be U.S. Bank National
Association.

 

“Security Entitlement” has the meaning specified in Section 8-102(a)(17) of the
UCC.

 

“Senior Net Leverage Ratio” means, with respect to any Collateral Loan and the
related Obligor, either (a) the meaning of “Senior Net Leverage Ratio” or
comparable term set forth in the Related Documents for such Collateral Loan, or
(b) in the case of any Collateral Loan with respect to which the Related
Documents do not include a definition of “Senior Net Leverage Ratio” or
comparable term, the ratio obtained by dividing (i) the indebtedness (including
the full drawn but not the undrawn amount of any revolving and delayed draw
indebtedness) of the related Obligor (other than indebtedness of such Obligor
that is junior in terms of payment or lien subordination to indebtedness of such
Obligor held by the Borrower) as of such date, minus the Unrestricted Cash of
such Obligor as of such date by (ii) EBITDA of such Obligor for any period, as
calculated by the Collateral Manager in accordance with the Collateral
Management Standard.

 

 42

 

 

“Separateness Provisions” means the provisions contained in Sections 3 and 5(e)
of the Amended and Restated Trust Agreement of the Borrower.

 

“Solvent” as to any Person means that such Person is not “insolvent” within the
meaning of Section 101(32) of the Bankruptcy Code or Section 271 of the New York
Debtor and Creditor Law.

 

“Standard First Lien Loan” means, as of any date of determination, an Eligible
Collateral Loan that satisfies each of the following criteria on such date:

 

(a)Such Collateral Loan is a First Lien Loan;

 

(b)Such Collateral Loan has a Moody’s Rating of B3 or higher and an S&P Rating
of B- or higher by S&P;

 

(c)Such Collateral Loan has an outstanding Tranche Size of at least $125,000,000
on the date such Collateral Loan is purchased by the Borrower;

 

(d)Such Collateral Loan is the subject of at least two bid quotations from
nationally recognized independent dealers in the related loan as reported by an
independent nationally recognized pricing service on any date of determination;
and

 

(e)Transfers of the Collateral Loan may be effected pursuant to the Standard
Terms and Conditions for Par/Near Par Trade Confirmations as published by The
Loan Syndications and Trading Association, Inc. on the date such Collateral Loan
is purchased by the Borrower.

 

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

 

“Subject Laws” means the regulations and rules promulgated by the U.S.
Department of Treasury and/or administered by OFAC, including U.S. Executive
Order No. 13224, and other related statutes, laws and regulations.

 

“Subsidiary” means any Person with respect to which the Borrower or the
Equityholder, as the case may be, owns, directly or indirectly, more than 50% of
the Equity Securities of such Person.

 

“Tangible Net Worth” means, at any time, the excess of the value of total assets
(excluding patents, trademarks, copyrights, trade names, deferred or capitalized
research and development costs, goodwill (including any amounts, however
designated, representing the cost of acquisition of business and investments in
excess of the book value thereof), unamortized debt discount and expense,
deferred research and development costs, any write-up of asset value associated
with intangible assets under GAAP, and any other assets treated as intangible
assets under GAAP) over total liabilities, determined in accordance with GAAP,
of the Equityholder and its Subsidiaries.

 

 43

 

 

“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.

 

“Total Net Leverage Ratio” means, with respect to any Collateral Loan and the
related Obligor, either (a) the meaning of “Total Net Leverage Ratio” or
comparable term set forth in the Related Documents for such Collateral Loan, or
(b) in the case of any Collateral Loan with respect to which the Related
Documents do not include a definition of “Total Net Leverage Ratio” or
comparable term, the ratio obtained by dividing (i) the total indebtedness of
the related Obligor as of such date, minus the Unrestricted Cash of such Obligor
as of such date by (ii) EBITDA of such Obligor for any period, as calculated by
the Collateral Manager in accordance with the Collateral Management Standard.

 

“Tranche Size” means, in respect of any Collateral Loan, the aggregate principal
amount of all of the borrowing facilities available to the Obligor under the
terms of the relevant Underlying Loan Agreement as of the original effective
date of the Underlying Loan Agreement. For purposes of determining the Tranche
Size in respect of any Collateral Loan: (1) for Collateral Loans that are, in
accordance with then-prevailing market practice, typically bought and sold
together, the respective aggregate principal amount of the borrowing facilities
available to the Obligor under the facilities evidenced by the relevant
Underlying Loan Agreement shall be aggregated (and, for the avoidance of doubt,
the respective aggregate principal amounts of all revolving facilities, term
loan “A” tranches, term loan “B” tranches and similar loan tranches issued under
a single credit agreement shall be aggregated); (2) the respective principal
amounts of lines of credit and delayed draws that, in accordance with
then-prevailing market practice, trade with any Collateral Loan shall be
aggregated; and (3) the respective principal amount of any borrowing facilities
that are, under then prevailing market practice, considered add-on facilities in
respect of any Collateral Loan shall be aggregated with the principal amount of
such Collateral Loan; provided that, in the case of clauses (1), (2) and (3)
above, such facilities are pari passu in terms of repayment seniority and, with
respect to appropriate price adjustments, buyers are typically indifferent
between such facilities.

 

“UCC” means the New York Uniform Commercial Code; provided that if, by reason of
any mandatory provisions of law, the perfection, the effect of perfection or
non-perfection or priority of the security interests granted to the Collateral
Agent pursuant to this Agreement are governed by the Uniform Commercial Code as
in effect in a jurisdiction of the United States of America other than the State
of New York, then “UCC” means the Uniform Commercial Code as in effect from time
to time in such other jurisdiction for purposes of such perfection, effect of
perfection or non-perfection or priority.

 

“Uncertificated Security” has the meaning specified in Section 8-102(a)(18) of
the UCC.

 

“Underlying Loan Agreement” means, with respect to any Collateral Loan, the
document or documents evidencing the commercial loan agreement or facility
pursuant to which such Collateral Loan is made.

 

“Underlying Note” means one or more promissory notes, if any, executed by an
Obligor evidencing a Collateral Loan.

 

“Unencumbered Liquidity” means, with respect to the Equityholder, the sum of (i)
unrestricted cash or cash equivalents, plus (ii) committed, undrawn equity
capital of the Equityholder (other than in respect of any defaulted investors),
which is available to be contributed to the Borrower by the Equityholder without
any third party consent.

 

 44

 

 

“Unfunded Exposure Amount” means on any date of determination, with respect to
any Delayed Drawdown Collateral Loans and Revolving Collateral Loans, the
aggregate amount (without duplication) of all (a) unfunded commitments and (b)
all standby or contingent commitments of the Borrower pursuant to such
Collateral Loan.

 

“Unfunded Reserve Account” has the meaning specified in Section 8.05.

 

“Unfunded Reserve Account Shortfall” has the meaning specified in Section 2.01.

 

“Unfunded Reserve Required Amount” means an amount equal to the aggregate sum
of:

 

(a)          with respect to each Delayed Drawdown Collateral Loan included in
the Collateral:

 

(i)          the aggregate sum of the unfunded commitments of the Borrower in
respect of all such Delayed Drawdown Collateral Loans, minus

 

(ii)         the aggregate sum of the unfunded commitments of the Borrower in
respect of each such Delayed Drawdown Collateral Loan included in the Collateral
times the Original Asset Value of such Delayed Drawdown Collateral Loan
(expressed as percentage of par) times the Advance Rate then in effect for such
Delayed Drawdown Collateral Loan; plus

 

(b)          with respect to each Revolving Collateral Loan included in the
Collateral:

 

(i)          the aggregate sum of the unfunded commitments of the Borrower in
respect of all such Revolving Collateral Loans, minus

 

(ii)         the aggregate sum of the unfunded commitments of the Borrower in
respect of each such Revolving Collateral Loan included in the Collateral times
the Original Asset Value of such Revolving Collateral Loan (expressed as
percentage of par) times the Advance Rate then in effect for such Revolving
Collateral Loan;

 

provided that after the Commitment Termination Date, the Unfunded Reserve
Required Amount shall equal the Unfunded Exposure Amount.

 

“Unrestricted Cash” means “Unrestricted Cash” or any comparable term in the
Related Document for any Collateral Loan, and in any case that “Unrestricted
Cash” or such comparable term is not defined in such Related Documents, all cash
available for use for general corporate purposes and not held in any reserve
account or legally or contractually restricted for any particular purposes or
subject to any lien (other than blanket liens permitted under or granted in
accordance with such Related Documents), as reflected on the most recent
financial statements of the related Obligor that have been delivered to the
Borrower.

 

“Unused Amount” means, for any day, an amount equal to the excess, if any, of
(a) the Facility Amount on such day over (b) the Advances Outstanding on such
day.

 

“U.S. Treasuries” means bonds or other evidences of indebtedness issued by the
U.S. Department of the Treasury.

 

 45

 

 

“Utilization Rate” means, for any day, an amount (expressed as a percentage)
equal to the Advances Outstanding divided by the Facility Amount.

 

“Volcker Rule” means Section 13 of the U.S. Bank Holding Company Act of 1956 and
the applicable rules and regulations thereunder.

 

“Warrant Asset” means any equity purchase warrants or similar rights convertible
into or exchangeable or exercisable for any equity interests received by the
Borrower as an “equity kicker” from the Obligor in connection with a Collateral
Loan; provided such Warrant Asset was received by the Borrower in lieu of debts
previously contracted with respect to such Collateral Loan.

 

“Weighted Average Life” means, as of any date of determination with respect to
all Eligible Collateral Loans, the number of years following such date obtained
by:

 

(a)          summing the products of: (i) the Average Life at such time of each
Eligible Collateral Loan multiplied by (ii) the Principal Balance of such
Eligible Collateral Loan; and

 

(b)          dividing such sum by the Aggregate Principal Balance of all
Eligible Collateral Loans as of such date.

 

For the purposes of the foregoing, the “Average Life” is, on any date of
determination with respect to any Eligible Collateral Loan, the quotient
obtained by dividing (x) the sum of the products of (A) the number of years
(rounded to the nearest one hundredth thereof) from such date of determination
to the respective dates of each successive Scheduled Distribution of principal
of such Eligible Collateral Loan and (B) the respective amounts of principal of
such Scheduled Distributions by (y) the sum of all successive Scheduled
Distributions of principal on such Eligible Collateral Loan.

 

“Weighted Average Moody’s Rating Factor” means, as of any date of determination
with respect to all Eligible Collateral Loans, the number (rounded up to the
nearest whole number) determined by:

 

(a) summing the products of (i) the Principal Balance of each Eligible
Collateral Loan (excluding for avoidance of doubt Equity Securities) multiplied
by (ii) the Moody’s Rating Factor of such Eligible Collateral Loan; and

 

(b) dividing such sum by the Aggregate Principal Balance of all such Eligible
Collateral Loans.

 

“Weighted Average Spread” means, as of any date, the number, expressed as a
percentage, obtained by dividing:

 

(a)          the amount equal to (i) the Aggregate Funded Spread with respect to
all Eligible Collateral Loans plus (ii) the Aggregate Unfunded Spread, by

 

(b)          the Aggregate Principal Balance of all Eligible Collateral Loans as
of such date.

 

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

 

“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.

 

 46

 

 

Section 1.02.         Rules of Construction

 

For all purposes of this Agreement and the other Facility Documents, except as
otherwise expressly provided or unless the context otherwise requires, (a)
singular words shall connote the plural as well as the singular and vice versa
(except as indicated), as may be appropriate, (b) the words “herein,” “hereof”
and “hereunder” and other words of similar import used in any Facility Document
refer to such Facility Document as a whole and not to any particular article,
schedule, section, paragraph, clause, exhibit or other subdivision thereof, (c)
the headings, subheadings and table of contents set forth in any Facility
Document are solely for convenience of reference and shall not constitute a part
of such Facility Document nor shall they affect the meaning, construction or
effect of any provision hereof, (d) references in any Facility Document to
“include” or “including” shall mean include or including, as applicable, without
limiting the generality of any description preceding such term, and for purposes
hereof the rule of ejusdem generis shall not be applicable to limit a general
statement, followed by or referable to an enumeration of specific matters, to
matters similar to those specifically mentioned, (e) any definition of or
reference to any Facility Document, agreement, instrument or other document
shall be construed as referring to such Facility Document, instrument or other
document as from time to time amended, restated, supplemented or otherwise
modified (subject to any restrictions on such amendments, restatements,
supplements or modifications set forth herein or any other Facility Document),
(f) any reference in any Facility Document, including the introduction and
recitals to such Facility Document, to any Person shall be construed to include
such Person’s successors and assigns (subject to any restrictions set forth
herein or in any other applicable agreement), (g) any reference to any law or
regulation herein shall refer to such law or regulation as amended, modified or
supplemented from time to time, (h) unless otherwise specified herein, any use
of “material” or “materially” or words of similar meaning in this Agreement
shall mean material, as determined by the Administrative Agent in its reasonable
discretion, and (i) an Event of Default shall be deemed to be continuing until
it is waived in accordance with Section 12.01.

 

Section 1.03.         Computation of Time Periods

 

Unless otherwise stated in the applicable Facility Document, in the computation
of a period of time from a specified date to a later specified date, the word
“from” means “from and including”, the word “through” means “to and including”
and the words “to” and “until” both mean “to but excluding”. Periods of days
referred to in any Facility Document shall be counted in calendar days unless
Business Days are expressly prescribed. Unless otherwise indicated herein, all
references to time of day refer to Eastern standard time or Eastern daylight
saving time, as in effect in New York City on such day.

 

Section 1.04.         Collateral Value Calculation Procedures

 

In connection with all calculations required to be made pursuant to this
Agreement with respect to Scheduled Distributions on any Collateral Loan, or any
payments on any other assets included in the Collateral, with respect to the
sale of and reinvestment in Collateral Loans, and with respect to the income
that can be earned on Scheduled Distributions on such Collateral Loans and on
any other amounts that may be received for deposit in the Collection Account,
the provisions set forth in this Section 1.04 shall be applied. The provisions
of this Section 1.04 shall be applicable to any determination or calculation
that is covered by this Section 1.04, whether or not reference is specifically
made to Section 1.04, unless some other method of calculation or determination
is expressly specified in the particular provision.

 

 47

 

 

(a)          All calculations with respect to Scheduled Distributions on any
Collateral Loan shall be made on the basis of information as to the terms of
each such Collateral Loan and upon reports of payments, if any, received on such
Collateral Loan that are furnished by or on behalf of the Obligor of such
Collateral Loan and, to the extent they are not manifestly in error, such
information or reports may be conclusively relied upon in making such
calculations.

 

(b)          For purposes of calculating the Coverage Tests, except as otherwise
specified in the Coverage Tests, such calculations will not include (i)
scheduled interest and principal payments on Ineligible Collateral Loans unless
or until such payments are actually made and (ii) ticking fees and other similar
fees in respect of Collateral Loans, unless or until such fees are actually
paid.

 

(c)          For each Collection Period and as of any date of determination, the
Scheduled Distribution on any Collateral Loan (other than an Ineligible
Collateral Loan, which, except as otherwise provided herein, shall be assumed to
have Scheduled Distributions of zero) shall be the total amount of (i) payments
and collections to be received during such Collection Period in respect of such
Collateral Loan, (ii) proceeds of the sale of such Collateral Loan received and,
in the case of sales which have not yet settled, to be received during such
Collection Period that are not reinvested in additional Collateral Loans or
retained in a Collection Account for subsequent reinvestment pursuant to Article
X, which proceeds, if received as scheduled, will be available in a Collection
Account and available for distribution at the end of such Collection Period and
(iii) amounts referred to in clause (i) or (ii) above that were received in
prior Collection Periods but were not disbursed on a previous Payment Date or
retained in a Collection Account for subsequent reinvestment pursuant to Article
X.

 

(d)          Except as otherwise expressly provided herein, each Scheduled
Distribution receivable with respect to a Collateral Loan shall be assumed to be
received on the applicable Due Date.

 

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

 

(f)          For purposes of calculating all Concentration Limitations, in both
the numerator and the denominator of any component of the Concentration
Limitations, Ineligible Collateral Loans will be treated as having a Principal
Balance equal to zero.

 

(g)          Except as otherwise provided herein, Ineligible Collateral Loans
will (i) not be included in the calculation of the Collateral Quality Test, (ii)
be treated as having an Asset Value of equal to zero and (iii) be excluded from
the calculation of the Borrowing Base on and after the date such Collateral Loan
constitutes an Ineligible Collateral Loan.

 

(h)          For purposes of determining the Minimum Weighted Average Spread
Test (and related computations of Aggregate Funded Spread), capitalized or
deferred interest (and any other interest that is not paid in cash) will be
excluded.

 

(i)          Portions of the same Collateral Loan acquired by the Borrower on
different dates (whether through purchase, receipt by contribution or the making
or origination thereof, but excluding subsequent draws under Revolving
Collateral Loans or Delayed Drawdown Collateral Loans) will, for purposes of
determining the purchase price of such Collateral Loan, be treated as separate
purchases on separate dates (and not a weighted average purchase price for any
particular Collateral Loan).

 

(j)          For the purposes of calculating compliance with each of the
Concentration Limitations all calculations will be rounded to the nearest 0.01%.

 

 48

 

 

(k)          For purposes of calculating compliance with the Borrowing Base
Test, the Equity Coverage Test, the Minimum Equity Test, the Collateral Quality
Test, or any Concentration Limitation under this Agreement in connection with
the acquisition or disposition of a Collateral Loan or Eligible Investment, each
of the trade date and the settlement date with respect to any such Collateral
Loan or Eligible Investment acquired or disposed of or under consideration for
acquisition or disposition shall be used to determine compliance with the
Borrowing Base Test, the Equity Coverage Test, the Minimum Equity Test, the
Collateral Quality Test, or any Concentration Limitation and whether such
acquisition or disposition is permitted hereunder; provided that, (i) for
purposes of calculating compliance with the Borrowing Base Test, the Equity
Coverage Test, the Minimum Equity Test, the Collateral Quality Test, or any
Concentration Limitation, the calculation thereof shall assume (and give pro
forma effect to) (x) the making of an Advance to the Borrower (based on the
Advance Rate applicable thereto) and any capital contribution to the Borrower by
the Equityholder upon settlement of the acquisition of a Collateral Loan (based
on the purchase price therefor) and (y) the repayment of an Advance to the
Borrower upon settlement of the disposition of a Collateral Loan (based on the
sale price therefor) and (ii) for purposes of calculating the Borrowing Base
Test, the Equity Coverage Test, the Minimum Equity Test, the Collateral Quality
Test, or any Concentration Limitation in connection with the making or repayment
of any Advance, such calculation shall be recalculated at the time such Advance
is made or repaid after giving effect to the settlement of any Collateral Loan
acquired or disposed of.

 

(l)          To the extent of any ambiguity in the interpretation of any
definition or term contained in this Agreement or to the extent more than one
methodology can be used to make any of the determinations or calculations set
forth herein, the Collateral Administrator shall request direction from the
Administrative Agent as to the interpretation and/or methodology to be used, and
the Collateral Administrator shall follow such direction, and together with the
Collateral Agent, the Custodian and the Securities Intermediary, shall be
entitled to conclusively rely thereon without any responsibility or liability
therefor.

 

ARTICLE II
ADVANCES

 

Section 2.01.         Revolving Credit Facility; Approval Requests

 

(a)          The Borrower, shall, on or prior to the third Business Day prior to
each proposed trade date of each proposed acquisition of one or more Collateral
Loans (whether proposed to be funded by an Advance or by the use of the cash
proceeds contributed by the Equityholder, or by an in-kind contribution of
Collateral Loans contributed by the Equityholder or any combination thereof)
submit an asset approval request for such Collateral Loans through the Citi
Velocity website located at www.citivelocity.com (such request, an “Approval
Request”). Such approval may take the form of a standing list of pre-approved
assets containing the characteristics of each pre-approved asset (other than
purchase price), together with a notice of intention to trade containing the par
amount and purchase price of the Collateral Loan(s) being acquired delivered on
or prior to the third Business Day preceding the proposed trade date.

 

(b)          The Administrative Agent shall have the right to approve or reject
any Approval Request in its sole discretion and to request additional
information regarding any proposed Collateral Loan. The Administrative Agent
shall promptly (and in any event within ten (10) Business Days after receipt by
the Administrative Agent of all required information and documentation; provided
that if the Administrative Agent shall fail to so notify the Collateral Manager
and the Borrower, the Administrative Agent shall be deemed to have rejected such
Approval Request) notify the Collateral Manager and the Borrower (with a copy to
the Collateral Agent and the Collateral Administrator) in writing (including via
electronic mail) whether each Approval Request has been approved or rejected.
Any approval may be withdrawn at any time at least three (3) Business Days prior
to the time at which the Borrower actually becomes obligated to purchase or
enter into documents governing such proposed Collateral Loan by written notice
(including via e-mail) of such withdrawal from the Administrative Agent to the
Collateral Manager. If the Administrative Agent has rejected an Approval
Request, or withdrawn or withheld its approval of any such request, then the
Borrower shall not be authorized to purchase such proposed Collateral Loan
unless, in the case of a withdrawn approval, the Administrative Agent has not
withdrawn its approval by written notification to the Borrower at least three
(3) Business Days prior to the time at which the Borrower enters into a
commitment to purchase such proposed Collateral Loan.

 

 49

 

 

(c)          On the terms and subject to the conditions hereinafter set forth,
including Article III, each Lender severally agrees to make loans to the
Borrower (each, an “Advance”) from time to time on any Business Day during the
Reinvestment Period, on a pro rata basis in each case in an aggregate principal
amount at any one time outstanding up to but not exceeding such Lender’s
Commitment and, as to all Lenders, in an aggregate principal amount up to but
not exceeding the Borrowing Base as then in effect. Each such borrowing of an
Advance on any single day is referred to herein as a “Borrowing”.

 

Within such limits and subject to the other terms and conditions of this
Agreement, the Borrower may borrow (and re-borrow) Advances under this Section
2.01 and prepay Advances under Section 2.05.

 

Notwithstanding anything to the contrary herein, if, upon the occurrence of an
Event of Default or on the Commitment Termination Date, the amount on deposit in
the Unfunded Reserve Account is less than the Unfunded Exposure Amount (such
amount, the “Unfunded Reserve Account Shortfall”), the Borrower shall cause to
be deposited in the Unfunded Reserve Account an amount equal to the Unfunded
Reserve Account Shortfall. The Unfunded Reserve Account Shortfall may be funded
with Advances to the Borrower and capital contributions by the Equityholder.
Following receipt of a Notice of Borrowing (which shall specify the account
details of the Unfunded Reserve Account where the funds will be made available),
each Lender shall fund its pro rata portion of such Advances in accordance with
Section 2.02(e), notwithstanding anything to the contrary herein (including,
without limitation, the Borrower’s failure to satisfy any of the conditions
precedent set forth in Section 3.02); provided that any such Advance to the
Borrower shall not exceed the Borrowing Base.

 

Section 2.02.         Making of the Advances

 

(a)          If the Borrower desires to make a Borrowing under this Agreement it
shall give the Administrative Agent (with a copy to the Collateral Agent and the
Collateral Administrator) a written notice (each, a “Notice of Borrowing”) for
such Borrowing (which notice shall be irrevocable and effective upon receipt)
not later than:

 

(i)          in the case of Advances requested on the Closing Date, 5:00 p.m.
two (2) Business Days prior to the Closing Date; and

 

(ii)         in the case of all other Advances 11:00 a.m. three (3) Business
Days prior to the requested Borrowing Date.

 

(b)          There shall be a maximum of three (3) Borrowings requested per
week.

 

(c)          Each Notice of Borrowing shall be substantially in the form of
Exhibit B hereto, dated the date the request for the related Borrowing is being
made, signed by a Responsible Officer of the Borrower, shall attach a Borrowing
Base Calculation Statement, and shall otherwise be appropriately completed. Such
Notice of Borrowing shall specify the proposed Borrowing Date (specifically
identifying whether such Borrowing will be on three (3) Business Days’ notice.
The proposed Borrowing Date specified in each Notice of Borrowing shall be a
Business Day falling on or prior to the Commitment Termination Date and the
amount of the Borrowing requested in such Notice of Borrowing (the “Requested
Amount”) shall be equal to at least $500,000 or an integral multiple of $10,000
in excess thereof (or, if less, the remaining unfunded Commitments hereunder or,
in the case of Delayed Drawdown Collateral Loans or Revolving Collateral Loans,
such lesser amount required to be funded by the Borrower in respect thereof).

 

 50

 

 

(d)          The Administrative Agent shall notify each Lender of its receipt of
such Notice of Borrowing by 2:00 p.m. on the day of receipt thereof (or, if such
day is not a Business Day, by noon on the next succeeding Business Day).

 

(e)          Each Lender shall, not later than 11:00 a.m. on each Borrowing Date
in respect of Advances, make its Percentage of the applicable Requested Amount
available to the Administrative Agent in immediately available funds by
disbursing such funds to the account of the Administrative Agent in accordance
with the wiring instruction set forth in the notification of Notice of Borrowing
delivered by the Administrative Agent to the Lenders pursuant to Section
2.02(a). Once each Lender has funded its Percentage of the applicable Requested
Amount, the Administrative Agent shall make the Requested Amount available to
the Borrower by disbursing such funds to the Collection Account.

 

Section 2.03.         Evidence of Indebtedness; Notes

 

(a)          Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to it and
resulting from the Advances made by such Lender to the Borrower, from time to
time, including the amounts of principal and interest thereon and paid to it,
from time to time hereunder; provided that the failure of any Lender to maintain
such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Advances in accordance with the terms of this
Agreement. The Collateral Agent shall be entitled to conclusively rely upon the
information provided to it by the Administrative Agent with respect to the
Advances Outstanding with respect to each Lender.

 

(b)          Any Lender may request that its Advances to the Borrower be
evidenced by a Note. In such event, the Borrower shall promptly prepare, execute
and deliver to such Lender a Note payable to such Lender and otherwise
appropriately completed. Thereafter, the Advances of such Lender evidenced by
such Note and interest thereon shall at all times (including after any
assignment pursuant to Section 12.06(a)) be represented by a Note payable to
such Lender (or registered assigns pursuant to Section 12.06(a)), except to the
extent that such Lender (or assignee) subsequently returns any such Note for
cancellation and requests that such Advances once again be evidenced as
described in clause (a) of this Section 2.03.

 

(c)          If any Lender elects not to receive a Note, all references herein
and the other Facility Documents to such Lender’s Note shall be deemed to mean
the Advances Outstanding with respect to such Lender. The parties hereto
acknowledge and agree that the provisions herein and the other Facility
Documents related to the Lenders hereunder shall apply to each Lender regardless
of whether such Lender has received a Note.

 

Section 2.04.         Payment of Amounts

 

The Borrower shall pay principal and Interest on the Advances and fees in
accordance with the Priority of Payments to the Lenders pursuant to the Priority
of Payments as follows:

 

(a)          100% of the outstanding principal amount of each Advance, together
with all accrued and unpaid Interest thereon, shall be payable on the Final
Maturity Date.

 

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(b)          Interest shall accrue at the Interest Rate on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full.

 

(c)          The Administrative Agent shall determine the unpaid Interest,
Commitment Fees, and Prepayment Fees payable thereto prior to each Payment Date
using the applicable Interest Rate for the related Interest Accrual Period to be
paid by the Borrower with respect to each Advance on each Payment Date for the
related Interest Accrual Period and shall advise each Lender and the Collateral
Manager thereof and shall send a consolidated invoice of all such Interest,
Commitment Fees, and Prepayment Fees to the Borrower on the second (2nd)
Business Day prior to such Payment Date.

 

(d)          Accrued Interest on each Advance shall be payable in arrears (i) on
each Payment Date, and (ii) in connection with any prepayment in full of the
Advances pursuant to Section 2.05(a); provided that with respect to any
prepayment in full of the Advances Outstanding, accrued Interest on such amount
through the date of prepayment may be payable on such date or as otherwise
agreed to between the Lenders and the Borrower. Accrued Commitment Fees shall be
payable in arrears on each Payment Date.

 

(e)          The obligation of the Borrower to pay the Obligations, including
the obligation of the Borrower to pay the Lenders the outstanding principal
amount of the Advances and accrued interest thereon, shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms hereof (including Section 2.15), under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower or any other Person may have or have had against any Secured Party or
any other Person.

 

Section 2.05.         Prepayment of Advances

 

(a)          Optional Prepayments. The Borrower may, from time to time on any
Business Day, voluntarily prepay Advances in whole or in part, without penalty
or premium, subject to Section 2.10; provided that the Borrower shall have
delivered to the Collateral Agent and the Administrative Agent written notice of
such prepayment (such notice, a “Notice of Prepayment”) in the form of Exhibit C
hereto not later than 12:00 noon three (3) Business Days prior to the date of
such prepayment (provided that same day notice may be given to cure any
non-compliance with the Coverage Tests). The Administrative Agent shall promptly
notify the Lenders of such Notice of Prepayment. Each such Notice of Prepayment
shall be irrevocable and effective upon receipt and shall be dated the date such
notice is being given, signed by a Responsible Officer of the Borrower and
otherwise appropriately completed. Each prepayment by the Borrower of any
Advance pursuant to this Section 2.05(a) (other than a prepayment made in order
to cure any non-compliance with the Coverage Tests) shall in each case be in a
principal amount of at least $100,000 or, if less, the entire outstanding
principal amount of the Advances Outstanding or, in the case of any prepayment
of Advances with the proceeds of a prepayment or repayment of principal of
Collateral Loans, such lesser amount as is paid by the applicable Obligor in
respect thereof. If a Notice of Prepayment is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.

 

(b)          Mandatory Prepayments. The Borrower shall prepay the Advances on
each Payment Date in the manner and to the extent provided in the Priority of
Payments, including as applicable and without limitation, the Mandatory
Amortization Amount applicable to each applicable Payment Date. The Borrower
shall provide, in each Payment Date Report, notice of the aggregate amounts of
Advances that are to be prepaid on the related Payment Date in accordance with
the Priority of Payments.

 

(c)          Borrowing Base Deficiency Cures.

 

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(i)          In addition to any other obligation of the Borrower to cure any
Borrowing Base Deficiency pursuant to the terms of this Agreement, if any
Borrowing Base Deficiency exists, then the Borrower may eliminate such Borrowing
Base Deficiency in its entirety by effecting one or more (or any combination
thereof) of the following actions: (A) deposit into or credit to the Collection
Account cash and Eligible Investments, (B) repay Advances (together with any
breakage payments pursuant to Section 2.10 and all accrued and unpaid costs and
expenses of the Agents, Custodian, Collateral Administrator, Securities
Intermediary and the Lenders for which the Borrower has received a reasonably
detailed invoice prior to such date of repayment, in each case in respect of the
amount so repaid) or (C) during the Reinvestment Period, pledge additional
Collateral Loans as Collateral.

 

(ii)         In connection with the proposed repayment of Advances or pledge of
additional Collateral Loans as Collateral pursuant to Section 2.05(c)(i), the
Borrower (or the Collateral Manager on its behalf) shall deliver in accordance
with Section 2.05(a), (x) to the Administrative Agent (with a copy to the
Collateral Agent, the Collateral Administrator and the Custodian), notice of
such repayment or pledge and a duly completed Borrowing Base Calculation
Statement, updated to the date such repayment or pledge is being made and giving
pro forma effect to such repayment or pledge, and (y) to the Administrative
Agent, if applicable, a description of any Collateral Loans and each Obligor of
such Collateral Loan to be pledged.

 

(iii)        Until such time as any Borrowing Base Deficiency has been cured in
full and no other Default or Event of Default has occurred and is continuing,
the Borrower shall not request the right to transfer (by sale, dividend,
distribution or otherwise), and the Borrower shall not request that the
Collateral Agent grant the release of any Lien on, or the transfer of, any
Collateral Loan from the Collateral, other than any transfer that complies with
Section 10.01(a).

 

(d)          Additional Prepayment Provisions. Each prepayment pursuant to this
Section 2.05 shall be subject to Sections 2.04(d) and 2.10 and applied to the
Advances in accordance with the Lenders’ respective Percentages.

 

Section 2.06.         Changes of Commitments

 

(a)          Automatic Reduction and Termination.

 

(i)          The Commitments of all Lenders shall be automatically reduced to
zero at 5:00 p.m. on the Commitment Termination Date.

 

(ii)         If the daily average aggregate amount of the Commitments of all
Lenders for any period of three consecutive months ending on any Determination
Date exceeds 120% of the daily average of the Advances Outstanding during such
period, then on such Determination Date, the aggregate amount of the Commitments
of the Lenders shall be automatically and permanently reduced (pro rata, based
on each Lender’s Percentage), to an aggregate amount equal to the greater of (x)
120% of the daily average of the Advances Outstanding during such three-month
period and (y) the Advances Outstanding on such Determination Date (such
reduction, an “Automatic Commitment Reduction”); provided that the Borrower may
elect not to have such Automatic Commitment Reduction apply upon delivery to
Administrative Agent of written notice at least 10 Business Days prior to such
Determination Date (subject to the increased Commitment Fee Rate as described in
such definition). Other than as set forth in the preceding sentence, the
occurrence of any subsequent Automatic Commitment Reduction shall have no effect
on the Commitment Fee Rate.

 

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(b)          Optional Termination or Reductions. Prior to the Final Maturity
Date, the Borrower shall have the right to terminate or reduce the unused amount
of the Facility Amount at any time or from time to time without any fee or
penalty, except as specified in Section 2.12(b), upon not less than three (3)
Business Days’ prior notice to the Administrative Agent, the Collateral Agent,
the Lenders, the Collateral Administrator and the Custodian of each such
termination or reduction, which notice shall specify the effective date of such
termination or reduction and the amount of any such reduction; provided that any
notice received after 3:00 p.m. shall be deemed to be received on the next
Business Day; provided, further, that (i) the amount of any such reduction of
the Facility Amount shall be equal to at least $500,000 or an integral multiple
of $10,000 in excess thereof or, if less, the remaining unused portion thereof,
and (ii) no such reduction will reduce the Facility Amount below the sum of (x)
the aggregate principal amount of Advances Outstanding at such time and (y) the
Unfunded Reserve Required Amount. Such notice of termination or reduction shall
be irrevocable and shall be effective only upon receipt by the Administrative
Agent, the Collateral Agent, the Lenders, the Collateral Administrator and the
Custodian, and shall attach, in the case of a reduction of the Commitments, a
Borrowing Base Calculation Statement. Each reduction of Commitments of the
Lenders hereunder shall be applied pro rata to reduce the respective Commitments
of each Lender.

 

(c)          Effect of Termination or Reduction. The Commitments of the Lenders
once terminated or reduced may not be reinstated. Each reduction of the Facility
Amount pursuant to this Section 2.06 shall be applied ratably among the Lenders
in accordance with their respective Commitments.

 

Section 2.07.         Maximum Lawful Rate

 

It is the intention of the parties hereto that the interest on the Advances
shall not exceed the maximum rate permissible under Applicable Law. Accordingly,
anything herein or in any Note to the contrary notwithstanding, in the event any
interest is charged to, collected from or received from or on behalf of the
Borrower by the Lenders pursuant hereto or thereto in excess of such maximum
lawful rate, then the excess of such payment over that maximum shall be applied
first to the payment of amounts then due and owing by the Borrower to the
Secured Parties under this Agreement (other than in respect of principal of and
interest on the Advances) and then to the reduction of the outstanding principal
amount of the Advances Outstanding.

 

Section 2.08.         Several Obligations

 

The failure of any Lender to make any Advance to be made by it on the date
specified therefor shall not relieve any other Lender of its obligation to make
its Advance on such date. None of the Administrative Agent, the Collateral
Agent, the Custodian, the Securities Intermediary or the Collateral
Administrator, shall be responsible for the failure of any Lender to make any
Advance, and no Lender shall be responsible for the failure of any other Lender
to make an Advance required to be made by such other Lender.

 

Section 2.09.         Increased Costs

 

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

 

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

 

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(ii)         subject any Secured Party to any Taxes (other than (A) Non-Excluded
Taxes, (B) Taxes described in clauses (b) through (d) of the definition of
“Excluded Taxes” and (C) 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; or

 

(iii)        impose on any Affected Person or the London interbank market any
other condition, cost or expense, affecting this Agreement or Advances made by
such Affected Person by reference to the LIBOR Rate or any participation
therein;

 

and the result of any of the foregoing shall be to increase the cost to any
Affected Person of making, continuing, converting into or maintaining any
Advance (or of maintaining its obligation to make any Advance) or to increase
the cost to, or to reduce the amount of any payment (whether of principal,
interest, fees, compensation or otherwise) or sum received or receivable by,
such Affected Person hereunder (whether of principal, interest, fees,
compensation or otherwise), then the Borrower will pay to such Affected Person
from time to time after receipt of a written demand by a Responsible Officer of
such Affected Person in Dollars, such additional amount or amounts as will
compensate such Affected Person for such additional costs incurred or reduction
suffered within ten (10) days of receipt of such demand. If a Lender requests
compensation by the Borrower under this Section 2.09, the Borrower may, by
notice to such Lender, suspend the obligation of such Lender to make or continue
Advances by reference to the LIBOR Rate, until the event or condition giving
rise to such request ceases to be in effect (in which case (x) all Advances of
such Lender to be denominated in Dollars shall be made or continued by reference
to the Base Rate and (y) such Lender shall have no obligation to make any
Advances by reference to the LIBOR Rate); provided that such suspension shall
not affect the right of such Lender to receive the compensation so requested.

 

(b)          Capital Requirements. If any Affected Person determines that any
Change in Law regarding capital or liquidity requirements has or would have (but
for the operation of this Section 2.09) the effect of reducing the rate of
return on such Affected Person’s capital or on the capital of such Affected
Person’s holding company, if any, as a consequence of this Agreement (or arising
in connection herewith) or the Advances made by such Affected Person to a level
below that which such Affected Person or such Affected Person’s holding company
could have achieved but for such Change in Law (taking into consideration such
Affected Person’s policies and the policies of such Affected Person’s holding
company with respect to capital adequacy or liquidity coverage) by an amount
deemed to be material by such Affected Person, then from time to time after
demand by such Affected Person, the Borrower will pay to such Affected Person in
Dollars, such additional amount or amounts as will compensate such Affected
Person or such Affected Person’s holding company for any such reduction suffered
or charge imposed within ten (10) days of receipt of such demand.

 

(c)          Liquidity Support. If as a result of any event or circumstance
similar to those described in clause (a) or (b) of this Section 2.09, any
Affected Person is required to compensate a bank or other financial institution
providing liquidity support, credit enhancement or other similar support to such
Affected Person in connection with this Agreement or the funding or maintenance
of Advances hereunder, then the Borrower shall pay to such Affected Person such
additional amount or amounts as may be necessary to reimburse such Affected
Person for any amounts payable or paid by it.

 

(d)          Ratings. If the Administrative Agent determines that it is
necessary or appropriate to obtain a credit rating on the Advances, the Borrower
shall (x) provide (no later than 60 days following receipt by the Borrower of
such reasonable request) at least one credit rating agency designated by the
Administrative Agent with all information and documents reasonably requested by
such rating agency (to the extent such information or documents are in the
possession of or reasonably available to the Borrower) and otherwise cooperate
with such rating agency’s review of the Facility Documents and transactions
contemplated hereby, and (y) pay the costs and expenses of such rating agency in
respect of the rating of the Advances.

 

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(e)          Calculation. In determining any amount provided for in this Section
2.09, the Affected Person may use any reasonable averaging and attribution
methods. The Administrative Agent, on behalf of any Affected Person making a
claim under this Section 2.09, shall submit to the Borrower a certificate of a
Responsible Officer of the Affected Person setting forth in reasonable detail
the basis for and the computations of such additional or increased costs, which
certificate shall be conclusive absent manifest error. The Borrower shall pay
such amount shown as due on any such certificate on the next Payment Date after
receipt thereof.

 

(f)          Delay in Requests. Failure or delay on the part of any Affected
Person to demand compensation pursuant to this Section shall not constitute a
waiver of such Affected Person right to demand such compensation; provided that
the Borrower shall not be required to compensate an Affected Person pursuant to
this Section for any increased costs or reductions incurred more than six months
prior to the date that such Affected Person notifies the Borrower of the Change
in Law giving rise to such increased costs or reductions and of such Affected
Person’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 six-month period referred to above shall be extended to include the
period of retroactive effect thereof.

 

(g)          Lending Office. Upon the occurrence of any event giving rise to the
Borrower’s obligation to pay additional amounts to a Lender pursuant to clauses
(a) or (b) of this Section 2.09, such Lender will, if requested by the Borrower,
use reasonable efforts (subject to overall policy considerations of such Lender)
to designate a different lending office if such designation would reduce or
obviate the obligations of the Borrower to make future payments of such
additional amounts; provided that such designation is made on such terms that
such Lender and its lending office suffer no unreimbursed cost or material legal
or regulatory disadvantage (as reasonably determined by such Lender), with the
object of avoiding future consequence of the event giving rise to the operation
of any such provision.

