Exhibit 10.1

Execution Copy

 

 

 

REVOLVING CREDIT AND SECURITY AGREEMENT

among

NEWSTAR COMMERCIAL LOAN FUNDING 2012-1 LLC,

as Borrower,

THE LENDERS FROM TIME TO TIME PARTIES HERETO,

NATIXIS, NEW YORK BRANCH,

as Administrative Agent

and

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

Dated as of February 16, 2012

 

 

 

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TABLE OF CONTENTS

 

                 Page  

ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION; COMPUTATIONS

     1      

Section 1.01

    

Definitions

     1      

Section 1.02

    

Rules of Construction

     52      

Section 1.03

    

Computation of Time Periods

     52      

Section 1.04

    

Collateral Value Calculation Procedures

     52   

ARTICLE II ADVANCES UNDER THE FACILITY

     54      

Section 2.01

    

Revolving Credit Facility

     54      

Section 2.02

    

Advances

     54      

Section 2.03

    

Evidence of Indebtedness; Notes

     55      

Section 2.04

    

Payment of Principal and Interest

     56      

Section 2.05

    

Prepayment of Advances

     57      

Section 2.06

    

Reductions in Commitments

     58      

Section 2.07

    

Maximum Lawful Rate

     59      

Section 2.08

    

Several Obligations

     59      

Section 2.09

    

Increased Costs

     59      

Section 2.10

    

Compensation; Breakage Payments

     61      

Section 2.11

    

Illegality; Inability to Determine Rates

     61      

Section 2.12

    

Rescission or Return of Payment

     62      

Section 2.13

    

Fees Payable by Borrower

     62      

Section 2.14

    

Post-Default Interest

     63      

Section 2.15

    

Payments Generally

     63      

Section 2.16

    

Applicable Row Level

     63      

Section 2.17

    

Rating Criteria for Lenders

     64   

ARTICLE III CONDITIONS PRECEDENT

     65      

Section 3.01

    

Conditions Precedent to Initial Borrowing

     65      

Section 3.02

    

Conditions Precedent to Each Borrowing

     67   

ARTICLE IV REPRESENTATIONS AND WARRANTIES

     68      

Section 4.01

    

Representations and Warranties of the Borrower

     68      

Section 4.02

    

Representations and Warranties of the Trustee

     73   

ARTICLE V COVENANTS

     74      

Section 5.01

    

Affirmative Covenants of the Borrower

     74      

Section 5.02

    

Negative Covenants of the Borrower

     79      

Section 5.03

    

Certain Undertakings Relating to Separateness

     84   

ARTICLE VI EVENTS OF DEFAULT

     86      

Section 6.01

    

Events of Default

     86      

Section 6.02

    

Remedies

     89   

ARTICLE VII PLEDGE OF COLLATERAL; RIGHTS OF THE TRUSTEE

     90      

Section 7.01

    

Grant of Security

     90      

Section 7.02

    

Release of Lien on Collateral

     91      

Section 7.03

    

Rights and Remedies

     92      

Section 7.04

    

Remedies Cumulative

     93      

Section 7.05

    

Related Documents

     93      

Section 7.06

    

Borrower Remains Liable

     94   

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TABLE OF CONTENTS

(continued)

 

                 Page     

Section 7.07

    

Assignment of Collateral Servicing Agreement and the Master Sale Agreement

     94      

Section 7.08

    

Protection of Collateral

     96   

ARTICLE VIII ACCOUNTS, ACCOUNTINGS AND RELEASES

     96      

Section 8.01

    

Collection of Money

     96      

Section 8.02

    

Collection Account

     97      

Section 8.03

    

Transaction Accounts

     99      

Section 8.04

    

The Future Funding Reserve Account; Fundings

     100      

Section 8.05

    

Reinvestment of Funds in Covered Accounts; Reports by Trustee

     100      

Section 8.06

    

Accountings

     102      

Section 8.07

    

Other Data; Obligor Financial Information

     103      

Section 8.08

    

Release of Collateral

     105      

Section 8.09

    

Reports by Independent Accountants

     106      

Section 8.10

    

Reports to Moody’s

     106   

ARTICLE IX APPLICATION OF MONIES

     107      

Section 9.01

    

Disbursements of Monies from Payment Account

     107   

ARTICLE X SALE AND SUBSTITUTION OF COLLATERAL LOANS; PURCHASE OF ADDITIONAL
COLLATERAL LOANS

     112      

Section 10.01

    

Sales and Substitutions of Collateral Loans

     112      

Section 10.02

    

Purchase of Additional Collateral Loans

     115      

Section 10.03

    

Conditions Applicable to All Sale and Purchase Transactions

     116      

Section 10.04

    

Additional Capital Contributions

     117   

ARTICLE XI THE TRUSTEE AND DOCUMENT CUSTODIAN

     117      

Section 11.01

    

Designation of Trustee

     117      

Section 11.02

    

Duties of Trustee

     117      

Section 11.03

    

Merger or Consolidation

     121      

Section 11.04

    

Trustee and Custodian Compensation

     121      

Section 11.05

    

Trustee Removal

     122      

Section 11.06

    

Limitation on Liability

     122      

Section 11.07

    

The Trustee Not to Resign

     125      

Section 11.08

    

Release of Documents

     125      

Section 11.09

    

Return of Related Documents

     126      

Section 11.10

    

Access to Certain Documentation and Information Regarding the Collateral; Audits

     126      

Section 11.11

    

Indemnification

     127   

ARTICLE XII THE ADMINISTRATIVE AGENT

     128      

Section 12.01

    

Authorization and Action

     128      

Section 12.02

    

Delegation of Duties

     128      

Section 12.03

    

Administrative Agent’s Reliance, Etc.

     129      

Section 12.04

    

Indemnification

     130      

Section 12.05

    

Successor Administrative Agent

     131   

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TABLE OF CONTENTS

(continued)

 

                 Page   ARTICLE XIII MISCELLANEOUS      132      

Section 13.01

    

No Waiver; Modifications in Writing

     132      

Section 13.02

    

Notices, Etc.

     132      

Section 13.03

    

Taxes

     134      

Section 13.04

    

Costs and Expenses; Indemnification

     137      

Section 13.05

    

Execution in Counterparts

     139      

Section 13.06

    

Assignability; Participation; Register

     139      

Section 13.07

    

Governing Law

     141      

Section 13.08

    

Severability of Provisions

     141      

Section 13.09

    

Confidentiality

     141      

Section 13.10

    

Merger

     142      

Section 13.11

    

Survival

     142      

Section 13.12

    

Submission to Jurisdiction; Waivers; Etc.

     142      

Section 13.13

    

Waiver of Jury Trial

     143      

Section 13.14

    

Service of Process

     143      

Section 13.15

    

[Reserved]

     143      

Section 13.16

    

[Reserved]

     143      

Section 13.17

    

PATRIOT Act Notice

     144      

Section 13.18

    

Legal Holidays

     144      

Section 13.19

    

Non-Petition

     144      

Section 13.20

    

Custodianship; Delivery of Collateral Loans and Eligible Investments

     144      

Section 13.21

    

Special Provisions Applicable to CP Conduits

     146   

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SCHEDULES

 

Schedule 1

  

Initial Commitments and Percentages

Schedule 2

  

Scope of Monthly Report and Payment Date Report

Schedule 3

  

Initial Collateral Loans

Schedule 4

  

Diversity Score Calculation

Schedule 5

  

[Intentionally Omitted]

Schedule 6

  

Moody’s Industry Classification Group List

Schedule 7

  

LIBOR Definition

Schedule 8

  

Moody’s Rating Definitions

Schedule 9

  

Moody’s RiskCalc Calculation

Schedule 10

  

Location of Related Documents

EXHIBITS

 

Exhibit A

  

Form of Note

Exhibit B

  

Form of Notice of Borrowing

Exhibit C

  

Form of Notice of Prepayment

Exhibit D

  

Form of Assignment and Acceptance

Exhibit E

  

Form of Account Control Agreement

Exhibit F

  

Form of Retention of Net Economic Interest Letter

Exhibit G

  

Form of Release of Related Documents

Exhibit H

  

Form of Payoff Letter

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REVOLVING CREDIT AND SECURITY AGREEMENT

REVOLVING CREDIT AND SECURITY AGREEMENT dated as of February 16, 2012 among
NEWSTAR COMMERCIAL LOAN FUNDING 2012-1 LLC, a Delaware limited liability
company, as borrower (together with its permitted successors and assigns, the
“Borrower”); the LENDERS from time to time party hereto; NATIXIS, NEW YORK
BRANCH (“Natixis”), as administrative agent for the Secured Parties (as
hereinafter defined) (in such capacity, together with its successors and
assigns, the “Administrative Agent”) and U.S. BANK NATIONAL ASSOCIATION (the
“Bank”), a national banking association (together with its successors and
assigns, “US Bank”), not in its individual capacity but as trustee for the
Secured Parties (as hereinafter defined) (in such capacity, together with its
successors and assigns, the “Trustee”).

W I T N E S S E T H:

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:

“ABL Facility” means a lending facility pursuant to which the loans thereunder
are secured by a perfected, first priority security interest in accounts
receivable, inventory, machinery, equipment, real estate, oil and gas reserves,
vessels, or periodic revenues, where such collateral security consists of assets
generated or acquired by the related Obligor in its business.

“Account” has the meaning specified in Section 9-102(a)(2) of the UCC.

“Account Control Agreement” means an agreement in substantially the form of
Exhibit E hereto.

“Acquisition and Dispositions Standards” has the meaning assigned to such term
in Section 10.03(b).