 

(h)          After-Tax Basis. The payment of amounts under this Section 2.09
shall be on an after Tax basis.

 

Section 2.10.         Compensation; Breakage Payments

 

The Borrower agrees to compensate each Affected Person from time to time, on the
Payment Dates (or the applicable date of prepayment) following such Affected
Person’s written request (which request shall set forth in reasonable detail the
basis for requesting such amounts) in accordance with the Priority of Payments,
for all reasonable and documented losses, expenses and liabilities (including
any interest paid by such Affected Person to lenders of funds borrowed to make
or carry an Advance bearing interest that was computed by reference to the LIBOR
Rate and any loss sustained by such Affected Person in connection with the
re-employment of such funds but excluding loss of anticipated profits), which
such Affected Person may sustain: (i) if for any reason (including any failure
of a condition precedent set forth in Article III but excluding a default by the
applicable Lender) a Borrowing of any Advance bearing interest that was computed
by reference to the LIBOR Rate by the Borrower does not occur on the Borrowing
Date specified therefor in the applicable Notice of Borrowing delivered by the
Borrower, (ii) if any payment, prepayment or conversion of any of the Borrower’s
Advances bearing interest that was computed by reference to the LIBOR Rate
occurs on a date that is not the last day of the relevant Interest Accrual
Period, and (iii) if any payment or prepayment of any Advance bearing interest
that was computed by reference to the LIBOR Rate is not made on a Payment Date
or pursuant to a Notice of Prepayment given by the Borrower. A certificate as to
any amounts payable pursuant to this Section 2.10 submitted to the Borrower by
any Lender (with a copy to the Agents, and accompanied by a reasonably detailed
calculation of such amounts and a description of the basis for requesting such
amounts) shall be conclusive in the absence of manifest error.

 

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Section 2.11.         Illegality; Inability to Determine Rates

 

(a)          Notwithstanding any other provision in this Agreement, in the event
of a Disruption Event, then the affected Lender shall promptly notify the Agents
and the Borrower thereof, and such Lender’s obligation to make or maintain
Advances hereunder based on the Adjusted Eurodollar Rate shall be suspended
until such time as such Lender may again make and maintain Advances based on the
Adjusted Eurodollar Rate.

 

(b)          Upon the occurrence of any event giving rise to a Lender’s
suspending its obligation to make or maintain Advances based on the Adjusted
Eurodollar Rate pursuant to Section 2.11(a), such Lender will, if requested by
the Borrower, use reasonable efforts (subject to overall policy considerations
of such Lender) to designate a different lending office if such designation
would enable such Lender to again make and maintain Advances based on the
Adjusted Eurodollar Rate; provided that such designation is made on such terms
that such Lender and its lending office suffer no unreimbursed cost or material
legal or regulatory disadvantage (as reasonably determined by such Lender), with
the object of avoiding future consequence of the event giving rise to the
operation of any such provision.

 

(c)          If, prior to the first day of any Interest Accrual Period or prior
to the date of any Advance, as applicable, either (i) the Administrative Agent
determines that for any reason adequate and reasonable means do not exist for
determining the LIBOR Rate for the applicable Advances, or (ii) the Required
Lenders determine and notify the Administrative Agent that the Adjusted
Eurodollar Rate with respect to such Advances does not adequately and fairly
reflect the cost to such Lenders of funding such Advances, the Administrative
Agent will promptly so notify the Borrower, the Collateral Agent and each
Lender. Thereafter, the obligation of the Lenders to make or maintain Advances
based on the Adjusted Eurodollar Rate shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes such
notice.

 

(d)          Upon receipt of any notice described in Section 2.11(a) or (c), the
Borrower may revoke any pending request for the making or continuation of an
Advance based on the Adjusted Eurodollar Rate) or, failing that, will be deemed
to have converted such request into a request for an Advance based on the Base
Rate.

 

Section 2.12.         Fees

 

(a)          Commitment Fee. On each Payment Date, the Borrower shall pay to the
Collateral Agent (for the account of the Lenders on a pro rata basis) a
commitment fee (a “Commitment Fee”) in an amount equal to the sum, for each day
during the related Interest Accrual Period from and including the Closing Date
to and excluding the Final Maturity Date, of the product of (i) the Commitment
Fee Rate, divided by 360 and (ii) the Unused Amount, in each case for each such
day during the related Interest Accrual Period.

 

(b)          Prepayment Fee. If, at any time prior to the second anniversary of
the Closing Date, the Facility Amount is reduced in whole or in part at the
option or election of the Borrower, the Borrower shall pay to the Collateral
Agent (for the account of the Lenders on a pro rata basis), a prepayment fee (a
“Prepayment Fee”) equal to the product of (i) the Prepayment Fee Rate multiplied
by (ii) the Facility Amount. Such Prepayment Fee shall be payable on the date of
the termination of this Agreement (in the event this Agreement is terminated in
whole) or on the first Payment Date immediately succeeding the reduction of the
Facility Amount (in the event the Facility Amount is reduced in part).

 

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(c)          Administrative Agent Fees. The Borrower agrees to pay to the
Administrative Agent such fees as are mutually agreed to in writing from time to
time by the Borrower and the Administrative Agent, including the fees set forth
in the Administrative Agent Fee Letter.

 

(d)          Collateral Agent, Collateral Administrator, Custodian and
Securities Intermediary Fees. The Borrower agrees to pay to the Collateral
Agent, the Collateral Administrator, the Custodian and the Securities
Intermediary such fees as are mutually agreed to in writing from time to time by
the Borrower and the Collateral Agent, the Collateral Administrator, the
Custodian and the Securities Intermediary, including the fees set forth in the
Collateral Administration and Agency Fee Letter.

 

Section 2.13.         Rescission or Return of Payment

 

The Borrower agrees that, if at any time (including after the occurrence of the
Final Maturity Date) all or any part of any payment theretofore made by it to
any Secured Party or any designee of a Secured Party is or must be rescinded or
returned for any reason whatsoever (including the insolvency, bankruptcy or
reorganization of the Borrower or any of its Affiliates), the obligation of the
Borrower to make such payment to such Secured Party shall, for the purposes of
this Agreement, to the extent that such payment is or must be rescinded or
returned, be deemed to have continued in existence and this Agreement and any
other applicable Facility Document shall continue to be effective or be
reinstated, as the case may be, as to such obligations, all as though such
payment had not been made.

 

Section 2.14.         Default Interest

 

During the existence and continuance of an Event of Default, at the election of
the Administrative Agent or Required Lenders, all Obligations (other than
principal and interest on the Advances, where the default rate is reflected in
the Applicable Margin) shall bear interest at the Default Rate until rescinded
by the Administrative Agent or the Required Lenders. Interest payable at the
Default Rate shall be payable on each Payment Date in accordance with the
Priority of Payments.

 

Section 2.15.         Payments Generally

 

(a)          All amounts owing and payable to any Secured Party, any Affected
Person or any Indemnified Party, in respect of the Advances and other
Obligations, including the principal thereof, interest, fees, indemnities,
expenses or other amounts payable under this Agreement or any other Facility
Document, shall be paid on behalf and at the direction of the Borrower (or the
Collateral Manager on behalf of the Borrower) by the Collateral Agent in
accordance with the Priority of Payments to the applicable recipient in Dollars
in immediately available funds, on each Payment Date in accordance with the
Priority of Payments, and all without counterclaim, setoff, deduction, defense,
abatement, suspension or deferment. Each Lender shall provide wire instructions
to the Borrower and the Collateral Agent. Other than with respect to payments on
a Payment Date, payments must be received by the Collateral Agent on or prior to
3:00 p.m. on a Business Day to be remitted by the Collateral Agent on such
Business Day to the Lenders; provided that payments received by the Collateral
Agent after 3:00 p.m. on a Business Day will be deemed to have been paid on the
next following Business Day. At no time will the Collateral Agent have any duty
(express or implied) to fund (or front or advance) any amount owing by the
Borrower hereunder.

 

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(b)          Except as otherwise expressly provided herein, all computations of
interest, fees and other Obligations shall be made on the basis of a year of 360
days for the actual number of days elapsed in computing interest on any Advance,
the date of the making of the Advance shall be included and the date of payment
shall be excluded; provided that, if an Advance is repaid on the same day on
which it is made, one day’s Interest shall be paid on such Advance.
All computations made by the Collateral Agent or the Administrative Agent under
this Agreement or any other Facility Document shall be conclusive absent
manifest error.

 

(c)          All payments under the Facility Documents shall be made in USD.

 

Section 2.16.         Replacement of Lenders

 

(a)          Notwithstanding anything to the contrary contained herein, in the
event that (i) any Affected Person shall request reimbursement for amounts owing
pursuant to Section 2.09 (each such Affected Person, a “Potential Terminated
Lender”), (ii) the Borrower shall be required to reimburse any Affected Person
for any Non-Excluded Taxes or pay any additional amounts to any Affected Person
or any Governmental Authority for the account of any Affected Person pursuant to
Section 12.03 (each such Affected Person, also a “Potential Terminated Lender”),
(iii) any Lender is a Defaulting Lender (such Defaulting Lender, also,
a “Potential Terminated Lender”) or (iv) any Lender does not give or approve any
consent, waiver or amendment that requires the approval of all Lenders or all
affected Lenders in accordance with the terms hereof and has been approved by
the Required Lenders (such non-consenting Lender, also, a “Potential Terminated
Lender”), the Borrower, at its sole expense and effort, shall be permitted, upon
written notice to the Administrative Agent and such Potential Terminated Lender
(with a copy to the Collateral Agent), to require such Potential Terminated
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in, and consents required by, Section 12.06), all
of its interests, rights (other than its existing rights to payments pursuant to
Sections 2.09 and 12.03) and obligations under this Agreement and the related
Facility Documents to an assignee permitted pursuant to Section 12.06 (a
“Replacement Lender”) that shall assume such obligations (which assignee may be
another Lender, if such Lender accepts such assignment); provided that:

 

(A)         such Potential Terminated 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 and under
the other Facility Documents (including any amounts under Section 2.10 but
subject to Section 2.17) from the Replacement Lender (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower (in the
case of all other amounts);

 

(B)         in the case of any such assignment resulting from a claim for
compensation under Sections 2.09 or 12.03, such assignment will result in a
reduction in such compensation or payments thereafter;

 

(C)         such assignment does not conflict with applicable Laws; and

 

(D)         in the case of an assignment based on clause (iv) above, the
Replacement Lender shall have consented to the applicable amendment, waiver or
consent.

 

(b)          Each Potential Terminated Lender hereby agrees to take all actions
reasonably necessary, at the sole expense of the Borrower, to permit a
Replacement Lender to succeed to its rights and obligations hereunder. Upon the
effectiveness of any such assignment to a Replacement Lender, (i) such
Replacement Lender shall become a “Lender” hereunder for all purposes of this
Agreement and the other Facility Documents, (ii) the applicable Potential
Terminated Lender shall have no further Commitment hereunder (such Person, a
“Terminated Lender”) and (iii) such Replacement Lender shall have a Commitment
in the amount not less than the Terminated Lender’s Commitment assumed by it.

 

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(c)          No Lender shall be required to make any assignment or delegation
pursuant to Section 2.16(a) if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.

 

Section 2.17.         Defaulting Lenders.

 

(a)     Adjustments. Notwithstanding anything to the contrary contained in this
Agreement, if any Lender becomes a Defaulting Lender, then, until such time as
that Lender is no longer a Defaulting Lender pursuant to Section 2.17(b), to the
extent permitted by Applicable Law:

 

(i)          Waivers and Amendments. Such Defaulting Lender’s right to approve
or disapprove any amendment, waiver or consent with respect to this Agreement
shall be restricted as set forth in the definition of “Required Lenders” and
Section 12.01.

 

(ii)         Defaulting Lender Waterfall. Any payment of principal, interest,
fees or other amounts received by the Administrative Agent for the account of
such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article IX or otherwise) shall be applied at such time or times as may be
determined by the Administrative Agent as follows: first, to the payment of any
amounts owing by such Defaulting Lender to the Administrative Agent hereunder;
second, as the Borrower may request (so long as no Event of Default exists and
is continuing), to the funding of any Advance in respect of which such
Defaulting Lender has failed to fund its portion thereof as required by this
Agreement, as determined by the Administrative Agent; third, if so determined by
the Administrative Agent and the Borrower, to be held in a deposit account and
released pro rata in order to satisfy such Defaulting Lender’s potential future
funding obligations with respect to Advances under this Agreement; fourth, to
the payment of any amounts owing to the Lenders as a result of any judgment of a
court of competent jurisdiction obtained by any Lender against such Defaulting
Lender as a result of such Defaulting Lender’s breach of its obligations under
this Agreement; fifth, so long as no Event of Default exists and is continuing,
to the payment of any amounts owing to the Borrower as a result of any judgment
of a court of competent jurisdiction obtained by the Borrower against such
Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement; and sixth, to such Defaulting Lender or as
otherwise directed by a court of competent jurisdiction; provided that if such
payment is a payment of the principal amount of any Advances in respect of which
such Defaulting Lender has not fully funded its appropriate share, such payment
shall be applied solely to pay the Advances of all non-Defaulting Lenders on a
pro rata basis prior to being applied to the payment of any Advances of such
Defaulting Lender until such time as all Advances are held by the Lenders pro
rata in accordance with the Commitments hereunder. Any payments, prepayments or
other amounts paid or payable to a Defaulting Lender that are applied (or held)
to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant
to this Section 2.16 shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

 

(iii)        Certain Fees. No Defaulting Lender shall be entitled to receive any
fee payable under Section 2.12(a) for any period during which that Lender is a
Defaulting Lender and the Borrower shall not be required to pay any such fee
that otherwise would have been required to have been paid to such Defaulting
Lender.

 

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(b)   Defaulting Lender Cure. If the Borrower, the Administrative Agent agree in
writing that a Lender is no longer a Defaulting Lender, the Administrative Agent
will so notify the parties hereto, whereupon as of the effective date specified
in such notice and subject to any conditions set forth therein, that Lender
will, to the extent applicable, purchase at par that portion of outstanding
Advances of the other Lenders or take such other actions as the Administrative
Agent may determine to be necessary to cause the Advances Outstanding to be held
on a pro rata basis by the Lenders in accordance with their Percentages,
whereupon such Lender will cease to be a Defaulting Lender; provided that no
adjustments will be made retroactively with respect to fees accrued or payments
made by or on behalf of the Borrower while that Lender was a Defaulting Lender;
and provided, further, that except to the extent otherwise expressly agreed by
the affected parties, no change hereunder from Defaulting Lender to Lender will
constitute a waiver or release of any claim of any party hereunder arising from
that Lender’s having been a Defaulting Lender.

 

Section 2.18.         Right of Setoff

 

The Borrower agrees that, in addition to (and without limitation of) any right
of set-off that the Agents or any Lender may otherwise have, each of the Agents
and the Lenders shall be entitled, at its option, to offset amounts owing by the
Agents or such Lender, as the case may be, to the Borrower, in USD or in any
other currency (irrespective of the place of payment or booking office of the
obligation and regardless of whether such amounts are then due to the Borrower),
against any amount payable by the Borrower to the Agents or such Lender, as the
case may be, under this Agreement that is not paid when due. For this purpose,
any amount owing by the Agents or any Lender to the Borrower may be converted by
the Agents or such Lender, as the case may be, into the currency in which the
amount payable by the Borrower to the Agents or such Lender, as the case may be,
under this Agreement is denominated at the rate of exchange at which the Agents
or such Lender, as the case may be, would be able, acting in a reasonable manner
and in good faith, to purchase the relevant amount of such currency.

 

Section 2.19.         Contractual Currency

 

To the fullest extent permitted by applicable law, if any judgment or order
expressed in a currency other than the currency in which a payment is required
by this Agreement is to be made by the Borrower (the “Contractual Currency”) is
rendered:

 

(a)          for the payment of any amount owing in respect of this Agreement;
or

 

(b)          in respect of a judgment or order of another court for the payment
of any amount described in the foregoing clause (a),

 

the recipient of such payment, after recovery in full of the aggregate amount to
which the recipient of such payment is entitled pursuant to the judgment or
order, will be entitled to receive promptly from the Borrower the amount of any
shortfall of the Contractual Currency received by the recipient of such payment
as a consequence of sums being paid in such other currency if such shortfall
arises or results from any variation between the rate of exchange at which the
Contractual Currency is converted into the currency of the judgment or order for
the purposes of such judgment or order and the rate of exchange at which the
recipient of such payment is able, acting in a reasonable manner and in good
faith in converting the currency received into the Contractual Currency, to
purchase the Contractual Currency with the amount of the currency of the
judgment or order actually received by the recipient of such payment. The term
“rate of exchange” includes any premiums and costs of exchange payable in
connection with the purchase of or conversion into the Contractual Currency.

 

To the fullest extent permitted by applicable law, the obligations in this
Section constitute separate and independent obligations from the other
obligations in this Agreement and any related document, will be enforceable as
separate and independent causes of action, will apply notwithstanding any
indulgence granted by the recipient of such payment and will not be affected by
judgment being obtained or claim or proof being made for any other sums payable
in respect of this Agreement or any related document. To the extent permitted by
Applicable Law, the Borrower hereby waives the right to invoke any defense of
payment impossibility.

 

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Section 2.20.         Lending Offices; Changes Thereto

 

Each Lender may at any time or from time to time designate, by written notice to
the Administrative Agent to the extent not already reflected on Schedule 1, one
or more domestic or foreign lending offices (which, for this purpose, may
include branches or Affiliates of the respective Lender) for the various
Advances made by such Lender (including by designating a separate lending office
(or Affiliate) to act as such); provided that, for designations made after the
Closing Date to the extent such designation shall result in increased costs
under Section 2.09 in excess of those which would be charged in the absence of
the designation of a different lending office (including a different Affiliate
of the respective Lender), then the Borrower shall not be obligated to pay such
excess increased costs (although the Borrower, in accordance with and pursuant
to the other provisions of this Agreement, shall be obligated to pay the costs
which would apply in the absence of such designation and any subsequent
increased costs of the type described above resulting from changes after the
date of the respective designation). Each lending office and Affiliate of any
Lender designated as provided above shall, for all purposes of this Agreement,
be treated in the same manner as the respective Lender (and shall be entitled to
all indemnities and similar provisions in respect of its acting as such
hereunder) and any designation of a lending office pursuant to this Section 2.20
shall not affect the obligation of the Borrower to repay any Obligations in
accordance with the terms of this Agreement.

 

Section 2.21.         [Reserved].

 

Section 2.22.         [Reserved].

 

Section 2.23.         Recourse Against Certain Parties.

 

Notwithstanding any other provision of this Agreement, the obligations of the
Borrower under this Agreement are limited recourse obligations of the Borrower
(and not any of its Affiliates or any other party) payable solely from the
Collateral in accordance with the Priority of Payments and, following
realization of the Collateral, and application of the proceeds thereof in
accordance with the Priority of Payments and, subject to Section 2.13, all
obligations of and any claims against the Borrower hereunder or in connection
herewith after such realization shall be extinguished and shall not thereafter
revive. No recourse shall be had against any officer, director, employee,
shareholder, member, manager, agent, partner, principal or incorporator of the
Borrower or their respective successors or assigns for any amounts payable under
this Agreement. It is understood that the foregoing provisions of this Section
2.23 shall not (i) prevent recourse to the Collateral for the sums due or to
become due under any security, instrument or agreement which is part of the
Collateral or (ii) constitute a waiver, release or discharge of any indebtedness
or obligation evidenced by this Agreement until such Collateral has been
realized. It is further understood that the foregoing provisions of this Section
2.23 shall not limit the right of any Person to name the Borrower as a party
defendant in any proceeding or in the exercise of any other remedy under this
Agreement, so long as no judgment in the nature of a deficiency judgment or
seeking personal liability shall be asked for or (if obtained) enforced against
the Borrower.

 

ARTICLE III
CONDITIONS PRECEDENT

 

Section 3.01.         Conditions Precedent to Initial Advances

 

The obligation of each Lender to make its initial Advance hereunder shall be
subject to the conditions precedent that the Administrative Agent shall have
received on or before the Closing Date the following, each in form and substance
reasonably satisfactory to the Administrative Agent, the deliverables set forth
below or, as applicable, the events set forth below shall have occurred (or such
applicable conditions precedent have been waived by the Administrative Agent):

 

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(a)          each of the Facility Documents duly executed and delivered by the
parties thereto, which shall each be in full force and effect;

 

(b)          true and complete copies certified by a Responsible Officer of the
Borrower of all Governmental Authorizations, Private Authorizations and
Governmental Filings, if any, required in connection with the transactions
contemplated by this Agreement and the other Facility Documents;

 

(c)          each of the representations and warranties of the Borrower
contained in the Facility Documents shall be true and correct as of the Closing
Date (except to the extent such representations and warranties expressly relate
to any earlier date, in which case such representations and warranties shall be
true and correct as of such earlier date);

 

(d)          one or more certificates of a Responsible Officer of each of the
Borrower, the Equityholder and the Collateral Manager certifying (i) as to its
Constituent Documents, (ii) that each of the representations and warranties are
true and correct as of the Closing Date (except to the extent such
representations and warranties expressly relate to any earlier date, in which
case such representations and warranties shall be true and correct as of such
earlier date), (iii) to its knowledge, that no Default or Event of Default has
occurred and is continuing, and (iv) as to the incumbency and specimen signature
of each of its Responsible Officers authorized to execute the Facility Documents
to which it is a party;

 

(e)          proper financing statements, in acceptable form for filing on the
Closing Date, under the UCC with the Delaware Secretary of State and any other
applicable filing office in any applicable jurisdiction that the Administrative
Agent deems reasonably necessary or desirable in order to perfect the interests
in the Collateral contemplated by this Agreement and such further instruments
and such further actions that the Administrative Agent deems reasonably
necessary or desirable in order to maintain and protect the Collateral Agent’s
first-priority perfected security interest in the Collateral, provided that to
the extent any security interest in the Collateral or any deliverable related to
the perfection of security interests in the Collateral (other than any
Collateral the security interest in which may be perfected by the filing of a
UCC financing statement) is not or cannot be provided and/or perfected on the
Closing Date (x) without undue burden or expense or (y) after the Borrower’s use
of commercially reasonable efforts to do so, then the provision and/or
perfection of such security interest(s) or deliverable(s) shall not constitute a
condition precedent to the availability of the initial Advance on the Closing
Date but shall be required to be delivered after the Closing Date in accordance
with Section 5.01(n);

 

(f)          copies of proper financing statement amendments (or the equivalent
thereof in any applicable foreign jurisdiction) and, if applicable, release
letters, if any, necessary to release all security interests and other rights
(other than Permitted Liens) of any Person (other than the Collateral Agent) in
the Collateral previously granted by the Borrower or any transferor;

 

(g)          legal opinions (addressed to each of the Secured Parties) of (i)
counsel to the Borrower, the Collateral Manager and the Equityholder, covering
customary corporate matters (including opinions regarding no conflict with
covered laws and non-contravention with organizational documents and material
agreements, the Investment Company Act and the Volcker Rule), substantive
nonconsolidation of the Borrower with the Collateral Manager and the
Equityholder, perfection of the Collateral Agent’s security interest in the
Collateral and such other matters as the Administrative Agent and its counsel
shall reasonably request and (ii) counsel to the Collateral Administrator, the
Collateral Agent and the Custodian, covering corporate and enforceability
matters, and such other matters as the Administrative Agent and its counsel
shall reasonably request;

 

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(h)          the Equityholder shall have made (or substantially simultaneously
or concurrently with the Closing Date shall make) an equity contribution to the
Borrower (or shall be deemed to have made an equity contribution to the Borrower
in the form of the payment of a portion of the Purchase Price for the initial
Collateral Loans) in an amount sufficient, when combined with the proceeds of
the initial Advance hereunder, to pay the purchase price for the initial
Collateral Loans to be included in the Collateral and all fees and expenses in
connection therewith;

 

(i)          since December 31, 2016, there shall have been no Material Adverse
Effect;

 

(j)          after giving effect to the transactions contemplated in connection
herewith, the Borrower shall not have any Indebtedness other than the
Obligations;

 

(k)          all of the Covered Accounts shall have been established and shall
be subject to the Account Control Agreement;

 

(l)          evidence reasonably satisfactory to it that (i) all fees and (to
the extent invoiced at least two (2) Business Days prior to the Closing Date)
expenses due and owing to the Administrative Agent on or prior to the Closing
Date have been received or will be received contemporaneously with the Closing
Date; and (ii) (to the extent invoiced at least two (2) Business Days prior to
the Closing Date) the reasonable and documented fees and expenses of Winston &
Strawn LLP, counsel to the Administrative Agent, and of counsel to the
Custodian, the Securities Intermediary and the Collateral Administrator in
connection with the transactions contemplated hereby, shall have been paid by
the Borrower;

 

(m)         at least three (3) Business Days prior to the Closing Date, a
Borrowing Base Calculation Statement prepared as of a date reasonably prior to
the Closing Date;

 

(n)          evidence reasonably satisfactory to it that an amount equal to the
Unfunded Reserve Required Amount with respect to the Collateral Loans to be
acquired on the Closing Date shall have been deposited into the Unfunded Reserve
Account;

 

(o)          a solvency certificate reasonably satisfactory to it from an
authorized signatory of the Borrower and the Equityholder;

 

(p)          the Lenders and the Administrative Agent shall have received a
Notice of Borrowing with respect to such Advance (including the Borrowing Base
Calculation Statement attached thereto, all duly completed) delivered in
accordance with Section 2.02, certified by a Responsible Officer of the Borrower
(or the Collateral Manager on behalf of the Borrower), demonstrating that
immediately after the making of such initial Advance, each of the Coverage
Tests, the Collateral Quality Test and the Concentration Limitations shall be
satisfied;

 

(q)          the Borrower (or the Collateral Manager on behalf of the Borrower)
shall have delivered to the Custodian all of the Loan Files for each Collateral
Loan owned by the Borrower at the address identified herein; and

 

(r)          the Borrower shall have instructed all Obligors or, if applicable,
the administrative agents, on the Collateral Loans that all payments shall be
made directly to the Collection Account and all Collections received by the
Borrower or its Affiliates with respect to the Collateral shall be held in trust
for the benefit of the Collateral Agent on behalf of the Secured Parties.

 

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Section 3.02.         Conditions Precedent to Subsequent Advances

 

The obligation of each Lender to make each Advance to be made by it (other than
the initial Advance) on each Borrowing Date shall be subject to the fulfillment
(or waiver by the Required Lenders) of the following conditions; provided that
the conditions described in clauses (c) and (d) (other than a Default or Event
of Default described in Section 6.01(i)) below need not be satisfied if the
proceeds of the Borrowing are used to fund Delayed Drawdown Collateral Loans or
Revolving Collateral Loans then owned by the Borrower or to fund the Unfunded
Reserve Account to the extent required under Section 8.05:

 

(a)          the Lenders and the Administrative Agent shall have received a
Notice of Borrowing with respect to such Advance (including the Borrowing Base
Calculation Statement attached thereto, all duly completed) delivered in
accordance with Section 2.02;

 

(b)          immediately after the making of such Advance on the applicable
Borrowing Date, each of the Coverage Tests, the Collateral Quality Test and the
Concentration Limitations shall be satisfied (as demonstrated on the Borrowing
Base Calculation Statement attached to such Notice of Borrowing and certified by
a Responsible Officer of the Borrower (or the Collateral Manager on behalf of
the Borrower));

 

(c)          each of the representations and warranties of the Borrower
contained in the Facility Documents shall be true and correct in all material
respects as of such Borrowing Date (except to the extent such representations
and warranties expressly relate to any earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date as if made on such date);

 

(d)          no Default or Event of Default shall have occurred and be
continuing at the time of the making of such Advance or shall result upon the
making of such Advance (as demonstrated, with respect to Sections 6.01(p) and
(s), on the Borrowing Base Calculation Statement attached to the applicable
Notice of Borrowing and certified by a Responsible Officer of the Borrower (or
the Collateral Manager on behalf of the Borrower), setting forth a calculation
of the Tangible Net Worth and Unencumbered Liquidity of the Equityholder as of
the end of the most recently ended fiscal quarter);

 

(e)          after the making of such Advances and the deposit of any portion
thereof into the Unfunded Reserve Account, the amount on deposit therein is at
least equal to the Unfunded Reserve Required Amount; and

 

(f)          the Borrower (or the Collateral Manager on behalf of the Borrower)
shall have delivered to the Custodian all of the Loan Files for each Collateral
Loan owned by the Borrower at any time during the term of this Agreement at the
address identified herein.

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES

 

Section 4.01.         Representations and Warranties of the Borrower

 

The Borrower represents and warrants to each of the Secured Parties on and as of
the Closing Date and each Measurement Date, as follows:

 

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(a)          Due Organization; Power and Authority. The Borrower is a Delaware
limited liability company, duly formed under the laws of its jurisdiction of
organization, with full power and authority to own and operate its assets and
properties (and has duly authorized such grant by all necessary action and the
execution, delivery and performance of this Agreement and the other Facility
Documents to which it is a party have been duly authorized by it by all
necessary action) and to conduct the business in which it is now engaged and to
execute and deliver and perform its obligations under this Agreement and the
other Facility Documents to which it is a party.

 

(b)          Due Qualification and Good Standing. The Borrower is validly
existing and in good standing under the laws of its jurisdiction of
organization. The Borrower is duly qualified to do business and, to the extent
applicable, is in good standing in each other jurisdiction in which the nature
of its business, assets and properties, including the performance of its
obligations under this Agreement, the other Facility Documents to which it is a
party and its Constituent Documents, requires such qualification, except where
the failure to be so qualified or in good standing would not reasonably be
expected to have a Material Adverse Effect.

 

(c)          Due Authorization; Execution and Delivery; Legal, Valid and
Binding; Enforceability. The execution and delivery by the Borrower of, and the
performance of its obligations under the Facility Documents to which it is a
party and the other instruments, certificates and agreements contemplated
thereby are within its powers and have been duly authorized by all requisite
action by it and have been duly executed and delivered by it and constitute its
legal, valid and binding obligations enforceable against it in accordance with
their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally or general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

 

(d)          Non-Contravention. None of the execution and delivery by the
Borrower of this Agreement or the other Facility Documents to which it is a
party, the Borrowings or the pledge of the Collateral hereunder, the
consummation of the transactions herein or therein contemplated, or compliance
by it with the terms, conditions and provisions hereof or thereof, will (i)
conflict with, or result in a breach or violation of, or constitute a default
under its Constituent Documents, (ii) conflict with or contravene (A) any
Applicable Law, (B) any material indenture, agreement or other contractual
restriction binding on or affecting it or any of its assets, including any
Related Document, or (C) any order, writ, judgment, award, injunction or decree
binding on or affecting it or any of its assets or properties or (iii) result in
a breach or violation of, constitute a default under, or permit the acceleration
of any obligation or liability in, any material contractual obligation or any
material agreement or document to which it is a party or by which it or any of
its assets are bound (or to which any such obligation, agreement or document
relates).

 

(e)          Governmental Authorizations; Private Authorizations; Governmental
Filings. The Borrower has obtained, maintained and kept in full force and effect
all Governmental Authorizations and Private Authorizations which are necessary
for it to properly carry out its business, except where the failure to do so
would not reasonably be expected to have a Material Adverse Effect, and has made
all material Governmental Filings necessary for the execution and delivery by it
of the Facility Documents to which it is a party, the Borrowings by the Borrower
under this Agreement, the pledge of the Collateral by the Borrower under this
Agreement and the performance by the Borrower of its obligations under this
Agreement and the other Facility Documents to which it is a party (other than
any filings permitted to be made after the Closing Date pursuant to Section
5.01(n), and no material Governmental Authorization, Private Authorization or
Governmental Filing which has not been obtained or made is required to be
obtained or made by it in connection with the execution and delivery by it of
any Facility Document to which it is a party, the Borrowings by the Borrower
under this Agreement, the pledge of the Collateral by the Borrower under this
Agreement or the performance of its obligations under this Agreement and the
other Facility Documents to which it is a party.

 

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(f)          Compliance with Agreements, Laws, Etc. The Borrower has duly
observed and complied with all Applicable Laws relating to the conduct of its
business and its assets, except where the failure to so observe or comply would
not reasonably be expected to have a Material Adverse Effect. The Borrower has
preserved and kept in full force and effect its legal existence. The Borrower
has preserved and kept in full force and effect its rights, privileges,
qualifications and franchises, except where the failure to do so would not
reasonably be expected to result in a Material Adverse Effect. Without limiting
the foregoing, neither the Borrower nor, to the knowledge of any Responsible
Officer of the Borrower, any Affiliate of the Borrower is (i) a country,
territory, organization, person or entity named on a list of (or otherwise
subject to sanctions by) the Office of Foreign Asset Control, U.S. Department of
the Treasury (“OFAC”); (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
“NonCooperative 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 USA PATRIOT
Act (Title III of Pub. L. 107-56 (signed into law on October 26, 2001))
(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. The Borrower is in compliance in all material
respects with all applicable OFAC rules and regulations and also in compliance
in all material respects with all applicable provisions of the PATRIOT Act.

 

(g)          Location. The Borrower’s office in which the Borrower maintains its
corporate books and records is located at the address for notices to the
Borrower as set forth on Schedule 8 (as such location may change from time to
time as notified to the Administrative Agent in accordance with Section 12.02).
The Borrower’s jurisdiction of organization is the jurisdiction referred to in
Section 4.01(a).

 

(h)          Investment Company Act. Assuming compliance by each of the Lenders
and any participant with Section 12.06, neither the Borrower nor the pool of
Collateral is required to register as an “investment company” under the
Investment Company Act.

 

(i)          Volcker Rule. The transactions contemplated by this Agreement and
the other Facility Documents do not result in the Lenders holding an “ownership
interest” in a “covered fund” for purposes of the Volcker Rule.

 

(j)          Taxes. The Borrower has filed all U.S. federal Tax returns and all
other material Tax returns which are required to be filed by it, if any, and has
paid all U.S. federal Taxes and all other material Taxes shown to be due and
payable on such returns, if any, or pursuant to any assessment received by any
such Person other than any such taxes, assessments or charges that are being
contested in good faith by appropriate proceedings and for which appropriate
reserves in accordance with GAAP have been established.

 

(k)          Tax Status. For U.S. federal income tax purposes, the Borrower is
disregarded as an entity separate from its sole owner for U.S. federal income
tax purposes, the Equityholder, within the meaning of Treasury Regulation
Section 301.7701-3. The Equityholder is a United States Person within the
meaning of Section 7701(a)(30) of the Code.

 

(l)          ERISA. Neither (i) the Borrower nor (ii) except as would not
constitute a Material Adverse Effect, any member of its ERISA Group has, or
during the past five years had, any liability or obligation with respect to any
Plan or Multiemployer Plan.

 

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(m)         Plan Assets. The assets of the Borrower are not treated as “plan
assets” for purposes of Section 3(42) of ERISA and the Collateral is not deemed
to be “plan assets” for purposes of Section 3(42) of ERISA. The Borrower has not
taken, or omitted to take, any action which could result in any of the
Collateral being treated as “plan assets” for purposes of Section 3(42) of ERISA
or, assuming that the assets of the Lenders, the Administrative Agent and the
Collateral Agent are not deemed to be “plan assets” for purposes of Section
3(42) of ERISA, the occurrence of any Prohibited Transaction in connection with
the transactions contemplated hereunder.

 

(n)          Solvency. After giving effect to each Advance hereunder, and the
disbursement of the proceeds of such Advance, the Borrower is and will be
Solvent.

 

(o)          Material Adverse Effect. Since its date of formation, no event or
condition has occurred with respect to the Borrower that constitutes a Material
Adverse Effect.

 

(p)          Special Purpose Provision. The Borrower has complied in all
material respects with its Constituent Documents and the activities described in
Section 5.05 hereof.

 

(q)          Exchange Act Compliance; Regulations T, U and X; Margin
Regulations. None of the transactions contemplated herein or in the other
Facility Documents (including, without limitation, the use of the proceeds from
the transfer of the Collateral) will violate or result in a violation of Section
7 of the Exchange Act, or any regulations issued pursuant thereto, including,
without limitation, Regulations T, U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R., Chapter II. The Borrower does not own or
intend to carry or purchase, and no proceeds from the Advances will be used to
carry or purchase, any “margin stock” within the meaning of Regulation U or to
extend “purpose credit” within the meaning of Regulation U.

 

(r)          No Proceedings. There are no proceedings or investigations pending
or, to the best knowledge of any Responsible Officer of the Borrower, threatened
against it, before any Official Body having jurisdiction over it or its
properties (i) asserting the invalidity of any of the Facility Documents, (ii)
seeking to prevent the making of the Advances or the consummation of any of the
transactions contemplated by the Facility Documents or (iii) seeking any
determination or ruling that would reasonably be expected to have a Material
Adverse Effect.

 

(s)          Bulk Sales. The grant of the security interest in the Collateral by
the Borrower to the Collateral Agent, for the benefit of the Secured Parties,
pursuant to this Agreement, and the execution, delivery and performance of this
Agreement and the other Facility Documents, is in the ordinary course of
business for the Borrower and is not subject to the bulk transfer or any similar
statutory provisions in effect in any applicable jurisdiction.

 

(t)          Collateral. Except as otherwise expressly permitted or required by
the terms of this Agreement, no item of Collateral has been sold, transferred,
assigned or pledged by the Borrower to any Person.

 

(u)          Indebtedness. The Borrower has no Indebtedness or other
indebtedness, secured or unsecured, direct or contingent (including guaranteeing
any obligation), other than (a) Indebtedness incurred under the terms of the
Facility Documents and (b) Indebtedness incurred pursuant to certain ordinary
business expenses arising pursuant to the transactions contemplated by this
Agreement and the other Facility Documents.

 

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(v)         Collections. The Borrower acknowledges that (a) all Obligors (and
related agents) have been directed to make all payments directly to the
Collection Account and (b) all Collections received by it or its Affiliates with
respect to the Collateral pledged hereunder are held and shall be held in trust
for the benefit of the Collateral Agent, on behalf of the Secured Parties until
deposited into the Collection Account in accordance with this Agreement.

 

(w)         Sanctions. None of (a) the Borrower, any Subsidiary or any of their
respective directors, officers or employees, or (b) to the knowledge of any
Responsible Officer of the Borrower, any agent of the Borrower or any Subsidiary
that will act in any capacity in connection with or benefit from the facility
established hereby, is a Sanctioned Person. No Advance, use of proceeds or other
transaction contemplated by this Agreement will violate applicable Sanctions.

 

(x)          Environmental. With respect to each item of Related Security as of
the date such Collateral Loan related to such Related Security was included in
the Collateral, to the actual knowledge of a Responsible Officer of the Borrower
(without independent inquiry): (a) the related Obligor’s operations comply in
all material respects with all applicable Environmental Laws; and (b) the
related Obligor does not have any material contingent liability in connection
with any release of any Hazardous Materials into the environment other than as
materially mitigated by remediation reserves, indemnities, guaranties,
acceptance into state-sponsored cleanup funds or other sources. As of the
applicable date such Collateral Loan related to such Related Security was
included in the Collateral, the Borrower has not received any written notice of,
or inquiry from any Official Body regarding, any material violation, alleged
material violation, material non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Related Security.

 

(y)          No Fraud. To the actual knowledge of any Responsible Officer of the
Borrower, each Collateral Loan was originated without any fraud or material
misrepresentation on the part of any party thereto.

 

(z)          Broker/Dealer. The Borrower is not a broker/dealer or subject to
the Securities Investor Protection Act of 1970.

 

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

 

Section 4.02.         Additional Representations and Warranties of the Borrower

 

The Borrower represents and warrants to each of the Secured Parties on and as of
the Closing Date and each Measurement Date, as follows:

 

(a)          Information. Each Notice of Borrowing, each Monthly Report, each
Borrowing Base Calculation Statement, each Payment Date Report and all other
written information, reports, certificates and statements furnished by or on
behalf of the Borrower to any Secured Party for purposes of or in connection
with this Agreement, the other Facility Documents or the transactions
contemplated hereby or thereby is true, complete and correct in all material
respects as of the date such information is stated or certified. All Collateral
Loans included as Eligible Collateral Loans in the most recent calculation of
the Coverage Tests required to be determined hereunder were Eligible Collateral
Loans as of the date of such calculation and any other information contained in
each Notice of Borrowing is an accurate and complete listing of all the
Collateral Loans contained in the Collateral as of the related date such
Collateral Loan was included in the Collateral and the information contained
therein with respect to the identity of such item of Collateral and the amounts
owing thereunder is true and correct as of the related date such Collateral Loan
was included in the Collateral.

 

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(b)          Representations Relating to the Collateral.