“Acquisition Funds” the cash and/or the portion of any Collateral Loan (in the
case of a Collateral Loan contributed pursuant to the Master Sale Agreement)
contributed by the holders of the Equity to the Borrower plus the funds
available pursuant to Section 9.01(a)(i)(J) on such date of determination.

 

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“Administrative Agent” means Natixis, New York Branch.

“Administrative Agent Fee” shall have the meaning specified in the Fee Letter.

“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 the sum of:

(a) 0.02% per annum (prorated for the related Collection Period on the basis of
a 360-day year consisting of twelve 30-day months) of the Daily Average
Collateral Loan Commitment Amount on the related Determination Date; and

(b) $60,000 per quarter;

provided that (1) if the amount of Administrative Expenses paid under the
Administrative Expense Cap (including any excess applied in accordance with this
proviso) on the three immediately preceding Payment Dates or during the related
Collection Periods is less than the stated Administrative Expense Cap in the
aggregate for such three preceding Payment Dates, then the excess may be applied
to the Administrative Expense Cap with respect to the then-current Payment Date;
and (2) in respect of the first three Payment Dates following the Closing Date,
such excess amount shall be calculated based on the Payment Dates preceding such
Payment Date.

“Administrative Expenses” means the fees and expenses and other amounts due or
accrued of the Borrower with respect to any Payment Date and payable in the
following order by the Borrower:

(a) first, to the Trustee, the Custodian and the Securities Intermediary for
fees and expenses (including indemnity amounts) pursuant to the Trustee Fee
Letter and the Facility Documents; and

(b) second, to the Administrative Agent in respect of the Administrative Agent
Fee;

(c) third, on a pro rata basis, to:

(i) the Independent Accountants, agents (other than the Collateral Servicer) and
counsel of the Borrower for fees and expenses;

(ii) the Rating Agencies for fees and expenses (including any annual fee,
amendment fees and surveillance fees) in connection with any rating of the
Facility or in connection with the rating of (or provision of Credit Estimates
in respect of) any Collateral Loans;

(iii) the Collateral Servicer under this Agreement and the Collateral Servicing
Agreement, including (x) expenses of the Collateral Servicer (including fees for
its accountants, agents and counsel) incurred in connection with the

 

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purchase, sale or disposition of any Collateral Loans, and (y) any other
expenses incurred in connection with the Collateral Loans and all other amounts
payable pursuant to the Collateral Servicing Agreement; and

(iv) the Collateral Servicer or any other Person in respect of any other fees or
expenses permitted under or incurred pursuant to or in connection with this
Agreement and the documents delivered pursuant to or in connection with this
Agreement, and including:

(x) to the Lenders, the Administrative Agent and the Trustee (or related
indemnified parties) for fees, expenses and other amounts payable by the
Borrower under this Agreement or any other Facility Document (including,
notwithstanding anything herein to the contrary, but subject to Sections 2.04(f)
and 13.04, amounts sufficient to reimburse each Lender for all amounts paid by
such Lender pursuant to Section 11.11 and Section 12.04 (and subject to the
limitations therein));

(y) to the Lenders, the Administrative Agent and the Trustee for expenses and
other amounts related to the negotiation, closing, administration, amendment,
extension, work-out or enforcement of this Agreement; and

(z) all legal and other fees and expenses incurred in connection with the
negotiation, closing, funding, purchase, sale, administration, work-out or
enforcement of any Collateral Loans (including any amounts payable by the
Borrower or the Collateral Servicer in connection with any advances made to
protect or preserve rights against any related Obligor or to indemnify an agent
or representative for the lenders pursuant to any Related Documents), and any
other expenses incurred in connection with the Collateral Loans,

provided that (1) for the avoidance of doubt, 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
(including, without limitation, interest and principal, other amounts owing in
respect of the Advances and the Commitments and the Collateral Servicing Fees)
shall not constitute Administrative Expenses and (2) expenses in connection with
the occurrence of the Closing Date, to the extent paid for with Cash contributed
by the Collateral Servicer or an Affiliate thereof under Section 10.04, shall
not constitute Administrative Expenses.

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

“Affected Person” means (i) each Lender, (ii) the relevant Lender’s parent
and/or holding company, (iii) if the relevant Lender is a CP Conduit, the
related Liquidity Bank and (iv) any Participant.

“Affiliate” means, in respect of a referenced Person, another Person
Controlling, Controlled by or under common Control with such referenced Person;
provided, however, that a

 

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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 under, guarantees or otherwise contractually provides credit support
for the obligations of the other such Person or Obligor).

“Aggregate Funded Spread” means, as of any date, in the case of each Floating
Rate Obligation, (i) the excess of the interest rate over Specified LIBOR (with
respect to Collateral Loans that do not bear interest based upon a Specified
LIBOR, the spread shall be deemed to be the all-in rate minus the applicable
LIBOR) as then in effect (which spread or excess may be expressed as a negative
percentage) multiplied by (ii) the Principal Balance of such Collateral Loan
(excluding the unfunded portion of any Delayed Funding Collateral Loan or
Revolving Collateral Loan), provided that with respect to any Collateral Loan
that bears interest at a floating rate subject to a floor rate (i.e. LIBOR or
Prime floor) and such floor rate is in effect, the spread for purpose of this
definition will be the interest rate over the prevailing floor rate in effect,
provided further that any portion of the interest accrued for a specified period
of time or until the maturity thereof is, or at the option of the Obligor may
be, added to the principal balance of such loan or Collateral Loan or otherwise
deferred rather than being paid in Cash shall be excluded from the interest rate
for purposes of this definition.

“Aggregate Industry Equivalent Unit Score” has the meaning assigned to such term
in Schedule 4.

“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.

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

“Agreement” means this Revolving Credit and Security Agreement, as the same may
from time to time be amended, supplemented, waived or modified in accordance
with the provisions hereof.

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

“Applicable Law” means any Law of any 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” shall have the meaning specified in the Fee Letter.

“Applicable Row Level” means a single number that refers to one row under the
column of that name as set forth in the Matrix that becomes effective after the
Collateral Servicer confirms in writing that all of the columns in the Matrix
for both the existing and proposed Applicable Row Level are in compliance after
the Borrower or the Collateral Servicer provides a notice of intent to change
the then-current Applicable Row Level as described in Section 2.16(c).

 

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“Appraised Value” means, with respect to any Collateral Loan, the value of the
tangible and intangible assets securing such Collateral Loan net of estimated
costs of their liquidation and, without duplication, the cash flow generating
capability of the Obligor and any guarantor of the related Collateral Loan, as
determined by the applicable Approved Valuation Firm, in each case as set forth
in the related Valuation or, if a range of values is set forth therein, the
midpoint of such values. If the Borrower owns less than 100% of the total
lenders’ interests secured by the assets securing any Collateral Loan or has
sold any Participation Interest in such Collateral Loan, the Appraised Value
with respect to such Collateral Loan will be reduced pro rata to reflect the
proportionate interests of all other lenders or participants secured by such
assets that rank pari passu with the Borrower’s interest under such Collateral
Loan and, if the security interest of the Collateral Loan in such assets is not
a first priority security interest, the Appraised Value with respect to such
Collateral Loan will also be reduced by the amount of all obligations secured by
such assets at a higher level of priority than the Borrower’s interest in such
assets under such Collateral Loan.

“Approved Valuation Firm” means a nationally recognized valuation firm
acceptable to the Administrative Agent, envisioned as of the Closing Date to
include each of (i) Houlihan Lokey Howard & Zukin, (ii) Lincoln International
LLC (f/k/a Lincoln Partners LLC), (iii) Duff & Phelps Corp., (iv) Valuation
Research Corporation, (v) FTI Consulting, Inc., (vi) American Appraisal
Associates, Inc., (vii) Deloitte LLP, (viii) Ernst & Young LLP, (ix) KPMG LLP,
(x) Capstone Advisory Group, LLC and (xi) any other nationally recognized
accounting firm or valuation firm selected by the Borrower with notice to
Moody’s and, in each case as approved by the Administrative Agent in its
reasonable sole discretion.

“Article 122a” means Article 122a of Directive 2006/48/EC (as amended by
Directive 2009/111/EC) and any corresponding law or rule as in effect in any
country in the European Economic Area and applicable to any Lender, Liquidity
Bank or its holding company and as any may be amended or supplemented from time
to time by rule, regulation or directive.

“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.

“Assumed Reinvestment Rate” means, at any time, the current yield (or weighted
average yield) obtained by the Borrower at such time on its Eligible
Investments.

“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 FINRA, 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.

 

5

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“Average Par Amount” has the same meaning assigned to such term in Schedule 4.

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

“Bankruptcy Code” means the United States Bankruptcy Code, as amended.

“Base Rate” means, for any day, a fluctuating rate of interest per annum equal
to the highest of:

(a) the rate of interest in effect for such day that is identified and normally
published by The Wall Street Journal as the “Prime Rate” (or, if more than one
rate is published as the Prime Rate, then the highest of such rates), with any
change in Prime Rate to become effective as of the date the rate of interest
which is so identified as the “Prime Rate” is different from that published on
the preceding Business Day (and, if The Wall Street Journal no longer reports
the Prime Rate, or if such Prime Rate no longer exists, then the Administrative
Agent may select a reasonably comparable index or source to use as the basis for
the Base Rate under this clause (a));

(b) the Federal Funds Rate plus one-half of one percent (0.50%) per annum; and

(c) Specified LIBOR plus 1.00% per annum.

The Base Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer of the Administrative Agent or any
Lender. Interest calculated pursuant to clause (a) above will be determined
based on a year of 365 days or 366 days, as applicable, and actual days elapsed.
Interest calculated pursuant to clauses (b) and (c) above will be determined
based on a year of 360 days and actual days elapsed.

“Base Rate Advance” means an Advance that bears interest at the Base Rate as
provided in Section 2.04 and Section 2.11.

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

“Borrower” means NewStar Commercial Loan Funding 2012-1 LLC, a Delaware limited
liability company.

“Borrower LLC Agreement” means the Limited Liability Company Agreement of the
Borrower, dated as of February 16, 2012, as amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof and thereof.

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

 

6

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“Borrowing Date” means the date of a Borrowing.

“Breakage Payment” has the meaning assigned to such term in Section 2.10.

“Bridge Loan” means a loan incurred in connection with a merger, acquisition,
consolidation, sale of all or substantially all of the assets of a Person or
entity, restructuring or similar transaction, which loan by its terms is
required to be repaid within one year of the incurrence thereof with proceeds
from additional borrowings or other re-financings.

“Business Day” means any day other than a Saturday or Sunday, provided that days
on which banks are authorized or required to close in New York, New York,
Boston, Massachusetts, Florence, South Carolina or, solely with respect to the
Calculation Agent and the calculation of LIBOR, London, England, and days on
which commercial paper markets in the United States are closed shall not
constitute Business Days.

“Caa Adjustment” means, for all Collateral Loans (other than Deferring
Securities, Defaulted Loans and Charged-Off Loans) with a Moody’s Default
Probability Rating less than “B3”, the product obtained by multiplying (x) the
Principal Balance of such Collateral Loan by (y) the difference between (A) 100%
and (B) the Market Value of such Collateral Loan expressed in terms of the
Principal Balance; provided that the Caa Adjustment with respect to the first
10.0% in Aggregate Principal Balance of all Collateral Loans subject to this
definition having the highest Market Value will be zero.

“Calculation Agent” means the Bank, as calculation agent, for purposes of
Schedule 7.

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

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

“Charged-Off Loan” means any (i) Defaulted Loan that has been a Defaulted Loan
for a consecutive period of more than one year or (ii) Collateral Loan as to
which a Specified Change that extends the scheduled maturity date of such
Collateral Loan beyond the Final Maturity Date has occurred that was not
consented to by the Administrative Agent; provided that any such Collateral Loan
shall no longer be deemed to be a Charged-Off Loan with the written consent of
the Administrative Agent (at the direction of the Required Lenders) to such
Specified Change.

“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.

 

7

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“Closing Date” means February 16, 2012.

“Closing Expense Account” means the account established pursuant to
Section 8.03(c).

“Closing Expense Account Amount” shall have the meaning specified in the Fee
Letter.

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

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

“Collateral Interest Amount” means, as of any date of determination, without
duplication, the sum of (a) the aggregate amount of Interest Proceeds that has
been received or that is expected to be received (other than Interest Proceeds
(i) expected to be received from Defaulted Loans, unless actually received and
(ii) received as capital contributions from the Equity holders and designated as
Interest Proceeds by the Borrower), and (b) the aggregate amount of Interest
Proceeds on deposit in the Interest Collection Subaccount, in each case during
the Collection Period (and, if such Collection Period does not end on a Business
Day, the next succeeding Business Day) in which such date of determination
occurs.

“Collateral Loan” means a loan obligation, debt obligation or Participation
Interest as of the date of acquisition by, or contribution to, the Borrower (or
its binding commitment to acquire the same) meets each of the following
criteria:

 

  (a) permits assignment to the Borrower and the pledge thereof to the Trustee
hereunder;

 

  (b) is denominated and payable in Dollars (and is not convertible into, or
payable in, any other currency) and is governed by the law of a state of the
United States;

 

  (c) is an obligation of an Obligor organized in the United States (or any
state thereof but excluding any territory thereof);

 

  (d) is an “eligible asset” as defined in Rule 3a-7 under the Investment
Company Act;

 

  (e) is not a Defaulted Loan, a Credit Risk Loan, a Synthetic Loan, a Bridge
Loan, a Structured Finance Obligation, a Real Estate Loan, or a loan that is a
DIP Loan, a PIK Loan, a Second Lien Loan or a Mezzanine Loan;

 

  (f) is not a Zero Coupon Obligation;

 

  (g) is not a finance lease or chattel paper;

 

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  (h) is not an obligation the repayment of which is by its terms subject to
material non-credit related risk (including, without limitation, catastrophe
bonds, weather-linked derivatives, commodity-linked notes, etc.);

 

  (i) no portion thereof (including any conversion option, exchange option or
other similar component thereof) is exchangeable or convertible into equity;

 

  (j) is not an Equity Security or a component of an Equity Security (other than
an Equity Kicker received in connection with a Collateral Loan);

 

  (k) is not currently the subject of an offer and has not been called for
redemption;

 

  (l) does not constitute Margin Stock;

 

  (m) such obligation or security is not subject to U.S. withholding or foreign
withholding tax unless the Obligor of the obligation or security is required to
make “gross-up” payments for the full amount of such withholding tax.

 

  (n) provides for the full amount of principal at maturity;

 

  (o) if such Collateral Loan is a Participation Interest, the Moody’s
Counterparty Criteria are satisfied;

 

  (p) matures prior to the Final Maturity Date;

 

  (q) requires payment of interest by the obligor of such Collateral Loan with a
payment frequency no less than quarterly;

 

  (r) has a Moody’s Default Probability Rating of at least “B3” or better
(subject to the Concentration Limitations); provided that such Collateral Loan
may have a Moody’s Default Probability Rating of “Caa1” so long as the Maximum
Moody’s Rating Factor Test is maintained or improved if previously out of
compliance and the Concentration Limitations are maintained or improved if
previously out of compliance;

 

  (s) is not an obligation (other than a Revolving Collateral Loan or a Delayed
Funding Collateral Loan) pursuant to which any future advances or payments to
the Obligor may be required to be made by the Borrower;

 

  (t) will not cause the Borrower or the pool of assets to be required to be
registered as an investment company under the Investment Company Act;

 

  (u) is a Senior Secured First Lien Loan;

 

  (v) unless the acquisition of such Collateral Loan has been approved in
writing by the Administrative Agent, is acquired for a price equal to or greater
than 90.0% of its Principal Balance;

 

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  (w) unless the acquisition of such Collateral Loan has been approved in
writing by the Administrative Agent, is a Collateral Loan of an Obligor that has
a trailing twelve month net senior debt to EBITDA ratio of less than 4.0x and a
trailing twelve month net total debt to EBITDA ratio of less than 6.0x, provided
that, notwithstanding the foregoing, (i) if the Collateral Loan is a broadly
syndicated loan with a minimum debt issuance of $250,000,000 and a public rating
of B3 and B- by Moody’s and S&P, respectively, or higher then such Obligor has a
trailing twelve month net senior debt to EBITDA ratio of less than 5.0x and a
trailing twelve month net total debt to EBITDA ratio of less than 7.0x (provided
that not more than 10% of Total Capitalization may consist of Collateral Loans
of Obligors that are subject to this proviso), (ii) if the Collateral Loan is a
Senior Secured First Lien Loan and the Obligor has no other outstanding
subordinated debt then such Obligor has a trailing twelve month net senior debt
to EBITDA ratio of less than 5.0x (provided that not more than 20% of Total
Capitalization may consist of Collateral Loans of Obligors that are subject to
this proviso) and (iii) if the Obligor of such Collateral Loan is primarily
engaged in the media business, broadcasting, entertainment, printing, publishing
and telecommunications, then such Obligor has a trailing twelve month net senior
debt to EBITDA ratio of less than 4.5x (provided that not more than 12% of Total
Capitalization may consist of Collateral Loans of Obligors that are subject to
this proviso);

 

  (x) unless the acquisition of such Collateral Loan has been approved in
writing by the Administrative Agent, at time of acquisition of such Collateral
Loan at least 80% of Total Capitalization must consist of Obligors that have a
trailing twelve month EBITDA of at least $10,000,000 based on the most recent
financial information provided by the Obligor and relied upon for the Collateral
Servicer’s investment decision; and

 

  (y) unless the acquisition of such Collateral Loan has been approved in
writing by the Administrative Agent, is not a Covenant Lite Loan.

“Collateral Loan Checklist” means, with respect to a Collateral Loan, an
electronic or hard copy, as applicable, list delivered by or on behalf of the
Borrower to the Trustee that identifies each of the items which constitute the
Related Documents, specifies whether such document is an original or a copy and
includes the identification number and name of the Obligor with respect to such
Collateral Loan.

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

 

  (a) the Moody’s Diversity Test;

 

  (b) the Minimum Floating Spread Test;

 

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  (c) the Minimum Weighted Average Coupon Test;

 

  (d) the Maximum Weighted Average Life Test;

 

  (e) the Maximum Moody’s Rating Factor Test; and

 

  (f) the Minimum Weighted Average Moody’s Recovery Rate Test;

provided that, the Moody’s Diversity Test shall not apply during the Ramp-Up
Period.

“Collateral Servicing Agreement” means the agreement, dated as of the Closing
Date, between the Borrower and the Collateral Servicer relating to the Facility
and the Collateral, as amended from time to time in accordance with the terms
hereof and thereof.

“Collateral Servicing Fee” shall have the meaning specified in the Fee Letter.

“Collateral Servicer” means NewStar Financial, Inc. or any successor in such
capacity in accordance with the Collateral Servicing Agreement.

“Collection Account” means the trust account established pursuant to
Section 8.02, which includes the Principal Collection Subaccount and the
Interest Collection Subaccount.