 

(i)          The Borrower owns and has good and marketable title to all
Collateral Loans (other than the Collateral Loans related to the Collateral
Participation Interests, until any such Collateral Participation Interest is
elevated to a full assignment) and other Collateral free and clear of any Lien,
claim or encumbrance of any Person, other than Permitted Liens;

 

(ii)         the Borrower has acquired its ownership in the Collateral Loans and
other Collateral in good faith without notice of any adverse claim, other than
Permitted Liens;

 

(iii)        other than Permitted Liens, the Borrower has not pledged, assigned
or sold (except as otherwise permitted under the Facility Documents), granted a
security interest in, or otherwise conveyed (except as otherwise permitted under
the Facility Documents) any of the Collateral;

 

(iv)        the Borrower has full right to grant a security interest in and
assign and pledge the Collateral to the Collateral Agent for the benefit of the
Secured Parties (and has duly authorized such grant by all necessary action and
the execution, delivery and performance of this Agreement and the other Facility
Documents to which it is a party have been duly authorized by it by all
necessary action);

 

(v)         other than the security interest granted to the Collateral Agent for
the benefit of the Secured Parties pursuant to this Agreement, the Borrower has
not pledged, assigned, sold, granted a security interest in, or otherwise
conveyed any of the Collateral; the Borrower has not authorized the filing of
and is not aware of any financing statements or any equivalent filing in any
applicable jurisdiction against the Borrower that include a description of
collateral covering the Collateral other than any financing statement or any
equivalent filing in any applicable jurisdiction (A) relating to the security
interest granted to the Collateral Agent hereunder or (B) any security interest
that has been terminated or fully and validly assigned to the Collateral Agent
or the Borrower on or prior to the date hereof; and the Borrower is not aware of
any judgment, PBGC liens or Tax lien filings against the Borrower or any of its
assets;

 

(vi)        the Collateral constitutes Money, Cash, accounts (as defined in
Section 9-102(a)(2) of the UCC), Instruments, general intangibles (as defined in
Section 9-102(a)(42) of the UCC), Uncertificated Securities, Certificated
Securities or security entitlements to financial assets resulting from the
crediting of financial assets to a “securities account” (as defined in Section
8-501(a) of the UCC) or supporting obligations;

 

(vii)       all Covered Accounts constitute “securities accounts” under Section
8-501(a) of the UCC or “deposit accounts” as defined in Section 9-102 of the
UCC;

 

(viii)      this Agreement creates a valid, continuing and, upon Delivery of
Collateral, execution of the Account Control Agreement and filing of the
financing statements referenced in clause (xi) below, perfected security
interest (as defined in Section 1-201(37) of the UCC) in the Collateral in favor
of the Collateral Agent, for the benefit and security of the Secured Parties,
which security interest is prior to all other Liens and claims (other than
Permitted Liens) and is enforceable as such against creditors of and purchasers
from the Borrower, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally or general principles of equity,
regardless of whether considered in a proceeding in equity or at law;

 

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(ix)         the Borrower has received all consents and approvals required by
the terms of the Related Documents in respect of such Collateral to the pledge
hereunder to the Collateral Agent of its interest and rights in such Collateral;

 

(x)          with respect to the Collateral that constitutes Security
Entitlements:

 

(A)         all such Collateral has been and will have been credited to the
applicable Covered Account;

 

(B)         the Securities Intermediary for each Covered Account has agreed to
treat all assets credited to the Covered Accounts as Financial Assets; and

 

(C)         either (x) the Borrower has caused or will have caused, on or prior
to the Closing Date, the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under Applicable Law in
order to perfect the security interest in the Collateral granted to the
Collateral Agent, for the benefit and security of the Secured Parties, hereunder
(which the Borrower hereby agrees may be an “all asset” filing) or (y)(A) the
Borrower has delivered to the Collateral Agent a fully executed Account Control
Agreement pursuant to which the Securities Intermediary has agreed to comply
with all instructions originated by the Collateral Agent relating to the Covered
Accounts without further consent of the Borrower or (B) the Borrower has taken
all steps necessary to cause the Securities Intermediary to identify in its
records the Collateral Agent as the Person having a Security Entitlement against
the Securities Intermediary in each of the Covered Accounts; and

 

(xi)         with respect to Collateral that constitutes accounts or general
intangibles, the Borrower has caused or will have caused, on or prior to the
Closing Date, the filing of all appropriate financing statements in the proper
filing office in the appropriate jurisdictions under Applicable Law in order to
perfect the security interest in the Collateral granted to the Collateral Agent,
for the benefit and security of the Secured Parties, hereunder (which the
Borrower hereby agrees may be an “all asset” filing).

 

(c)          Value Given. The Borrower has acquired each Collateral Loan in the
ordinary course of its business and has given fair consideration and reasonably
equivalent value to the seller of each Collateral Loan in exchange for the
purchase of each such Collateral Loan. No such transfer has been made for or on
account of an antecedent debt owed by the Borrower to such seller and no such
transfer is or may be voidable or subject to avoidance under any section of the
Bankruptcy Code.

 

Section 4.03.         Representations and Warranties of the Equityholder and the
Collateral Manager

 

The Collateral Manager and the Equityholder, as applicable, each represents and
warrants to each of the Secured Parties on and as of the Closing Date and each
Borrowing Date, as follows:

 

(a)          Due Organization. The Collateral Manager is a limited liability
company, duly organized and validly existing under the laws of the State of
Delaware, with full power and authority to own and operate its assets and
properties, conduct the business in which it is now engaged and to execute and
deliver and perform its obligations under this Agreement and the other Facility
Documents to which it is a party. The Equityholder is a corporation, duly
incorporated and validly existing under the laws of the State of Maryland, with
full power and authority to own and operate its assets and properties, conduct
the business in which it is now engaged and to execute and deliver and perform
its obligations under this Agreement and the other Facility Documents to which
it is a party.

 

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(b)          Due Qualification and Good Standing. The Collateral Manager is in
good standing in the State of Delaware. The Equityholder is in good standing in
the State of Maryland. It is duly qualified to do business and, to the extent
applicable, is in good standing in each other jurisdiction in which the nature
of its business, assets and properties, including the performance of its
obligations under this Agreement, the other Facility Documents to which it is a
party and its Constituent Documents, requires such qualification, except where
the failure to be so qualified or in good standing would not reasonably be
expected to have a Material Adverse Effect.

 

(c)          Due Authorization; Execution and Delivery; Legal, Valid and
Binding; Enforceability. The execution and delivery by it, and the performance
of its obligations under the Facility Documents to which it is a party and the
other instruments, certificates and agreements contemplated thereby, are within
its powers and have been duly authorized by all requisite action by it and have
been duly executed and delivered by it and constitute its legal, valid and
binding obligations enforceable against it in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors’ rights generally or general principles of equity, regardless of
whether considered in a proceeding in equity or at law.

 

(d)          Non-Contravention. None of the execution and delivery by it of this
Agreement or the other Facility Documents to which it is a party, the
consummation of the transactions herein or therein contemplated, or compliance
by it with the terms, conditions and provisions hereof or thereof, will (i)
conflict with, or result in a breach or violation of, or constitute a default
under its Constituent Documents, (ii) conflict with or contravene (A) any
Applicable Law, (B) any indenture, agreement or other contractual restriction
binding on or affecting it or any of its assets, including any Related Document,
or (C) any order, writ, judgment, award, injunction or decree binding on or
affecting it or any of its assets or properties or (iii) result in a breach or
violation of, or constitute a default under, or permit the acceleration of any
obligation or liability in any contractual obligation or any agreement or
document to which it is a party or by which it or any of its assets are bound
(or to which any such obligation, agreement or document relates), except in the
case of clauses (ii) and (iii) above, where such conflicts, breaches, violations
or defaults would not reasonably be expected to have a Material Adverse Effect.

 

(e)          Governmental Authorizations; Private Authorizations; Governmental
Filings. It has obtained, maintained and kept in full force and effect all
Governmental Authorizations and Private Authorizations which are necessary for
it to properly carry out its business, except where the failure to do so would
not reasonably be expected to have a Material Adverse Effect, and made all
material Governmental Filings necessary for the execution and delivery by it of
the Facility Documents to which it is a party, and the performance by it of its
obligations under this Agreement and the other Facility Documents to which it is
a party, and no material Governmental Authorization, Private Authorization or
Governmental Filing which has not been obtained or made is required to be
obtained or made by it in connection with the execution and delivery by it of
any Facility Document to which it is a party or the performance of its
obligations under this Agreement and the other Facility Documents to which it is
a party.

 

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(f)          Compliance with Agreements, Laws, Etc. It has duly observed and
complied with all Applicable Laws relating to the conduct of its business and
its assets, except where the failure to so observe or comply would not
reasonably be expected to have a Material Adverse Effect. It has preserved and
kept in full force and effect its legal existence. It has preserved and kept in
full force and effect its rights, privileges, qualifications and franchises,
except where the failure to do so would not reasonably be expected to result in
a Material Adverse Effect. Without limiting the foregoing, neither it nor, to
the actual knowledge any Responsible Officer of the Borrower, any of its
Affiliates is (i) a country, territory, organization, person or entity named on
an 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 in all material
respects with all applicable OFAC rules and regulations and also in compliance
in all material respects with all applicable provisions of the PATRIOT Act.

 

(g)          Taxes. It has filed all U.S. federal income tax returns and all
other material tax returns which are required to be filed by it, if any, and has
paid all U.S. federal income taxes and all other material taxes shown to be due
and payable on such returns, if any, or pursuant to any assessment received by
any such Person other than any such taxes, assessments or charges that are being
contested in good faith by appropriate proceedings and for which appropriate
reserves in accordance with GAAP have been established.

 

(h)          Eligibility. Each Collateral Loan included in a Monthly Report or a
Borrowing Base Calculation Statement required to be delivered by it under this
Agreement as an Eligible Collateral Loan was, in fact, an Eligible Collateral
Loan at such time.

 

Section 4.04.         Representations and Warranties of the Collateral Agent,
Custodian and Collateral Administrator.

 

Each of the Collateral Agent, the Custodian and the Collateral Administrator
represents and warrants in its individual capacity and as Collateral Agent,
Custodian or Collateral Administrator, as applicable, as follows (and any
successor Collateral Agent, Custodian or Collateral Administrator appointed in
accordance with this Agreement represents and warrants as follows in its
individual capacity and as Collateral Agent, Custodian or Collateral
Administrator, as applicable):

 

(a)          Organization and Corporate Power. It is a duly organized and
validly existing national banking association in good standing under the laws of
the United States. It has full power, authority and legal right to execute,
deliver and perform its obligations as Collateral Agent, Custodian or Collateral
Administrator, as applicable, under this Agreement.

 

(b)          Due Authorization. The execution and delivery of this Agreement and
the consummation of the transactions provided for herein have been duly
authorized by all necessary association or corporate action, as applicable, on
its part, either in its individual capacity or as Collateral Agent, Custodian or
Collateral Administrator, as the case may be.

 

(c)          No Conflict. The execution and delivery of this Agreement, the
performance of the transactions contemplated hereby and the fulfillment of the
terms hereof will not conflict with, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a default under any indenture, contract, agreement, mortgage, deed of
trust, or other instrument to which it is a party or by which it or any of its
property is bound.

 

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(d)          No Violation. Its execution and delivery of this Agreement, its
performance of the transactions contemplated hereby and the fulfillment of the
terms hereof will not conflict with or violate, in any material respect, any
Applicable Law.

 

(e)          All Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or Governmental Authority applicable to
the Collateral Agent, the Custodian or the Collateral Administrator required in
connection with the execution and delivery of this Agreement, the performance by
the Collateral Agent, the Custodian or the Collateral Administrator, as
applicable, of the transactions contemplated hereby and the fulfillment by the
Collateral Agent, the Custodian or the Collateral Administrator, as applicable,
of the terms hereof have been obtained.

 

(f)          Validity, etc. This Agreement constitutes the legal, valid and
binding obligation of the Collateral Agent, the Custodian or the Collateral
Administrator, as applicable, enforceable against it in accordance with its
terms, except as such enforceability may be limited by applicable Insolvency
Laws or general principles of equity (whether considered in a suit at law or in
equity).

 

ARTICLE V
COVENANTS

 

Section 5.01.         Affirmative Covenants of the Borrower

 

The Borrower covenants and agrees that, until the Final Maturity Date (and
thereafter until the date that all Obligations, other than contingent
indemnification and reimbursement obligations for which no claim has been
asserted, have been paid and performed in full):

 

(a)          Compliance with Agreements, Laws, Etc. It shall (i) duly observe
and comply in all material respects with all Applicable Laws relative to the
conduct of its business or to its assets, (ii) preserve and keep in full force
and effect its legal existence, (iii) preserve and keep in full force and effect
its rights, privileges, qualifications and franchises, except where the failure
to do so would not reasonably be expected to result in a Material Adverse
Effect, (iv) comply with the terms and conditions of each Facility Document to
which it is a party, its Constituent Documents and, except where the failure to
do so would not reasonably be expected to result in a Material Adverse Effect,
each Related Document to which it is a party and (v) obtain, maintain and keep
in full force and effect all Governmental Authorizations, Private Authorizations
and Governmental Filings which are necessary or appropriate to properly carry
out its business and the transactions contemplated to be performed by it under
the Facility Documents to which it is a party, its Constituent Documents and the
Related Documents to which it is a party.

 

(b)          Enforcement.

 

(i)          It shall not take any action that would release any Obligor from
any of such Obligor’s covenants or obligations under any instrument or agreement
included in the Collateral, except in the case of (A) repayment of Collateral
Loans, (B) subject to the terms of this Agreement (including Section 5.02
hereof), (1) amendments, consents, waivers and other modifications of Collateral
Loans in accordance with the Collateral Management Standard and (2) actions
taken in connection with the work out or restructuring of any Collateral Loan in
accordance with the provisions hereof, and (C) other actions by the Collateral
Manager required hereby or otherwise to the extent not prohibited by, or in
conflict with, this Agreement.

 

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(ii)         It will not, without the prior written consent of the
Administrative Agent and the Required Lenders, contract with other Persons
(other than the Collateral Manager and the Collateral Administrator) for the
performance of actions and obligations to be performed by the Borrower or the
Collateral Manager hereunder. Notwithstanding any such arrangement, the Borrower
shall remain primarily liable with respect thereto. The Borrower will promptly
perform, and use commercially reasonable efforts to cause the Collateral Manager
to perform, all of their obligations and agreements contained in this Agreement
or any other Facility Document to which such Person is a party.

 

(c)          Further Assurances. It shall promptly upon the reasonable request
of the Required Lenders (through the Administrative Agent), at the Borrower’s
expense, execute and deliver such further instruments and take such further
action in order to maintain and protect the Collateral Agent’s first-priority
perfected security interest in the Collateral pledged by the Borrower for the
benefit of the Secured Parties free and clear of any Liens (other than Permitted
Liens). At the reasonable request of the Required Lenders (through the
Administrative Agent), the Borrower shall promptly take, at the Borrower’s
expense, such further action in order to establish and protect the rights,
interests and remedies created or intended to be created under this Agreement in
favor of the Secured Parties in the Collateral, including all actions which are
necessary to (x) enable the Secured Parties to enforce their rights and remedies
under this Agreement and the other Facility Documents, and (y) effectuate the
intent and purpose of, and to carry out the terms of, the Facility Documents.

 

(d)          Financial Statements; Other Information. It shall provide to the
Administrative Agent:

 

(i)          within 120 days after the end of each fiscal year of the
Equityholder (commencing with the fiscal year ending 2017), an annual report of
the Equityholder containing an audited consolidated statement of assets and
liabilities as of the end of such fiscal year, and audited consolidated
statements of operations, changes in net assets and cash flows, for the year
then ended, prepared in accordance with GAAP, each reported on by independent
public accountants of recognized national standing (without a “going concern” or
like qualification or exception and without any qualification or exception as to
the scope of such audit), to the effect that such consolidated financial
statements present fairly in all material respects the financial condition and
results of operations of the Equityholder and its consolidated Subsidiaries on a
consolidated basis;

 

(ii)         within 60 days after the end of each of the first three quarters of
each fiscal year of the Equityholder, an unaudited financial report of the
Equityholder containing a consolidated statement of assets and liabilities,
consolidated statements of operations, changes in net assets, and cash flows,
and a market value report regarding the Equityholder’s investments, in each case
for the period then ended, all certified by one of its senior financial officers
as presenting fairly in all material respects the financial condition and
results of operations of the Equityholder and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;

 

(iii)        within five (5) Business Days after a Responsible Officer of the
Borrower obtains actual knowledge of the occurrence and continuance of any (A)
Default, or (B) Event of Default, a certificate of a Responsible Officer of the
Borrower setting forth the details thereof and the action which the Borrower or
the Collateral Manager is taking or proposes to take with respect thereto;

 

(iv)        to the extent reasonably available to the Collateral Manager (on
behalf of the Borrower) pursuant to the Related Documents (or, upon the request
of the Administrative Agent, shall request such information and use commercially
reasonable efforts to obtain the same), on or prior to the date the Borrower
acquires a Collateral Loan, audited financial statements of the related Obligor
for the two (2) year period most recently ended with respect to the related
Obligor;

 

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(v)         to the extent reasonably available to the Collateral Manager (on
behalf of the Borrower) pursuant to the Related Documents, the annual audited
financial statements with respect to each Obligor and the financial reporting
packages delivered by such Obligor pursuant to the applicable Related Documents,
which delivery shall be made within ten (10) Business Days after receipt by a
Responsible Officer of the Borrower or the Collateral Manager (on behalf of the
Borrower) as specified in the Related Documents;

 

(vi)        within ten (10) days after the end of each calendar month, the
portfolio monitoring report prepared by the Collateral Manager with respect to
each Obligor on a monthly basis (including (1) covenant and financial covenant
testing, (2) the Borrower’s (or Collateral Manager’s) internal rating estimate
for each Collateral Loan, (3) background information with respect to the
Obligor, (4) transaction rationale, (5) recent events, including an explanation
of all amendments, modifications and waivers made with respect to any Related
Documents related to any Collateral Obligation during the immediately preceding
quarterly period), (6) summary financial information including comparisons to
prior years, if applicable, and a budget (if received from the related Obligor),
(7) an assessment of such Obligor and information known to the Collateral
Manager that may be material to their future financial performance, and (8)
without duplication, the information obligations specified in Schedule 4 hereto;

 

(vii)       to the extent reasonably available to the Collateral Manager (on
behalf of the Borrower) pursuant to the Related Documents, copies of any
material amendment, restatement, supplement, waiver or other modification to the
Related Documents of any Collateral Loan within ten (10) Business Days following
the effectiveness of such amendment, restatement, supplement, waiver or other
modification; provided, however, that any amendment, restatement, supplement,
waiver or other modification to the Related Documents of any Collateral Loan
that would constitute a Material Modification shall be provided within five (5)
Business Days following the date a Responsible Officer of the Borrower or the
Collateral Manager receives a copy thereof;

 

(viii)      together with each Monthly Report delivered in accordance with
Section 8.09, a certificate of a Responsible Officer of the Equityholder setting
forth a calculation of the Tangible Net Worth and Unencumbered Liquidity of the
Equityholder as of the end of the most recently ended fiscal quarter related to
such financial statements;

 

(ix)         no later than 90 days after the end of each fiscal quarter, a copy
of the internal quarterly review performed by the Borrower (or the Collateral
Manager on its behalf) with respect to the Collateral Loans;

 

(x)          on each Business Day, a Borrowing Base Calculation Statement;

 

(xi)         copies of the underwriting and credit memos prepared by the
Collateral Manager with respect to each Collateral Loan, on or prior to date the
Borrower acquires a Collateral Loan, and copies of any updates or amendments
thereto, within ten (10) Business Days after such updates or amendments become
available;

 

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(xii)        to the extent reasonably available, financial reporting packages
with respect to each Obligor including (A) each Obligor’s (1) legal name and
address, (2) jurisdiction, (3) tax identification number, (4) audited financial
statements delivered under clause (iv) above and unaudited interim financial
statements for the most recent fiscal year, (5) any internal credit memos
produced by the Collateral Manager and (6) company forecasts including plans
related to capital expenditures, if available to the Collateral Manager, (B) to
the extent available to the Collateral Manager and not otherwise included in
(A), above, each Obligor’s (1) business model, company strategy, and names of
known peers, (2) shareholding pattern and details of the management team and (3)
debt maturity schedule and any banking facility details with respect to other
facilities and (C) such other information as any Lender may reasonably require
for regulatory purposes relating to the Collateral Loans or the transactions
contemplated hereby and so notify in writing the Borrower and the Collateral
Manager (including, without limitation, the Collateral Manager’s internal rating
of such obligor); provided that such information is in the possession of the
Borrower or the Collateral Manager, as applicable, or reasonably obtainable
thereby without undue burden or expense and not subject to any applicable
confidentiality restrictions prohibiting such disclosure to the Administrative
Agent;

 

(xiii)       within five (5) Business Days after written request therefor, such
additional information regarding the Borrower’s financial position or business
and the Collateral (including reasonably detailed calculations of the existence
of a Borrowing Base Deficiency or noncompliance with the Collateral Quality
Test, Equity Coverage Test, Minimum Equity Test or any Concentration Limitation)
as the Required Lenders (through the Administrative Agent) may reasonably
request;

 

(xiv)      within five (5) Business Days after a Responsible Officer of the
Borrower, the Equityholder, or the Collateral Manager obtains actual knowledge
thereof, notice of any material action, suit, proceeding, dispute, offset,
deduction, defense or counterclaim with respect to (x) the Borrower, the
Equityholder, or the Collateral Manager or (y) any Collateral that (A) is
asserted by an Obligor with respect to such Obligor’s obligations under any
Related Document with respect to any Collateral (or portion thereof) or (B)
could reasonably be expected to have a Material Adverse Effect;

 

(xv)       within five (5) Business Days after a Responsible Officer of the
Borrower, the Equityholder, or the Collateral Manager obtains actual knowledge
thereof, notice of the occurrence of any ERISA Event and copies of any
communications with all Governmental Authorities or any Multiemployer Plan with
respect to such ERISA Event;

 

(xvi)      within five (5) Business Days after a Responsible Officer of the
Borrower, the Equityholder, or the Collateral Manager obtains actual knowledge
thereof, notice of any Insolvency Event related to any Obligor;

 

(xvii)     within five (5) Business Days after a Responsible Officer of the
Borrower, the Equityholder, or the Collateral Manager obtains actual knowledge
thereof, notice of a default in any payment required under any Related Document;
and

 

(xviii)    on each Business Day, a trade blotter, cash flow and position report
of the Borrower.

 

Notwithstanding the foregoing, the requirement to deliver financial statements
set forth in Section 5.01(d)(i) and Section 5.01(d)(ii) will be satisfied at any
such time as such financial statements are appropriately filed with the SEC, if
applicable.

 

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(e)          Access to Records and Documents. It shall permit the Administrative
Agent (or any Person designated by the Administrative Agent, subject to delivery
of standard confidentiality agreements) to, upon reasonable advance notice and
during normal business hours, visit and inspect and make copies thereof at
reasonable intervals (i) its books, records and accounts relating to its
business, financial condition, operations, assets and its performance under the
Facility Documents and the Related Documents and to discuss the foregoing with
its and such Person’s officers, partners, employees and accountants, and (ii)
all of its Related Documents, in each case as often as the Administrative Agent
may reasonably request; provided that so long as no Event of Default has
occurred, the Borrower shall be responsible for all costs and expenses for only
one such visit per fiscal year by the Administrative Agent or its designees and
provided, further, that an officer or employee of the Borrower or the Collateral
Manager shall have the opportunity to be present at any discussion between the
Administrative Agent, any Lender or any other Person designated by the
Administrative Agent, on the one hand, and the Borrower’s accountants, on the
other hand. The Administrative Agent shall provide ten (10) days’ prior notice
to the Borrower and the Lenders of any such visit and any Lender shall be
permitted to accompany the Administrative Agent in such visit.

 

(f)          Use of Proceeds. It shall use the proceeds of each Advance made
hereunder solely:

 

(i)          on the Closing Date with respect to the initial Advance, to acquire
Eligible Collateral Loans from the Equityholder and the Closing Date
Participation Interests from 15th Street Loan Funding LLC and 15th Street Loan
Funding 2 LLC, in each case as set forth on Schedule 6 hereto, and to pay fees
and expenses in connection with this Agreement and the other Facility Documents
in accordance with the terms thereof;

 

(ii)         after the Closing Date with respect to each additional Advance:

 

(A)         to fund or pay the purchase price (in a manner that shall constitute
valid and true sales for consideration (and not merely a pledge of such assets
for security purposes)) of Eligible Collateral Loans or Eligible Investments
owned or acquired by the Borrower in accordance with the terms and conditions
set forth herein;

 

(B)         to fund additional extensions of credit under Delayed Drawdown
Collateral Loans and Revolving Collateral Loans held by the Borrower, in each
case in accordance with the terms of this Agreement; and

 

(C)         to fund the Unfunded Reserve Account on or prior to the Commitment
Termination Date to the extent the Unfunded Reserve Account is required to be
funded pursuant to Section 8.05 (and the Borrower shall submit a Notice of
Borrowing for a Borrowing Date falling no more than five and no less than one
Business Day prior to the Commitment Termination Date with a Requested Amount
sufficient to fully fund the Unfunded Reserve Account to the extent required
under Section 8.05).

 

Without limiting the foregoing, it shall use the proceeds of each Advance in a
manner that does not, directly or indirectly, violate any provision of its
Constituent Documents or any Applicable Law, including Regulation T, Regulation
U and Regulation X. Further, the Borrower shall not use the proceeds of any
Advance in a manner that would cause such credit extension to become a “covered
transaction” as defined in Section 23A of the Federal Reserve Act (12 U.S.C. §
371c) and Regulation W (12 C.F.R. Part 223), including any transaction where the
proceeds of any Advance are used for the benefit of, or transferred to, an
affiliate of a Lender.

 

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(g)          Information and Reports. Each Notice of Borrowing, each Monthly
Report, each Borrowing Base Calculation Statement, each Payment Date Report and
all other written information, reports, certificates and statements furnished by
or on behalf of the Borrower to any Secured Party for purposes of or in
connection with this Agreement, the other Facility Documents or the transactions
contemplated hereby or thereby shall be true, complete and correct in all
material respects as of the date such information is stated or certified and the
delivery by or on behalf of the Borrower of any such Notice of Borrowing,
Monthly Report, Borrowing Base Calculation Statement, Payment Date Report or
other written information, reports, certificates and statements shall be deemed
to be a representation and warranty by the Borrower that such information is
true, complete and correct in all material respects as of the date such
information is stated or certified.

 

(h)          No Other Business. The Borrower shall not engage in any business or
activity other than (i) borrowing Advances pursuant to this Agreement, funding,
acquiring, owning, holding, administering, selling, enforcing, lending,
exchanging, redeeming, pledging, contracting for the management of and otherwise
dealing with Collateral Loans, Eligible Investments and the Collateral in
connection therewith and entering into the Facility Documents, any applicable
Related Documents and any other agreement contemplated by this Agreement and
(ii) other activities that are incidental to the activities specified in clause
(i).

 

(i)          Tax Matters. The Borrower shall (and each Lender hereby agrees to)
treat the Advances and the Notes as debt for U.S. federal income tax purposes
and will take no contrary position, unless otherwise required pursuant to a
closing agreement with the U.S. Internal Revenue Service or a non-appealable
judgment of a court of competent jurisdiction. Notwithstanding any contrary
agreement or understanding, the Equityholder, the Borrower, the Agents, the
Collateral Administrator, the Custodian, the Securities Intermediary and the
Lenders (and each of their respective employees, representatives or other
agents) may disclose to any and all Persons, without limitation of any kind, the
tax treatment and tax structure of the transactions contemplated by this
Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided to them relating to such tax treatment and tax
structure. The foregoing provision shall apply from the beginning of discussions
between the parties. For this purpose, the tax treatment of a transaction is the
purported or claimed U.S. tax treatment of the transaction under applicable U.S.
federal, state or local law, and the tax structure of a transaction is any fact
that may be relevant to understanding the purported or claimed U.S. tax
treatment of the transaction under applicable U.S. federal, state or local law.
For U.S. federal income tax purposes, the Borrower shall remain disregarded as
an entity separate from its sole owner, the Equityholder, within the meaning of
Treasury Regulation Section 301.7701-3. The Equityholder shall remain a United
States Person within the meaning of Section 7701(a)(30) of the Code.

 

(j)          Collections. The Borrower (or the Collateral Manager on its behalf)
shall direct any agent or administrative agent for any Collateral Loan to remit
all payments and collections with respect to such Collateral Loan and, if
applicable, to direct the Obligor with respect to such Collateral Loan to remit
all such payments and collections with respect to such Collateral Loan directly
to the Collection Account. The Borrower shall transfer, or cause to be
transferred, all Collections to the Collection Account by the close of business
on the Business Day following the date such Collections are received by the
Borrower, the Equityholder, the Collateral Manager or any of their respective
Affiliates.

 

(k)          Priority of Payments. The Borrower shall instruct in writing (or
cause the Collateral Manager to instruct in writing) the Collateral Agent to
apply all Interest Proceeds and Principal Proceeds solely in accordance with the
Priority of Payments and the other provisions of this Agreement.

 

(l)          Acquisition of Collateral Loans from the Equityholder. Any
acquisition of Collateral Loans by the Borrower from the Equityholder or an
Affiliate thereof shall be for fair market value and no adverse selection
procedures shall be employed by the Borrower (or the Collateral Manager on
behalf of the Borrower) in selecting the Collateral Loans for acquisition.

 

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(m)          Credit and Collection Policy. The Borrower will (i) comply in all
material respects with the Credit and Collection Policy in regard to the
Collateral, (ii) furnish to the Administrative Agent and the Lenders prior to
its effective date prompt written notice of any changes relating to its
corporate finance business in the Credit and Collection Policy, and (iii)
furnish to the Administrative Agent and the Lenders copies of all other changes
in the Credit and Collection Policy. The Borrower will not agree to or otherwise
permit to occur any material change (as determined by the Administrative Agent
in its sole discretion) in the Credit and Collection Policy relating to its
corporate finance business without the prior written consent of the
Administrative Agent and the Required Lenders; provided that no consent shall be
required from the Administrative Agent or the Lenders in connection with any
change mandated by Applicable Law or a Governmental Authority, as evidenced by a
written opinion of counsel, which opinion shall be reasonably acceptable to the
Administrative Agent, to that effect delivered to the Administrative Agent. The
Administrative Agent will use commercially reasonable efforts to determine
whether any such proposed change is material and adverse to the interests of the
Lenders within five (5) Business Days of receipt of notice with respect thereto.
The Borrower shall promptly forward copies of the amended Credit and Collection
Policy reflecting any changes thereto to the Administrative Agent for
distribution to the Lenders.

 

(n)          Further Assurances. The Borrower shall deliver all such further
instruments and take all such further actions that the Administrative Agent
deems reasonably necessary or desirable in order to maintain and protect the
Collateral Agent’s first-priority perfected security interest in the Collateral.

 

(o)          Access to Data Site. The Borrower shall, or shall cause the
Collateral Manager to, (a) maintain the Data Site and (b) grant access to the
Data Site to the Administrative Agent, the Collateral Agent, the Custodian, the
Collateral Administrator and each Lender or prospective Lender; provided that
the Borrower shall not be required to grant access to the Data Site to (i) any
Disqualified Person or (ii) any Person that has not agreed to be bound by
confidentiality requirements that are consistent with Section 12.09 or are
otherwise satisfactory to the Borrower and the Collateral Manager. The Borrower
shall, or shall cause the Collateral Manager to, to the extent posting such
information would not result in a breach by the Borrower or the Collateral
Manager of its respective confidentiality obligations, post the information
described in Section 5.01(d)(xii) for each Collateral Loan to the Data Site.

 

(p)          Delivery of Loan Files. The Borrower (or the Collateral Manager on
behalf of the Borrower) shall deliver to the Custodian (with a copy to be posted
by the Borrower (or the Collateral Manager on behalf of the Borrower) to the
Data Site) for each Collateral Loan, each item referenced in the definition of
“Loan File”; provided that, other than as set forth above with respect to any
original assignment of any Collateral Loan or any original executed promissory
note with respect to any Collateral Loan (each of which shall be delivered to
the Custodian in sealed envelopes labeled appropriately), the requirements set
forth in this Section 5.01(p) shall be satisfied by providing electronic copies
of any Required Loan Document to the Custodian; provided, further, that any
filed stamped document included in any Loan File shall be delivered as soon as
they are reasonably available (but in no event later than 30 Business Days after
the related Borrowing Date). Neither the Custodian nor the Collateral
Administrator shall have any obligation to review any of the documents delivered
to it hereunder

 

(q)          Certificate of Assignment for Closing Date Participation Interests.
Not later than the date that is sixty (60) days after the Closing Date (or such
longer period to which the Administrative Agent may agree), the Borrower shall
deliver to the Custodian and the Administrative Agent a copy of the fully
executed assignment agreement assigning the Collateral Loans related to the
Closing Date Participation Interests directly to the Borrower, certified by an
officer of the Borrower (or the Collateral Manager on behalf of the Borrower)
and written evidence satisfactory to the Administrative Agent that the Borrower
is recognized as the owner of record by the related administrative agent in
respect of the Related Documents.

 

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Section 5.02.         Negative Covenants of the Borrower

 

The Borrower covenants and agrees that, until the Final Maturity Date (and
thereafter until the date that all Obligations, other than contingent
indemnification and reimbursement obligations for which no claim has been
asserted, have been Paid in Full):

 

(a)          Restrictive Agreements. It shall not enter into or suffer to exist
or permit to become effective any agreement that prohibits, limits or imposes
any condition upon its ability to create, incur, assume or suffer to exist any
Lien (other than Permitted Liens) upon any of its property or revenues
constituting Collateral, whether now owned or hereafter acquired, to secure its
obligations under the Facility Documents other than this Agreement and the other
Facility Documents or to perform its obligations under the Facility Documents to
which it is a party.

 

(b)          Liquidation; Merger; Sale of Collateral. It shall not consummate
any plan of liquidation, dissolution, partial liquidation, merger or
consolidation (or suffer any liquidation, dissolution or partial liquidation)
nor sell, transfer, exchange or otherwise dispose of any of its assets (other
than dispositions permitted under this Agreement), or enter into an agreement or
commitment to do so or enter into or engage in any business with respect to any
part of its assets, except as expressly permitted by this Agreement and the
other Facility Documents (including in connection with the Payment in Full of
the Obligations).

 

(c)          Amendments to Constituent Documents, Etc. Without the consent of
the Administrative Agent (such consent not to be unreasonably withheld or
delayed), (i) it shall not amend, modify or take any action inconsistent with
its Constituent Documents and (ii) it will not amend, modify or waive in any
material respect any term or provision in any Facility Document (other than in
accordance with any provision thereof requiring the consent of the
Administrative Agent or all or a specified percentage of the Lenders).

 

(d)          Liens. It shall not create, assume or suffer to exist any Lien on
any of its assets now owned or hereafter acquired by it at any time, except for
Permitted Liens or as otherwise expressly permitted by this Agreement and the
other Facility Documents.

 

(e)          Margin Requirements; Covered Transactions. It shall not (i) extend
credit to others for the purpose of buying or carrying any Margin Stock in such
a manner as to violate Regulation T or Regulation U or (ii) use all or any part
of the proceeds of any Advance, whether directly or indirectly, and whether
immediately, incidentally or ultimately, for any purpose that violates the
provisions of Regulation U or Regulation X.

 

(f)          Changes to Filing Information. It shall not change its name or its
jurisdiction of organization from that referred to in Section 4.01(a), unless it
gives ten (10) days’ prior written notice to the Administrative Agent and takes
all actions that the Administrative Agent or the Required Lenders (through the
Administrative Agent) reasonably request and determine to be necessary to
protect and perfect the Collateral Agent’s perfected security interest in the
Collateral.

 

(g)          Transactions with Affiliates. It shall not sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, unless such transaction is upon terms no less favorable to
the Borrower than it would obtain in a comparable arm’s-length transaction with
a Person that is not an Affiliate (it being agreed that any purchase or sale at
par shall be deemed to comply with this provision). The foregoing covenant (i)
shall not apply to the execution, delivery and performance of the Facility
Documents or the Borrower’s Constituent Documents, (ii) shall not prohibit the
Borrower from making Restricted Payments permitted under Section 5.02(r) and
(iii) shall not prohibit the Equityholder from transferring Collateral Loans,
Cash or other assets to the Borrower in whole or in part as a capital
contribution to the Borrower.

 

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(h)         Subject Laws. It shall not utilize directly or indirectly the
proceeds of any Advance for the benefit of any Person controlling, controlled
by, or under common control with any other Person, whose name appears on the
Specially Designated Nationals and Blocked Persons List (SDN) maintained by OFAC
or otherwise in violation of any Subject Laws.

 

(i)          No Claims Against Advances. Subject to Applicable Law, it shall not
claim any credit on, make any deduction from, or dispute the enforceability of
payment of the principal or interest payable (or any other amount) in respect of
the Advances or assert any claim against any present or future Lender, by reason
of the payment of any Taxes levied or assessed upon any part of the Collateral.

 

(j)          Indebtedness; Guarantees; Securities; Other Assets. It shall not
incur or assume or guarantee any indebtedness, obligations (including contingent
obligations) or other liabilities, or issue any additional securities, whether
debt or equity, in each case other than (i) the Obligations pursuant to or as
expressly permitted by this Agreement and the other Facility Documents or (ii)
pursuant to customary indemnification, expense reimbursement, funding
obligations and similar provisions under the Related Documents. The Borrower
shall not acquire any Collateral Loan or other property other than as expressly
permitted hereunder.

 

(k)          Validity of this Agreement. It shall not (i) permit the validity or
effectiveness of this Agreement or any grant of Collateral hereunder to be
impaired, or permit the Lien of this Agreement to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released from
any covenant or obligation with respect to this Agreement and (ii) except as
permitted by this Agreement, take any action that would permit the Lien of this
Agreement not to constitute a valid first-priority perfected security interest
(subject to Permitted Liens) in the Collateral.

 

(l)          Subsidiaries. It shall not have or permit the formation of any
Subsidiaries, provided that this clause shall not apply to any Obligor that
becomes a Subsidiary of the Borrower in connection with a work-out or
restructuring of a Collateral Loan or a bankruptcy of the related Obligor.

 

(m)        Name. It shall not conduct business under any name other than its
own.

 

(n)         Employees. It shall not have any employees (other than any
Responsible Officers and other officers and directors to the extent they are
employees).

 

(o)         ERISA. Neither it nor any member of its ERISA Group shall establish
any Plan or Multiemployer Plan.

 

(p)         Non-Petition. The Borrower shall not be party to any agreements
under which it has any material obligation or liability (direct or contingent)
without using commercially reasonable efforts to include customary
“non-petition” and “limited recourse” provisions therein (and shall not amend or
eliminate such provisions in any agreement to which it is party), except for
loan agreements, related loan documents, bond indentures and related bond
documents, any agreements related to the purchase and sale of any Collateral
Loan which contain customary (as determined by the Collateral Manager) purchase
or sale terms or which are documented using customary (as determined by the
Collateral Manager) loan trading documentation, customary service contracts and
engagement letters entered into in connection with the Collateral Loans and any
agreement that does not impose a material obligation on the Borrower and that is
of a type that customarily does not include “non-petition” or “limited recourse”
provisions.

 

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(q)         Certificated Securities. The Borrower shall not acquire or hold any
Certificated Securities in bearer form (other than securities not required to be
in registered form under Section 163(f)(2)(A) of the Code) in a manner that does
not satisfy the requirements of United States Treasury Regulations section
1.165-12(c) (as determined by the Collateral Manager).

 

(r)          Restricted Payments. The Borrower shall not make any Restricted
Payments other than (i) with respect to amounts received by the Borrower in
accordance with Section 9.01 (in the case of Interest Proceeds and Principal
Proceeds) or any other provision of this Agreement or the Facility Documents
which expressly requires or permits payments to be made to or amounts to be
reimbursed to the Equityholder, (ii) amounts distributed by the Borrower in
connection with the acquisition or substitution, as applicable, of Collateral
Loans from the Equityholder in accordance with Article X or (iii) Permitted Tax
Distributions.

 

(s)         Amendments to Collateral Loans. The Borrower (and the Collateral
Manager on its behalf) shall not consent to any amendment or other modification
of any Collateral Loan or any Related Document for any Collateral Loan (i) that
would be a Material Modification, (ii) that would result in an Event of Default,
(iii) after the occurrence and continuance of an Event of Default or (iv) that
would cause any Collateral Loan to become an Ineligible Collateral Loan, in each
case without the prior written consent of the Administrative Agent in its sole
discretion. The Borrower (and the Collateral Manager on its behalf) shall not
consent to any extension or postponement of the maturity date with respect to
any Collateral Loan unless, after giving effect to any such extension or
postponement, the Maximum Weighted Average Life Test shall be satisfied.