“Collection Period” means, with respect to the first Payment Date, the period
from and including the Closing Date to and including the Determination Date
preceding the first Payment Date, and thereafter, the period from but excluding
the Determination Date preceding the previous Payment Date to and including the
Determination Date preceding the current Payment Date or, in the case of the
final Collection Period preceding the Final Maturity Date or the final
Collection Period preceding an optional prepayment in whole of the Advances,
ending on the Final Maturity Date or the date of such prepayment, respectively.

“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 Loans constituting Collateral, including all principal,
interest, fees, distributions 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.

“Commercial Paper” means, with respect to a CP Conduit, at any time of
determination, commercial paper of such CP Conduit or its related Commercial
Paper issuer the proceeds of which are then allocated by the administrator of
such CP Conduit or its related Commercial Paper issuer as the source of funding
the acquisition or maintenance of such CP Conduit’s obligations hereunder.

“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 in an aggregate principal amount at any one time
outstanding up to but not exceeding the amount set forth opposite the name of
such Lender on Schedule 1 or in the

 

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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 13.06(a).

“Commitment Fees” has the meaning assigned to such term in Section 2.13(a).

“Commitment Shortfall” means, as of any date, the excess, if any, of (a) the sum
of (i) the Net Aggregate Exposure Amount plus (ii) the aggregate of unsettled
purchases of Collateral Loans not offset by Cash on deposit in the Principal
Collection Subaccount over (b) the Total Commitment minus the aggregate
outstanding principal amount of all Advances.

“Commitment Shortfall Test” means a test that will be satisfied at any time if
the Commitment Shortfall equals zero at such time.

“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.

“Commitment Termination Date Balance” means the aggregate outstanding principal
balance of the Advances as of the Commitment Termination Date.

“Concentration Account” The account maintained at the Concentration Account
Bank, subject to the Intercreditor Agreement, named “NewStar Concentration LLC
(security for US Bank, Account Custodian)”, with the account number
2090032625215.

“Concentration Account Bank” means, Wachovia Bank, National Association.

“Concentration Account Servicer” means, NewStar Financial, Inc.

“Concentration Limitations” means limitations that are satisfied if, as of any
date of determination, for all Collateral Loans (other than Charged-Off Loans)
in the aggregate, (1) the Aggregate Principal Balance of the Collateral Loans
owned (or, in relation to a proposed purchase of a Collateral Loan, proposed to
be owned) by the Borrower (other than Defaulted Loans and Charged-Off Loans) and
(2) with respect to Defaulted Loans, an amount determined as set forth in clause
(b) of the definition of Principal Collateralization Amount, in each case
calculated as a percentage of Total Capitalization (unless otherwise specified),
comply with all of the requirements set forth below (or, in connection with a
proposed purchase, if not in compliance, the relevant requirements are
maintained or improved as a result of such purchase):

 

  (a) not more than 3% consists of Fixed Rate Obligations;

 

  (b) not more than 3% consists of obligations of any one Obligor (and
Affiliates thereof), provided that during Stage I of the Ramp-Up Period, not
more than $3,600,000 may consist of obligations of any one Obligor (and
Affiliates thereof);

 

  (c) not more than 15% consists of Revolving Collateral Loans or Delayed
Funding Collateral Loans;

 

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  (d) not more than 10% consists of Collateral Loans with Obligors in any single
Moody’s Industry Classification, provided that any one Moody’s Industry
Classification may constitute up to 15%;

 

  (e) a maximum of 10% consists of Collateral Loans that have a Moody’s Default
Probability Rating of “Caa1” or below (excluding Collateral Loans with a Moody’s
Default Probability Rating “Ca” or below or otherwise are Defaulted Loans);

 

  (f) not more than 10% consists of Participation Interests, and the Moody’s
Counterparty Criteria are satisfied; provided that (x) not more than 5% consists
of Participation Interests in respect of a single Selling Institution;

 

  (g) not more than 5% consists of Collateral Loans that are Letters of Credit;
and

 

  (h) not more than 10% consists of Collateral Loans that have attached Equity
Kickers.

“Conduit Assignee” means any multi-seller commercial paper conduit or special
purpose entity funded by a multi-seller commercial paper conduit which is, in
either case, administered by a common manager or an Affiliate thereof, or the
collateral trustee of such entity.

“Constituent Documents” means in respect of any Person, the certificate or
articles of formation or organization, the limited liability company agreement
(including, in the case of the Borrower, the Borrower LLC 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
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.

“Contingent Obligation” as to any Person means, without duplication, (i) any
contingent obligation of such Person required to be shown on such Person’s
balance sheet in accordance with GAAP, and (ii) any obligation required to be
disclosed in the footnotes to such Person’s financial statements in accordance
with GAAP, guaranteeing partially or in whole any non-recourse Indebtedness,
lease, dividend or other obligation, exclusive of contractual indemnities
(including, without limitation, any indemnity or price-adjustment provision
relating to the purchase or sale of securities or other assets) and guarantees
of non-monetary obligations (other than guarantees of completion) which have not
yet been called on or quantified, of such Person or of any other Person. The
amount of any Contingent Obligation described in clause (ii) shall be deemed to
be (a) with respect to a guaranty of interest or interest and principal, or
operating income guaranty, the sum of all payments required to be made
thereunder (which in the case of an operating income guaranty shall be deemed to
be equal to the debt service for the note secured thereby), calculated at the
applicable interest rate, through (i) in the case of an interest or interest and
principal guaranty, the stated date of maturity of the obligation (and

 

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commencing on the date interest could first be payable thereunder), or (ii) in
the case of an operating income guaranty, the date through which such guaranty
will remain in effect, and (b) with respect to all guarantees not covered by the
preceding clause (a), an amount equal to the stated or determinable amount of
the primary obligation in respect of which such guaranty is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as recorded on
the balance sheet and on the footnotes to the most recent financial statements
of the Borrower. Notwithstanding anything contained herein to the contrary,
guarantees of completion shall not be deemed to be Contingent Obligations unless
and until a claim for payment or performance has been made thereunder by the
person entitled to performance or payment thereunder, at which time any such
guaranty of completion shall be deemed to be a Contingent Obligation in an
amount equal to any such claim. Subject to the preceding sentence, (i) in the
case of a joint and several guaranty given by such Person and another Person
(but only to the extent such guaranty is directly or indirectly recourse to such
Person), the amount of the guaranty, to the extent it is directly or indirectly
recourse to such Person, shall be deemed to be 100% thereof unless and only to
the extent that such other Person has delivered Cash or cash equivalents to
secure all or any part of such Person’s guaranteed obligations and (ii) in the
case of any other guaranty, (whether or not joint and several) of an obligation
otherwise constituting Indebtedness of such Person, the amount of such guaranty
shall be deemed to be only that amount in excess of the amount of the obligation
constituting Indebtedness of such Person.

“Control” means, with respect to any Person, the direct or indirect possession
of the power (i) to vote more than 50% of the equity interests having ordinary
voting power for the election of directors (or the applicable equivalent) of
such Person or (ii) to direct or cause the direction of the management or
policies of such Person, whether through ownership, by contract, arrangement or
understanding, or otherwise; provided, however, that an independent director or
independent manager of a Person shall not be deemed to exercise control for
purposes of this definition. “Controlled” and “Controlling” have the meaning
correlative thereto.

“Covenant Lite Loan” means a Collateral Loan the Related Documents for which do
not (i) contain any financial covenants or (ii) require the borrower thereunder
to comply with any Maintenance Covenant (regardless of whether compliance with
one or more Incurrence Covenants is otherwise required by such Related
Documents).

“Coverage Test” means each of:

 

  (a) the Overcollateralization Ratio Test; and

 

  (b) the Interest Coverage Ratio Test.

“Covered Account” means each of the Collection Account (including the Interest
Collection Subaccount and the Principal Collection Subaccount), the Payment
Account, the Future Funding Reserve Account, the Custodial Account and the
Closing Expense 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 and that is a Lender. For the avoidance of doubt, for all purposes under
this Agreement and the other Facility Documents, the term “CP Conduit” shall
mean Versailles Assets LLC, a Delaware limited liability company.

 

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“CP Rate” means, for any CP Conduit, the per annum rate equivalent to the rate
(or, if more than one rate, the weighted average of the rates) applicable to the
Commercial Paper issued by such CP Conduit or its related Commercial Paper
issuer and allocated, in whole or in part, to fund obligations hereunder, which
Commercial Paper may be sold by any placement agent or commercial paper dealer
selected by such CP Conduit, and which rate shall incorporate (i) applicable
commercial paper dealer and placement agent fees and commissions and (ii) other
funding costs (excluding costs associated with a Conduit Lender’s liquidity
fundings) of such CP Conduit relating to the transactions under this Agreement
and the Loan Documents, such as the costs of funding odd lots or small dollar
amounts; provided that if the rate (or rates) as agreed between any such agent
or dealer and such CP Conduit is a discount rate, then the CP Rate shall be the
rate (or if more than one rate, the weighted average of the rates) resulting
from such CP Conduit’s converting such discount rate (or rates) to an
interest-bearing equivalent rate per annum; provided further, that the CP Rate
shall not exceed the CP Rate Cap.

“CP Rate Advance” means an Advance that bears interest at the CP Rate as
provided in Section 2.04.

“CP Rate Cap” shall have the meaning specified in the Fee Letter.

“CRD” shall mean the Capital Requirements Directive which is comprised of
Directives 2006/48/EC of the European Parliament and of the Council of 14 June
2006 relating to the taking up and pursuit of the business of credit
institutions and Directive 2006/49/EC of the European Parliament and of the
Council of 14 June 2006 on the capital adequacy of investment firms and credit
institutions, as amended from time to time.

“Credit Estimate” means, with respect to any Collateral Loan, a credit estimate
rating obtained from Moody’s.