 

(t)          Obligor Payment Instructions. The Borrower shall not make any
change, or permit the Collateral Manager to make any change, in its instructions
to Obligors, agent banks or administrative agents on the Collateral Loans
regarding payments to be made with respect to the Collateral Loans to the
Collection Account, unless the Administrative Agent has consented to such
change. The Borrower acknowledges that the power of attorney granted in Section
6.03 to the Administrative Agent is exercisable only after the occurrence and
during the continuance of an Event of Default and permits the Administrative
Agent to give notice to the Obligors and related agents of the Collateral
Agent’s interest in the Collateral and the obligation to make payments as
directed by the Administrative Agent. The Borrower further agrees that it shall
(or it shall cause the Collateral Manager to) provide prompt notice to the
Administrative Agent of any misdirected or errant payments made by any Obligor
with respect to any Collateral Loan and direct such Obligor to make payments as
required hereunder to the extent a Responsible Officer of the Borrower or the
Collateral Manager, as applicable, has actual knowledge of such misdirected or
errant payments.

 

Section 5.03.        Affirmative Covenants of the Equityholder and the
Collateral Manager

 

Each of the Equityholder and the Collateral Manager, covenants and agrees that,
until the Final Maturity Date (and thereafter until the date that all
Obligations have been Paid in Full):

 

(a)         Compliance with Agreements, Laws, Etc. It shall (i) duly observe and
comply in all material respects with all Applicable Laws relative to the conduct
of its business or to its assets, (ii) preserve and keep in full force and
effect its legal existence, (iii) preserve and keep in full force and effect its
rights, privileges, qualifications and franchises, except where the failure to
do so would not reasonably be expected to result in a Material Adverse Effect,
(iv) comply with the terms and conditions of each Facility Document to which it
is a party, its Constituent Documents and each Related Document to which it is a
party and (v) obtain, maintain and keep in full force and effect all
Governmental Authorizations, Private Authorizations and Governmental Filings
which are necessary or appropriate to properly carry out (A) its business and
(B) the transactions contemplated to be performed by it under the Facility
Documents to which it is a party, its Constituent Documents and the Related
Documents to which it is a party, except, in the case of clause (v)(A), where
the failure to do so would not reasonably be expected to result in a Material
Adverse Effect.

 

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(b)         Information and Reports.

 

(i)          Each Notice of Borrowing, each Monthly Report, each Borrowing Base
Calculation Statement, each Payment Date Report and all other written
information, reports, certificates and statements furnished by the Collateral
Manager to any Secured Party for purposes of or in connection with this
Agreement, the other Facility Documents or the transactions contemplated hereby
or thereby shall be true, complete and correct in all material respects as of
the date such information is stated or certified.

 

(ii)         The Collateral Manager shall provide to the Administrative Agent or
cause to be provided to the Administrative Agent (with enough additional copies
for each Lender):

 

(A)        a Borrowing Base Calculation Statement on (A) each date on which the
Collateral Manager sells or substitutes any Collateral Loan, (B) the date on
which a Responsible Officer of the Collateral Manager obtains knowledge of any
Material Modification with respect to a Collateral Loan, (C) each other date
reasonably requested by the Administrative Agent upon at least two (2) Business
Days’ written notice to the Collateral Manager and (D) each Measurement Date;
and

 

(B)         from time to time such additional information regarding the
Collateral (including reasonably detailed calculations of the Coverage Tests and
the Collateral Quality Test) as the Required Lenders (through the Administrative
Agent) may reasonably request in writing.

 

(iii)        The Collateral Manager shall provide to the Collateral
Administrator the information described in Section 1 clauses (x), (xv), (xvi),
(xviii), and (xix) through (xxiii), Section 7, Section 8, Section 9, Section 12,
and Section 13, each of the Monthly Report.

 

(iv)        The Collateral Manager shall, on each Business Day, calculate the
Borrowing Base, the Equity Coverage Requirement, the Minimum Equity Amount and
the Net Equity Amount and provide such calculations to the Borrower, the
Collateral Administrator and the Administrative Agent.

 

(v)         The Collateral Manager shall track the delivery to the Data Site (or
in the case of any original assignment of any Collateral Loan or any original
executed promissory note with respect to any Collateral Loan, the delivery
thereof to the Custodian) of the Required Loan Documents with respect to each of
the Collateral Loans owned by the Borrower.

 

(vi)        The Collateral Manager shall, no later than the fifth (5th) Business
Day following the end of each month, provide to the Administrative Agent and the
Collateral Administrator a report with the information obligations specified for
delivery by the Collateral Manager as set forth on Schedule 4 hereto.

 

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(c)          Notice of Default. Within five (5) Business Days after a
Responsible Officer of the Collateral Manager or the Equityholder obtains actual
knowledge of the occurrence and continuance of any (A) Default or (B) Event of
Default, the Collateral Manager shall deliver to the Administrative Agent a
certificate of a Responsible Officer of the Collateral Manager setting forth the
details thereof and the action which the Collateral Manager is taking or
proposes to take with respect thereto; provided that the Collateral Manager
shall not be obligated to deliver such certificate to the extent that a
Responsible Officer of the Borrower delivers a certificate with respect to such
Default or Event of Default pursuant to Section 5.01(d)(iii).

 

(d)          Access to Records and Documents. It shall permit the Administrative
Agent (or any Person designated by the Administrative Agent, subject to delivery
of standard confidentiality agreements) to, upon reasonable advance written
notice and during normal business hours, visit and inspect and make copies
thereof at reasonable intervals (i) its books, records and accounts relating to
its business, financial condition, operations, assets and its performance under
the Facility Documents and the Related Documents and to discuss the foregoing
with its and such Person’s officers, partners, employees and accountants, and
(ii) all of its Related Documents, in each case as often as the Administrative
Agent may reasonably request; provided that so long as no Event of Default has
occurred, the Borrower shall be responsible for all costs and expenses for only
one such visit per fiscal year by the Administrative Agent or its respective
designees; provided, further, that an officer or employee of the Collateral
Manager shall have the opportunity to be present at any discussion between the
Administrative Agent, any Lender or any other Person designated by the
Administrative Agent, on the one hand, and the Collateral Manager’s accountants,
on the other hand. The Administrative Agent shall provide ten (10) days’ prior
written notice to the Lenders of any such visit and any Lender shall be
permitted to accompany the Administrative Agent in such visit. Any such visit
and inspection shall be made simultaneously with any visit and inspection
pursuant to Section 5.01(e).

 

(e)          Notice of Material Modification. Within three (3) Business Days
after a Responsible Officer of the Collateral Manager obtains actual knowledge
of the occurrence of a Material Modification, the Collateral Manager shall
deliver to the Administrative Agent a certificate of a Responsible Officer of
the Collateral Manager setting forth the details thereof and attaching a copy of
the related amendment or waiver.

 

(f)          Credit and Collection Policy. The Collateral Manager shall (i)
comply in all material respects with the Credit and Collection Policy in regard
to the Collateral, (ii) furnish to the Administrative Agent and the Lenders
prior to its effective date prompt written notice of any changes relating to its
corporate finance business in the Credit and Collection Policy, and (iii)
furnish to the Administrative Agent and the Lenders copies of all other changes
in the Credit and Collection Policy. The Collateral Manager will not agree to or
otherwise permit to occur any material change (as determined by the
Administrative Agent in its sole discretion) in the Credit and Collection Policy
relating to its corporate finance business without the prior written consent of
the Administrative Agent and the Required Lenders; provided that no consent
shall be required from the Administrative Agent or the Lenders in connection
with any change mandated by Applicable Law or a Governmental Authority, as
evidenced by a written opinion of counsel, which opinion shall be reasonably
acceptable to the Administrative Agent, to that effect delivered to the
Administrative Agent. The Administrative Agent will use commercially reasonable
efforts to determine whether any such proposed change is material and adverse to
the interests of the Lenders within five (5) Business Days of receipt of notice
with respect thereto. The Collateral Manager shall promptly forward copies of
the amended Credit and Collection Policy reflecting any changes thereto to the
Administrative Agent for distribution to the Lenders. Compliance by the
Collateral Manager with this covenant shall be deemed to constitute compliance
by the Borrower with its corresponding obligations under Section 5.01(m).

 

(g)          Collections. The Collateral Manager shall direct any agent or
administrative agent for any Collateral Loan in respect of any Collateral Loan
to remit all payments and collections with respect to such Collateral Loan and,
if applicable, to direct the Obligor with respect to such Collateral Loan to
remit all such payments and collections with respect to such Collateral Loan
directly to the Collection Account.

 

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Section 5.04.         Negative Covenant of the Equityholder and the Collateral
Manager

 

The Equityholder and the Collateral Manager each covenants and agrees that,
until the Final Maturity Date (and thereafter until the date that all
Obligations have been Paid in Full), it shall not enter into or suffer to exist
or permit to become effective any agreement that prohibits, limits or imposes
any material condition upon its ability to perform its obligations under the
Facility Documents to which it is a party.

 

Section 5.05.         Certain Undertakings Relating to Separateness

 

Without limiting any, and subject to all, other covenants of the Borrower,
Collateral Manager and Equityholder contained in this Agreement:

 

(a)          The Borrower shall maintain its bank accounts, books, accounting
and other records separate from those of any other Person, except that the
accounts of the Borrower may be included in the consolidated financial
statements of the Equityholder as required by GAAP or applicable law.

 

(b)          The Borrower, Collateral Manger and the Equityholder shall not
commingle or pool any of their funds or assets with those of any Affiliate or
any other Person, and each shall hold all of its assets in its own name, except
as otherwise permitted or required under the Facility Documents.

 

(c)          Each of the Borrower, the Collateral Manager and the Equityholder
shall pay its own debts, liabilities and expenses only out of its own assets as
the same shall become due; provided that the Borrower, the Collateral Manager
and the Equityholder may share overhead expenses with another Person so long as
such expenses are allocated fairly and reasonably between the Borrower, the
Collateral Manager and the Equityholder and such other Person.

 

(d)          The Borrower has observed, and shall observe, in all material
respects all (A) limited liability company formalities and (B) other
organizational formalities, in each case to the extent necessary or advisable to
preserve its separate existence.

 

(e)          The Borrower shall have at least one (1) Independent Manager at all
times.

 

(f)          The Borrower shall not (A) guarantee, become obligated for, or hold
itself or its credit out to be responsible for or available to satisfy, the
debts or obligations of any other Person or (B) control the decisions or actions
respecting the daily business or affairs of any other Person, except, in each
case, as permitted by or pursuant to the Facility Documents.

 

(g)         The Borrower shall, at all times, hold itself out to the public as a
legal and economic entity separate from any other Person, shall not identify
itself as a division of any other Person and shall correct any known
misunderstanding regarding its separate identity; provided that the assets,
liabilities and operating results of the Borrower may be consolidated for
accounting purposes and included in consolidated financial statements of the
Equityholder as required by GAAP or applicable law.

 

(h)         Any transaction between the Borrower and its Affiliates shall be on
arm’s-length terms.

 

(i)          Except as provided in the Facility Documents, the Borrower shall
not grant a security interest or otherwise pledge its assets for the benefit of
any other Person.

 

(j)          Except as provided in the Facility Documents, the Borrower shall
not acquire any securities or debt instruments of the Equityholder, its
Affiliates or any other Person (except for equity interests in Obligors in
connection with the exercise of any remedies with respect to a Collateral Loan
or any exchange offer, work-out or restructuring of a Collateral Loan).

 

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(k)          The Borrower shall not make loans or advances to any Person, except
for the Collateral Loans and as permitted by or pursuant to the Facility
Documents.

 

(l)          The Borrower shall make no transfer of its Collateral Loans, except
as permitted by or pursuant to the Facility Documents.

 

(m)         The Borrower shall file its own Tax returns, if any, as may be
required under applicable law, to the extent that the Borrower is (1) not part
of a consolidated group filing a consolidated return or returns or (2) not
treated as a disregarded entity separate from its sole owner of another taxpayer
for Tax purposes, within the meaning of Treasury Regulation Section 301.7701-3
and pay any Taxes so required to be paid under Applicable Law.

 

(n)         The Borrower shall, to the extent used in its business, use separate
stationery, invoices and checks.

 

(o)         The Borrower shall maintain adequate capital in light of its
contemplated business operations; provided, however, that the foregoing shall
not require the Equityholder to make additional capital contributions.

 

(p)         The Borrower shall at all times be organized as a special purpose
entity and it shall not, nor shall it permit any Affiliate or any other Person
to, amend, modify or otherwise change its Constituent Documents in a manner that
would adversely affect the existence of the Borrower as a bankruptcy-remote
special purpose entity.

 

(q)         The Borrower shall at all times conduct its business so that any
assumptions made with respect to the Borrower in any “true sale” and
“substantive non-consolidation” opinion letter delivered in connection with the
Facility Documents will continue to be true and correct in all material
respects, but solely to the extent that said opinion letters expressly require
such assumptions to remain true and correct at all times in order for such
letters’ underlying opinions to be valid.

 

ARTICLE VI
EVENTS OF DEFAULT

 

Section 6.01.         Events of Default

 

“Event of Default”, wherever used herein, means the occurrence of any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):

 

(a)          a default in the payment, when due and payable, of any Interest on
or Commitment Fee and such default has not been cured within two (2) Business
Days; or

 

(b)         the failure on any Payment Date to disburse amounts in the
Collection Account in accordance with the Priority of Payments set forth herein
and such failure has not been remedied within two (2) Business Days; or

 

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(c)          (i) the Borrower fails to repay the Obligations (other than
contingent indemnification and reimbursement obligations for which no claim has
been asserted) in full on the Final Maturity Date or (ii) the failure to make
payment of the Mandatory Amortization Amount on the applicable Payment Date; or

 

(d)          (i) the Borrower or the pool of Collateral becomes, or becomes
subject to regulation as, an “investment company” under Section 8 of the
Investment Company Act or (ii) the transactions contemplated by the Facility
Documents result in one or more of the Lenders holding an “ownership interest”
in a “covered fund” under the Volcker Rule and, solely in the case of this
clause (ii), any Agent shall have delivered written notice thereof to the
Borrower (which may be a .pdf or similar file sent by e-mail); or

 

(e)          a default in any respect in the performance, or breach in any
respect, of any covenant or agreement of the Borrower, the Equityholder or the
Collateral Manager under Sections 5.01(a)(ii), 5.01(c), 5.01(d)(i), (ii), (iii)
and (viii), 5.01(e), 5.01(f), 5.01(h), 5.01(j), 5.01(k), 5.01(n), 5.01(p), 5.02,
5.03, 5.04 and 5.05; or

 

(f)          except as otherwise provided in this Section 6.01, a default in any
material respect in the performance, or breach in any material respect, of any
covenant or agreement of the Borrower or the Equityholder under this Agreement
or the other Facility Documents to which it is a party, or the failure of any
representation or warranty of the Borrower or the Equityholder made in this
Agreement or in any other Facility Document to be correct, in each case, in all
material respects when the same shall have been made, and the continuation of
such default, breach or failure for a period of ten (10) Business Days after the
earlier of (i) written notice to the Borrower, the Collateral Manager and the
Equityholder by the Administrative Agent, and (ii) actual knowledge of a
Responsible Officer of the Borrower, the Equityholder or the Collateral Manager,
as applicable; provided that the existence of a Borrowing Base Deficiency or
Equity Coverage Deficiency shall be subject to clause (o) below; or

 

(g)          the rendering of one or more final judgments, decrees or orders
against the Borrower or the Equityholder by a court or arbitrator of competent
jurisdiction for the payment of money in excess individually or in the aggregate
of $1,000,000 (in the case of the Borrower) or $1,000,000 (in the case of the
Equityholder) (in each case exclusive of judgment amounts fully covered by
insurance), and the Borrower or the Equityholder, as applicable, shall not have
either (x) discharged or provided for the discharge of any such judgment, decree
or order in accordance with its terms or (y) perfected a timely appeal of such
judgment, decree or order and caused the execution of same to be stayed during
the pendency of the appeal, in each case, within thirty (30) days from the date
of entry thereof; or

 

(h)          the Borrower or the Equityholder shall have made payments of
amounts in excess of $1,000,000 (in the case of the Borrower) or $1,000,000 (in
the case of the Equityholder) in settlement of any litigation, claim or dispute
(exclusive of settlement amounts fully covered by insurance); or

 

(i)          an Insolvency Event relating to the Borrower or the Equityholder
occurs; or

 

(j)          (i) any material provision of any Facility Document shall (except
in accordance with its terms) terminate, cease to be effective or cease to be
legally valid, binding and enforceable, (ii) the Borrower, the Equityholder or
the Collateral Manager shall, directly or indirectly, contest in any manner the
effectiveness, validity, binding nature or enforceability of any Facility
Document or any Lien purported to be created thereunder, or (iii) any Lien
securing any obligation under any Facility Document shall, in whole or in part,
cease to be a first-priority perfected security interest of the Collateral
Agent, except as otherwise expressly permitted in accordance with the applicable
Facility Document (including, for the avoidance of doubt, as provided in Section
5.02(k)(ii)); or

 

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(k)          (i) the Internal Revenue Service shall file notice of a Lien
pursuant to Section 6323 of the Code with regard to any asset of the Borrower or
the Equityholder and such Lien shall not have been released within five Business
Days or (ii) the PBGC shall file notice of a Lien pursuant to Section 4068 of
ERISA with regard to any asset of the Borrower or the Equityholder and such Lien
shall not have been released within five (5) Business Days; or

 

(l)          a Change of Control occurs without the prior written consent of the
Administrative Agent; or

 

(m)         a Collateral Manager Default occurs (for the avoidance of doubt,
after giving effect to any grace period or applicable notice period or
requirement); or

 

(n)         CION Investment Management, LLC ceases to be the Collateral Manager
hereunder; or

 

(o)         (i) failure of the Borrower to maintain at least one (1) Independent
Manager (it being understood that the Borrower shall not be in violation of the
requirement to have at least one (1) Independent Manager after the earlier of an
Independent Manager resigning or becoming deceased so long as a new Independent
Manager is appointed within 30 days after a Responsible Officer of the Borrower
has actual knowledge or receives written notice thereof), (ii) the removal of
any Independent Manager of the Borrower without “Cause” (as such term is defined
in the organizational document of the Borrower) or without giving prior written
notice to the Administrative Agent, each as required in the organizational
documents of the Borrower, or (iii) the Borrower shall otherwise fail to qualify
as a bankruptcy-remote entity based upon the criteria set forth in this
Agreement, such that reputable counsel of national standing could no longer
render a substantive nonconsolidation opinion with respect to the Borrower, on
the one hand, and the Equityholder and the Collateral Manager, on the other
hand; or

 

(p)         a Borrowing Base Deficiency or Equity Coverage Deficiency shall
exist and not be cured within two (2) Business Days; or

 

(q)         the Equityholder and its subsidiaries (to the extent the cash and
other amounts of such subsidiaries are not restricted from being distributed to
the Equityholder) shall fail to maintain Unencumbered Liquidity of at least the
lesser of (i) $10,000,000 and (ii) 3% of the Aggregate Principal Balance at any
time; or

 

(r)          subject in each case to Section 9.01, the failure of the Borrower
on any date to maintain an amount equal to the Unfunded Reserve Required Amount
on deposit in the Unfunded Reserve Account in accordance with this Agreement
and, solely during the Reinvestment Period, such failure shall continue for five
(5) Business Days; or

 

(s)          the failure of the Borrower or the Equityholder to make any payment
when due (after giving effect to any related notice period or requirement or
grace period) under one or more agreements for borrowed money to which it is a
party and the indebtedness for borrowed money thereunder is in an amount in
excess of $1,000,000 (in the case of the Borrower) or $1,000,000 (in the case of
the Equityholder), individually or in the aggregate, or the occurrence of any
event or condition that has resulted in the acceleration of such indebtedness,
whether or not waived; or

 

(t)          the Equityholder shall fail to maintain a minimum Tangible Net
Worth of $750,000,000.

 

With respect to any notice that may be furnished by an Agent to the Borrower
pursuant to Sections 6.01(a), (c) and (d), upon written request therefor to the
applicable Agent, the Required Lenders may direct such Agent to provide such
notice to the Borrower. Such Agent shall promptly thereafter provide such notice
to the Borrower.

 

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Section 6.02.         Remedies.

 

(a)          Upon the occurrence and during the continuance of any Event of
Default, in addition to all rights and remedies specified in this Agreement and
the other Facility Documents, including (and subject to) Article VII, and the
rights and remedies of a secured party under Applicable Law, including the UCC,
the Administrative Agent shall, at the request of, or may with the consent of,
the Required Lenders (with a copy to the Collateral Agent), do any one or more
of the following: (1) declare the Commitments to be terminated forthwith,
whereupon the Commitments shall forthwith terminate, and (2) declare the
principal of and the accrued interest on the Advances and all other amounts
whatsoever payable by the Borrower hereunder to be forthwith due and payable,
whereupon such amounts shall be immediately due and payable without presentment,
demand, protest or other formalities of any kind, all of which are hereby waived
by the Borrower; provided that, upon the occurrence of any Event of Default, the
Reinvestment Period shall terminate upon notice by the Administrative Agent to
the Borrower; provided, further, that upon the occurrence of any Event of
Default described in clause (i) of Section 6.01 with respect to the Borrower,
the Commitments shall automatically terminate and the Advances and all such
other amounts shall automatically become due and payable, without any further
action by any party.

 

(b)          Upon the occurrence and during the continuance of an Event of
Default the Administrative Agent may, or shall upon the direction of the
Required Lenders, exercise (or direct the Collateral Agent, as applicable, to
exercise) such rights, including: (u) the exercise of the Collateral Manager’s
rights and obligations under the Facility Documents (including the right to
direct the Collateral Manager to exercise such rights), including its unilateral
power to (A) consent to modifications to Collateral Loans, (B) take any
discretionary action with respect to Collateral Loans and (C) direct the
acquisition, sales and other dispositions of Collateral Loans; (v) the
termination of the Collateral Manager’s rights to exercise any rights or take
any action with respect to the Collateral; (w) the transfer of the Collateral
Manager’s rights and obligations under the Facility Documents to a successor
Collateral Manager; (x) if the Collateral Manager is not terminated or otherwise
replaced in accordance with this Agreement, to require the Collateral Manager to
obtain the consent of the Administrative Agent before agreeing to any
modification of any Collateral Loan, taking any discretionary action with
respect to any Collateral Loan or causing the Borrower to sell or otherwise
dispose of any Collateral Loan; (y) if the Collateral Manager is not terminated
or otherwise replaced in accordance with this Agreement, to require the
Collateral Manager to cause the Borrower to sell or otherwise dispose of any
Collateral Loan as directed by the Administrative Agent pursuant to Section
7.03, and (z) with respect to any specific Collateral Loan, to require the
Collateral Manager to take such discretionary action with respect to such
Collateral Loan as directed by the Administrative Agent.

 

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

 

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Section 6.03.         Power of Attorney.

 

(a)          The Borrower hereby irrevocably appoints the Administrative Agent
as its true and lawful attorney (with full power of substitution) in its name,
place and stead and at its expense, in connection with the enforcement of the
rights and remedies provided for (and subject to the terms and conditions set
forth) in this Agreement including without limitation the following powers: (i)
to give any necessary receipts or acquittance for amounts collected or received
hereunder, (ii) to make all necessary transfers of the Collateral in connection
with any such sale or other disposition made pursuant hereto, (iii) to execute
and deliver for value all necessary or appropriate bills of sale, assignments
and other instruments in connection with any such sale or other disposition, the
Borrower hereby ratifying and confirming all that such attorney (or any
substitute) shall lawfully do hereunder and pursuant hereto, (iv) to sign any
agreements, orders or other documents in connection with or pursuant to any
Facility Document and (v) to exercise directly the Collateral Manager’s rights
and obligations under this Agreement, including the exercise of rights set forth
in Section 6.02(b), if and to the extent that the Collateral Manager has not
complied with any direction given by the Administrative Agent in accordance with
this Agreement within three (3) Business Days after the Business Day on which
such direction was given to the Collateral Manager; provided that no such
direction or lapse of time shall be required after the occurrence and during the
continuance of a Collateral Manager Default. Nevertheless, if so requested by
the Administrative Agent, the Borrower shall ratify and confirm any such sale or
other disposition by executing and delivering to the Administrative Agent all
proper bills of sale, assignments, releases and other instruments as may be
designated in any such request.

 

(b)          No person to whom this power of attorney is presented as authority
for the Administrative Agent to take any action or actions contemplated by
clause (a) shall inquire into or seek confirmation from the Borrower as to the
authority of the Administrative Agent to take any action described below, or as
to the existence of or fulfillment of any condition to the power of attorney
described in clause (a), which is intended to grant to the Administrative Agent
unconditionally the authority to take and perform the actions contemplated
herein, and to the extent permitted by Applicable Law, the Borrower irrevocably
waives any right to commence any suit or action, in law or equity, against any
person or entity that acts in reliance upon or acknowledges the authority
granted under this power of attorney. The power of attorney granted in clause
(a) is coupled with an interest and may not be revoked or canceled by the
Borrower until all obligations of the Borrower under the Facility Documents have
been Paid in Full and the Administrative Agent has provided its written consent
thereto.

 

(c)          Notwithstanding anything to the contrary herein, the power of
attorney granted pursuant to this Section 6.03 shall only be exercisable after
the occurrence and during the continuance of an Event of Default.

 

ARTICLE VII
PLEDGE OF COLLATERAL;
RIGHTS OF THE COLLATERAL AGENT

 

Section 7.01.         Grant of Security

 

(a)          The Borrower hereby grants, pledges and collaterally assigns to the
Collateral Agent, for the benefit of the Secured Parties, as collateral security
for all Obligations, a continuing security interest in, and a Lien upon, all of
the Borrower’s right, title and interest in, to and under, the following
property, in each case whether tangible or intangible, wheresoever located, and
whether now owned by the Borrower or hereafter acquired and whether now existing
or hereafter coming into existence (all of the property described in this
Section 7.01(a) being collectively referred to herein as the “Collateral”):

 

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(i)          all Collateral Loans and Related Documents (including those listed,
as of the Closing Date, in Schedule 6 hereto), both now and hereafter owned,
including all Collections and other Proceeds thereon or with respect thereto;

 

(ii)         each Covered Account and all Money and all investment property
(including all securities, all security entitlements with respect to such
Covered Account and all financial assets carried in such Covered Account) from
time to time on deposit in or credited to each Covered Account;

 

(iii)        all interest, dividends, stock dividends, stock splits,
distributions and other Money or property of any kind distributed in respect of
the Collateral Loans of the Borrower, which the Borrower is entitled to receive,
including all Collections in respect of all Collateral Loans;

 

(iv)        each Facility Document and all rights, remedies, powers, privileges
and claims under or in respect thereto (whether arising pursuant to the terms
thereof or otherwise available to the Borrower at law or equity), including the
right to enforce each such document and to give or withhold any and all
consents, requests, notices, directions, approvals, extensions or waivers under
or with respect thereto, to the same extent as the Borrower could but for the
assignment and security interest granted to the Collateral Agent under this
Agreement;

 

(v)         all Cash or Money in possession of the Borrower or delivered to the
Collateral Agent or Securities Intermediary (or a bailee thereof);

 

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

 

(vii)       all securities, loans and investments, and all other property of any
type or nature in which the Borrower has an interest (including the equity
interests of each Subsidiary of the Borrower), and all property of the Borrower
which is delivered to the Custodian by or on behalf of the Borrower (whether or
not constituting Collateral Loans or Eligible Investments);

 

(viii)      all Liens, Related Security, property, guaranties, supporting
obligations, insurance and other agreements or arrangements of whatever
character from time to time supporting or securing payment of the assets,
investments and properties described above; and

 

(ix)         all Proceeds of any and all of the foregoing.

 

(b)          All terms used in this Section 7.01 but not defined in Section 1.01
shall have the respective meanings assigned to such terms in the UCC as
applicable.

 

(c)          The Borrower hereby collaterally assigns to the Collateral Agent,
for the benefit of the Secured Parties, all of the Borrower’s right and title to
and interest in, to and under (but not any liabilities, duties or obligations
under) the Closing Date Participation Agreement, the Related Documents for each
Collateral Loan, all other agreements, documents and instruments evidencing,
securing or guarantying any Collateral Loan and all other agreements, documents
and instruments related to any of the foregoing but excluding any Excluded Taxes
or Retained Interest (the “Assigned Documents”). The parties hereto agree that
such collateral assignment to the Collateral Agent, for the benefit of the
Secured Parties, shall terminate upon the Payment in Full of all outstanding
Obligations.

 

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Section 7.02.         Release of Security Interest

 

If and only if all Obligations have been Paid in Full, the Administrative Agent
shall provide notice of the same to the Collateral Agent and the Collateral
Agent, on behalf of the Secured Parties, shall, at the expense of the Borrower,
promptly execute, deliver and authorize for filing such instruments as the
Borrower shall prepare and reasonably request in order to reassign, release or
terminate the Secured Parties’ security interest in the Collateral; provided
that the Collateral Agent shall also promptly release or terminate the Secured
Parties’ security interest in the Collateral in connection with any sale of
Collateral permitted under this Agreement. The Secured Parties acknowledge and
agree that upon the sale or disposition of any Collateral by the Borrower in
compliance with the terms and conditions of this Agreement, the security
interest of the Secured Parties in such Collateral shall immediately and
automatically terminate without further act, the Administrative Agent shall
promptly provide notice of the same to the Collateral Agent, and the Collateral
Agent shall, on behalf of the Secured Parties and at the expense of the
Borrower, execute, deliver and authorize for filing such instruments as the
Borrower shall prepare and reasonably request to reflect or evidence such
termination. Any and all actions under this Article VII in respect of the
Collateral shall be without any recourse to, or representation or warranty by
any Secured Party and shall be at the sole cost and expense of the Borrower.

 

Section 7.03.         Rights and Remedies

 

(a)          The Collateral Agent (for itself and on behalf of the other Secured
Parties) shall have all of the rights and remedies of a secured party under the
UCC and other Applicable Law. Solely upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent or its designees (which
may include, without limitation, the Collateral Agent) shall, acting solely at
the written direction of the Administrative Agent or the Required Lenders acting
through the Administrative Agent, (i) instruct the Borrower to deliver any or
all of the Collateral, the Related Documents and any other document relating to
the Collateral to the Collateral Agent or its designees and otherwise give all
instructions for the Borrower regarding the Collateral; (ii) sell or otherwise
dispose of the Collateral, all without judicial process or proceedings; (iii)
take control of the Proceeds of any such Collateral; (iv) subject to the
provisions of the applicable Related Documents, exercise any consensual or
voting rights in respect of the Collateral; (v) release, make extensions,
discharges, exchanges or substitutions for, or surrender all or any part of the
Collateral; (vi) enforce the Borrower’s rights and remedies with respect to the
Collateral; (vii) institute and prosecute legal and equitable proceedings to
enforce collection of, or realize upon, any of the Collateral; (viii) require
that the Borrower promptly take all actions necessary to cause the liquidation
of the Collateral in order to pay all amounts due and payable in respect of the
Obligations, in accordance with the terms of the Related Documents; (ix) redeem
or withdraw or cause the Borrower to redeem or withdraw any asset of the
Borrower to pay amounts due and payable in respect of the Obligations; (x) make
copies of all books, records and documents relating to the Collateral; and (xi)
endorse the name of the Borrower upon any items of payment relating to the
Collateral or upon any proof of claim in bankruptcy against an account debtor.
In the absence of written direction of the Administrative Agent or the Required
Lenders (acting through the Administrative Agent), the Collateral Agent shall
take no action. The Collateral Agent shall not be liable to the Administrative
Agent, the Required Lenders or any other party for any action taken or omitted
to be taken at the direction of the Administrative Agent or the Required Lenders
(acting through the Administrative Agent) or any inaction in the absence
thereof.

 

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(b)          The Borrower hereby agrees that, upon the occurrence and during the
continuance of an Event of Default, at the request of the Administrative Agent
or the Required Lenders (acting through the Administrative Agent), it shall
execute all documents and agreements which are necessary or appropriate to have
the Collateral assigned to the Collateral Agent or its designee. For purposes of
taking the actions described in clauses (a) through (b) of this Section 7.03
the Borrower hereby irrevocably appoints the Collateral Agent as its
attorney-in-fact (which appointment being coupled with an interest and is
irrevocable while any of the Obligations remain unpaid (other than unasserted
contingent obligations)), with power of substitution, in the name of the
Collateral Agent or in the name of the Borrower or otherwise, for the use and
benefit of the Collateral Agent for the benefit of the Secured Parties, but at
the cost and expense of the Borrower and, except as expressly required by
Applicable Law, without notice to the Borrower. Such appointment shall in no way
impose upon the Collateral Agent any obligation to take any such action unless
specifically directed to do so and subject to the receipt of an indemnity from
the Lenders reasonably satisfactory to it.

 

Section 7.04.         Remedies Cumulative

 

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

 

Section 7.05.         Related Documents

 

(a)          Each of the Borrower and the Collateral Manager hereby agrees that,
to the extent not expressly prohibited by the terms of the Related Documents,
after the occurrence and during the continuance of an Event of Default, it shall
(i) upon the written request of the Administrative Agent, promptly forward to
the Administrative Agent all material information and notices which it receives
under or in connection with the Related Documents relating to the Collateral,
and (ii) upon the written request of the Administrative Agent, act and refrain
from acting in respect of any request, act, decision or vote under or in
connection with the Related Documents relating to the Collateral only in
accordance with the direction of the Administrative Agent (in its reasonable
discretion).

 

(b)          The Borrower agrees that, to the extent the same shall be in the
Borrower’s possession, it will hold all Related Documents relating to the
Collateral in trust for the Collateral Agent on behalf of the Secured Parties,
and upon request of the Administrative Agent following the occurrence and during
the continuance of an Event of Default or as otherwise provided herein, promptly
deliver the same to the Collateral Agent or its designee. In addition, in
accordance with this Agreement, promptly (and in any event within five (5)
Business Days) following its acquisition of any Collateral Loan, the Borrower
shall deliver to the Custodian the Required Loan Documents.

 

Section 7.06.         Borrower Remains Liable

 

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

 

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

 

Section 7.07.         Protection of Collateral

 

The Borrower shall from time to time execute and deliver all such supplements
and amendments hereto and file or authorize the filing of all such UCC-1
financing statements and continuation statements, instruments of further
assurance and other instruments, and shall take such other action as may be
necessary to secure the rights and remedies of the Secured Parties hereunder and
to:

 

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

 

(b)          maintain, preserve and perfect any grant of security made or to be
made by this Agreement including the first-priority nature of the Lien (subject
to Permitted Liens) or carry out more effectively the purposes hereof;

 

(c)          perfect or protect the validity of any grant made or to be made by
this Agreement (including any and all actions necessary or desirable as a result
of changes in Applicable Law);

 

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

 

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

 

(f)          pay or cause to be paid any and all Taxes levied or assessed upon
all or any part of the Collateral.

 

If the Borrower fails to prepare and file any instrument or to take any action
required pursuant to this Section 7.07 within ten (10) Business Days after the
Administrative Agent’s request and written instruction therefor, the Borrower
hereby designates the Collateral Agent as its agent to prepare and file such
instrument and take such action required pursuant to this Section 7.07. The
Borrower further authorizes the Collateral Agent to file
UCC-1 financing statements and continuation statements therefor, that name the
Borrower as debtor and the Collateral Agent as secured party and that describes
“all assets in which the debtor now or hereafter has rights” (or words of
similar effect) as the Collateral in which the Collateral Agent has a grant of
security hereunder. Such designation shall not impose upon the Collateral Agent
or the Administrative Agent or any other Secured Party, or release or diminish,
the Borrower’s obligations under this Section 7.07.

 

Notwithstanding the generality of the foregoing, the Borrower shall, not earlier
than six (6) months and not later than one (1) month prior to the fifth (5th)
anniversary of the date of filing of any financing statement filed pursuant to
this Agreement authorize, deliver and file or cause to be filed an appropriate
continuation statement with respect to each such financing statement.

 

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ARTICLE VIII
ACCOUNTS, ACCOUNTINGS AND RELEASES

 

Section 8.01.         Collection of Money

 

Except as otherwise expressly provided herein, the Administrative Agent may and
the Collateral Agent shall at the direction of the Administrative Agent (or the
Required Lenders acting through the Administrative Agent) demand payment or
delivery of, and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all Money and other
property payable to or receivable by the Collateral Agent pursuant to this
Agreement, including all payments due on the Collateral, in accordance with the
terms and conditions of such Collateral. The Collateral Agent shall segregate
and hold all such Money and property received by it in trust for the Secured
Parties and shall apply it as provided in this Agreement. Each Covered Account
shall be established and maintained under the Account Control Agreement with a
Qualified Institution. Any Covered Account may contain any number of subaccounts
for the convenience of the Collateral Agent or as required by the Collateral
Manager for convenience in administering the Covered Account or the Collateral.

 

Section 8.02.         Collection Account

 

(a)          In accordance with this Agreement and the Account Control
Agreement, the Collateral Agent shall, on or prior to the Closing Date,
establish at the Custodian one (1) segregated trust account, (including any
sub-accounts deemed appropriate or necessary by the Custodian, for convenience
in administering such account), which will collectively be designated the
“Collection Account”, which shall be maintained by the Borrower with the
Custodian in accordance with the Account Control Agreement and which shall be
subject to the Lien of the Collateral Agent. The Collateral Agent shall from
time to time deposit into the Collection Account promptly upon receipt thereof
all Interest Proceeds received by the Collateral Agent and identified as such by
the Collateral Manager. The Collateral Agent shall from time to time deposit
into the Collection Account promptly upon receipt thereof all Principal Proceeds
(unless simultaneously reinvested in additional Collateral Loans in accordance
with Article X or required to be deposited in the Unfunded Reserve Account
pursuant to Section 8.05) received by the Collateral Agent and identified as
such by the Collateral Manager. All funds deposited from time to time in the
Collection Account pursuant to this Agreement shall be held on behalf of the
Collateral Agent as part of the Collateral and shall be applied to the purposes
herein provided.

 

(b)          At any time when reinvestment is permitted pursuant to Article X,
the Collateral Manager on behalf of the Borrower (subject to compliance with
Article X) may, by delivery of written instructions (which may be a .pdf or
similar file sent by email) of a Responsible Officer of the Collateral Manager
to the Collateral Agent and the Collateral Administrator, direct the Collateral
Agent to, and upon receipt of such instructions the Collateral Agent shall,
withdraw funds on deposit in the Collection Account representing Principal
Proceeds (together with accrued interest received with regard to any Collateral
Loan and Interest Proceeds but only to the extent used to pay for accrued
interest on an additional Collateral Loan) and reinvest such funds in additional
Collateral Loans in accordance with such instructions. If at any time the amount
on deposit in the Unfunded Reserve Account is less than the Unfunded Reserve
Required Amount, the Collateral Manager (on behalf of the Borrower) may, by
delivery of written instructions (which may be a .pdf or similar file sent by
email) of a Responsible Officer of the Collateral Manager to the Collateral
Agent and the Collateral Administrator, direct the Collateral Agent to, and upon
receipt of such instructions the Collateral Agent shall, withdraw funds on
deposit in the Collection Account representing Principal Proceeds and remit such
funds as so directed by the Collateral Manager to meet the Borrower’s funding
obligations in respect of Delayed Drawdown Collateral Loans or Revolving
Collateral Loans.

 

(c)          The Collateral Agent shall transfer to the Collection Account from
the other Collection Account for application pursuant to Section 9.01(a), on
each Payment Date, the amount set forth to be so transferred in the Payment Date
Report for such Payment Date.

 

Section 8.03.         [Reserved.]

 

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Section 8.04.         [Reserved.]

 

Section 8.05.         The Unfunded Reserve Account; Fundings

 

In accordance with this Agreement and the Account Control Agreement, the
Collateral Agent shall, on or prior to the Closing Date, establish at the
Custodian one (1) segregated trust account, which shall be designated as the
“Unfunded Reserve Account”, which shall be maintained by the Borrower with the
Custodian in accordance with the Account Control Agreement and which shall be
subject to the Lien of the Collateral Agent. The only permitted deposits to or
withdrawals from the Unfunded Reserve Account shall be in accordance with the
provisions of this Agreement.

 

On the date of acquisition by the Borrower of any Delayed Drawdown Collateral
Loan, Revolving Collateral Loan, and on any Payment Date, the Collateral Manager
shall instruct the Collateral Agent to withdraw funds from the Collection
Account for deposit into the Unfunded Reserve Account, to the extent required so
that the amount of funds on deposit in the Unfunded Reserve Account is equal to
the Unfunded Reserve Required Amount.

 

During the Reinvestment Period, fundings of Delayed Drawdown Collateral Loans
and Revolving Collateral Loans shall be made using, first, amounts on deposit in
the Unfunded Reserve Account (in an amount equal to the amount on deposit
therein with respect to such Delayed Drawdown Collateral Loan or Revolving
Collateral Loan), then available Principal Proceeds and finally, borrowing of
Advances under Section 2.01.

 

During the Amortization Period, Principal Proceeds received by the Borrower (or
the Collateral Manager on its behalf) in respect of Revolving Collateral Loans
(to the extent not accompanied by a permanent reduction in the related
commitments) shall be deposited by the Borrower (or the Collateral Manager on
its behalf) into the Unfunded Reserve Account.