“Credit Risk Loan” means a Collateral Loan that is not a Defaulted Loan but
which, in the reasonable business judgment of the Collateral Servicer (exercised
in accordance with the Servicing Standard), has a significant risk of declining
in credit quality and, with the lapse of time, becoming a Defaulted Loan and is
designated as a “Credit Risk Loan” by the Collateral Servicer; provided,
however, that if the rating of the Notes has been reduced by Moody’s by two or
more rating subcategories from that in effect on the Closing Date (unless such
rating subsequently has been upgraded to at least the rating assigned on the
Closing Date), then such Collateral Loan will be considered a Credit Risk Loan
only if it has a Moody’s Rating or Moody’s Default Probability Rating of “Caa1”
or below.

“Custodial Account” means the custodial account established pursuant to
Section 8.03(b).

“Custodian” means the Bank, as custodian, including as Document Custodian
hereunder, together with its successors.

 

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“Cut-Off Date” means, with respect to each Collateral Loan, the date such
Collateral Loan is acquired by the Borrower.

“Daily Average Collateral Loan Commitment Amount” means, for any Payment Date,
the daily average Aggregate Principal Balance of all Collateral Loans for the
Collection Period relating to such Payment Date (as certified by the Collateral
Servicer to the Trustee and based on the average of the Aggregate Principal
Balance of all Collateral Loans as of the reporting dates set forth in the last
three Monthly Reports).

“Daily Statement” has the meaning set forth in Section 8.07(c).

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

“Defaulted Loan” means any Collateral Loan:

(i) as to which (a) a default as to the scheduled payment of principal and/or
interest has occurred and is continuing with respect to such Collateral Loan
unless due to an administrative error in which case the grace period is five
Business Days, (b) a default as to the scheduled payment of principal and/or
interest has occurred and is continuing on another Collateral Loan of the same
Obligor which is senior or pari passu in right of payment to such Collateral
Loan (provided that both such other Collateral Loan and the Collateral Loan are
full recourse obligations), (c) the Obligor of which is the subject of a
bankruptcy, insolvency, receivership or other analogous proceeding and such
proceeding has not been stayed or dismissed, or (d) such Collateral Loan or
Obligor has a Moody’s Rating or a Moody’s Default Probability Rating of “Ca”,
“C”, “D” or “SD” or had such rating before such rating was withdrawn; provided
that once a Defaulted Loan has been restructured, it will no longer constitute a
Defaulted Loan when (i) it is current on all payments for nine consecutive
months if it pays quarterly or monthly, (ii) such Defaulted Loan would qualify
as a Collateral Loan if acquired at such time and (iii) the applicable Moody’s
rating has been refreshed;

(ii) that is a participation in a loan that would, if such loan were a
Collateral Loan, constitute a “Defaulted Loan” under paragraph (i) above (a
“Defaulted Participation Loan”);

(iii) that is a participation in a loan (other than a Defaulted Participation
Loan) with respect to which the long-term debt or deposit obligations of the
selling institution are rated less than “A3” by Moody’s or any such debt or
deposit obligations shall cease to be rated by Moody’s; or (b) the selling
institution has defaulted in the performance of any of its payment obligations
with respect to such Participations under the related participation agreement;

(iv) that is considered is a Defaulted Loan under the Collateral Servicer’s
credit policy and procedures manual;

(v) as to which a Specified Change (other than an extension of the scheduled
maturity date of the Collateral Loan beyond the Final Maturity Date, in which
case such Collateral Loan shall be deemed to be a Charged-Off Loan as provided
in clause (ii) of the definition thereof) has occurred that was not consented to
by the Administrative Agent provided that any such Collateral Loan shall no
longer be deemed to be a Defaulted Loan pursuant to this clause (v) with the
written consent of the Administrative Agent (at the direction of the Required
Lenders) to such Specified Change; or

 

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(vi) that is a loan or other debt obligation that at the time of acquisition,
conversion or exchange does not satisfy the requirements of a Collateral Loan
and is not an Eligible Investment or a Charged-Off Loan.

“Deferrable Security” A Collateral Loan that by its terms permits the deferral
or capitalization of payment of accrued, unpaid interest.

“Deferring Security” A Deferrable Security that is not a Defaulted Loan and is
deferring the payment of interest due thereon and has been so deferring the
payment of interest due thereon (i) with respect to Collateral Loans that have a
Moody’s Rating of at least “Baa3”, for more than six consecutive months, and
(ii) with respect to Collateral Loans that have a Moody’s Rating of “Ba1” or
below, for more than three consecutive months, which deferred capitalized
interest has not, as of the date of determination, been paid in Cash.

“Delayed Funding Collateral Loan” means a Collateral Loan that (a) requires the
Borrower to make one or more future advances to the borrower 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 borrower thereunder; provided that any such Collateral
Loan will be a Delayed Funding Collateral Loan only to the extent of undrawn
commitments and solely until all commitments by the Borrower to make advances on
such Collateral Loan to the borrower 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) in the case of each Certificated Security (other than a Clearing Corporation
Security), Instrument and Participation Interest in which the Participation
Interest or the underlying loan is represented by an Instrument:

(i) causing the delivery of such Certificated Security or Instrument to the
Custodian by registering the same in the name of the Custodian or its affiliated
nominee or by endorsing the same to the Custodian or in blank;

(ii) causing the Custodian to indicate continuously on its books and records
that such Certificated Security or Instrument is credited to the applicable
Covered Account; and

(iii) causing the Custodian to maintain continuous possession of such
Certificated Security or Instrument;

(b) in the case of each Uncertificated Security (other than a Clearing
Corporation Security), unless covered by clause (e) below:

(i) causing such Uncertificated Security to be continuously registered on the
books of the issuer thereof to the Custodian; and

 

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(ii) causing the Custodian to indicate continuously on its books and records
that such Uncertificated Security is credited to the applicable Covered Account;

(c) in the case of each Clearing Corporation Security:

(i) causing the relevant Clearing Corporation to credit such Clearing
Corporation Security to the securities account of the Custodian, and

(ii) causing the Custodian to indicate continuously on its books and records
that such Clearing Corporation Security is credited to the applicable Covered
Account;

(d) in the case of each security issued or guaranteed by the United States or
any agency or instrumentality thereof and that is maintained in book-entry
records of a Federal Reserve Bank (each such security, a “Government Security”):

(i) causing the creation of a Security Entitlement to such Government Security
by the credit of such Government Security to the securities account of the
Custodian at such Federal Reserve Bank, and

(ii) causing the Custodian to indicate continuously on its books and records
that such Government Security is credited to the applicable Covered Account;

(e) in the case of each Security Entitlement not governed by clauses (a) through
(d) above:

(i) causing a Securities Intermediary (x) to indicate on its books and records
that the underlying Financial Asset has been credited to the Custodian’s
securities account, (y) to receive a Financial Asset from a Securities
Intermediary or to acquire the underlying Financial Asset for a Securities
Intermediary, and in either case, to accept it for credit to the Custodian’s
securities account or (z) to become obligated under other law, regulation or
rule to credit the underlying Financial Asset to a Securities Intermediary’s
securities account,

(ii) causing such Securities Intermediary to make entries on its books and
records continuously identifying such Security Entitlement as belonging to the
Custodian and continuously indicating on its books and records that such
Security Entitlement is credited to the Custodian’s securities account, and

(iii) causing the Custodian to indicate continuously on its books and records
that such Security Entitlement (or all rights and property of the Custodian
representing such Security Entitlement) is credited to the applicable Covered
Account;

 

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(f) in the case of Cash or Money:

(i) causing the delivery of such Cash or Money to the Custodian, or in the case
of Money that is not Dollars, causing the conversion thereof to Dollars and the
delivery of such Dollars to the Custodian,

(ii) causing the Custodian to credit such Dollars to a deposit account
maintained as a sub-account of the applicable Covered Account, and

(iii) causing the Custodian to indicate continuously on its books and records
that such Dollars are credited to the applicable Covered Account; and

(g) in the case of each Account or General Intangible (including any
Participation Interest in which neither the Participation Interest nor the
underlying loan is represented by an Instrument delivered to the Custodian
pursuant to clause (a) above), causing the filing of a Financing Statement in
the office of the Secretary of State of the State of Delaware (which Financing
Statement does not need to refer to the specific Collateral that is being
Delivered and may be a Financing Statement that was previously filed).

In addition, the Collateral Servicer 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 pledge hereunder (except (A) to the
extent that the requirement for such consent is rendered ineffective under
Section 9-406 of the UCC and (B) for any customary procedural requirements and
agents’ and/or Obligors’ consents expected to be obtained in due course in
connection with the transfer of the Collateral Loans to the Borrower (except, in
the case of clause (B), for any such agents’ consents where the Collateral
Servicer of any of its Affiliates is the agent which the Collateral Servicer
will obtain)).

“Determination Date” means the fifteenth day of each calendar month and, if such
day is not a Business Day, the next succeeding Business Day.

“DIP Loan” means any interest in a Collateral Loan that is a loan or financing
facility:

(a) which is an obligation of a debtor-in-possession pursuant to Section 364 of
the Bankruptcy Code,

(b) the terms of which have been approved by an order of a United States
Bankruptcy Court, a United States District Court, or any other court of
competent jurisdiction, the enforceability of which order is not subject to any
ending contested matter or proceeding (as such terms are defined in the Federal
Rules of Bankruptcy Procedure),

(c) which (i) has priority under Section 364(c)(1) of the Bankruptcy Code, or
(ii) is secured by liens of the kind described in Section 364(c)(2), 364(c)(3)
or 364(c)(8) of the Bankruptcy Code,

(d) which pays Cash interest on a current basis, and

 

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(e) which has paid its most recent scheduled interest and principal payments (if
any) and the Collateral Servicer reasonably expects that such loan or credit
facility will continue to pay interest and principal.