 

Amounts on deposit in the Unfunded Reserve Account will be available solely to
cover drawdowns on the Delayed Drawdown Collateral Loans and Revolving
Collateral Loans; provided that, to the extent that the aggregate amount of
funds on deposit therein at any time exceeds the Unfunded Reserve Required
Amount, the Collateral Agent shall remit such excess to the Collection Account.
In addition, following the occurrence of an Event of Default, funds in the
Unfunded Reserve Account may be withdrawn by the Collateral Agent and deposited
into the Collection Account at the direction of the Administrative Agent.

 

Section 8.06.         [Reserved].

 

Section 8.07.         Account Control Agreement.

 

The provisions of Sections 8.02 and 8.05 are subject to the terms of the Account
Control Agreement.

 

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Section 8.08.         Funds in Covered Accounts; Reports by Collateral Agent

 

(a)          By delivery of a certificate of a Responsible Officer (which may be
in the form of standing instructions), the Borrower (or the Collateral Manager
on behalf of the Borrower) shall at all times direct the Collateral Agent to,
and, upon receipt of such certificate, the Collateral Agent shall, invest all
funds on deposit in the Collection Account and the Unfunded Reserve Account in
Eligible Investments having stated maturities no later than the Business Day
preceding the next Payment Date (or such shorter maturities expressly provided
herein). If, prior to the occurrence of an Event of Default, the Borrower shall
not have given any such investment directions, the Collateral Agent shall seek
instructions from the Collateral Manager within three (3) Business Days after
transfer of any funds to such accounts and shall invest in Eligible Investments
that mature overnight until it shall receive written instructions from the
Collateral Manager. After the occurrence and during the continuance of an Event
of Default, the Collateral Agent shall invest and reinvest such funds as fully
as practicable in Eligible Investments as described in clause (a) of the
definition thereof or as otherwise directed by the Collateral Manager maturing
not later than the earlier of (i) thirty (30) days after the date of such
investment (unless putable at par to the issuer thereof) or (ii) the Business
Day immediately preceding the next Payment Date (or such shorter maturities
expressly provided herein). Except to the extent expressly provided otherwise
herein, all interest, gain, loss and other income from such investments shall be
deposited, credited or charged (as applicable) in and to the Collection Account.
Absent its timely receipt of such instruction from the Collateral Manager or
Administrative Agent, as applicable, in accordance with the foregoing, the
Collateral Agent shall not be under an obligation to invest (or pay interest on)
funds held hereunder. The Collateral Agent shall in no way be liable for any
insufficiency in a Covered Account resulting from any loss relating to any such
investment.

 

(b)          The Collateral Agent agrees to give the Borrower prompt notice if
any Covered Account or any funds on deposit in any Covered Account, or otherwise
to the credit of a Covered Account, shall become subject to any writ, order,
judgment, warrant of attachment, execution or similar process. All Covered
Accounts shall remain at all times with the Custodian.

 

(c)          The Collateral Agent shall supply, in a timely fashion, to the
Borrower and the Collateral Manager any information regularly maintained by the
Collateral Agent that the Borrower or the Collateral Manager may from time to
time reasonably request with respect to the Collateral Loans, the Covered
Accounts and the other Collateral and provide any other requested information
reasonably available to the Collateral Agent and required to be provided by
Section 8.09 or to permit the Collateral Manager to perform its obligations
hereunder or the Borrower’s obligations hereunder that have been delegated to
the Collateral Manager. The Collateral Agent shall promptly forward to the
Collateral Manager copies of notices, periodic financial reports and other
writings received by it from the Obligor of any Collateral Loan or from any
Clearing Agency with respect to any Collateral Loan.

 

Section 8.09.         Accountings

 

(a)          Monthly. Not later than ten (10) Business Days following the last
calendar day of each calendar month (other than the months for which a Payment
Date Report is delivered) (the “Monthly Reporting Date”), the Borrower shall
compile and provide (or cause to be compiled and provided) to the Administrative
Agent and the Equityholder a monthly report (which includes a Borrowing Base
Calculation Statement prepared by the Collateral Manager and provided to the
Collateral Administrator for inclusion in the Monthly Report) (each, a “Monthly
Report”) in accordance with this Section 8.09. The Borrower shall compile and
provide (or cause to be compiled and provided) to the Administrative Agent and
the Collateral Administrator a loan data file (the “Data File”) for the previous
monthly period ending on the Monthly Report Determination Date (containing such
information agreed upon by the Borrower (or the Collateral Manager on its
behalf), the Collateral Administrator and the Administrative Agent). The
Borrower shall provide (or cause to be provided) the Data File no later than ten
(10) Business Days following the Monthly Reporting Date. As used herein, the
“Monthly Report Determination Date” with respect to any calendar month will be
the fifteenth day of the prior calendar month. The first Monthly Report shall be
delivered on May 12, 2017 and shall be determined with respect to the Monthly
Report Determination Date that is April 15, 2017. The Monthly Report for a
calendar month shall be in a form reasonably acceptable to the Borrower, the
Collateral Administrator, the Collateral Manager, the Equityholder and the
Administrative Agent and shall contain the information with respect to the
Collateral Loans and Eligible Investments included in the Collateral set forth
in Schedule 2 hereto, and shall be determined as of the Monthly Report
Determination Date for such calendar month.

 

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(b)          Payment Date Accounting. The Borrower shall render (or cause to be
rendered) an accounting (each, a “Payment Date Report”), determined as of the
close of business on each Determination Date preceding a Payment Date, and shall
deliver such Payment Date Report to the Agents and the Equityholder not later
than the second Business Day preceding the related Payment Date. The Payment
Date Report shall be in a form reasonably acceptable to the Borrower, the
Collateral Manager, the Equityholder, the Collateral Administrator and the
Administrative Agent and shall contain the information set forth in Schedule 3
hereto.

 

In addition, the Borrower shall provide (or cause to be provided) in each
Payment Date Report a statement setting forth in reasonable detail each
amendment, modification or waiver under any Related Document for each Collateral
Loan that constitutes a Material Modification that became effective since the
immediately preceding Payment Date Report (or, in respect of the first Payment
Date Report, from the Closing Date) unless previously disclosed under Section
5.01(d)(vii) or 8.09(a).

 

The first Payment Date Report shall be delivered on June 13, 2017, shall be
determined with respect to the Determination Date that is June 8, 2017, and
shall be used in connection with the payments to be made on the Payment Date
that is June 15, 2017.

 

(c)          Failure to Provide Accounting. If the Collateral Agent shall not
have received any accounting provided for in this Section 8.09 on the first
Business Day after the date on which such accounting is due to the Collateral
Agent, the Collateral Agent shall notify the Borrower, who shall use reasonable
efforts to obtain such accounting by the applicable Payment Date.

 

For the avoidance of doubt, the Borrower has engaged the Collateral
Administrator pursuant to Article XV hereof to compile and provide the
information and reports to be provided in this Section 8.09; provided, however,
that the Collateral Administrator’s obligation to compile and provide such
information and reports is subject to the receipt of the information necessary
to do so from the Collateral Manager and the Administrative Agent.

 

Section 8.10.         Release of Collateral

 

(a)          If no Event of Default has occurred and is continuing, the Borrower
may, by delivery of a certificate of a Responsible Officer of the Collateral
Manager delivered to the Collateral Agent and the Custodian at least one (1)
Business Day prior to the settlement date for any sale of any item of Collateral
certifying that the sale of such Collateral is being made in accordance with
Section 10.01 and such sale complies with all applicable requirements of Section
10.01, direct the Collateral Agent (or the Custodian on its behalf) to release
or cause to be released such item from the Lien of this Agreement and, upon
receipt of such certificate, the Collateral Agent (or Custodian, as applicable)
shall deliver any such item, if in physical form, duly endorsed to the broker or
purchaser designated in such certificate or, if such item is a Clearing
Corporation Security, cause an appropriate transfer thereof to be made, in each
case against receipt of the sales price therefor as specified by the Collateral
Manager in such certificate; provided that the Collateral Agent (or the
Custodian on its behalf) may deliver any such item in physical form for
examination in accordance with street delivery custom; provided, further, that
neither the Collateral Agent nor the Custodian will be deemed to have notice of
an Event of Default unless it has received notice thereof.

 

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(b)          The Collateral Agent (or Custodian, as applicable) shall, upon the
receipt of a certificate of the Borrower, by delivery of a certificate of a
Responsible Officer of the Collateral Manager, deliver any Collateral in
accordance with such certificate, and execute such documents or instruments as
are delivered by or on behalf of the Borrower and reasonably necessary to
release or cause to be released such security from the Lien of this Agreement,
which is set for any mandatory call or redemption or payment in full to the
appropriate paying agent on or before the date set for such call, redemption or
payment, in each case against receipt of the call or redemption price or payment
in full thereof.

 

(c)          As provided in Section 8.02(a), the Collateral Agent (and its
designees) shall deposit any proceeds received by it from the disposition of a
Collateral Loan in the Collection Account as instructed by the Collateral
Manager, unless simultaneously applied to the purchase of additional Collateral
Loans as permitted under and in accordance with the requirements of this
Article VIII and Article X.

 

(d)          The Collateral Agent shall, upon receipt of a certificate of a
Responsible Officer of the Borrower certifying that there are no Commitments
outstanding and all Obligations of the Borrower hereunder and under the other
Facility Documents have been satisfied (other than unasserted contingent
obligations), execute such documents or instruments as are delivered by or on
behalf of the Borrower and reasonably necessary to release any remaining
Collateral from the Lien of this Agreement.

 

(e)          Any security, Collateral Loan or amounts that are released pursuant
to Section 8.10(a) or (b) shall be automatically released from the Lien of this
Agreement.

 

Any direction received by the Collateral Agent or the Custodian, as applicable,
on or prior to 12:00 noon on any Business Day shall be effective on such
Business Day and any direction received by the Collateral Agent or the
Custodian, as applicable, after 12:00 noon on any Business Day, or at any time
on any day that is not a Business Day, shall be effective in each case on the
next succeeding Business Day.

 

Section 8.11.         Reports by Independent Accountants

 

(a)          The Collateral Manager will appoint a firm of independent certified
public accountants, independent auditors or independent consultants specializing
in securitization transactions (together with its successors, the “Independent
Accountants”), in each case reasonably acceptable to the Administrative Agent,
for purposes of reviewing and delivering the reports of such accountants
required by this Agreement, which may be the firm of independent certified
public accountants, independent auditors or independent consultants that
performs accounting services for the Collateral Manager. The Collateral Manager
may remove any firm of Independent Accountants at any time upon notice to, but
without the consent of, the Administrative Agent. Upon any resignation by such
firm or removal of such firm by the Collateral Manager, the Collateral Manager
shall promptly appoint, by a certificate of a Responsible Officer of the
Collateral Manager delivered to the Agents, a successor thereto that shall also
be a firm of independent certified public accountants, independent auditors or
independent consultants of recognized standing, which may be a firm of
independent certified public accountants, independent auditors or independent
consultants that performs accounting services for the Collateral Manager. The
fees of such Independent Accountants and any successor shall be payable by the
Borrower.

 

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(b)          The Collateral Manager will cause the Independent Accountants to
furnish to the Administrative Agent (with a copy to the Collateral Agent) within
120 days of the end of each fiscal year of the Borrower (starting with the
fiscal year ending 2017), to the effect that such firm has applied certain
agreed-upon procedures approved by the Administrative Agent (as such agreed-upon
procedures may be updated from time to time in response to reasonable requests
of the Administrative Agent) with respect to a selection of Monthly Reports
and/or Payment Date Reports from the related fiscal year, as applicable, and,
with respect to the Collateral Manager’s performance hereunder, to assist the
Administrative Agent in determining that the Monthly Reports and Payment Date
Reports for the related fiscal year, as applicable, were prepared in compliance
with this Agreement, except for such exceptions as it believes to be immaterial
and such other exceptions as will be set forth in such firm’s report (including,
with respect to any such exceptions, an explanation of how each such exception
arose and reflecting the input/explanation of the Collateral Manager thereto).
Such reports pursuant to this clause (b) shall be at the expense of the
Borrower.

 

(c)          In the event the Independent Accountants appointed pursuant to
clause (b) above require the Collateral Agent or the Collateral Administrator,
as applicable, to agree to the procedures performed by such Independent
Accountants with respect to any of the reports, statements of such Independent
Accountants, or sign any agreement in connection therewith, the Collateral Agent
or the Collateral Administrator, as applicable, is hereby directed by the
Borrower, to so agree to the terms and conditions requested by such Independent
Accountants as a condition to receiving documentation required by this
Agreement; it being understood and agreed that the Collateral Agent and the
Collateral Administrator shall deliver such agreement in conclusive reliance on
such direction and shall make no inquiry or investigation as to, and shall have
no obligation or responsibility in respect of, the terms of the engagement of
such Independent Accountants by the Borrower or the sufficiency, validity or
correctness of the agreed upon procedures in respect of such engagement. The
Collateral Agent and the Collateral Administrator may require the delivery of a
written direction to the execution of any such agreement required for the
delivery of any report or statement of such Independent Accountants to the
Collateral Agent and the Collateral Administrator under this Agreement. The
Collateral Agent and the Collateral Administrator are hereby authorized, without
liability on their part, to execute and deliver any such agreement with such
Independent Accountants, which agreement, to the extent so directed by the
Borrower (or the Collateral Manager on behalf of the Borrower), may include,
amongst other things, (i) an acknowledgement that the Borrower has agreed that
the procedures by such Independent Accountants are sufficient for the relevant
purposes, (ii) releases by the Collateral Agent and the Collateral Administrator
of any claims, liabilities and expenses arising out of or relating to such
Independent Accountant’s engagement, agreed-upon procedures or any report or
statement issued by such Independent Accountants under any such engagement and
acknowledgement of other limitations of liability in favor of such Independent
Accountants and (iii) restrictions or prohibitions on the disclosure of any such
reports, statements or other information or documents provided to it by such
Independent Accountants.

 

ARTICLE IX
APPLICATION OF FUNDS

 

Section 9.01.         Disbursements of Funds from Collection Account

 

(a)          Notwithstanding any other provision in this Agreement, but subject
to the other subsections of this Section 9.01, the Collateral Agent, based
solely upon the Payment Date Report, shall disburse amounts from the Collection
Account pursuant to Section 8.02 in accordance with the following priorities
(the “Priority of Payments”):

 

(i)          On each Payment Date, so long as no Event of Default has occurred
and is continuing or would result therefrom, Interest Proceeds on deposit in the
Collection Account, to the extent received on or before the related
Determination Date (or, if such Determination Date is not a Business Day, the
next succeeding Business Day) will be applied in the following order of
priority:

 

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(A)         (1) first, to pay all out-of-pocket costs and expenses of the
Collateral Agent, the Collateral Administrator, the Securities Intermediary and
the Custodian incurred in connection with any sale of Collateral or exercise of
other remedial rights pursuant to Section 7.03; (2) second, to pay other
Administrative Expenses in accordance with the priorities specified in the
definition thereof; provided that the amount in this clause (2) shall not exceed
the Administrative Expense Cap for such Payment Date; provided, further, that
upon any commencement of the exercise of remedies described in Section 6.02,
Administrative Expenses paid pursuant to this subclause (A)(2) to the Collateral
Administrator, the Collateral Agent, the Securities Intermediary or the
Custodian shall be paid without regard to the Administrative Expense Cap;

 

(B)         to the Collateral Manager to pay the Collateral Management Fee, plus
any Collateral Management Fee that remains due and unpaid in respect of any
prior Payment Dates as a result of insufficient funds, except, in each case, to
the extent that the Collateral Manager elects to defer such current or
previously due Collateral Management Fee pursuant to this Agreement;

 

(C)         to each Lender, to pay accrued and unpaid Interest on the Advances,
Commitment Fees, and Prepayment Fees, if any, due to each such Lender and
amounts payable to each such Lender under Section 2.10;

 

(D)         to pay principal of the Advances of each Lender (pro rata, based on
each Lender’s Percentage) in an amount required to cure any Borrowing Base
Deficiency or to cure any failure of the Equity Coverage Test or the Minimum
Equity Test;

 

(E)         during the Amortization Period, to pay principal of the Advances of
each Lender (pro rata, based on each Lender’s Percentage) in an amount equal to
the Mandatory Amortization Amount for such Payment Date;

 

(F)         for deposit into the Unfunded Reserve Account until the amount on
deposit therein equals the Unfunded Reserve Required Amount;

 

(G)         (1) first, to the Administrative Agent, to pay any fees, expenses,
indemnities and other amounts payable to the Administrative Agent pursuant the
Administrative Agent Fee Letter and any other Facility Documents and (2) second,
to the Lenders (or related indemnified parties) to pay any fees, expenses,
indemnities and other amounts payable by the Borrower under any Facility
Document;

 

(H)         (1) first, to the payment or application of amounts referred to in
clause (A) above (in the same order of priority specified therein), to the
extent not paid in full pursuant to applications under such clause; and (2)
second, to pay all other Obligations then due and owing (other than Advances
Outstanding), including accrued and unpaid amounts owing to Affected Persons
(if any) under Sections 2.09 and 12.03;

 

(I)         to the Equityholder to make Permitted Tax Distributions; and

 

(J)         to be allocated at the discretion of the Collateral Manager (as set
forth in the Payment Date Report) to any one or more of the following payments:
(1) to prepay the Advances or (2) to the Borrower or its designee, which amounts
may be distributed to the Equityholder.

 

(ii)         On each Payment Date, so long as no Event of Default has occurred
and is continuing or would result therefrom, Principal Proceeds on deposit in
the Collection Account to the extent received on or before the related
Determination Date (or, if such Determination Date is not a Business Day, the
next succeeding Business Day) will be applied in the following order of
priority:

 

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(A)         to the payment of unpaid amounts under clauses (A) through (F)
in clause (i) above (in the same order of priority specified therein), to the
extent not paid in full thereunder;

 

(B)         during the Amortization Period, to pay principal of the Advances of
each Lender (pro rata, based on each Lender’s Percentage) until the Advances are
paid in full; provided that if the amount on deposit in the Unfunded Reserve
Account equals or exceeds the amount of outstanding Advances, the Borrower (or
the Collateral Manager on its behalf) may elect to withdraw such amounts from
the Unfunded Reserve Account and repay the Advances pursuant to this clause (B);

 

(C)         to the payment of unpaid amounts under clauses (G) and (H) in clause
(i) above (in the same order of priority specified therein), to the extent not
paid in full thereunder;

 

(D)         during the Reinvestment Period, at the discretion of the Collateral
Manager, all remaining amounts shall be allocated to any one or more of the
following payments: (1) to the Collection Account for the purchase of additional
Collateral Loans and the funding of Delayed Drawdown Collateral Loans and
Revolving Collateral Loans or (2) for deposit into the Unfunded Reserve Account;
and

 

(E)         during the Amortization Period, to the Borrower or its designee,
which amounts may be distributed to the Equityholder.

 

(iii)        On each Payment Date after the occurrence and during the
continuance of an Event of Default, or if an Event of Default would result from
the application of Collections pursuant to the preceding clauses (i) or (ii),
all Collections on deposit in the Collection Account, to the extent received on
or before the related Determination Date (or, if such Determination Date is not
a Business Day, the next succeeding Business Day) will be applied in the
following order of priority:

 

(A)         (1) first, to pay all out-of-pocket costs and expenses of the
Collateral Agent, the Collateral Administrator, the Securities Intermediary and
the Custodian incurred in connection with any sale of Collateral or exercise of
other remedial rights pursuant to Section 7.03; and (2) second, to pay other
Administrative Expenses in accordance with the priorities specified in the
definition thereof; provided that the amount in this clause (2) shall not exceed
the Administrative Expense Cap for such Payment Date; provided, further, that
upon any commencement of the exercise of remedies described in Section 6.02,
Administrative Expenses paid pursuant to this subclause (A)(2) to the Collateral
Administrator, the Collateral Agent, the Securities Intermediary or the
Custodian shall be paid without regard to the Administrative Expense Cap;

 

(B)         to the Collateral Manager to pay the Collateral Management Fee, plus
any Collateral Management Fee that remains due and unpaid in respect of any
prior Payment Dates as a result of insufficient funds;

 

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(C)         to each Lender, to pay accrued and unpaid Interest on the Advances,
Commitment Fees, and Prepayment Fees due to each such Lender and amounts payable
to each such Lender under Section 2.10;

 

(D)         to pay the principal of the Advances of each Lender (pro rata, based
on each Lender’s Percentage) until paid in full;

 

(E)         for deposit into the Unfunded Reserve Account until the amount on
deposit therein equals the Unfunded Reserve Required Amount;

 

(F)         to the Administrative Agent, to pay any fees, expenses, indemnities
and other amounts payable to the Administrative Agent pursuant the
Administrative Agent Fee Letter and any other Facility Documents;

 

(G)         to the Lenders (or related indemnified parties) to pay any fees,
expenses, indemnities and other amounts payable by the Borrower under any
Facility Document;

 

(H)         to the payment or application of amounts referred to in clause (A)
above (in the same order of priority specified therein), to the extent not paid
in full pursuant to applications under such clause;

 

(I)         to the payment of amounts referred to in clause (B) above, to the
extent not paid in full pursuant to such clause;

 

(J)         to pay all other Obligations then due and owing (other than Advances
Outstanding), including accrued and unpaid amounts owing to Affected Persons
(if any) under Sections 2.09 and 12.03; and

 

(K)         to the Borrower or its designee, which amounts may be distributed to
the Equityholder.

 

(b)          If on any Payment Date the amount available in the Collection
Account is insufficient to make the full amount of the disbursements required by
the Payment Date Report, the Collateral Agent shall make the disbursements
called for in the order and according to the priority set forth under Section
9.01(a) to the extent funds are available therefor.

 

ARTICLE X
SALE OF COLLATERAL LOANS;
PURCHASE OF ADDITIONAL COLLATERAL LOANS

 

Section 10.01.      Sales of Collateral Loans

 

(a)          Sales of Collateral Loans. Subject to the satisfaction (or waiver,
by the Administrative Agent) of the conditions specified in Sections 10.04, the
Borrower may, but will not be required to, sell any Collateral Loan if such sale
meets each of the requirements set forth below:

 

(i)          no Default or Event of Default exists and is continuing or would
result upon giving effect thereto;

 

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(ii)         upon giving effect thereto and to the application of the proceeds
thereof, each of the Coverage Tests, Collateral Quality Test and Concentration
Limitations shall be satisfied (or, if any Collateral Quality Test or any
Concentration Limitation is not satisfied before the making of such sale, the
level of compliance with the Collateral Quality Test or such Concentration
Limitation shall be improved);

 

(iii)        such sale is made for Cash; and

 

(iv)        no adverse selection procedures have been employed by the Borrower
(or the Collateral Manager on behalf of the Borrower) in selecting the
Collateral Loans for sale.

 

(b)          Sales of Equity Securities. The Borrower may sell any Equity
Security at any time without restriction, and shall use its commercially
reasonable efforts to effect the sale of any Equity Security, regardless of
price, within forty-five (45) days of receipt if such Equity Security
constitutes Margin Stock, unless such sale is prohibited by Applicable Law or
contract, in which case such Equity Security should be sold as soon as such sale
is permitted by Applicable Law or contract.

 

(c)          Certain Restrictions. In the case of a sale of a Collateral Loan to
an Affiliate of the Borrower at a price less than the original percentage of par
paid by the Borrower, the purchase price shall not be less than the Asset Value
of such Collateral Loan.

 

(d)          Application of Proceeds of Sales. The Collateral Manager on behalf
of the Borrower shall deposit the proceeds of any sale effected pursuant to this
Section 10.01 into the Collection Account for disbursement in accordance with
Section 9.01 or reinvestment in additional Collateral Loans in accordance with
Section 10.02.

 

Section 10.02.      Purchase of Additional Collateral Loans

 

On any date during the Reinvestment Period, if no Default or Event of Default
has occurred and is continuing, the Collateral Manager on behalf of the Borrower
may, if the conditions specified in this Section 10.02 and Section 10.04 are met
(or, solely in the case of the conditions set forth in Section 10.04, waived by
the Administrative Agent), invest Principal Proceeds (and accrued interest
received with respect to any Collateral Loan to the extent used to pay for
accrued interest on additional Collateral Loans) in additional Collateral Loans;
provided that no Collateral Loan may be purchased unless each of the following
conditions is satisfied as of the date such Collateral Loan is added to the
Collateral:

 

(i)          such obligation is an Eligible Collateral Loan;

 

(ii)         the conditions to making an Advance, as set forth in Section 3.02,
are satisfied.

 

Section 10.03.      [Reserved].

 

Section 10.04.      Conditions Applicable to All Sale and Purchase Transactions

 

(a)          Any transaction effected under this Article X or in connection with
the acquisition of additional Collateral Loans if effected with a Person that is
an Affiliate of the Equityholder (or with an account or portfolio for which the
Equityholder or any of its Affiliates serves as investment adviser), shall be
(i) for fair market value, (ii) on terms no less favorable to the Borrower than
would be the case if such Person were not an Affiliate or as otherwise expressly
permitted in this Agreement and (iii) effected in accordance with all Applicable
Laws.

 

(b)          Upon each acquisition by the Borrower of a Collateral Loan (i) all
of the Borrower’s right, title and interest to such Collateral Loan shall be
subject to the Lien granted to the Collateral Agent pursuant to this Agreement
and (ii) such Collateral Loan shall be Delivered to the Custodian on behalf of
the Collateral Agent.

 

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(c)          The Borrower shall not, nor shall the Collateral Manager on behalf
of the Borrower, acquire (whether by purchase or substitution) or dispose of any
Collateral Loan unless each of the following conditions is met: (a) if such
Collateral Loan is being acquired by the Borrower, it is an Eligible Collateral
Loan, (b) such Collateral Loan is being acquired or disposed of in accordance
with the terms of this Agreement, (c) such Collateral Loan is not being acquired
or disposed of for the primary purpose of recognizing gains or decreasing losses
resulting from market value changes and (d) the Collateral Manager reasonably
believes (which determination shall not be subject to question based on
subsequent events) that such acquisition or disposition will not result in a
downgrade or withdrawal of any rating assigned by a rating agency to the
Advances, if applicable.

 

Section 10.05.      Additional Equity Contributions

 

The Equityholder may, but shall have no obligation to, at any time or from time
to time make a capital contribution to the Borrower for any purpose, including
for the purpose of curing any Default or Event of Default, satisfying the
Coverage Tests, enabling the acquisition or sale of any Collateral Loan or
satisfying any conditions under Section 3.02. Each contribution shall either be
made (a) in Cash, (b) by assignment and contribution of an Eligible Investment
and/or (c) by assignment and contribution of an Eligible Collateral Loan. All
Cash contributed or loaned to the Borrower shall be treated as Principal
Proceeds, except to the extent that the Equityholder specifies that such Cash
shall constitute Interest Proceeds, and shall be deposited into a Collection
Account in accordance with Section 8.02 as designated by the Equityholder.

 

ARTICLE XI
THE AGENTS

 

Section 11.01.      Authorization and Action

 

(a)          Each Lender hereby irrevocably appoints and authorizes the
Administrative Agent and the Collateral Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and, to the extent
applicable, the other Facility Documents as are delegated to such Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto, subject to the terms hereof. No Agent shall have any duties or
responsibilities, except those expressly set forth herein or in the other
Facility Documents to which it is a party or any fiduciary relationship with any
Secured Party and no implied covenants, functions, responsibilities, duties or
obligations or liabilities on the part of such Agent shall be read into this
Agreement or any other Facility Document to which such Agent is a party (if any)
as duties on its part to be performed or observed. No Agent shall have or be
construed to have any other duties or responsibilities in respect of this
Agreement or any other Facility Document and the transactions contemplated
hereby or thereby. As to any matters not expressly provided for by this
Agreement or the other Facility Documents, no Agent shall be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the written instructions of the Required Lenders (or, with
respect to the Collateral Agent, the Administrative Agent); provided that such
Agent shall not be required to take any action which exposes such Agent, in its
judgment, to personal liability, cost or expense or which is contrary to this
Agreement, the other Facility Documents or Applicable Law, or would be, in its
judgment, contrary to its duties hereunder, under any other Facility Document or
under Applicable Law. Each Lender agrees that in any instance in which the
Facility Documents provide that the Administrative Agent’s consent may not be
unreasonably withheld, provide for the exercise of the Administrative Agent’s
reasonable discretion, or provide to a similar effect, it shall not in its
instructions (or by refusing to provide instruction) to the Administrative Agent
withhold its consent or exercise its discretion in an unreasonable manner.

 

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(b)          If the Collateral Agent has been requested or directed by the
Administrative Agent or the Required Lenders to take any action pursuant to any
provision of this Agreement or any other Facility Document, the Collateral Agent
shall not be under any obligation to exercise any of the rights or powers vested
in it by this Agreement or such Facility Document in the manner so requested
unless it shall have been provided indemnity reasonably satisfactory to it
against the costs, expenses and liabilities which may be incurred by it in
compliance with or in performing such request or direction. No provision of this
Agreement or any other Facility Document shall otherwise be construed to require
the Collateral Agent to expend or risk its own funds or to take any action that
could in its judgment cause it to incur any cost, expenses or liability, unless
it is provided indemnity acceptable to it against any such expenditure, risk,
costs, expense or liability. For the avoidance of doubt, the Collateral Agent
shall not have any duty or obligation to take any action to exercise or enforce
any power, right or remedy available to it under this Agreement or any other
Facility Document or any Related Document unless and until directed by the
Required Lenders (or the Administrative Agent on their behalf).

 

(c)          Neither the Collateral Agent nor any officer, agent or
representative thereof shall be personally liable for any action taken by any
such Person in accordance with any notice given by the Administrative Agent or
the Required Lenders pursuant to the terms of this Agreement or any other
Facility Document even if, at the time such action is taken by any such Person,
the Administrative Agent or the Required Lenders or Persons purporting to be the
Administrative Agent or the Required Lenders are not entitled to give such
notice. If any dispute or disagreement shall arise as to the allocation of any
sum of money received by the Collateral Agent hereunder or under any Facility
Document, the Collateral Agent shall have the right to deliver such sum to a
court of competent jurisdiction and therein commence an action for interpleader.

 

(d)          If in performing its duties under this Agreement, the Collateral
Agent is required to decide between alternative courses of action, it 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. 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.

 

(e)          Instructions to Collateral Agent.

 

(i)          The Collateral Agent shall be entitled to refrain from taking any
action unless it has such instruction (in the form of Proper Instructions) from
the Borrower (or the Collateral Manager on the Borrower’s behalf) the Required
Lenders or the Administrative Agent, as applicable, as it reasonably deems
necessary. In the absence of gross negligence, fraud or willful misconduct by
the Collateral Agent, the Collateral Agent shall have no liability for any
action (or forbearance from action) taken pursuant to any Proper Instruction of
the Borrower, the Collateral Manager, the Required Lenders or the Administrative
Agent, as applicable.

 

(ii)         Whenever the Collateral Agent is entitled or required to receive or
obtain any communications or information pursuant to or as contemplated by this
Agreement, it shall be entitled to receive the same in writing, in form, content
and medium reasonably acceptable to it and otherwise in accordance with any
applicable term of this Agreement; and whenever any report or other information
is required to be produced or distributed by the Collateral Agent it shall be in
form, content and medium reasonably acceptable to it and the Borrower, and
otherwise in accordance with any applicable term of this Agreement.

 

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(iii)        In case any reasonable question arises as to its duties hereunder,
the Collateral Agent may, so long as no Event of Default has occurred and is
continuing, request instructions from the Collateral Manager and may, after the
occurrence and during the continuance of an Event of Default, request
instructions from the Administrative Agent, and shall be entitled at all times
to refrain from taking any action unless it has received instructions from the
Collateral Manager or the Administrative Agent, as applicable. The Collateral
Agent shall, in the absence of gross negligence, fraud or willful misconduct by
the Collateral Agent, have no liability, risk or cost for any action taken
pursuant to and in compliance with the instruction of the Administrative Agent.

 

(f)          General Standards of Care for the Collateral Agent. Notwithstanding
any terms herein contained to the contrary, the acceptance by the Collateral
Agent of its appointment hereunder is expressly subject to the following terms,
which shall govern and apply to each of the terms and provisions of this
Agreement (whether or not so stated therein):

 

(i)          The Collateral Agent shall not be deemed to have notice of any
fact, claim or demand with respect hereto unless actually known by a Responsible
Officer of the Collateral Agent or unless (and then only to the extent) received
in writing by the Collateral Agent and specifically referencing this Agreement.
The Collateral Agent shall not be charged with knowledge of any notices,
documents, instruments or reports delivered or prepared by the Collateral
Administrator. The Collateral Agent is not responsible for or chargeable with
knowledge of any terms or conditions contained in any other agreement to which
it is not a party referred to herein. It is hereby acknowledged that the
Collateral Agent shall have no 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 by any Person under any Facility Document or Related Document.

 

(ii)         No provision of this Agreement shall require the Collateral Agent
to expend or risk its own funds, or to take any action (or forbear from action)
hereunder which might in its judgment involve any expense or any financial or
other liability unless it shall be furnished with acceptable indemnification.
Nothing herein shall obligate the Collateral Agent to commence, prosecute or
defend legal proceedings in any instance, whether on behalf of the Borrower or
on its own behalf or otherwise, with respect to any matter arising hereunder, or
relating to this Agreement or the services contemplated hereby.

 

(iii)        The permissive right of the Collateral Agent to take any action
hereunder shall not be construed as a duty.

 

(iv)        The Collateral Agent may act or exercise its duties or powers
hereunder through agents or attorneys-in-fact, and the Collateral Agent shall
not be liable or responsible for the actions or omissions of any such agent or
attorney-in-fact selected by it with reasonable care.

 

(v)         The Collateral Agent shall have no obligation to determine the
Interest Rate or whether an asset is an Eligible Collateral Loan.

 

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Section 11.02.      Delegation of Duties

 

(a)          Each Agent may execute any of its duties under this Agreement and
each other Facility Document by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. No Agent shall be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.

 

(b)          Without limiting the generality of Section 11.02(a), the
Administrative Agent may at any time or from time to time designate one or more
of its Affiliates to execute any of its duties under this Agreement and each
other Facility Document.

 

Section 11.03.      Agents’ Reliance, Etc.

 

(a)          Neither Agent nor any of their respective directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken
by it or them under or in connection with this Agreement or any of the other
Facility Documents, except for its or their own gross negligence, fraud or
willful misconduct. Without limiting the generality of the foregoing, each
Agent: (i) may consult with legal counsel (including counsel for the Borrower or
the Collateral Manager or any of their Affiliates) and independent public
accountants and other experts selected by it and the advice or opinion of such
counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted to be taken by such Agent in good faith in
accordance with such opinion and shall not be liable for any action taken,
suffered or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (ii) makes no warranty or
representation to any Secured Party or any other Person and shall not be
responsible to any Secured Party or any Person for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement or the other Facility Documents; (iii) shall not have any duty to
monitor, ascertain, or investigate as to the performance or observance of any of
the terms, covenants or conditions of this Agreement, the other Facility
Documents, any Related Document or any notice, consent, certificate, instruction
or waiver, report, statement, opinion, direction or other instrument or writing
on the part of the Borrower, the Collateral Manager or any other Person or to
inspect the property (including the books and records) of the Borrower or the
Collateral Manager; (iv) shall not be responsible to any Secured Party or any
other Person for the due execution, legality, validity, enforceability,
perfection, genuineness, sufficiency or value of any Collateral (or the
validity, perfection, priority or enforceability of the Liens on the
Collateral), this Agreement, the other Facility Documents, any Related Document
or any other instrument or document furnished pursuant hereto or thereto; (v)
shall incur no liability under or in respect of this Agreement or any other
Facility Document by relying on, acting upon (or by refraining from action in
reliance on) any notice, consent, certificate (including, for the avoidance of
doubt, the Borrowing Base Calculation Statement), instruction or waiver, report,
statement, opinion, direction or other instrument or writing (which may be
delivered by telecopier, email, cable or telex, if acceptable to it) reasonably
believed by it to be genuine and believe by it to be signed or sent by the
proper party or parties; (vi) shall not be responsible to any Person for any
recitals, statements, information, representations or warranties regarding the
Borrower or the Collateral or in any document, certificate or other writing
delivered in connection herewith or therewith or for the execution,
effectiveness, genuineness, validity, enforceability, perfection,
collectability, priority or sufficiency of thereof or any such other document or
the financial condition of any Person or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions related to any Person or the existence or possible existence of
any Default or Event of Default; and (vii) shall not have any obligation
whatsoever to any Person to assure that any collateral exists or is owned by any
Person or is cared for, protected or insured or that any liens have been
properly or sufficiently or lawfully created, perfected, protected or enforced
or are entitled to any particular priority, or to exercise or to continue
exercising at all or in any manner or under any duty of care, disclosure or
fidelity any of the rights, authorities and powers granted or available with
respect thereto. No Agent shall have any liability to the Borrower, any Lender
or any other Person for the Borrower’s, the Collateral Manager’s, any Lender’s,
or any other Person’s, as the case may be, performance of, or failure to
perform, any of their respective obligations and duties under this Agreement or
any other Facility Document.

 

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(b)          No Agent shall be liable for the actions of omissions of any other
Agent (including concerning the application of funds), or under any duty to
monitor or investigate compliance on the part of any other Agent with the terms
or requirements of this Agreement, any Facility Document or any Related
Document, or their duties hereunder or thereunder. In the absence of gross
negligence, fraud or willful misconduct by such Agent, each Agent shall be
entitled to assume the due authority of any signatory and genuineness of any
signature appearing on any instrument or document it may receive (including each
Notice of Borrowing received hereunder). No Agent shall be liable for any action
taken in good faith and reasonably believed by it to be within the powers
conferred upon it, or taken by it pursuant to any direction or instruction by
which it is governed, or omitted to be taken by it by reason of the lack of
direction or instruction required hereby for such action (including for refusing
to exercise discretion or for withholding its consent in the absence of its
receipt of, or resulting from a failure, delay or refusal on the part of the
Required Lenders to provide, written instruction to exercise such discretion or
grant such consent from the Required Lenders, as applicable). No Agent shall be
liable for any error of judgment made in good faith unless such Agent was
grossly negligent in ascertaining the relevant facts or engaged in fraud or
willful misconduct. Nothing herein or in any Facility Document or Related
Document shall obligate any Agent to advance, expend or risk its own funds, or
to take any action which in its reasonable judgment may cause it to incur any
expense or financial or other liability for which it is not adequately
indemnified. No Agent shall be liable for any indirect, special, punitive or
consequential damages (including lost profits) whatsoever, even if it has been
informed of the likelihood thereof and regardless of the form of action. No
Agent shall be charged with knowledge or notice of any matter unless actually
known to a Responsible Officer of such Agent, or unless and to the extent
written notice of such matter is received by such Agent at its address in
accordance with Section 12.02. Any permissive grant of power to an Agent
hereunder shall not be construed to be a duty to act. Neither Agent shall be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, entitlement order, approval or other paper or document.
Neither Agent shall be liable for any error of judgment, or for any act done or
step taken or omitted by it, in good faith, or for any mistakes of fact or law,
or for anything that it may do or refrain from doing in connection herewith,
except in the case of its willful misconduct or grossly negligent performance or
omission of its duties.

 

(c)          No Agent shall be responsible or liable for delays or failures in
performance resulting from acts beyond its control, provided that such Agent
takes commercially reasonable efforts to resume performance after the cessation
of such acts. Such acts shall include acts of God, strikes, lockouts, riots,
acts of war, epidemics, governmental regulations imposed after the fact, fire,
communication line failures, computer viruses, power failures, earthquakes or
other disasters.

 

(d)          The delivery of reports and other documents and information to the
Collateral Agent hereunder or under any other Facility Document is for
informational purposes only and the Collateral Agent’s, receipt of such
documents and information shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein. The Collateral Agent is hereby authorized and directed to execute and
deliver the other Facility Documents to which it is a party. Whether or not
expressly stated in such Facility Documents, in performing (or refraining from
acting) thereunder, the Collateral Agent shall have all of the rights, benefits,
protections and indemnities which are afforded to it in this Agreement.

 

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(e)          Each Lender acknowledges that, except as expressly set forth in
this Agreement, neither Agent has made any representation or warranty to it, and
that no act by either Agent hereafter taken, including any consent and
acceptance of any assignment or review of the affairs of the Borrower, shall be
deemed to constitute any representation or warranty by such Agent to any Secured
Party as to any matter. Each Lender represents to each Agent that it has,
independently and without reliance upon such Agent and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Borrower and the Collateral Manager,
and made its own decision to enter into this Agreement and the other Facility
Documents to which it is a party. Each Lender also represents that it will,
independently and without reliance upon either Agent or any other Secured Party
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement and the Facility Documents, and to make such investigations
as it deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Borrower and the Collateral Manager. Neither Agent shall have any duty or
responsibility to provide any Secured Party with any credit or other information
concerning the business, prospects, operations, property, financial or other
condition or creditworthiness of the Borrower or Collateral Manager which may
come into the possession of such Agent.

 

Section 11.04.      Indemnification

 

Each of the Lenders agrees to indemnify and hold the Agents harmless (to the
extent not reimbursed by or on behalf of the Borrower pursuant to Section 12.04
or otherwise) from and against any and all Liabilities which may be imposed on,
incurred by, or asserted against the Agents in any way relating to or arising
out of this Agreement or any other Facility Document or any Related Document or
any action taken or omitted by the Agents under this Agreement or any other
Facility Document or any Related Document; provided that no Lender shall be
liable to any Agent for any portion of such Liabilities resulting from such
Agent’s gross negligence or willful misconduct; and provided, further, that no
Lender shall be liable to the Collateral Agent for any portion of such
Liabilities unless such Liabilities are imposed on, incurred by, or asserted
against the Collateral Agent as a result of any action taken, or not taken, by
the Collateral Agent at the direction of the Administrative Agent or such Lender
or Lenders, as the case may be, in accordance with the terms and conditions set
forth in this Agreement (it being understood and agreed that the Collateral
Agent shall be under no obligation to exercise or to honor any of the rights or
powers vested in it by this Agreement at the request or direction of the
Administrative Agent or any of the Lenders (or other Persons authorized or
permitted under the terms hereof to make such request or give such direction)
pursuant to this Agreement or any other Facility Document, unless the
Administrative Agent or such Lenders shall have provided to the Collateral Agent
security or indemnity reasonably satisfactory to it against the costs, expenses
(including reasonable and documented attorney’s fees and expenses) and
Liabilities which might reasonably be incurred by it in compliance with such
request or direction, whether such indemnity is provided under this Section
11.04 or otherwise). The rights of the Agents and obligations of the Lenders
under or pursuant to this Section 11.04 shall survive the termination of this
Agreement, and the earlier removal or resignation of the any Agent hereunder.

 

Section 11.05.      Successor Agents

 

(a)          Subject to the terms of this Section 11.05, each Agent may, upon
thirty (30) days’ notice to the Lenders and the Borrower, resign as
Administrative Agent or the Collateral Agent, as applicable. If an Agent shall
resign, then the Required Lenders shall appoint a successor agent. If for any
reason a successor agent is not so appointed and does not accept such
appointment within thirty (30) days of notice of resignation, such Agent may
appoint a successor agent.

 

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(b)          Any successor Administrative Agent and any successor Collateral
Agent shall be a U.S. Person (within the meaning of Section 7701(a)(30) of the
Code) and shall be a bank with an office in the United States of America or an
Affiliate of such bank and a “financial institution” within the meaning of
Treasury Regulations Section 1.1441-1 (as in effect on the date hereof).
The appointment of any successor Agent shall be subject to the prior written
consent of the Borrower (which consent shall not be unreasonably withheld or
delayed); provided that the consent of the Borrower to any such appointment
shall not be required if an Event of Default shall have occurred and is
continuing. Any resignation or removal of an Agent shall be effective upon the
appointment of a successor agent pursuant to this Section 11.05. After the
effectiveness of any retiring or removed Agent’s resignation or removal
hereunder as Agent, the retiring or removed Agent shall be discharged from its
duties and obligations hereunder and under the other Facility Documents and the
provisions of this Article XI shall continue in effect for its benefit with
respect to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and under the other Facility Documents.

 

(c)          Subject to the terms of this Section 11.05(c) the Administrative
Agent may, upon thirty (30) days’ notice to the Collateral Manager, the
Equityholder, the Collateral Agent, the Lenders and the Borrower, remove and
discharge the Collateral Agent from the performance of its obligations under
this Agreement and under the other Facility Documents without cause at any time.
If the Collateral Agent shall be removed pursuant to this Section 11.05(c), then
the Administrative Agent during such thirty (30) day period shall appoint a
successor Collateral Agent. The appointment of any successor Collateral Agent
pursuant to this Section 11.05(c) shall be subject to the prior written consent
of the Borrower (provided that no Event of Default has occurred and is
continuing) and the Required Lenders. If the Collateral Agent is removed
pursuant to this Section 11.05(c), the Collateral Agent shall be removed in all
other capacities in which it serves under this Agreement and under any of the
other Facility Documents (including in its capacity as Custodian), but not in
its capacities as Administrative Agent or Lender, if applicable. Any removal of
the Collateral Agent pursuant to this Section 11.05(c) shall be effective upon
the appointment of a successor Collateral Agent pursuant to this Section
11.05(c) and the acceptance of such appointment by such successor. After the
effectiveness of any removal of the Collateral Agent pursuant to this Section
11.05(c), the Collateral Agent shall be discharged from its duties and
obligations hereunder and under the other Facility Documents (but not in its
capacities as Administrative Agent or Lender, if applicable) and the provisions
of this Article XI and Section 11.05(c) shall continue in effect for its benefit
with respect to any actions taken or omitted to be taken by it while it was the
Collateral Agent under this Agreement and under the other Facility Documents. In
the event a successor Collateral Agent shall not be appointed within such thirty
(30) day period, the Collateral Agent may petition a court of competent
jurisdiction for the appointment of a successor Collateral Agent.

 

Section 11.06.      Merger, Conversion, Consolidation or Succession to Business
of Agents

 

Any organization or entity into which any Agent may be merged or converted or
with which it may be consolidated, or any organization or entity resulting from
any merger, conversion or consolidation to which such Agent shall be a party, or
any organization or entity succeeding to all or substantially all of the
corporate trust business of such Agent, shall be the successor of such Agent
hereunder, without the execution or filing of any document or any further act on
the part of any of the parties hereto.

 

Section 11.07.      Titles

 

Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Facility Document, no Person listed on the cover page
of this Agreement as a “bookrunner” or “arranger” shall have any duties or
responsibilities, nor shall such Person have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Facility Document or otherwise exist against such Persons
in their respective capacities as such.

 

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ARTICLE XII
MISCELLANEOUS

 

Section 12.01.      No Waiver; Modifications in Writing

 

(a)          No failure or delay on the part of any Secured Party exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. Any waiver of any provision of this Agreement or any other Facility
Document, and any consent to any departure by any party to this Agreement or any
other Facility Document from the terms of any provision of this Agreement or
such other Facility Document, shall be effective only in the specific instance
and for the specific purpose for which given. No notice to or demand on the
Borrower, the Collateral Manager or the Equityholder in any case shall entitle
the Borrower, the Collateral Manager or the Equityholder to any other or further
notice or demand in similar or other circumstances.

 

(b)          No amendment, modification, supplement or waiver of this Agreement
shall be effective unless signed by the Borrower, the Collateral Manager, the
Equityholder, the Collateral Administrator, the Custodian, and the Collateral
Agent; provided that:

 

(i)          any Fundamental Amendment shall require the written consent of all
Lenders (or, in the case of clauses (a) through (d) of the definition of
Fundamental Amendment, in addition to the consent of the foregoing, each Lender
directly affected thereby);

 

(ii)         no such amendment, modification, supplement or waiver shall amend,
modify or otherwise affect the rights or duties of any Agent hereunder without
the prior written consent of such Agent;

 

(iii)        any amendment to Section 12.06(a)(iv), clause (a)(ii) of the first
proviso to Section 12.09, or Section 12.18 shall require the consent of each CP
Lender.

 

Section 12.02.      Notices, Etc.

 

(a)          Except where telephonic instructions are authorized herein to be
given, all notices, demands, instructions and other communications required or
permitted to be given to or made upon any party hereto shall be in writing,
unless otherwise expressly specified herein, and shall be (i) personally
delivered or sent by registered, certified or express mail, postage prepaid, or
by facsimile transmission, or by prepaid courier service, or by electronic mail
(if the recipient has provided an email address) to the address, facsimile
number or email address, as applicable, set forth with respect to such party on
Schedule 8 (or, if not provided on Schedule 8 with respect to any party, such
address, facsimile number or email address provided by such party in writing to
the Administrative Agent), (ii) in the case of notices to any Lender, posted to
Intralinks® (to the extent such system is available and set up by or at the
direction of Administrative Agent prior to posting) in an appropriate location
by uploading such notice, demand, request, direction or other communication to
www.intralinks.com, faxing it to 866-545-6600 with an appropriate bar-code fax
coversheet or using such other means of posting to Intralinks® as may be
available and reasonably acceptable to the Administrative Agent prior to such
posting, or (iii) in the case of notices to any Lender, posted to any other
electronic system approved by or set up by or at the direction of the
Administrative Agent, and shall in each case be deemed to be given for purposes
of this Agreement on the day that such writing is received by the intended
recipient thereof or posted in accordance with the provisions of this Section
12.02. Unless otherwise specified in a notice sent or delivered in accordance
with the foregoing provisions of this Section 12.02, notices, demands,
instructions and other communications in writing shall be given to or made upon
the respective parties hereto at their respective addresses (or to their
respective facsimile numbers or email addresses) indicated in Schedule 8 (or, if
not provided on Schedule 8 with respect to any party, such address, facsimile
number or email address provided in writing by such party to the Administrative
Agent), and, in the case of telephonic instructions or notices, by calling the
telephone number or numbers indicated for such party in Schedule 8 (or, if not
provided on Schedule 8 with respect to any party, such telephone number or
numbers provided in writing by such party to the Administrative Agent). Each
party shall notify the Administrative Agent in writing of any changes in the
address, facsimile number, telephone number or email address to which notices to
such Person should be directed, and of such other administrative information as
the Administrative Agent shall reasonably request.

 

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(b)          Each of the Collateral Agent, the Custodian and the Collateral
Administrator hereby agrees to accept and act upon instructions or directions
pursuant to this Agreement sent by unsecured e-mail (or .pdf files of executed
documents), facsimile transmission or other similar unsecured electronic
methods, provided that any person providing such instructions or directions
shall provide to any of the Collateral Agent, the Custodian or the Collateral
Administrator, as applicable, an incumbency certificate listing such designated
persons, which such incumbency certificate shall be amended and replaced
whenever a person is to be added or deleted from the listing. If any party
hereto elects to give any of the Collateral Agent, the Custodian or the
Collateral Administrator, as applicable, e-mail (or .pdf files of executed
documents) or facsimile instructions (or instructions by a similar electronic
method), the Collateral Agent’s, the Custodian’s or the Collateral
Administrator’s understanding of such instructions actually received by any of
the Collateral Agent, the Custodian or the Collateral Administrator, as
applicable, shall be deemed controlling in the event that such instructions are
ambiguous; provided that prior to acting in response to any such instructions
that it deems to be ambiguous, the Collateral Agent, Custodian or Collateral
Administrator shall use commercially reasonable efforts to contact the
instructing party and obtain from such instructing party any necessary
clarifications with respect to such instructions. Each of the other parties
hereto understands and agrees that the none of the Collateral Agent, the
Custodian or the Collateral Administrator can determine the identity of the
actual sender of such instructions and that the Collateral Agent, the Custodian
or the Collateral Administrator shall conclusively presume that directions that
purport to have been sent by an officer listed on the incumbency certificate
provided to it have been sent by such officer. The other parties hereto shall be
responsible for ensuring that only authorized officers transmit such
instructions to the Collateral Agent, the Custodian or the Collateral
Administrator and that each such party is solely responsible to safeguard the
use and confidentiality of applicable user and authorization codes, passwords
and/or authentication keys upon receipt by it. None of the Collateral Agent, the
Custodian or the Collateral Administrator shall be liable for any losses, costs
or expenses arising directly or indirectly from the Collateral Agent’s, the
Custodian’s or the Collateral Administrator’s, as applicable, reasonable, good
faith reliance upon and compliance with such instructions, notwithstanding that
such directions conflict with or are inconsistent with a subsequent written
instruction, subject to the duty of care applicable to such Person acting in
such capacity. Each of the other parties hereto agrees (i) to assume all risks
arising out of its respective use of such electronic methods to submit
instructions and directions to any of the Collateral Agent, the Custodian or the
Collateral Administrator, as applicable, including without limitation the risk
of any of the Collateral Agent, the Custodian or the Collateral Administrator,
as applicable, acting on unauthorized instructions, and the risk of interception
and misuse by third parties, (ii) that it is fully informed of the protections
and risks associated with the various methods of transmitting Instructions to
the Collateral Agent, the Custodian or the Collateral Administrator and that
there may be more secure methods of transmitting instructions than the method(s)
selected by it, (iii) that the security procedures (if any) to be followed in
connection with its transmission of instructions provide to it a commercially
reasonable degree of protection in light of its particular needs and
circumstances and (iv) to notify the Collateral Agent, the Custodian or the
Collateral Administrator immediately upon learning of any compromise or
unauthorized use of the security procedures.

 

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Section 12.03.      Taxes

 

(a)          Any and all payments by, or on account of any obligation of the
Borrower under any Facility Document shall be made without deduction or
withholding for any Taxes, except as required by applicable Law. If any
applicable Law requires the deduction or withholding of any Tax from any such
payment by the Borrower, the Collateral Agent or the Administrative Agent, then
the applicable Borrower, the Collateral Agent or the Administrative Agent (as
applicable) 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 a Non-Excluded
Tax, then the sum payable by the Borrower 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 Secured Party receives an amount equal to the sum it
would have received had no such deduction or withholding been made.

 

(b)          In addition, the Borrower agrees to timely pay (or at the option of
the Administrative Agent, timely reimburse it for the payment of) any present or
future stamp, court or documentary, intangible, recording or filing taxes or any
other excise or property taxes, charges or similar Taxes or levies that arise
from any payment made hereunder, under the Notes or under any other Facility
Document, or from the execution, delivery, performance enforcement or
registration of, from the receipt or perfection of a security interest under, or
otherwise with respect to, this Agreement, the Notes or under any other Facility
Document, except any such Taxes that are Other Connection Taxes imposed with
respect to an assignment (other than an assignment made pursuant to Section 2.16
or Section 12.03(g)) (collectively, the “Other Taxes”).

 

(c)          The Borrower agrees to indemnify, within ten (10) days after demand
therefor each of the Secured Parties for (i) the full amount of Non-Excluded
Taxes or Other Taxes (including any Non-Excluded Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 12.03) paid or
payable by any Secured Party (or required to be withheld or deducted from
payments to a Secured Party) and (ii) any reasonable expenses arising therefrom
or with respect thereto, in each case whether or not such Non-Excluded Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate describing in reasonable detail the basis
thereof and the amount of such payment or liability will be promptly delivered
to the Borrower 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 or other Secured
Party and shall be conclusive absent manifest error.

 

(d)          Promptly after the date of any payment of Taxes pursuant to this
Section 12.03, the Borrower will furnish to each Agent the original or a
certified copy of a receipt issued by the relevant Governmental Authority
evidencing payment thereof (or other evidence of payment as may be reasonably
satisfactory to such Agent).

 

(e)          If any payment is made by the Borrower (or the Collateral Manager
on its behalf) to or for the account of any Secured Party after deduction for or
on account of any Non-Excluded Taxes or Other Taxes, and an indemnity payment or
additional amounts are paid by the Borrower pursuant to this Section 12.03,
then, if such Secured Party in its sole discretion, but acting in good faith,
determines that it has received a refund of such Non-Excluded Taxes or Other
Taxes, such Secured Party shall, to the extent that it can do so without
prejudice apply for such refund and reimburse the Borrower (or the Collateral
Manager, as applicable) such amount of any refund (but only to the extent of
indemnity payments made under this Section with respect to Taxes giving rise to
such refund) received (net of reasonable out-of-pocket expenses, including
Taxes, incurred and without interest, other than interest received by the
applicable Secured Party from the relevant Governmental Authority) as such
Secured Party shall determine in its sole discretion, but acting in good faith,
to be attributable to the relevant Non-Excluded Taxes or Other Taxes; provided
that in the event that such Secured Party is required to repay such refund to
the relevant taxing authority, the Borrower agrees to return the amount paid to
such Secured Party pursuant to this paragraph (e) (plus any penalties, interest
or other charges imposed by the relevant Governmental Authority).
Notwithstanding anything to the contrary in this paragraph (e), in no event will
the Secured Party be required to pay any amount to an indemnifying party
pursuant to this paragraph (e) the payment of which would place the Secured
Party in a less favorable net after-Tax position than the Secured Party would
have been in if the Tax subject to indemnification and giving rise to such
refund had not been deducted, withheld or otherwise imposed and the
indemnification payments or additional amounts with respect to such Tax had
never been paid.

 

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(f)          Each Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under this Agreement or any
Facility Document shall deliver to the Borrower and each Agent, at the time or
times reasonably requested by the Borrower or such Agent, such properly
completed and executed documentation reasonably requested by the Borrower or
such Agent as will permit such payments to be made without withholding or at a
reduced rate of withholding.  In addition, each Lender, if reasonably requested
by the Borrower or any Agent, shall deliver such other documentation reasonably
requested by the Borrower or such Agent as will enable the Borrower or such
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 sub-clauses (A), (B)
and (D) of Section 12.03(f)(i)) 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.

 

(i)          Without limiting the generality of the foregoing.

 

(A)         any Lender that is a U.S. Person (as defined in Section 7701(a)(30)
of the Code) shall deliver to the Borrower and the Agents on or prior to the
date on which such Lender becomes a Lender under this Agreement (and from time
to time thereafter upon the reasonable request of the Borrower or the Agents),
executed originals of IRS Form W-9 certifying that such Lender is exempt from
U.S. federal backup withholding tax;

 

(B)         any Lender that is not a “United States person” under Section
7701(a)(30) of the Code (a “Non-U.S. Lender”) shall, to the extent it is legally
entitled to do so, deliver to the Borrower and the Agents (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Non-U.S. Lender becomes a Lender under this Agreement (and from time to
time thereafter upon the reasonable request of the Borrower or an Agent),
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 Facility Document, executed originals of IRS Form W-8BEN-E
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 Facility Document, IRS Form W-8BEN-E
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)         executed originals of IRS Form W-8ECI;

 

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(iii)        in the case of a Non-U.S. 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 E-1 to the effect that such
Non-U.S. Lender is not a “bank” within the meaning of Section 881(C)(3)(A) of
the Code, a “10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code or a “controlled foreign corporation” described
in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and
(y) executed originals of IRS Form W-8BEN-E; or

 

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

 

(C)         any Non-U.S. Lender shall, to the extent it is legally entitled to
do so, deliver to the Borrower and the Agents (in such number of copies as shall
be requested by the recipient) on or prior to the date on which such Non-U.S.
Lender becomes a Lender under this Agreement (and from time to time thereafter
upon the reasonable request of the Borrower or Agents), 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 Borrower or the Agents to determine the withholding or deduction
required to be made; and

 

(D)         if a payment made to a Lender under any Facility Document would be
subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code as applicable), such
Lender shall deliver to the Borrower and the Agents at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Agents 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 Borrower or the Agents as may be
necessary for the Borrower and the Agents 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 Borrower and the Agents in writing
of its legal inability to do so.

 

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(g)          If any Secured Party requires the Borrower to pay any additional
amount to such Secured Party or any Governmental Authority for the account of
such Secured Party or to indemnify such Secured Party pursuant to this Section
12.03, then such Secured Party shall use reasonable efforts to designate a
different lending office for funding or booking its Advances hereunder or to
assign its rights and obligations hereunder to another of its offices, branches
or affiliates, if such Secured Party determines, in its sole discretion that
such designation or assignment (i) would eliminate or reduce amounts payable
pursuant to this Section 12.03 in the future and (ii) would not subject such
Secured Party to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Secured Party. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Secured Party in connection with
any such designation or assignment.

 

(h)          Nothing in this Section 12.03 shall be construed to require any
Secured Party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the Borrower or any other
Person.

 

(i)          Each Lender shall severally indemnify each Agent, within ten (10)
days after demand therefor, for (i) any Non-Excluded Taxes and Other Taxes
attributable to such Lender (but only to the extent that the Borrower has not
already indemnified such Agent for such Non-Excluded Taxes or Other Taxes, as
applicable, and without limiting the obligation of the Borrower to do so), (ii)
any Taxes attributable to such Lender’s failure to comply with the provisions of
Section 12.06(c) 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 such Agent in connection with any Facility 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 applicable Agent shall be conclusive
absent manifest error. Each Lender hereby authorizes each Agent to set off and
apply any and all amounts at any time owing to such Lender under any Facility
Document or otherwise payable by such Agent to the Lender from any other source
against any amount due to such Agent under this paragraph (i).

 

Section 12.04.      Costs and Expenses; Indemnification

 

(a)          The Borrower agrees to promptly pay on written demand all
reasonable and documented out-of-pocket costs and expenses of the Agents, the
Custodian, the Securities Intermediary and the Collateral Administrator in
connection with the preparation, review, negotiation, reproduction, execution
and delivery of this Agreement and the other Facility Documents, including the
reasonable and documented fees and disbursements of one outside counsel for the
Administrative Agent plus, if necessary, one additional local counsel, one
outside counsel for the Collateral Agent, the Custodian, the Securities
Intermediary and the Collateral Administrator (unless one counsel shall not be
able to represent such parties due to an actual or perceived conflict of
interest), costs and expenses of creating, perfecting, releasing or enforcing
the Collateral Agent’s security interests in the Collateral, including filing
and recording fees, expenses and taxes, stamp or documentary taxes, search fees,
UCC filing fees, and the equivalent thereof in any foreign jurisdiction, and all
other related fees and expenses in connection therewith, and in connection with
the administration and any modification or amendment of this Agreement, the
Notes or any other Facility Document and advising the Agents as to their
respective rights, remedies and responsibilities. The Borrower agrees to
promptly pay on written demand all reasonable and documented costs and expenses
of each of the Secured Parties in connection with the enforcement of this
Agreement, the Notes or any other Facility Document, including all reasonable
and documented costs and expenses incurred by the Collateral Agent or the
Custodian in connection with the preservation, collection, foreclosure or
enforcement of the Collateral subject to the Facility Documents or any interest,
right, power or remedy of the Collateral Agent or in connection with the
collection or enforcement of any of the Obligations or the proof, protection,
administration or resolution of any claim based upon the Obligations in any
insolvency proceeding, including all reasonable and documented fees and
disbursements of attorneys, accountants, auditors, consultants, appraisers and
other professionals engaged by the Collateral Agent and the Collateral
Administrator. Without prejudice to its rights hereunder, the expenses and the
compensation for the services of the Secured Parties are intended to constitute
expenses of administration under any applicable bankruptcy law.

 

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(b)          The Borrower agrees to indemnify and hold harmless each Secured
Party, each Conduit Trustee, and each of their Affiliates and the respective
officers, directors, employees, agents, managers of, and any Person controlling
any of, the foregoing (each, an “Indemnified Party”) from and against any and
all Liabilities that may be incurred by or asserted or awarded against any
Indemnified Party (limited, solely in the case of Liabilities owing to the
Administrative Agent in respect of attorney’s fees and expenses, to the
reasonable and documented attorney’s fees and expenses of one outside counsel
and one local counsel in each applicable jurisdiction), in each case arising out
of or in connection with or by reason of the execution, delivery, enforcement,
performance, administration of or otherwise arising out of or incurred in
connection with this Agreement, any other Facility Document, any Related
Document or any transaction contemplated hereby or thereby (and regardless of
whether or not any such transactions are consummated), including any such
Liability that is incurred or arises out of or in connection with, or by reason
of any one or more of the following: (i) preparation for a defense of any
investigation, litigation or proceeding arising out of, related to or in
connection with this Agreement, any other Facility Document, any Related
Document or any of the transactions contemplated hereby or thereby; (ii) any
breach or alleged breach of any covenant by the Borrower or the Collateral
Manager contained in any Facility Document; (iii) any representation or warranty
made or deemed made by the Borrower or the Collateral Manager contained in any
Facility Document or in any certificate, statement or report delivered in
connection therewith is, or is alleged to be, false or misleading; (iv) any
failure by the Borrower or the Collateral Manager to comply with any Applicable
Law or contractual obligation binding upon it; (v) any failure to vest, or delay
in vesting, in the Collateral Agent (for the benefit of the Secured Parties) a
perfected security interest in all of the Collateral free and clear of all Liens
(other than Permitted Liens); (vi) any action or omission, not expressly
authorized by the Facility Documents, by the Borrower or any Affiliate of the
Borrower which has the effect of impairing the validity or enforceability of the
Collateral or the rights of the Agents or the other Secured Parties with respect
thereto; (vii) the failure to file, or any delay in filing, financing
statements, continuation statements or the equivalent thereof in any foreign
jurisdiction or other similar instruments or documents under the UCC of any
applicable jurisdiction or other Applicable Law with respect to any Collateral,
whether at the time of any Advance or at any subsequent time; (viii) any
dispute, claim, offset or defense (other than the discharge in bankruptcy of an
Obligor) of an Obligor to the payment with respect to any Collateral (including
a defense based on any Collateral Loan (or the Related Documents evidencing such
Collateral Loan) not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms, except to the extent such
unenforceability is due to the bankruptcy of such Obligor), or any other claim
resulting from any related property securing such Collateral Loan; (ix) the
commingling of Collections on the Collateral at any time with other funds; (x)
any failure by the Borrower to give reasonably equivalent value to the
applicable seller, in consideration for the transfer by such seller to the
Borrower of any item of Collateral or any attempt by any Person to void or
otherwise avoid any such transfer under any statutory provision or common law or
equitable action, including any provision of the Bankruptcy Code; (xi) the
failure of the Borrower, the Collateral Manager or any of their respective
agents or representatives to remit to the Collection Account, within one (1)
Business Day of receipt, Collections on the Collateral Loans remitted to the
Borrower, the Collateral Manager or any such agent or representative as provided
in this Agreement; and (xii) any Default or Event of Default; in each case,
except (A) to the extent any such Liability is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted solely from the
gross negligence, fraud or willful misconduct of such Indemnified Party, any of
its Affiliates or the respective officers, directors, employees, agents,
managers of, and any Person controlling any of, the foregoing, (B) to the extent
any such Liability results from a claim brought by the Borrower against an
Indemnified Party (other than the Collateral Agent, the Custodian or the
Collateral Administrator) for material breach of such Indemnified Party’s
obligations hereunder or under any other Facility Document, if the Borrower has
obtained a final, nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction, or (C) to the extent any such
Liability results from a claim solely between or among Indemnified Parties
(other than any claims against an Indemnified Party in its capacity or in
fulfilling its role as the Administrative Agent, Collateral Agent, Custodian,
Securities Intermediary, Collateral Administrator or any similar role) and not
arising out of any act or omission on the part of the Borrower, the Collateral
Manager or their respective Affiliates. In the case of an investigation,
litigation or proceeding to which the indemnity in this paragraph applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by the Borrower, any of the Borrower’s equityholders or
creditors, an Indemnified Party or any other Person, whether or not an
Indemnified Party is otherwise a party hereto. The Borrower shall not have any
liability hereunder to any Indemnified Party to the extent an Indemnified Party
affects any settlement of a matter that is (or could be) subject to
indemnification hereunder without the prior written consent of the Borrower
(which consent shall not be unreasonably withheld or delayed), but if settled
with such consent or if there is a final judgment for the party claiming against
such Indemnified Party, the Borrower agrees to indemnify the Indemnified Party
from and against any loss or liability by reason of such settlement or judgment
to the extent set forth in this Section 12.04(b).  The Borrower shall not,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is a party (or, in the case of a threatened proceeding, could
reasonably have been expected to be a party if such proceeding had been brought)
and indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement (i) does not include a statement as to or admission of, fault,
culpability or a failure to act by or on behalf of any such Indemnified Party,
and (ii) includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such proceeding. In no case
shall the Borrower be responsible for any Indemnified Party’s lost revenues or
lost profits. This Section 12.04(b) shall not apply with respect to Taxes other
than any Taxes that represent losses, claims, damages, etc. arising from any
non-Tax claim.

 

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(c)          Indemnity by Equityholder. The Equityholder agrees to indemnify and
hold harmless each Indemnified Party from and against any and all Liabilities
that may be incurred by or asserted or awarded against any Indemnified Party, in
each case arising out of or in connection with any acts or omissions of the
Equityholder in connection with this Agreement, any other Facility Document, any
Related Document or any transaction contemplated hereby or thereby (and
regardless of whether or not any such transactions are consummated), including
(but not limited to) any such Liability that is incurred or arises out of or in
connection with, or by reason of any one or more of the following: (i) any
breach or alleged breach of any covenant by the Equityholder contained in any
Facility Document; (ii) any representation or warranty made or deemed made by
the Equityholder contained in any Facility Document or in any certificate,
statement or report delivered in connection therewith is, or is alleged to be,
false or misleading; (iii) any failure by the Equityholder to comply with any
Applicable Law or contractual obligation binding upon it; and (iv) any action or
omission, not expressly authorized by the Facility Documents, by the
Equityholder or any Affiliate of the Equityholder which has the effect of
impairing the validity or enforceability of the Collateral or the rights of the
Agents or the other Secured Parties with respect thereto; except to the extent
any such Liability is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted solely from the gross negligence, fraud
or willful misconduct of such Indemnified Party, any of its Affiliates or the
respective officers, directors, employees, agents, managers of, and any Person
controlling any of, the foregoing. In the case of an investigation, litigation
or proceeding to which the indemnity in this paragraph applies, such indemnity
shall be effective whether or not such investigation, litigation or proceeding
is brought by the Equityholder, any of the Equityholder’s equityholders or
creditors, an Indemnified Party or any other Person, whether or not an
Indemnified Party is otherwise a party hereto. The Equityholder shall not have
any liability hereunder to any Indemnified Party to the extent an Indemnified
Party affects any settlement of a matter that is (or could be) subject to
indemnification hereunder without the prior written consent of the Equityholder
(which consent shall not be unreasonably withheld or delayed), but if settled
with such consent or if there be a final judgment for the plaintiff, the
Equityholder agrees to indemnify the Indemnified Party from and against any loss
or liability by reason of such settlement or judgment to the extent set forth in
this Section 12.04(c).  The Equityholder shall not, without the prior written
consent of the Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Party is a party (or,
in the case of a threatened proceeding, could reasonably have been expected to
be a party if such proceeding had been brought) and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement (i) does not
include a statement as to or admission of, fault, culpability or a failure to
act by or on behalf of any such Indemnified Party, and (ii) includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such proceeding. In no case shall the
Equityholder be responsible for any Indemnified Party’s lost revenues or lost
profits. This Section 12.04(c) shall not apply with respect to Taxes other than
any Taxes that represent losses, claims, damages, etc. arising from any non-Tax
claim.

 

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Section 12.05.      Execution in Counterparts

 

This Agreement may be executed in any number of counterparts and by different
parties hereto on separate counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same Agreement.
Delivery of an executed signature page of this Agreement by facsimile or other
electronic transmission shall be effective as delivery of a manually executed
counterpart hereof.

 

Section 12.06.      Assignability

 

(a)          Subject to the conditions set forth in this Section 12.06, each
Lender may, with the consent of the Administrative Agent and the Borrower,
assign to any Person (other than to a Disqualified Person) all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Advances Outstanding or interests therein owned by it, together with ratable
portions of its Commitment); provided that such consent shall be deemed to have
been granted by the Borrower if the Borrower shall not have objected in writing
within five (5) Business Days of receipt of any such request for consent; and
provided, further, that:

 

(i)          each of the Borrower’s and the Administrative Agent’s consent to
any such assignment (A) shall not be unreasonably withheld or delayed and (B)
shall not be required if the assignee is (1) a Lender or any of its Affiliates
or (2) managed by a Lender or any of its Affiliates;

 

(ii)         the Borrower’s consent to any such assignment pursuant to this
Section 12.06(a) shall not be required if an Event of Default shall have
occurred and be continuing;

 

(iii)        notwithstanding anything herein to the contrary, each Lender may
make an assignment to any Person (which each Lender agrees to use reasonable
efforts to make such assignment to a Person who is not a Disqualified Person)
without the consent of the Borrower or the Administrative Agent if such Lender
makes a reasonable determination that its ownership of any of its rights or
obligations hereunder is prohibited by Applicable Law (including, without
limitation, the Volcker Rule); and

 

(iv)        any CP Lender may make an assignment to its Conduit Support
Provider, any other CP Lender for which the Conduit Support Provider of such
assignor or an Affiliate thereof is the Conduit Support Provider, its Program
Manager or any other CP Lender for which such assignor’s Program Manager or an
Affiliate thereof is the Program Manager, without the consent of the Borrower or
the Administrative Agent.

 

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The parties to each such assignment shall execute and deliver to the
Administrative Agent (with a copy to the Collateral Agent) an Assignment and
Acceptance and the applicable tax forms required by Sections 12.03(f), together
with administrative details for the applicable assignee (if such assignee is not
a current Lender or an Affiliate of Citibank, N.A.). Notwithstanding any other
provision of this Section 12.06, (x) no assignment may be made to the Borrower
or any of its Affiliates, and (y) no assignment shall be made to any Defaulting
Lender, a natural person or any Person that, upon becoming a Lender hereunder,
would constitute any of the foregoing Persons described in this clause (y).

 

(b)         The Borrower may not assign its rights or obligations hereunder or
any interest herein without the prior written consent of the Administrative
Agent and the Lenders.

 

(c)          (i)            Any Lender may, without the consent of the Borrower,
sell participations to Participants in all or a portion of such Lender’s rights
and obligations under this Agreement; provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (C) the Borrower, the Agents, the Collateral Administrator,
the Custodian and the Securities Intermediary and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement, and (D) each Participant
shall have agreed to be bound by this Section 12.06(c), Section 12.06(e),
Section 12.09 and Section 12.16. Any agreement 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 may provide
that such Lender will not, without the consent of the Participant, agree to any
Fundamental Amendment. Sections 2.09, 2.10, and 12.03 shall apply to each
Participant as if it were a Lender and had acquired its interest by assignment
pursuant to clause (a) of this Section; provided that (x) such Participant
agrees to be subject to the provisions of Sections 2.16 and 12.03(f) as if it
were an assignee under clause (a) of this Section and (y) no Participant shall
be entitled to any amount under Section 2.09, 2.10, or 12.03 which is greater
than the amount the related Lender would have been entitled to under any such
Sections or provisions if the applicable participation had not occurred.

 

(ii)          In the event that any Lender sells participations in any portion
of its rights and obligations hereunder, such Lender as nonfiduciary agent for
the Borrower shall maintain a register on which it enters the name of all
participants in the Advances held by it and the principal amount (and stated
interest thereon) of the portion of the Advance which is the subject of the
participation (the “Participant Register”). An Advance may be participated in
whole or in part only by registration of such participation on the Participant
Register (and each Note, if any, shall expressly so provide). The Participant
Register shall be available for inspection by the Administrative Agent and from
time to time upon reasonable prior notice and shall be available to any Lender
(as to itself but not as to any other Lender or Agent) at any reasonable time
and from time to time upon reasonable prior notice. The Participant Register
shall be available for inspection by the Borrower to the extent necessary for
the Borrower to establish that such commitment, loan or other obligation is in
registered form under Section 5f.103-1 of the United States Treasury Regulations
or for the Borrower, any Agent, the Collateral Administrator, the Custodian or
the Securities Intermediary to satisfy any information reporting requirement
with respect to payments made to such Participant. 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.

 

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(d)          The Administrative Agent, on behalf of and acting solely for this
purpose as the nonfiduciary agent of the Borrower, shall maintain at its address
specified in Section 12.02 or such other address as the Administrative Agent
shall designate in writing to the Lenders, a copy of this Agreement, each
signature page hereto, each Assignment and Acceptance delivered to and accepted
by it, and a register (the “Register”) for the recordation of the names,
addresses and wiring instructions of the Lenders and the aggregate outstanding
principal amount of the Advances Outstanding maintained by each Lender under
this Agreement (and any stated interest thereon). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agents, the Collateral Administrator, the Custodian, the
Securities Intermediary and the Lenders shall treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower, the
Collateral Agent or any Lender at any reasonable time and from time to time upon
reasonable prior notice. An Advance (and a Note, if any, evidencing the same)
may be assigned or sold in whole or in part only by registration of such
assignment or sale on the Register (and each Note with respect to the Advances,
if any, shall expressly so provide) and compliance with this Section 12.06.

 

(e)          Notwithstanding anything to the contrary set forth herein or in any
other Facility Document and each Lender hereunder, and each Participant, must at
all times be an “accredited investor” as defined in paragraphs (1), (2), (3),
and (7) of Rule 501(a) under the Securities Act (an “Accredited Investor”) and a
“qualified purchaser” as defined in the Investment Company Act (a “Qualified
Purchaser”). Each Lender represents to the Borrower, (i) on the date that it
becomes a party to this Agreement (whether by being a signatory hereto or by
entering into an Assignment and Acceptance) and (ii) on each date on which it
makes an Advance hereunder, that it is an Accredited Investor and a Qualified
Purchaser and it is not a Disqualified Person. Each Lender further agrees that
it shall not assign, or grant any participations in, any of its Advances or
Commitments, as applicable, to any Person unless such Person is an Accredited
Investor and a Qualified Purchaser.

 

(f)          Notwithstanding any other provision of this Section 12.06, any
Lender may at any time pledge or grant a security interest in all or any portion
of its rights (including rights to payment of principal and interest) under this
Agreement to secure obligations of such Lender, including any pledge or security
interest granted to a Federal Reserve Bank, without notice to or consent of the
Borrower or the Administrative Agent; provided that no such pledge or grant of a
security interest shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or grantee for such Lender as a party
hereto.

 

(g)          The Administrative Agent and each assignor of Advances or seller of
a participation hereunder shall be entitled to rely conclusively on a
representation of the assignee Lender or Participant, as applicable, in the
relevant Assignment and Acceptance or participation agreement, as applicable,
that such assignee or purchaser is not a Disqualified Person; provided that such
reliance by such assignor or seller is in good faith and reasonable under the
circumstances. Upon reasonable request by any Lender, the Administrative Agent
shall provide, and Borrower hereby expressly authorizes the Administrative Agent
to provide, the list of Disqualified Persons to any Lender upon such Lender’s
request therefor. Any assignment to a Disqualified Person or grant or sale of
participation to a Disqualified Person in violation of this Agreement shall be
null and void. Notwithstanding anything to the contrary contained in this
Agreement, the Administrative Agent shall not (x) be obligated to ascertain,
monitor or inquire as to whether any Lender or Participant or prospective Lender
or Participant, as applicable, is a Disqualified Person or (y) have any
liability with respect to or arising out of any assignment of Advances or any
participation, or disclosure of confidential information, to any Disqualified
Person.

 

Section 12.07.       Governing Law

 

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THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT OR ANY OTHER FACILITY DOCUMENT (EXCEPT, AS TO ANY OTHER FACILITY
DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

 

Section 12.08.      Severability of Provisions

 

Any provision of this Agreement or any other Facility Document which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

Section 12.09.      Confidentiality

 

Each Secured Party agrees to keep confidential all information provided to it by
the Borrower, the Collateral Manager or the Equityholder with respect to the
Borrower, its Affiliates, the Collateral, the Related Documents, the Obligors,
the Collateral Manager, the Equityholder or any other information furnished to
such Secured Party under or in connection with this Agreement (collectively, the
“Borrower Information”); provided that nothing herein shall prevent any Secured
Party from disclosing any Borrower Information (a) as reasonably required to
comply with the provisions of this Agreement and the other Facility Documents
(i) to any Secured Party or any Affiliate of a Secured Party or (ii) any of
their respective Affiliates, employees, officers, directors, auditors, agents,
attorneys, accountants, other professional advisors and, in the case of any CP
Lender, to its respective Program Manager, Conduit Support Providers, any
Conduit Rating Agency (including its professional advisors), any Conduit Trustee
and any Affiliates of any such party (collectively, the “Secured Party
Representatives”), it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Borrower Information
and instructed to keep such Borrower Information confidential, (b) subject to an
agreement to comply with the provisions of this Section and to use the Borrower
Information only in connection with this Agreement and the other Facility
Documents and not for any other purpose, to any actual or bone fide prospective
permitted assignees and Participants in any of the Secured Parties’ interests
under or in connection with this Agreement (including in connection with any
pledge or grant a security interest permitted pursuant to Section 12.06(f)) or
any actual or prospective party (or its Secured Party Representatives) to any
swap, derivative or other transaction under which payments are to be made by
reference to the Borrower and its obligations, this Agreement or payments
hereunder, (c) in response to any order of any court or other Governmental
Authority or as may otherwise be required to be disclosed pursuant to any
Applicable Law (provided that such Secured Party will, to the extent permitted,
use commercially reasonable efforts to promptly notify the Borrower and the
Collateral Manager in advance of such pending disclosure), (d) that is a matter
of general public knowledge or that has heretofore been made available to the
public by any Person other than any Secured Party or any Secured Party
Representative in violation of this Agreement, (e) in connection with the
performance of the terms of this Agreement and the exercise of any remedy
hereunder or under any other Facility Document or any action or proceeding
relating to this Agreement or any other Facility Document or the enforcement of
rights hereunder or thereunder, (f) to the extent required or requested by any
regulatory authority purporting to have jurisdiction over such Person or its
Secured Party Representatives (including any self-regulatory authority, such as
the National Association of Insurance Commissioners), (g) on a confidential
basis to (i) any rating agency in connection with rating the Borrower or the
credit facilities provided hereunder or (ii) the CUSIP Service Bureau or any
similar agency in connection with the issuance and monitoring of CUSIP numbers
or other market identifiers with respect to the credit facilities provided
hereunder or (h) with the consent of the Borrower.