“Diversity Score” has the meaning assigned to such term in Schedule 4.

“Document Custodian” means the Custodian when acting in the role of a custodian
of the Related Documents hereunder.

“Document Custodian Facilities” means the office of the Document Custodian.

“Dodd-Frank Act” has the meaning specified in Section 2.09(b).

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

“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 an Obligor of a Collateral Loan, for any period,
the net income of such Obligor plus the sum of interest, taxes, depreciation,
and amortization, with such adjustments as the Collateral Servicer determines to
be appropriate in accordance with the Servicing Standard, in each case for such
period.

“Effective Date” has the meaning specified in Section 2.16(a).

“Eligibility Criteria” means, in connection with each acquisition or commitment
to acquire a Collateral Loan, and after giving effect to any capital
contribution by the Equity holders of the Borrower occurring on or prior to such
date, each of the following:

(a) such loan is a Collateral Loan;

(b) each Collateral Quality Test and Concentration Limitation is satisfied after
giving effect to such acquisition or commitment (or, if not satisfied
immediately prior to such acquisition or commitment, such Collateral Quality
Test and/or Concentration Limitation, as applicable, is maintained or improved);

(c) each Coverage Test is satisfied after giving effect to such acquisition or
commitment;

(d) the applicable Row Advance Rate that is in use at such time equals or
exceeds the Portfolio Advance Rate; and

(e) no Commitment Shortfall exists, as determined in accordance with the
Commitment Shortfall Test.

“Eligible Asset” means, a financial asset, either fixed or revolving, that by
its terms converts into cash within a finite time period plus any rights or
other assets designed to assure the servicing or timely distribution of proceeds
to securityholders.

 

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“Eligible Investment Required Ratings” means, in the case of each Eligible
Investment, (i) has both a long-term and a short-term credit rating from
Moody’s, such ratings are “Aa3” or higher (not on credit watch for possible
downgrade) and “P-1” (not on credit watch for possible downgrade), respectively,
(ii) has only a long-term credit rating from Moody’s, such rating is “Aaa” (not
on credit watch for possible downgrade) and (iii) has only a short-term credit
rating from Moody’s, such rating is “P-1” (not on credit watch for possible
downgrade).

“Eligible Investments” means any Dollar investment that, at the time it is
Delivered (directly or through an intermediary or bailee), is one or more of the
following obligations or securities:

(i) direct obligations of, and obligations the timely payment of principal and
interest on which is fully and expressly guaranteed by, the United States or any
agency or instrumentality of the United States the obligations of which are
expressly backed by the full faith and credit of the United States;

(ii) demand and time deposits in, certificates of deposit of, trust accounts
with, bankers’ acceptances payable within 183 days of issuance by, or federal
funds sold by any depository institution or trust company incorporated under the
laws of the United States or any state thereof and subject to supervision and
examination by federal and/or state banking authorities, so long as the
commercial paper and/or the debt obligations of such depository institution or
trust company (or, in the case of the principal depository institution in a
holding company system, the commercial paper or debt obligations of such holding
company) at the time of such investment or contractual commitment providing for
such investment have the Eligible Investment Required Ratings;

(iii) unleveraged repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or guaranteed by
an agency or instrumentality of the United States, in either case entered into
with a depository institution or trust company (acting as principal) described
in clause (ii) above or entered into with an entity (acting as principal) with,
or whose parent company has (in addition to a guarantee agreement with such
entity), the Eligible Investment Required Ratings;

(iv) securities bearing interest or sold at a discount issued by any entity
formed under the laws of the United States or any State thereof that satisfies
the Eligible Investment Required Ratings at the time of such investment or
contractual commitment providing for such investment;

(v) non-extendable commercial paper or other short-term obligations with the
Eligible Investment Required Ratings and that either bear interest or are sold
at a discount from the face amount thereof and have a maturity of not more
than 183 days from their date of issuance;

(vi) a Reinvestment Agreement issued by any bank (if treated as a deposit by
such bank), or a Reinvestment Agreement issued by any insurance company or other
corporation or entity, in each case with the Eligible Investment Required
Ratings; provided that (a) the Rating Condition has been satisfied and the
Administrative Agent (at the direction of the Required Lenders) has consented
thereto or (b) such Reinvestment Agreement may be unwound at the option of the
Borrower without penalty;

 

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(vii) money market funds which have, at all times, credit ratings of “Aaa” and,
if such ratings are applicable to such types of money market funds, “MR1+” by
Moody’s; and

(viii) Cash;

provided that (1) Eligible Investments purchased with funds in the Collection
Account shall be held until maturity except as otherwise specifically provided
herein and shall include only such obligations or securities, other than those
referred to in clause (vii) above, as mature (or are putable at par to the
issuer thereof) no later than the earlier of (x) 60 days after the date of
acquisition thereof or (y) the next Business Day prior to the next Payment Date;
and (2) none of the foregoing obligations or securities shall constitute
Eligible Investments if (a) such obligation or security has an “f”, “r”, “p”,
“pi”, “q” or “t” subscript assigned by S&P, (b) all, or substantially all, of
the remaining amounts payable thereunder consist of interest and not principal
payments, (c) such obligation or security is subject to U.S. withholding or
foreign withholding tax unless the issuer of the security is required to make
“gross-up” payments for the full amount of such withholding tax, (d) such
obligation or security is secured by real property, (e) such obligation or
security is purchased at a price greater than 100% of the principal or face
amount thereof, (f) such obligation or security is subject of a tender offer,
voluntary redemption, exchange offer, conversion or other similar action or
(g) in the Collateral Servicer’s judgment, such obligation or security is
subject to material non-credit related risks. Any such investment, whether or
not expressly stated above, may be issued by or with or acquired from or through
the Trustee or any of its Affiliates, or any entity to which the Trustee
provides services or receives compensation (provided that such investment
otherwise meets the applicable requirements set forth above), and in connection
therewith the Trustee may assess and receive its usual and customary fees and
charges related thereto (so long as such fees and charges are reasonable and
consistent with the amounts that would be received in an arm’s length
transaction).

“Enforcement Event” has the meaning set forth in Section 9.01(a)(iv).

“Environmental Law” means any law, rule, regulation, order, writ, judgment,
injunction or decree of the United States or any other nation, or of any
political subdivision thereof, or of any governmental Authority relating to
pollution or protection of the environment or the treatment, storage, disposal,
release, threatened release or handling of hazardous materials, and all local
laws and regulations related to environmental matters and any specific
agreements entered into with any competent authorities which include commitments
related to environmental matters.

“EoD OC Ratio Failure” has the meaning set forth in Section 6.01(h).

“Equity” means the limited liability company interests in the Borrower.

“Equity Kicker” means, with respect to any Collateral Loan, one or more warrants
which collectively constitute no more than 2.0% of the purchase price paid by
the Borrower for such Collateral Loan as allocated by the Collateral Servicer in
accordance with the Servicing Standard.

 

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“Equity Security” means any of the following owned by the Borrower: (a) any
security or debt obligation which at the time of acquisition, conversion or
exchange does not satisfy the requirements of a Collateral Loan and is not an
Eligible Investment, provided that any debt security received by way of an
acquisition, conversion or exchange of a Defaulted Loan in connection with the
work-out or restructuring of such Defaulted Loan shall continue to be treated as
a Defaulted Loan (up to the Principal Balance not to exceed the Principal
Balance of such Defaulted Loan at the time of its distribution, conversion or
exchange) for period of one year from the date the related Collateral Loan first
became a Defaulted Loan to the extent such debt security provides for a security
package that is not materially worse than the security package provided for by
the Defaulted Loan it replaces or (b) any equity security or other obligation or
security that does not entitle the holder thereof to receive periodic payments
of interest and one or more installments of principal (including any warrant or
other equity component of a security or debt obligation that is received with
respect to, or purchased as a part or a unit of, a Collateral Loan).

“Equivalent Unit Score” has the meaning assigned to such term in Schedule 4.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.

“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) or the failure to
make by its due date a required installment under Section 430 of the Code with
respect to any Plan; (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; (i) the
failure of the Borrower or any member of its ERISA Group to make any required
contribution to a Multiemployer Plan; or (j) the incurrence of any liability (or
the reasonable expectation

 

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thereof) pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to any “employee benefit plan” (as defined in
Section 3 of ERISA), or the occurrence or existence of any event, transaction or
condition that could reasonably be expected to result in the incurrence of any
such liability, or in the imposition of any lien on any right, property or asset
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
of the Code or to Section 436(f) of the Code or to Sections 412 and 430 of the
Code; (k) the assertion of a material claim (other than routine claims for
benefits) against any Plan or the assets thereof, in connection with any Plan;
(l) the receipt from the Internal Revenue Service of notice of the failure of
any Plan to qualify under Section 401(a) of the Code, or the failure of any
trust forming part of any Plan to qualify for exemption from taxation under
Section 501(a) of the Code; or (m) the occurrence of a non-exempt “prohibited
transaction” with respect to which the Borrower or any member of its ERISA Group
is a “disqualified person” or a “party in interest” (within the meaning of
Section 4975 of the Code or Section 406 of ERISA, respectively) or which could
reasonably be expected to result in liability to the Borrower or any member of
its ERISA Group.

“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.

“Eurodollar Rate Advance” means each Advance that bears interest at a rate based
on LIBOR as provided in Section 2.04.

“Event of Bankruptcy” means (a) an involuntary proceeding shall be commenced or
an involuntary petition shall be filed seeking (i) liquidation, reorganization
or other relief in respect of the Collateral Servicer or its debts, or of all or
a substantial part of its assets, under any bankruptcy, insolvency, receivership
or similar law now or hereafter in effect or (ii) the appointment of all or a
receiver, trustee, custodian, sequestrator, conservator or similar official for
the Collateral Servicer or for all or a substantial part of its assets, and, in
any such case, such proceeding or petition shall continue undismissed for 60
days; (b) an order or decree approving or ordering any of the actions described
in clause (a) shall be entered; or (c) the Collateral Servicer shall: (i) be
wound up or dissolved, (ii) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(iii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (a) of this
definition, (iv) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Collateral
Servicer or for all or a substantial part of its assets, (v) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (vi) cease to be able to, or admit in writing its inability to, pay
its debts as they become due and payable, or make a general assignment for the
benefit of creditors or (vii) take any action for the purpose of effecting any
of the foregoing.

“Event of Default” has the meaning set forth in Section 6.01.

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

 

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“Excluded Taxes” has the meaning assigned to such term in Section 13.03(a).

“Exposure Amount” as of any date means, with respect to any Revolving Collateral
Loan or Delayed Funding Loan, the excess of (a) the Borrower’s maximum funding
commitment thereunder over (b) the outstanding principal balance of such
Revolving Collateral Loan or Delayed Funding Loan. For the avoidance of doubt,
Exposure Amounts in respect of a Defaulted Loan shall be included in the
calculation of the Exposure Amount if the Borrower is at such time subject to
contractual funding obligations with respect to such Defaulted Loan.

“Facility” means the debt facility governed by this Agreement and the other
Facility Documents.

“Facility Documents” means this (i) Agreement, the Notes, the Account Control
Agreement, the Fee Letter, the Trustee Fee Letter, the Collateral Servicing
Agreement, the Intercreditor Agreement, the Joinder Agreement, the Master Sale
Agreement, any other security agreements and other instruments entered into or
delivered by or on behalf of the Borrower pursuant to Section 5.01(c) to create,
perfect or otherwise evidence the Trustee’s security interest and (ii) any other
agreements delivered to the Administrative Agent, the Trustee and/or the Lenders
in furtherance of or pursuant to any of the foregoing.

“FAS 166/167 Regulatory Capital Rules” has the meaning specified in
Section 2.09(b).

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

“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; provided that, if at any time a
Lender is borrowing overnight funds from a Federal Reserve Bank that day, the
Federal Funds Rate for such Lender for such day shall be the average rate per
annum at which such overnight borrowings are made on that day as promptly
reported by such Lender to the Borrower, the Calculation Agent, the
Administrative Agent and the Trustee in writing. Each determination of the
Federal Funds Rate by a Lender pursuant to the foregoing proviso shall be
conclusive and binding except in the case of manifest error.

“Fee Letter” means the fee letter dated February 16, 2012 between the Borrower,
the Administrative Agent and the initial Lender.

“Final Maturity Date” means February 16, 2019.

 

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“Final Order” means an order, judgment, decree or ruling the operation or effect
of which has not been stayed, reversed or amended and as to which order,
judgment, decree or ruling (or any revision, modification or amendment thereof)
the time to appeal or to seek review or rehearing has expired and as to which no
appeal or petition for review or rehearing was filed or, if filed, remains
pending.

“FINRA” means The Financial Industry Regulatory Authority or any successor
entity.

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

“Financing Documents” has the meaning assigned to such term in Section 13.20(i).

“Financing Statements” has the meaning specified in Section 9-102(a)(39) of the
UCC.

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

“Floating Rate Obligation” Any Collateral Loan that bears a floating rate of
interest.

“Future Funding Reserve Account” means the account established pursuant to
Section 8.04.

“Future Funding Reserve Required Amount” has the meaning assigned to such term
in Section 8.04.

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

“General Intangible” has the meaning specified in Section 9-102(a)(42) of the
UCC.

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

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

“Indebtedness” of any Person means, without duplication, (a) as shown on such
Person’s balance sheet (i) all indebtedness of such Person for borrowed money or
for the

 

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deferred purchase price of property and (ii) all indebtedness of such Person
evidenced by a note, bond, debenture or similar instrument (whether or not
disbursed in full), (b) the face amount of all Letters of Credit issued for the
account of such Person and, without duplication, all unreimbursed amounts drawn
thereunder, (c) all Contingent Obligations of such Person, and (d) all payment
obligations of such Person under any interest rate protection agreement
(including, without limitation, any interest rate swaps, caps, floors, collars
and similar agreements) and currency swaps and similar agreements which were not
entered into specifically in connection with Indebtedness set forth in clauses
(a), (b) or (c) hereof.

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

“Independent Accountants” has the meaning assigned to such term in Section 8.09.

“Industry Diversity Score” has the meaning assigned to such term in Schedule 4.

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

“Insurance Policy” With respect to any Collateral Loan, an insurance policy
covering liability and physical damage to or loss of the Related Property.

“Intercreditor Agreement” The Intercreditor and Concentration Account
Administration Agreement (Wachovia Deposit Account), dated as of February 15,
2007 (as further amended, modified, waived, supplemented, restated or replaced
from time to time), by and among U.S. Bank National Association, as account
custodian and as secured party, Wachovia Capital Markets, LLC, as administrative
agent of a credit facility, NewStar Financial, Inc., as originator, as original
servicer, as collateral manager and as concentration account servicer, NewStar
CP Funding LLC, as seller under a credit facility, U.S. Bank National
Association, as trustee for various facilities, NewStar Trust 2005-1, as an
issuer, NewStar Short-Term Funding LLC, as a borrower, NewStar Credit
Opportunities Funding I Ltd., as seller under a credit facility, Natixis
Financial Products Inc., as administrative agent of a credit facility and as an
investor agent, NewStar Warehouse Funding 2005 LLC, as an issuer, NewStar
Structured Finance Opportunities II, LLC, as an issuer, NewStar Commercial Loan
Trust 2006-1, as an issuer, NewStar Concentration LLC, as account titleholder,
NewStar Commercial Loan Trust 2007-1, as an issuer, NewStar Credit Opportunities
Funding II Ltd., as an issuer, NewStar Commercial Loan Trust 2009-1, as an
issuer, NewStar Loan Funding LLC, as a financing SPE, NewStar CRE Finance I LLC,
as a financing SPE, each party that from time to time hereafter executes and
delivers a joinder thereto and Wachovia Bank, National Association, as
concentration account bank, as applicable.

“Interest Accrual Period” means, with respect to any CP Rate Advance or
Eurodollar Rate Advance, the period beginning on the relevant Borrowing Date to
but excluding the next succeeding Payment Date and, thereafter, each period
commencing on the last day of the immediately preceding Interest Accrual Period
to but excluding the next succeeding Payment Date.

“Interest Cap” shall have the meaning specified in the Fee Letter.

 

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“Interest Collection Subaccount” has the meaning specified in Section 8.02(a).

“Interest Coverage Ratio” as of any date, means, the ratio of (A) the Collateral
Interest Amount as of such date, to (B) the sum of all amounts payable (or
expected at such time to be payable) on the following Payment Date pursuant to,
during the Ramp-Up Period, clauses (A), (B), and (C) in Section 9.01(a)(i) and,
after the Ramp-Up Period, pursuant to clauses (A), (B), and (C) in
Section 9.01(a)(ii), in each case, for the Interest Accrual Period, for the
avoidance of doubt, the Interest Accrual Period that corresponds to the
Collection Period.

“Interest Coverage Ratio Test” means a test that is satisfied at any time if the
Interest Coverage Ratio is at least equal to 150%.

“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 and the other Collateral,
including the accrued interest received in connection with a sale thereof during
such Collection Period;

(b) all principal and interest payments received by the Borrower during such
Collection Period on Eligible Investments purchased with Interest Proceeds; and
all interest payments received by the Borrower during such Collection Period on
Eligible Investments purchased with amounts credited to the Future Funding
Reserve Account;

(c) all amendment and waiver fees, late payment fees (including compensation for
delayed settlement or trades), and all protection fees and other fees and
commissions received by the Borrower during such Collection Period, unless the
Collateral Servicer notifies the Administrative Agent and the Trustee before
such Determination Date that the Collateral Servicer in its sole discretion has
determined 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 Servicer notifies the Administrative Agent and the Trustee before
such Determination Date that the Collateral Servicer in its sole discretion has
determined that such payments are to be treated as Principal Proceeds;

provided that:

(1) as to any Defaulted Loan (and only so long as it remains a Defaulted Loan),
any amounts received in respect thereof 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 Defaulted Loan at the time as of which it became a Defaulted
Loan;

(2) (x) any dividends or distributions paid on any Equity Security in excess of
the cost basis of such Equity Security will constitute Interest Proceeds,
(y) any gain on the sale of Equity Securities (including Equity Securities
received as a result of

 

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exercising warrants) and warrants in an amount, if any, equal to the excess of
(A) the Cash generated by such sale plus the Market Value on the Collateral
Loan(s) of the same Obligor over (B) the Principal Balance (after adjustment for
any borrowings or repayments and exclusive of accrued interest) for such
Collateral Loan(s) will constitute Interest Proceeds and (z) all other payments
received in respect of Equity Securities will constitute Principal Proceeds; and

(3) all Cash received as capital contributions (however designated) from the
Equity holders of the Borrower will constitute Principal Proceeds, unless
otherwise directed by the Borrower by prior written notice to the Administrative
Agent and the Trustee.