 

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Section 12.10.      Merger

 

This Agreement and the other Facility Documents executed by the Administrative
Agent or the Lenders taken as a whole incorporate the entire agreement between
the parties hereto and thereto concerning the subject matter hereof and thereof
and this Agreement and such other Facility Documents supersede any prior
agreements among the parties relating to the subject matter thereof.

 

Section 12.11.      Survival

 

All representations and warranties made hereunder, in the other Facility
Documents and in any certificate delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery of
this Agreement and the making of the Advances hereunder. The agreements in
Sections 2.09, 2.10, 2.12, 2.23, 12.03, 12.04, 12.09, 12.16, 12.17,
12.18, 13.09(d), 14.06(b), 15.09 and this Section 12.11 shall survive the
termination of this Agreement in whole or in part, the Payment in Full of the
principal of and interest on the Advances, any foreclosure under,
or modification, release or discharge of, any or all of the Related Documents
and the resignation or replacement of any Agent; provided that the agreements in
Section 12.09 shall survive for a period of one year following the termination
of this Agreement.

 

Section 12.12.      Submission to Jurisdiction; Waivers; Etc.

 

Each party hereto hereby irrevocably and unconditionally:

 

(a)          submits for itself and its property in any legal action or
proceeding relating to this Agreement or the other Facility Documents to which
it is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York in the Borough of Manhattan, the courts of the United States of America
for the Southern District of New York, and the appellate courts of any of them;

 

(b)          consents that any such action or proceeding may be brought in any
court described in Section 12.12(a) and waives to the fullest extent permitted
by Applicable Law any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

 

(c)          other than the Custodian, Collateral Agent, Securities Intermediary
and the Collateral Administrator, agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
such party at its address set forth in Section 12.02 or at such other address as
may be permitted thereunder;

 

(d)          agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law; and

 

(e)          waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding against any
Secured Party arising out of or relating to this Agreement or any other Facility
Document any special, exemplary, punitive or consequential damages.

 

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Section 12.13.      IMPORTANT WAIVERS

 

(a)          TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER FACILITY DOCUMENT
OR FOR ANY COUNTERCLAIM HEREIN OR THEREIN OR RELATING HERETO OR THERETO, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE COLLATERAL MANAGER, THE BORROWER, THE EQUITYHOLDER, THE AGENTS,
THE COLLATERAL ADMINISTRATOR, THE CUSTODIAN, THE SECURITIES INTERMEDIARY OR ANY
OTHER AFFECTED PERSON. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF EACH OTHER FACILITY DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR ITS ENTERING INTO THIS AGREEMENT AND EACH
SUCH OTHER FACILITY DOCUMENT.

 

(b)          TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY WAIVES
ANY RIGHT TO CLAIM OR RECOVER IN ANY LITIGATION WHATSOEVER INVOLVING ANY
INDEMNIFIED PARTY, ANY SPECIAL, EXEMPLARY, PUNITIVE, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE WHATSOEVER OR ANY DAMAGES OTHER
THAN, OR IN ADDITION TO, ACTUAL DAMAGES, WHETHER SUCH WAIVED DAMAGES ARE BASED
ON STATUTE, CONTRACT, TORT, COMMON LAW OR ANY OTHER LEGAL THEORY, WHETHER THE
LIKELIHOOD OF SUCH DAMAGES WAS KNOWN AND REGARDLESS OF THE FORM OF THE CLAIM OF
ACTION; PROVIDED THAT THE FOREGOING SHALL NOT LIMIT THE INDEMNIFICATION
OBLIGATIONS OF THE BORROWER OR THE COLLATERAL MANAGER PURSUANT TO THE FACILITY
DOCUMENTS. NO PARTY OR INDEMNIFIED PARTY SHALL BE LIABLE FOR ANY DAMAGES ARISING
FROM THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR OTHER MATERIALS
DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION
TRANSMISSION SYSTEMS IN CONNECTION WITH ANY FACILITY DOCUMENT OR THE
TRANSACTIONS.

 

(c)           EACH PARTY CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
THE OTHER PARTY OR AN INDEMNIFIED PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY OR AN INDEMNIFIED PARTY WOULD NOT SEEK TO ENFORCE ANY OF
THE WAIVERS IN THIS SECTION 12.13 IN THE EVENT OF LITIGATION OR OTHER
CIRCUMSTANCES. THE SCOPE OF SUCH WAIVERS IS INTENDED TO BE ALL–ENCOMPASSING OF
ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THE FACILITY DOCUMENTS, REGARDLESS OF THEIR LEGAL THEORY.

 

(d)           EACH PARTY ACKNOWLEDGES THAT THE WAIVERS IN THIS SECTION 12.13 ARE
A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT SUCH PARTY HAS
ALREADY RELIED ON SUCH WAIVERS IN ENTERING INTO THE FACILITY DOCUMENTS, AND THAT
SUCH PARTY WILL CONTINUE TO RELY ON SUCH WAIVERS IN THEIR RELATED FUTURE
DEALINGS UNDER THE FACILITY DOCUMENTS. EACH PARTY FURTHER REPRESENTS AND
WARRANTS THAT IT HAS REVIEWED SUCH WAIVERS WITH ITS LEGAL COUNSEL AND THAT TO
THE EXTENT PERMITTED BY APPLICABLE LAW, IT KNOWINGLY AND VOLUNTARILY WAIVES ITS
RIGHT TO A JURY TRIAL AND OTHER RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.

 

(e)           THE WAIVERS IN THIS SECTION 12.13 ARE IRREVOCABLE, MEANING THAT
THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND SHALL APPLY TO ANY
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO ANY OF THE FACILITY
DOCUMENTS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

 

(f)           THE PROVISIONS OF THIS SECTION 12.13 SHALL SURVIVE TERMINATION OF
THE FACILITY DOCUMENTS AND THE INDEFEASIBLE PAYMENT IN FULL OF THE OBLIGATIONS.

 

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Section 12.14.         PATRIOT Act Notice

 

Each Agent, the Collateral Administrator, the Custodian, the Securities
Intermediary and each Lender hereby notifies the Borrower that, pursuant to the
requirements of the PATRIOT Act, it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Agent,
the Collateral Administrator, the Custodian, the Securities Intermediary or such
Lender to identify the Borrower in accordance with the PATRIOT Act. The Borrower
shall provide, to the extent commercially reasonable, such information and take
such actions as are reasonably requested in writing by any Lender, the
Collateral Administrator, the Custodian, the Securities Intermediary or any
Agent in order to assist such Lender, the Collateral Administrator, the
Custodian, the Securities Intermediary or such Agent, as applicable, in
maintaining compliance with the PATRIOT Act.

 

Each of the Collateral Agent, the Collateral Administrator, the Custodian, the
Securities Intermediary also hereby notifies the Administrative Agent and the
Lenders that, pursuant to the requirements of the PATRIOT Act, it is required to
obtain, verify and record information that identifies the Administrative Agent
and the Lenders, which information includes the name and address of the
Administrative Agent and the Lenders and other information that will allow the
Collateral Agent, the Collateral Administrator, the Custodian or the Securities
Intermediary the Agent or any Lender in accordance with the PATRIOT Act. The
Borrower shall provide, to the extent commercially reasonable, such information
and take such actions as are reasonably requested in writing by any Lender, the
Collateral Administrator, the Custodian, the Securities Intermediary or any
Agent in order to assist such Lender, the Collateral Administrator, the
Custodian, the Securities Intermediary or such Agent, as applicable, in
maintaining compliance with the PATRIOT Act. The Administrative Agent and the
Lenders shall provide, to the extent commercially reasonable, such information
and take such actions as are reasonably requested in writing by the Collateral
Agent, the Collateral Administrator, the Custodian or the Securities
Intermediary in order to assist the Collateral Agent, the Collateral
Administrator, the Custodian or the Securities Intermediary, as applicable, in
maintaining compliance with the PATRIOT Act.

 

Section 12.15.         Legal Holidays

 

In the event that the date of prepayment of Advances or the Final Maturity Date
shall not be a Business Day, then notwithstanding any other provision of this
Agreement or any other Facility Document, payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the nominal date of any such date of prepayment or Final
Maturity Date, as the case may be, and interest shall accrue on such payment for
the period from and after any such nominal date to but excluding such next
succeeding Business Day.

 

Section 12.16.         Non-Petition

 

Each Secured Party hereby agrees not to institute against, or join, cooperate
with or encourage any other Person in instituting against, the Borrower any
bankruptcy, reorganization, receivership, arrangement, insolvency, moratorium or
liquidation proceeding or other proceeding under federal or state bankruptcy or
similar laws until at least one year and one day, or, if longer, the applicable
preference period then in effect plus one day, after the Payment in Full of all
outstanding Obligations and the termination of all Commitments; provided that
nothing in this Section 12.16 shall preclude, or be deemed to prevent, any
Secured Party (a) from taking any action prior to the expiration of the
aforementioned one year and one day period, or, if longer, the applicable
preference period then in effect, in (i) any case or proceeding voluntarily
filed or commenced by the Borrower or (ii) any involuntary insolvency proceeding
filed or commenced against the Borrower by a Person other than any such Secured
Party, or (b) from commencing against the Borrower or any properties of the
Borrower any legal action which is not a bankruptcy, reorganization,
receivership, arrangement, insolvency, moratorium or liquidation proceeding or
other proceeding under federal or state bankruptcy or similar laws.

 

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Section 12.17.         Waiver of Setoff

 

To the extent permitted by Applicable Law, each of the Borrower, the Collateral
Manager and the Equityholder hereby waives any right of setoff it may have or to
which it may be entitled under this Agreement or any Applicable Law from time to
time against the Administrative Agent, any Lender or its respective assets.

 

Section 12.18.         Special Provisions Applicable to CP Lenders.

 

(a)          Each of the parties hereto (each, a “Restricted Person”) hereby
agrees that it will not institute against any CP Lender, or encourage, cooperate
with or join any other Person in instituting against any CP Lender, any
proceeding seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy or insolvency law or other similar law affecting creditors'
rights, present a petition for the winding up or liquidation of any CP Lender or
seek the appointment of an administrator, provisional liquidator, conservator,
receiver, trustee, custodian or other similar official for any CP Lender or for
all or substantially all of its assets prior to the date that is two years and
one day (or, if longer, the applicable preference period then in effect) after
the last day on which any Commercial Paper Notes shall have been outstanding.

 

(b)          Provided that the Restricted Person has complied with clause (a),
nothing in clause (a) above shall limit the right of any Restricted Person to
file any claim in or otherwise take any action with respect to any proceeding of
the type described in clause (a) above that was instituted against any CP Lender
by any person other than such Restricted Person.

 

(c)          Notwithstanding anything to the contrary contained herein, the
obligations of any CP Lender under this Agreement are solely the corporate
obligations of such CP Lender and, in the case of obligations of any CP Lender
other than Commercial Paper Notes, including the obligations under this
Agreement, shall be payable at such time as funds are received by or are
available to such CP Lender in excess of funds necessary to pay in full all
outstanding Commercial Paper Notes or other short-term funding backing its
Commercial Paper Notes and, to the extent funds are not available to pay such
obligations, the claims relating thereto shall not constitute a claim against
such CP Lender but shall continue to accrue. Each party hereto agrees that the
payment of any claim (as defined in Section 101 of the Bankruptcy Code) of any
such party shall be subordinated to the payment in full of all Commercial Paper
Notes.

 

(d)          No recourse under any obligation, covenant or agreement of any CP
Lender contained in this Agreement shall be had against any incorporator,
stockholder, officer, director, employee or agent of such CP Lender or any of
their Affiliates (solely by virtue of such capacity) by the enforcement of any
assessment or by any legal or equitable proceeding, by virtue of any statute or
otherwise; it being expressly agreed and understood that this Agreement is
solely a corporate obligation of any such CP Lender individually, and that no
personal liability whatever shall attach to or be incurred by any incorporator,
stockholder, officer, director, employee or agent of such CP Lender or any agent
thereof or any of their Affiliates (solely by virtue of such capacity) or any of
them under or by reason of any of the obligations, covenants or agreements of
such CP Lender contained in this Agreement, or implied therefrom, and that any
and all personal liability for breaches by any CP Lender of any of such
obligations, covenants or agreements, either at common law or at equity, or by
statute, rule or regulation, of every such incorporator, stockholder, officer,
director, employee or agent is hereby expressly waived as a condition of and in
consideration for the execution of this Agreement, provided that the foregoing
shall not relieve any such Person from any liability it might otherwise have as
a result of fraudulent actions taken or omissions made by them. No CP Conduit
shall or shall be obligated to, pay any amount pursuant to this Agreement unless
(x) such CP Conduit has received funds which may be used to make such payment
and which funds are not required to repay other debt of such CP Conduit pursuant
to the program documents governing such CP Conduit’s operations and (y) after
giving effect to such payment, either (A) such CP Conduit could issue its
Commercial Paper Notes to refinance all of its outstanding Commercial Paper
Notes (assuming such outstanding Commercial Paper Notes matured at such time) in
accordance with the program documents governing such CP Conduit’s operations or
(B) all of such CP Conduit’s Commercial Paper Notes are paid in full. Prior to
the commencement of any insolvency proceeding by or against a CP Conduit, any
amount that such CP Conduit does not pay pursuant to the operation of the
preceding sentence shall not constitute a claim against or obligation of such CP
Conduit for any such insufficiency unless and until such payment may be made in
accordance with the preceding sentence.

 

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(e)          Each CP Lender may act hereunder by and through its Program
Manager.

 

(f)          Each of the parties hereto waives any right to set-off and to
appropriate and apply any and all deposits and any other indebtedness at any
time held or owing thereby to or for the credit or the account of any CP Lender
against and on account of the obligations and liabilities of such CP Lender to
such party under this Agreement.

 

(g)          No pledge and/or collateral assignment by any CP Lender to a
Conduit Support Provider or Conduit Trustee of an interest in the rights of such
CP Lender in any Advance funded by such CP Lender and the Obligations shall
constitute an assignment and/or assumption of such CP Lender's obligations under
this Agreement, such obligations in all cases remaining with such CP Lender.
Moreover, any such pledge and/or collateral assignment of the rights of such CP
Lender shall be permitted hereunder without further action or consent and any
such pledgee may foreclose on any such pledge and perfect an assignment of such
interest and enforce such CP Lender's right hereunder, provided that any such
foreclosure, perfection on an assignment or enforcement shall be subject to the
assignment provisions of Section 12.06.

 

(h)          Each CP Lender or its Program Manager shall determine and announce
to the Administrative Agent and the Borrower the CP Rate for each Advance or
portion thereof that is made by such CP Lender to the extent such CP Lender is
funding the applicable Advance or portion thereof through the issuance of
Commercial Paper Notes, such determination to be conclusive absent manifest
error.

 

Section 12.19.         [Reserved].

 

Section 12.20.         [Reserved].

 

Section 12.21.         [Reserved].

 

Section 12.22.         Acknowledgment and Consent to Bail-In of EEA Financial
Institutions

 

(a)          Notwithstanding anything to the contrary in any Facility Document
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 any Facility Document, except to the extent
such liability is excluded under the Bail-In Legislation from the scope of any
Bail-In Action, 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:

 

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(i)           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

 

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

 

(A)         a reduction in full or in part or cancellation of any such liability
(including without limitation a reduction in any accrued or unpaid interest in
respect of such liability);

 

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

 

(C)         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.

 

ARTICLE XIII
CUSTODIAN

 

Section 13.01.         Appointment of Custodian

 

(a)          Appointment and Acceptance. The Borrower and the Administrative
Agent each hereby appoints the Custodian as document custodian of the Loan Files
delivered to it for all Collateral Loans owned by the Borrower at any time
during the term of this Agreement, on the terms and conditions set forth in this
Agreement (which shall include any addendum hereto which is hereby incorporated
herein and made a part of this Agreement), and the Custodian hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement with respect to it, subject to and in accordance with the provisions
hereof.

 

(b)          Instructions. The Borrower agrees that it shall from time to time
provide, or cause to be provided, to the Custodian all necessary instructions
and information, and shall respond promptly to all inquiries and requests of the
Custodian as may reasonably be necessary to enable the Custodian to perform its
duties hereunder.

 

(c)          Custodian. The Custodian shall take and retain custody of the Loan
Files delivered by the Borrower hereunder in accordance with the terms and
conditions of this Agreement, all for the benefit of the Collateral Agent and
the other Secured Parties, in order to perfect under the UCC the Collateral
Agent’s security interest therein for the benefit of the Secured Parties. In
taking and retaining custody of the Loan Files, the Custodian shall be deemed to
be acting as the agent of Collateral Agent for the benefit of the Secured
Parties; provided that the Custodian makes (a) no warranty or representation and
shall have no responsibility for the enforceability, completeness, validity,
sufficiency, value, genuineness, ownership or transferability of the Collateral
Loans and (b) no representation as to the existence, perfection or priority of
any lien on the Collateral Loans or the Required Loan Documents. It is expressly
agreed and acknowledged that the Custodian is not guaranteeing performance of or
assuming any liability for the obligations of the other parties hereto or any
parties to the Collateral Loans.

 

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Section 13.02.         Duties of Custodian

 

(a)          Segregation. All Loan Files held by the Custodian for the account
of the Borrower hereunder shall be (a) subject to the lien of the Collateral
Agent on behalf of the Secured Parties, (b) physically segregated from other
loans and non-cash property in the possession of the Custodian and (c)
identified by the Custodian as subject to this Agreement.

 

(b)          Register. The Custodian shall maintain a register (in book-entry
form or in such other form as it shall deem necessary or desirable) of the
Collateral Loans for which it holds Loan Files under this Agreement containing
such information as the Borrower and the Custodian may reasonably agree;
provided that, with respect to such Collateral Loans, all Loan Files shall be
held in safekeeping by the Custodian, individually segregated from the
securities and investments of any other Person and marked so as to clearly
identify such Loan Files as the property of the Borrower as set forth in this
Agreement.

 

Section 13.03.         Delivery of Collateral Loans to Custodian.

 

(a)          The Collateral Manager (on behalf of the Borrower) shall deliver,
or cause to be delivered (which may be via email, except for the original
promissory note, if any) promptly (and in any event within five (5) Business
Days of receipt) to the Custodian all of the Loan Files for each Collateral Loan
owned by the Borrower at any time during the term of this Agreement at the
address identified herein. The Custodian shall not be responsible for any
Collateral Loan or related Loan File until actually received by it. In
connection with each delivery of a Loan File to the Custodian, the Borrower
shall represent and warrant that the Loan Files delivered to the Custodian are
complete in all material respects. The Custodian shall notify the Collateral
Administrator of the Custodian’s receipt of any sealed envelopes described in
Section 5.01(p) purporting to contain any original assignment of any Collateral
Loan or any original executed promissory note with respect to any Collateral
Loan.

 

(i)          Notwithstanding anything herein to the contrary, delivery of the
Collateral Loans acquired by the Borrower which constitute Noteless Loans or
which are otherwise not evidenced by a “security” or “instrument” as defined in
Section 8-102 and Section 9-102(a)(47) of the UCC, respectively, shall be made
by delivery to the Custodian of a copy of the loan register with respect to such
Noteless Loan evidencing registration of such Collateral Loan on the books and
records of the applicable Obligor or bank agent to the name of the Borrower (or
its nominee) or a copy (which may be a facsimile copy) of an assignment
agreement in favor of the Borrower as assignee. Any duty on the part of the
Custodian with respect to the custody of such Collateral Loans shall be limited
to the exercise of reasonable care by the Custodian in the physical custody of
the related Loan Files delivered to it.

 

(ii)         In the absence of gross negligence, fraud or willful misconduct of
the Custodian, the Custodian may assume the genuineness of any document in a
Loan File it may receive and the genuineness and due authority of any signatures
appearing thereon, and shall be entitled to assume that each document it may
receive is what it purports to be on its face. If an original “security” or
“instrument” as defined in Section 8-102 and Section 9-102(a)(47) of the UCC,
respectively, is or shall be or become available with respect to any Collateral
Loan to be held by the Custodian under this Agreement, it shall be the sole
responsibility of the Borrower to make or cause delivery thereof to the
Custodian, and the Custodian shall not be under any obligation at any time to
determine whether any such original “security” or “instrument” has been or is
required to be issued or made available in respect of any Collateral Loan or to
compel or cause delivery thereof to the Custodian.

 

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Section 13.04.         Release of Documents/Control By Agents.

 

(a)          The Custodian shall release and ship for delivery, or direct its
agents or sub-custodians to release and ship for delivery, as the case may be,
Loan Files of the Borrower held by the Custodian, its agents or its
sub-custodians from time to time upon receipt of Proper Instructions
(specifying, among other things, the Collateral Loans and Loan Files to be
released and delivery instructions and other information as may be necessary to
enable the Custodian to release and ship such Loan Files), which may be standing
instructions (in a form acceptable to the Custodian) in accordance with this
Agreement.

 

(b)          Upon receipt by the Custodian from the Administrative Agent or the
Collateral Agent (acting at the direction of the Administrative Agent), of
written notice of the occurrence of an Event of Default indicating the
Administrative Agent’s intent to prohibit the Custodian from accepting
instructions from or on behalf of the Borrower (each such notice, a “Block
Notice”), the Custodian shall no longer accept or act upon Proper Instructions
or other instructions from the Borrower (or the Collateral Manager on its
behalf) hereunder with respect to the Collateral Loans or the Loan Files. From
and after its receipt of a Block Notice, the Custodian shall only comply with
Proper Instructions from the Collateral Agent (acting at the direction of the
Administrative Agent) or Administrative Agent.

 

Section 13.05.         Records.

 

The Custodian shall create and maintain complete and accurate records relating
to its activities under this Agreement with respect to the Collateral Loans or
other property of the Borrower held for the benefit of the Collateral Agent and
the other Secured Parties under this Agreement. All such records shall be the
property of the Borrower and, upon reasonable advance notice, shall at all times
during the regular business hours of the Custodian be open for inspection by
duly authorized officers, employees or agents of the Borrower, the Collateral
Agent and the Administrative Agent.

 

Section 13.06.         Reporting

 

(a)          If requested by the Borrower, the Collateral Agent or the
Administrative Agent, the Custodian shall render an itemized report of the Loan
Files held pursuant to this Agreement as of the end of each month and such other
matters as the parties may agree from time to time in form and substance
reasonably satisfactory to the Borrower, the Collateral Agent and the
Administrative Agent.

 

(b)          The Custodian shall have no duty or obligation to undertake any
market valuation of the Collateral Loans under any circumstance.

 

Section 13.07.         Certain General Terms

 

(a)          No Duty to Examine Related Documents. Nothing herein shall obligate
the Custodian to review or examine the terms of any underlying instrument,
certificate, credit agreement, indenture, loan agreement, promissory note or any
other document contained in the Loan Files evidencing or governing any
Collateral Loan to determine the validity, sufficiency, marketability or
enforceability of any Collateral Loan (and shall have no responsibility for the
genuineness or completeness thereof) or otherwise.

 

(b)          Resolution of Discrepancies. In the event of any discrepancy
between the information set forth in any report provided by the Custodian to the
Borrower and any information contained in the books or records of the Borrower,
the Borrower (or the Collateral Manager, on behalf of the Borrower) shall
promptly notify the Custodian thereof and the parties shall cooperate to
diligently resolve the discrepancy.

 

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(c)          Improper Instructions. Notwithstanding anything herein to the
contrary, the Custodian shall not be obligated to take any action (or forebear
from taking any action), which it reasonably determines to be contrary to the
terms of this Agreement or Applicable Law. In no instance shall the Custodian be
obligated to provide services on any day that is not a Business Day.

 

(d)          Proper Instructions.

 

(i)          Each of the Administrative Agent, the Collateral Manager and the
Borrower will give a notice to the Custodian, in a form acceptable to the
Custodian, specifying the names and specimen signatures of Persons authorized to
give Proper Instructions (collectively, “Authorized Persons” and each, an
“Authorized Person”) which notice shall be signed by an Authorized Person set
forth on Schedule 9 or otherwise previously certified to the Custodian. The
Custodian shall be entitled to rely upon the identity and authority of such
Persons until it receives written notice from an Authorized Person of the
Borrower, the Administrative Agent or the Collateral Manager, as applicable, to
the contrary. The initial Authorized Persons are set forth on Schedule 9
attached hereto and made a part hereof (as such Schedule 9 may be modified from
time to time by written notice from the Borrower, the Administrative Agent and
the Collateral Manager as applicable, to the Custodian).

 

(ii)         The Custodian shall have no responsibility or liability to the
Borrower (or any other Person) and shall be indemnified and held harmless by the
Borrower in the event that a subsequent written confirmation of an oral
instruction fails to conform to the oral instructions received by the Custodian.
The Custodian shall not have an obligation to act in accordance with purported
instructions to the extent that they conflict with Applicable Law or
regulations. The Custodian shall not be liable for any loss resulting from a
delay while it obtains clarification of any Proper Instruction.

 

(e)          Evidence of Authority. The Custodian shall be protected in acting
upon any instruction, notice, request, consent, certificate instrument or paper
reasonably believed by it to be genuine and to have been properly executed or
otherwise given by or on behalf of the Borrower, the Collateral Manager or
Administrative Agent, as applicable, by an Authorized Person thereof. The
Custodian may receive and accept a certificate signed by any Authorized Person
as conclusive evidence of:

 

(i)          the authority of any Person to act in accordance with such
certificate; or

 

(ii)         any determination or of any action by such Person as described in
such certificate,

 

and such certificate may be considered as in full force and effect until receipt
by the Custodian of written notice to the contrary from an Authorized Person of
the Borrower, the Collateral Manager or Administrative Agent, as applicable.

 

(f)          Receipt of Communications. Any communication received by the
Custodian on a day which is not a Business Day or after 3:30 p.m. (or such other
time as is agreed by the Borrower and the Custodian from time to time) on a
Business Day will be deemed to have been received on the next Business Day;
provided that in the case of communications so received after 3:30 p.m. on a
Business Day the Custodian will use its commercially reasonable efforts to
process such communications as soon as possible after receipt.

 

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(g)          In the event that (i) the Borrower, the Administrative Agent, the
Collateral Manager, the Custodian or the Collateral Agent shall be served by a
third party with any type of levy, attachment, writ or court order with respect
to any Loan File or a document included within a Loan File or (ii) a third party
shall institute any court proceeding by which any Loan File or a document
included within a Loan File shall be required to be delivered other than in
accordance with the provisions of this Agreement, the party receiving such
service shall promptly deliver or cause to be delivered to the other parties to
this Agreement (to the extent not prohibited by Applicable Law) copies of all
court papers, orders, documents and other materials concerning such proceedings.
The Custodian shall, to the extent permitted by law, continue to hold and
maintain all the Loan Files that are the subject of such proceedings pending a
final, nonappealable order of a court of competent jurisdiction permitting or
directing disposition thereof. Upon final determination of such court, the
Custodian shall dispose of such Loan File or a document included within such
Loan File as directed by the Administrative Agent, which shall give a direction
consistent with such determination. Expenses of the Custodian incurred as a
result of such proceedings shall be borne by the Borrower.

 

Section 13.08.         Compensation and Reimbursement of Custodian

 

(a)          Fees. The Custodian shall be entitled to compensation for its
services in accordance with the terms of the Collateral Administration and
Agency Fee Letter.

 

(b)          Expenses. The Borrower agrees to pay or reimburse to the Custodian
upon its request from time to time all reasonable and documented costs,
disbursements, advances, and expenses (including reasonable fees and expenses of
one legal counsel, plus, if necessary, one additional local counsel) incurred in
connection with the preparation or execution of this Agreement, or in connection
with the transactions contemplated hereby or the administration of this
Agreement or performance by the Custodian of its duties and services under this
Agreement (including costs and expenses of any action deemed necessary by the
Custodian to collect any amounts owing to it under this Agreement).

 

(c)          Priority of Payments. Amounts owing to the Custodian hereunder
shall be payable in accordance with the Priority of Payments.

 

Section 13.09.         Responsibility of Custodian

 

(a)          General Duties. The Custodian shall have no duties, obligations or
responsibilities under this Agreement or with respect to the Collateral Loans,
except for such duties as are expressly and specifically set forth in this
Agreement, and the duties and obligations of the Custodian shall be determined
solely by the express provisions of this Agreement. No implied duties,
obligations or responsibilities shall be read into this Agreement against, or on
the part of, the Custodian.

 

(b)          Instructions.

 

(i)          The Custodian shall be entitled to refrain from taking any action
unless it has such instruction (in the form of Proper Instructions) from the
Borrower (or the Collateral Manager on the Borrower’s behalf), the
Administrative Agent or the Collateral Agent, as applicable, as it reasonably
deems necessary, and shall be entitled to require, upon notice to the Borrower,
the Administrative Agent or the Collateral Agent, as applicable, that Proper
Instructions to it be in writing. In the absence of gross negligence, fraud or
willful misconduct of the Custodian, the Custodian shall have no liability for
any action (or forbearance from action) taken pursuant to any Proper Instruction
of the Borrower, the Collateral Manager, the Administrative Agent or the
Collateral Agent, as applicable.

 

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(ii)         Whenever the Custodian is entitled or required to receive or obtain
any communications or information pursuant to or as contemplated by this
Agreement, it shall be entitled to receive the same in writing, in form, content
and medium reasonably acceptable to it and otherwise in accordance with any
applicable term of this Agreement; and whenever any report or other information
is required to be produced or distributed by the Custodian it shall be in form,
content and medium reasonably acceptable to it and the Borrower, and otherwise
in accordance with any applicable term of this Agreement.

 

(iii)        In case any reasonable question arises as to its duties hereunder,
the Custodian may, so long as no Event of Default has occurred and is
continuing, request instructions from the Collateral Manager and may, after the
occurrence and during the continuance of an Event of Default, request
instructions from the Administrative Agent, and shall be entitled at all times
to refrain from taking any action unless it has received instructions from the
Collateral Manager or the Administrative Agent, as applicable. The Custodian
shall in all events have no liability, risk or cost for any action taken
pursuant to and in compliance with the instruction of the Administrative Agent.

 

(c)          General Standards of Care. Notwithstanding any terms herein
contained to the contrary, the acceptance by the Custodian of its appointment
hereunder is expressly subject to the following terms, which shall govern and
apply to each of the terms and provisions of this Agreement (whether or not so
stated therein):

 

(i)          The Custodian may rely on and shall be protected in acting or
refraining from acting upon any written notice, instruction, statement,
certificate, request, waiver, consent, opinion, report, receipt or other paper
or document furnished to it (including any of the foregoing provided to it by
telecopier or electronic means), not only as to its due execution and validity,
but also as to the truth and accuracy of any information therein contained,
which it in good faith believes to be genuine and signed or presented by the
proper person (which in the case of any instruction from or on behalf of the
Borrower shall be an Authorized Person); and the Custodian shall be entitled to
presume the genuineness and due authority of any signature appearing thereon.
The Custodian shall not be bound to make any independent investigation into the
facts or matters stated in any such notice, instruction, statement, certificate,
request, waiver, consent, opinion, report, receipt or other paper or document;
provided that if the form thereof is specifically prescribed by the terms of
this Agreement, the Custodian shall examine the same to determine whether it
substantially conforms on its face to such requirements hereof.

 

(ii)         Neither the Custodian nor any of its directors, officers or
employees shall be liable to anyone for any error of judgment, or for any act
done or step taken or omitted to be taken by it (or any of its directors,
officers of employees), or for any mistake of fact or law, or for anything which
it may do or refrain from doing in connection herewith, unless such action
constitutes gross negligence, fraud or willful misconduct on its part and in
breach of the terms of this Agreement. The Custodian shall not be liable for any
action taken by it in good faith and reasonably believed by it to be within
powers conferred upon it, or taken by it pursuant to any direction or
instruction by which it is governed hereunder, or omitted to be taken by it by
reason of the lack of direction or instruction required hereby for such action.

 

(iii)        In no event shall the Custodian be liable for any indirect,
special, punitive or consequential damages (including lost profits) whether or
not it has been advised of the likelihood of such damages.

 

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(iv)        The Custodian may consult with, and obtain advice from, legal
counsel selected in good faith with respect to any question as to any of the
provisions hereof or its duties hereunder, or any matter relating hereto, and
the written opinion or advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by the Custodian in good faith in accordance with the opinion and directions of
such counsel; the reasonable cost of such services shall be reimbursed pursuant
to Section 13.08(b) and (c) above.

 

(v)         The Custodian shall not be deemed to have notice of any fact, claim
or demand with respect hereto unless actually known by an officer charged with
responsibility for administering this Agreement or unless (and then only to the
extent) received in writing by the Custodian and specifically referencing this
Agreement.

 

(vi)        No provision of this Agreement shall require the Custodian to expend
or risk its own funds, or to take any action (or forbear from action) hereunder
which might in its judgment involve any expense or any financial or other
liability unless it shall be furnished with acceptable indemnification. Nothing
herein shall obligate the Custodian to commence, prosecute or defend legal
proceedings in any instance, whether on behalf of the Borrower or on its own
behalf or otherwise, with respect to any matter arising hereunder, or relating
to this Agreement or the services contemplated hereby.

 

(vii)       The permissive right of the Custodian to take any action hereunder
shall not be construed as a duty.

 

(viii)      The Custodian may act or exercise its duties or powers hereunder
through agents or attorneys, and the Custodian shall not be liable or
responsible for the actions or omissions of any such agent or attorney selected
by it with reasonable care.

 

(ix)         The Custodian shall not be responsible or liable for delays or
failures in performance resulting from acts beyond its control, provided that
the Custodian takes commercially reasonable efforts to resume performance after
the cessation of such acts. Such acts shall include acts of God, strikes,
lockouts, riots, acts of war, epidemics, governmental regulations imposed after
the fact, fire, communication line failures, computer viruses, power failures,
earthquakes or other disasters.

 

(x)          All indemnifications contained in this Agreement in favor of the
Custodian shall survive the termination of this Agreement.

 

(xi)         Each of the protections, reliances, indemnities and immunities
offered to the Collateral Agent in Article XI shall be afforded to the
Custodian.

 

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(xii)        The Custodian shall not be responsible for the accuracy or content
of any certificate, statement, direction or opinion furnished to it in
connection with this Agreement or any other Facility Document or Related
Document. The Custodian 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 by any Person under any
Facility Document or Related Document. The Custodian shall not be responsible to
any Person for any recitals, statements, information, representations or
warranties regarding the Borrower or the Collateral or in any document,
certificate or other writing delivered in connection herewith or therewith or
for the execution, effectiveness, genuineness, validity, enforceability,
perfection, collectability, priority or sufficiency of thereof or any such other
document or the financial condition of any Person or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions related to any Person or the existence or possible
existence of any Default or Event of Default. The Custodian shall not have any
obligation whatsoever to any Person to assure that any collateral exists or is
owned by any Person or is cared for, protected or insured or that any liens have
been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise or to
continue exercising at all or in any manner or under any duty of care,
disclosure or fidelity any of the rights, authorities and powers granted or
available with respect thereto.

 

(d)          Indemnification; Collateral Agent’s Lien.

 

(i)          The Borrower shall and does hereby indemnify and hold harmless the
Custodian for and from any and all costs and expenses (including reasonable
attorney’s fees and expenses), and any and all losses, damages, claims and
liabilities (collectively, “Losses”), that may arise, be brought against or
incurred by the Custodian, as a result of, relating to, or arising out of this
Agreement, or the administration or performance of the Custodian’s duties
hereunder, or the relationship between the Borrower and the Custodian created
hereby, other than such liabilities, losses, damages, claims, costs and expenses
as are caused by the Custodian’s own actions constituting gross negligence,
fraud or willful misconduct. Without limiting the foregoing, after the receipt
of a Block Notice, the parties hereto agree that the Lenders shall indemnify and
hold harmless the Custodian and its directors, officers, employees and agents
from and against any and all Losses incurred as a result of the Custodian’s
compliance with the Collateral Agent’s or the Administrative Agent’s (each
acting at the direction of the Required Lenders) direction or instruction in
connection with this Agreement (except to the extent due to the Custodian’s
willful misconduct, gross negligence or fraud) solely to the extent that such
Losses shall not have been reimbursed by the Borrower.

 

(ii)         Each of the Borrower, the Collateral Agent and the Custodian hereby
agrees that the Loan Files in respect of the Collateral Loans are being held by
the Custodian hereunder to perfect the lien of the Collateral Agent, on behalf
of the Secured Parties, in the Collateral Loans in accordance with this
Agreement.

 

Section 13.10.         Resignation and Removal; Appointment of Successor

 

(a)          Notwithstanding anything to the contrary contained in this
Agreement (including clauses (b) and (c) below), no resignation or removal of
the Custodian and no appointment of a successor Custodian pursuant to this
Article XIII shall become effective until the acceptance of such appointment by
the successor Custodian under Section 13.11 and the assumption by such successor
Custodian of the duties and obligations of the Custodian hereunder.

 

(b)          The Custodian may, at any time, resign under this Agreement by
giving not less than thirty (30) days advance written notice thereof to the
Borrower, the Collateral Manager, the Collateral Agent and the Administrative
Agent.

 

(c)          The Custodian may be removed at any time by the Administrative
Agent (i) upon ten (10) Business Days’ notice (with the prior written consent of
the Collateral Manager) or (ii) at any time if (A) a Default or an Event of
Default shall have occurred and be continuing, or (B) the Custodian shall become
incapable of acting or shall become the subject of an Insolvency Event. Notice
of any such removal shall be sent by the Administrative Agent to the Custodian,
the Borrower, the Lenders and the Collateral Manager.

 

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(d)          If the Custodian shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Custodian for any
reason (other than resignation with no replacement within 90 days), the Borrower
shall, promptly after becoming aware of such resignation, removal, incapacity or
vacancy, appoint a successor collateral custodian by written instrument,
executed by a Responsible Officer of the Borrower, one copy of which shall be
delivered to the retiring Custodian and one copy to the successor Custodian,
together with a copy to the Administrative Agent and the Lenders; provided that
such successor Custodian shall be appointed only upon the prior written consent
of the Administrative Agent and, prior to the occurrence of a Default or an
Event of Default, the Collateral Manager (in each case which consent shall not
be unreasonably withheld, conditioned or delayed). In the case of a resignation
by the Custodian, if no successor Custodian shall have been appointed and an
instrument of acceptance by a successor Custodian shall not have been delivered
to the resigning Custodian and the Administrative Agent within 90 days after the
giving of such notice of resignation, the Administrative Agent may appoint a
successor Custodian or the resigning Custodian may petition any court of
competent jurisdiction to appoint a successor Custodian.

 

(e)          Upon termination of this Agreement or resignation of the Custodian,
the Borrower shall pay to the Custodian such compensation, and shall likewise
reimburse the Custodian for its reasonable and documented costs, expenses and
disbursements, as may be due as of the date of such termination or resignation
(or removal, as the case may be) all in accordance with the Priority of
Payments. All indemnifications in favor of the Custodian under this Agreement
shall survive the termination of this Agreement, or any resignation or removal
of the Custodian.

 

(f)          In the event of any resignation or removal of the Custodian, the
Custodian shall provide to the Borrower a complete final report or data file
transfer of any Confidential Information as of the date of such resignation or
removal.

 

Section 13.11.         Acceptance and Appointment by Successor

 

Each successor Custodian appointed hereunder shall execute, acknowledge and
deliver to the Borrower, the Collateral Manager, the Administrative Agent, the
Lenders and the retiring Custodian an instrument accepting such appointment.
Upon delivery of the required instruments, the resignation or removal of the
retiring Custodian shall become effective and such successor Custodian, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts, duties and obligations of the retiring Custodian; but, on
request of the Borrower, the Collateral Manager, the Administrative Agent or the
successor Custodian, such retiring Custodian shall (i) execute and deliver an
instrument transferring to such successor Custodian all the rights, powers and
trusts of the retiring Custodian and (ii) execute and deliver such further
documents and instruments and take such further action as may be reasonably
requested in order to effect the transfer of the rights, powers, duties and
obligations of the Custodian hereunder. Upon request of any such successor
Custodian, the Borrower shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Custodian all such rights,
powers and trusts.

 

Section 13.12.         Merger, Conversion, Consolidation or Succession to
Business of Custodian

 

Any organization or entity into which the Custodian may be merged or converted
or with which it may be consolidated, or any organization or entity resulting
from any merger, conversion or consolidation to which the Custodian shall be a
party, or any organization or entity succeeding to all or substantially all of
the corporate trust business of the Custodian, shall be the successor of the
Custodian hereunder, without the execution or filing of any document or any
further act on the part of any of the parties hereto.

 

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ARTICLE XIV
COLLATERAL MANAGEMENT

 

Section 14.01.         Designation of the Collateral Manager

 

(a)          Initial Collateral Manager. The servicing, administering and
collection of the Collateral shall be conducted by the Person designated as the
Collateral Manager hereunder in accordance with this Section 14.01, (such
Person, the “Collateral Manager”). CION Investment Management, LLC is hereby
appointed as, and hereby accepts such appointment and agrees to perform the
duties and responsibilities, of Collateral Manager pursuant to the terms hereof.

 

(b)          Subcontracts. The Collateral Manager may, with the prior written
consent of the Administrative Agent, subcontract with any other Person for
servicing, administering or collecting the Collateral; provided that (i) the
Collateral Manager shall select any such Person with reasonable care and shall
be solely responsible for the fees and expenses payable to such Person, (ii) the
Collateral Manager shall not be relieved of, and shall remain liable for, the
performance of the duties and obligations of the Collateral Manager pursuant to
the terms hereof without regard to any subcontracting arrangement and (iii) any
such subcontract shall be subject to the provisions hereof.

 

Section 14.02.         Duties of the Collateral Manager

 

(a)          Duties. The Collateral Manager shall take or cause to be taken all
such actions as may be necessary or advisable to service, administer and collect
on the Collateral from time to time, all in accordance with Applicable Law and
the Collateral Management Standard. Without limiting the foregoing, the duties
of the Collateral Manager shall include the following:

 

(i)          directing the acquisition, sale or substitution of Collateral in
accordance with Article X;

 

(ii)         supervising the Collateral, including (A) communicating with
Obligors; (B) subject to the provisos to this subclause (B), executing
amendments or other modifications, providing consents and waivers, exercising
voting rights, enforcing and collecting on the Collateral, provided that the
Collateral Manager shall not consent to any amendment or other modification of
any Collateral Loan or any Related Document for any Collateral Loan that would
violate the provisions of Section 5.02(s); and (C) otherwise managing the
Collateral on behalf of the Borrower;

 

(iii)        preparing and submitting claims to Obligors on each Collateral
Loan;

 

(iv)        maintaining appropriate books of account and servicing records with
respect to the Collateral (including copies of the Related Documents) reasonably
necessary or advisable for the services to be performed hereunder;

 

(v)         promptly delivering to the Administrative Agent or the Collateral
Agent, from time to time, such information and servicing records (including
information relating to its performance under this Agreement) as the
Administrative Agent or the Collateral Agent may from time to time reasonably
request;

 

(vi)        notifying the Administrative Agent of any material action, suit,
proceeding, dispute, offset, deduction, defense or counterclaim (A) that is or
is threatened to be asserted by an Obligor with respect to any Collateral Loan
(or portion thereof) of which it has actual knowledge or has received notice; or
(B) that could reasonably be expected to have a Material Adverse Effect;

 

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(vii)       maintaining the perfected security interest of the Collateral Agent,
for the benefit of the Secured Parties, in the Collateral;

 

(viii)      instructing the Obligors or, if applicable, the administrative
agents on the Collateral Loans to make payments directly into the Collection
Account;

 

(ix)         complying with such other duties and responsibilities as required
of the Collateral Manager by this Agreement; and

 

(x)          on each Measurement Date, providing to the Borrower, each Lender,
the Administrative Agent and the Collateral Agent the reports specified Schedule
12 hereto, a Borrowing Base Calculation Statement and items 2, 3 and 17 of
Schedule 2 hereto. On a monthly basis, the Collateral Manager will provide to
the Borrower, each Lender, the Administrative Agent and the Collateral Agent the
reports specified in Schedule 3 hereto.

 

It is acknowledged and agreed that the Borrower possesses only such rights with
respect to the enforcement of rights and remedies with respect to the Collateral
Loans and the underlying assets securing such Collateral Loans under the Related
Documents as have been transferred to the Borrower with respect to the related
Collateral Loan, and therefore, for all purposes under this Agreement, the
Collateral Manager shall perform its administrative and management duties
hereunder only to the extent that, as a lender under the Related Documents, the
Borrower has the right to do so.

 

(b)          The Administrative Agent, each Lender, the Collateral Agent and the
other Secured Parties shall not have any obligation or liability with respect to
any Collateral, nor shall any of them be obligated to perform any of the
obligations of the Collateral Manager hereunder.

 

(c)          The Collateral Manager shall not be responsible or liable for
delays or failures in performance resulting from acts of God, strikes, lockouts,
riots, acts of war, epidemics, governmental regulations imposed after the fact,
fire, communication line failures, computer viruses, power failures, earthquakes
or other disasters, provided that the Collateral Manager takes commercially
reasonable efforts to resume performance after the cessation of such acts and
nothing herein shall prevent the occurrence of a Default, an Event of Default or
a Collateral Manager Default.

 

Section 14.03.         Authorization of the Collateral Manager

 

The Borrower hereby authorizes the Collateral Manager to take any and all
reasonable steps in its name and on its behalf necessary or desirable in the
determination of the Collateral Manager and not inconsistent with the pledge of
the Collateral by the Borrower to the Collateral Agent, on behalf of the Secured
Parties hereunder, to collect all amounts due under any and all Collateral,
including endorsing its name on checks and other instruments representing
Collections, executing and delivering any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Collateral and, after the
delinquency of any Collateral and to the extent permitted under and in
compliance with Applicable Law, to commence proceedings with respect to
enforcing payment thereof, to the same extent as the Collateral Manager could
have done if it owned such Collateral. The Borrower shall furnish the Collateral
Manager (and any successors thereto) with any powers of attorney and other
documents necessary or appropriate to enable the Collateral Manager to carry out
its collateral management duties hereunder, and shall cooperate with the
Collateral Manager to the fullest extent in order to ensure the collectability
of the Collateral. In no event shall the Collateral Manager be entitled to make
the Collateral Agent, the Administrative Agent, any Lender or any other Secured
Party a party to any litigation without such party’s express prior written
consent, or to make the Borrower a party to any litigation (other than any
foreclosure or similar collection procedure) without the Administrative Agent’s
consent. Following the occurrence of an Event of Default (unless otherwise
waived by the Lenders in accordance with Section 12.01), the Administrative
Agent (acting in its sole discretion or at the direction of the Required
Lenders) may provide notice to the Collateral Manager (with a copy to the
Collateral Agent) that the Secured Parties are exercising their control rights
with respect to the Collateral in accordance with Section 6.02(b).
Notwithstanding the foregoing, the Collateral Manager shall act solely on behalf
of the Borrower as an independent contractor for the sole purpose of providing
the services described herein.

 

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Section 14.04.         Separateness Provisions of the Borrower.

 

The Collateral Manager shall not in any way interfere with or frustrate the
Borrower’s compliance with the provisions of Section 5.05 of this Agreement or
the Separateness Provisions.

 

Section 14.05.         Compensation

 

As compensation for its administrative and management activities hereunder, the
Collateral Manager or its designee shall be entitled to receive the Collateral
Management Fee pursuant to the Priority of Payments.

 

The Collateral Manager may, in its sole discretion, elect to irrevocably waive
payment of any or all of any Collateral Management Fee otherwise due on any
Payment Date by notice to the Borrower, the Collateral Administrator and the
Collateral Agent no later than the Determination Date immediately prior to such
Payment Date. Any such Collateral Management Fee, once waived, shall not
thereafter become due and payable and any claim of the Collateral Manager
therein shall be extinguished.

 

The Collateral Manager may, in its sole discretion, elect to defer payment of
all or a portion of the Collateral Management Fee on any Payment Date by
providing written notice to the Collateral Agent of such election no later than
the Determination Date immediately prior to such Payment Date. The Collateral
Manager may elect to receive payment of all or any portion of the deferred
Collateral Management Fee on any Payment Date to the extent of funds available
to pay such amounts in accordance with the Priority of Payments by providing
notice to the Collateral Agent and the Administrative Agent of such election and
the amount of such fees to be paid on or before three (3) Business Days
preceding such Payment Date.

 

If and to the extent that there are insufficient funds to pay any Collateral
Management Fee in full on any Payment Date or if any Collateral Management Fee
has accrued but is not yet due and payable, the amount due or accrued and unpaid
will be deferred and will be payable on such later Payment Date on which funds
are available in accordance with the Priority of Payments.

 

Section 14.06.         Expenses; Indemnification

 

(a)          The Collateral Manager shall be responsible for its expenses
incurred by it in the performance of its obligations under this Agreement.

 

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(b)          The Collateral Manager agrees to indemnify and hold harmless each
Indemnified Party from and against any and all Liabilities that may be incurred
by or asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with any acts or omissions of the Collateral Manager in
connection with this Agreement, any other Facility Document, any Related
Document or any transaction contemplated hereby or thereby (and regardless of
whether or not any such transactions are consummated), including (but not
limited to) any such Liability that is incurred or arises out of or in
connection with, or by reason of any one or more of the following: (i) any
breach or alleged breach of any covenant by the Collateral Manager contained in
any Facility Document; (ii) any representation or warranty made or deemed made
by the Collateral Manager contained in any Facility Document or in any
certificate, statement or report delivered in connection therewith is, or is
alleged to be, false or misleading; (iii) any failure by the Collateral Manager
to comply with any Applicable Law or contractual obligation binding upon it;
(iv) any action or omission, not expressly authorized by the Facility Documents,
by the Collateral Manager or any Affiliate of the Collateral Manager which has
the effect of impairing the validity or enforceability of the Collateral or the
rights of the Agents or the other Secured Parties with respect thereto; (v) the
commingling by the Collateral Manager of Collections on the Collateral at any
time with other funds; (vi) the failure of the Collateral Manager or any of its
agents or representatives to remit to the Collection Account, within one (1)
Business Day of receipt, Collections on the Collateral Loans remitted to the
Collateral Manager or any such agent or representative as provided in this
Agreement; and (vii) the treatment or representation, in any computations made
by it in connection with any Monthly Report, Payment Date Report, Borrowing Base
Calculation Statement or other report prepared by it hereunder of any commercial
loans as Eligible Collateral Loans, which were Ineligible Collateral Loans as of
the date of any such computation; except (A) to the extent any such Liability is
found in a final, non-appealable judgment by a court of competent jurisdiction
to have resulted solely from the gross negligence, fraud or willful misconduct
of such Indemnified Party, any of its Affiliates or the respective officers,
directors, employees, agents, managers of, and any Person controlling any of,
the foregoing, (B) to the extent any such Liability results from a claim brought
by the Collateral Manager against an Indemnified Party (other than the
Collateral Agent, the Custodian or the Collateral Administrator) for material
breach of such Indemnified Party’s obligations hereunder or under any other
Facility Document, if the Collateral Manager has obtained a final, nonappealable
judgment in its favor on such claim as determined by a court of competent
jurisdiction, or (C) to the extent any such Liability results from a claim
solely between or among Indemnified Parties (other than any claims against an
Indemnified Party in its capacity or in fulfilling its role as the
Administrative Agent, Collateral Agent, Collateral Administrator or any similar
role) and not arising out of any act or omission on the part of the Borrower,
the Collateral Manager or their respective Affiliates. In the case of an
investigation, litigation or proceeding to which the indemnity in this paragraph
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by the Collateral Manager, any of the
Collateral Manager’s equityholders or creditors, an Indemnified Party or any
other Person, whether or not an Indemnified Party is otherwise a party hereto.
The Collateral Manager shall not have any liability hereunder to any Indemnified
Party to the extent an Indemnified Party affects any settlement of a matter that
is (or could be) subject to indemnification hereunder without the prior written
consent of the Collateral Manager (which consent shall not be unreasonably
withheld or delayed), but if settled with such consent or if there be a final
judgment for the plaintiff, the Collateral Manager agrees to indemnify the
Indemnified Party from and against any loss or liability by reason of such
settlement or judgment to the extent set forth in this Section 14.06(b).  The
Collateral Manager shall not, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened proceeding
in respect of which any Indemnified Party is a party (or, in the case of a
threatened proceeding, could reasonably have been expected to be a party if such
proceeding had been brought) and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement (i) does not include a statement
as to or admission of, fault, culpability or a failure to act by or on behalf of
any such Indemnified Party, and (ii) includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such proceeding. In no case shall the Collateral Manager be responsible for any
Indemnified Party’s lost revenues or lost profits. This Section 14.06(b) shall
not apply with respect to Taxes other than any Taxes that represent losses,
claims, damages, etc. arising from any non-Tax claim.

 

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Section 14.07.         The Collateral Manager Not to Resign; Assignment

 

(a)          The Collateral Manager shall not resign from the obligations and
duties hereby imposed on it.

 

(b)          The Collateral Manager may not assign its rights or obligations
hereunder or any interest herein without the prior written consent of the
Administrative Agent.

 

Section 14.08.         Appointment of Successor Collateral Manager

 

(a)          Upon the occurrence of an Event of Default, notwithstanding
anything herein to the contrary, the Administrative Agent (as directed by the
Required Lenders), with notice to the Borrower, the Equityholder, the Collateral
Agent and the Lenders, may terminate all of the rights and obligations of the
Collateral Manager as “Collateral Manager” under this Agreement. The
Administrative Agent, with notice to the Borrower, the Equityholder, the
Collateral Agent and the Lenders, shall appoint a successor Collateral Manager
(the “Successor Collateral Manager”), which, for the avoidance of doubt may be
the Administrative Agent or any Lender, and such Successor Collateral Manager
shall accept its appointment by a written assumption in a form acceptable to the
Administrative Agent in its sole discretion. Until a successor Collateral
Manager is appointed as set forth above, the Collateral Manager shall (i) unless
otherwise notified by the Administrative Agent, continue to act in such capacity
in accordance with Section 14.02 and (ii) as requested by the Administrative
Agent in its sole discretion (A) terminate some or all of its activities as
Collateral Manager hereunder by the Administrative Agent in its sole discretion
as necessary or desirable, (B) provide such information as may be requested by
the Administrative Agent to facilitate the transition of the performance of such
activities to the Administrative Agent or any agent thereof and (C) take all
other actions requested by the Administrative Agent, in each case to facilitate
the transition of the performance of such activities to the Administrative Agent
or any agent thereof.

 

(b)          Upon its appointment, the Successor Collateral Manager shall be the
successor in all respects to the Collateral Manager with respect to collateral
management functions under this Agreement and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the
Collateral Manager by the terms and provisions hereof, and all references in
this Agreement to the Collateral Manager shall be deemed to refer to the
Successor Collateral Manager; provided that the Successor Collateral Manager
shall have (i) no liability with respect to any action performed by the
terminated Collateral Manager prior to the date that the Successor Collateral
Manager becomes the successor to the Collateral Manager or any claim of a third
party based on any alleged action or inaction of the terminated Collateral
Manager, (ii) no obligation to pay any taxes required to be paid by the
Collateral Manager; provided that the Successor Collateral Manager shall pay any
income taxes for which it is liable, (iii) no obligation to pay any of the fees
and expenses of any other party to the transactions contemplated hereby, and
(iv) no liability or obligation with respect to any Collateral Manager
indemnification obligations of any prior Collateral Manager, including the
original Collateral Manager.

 

(c)          Notwithstanding anything contained in this Agreement to the
contrary, a Successor Collateral Manager is authorized to accept and rely on all
of the accounting, records (including computer records) and work of the prior
Collateral Manager relating to the Collateral Loans (collectively, the
“Predecessor Collateral Manager Work Product”) without any audit or other
examination thereof, and such Successor Collateral Manager shall have no duty,
responsibility, obligation or liability for the acts and omissions of the prior
Collateral Manager. If any error, inaccuracy, omission or incorrect or
non-standard practice or procedure (collectively, “Errors”) exist in any
Predecessor Collateral Manager Work Product and such Errors make it materially
more difficult to service or should cause or materially contribute to the
Successor Collateral Manager making or continuing any Errors (collectively,
“Continued Errors”), such Successor Collateral Manager shall have no duty,
responsibility, obligation or liability for such Continued Errors; provided that
such Successor Collateral Manager agrees to use its best efforts to prevent
further Continued Errors. In the event that the Successor Collateral Manager
becomes aware of Errors or Continued Errors, it shall, with the prior consent of
the Administrative Agent, use its best efforts to reconstruct and reconcile such
data as is commercially reasonable to correct such Errors and Continued Errors
and to prevent future Continued Errors.

 

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ARTICLE XV
THE COLLATERAL ADMINISTRATOR

 

Section 15.01.         Designation of Collateral Administrator

 

(a)          Initial Collateral Administrator. Until a successor Collateral
Administrator is appointed in accordance with this Article XV, U.S. Bank
National Association is hereby appointed as, and hereby accepts such appointment
and agrees to perform the duties and obligations of, Collateral Administrator
pursuant to the terms hereof and of the other Facility Documents to which the
Collateral Administrator is a party.

 

(b)          Successor Collateral Administrator. Upon the Collateral
Administrator’s receipt of written notice from the Administrative Agent of the
designation of a successor Collateral Administrator pursuant to the provisions
of Section 15.05, the Collateral Administrator agrees that it will terminate its
activities as Collateral Administrator hereunder. Notwithstanding such
termination, the Collateral Administrator shall be entitled to receive all
accrued and unpaid Collateral Administration and Agency Fees and Administrative
Expenses due and owing to it at the time of such termination.

 

Section 15.02.         Certain Duties and Powers

 

(a)          The Collateral Administrator shall assist the Borrower and the
Collateral Manager in connection with monitoring the Collateral by maintaining a
database on certain characteristics of the Collateral on an ongoing basis and
providing to the Borrower and the Collateral Manager (and, where applicable, the
Borrower’s independent public accountants) certain reports, schedules,
calculations all as more particularly described in this Section 15.02 below (in
each case, such reports, schedules and calculations shall be prepared in such
form and content, and in such greater detail, as may be mutually agreed upon by
the parties hereto from time to time and as may be required by the Agreement)
based upon information and data received from the Borrower and/or the Collateral
Manager, as required to be prepared and delivered (or which are necessary to be
prepared and delivered in order that certain other reports, schedules and
calculations can be prepared and delivered) under Article VIII of this
Agreement. The Collateral Administrator’s duties and authority to act as
Collateral Administrator hereunder are limited to the duties and authority
specifically provided for in this Agreement. The Collateral Administrator shall
not be deemed to assume the obligations of the Borrower or the Collateral
Manager hereunder or any other Facility Document, and nothing herein contained
shall be deemed to release, terminate, discharge, limit, reduce, diminish,
modify, amend or otherwise alter in any respect the duties, obligations or
Liabilities of the Borrower or the Collateral Manager under or pursuant to this
Agreement or any other Facility Document. Without limiting the foregoing, the
Collateral Administrator shall perform the following functions:

 

(i)          create a database with respect to the Collateral Loans, Equity
Securities and Eligible Investments credited to the Covered Accounts within five
(5) Business Days of the Closing Date;

 

(ii)         permit access to the information in the Collateral database by the
Collateral Manager and the Borrower;

 

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(iii)        update the Collateral database promptly for ratings changes and for
Collateral Loans, Equity Securities and Eligible Investments acquired or sold or
otherwise disposed of and for any amendments or changes to Collateral Loan
amounts or interest rates and, if direct online viewing access to the foregoing
is unavailable, report any updates as of the close of business on the preceding
Business Day to the Collateral database to the Administrative Agent no later
than 5:00 p.m. on each Business Day, in each case based upon, and to the extent
of, information furnished to the Collateral Administrator by or on behalf of the
Borrower or the Collateral Manager as may be reasonably required by the
Collateral Administrator, or by the agents for the obligors from time to time;

 

(iv)        track the receipt and daily allocation of cash to the Collection
Account and any withdrawals therefrom (including the applicable Interest Rates
provided to the Collateral Administrator by the Administrative Agent) and, if
direct online viewing access to the foregoing is unavailable, report the
balances of the Collection Account to the Administrative Agent no later than
5:00 p.m. on each Business Day as of the close of business on the preceding
Business Day;

 

(v)         prepare and arrange for the delivery of each Monthly Report and
Payment Date Report; and

 

(vi)        provide the Collateral Manager with such other information as may be
reasonably requested in writing by the Collateral Manager and as is within the
possession of the Collateral Administrator.

 

(b)          A reasonably sufficient time prior to the date on which (i) each
Monthly Report is required to be provided pursuant to Section 8.09(a) or (ii)
each Payment Date Report is required to be provided pursuant to Section 8.09(b),
the Collateral Administrator shall calculate, using the information contained in
the Collateral database created by the Collateral Administrator pursuant to
Section 15.02(a) above and any other Collateral information normally maintained
by the Collateral Administrator, and subject to the Collateral Administrator’s
receipt from the Collateral Manager of the information required for the
preparation of the Monthly Report or the Payment Date Report, each item required
to be stated in such Monthly Report or Payment Date Report in accordance with
this Agreement and provide the results of such calculations to the Collateral
Manager so that the Collateral Manager may confirm such results in accordance
with Section 15.02(d). Upon approval by the Collateral Manager, the Collateral
Administrator shall deliver the Monthly Report or Payment Date Report, as
applicable, to the Borrower, the Collateral Manager, the Equityholder and the
Administrative Agent in a form mutually acceptable to the Borrower, the
Collateral Manager, the Equityholder, the Administrative Agent and the
Collateral Administrator.

 

(c)          No provision of this Agreement shall be construed to relieve the
Collateral Administrator from liability for its own grossly negligent action,
its own grossly negligent failure to act, or its own willful misconduct or
fraud, except that:

 

(i)          this subsection shall not be construed to limit the effect of
subsection (a) of this Section 15.02;

 

(ii)         the Collateral Administrator shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Collateral
Administrator, unless it shall be proven that the Collateral Administrator was
grossly negligent in ascertaining the pertinent facts or engaged in fraud or
willful misconduct;

 

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(iii)        no provision of this Agreement shall require the Collateral
Administrator to expend or risk its own funds or otherwise incur any financial
or other liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers contemplated hereunder, if it shall have
reasonable grounds for believing that repayment of such funds or indemnity
satisfactory to it against such risk or liability is not reasonably assured to
it unless such risk or liability relates to the performance of its ordinary
services under this Agreement; and

 

(iv)        in no event shall the Collateral Administrator be liable for
special, punitive, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits) even if the Collateral
Administrator has been advised of the likelihood of such damages and regardless
of the form of such action.

 

(d)          The Borrower and the Collateral Manager shall cooperate with the
Collateral Administrator in connection with the matters described herein,
including calculations and information relating to the Monthly Reports and the
Payment Date Reports or as otherwise reasonably requested hereunder. Nothing
herein shall obligate the Collateral Administrator to determine independently
the correct characterization or categorization of any item of Collateral under
this Agreement (it being understood that any such characterization or
categorization shall be based exclusively upon the determination and
notification received by the Collateral Administrator from the Collateral
Manager). The Collateral Manager shall review and verify the contents of the
aforesaid reports. To the extent any of the information in such reports,
instructions or certificates conflicts with information, data or calculations in
the records of the Collateral Manager, the Collateral Manager shall notify the
Collateral Administrator of such discrepancy and use commercially reasonable
efforts to assist the Collateral Administrator in reconciling such discrepancy.
The Collateral Administrator shall cooperate with the Collateral Manager in
connection with the Collateral Manager’s review of the contents of the aforesaid
reports, instruction and certificates and will use commercially reasonable
efforts to provide such items to the Collateral Manager within a reasonably
sufficient time (as agreed between the Collateral Manager and the Collateral
Administrator) prior to any applicable due date to enable such review. The
Collateral Manager further agrees to send such reports, instructions, statements
and certificates to the Borrower for execution.

 

(e)          The Collateral Administrator shall have no obligation to determine
the Asset Value or the price of any Collateral in connection with any actions or
duties under this Agreement. Nothing herein shall prevent the Collateral
Administrator or any of its Affiliates from engaging in other businesses or from
rendering services of any kind to any Person.

 

(f)          The Collateral Administrator shall in no event have any liability
for the actions or omissions of the Borrower, the Collateral Manager, the
Administrative Agent, the Custodian (but only if not the same Person as the
Collateral Administrator) or any other Person, and shall have no liability for
any inaccuracy or error in any duty performed by it that results from or is
caused by inaccurate, untimely or incomplete information or data received by it
from the Borrower, the Collateral Manager, the Custodian (but only if not the
same Person as the Collateral Administrator) or another Person except to the
extent that such inaccuracies or errors are caused by the Collateral
Administrator's own bad faith, willful misconduct, gross negligence, fraud or
reckless disregard of its duties hereunder. The Collateral Administrator shall
not be liable for failing to perform or any delay in performing its specified
duties hereunder which results from or is caused by a failure or delay on the
part of the Borrower, the Collateral Manager, the Administrative Agent, the
Custodian (but only if not the same Person as the Collateral Administrator) or
any other Person in furnishing necessary, timely and accurate information to the
Collateral Administrator.

 

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(g)          It is expressly acknowledged by the Borrower and the Collateral
Manager that application and performance by the Collateral Administrator of its
various duties hereunder (including recalculations to be performed in respect of
the matters contemplated hereby) shall be based upon, and in reliance upon, data
and information provided to it by the Collateral Manager (and/or the Borrower)
with respect to the Collateral, and the Collateral Administrator shall have no
responsibility for the accuracy of any such information or data provided to it
by such Persons. Nothing herein shall impose or imply any duty or obligation on
the part of the Collateral Administrator to verify, investigate or audit any
such information or data, or to determine or monitor on an independent basis
whether any obligor under the Collateral is in default or in compliance with the
underlying documents governing or securing such securities, from time to time,
the role of the Collateral Administrator hereunder being solely to perform
certain mathematical computations and data comparisons and to provide certain
reports and other deliveries, as provided herein. For purposes of monitoring
changes in ratings, the Collateral Administrator shall be entitled to use and
rely (in good faith) exclusively upon one or more reputable electronic financial
information reporting services, and shall have no liability for any inaccuracies
in the information reported by, or other errors or omissions of, any such
services.

 

(h)          Nothing herein shall obligate the Collateral Administrator to
determine independently any characteristic of a Collateral Loan, or to evaluate
or verify the Collateral Manager's characterization of any Collateral Loan,
including whether any item of Collateral is a Broadly Syndicated Loan, Caa/CCC
Loan, Revolving Collateral Loan, Delayed Drawdown Collateral Loan, Fixed Rate
Obligation, Noteless Loan, PIK Loan, DIP Loan, Related Loan, Eligible Collateral
Loan, Ineligible Collateral Loan, Equity Security, First Lien Loan, Second Lien
Loan, Floor Obligation, Structured Finance Obligation, Certificated Security,
Uncertificated Security or Covenant Lite Loan, any such determination being
based exclusively upon notification the Collateral Administrator receives from
the Collateral Manager or from (or in its capacity as) the Collateral Agent
(based upon notices received by the Collateral Agent from the obligor, trustee
or agent bank under an underlying governing document, or similar source) and
nothing herein shall obligate the Collateral Administrator to review or examine
any underlying instrument or contract evidencing, governing or guaranteeing or
securing any Collateral Loan in order to verify, confirm, audit or otherwise
determine any characteristic thereof. In addition, the Collateral Manager shall
notify the Collateral Administrator of any Material Modification of a Collateral
Loan.

 

Section 15.03.         Certain Rights of Collateral Administrator

 

Notwithstanding any terms herein contained to the contrary, the acceptance by
the Collateral Administrator of its appointment hereunder is expressly subject
to the following terms, which shall govern and apply to each of the terms and
provisions of this Agreement (whether or not so stated therein):

 

(a)          The Collateral Administrator may conclusively rely on and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, note or other paper or document reasonably believed by it to be
genuine and to have been signed or presented by the proper party or parties.

 

(b)          If, in performing its duties under this Agreement, the Collateral
Administrator is required to decide between alternative courses of action, the
Collateral Administrator may request written instructions from the Collateral
Manager acting on behalf of the Borrower as to the appropriate course of action
desired by it. If the Collateral Administrator does not receive such
instructions within two (2) Business Days after it has requested them, the
Collateral Administrator may, but shall be under no duty to, take or refrain
from taking any such courses of action, provided that the Collateral
Administrator shall, as soon as practicable thereafter, notify the Collateral
Manager of which course of action, if any, it has decided to take. The
Collateral Administrator shall act in accordance with instructions received
after such two-Business Day period except to the extent it has already taken, or
committed itself to take, action inconsistent with such instructions.

 

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(c)          Neither the Collateral Administrator nor any of its directors,
officers or employees shall be liable to anyone for any error of judgment, or
for any act done or step taken or omitted to be taken by it (or any of its
directors, officers of employees), or for any mistake of fact or law, or for
anything which it may do or refrain from doing in connection herewith, unless
such action constitutes gross negligence, fraud or willful misconduct on its
part and in breach of the terms of this Agreement. The Collateral Administrator
shall not be liable for any action taken by it in good faith and reasonably
believed by it to be within powers conferred upon it, or taken by it pursuant to
any direction or instruction by which it is governed hereunder, or omitted to be
taken by it by reason of the lack of direction or instruction required hereby
for such action.

 

(d)          In no event shall the Collateral Administrator be liable for any
indirect, special, punitive or consequential damages (including lost profits),
whether or not it has been advised of the likelihood of such damages.

 

(e)          The Collateral Administrator may consult with, and obtain advice
from, legal counsel selected in good faith with respect to any question as to
any of the provisions hereof or its duties hereunder, or any matter relating
hereto, and the written opinion or advice of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by the Custodian in good faith in accordance with the opinion and
directions of such counsel; the reasonable cost of such services shall be
reimbursed pursuant to Section 15.04 below.

 

(f)          The Collateral Administrator shall not be deemed to have notice of
any fact, claim or demand with respect hereto unless actually known by a
Responsible Officer of the Collateral Administrator or unless (and then only to
the extent) received in writing by the Collateral Administrator and specifically
referencing this Agreement.

 

(g)          No provision of this Agreement shall require the Collateral
Administrator to expend or risk its own funds, or to take any action (or forbear
from action) hereunder which might in its judgment involve any expense or any
financial or other liability unless it shall be furnished with acceptable
indemnification. Nothing herein shall obligate the Collateral Administrator to
commence, prosecute or defend legal proceedings in any instance, whether on
behalf of the Borrower or on its own behalf or otherwise, with respect to any
matter arising hereunder, or relating to this Agreement or the services
contemplated hereby.

 

(h)          The permissive right of the Collateral Administrator to take any
action hereunder shall not be construed as a duty.

 

(i)          The Collateral Administrator may act or exercise its duties or
powers hereunder through agents or attorneys, and the Collateral Administrator
shall not be liable or responsible for the actions or omissions of any such
agent or attorney selected by it with reasonable care.

 

(j)          The Collateral Administrator shall not be responsible or liable for
delays or failures in performance resulting from acts beyond its control,
provided that the Collateral Administrator takes commercially reasonable efforts
to resume performance after the cessation of such acts. Such acts shall include
acts of God, strikes, lockouts, riots, acts of war, epidemics, governmental
regulations imposed after the fact, fire, communication line failures, computer
viruses, power failures, earthquakes or other disasters.

 

(k)          All indemnifications contained in this Agreement in favor of the
Collateral Administrator shall survive the termination of this Agreement.

 

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(l)          Each of the protections, reliances, indemnities and immunities
offered to the Collateral Agent in Article XI shall be afforded to the
Collateral Administrator.

 

(m)          The Collateral Administrator shall not be responsible for the
accuracy or content of any certificate, statement, direction or opinion
furnished to it in connection with this Agreement or any other Facility Document
or Related Document. The Collateral Administrator 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 by any Person under any
Facility Document or Related Document. The Collateral Administrator shall not be
responsible to any Person for any recitals, statements, information,
representations or warranties regarding the Borrower or the Collateral or in any
document, certificate or other writing delivered in connection herewith or
therewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectability, priority or sufficiency of thereof
or any such other document or the financial condition of any Person or be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions related to any Person or the
existence or possible existence of any Default or Event of Default. The
Collateral Administrator shall not have any obligation whatsoever to any Person
to assure that any collateral exists or is owned by any Person or is cared for,
protected or insured or that any liens have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise or to continue exercising at all or in any
manner or under any duty of care, disclosure or fidelity any of the rights,
authorities and powers granted or available with respect thereto.

 

Section 15.04.         Compensation and Reimbursement of Collateral
Administrator

 

(a)          The Borrower agrees to pay, and the Collateral Administrator shall
be entitled to receive, as compensation for the Collateral Administrator’s
performance of the duties called for herein, the amounts set forth in the
Collateral Administration and Agency Fee Letter.

 

(b)          The Borrower agrees to pay or reimburse to the Collateral
Administrator upon its request from time to time all reasonable and documented
costs, disbursements, advances, and expenses (including reasonable fees and
expenses of legal counsel) incurred in connection with the preparation or
execution of this Agreement, or in connection with the transactions contemplated
hereby or the administration of this Agreement or performance by the Collateral
Administrator of its duties and services under this Agreement (including costs
and expenses of any action deemed necessary by the Collateral Administrator to
collect any amounts owing to it under this Agreement).

 

(c)          All payments hereunder, including, but not limited to indemnities,
shall be paid in accordance with Section 9.01.

 

Section 15.05.         Resignation and Removal; Appointment of Successor

 

(a)          Notwithstanding anything to the contrary contained in this
Agreement (including clauses (b) and (c) below), no resignation or removal of
the Collateral Administrator and no appointment of a successor Collateral
Administrator pursuant to this Article XV shall become effective until the
acceptance of such appointment by the successor Collateral Administrator under
Section 15.06 and the assumption by such successor Collateral Administrator of
the duties and obligations of the Collateral Administrator hereunder.

 

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(b)          The Collateral Administrator may resign at any time by giving
written notice thereof to the Borrower, the Administrative Agent, the Collateral
Manager and the Lenders not less than 90 days prior to such resignation.

 

(c)          The Collateral Administrator may be removed at any time by the
Administrative Agent (i) upon ten (10) Business Days’ notice (with the prior
written consent of the Collateral Manager) or (ii) at any time if (A) an Event
of Default shall have occurred and be continuing, or (B) the Collateral
Administrator shall become incapable of acting or shall become the subject of an
Insolvency Event. Notice of any such removal shall be sent by the Administrative
Agent to the Collateral Administrator, the Borrower, the Lenders and the
Collateral Manager.

 

(d)          The Collateral Administrator may be removed at any time by the
Collateral Manager upon ten (10) Business Days’ notice (with the prior written
consent of the Administrative Agent).

 

(e)          If the Collateral Administrator shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Collateral
Administrator for any reason (other than resignation), the Borrower shall,
promptly after becoming aware of such resignation, removal, incapacity or
vacancy, appoint a successor collateral administrator by written instrument,
executed by a Responsible Officer of the Borrower, one copy of which shall be
delivered to the retiring Collateral Administrator and one copy to the successor
Collateral Administrator, together with a copy to the Administrative Agent and
the Lenders; provided that such successor Collateral Administrator shall be
appointed only upon the prior written consent of the Administrative Agent (not
to be unreasonably withheld, conditioned or delayed) and, so long as no
Collateral Manager Default shall have occurred and be continuing, the Collateral
Manager (in each case which consent shall not be unreasonably withheld,
conditioned or delayed). In the case of a resignation by the Collateral
Administrator, if no successor Collateral Administrator shall have been
appointed and an instrument of acceptance by a successor Collateral
Administrator shall not have been delivered to the resigning Collateral
Administrator and the Administrative Agent within 90 days after the giving of
such notice of resignation, the Administrative Agent may appoint a successor
Collateral Administrator or the resigning Collateral Administrator may petition
any court of competent jurisdiction to appoint a successor Collateral
Administrator.

 

Section 15.06.         Acceptance and Appointment by Successor

 

Each successor Collateral Administrator appointed hereunder shall execute,
acknowledge and deliver to the Borrower, the Collateral Manager, the
Administrative Agent, the Lenders and the retiring Collateral Administrator an
instrument accepting such appointment. Upon delivery of the required
instruments, the resignation or removal of the retiring Collateral Administrator
shall become effective and such successor Collateral Administrator, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts, duties and obligations of the retiring Collateral Administrator;
but, on request of the Borrower, the Collateral Manager, the Administrative
Agent or the successor Collateral Administrator, such retiring Collateral
Administrator shall (i) execute and deliver an instrument transferring to such
successor Collateral Administrator all the rights, powers and trusts of the
retiring Collateral Administrator and (ii) execute and deliver such further
documents and instruments and take such further action as may be reasonably
requested in order to effect the transfer of the rights, powers, duties and
obligations of the Collateral Administrator hereunder. Upon request of any such
successor Collateral Administrator, the Borrower shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Collateral Administrator all such rights, powers and trusts.

 

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Section 15.07.         Merger, Conversion, Consolidation or Succession to
Business of Collateral Administrator

 

Any organization or entity into which the Collateral Administrator may be merged
or converted or with which it may be consolidated, or any organization or entity
resulting from any merger, conversion or consolidation to which the Collateral
Administrator shall be a party, or any organization or entity succeeding to all
or substantially all of the corporate trust business of the Collateral
Administrator, shall be the successor of the Collateral Administrator hereunder,
without the execution or filing of any document or any further act on the part
of any of the parties hereto.

 

Section 15.08.         Certain Duties of Collateral Administrator Related to
Delayed Payment of Proceeds

 

In the event that in any month the Collateral Administrator shall not have
received any payment (or is unable to identify whether any payment consists of
Principal Proceeds or Interest Proceeds) with respect to any Collateral Loan
pursuant to the applicable Related Documents, (a) the Collateral Administrator
shall promptly notify the Administrative Agent, the Borrower, and the Collateral
Manager and (b) unless within three (3) Business Days (or the end of the
applicable grace period for such payment, if longer) after such notice such
payment shall have been received by the Custodian (or such Collections shall
have been identified), the Collateral Administrator shall request the applicable
Obligor or designated paying agent, as applicable, to make such payment (or
identify such Collections) as soon as practicable after such request but in no
event later than three (3) Business Days after the date of such request. In the
event that such payment is not made (or such Collections are not identified)
within such time period, the Collateral Administrator, subject to the provisions
of this Article XV, shall take such reasonable action at the Borrower’s expense
as the Collateral Manager shall direct. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Agreement. All Collections that the Collateral Administrator is unable to
identify as Principal Proceeds or Interest Proceeds shall be held in the
Collection Account.

 

Section 15.09.         Indemnification

 

(a)          The Borrower shall and does hereby indemnify and hold harmless the
Collateral Administrator for and from any and all costs and expenses (including
reasonable and documented attorney’s fees and expenses), and any and all losses,
damages, claims and liabilities (collectively, “Losses”), that may arise, be
brought against or incurred by the Collateral Administrator, as a result of,
relating to, or arising out of this Agreement, or the administration or
performance of the Collateral Administrator’s duties hereunder, or the
relationship between the Borrower and the Collateral Administrator created
hereby, other than such liabilities, losses, damages, claims, costs and expenses
as are directly caused by the Collateral Administrator’s own actions
constituting gross negligence, fraud or willful misconduct. Without limiting the
foregoing, after the receipt of a Block Notice, the parties hereto agree that
the Lenders shall indemnify and hold harmless the Collateral Administrator and
its directors, officers, employees and agents from and against any and all
Losses incurred as a result of the Collateral Administrator’s compliance with
the Collateral Agent’s (acting at the direction of the Administrative Agent or
the Required Lenders) or the Administrative Agent’s (acting at the direction of
the Required Lenders) direction or instruction in connection with this Agreement
(except to the extent due to the Collateral Administrator’s willful misconduct,
fraud or gross negligence) solely to the extent that such Losses shall not have
been reimbursed by the Borrower.

 

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

 

  FLATIRON FUNDING II, LLC,   as Borrower         By: /s/ Michael A. Reisner    
Name: Michael A. Reisner     Title: Authorized Signatory

 

[Signature Page to Credit and Security Agreement]

 

 

 

  CION Investment Management, LLC, as Collateral Manager         By: /s/ Michael
A. Reisner     Name: Michael A. Reisner     Title: Authorized Signatory

 

[Signature Page to Credit and Security Agreement]

 

 

 

 

  CION INVESTMENT CORPORATION, as the Equityholder         By: /s/ Michael A.
Reisner     Name: Michael A. Reisner     Title: Co-Chief Executive Officer and
Co-President

 

[Signature Page to Credit and Security Agreement]

 

 

 

 

  CITIBANK, N.A., as Administrative Agent and as a Lender         By: /s/
Victoria Chant     Name: Victoria Chant     Title: Vice President

 

[Signature Page to Credit and Security Agreement]

 

 

 

  U.S. Bank National Association, as Collateral Agent and as Collateral
Administrator         By: /s/ Ralph J. Creasia Jr.     Name: Ralph J. Creasia
Jr.     Title: Senior Vice President

 

[Signature Page to Credit and Security Agreement]

 

 

 

  U.S. Bank National Association, as Custodian         By: /s/ Kenneth Brandt  
    Name: Kenneth Brandt     Title: Assistant Vice President

 

[Signature Page to Credit and Security Agreement]