“Interim Date” means the date, no later than the sixth month anniversary of the
Closing Date (and, if the facts specified in clauses (i) through (v) below are
not satisfied, such date is deemed not to have occurred and the Collateral
Servicer shall provide written notice to the Administrative Agent, the Lenders
and Moody’s), on which the Collateral Servicer provides the Administrative Agent
and the Trustee with notice that (i) the Aggregate Principal Balance equals or
exceeds $120,000,000, (ii) the aggregate outstanding principal balance of all
Advances plus the Net Aggregate Exposure Amount is equal to or less than
$60,000,000, (iii) the number of unique industries equals or exceeds 11,
(iv) the Weighted Average Floating Spread equals or exceeds 4.75%, and (v) the
Weighted Average Moody’s Rating Factor of the Collateral Loans is less than or
equal 3490.

“Interim Order” means an order, judgment, decree or ruling entered after notice
and a hearing conducted in accordance with Bankruptcy Rule 4001(c) granting
interim authorization, the operation or effect of which has not been stayed,
reversed or amended.

“Investment Company Act” means the Investment Company Act of 1940, as amended,
and the rules and regulations promulgated thereunder, as modified or interpreted
by orders of, or other interpretative releases or letters issued by, any
Authority, 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.

“IRS” means the US Internal Revenue Service.

“Issuer Par Amount” has the same meaning assigned to such term in Schedule 4.

“Joinder Agreement” means the Joinder in Intercreditor and Concentration Account
Administration Agreement (Wachovia Deposit Account), dated as of February 16,
2012, by U.S. Bank National Association, as Trustee for NewStar Commercial Loan
Funding 2012-1 LLC, and the Borrower, as such agreement may be amended,
modified, waived, supplemented or restated from time to time.

“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, rule of public policy, settlement agreement,
statute, or writ, of any Authority, or any particular section, part or provision
thereof.

 

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“LC” has the meaning assigned to such term in the definition of Letter of
Credit.

“LC Commitment Amount” With respect to any Letter of Credit, the amount which
the Borrower could be required to pay to the LOC Agent Bank in respect thereof
(including, for the avoidance of doubt, any portion thereof which the Borrower
has collateralized or deposited into a trust or with the LOC Agent Bank for the
purpose of making such payments).

“Lenders” means the Persons listed on Schedule 1 and any other Person that shall
have become a party hereto pursuant to an Assignment and Acceptance, other than
any such Person that ceases to be a party hereto pursuant to an Assignment and
Acceptance.

“Letter of Credit” A facility whereby (i) a fronting bank (“LOC Agent Bank”)
issues or will issue a letter of credit (“LC”) for or on behalf of the Borrower
pursuant to a Related Document, (ii) if the LC is drawn upon, and the borrower
does not reimburse the LOC Agent Bank, the lender/participant is obligated to
fund its portion of the facility, (iii) the LOC Agent Bank passes on (in whole
or in part) the fees and any other amounts it receives for providing the LC to
the lender/participant and (iv)(a) the Related Documents require the Borrower to
fully collateralize the Borrower’s obligations to the related LOC Agent Bank or
obligate the Borrower to make a deposit into a trust in an aggregate amount
equal to the related LC Commitment Amount, (b) the collateral posted by the
Borrower is held by, or the Borrower’s deposit is made in, a depository
institution meeting the requirement set forth in Section 8.01 and (c) the
collateral posted by the Borrower is invested in Eligible Investments.

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

“LIBOR” has the meaning assigned to such term on Schedule 7.

“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 any filing authorized by the Borrower of any financing statement
under the UCC or comparable law of any jurisdiction).

“Liquidity Bank” means the Person or Persons who provide liquidity support to a
Lender pursuant to a Liquidity Facility.

“Liquidity Facility” means, for any Lender, a loan facility, asset purchase
facility, swap transaction or other arrangement under which the providers of
such facility have agreed to provide funds to such Lender for purposes of
funding such Lender’s obligations under this Agreement.

“LOC Agent Bank” The meaning specified in the definition of the term “Letter of
Credit”.

 

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“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.

“Maintenance Covenant” means a covenant by any borrower to comply with one or
more financial covenants during each reporting period, whether or not such
borrower has taken any specified action.

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

“Market Value” means, with respect to any loans or other assets, the amount
(determined by the Collateral Servicer in accordance with the Servicing
Standard) equal to the product of the principal amount thereof and the price
determined in the following manner:

(a) the bid-side quote determined by any of Loan Pricing Corporation, LoanX
Inc., MarkIt Partners, Mergent, Inc., IDC, Houlihan Lokey or any other
nationally recognized loan pricing service selected by the Collateral Servicer
with notice to Moody’s;

(b) if such quote described in clause (a) is not available,

(i) the average of the bid-side quotes determined by three independent
broker-dealers active in the trading of such Collateral Loan or asset;

(ii) if only two such bids can be obtained, the lower of the bid-side quotes of
such two bids; or

(iii) if the Collateral Servicer is a registered investment adviser under the
Investment Advisers Act of 1940, as amended, if only one such bid can be
obtained, such bid;

(c) if the Market Value of a Collateral Loan or an asset cannot be determined in
accordance with clause (a) or (b) above, then the Market Value shall be the
Appraised Value, provided that the Appraised Value of such Collateral Loan or
asset has been obtained or updated within the immediately preceding three
months;

(d) if such quote or bid described in clause (a) or (b) or the Appraised Value
described in (c) is not available, then the Market Value of such Collateral Loan
shall be the lower of (i) the Moody’s Recovery Rate and (ii) if the Collateral
Servicer is a registered investment adviser under the Investment Advisers Act of
1940, as amended, the Market Value determined by the Collateral Servicer
exercising reasonable commercial judgment in accordance with the Servicing
Standard, consistent with the manner in which it would determine the market
value of an asset for purposes of other funds or accounts managed by it; or

(e) if the Market Value of a Collateral Loan or an asset cannot be determined in
accordance with clause (a), (b), (c) or (d) above, then the Market Value shall
be deemed to be zero until such determination is made in accordance with clause
(a), (b), (c) or (d) above.

 

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“Master Sale Agreement” means the Loan Sale and Contribution Agreement, dated as
of the Closing Date, as amended, restated, supplemented or otherwise modified
from time to time, between the Originator, as seller, and the Borrower, as
buyer.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, liabilities or financial condition of the Borrower, (b) the ability of
the Borrower to perform its obligations under this Agreement and the other
Facility Documents or (c) the rights, remedies or benefits (taken as a whole)
available to the Lenders, the Administrative Agent or the Trustee under this
Agreement and the other Facility Documents.

“Matrix” shall have the meaning specified in the Fee Letter.

“Maximum Moody’s Rating Factor Test” means a test that will be satisfied on any
Measurement Date if the Weighted Average Moody’s Rating Factor of the Collateral
Loans is less than or equal to the Row Moody's Rating Factor.

“Maximum Weighted Average Life Test” means, on any date of determination, a test
that will be satisfied if the Weighted Average Life of all Collateral Loans as
of such date is less than or equal to 4.0 years.

“Measurement Date” means (a) each Monthly Report Determination Date, (b) each
day any Collateral Loan is purchased or sold, (c) any day on which a Collateral
Loan becomes a Defaulted Loan and (d) any other day pursuant to the request of
the Administrative Agent, not to exceed more than one such request in any
calendar month.

“Mezzanine Loan” means a loan made to a holding company or other equity holder
of an operating entity where (i) the Borrower holds a first priority lien on the
assets of such equity holder and/or the equity in the operating entity and
(ii) the assets of the operating entity may have been pledged to another lender
to secure loans made to such operating entity by such other lender.

“Minimum Floating Spread Test” means a test that will be satisfied on any date
of determination if the Weighted Average Floating Spread equals or exceeds the
Row Minimum Weighted Average Spread.

“Minimum Weighted Average Coupon Test” means a test that will be satisfied on
any date of determination if the Weighted Average Coupon equals or exceeds the
Minimum Weighted Average Coupon Test Level.

“Minimum Weighted Average Coupon Test Level” means 6.00%.

“Minimum Weighted Average Moody’s Recovery Rate Test” means a test that will be
satisfied on any Measurement Date if the Weighted Average Moody’s Recovery Rate
equals or exceeds 45%.

“Money” has the meaning specified in Section 1-201(b)(24) of the UCC, and shall
be deemed to include “Monies” wherever such term may be used herein.

 

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“Monthly Report” has the meaning specified in Section 8.06(a).

“Monthly Report Date” means the 25th day of each calendar month in each year,
the first of which shall be April 25, 2012; provided that, (i) if any such day
is not a Business Day, then such Monthly Report Date shall be the next
succeeding Business Day and (ii) the final Monthly Report Date shall be on the
Final Maturity Date.

“Monthly Report Determination Date” means, with respect to any Monthly Report
Date, the Determination Date prior to such Monthly Report Date.

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

“Moody’s Counterparty Criteria” With respect to any Participation Interest or
Letter of Credit proposed to be acquired by the Borrower, criteria that will be
met if immediately after giving effect to such acquisition, (x) the percentage
of the Total Capitalization that consists in the aggregate of Participation
Interests or Letters of Credit with Selling Institutions or LOC Agent Banks, as
the case may be, that have the same or a lower Moody’s credit rating does not
exceed the “Aggregate Percentage Limit” set forth below for such Moody’s credit
rating and (y) the percentage of the Total Capitalization that consists in the
aggregate of Participation Interests or Letters of Credit with any single
Selling Institution or LOC Agent Bank, as the case may be, that has the Moody’s
credit rating set forth below or a lower credit rating does not exceed the
“Individual Percentage Limit” set forth below for such Moody’s credit rating:

 

Moody’s credit rating of Selling Institution or LOC Agent Bank (at or
below)    Aggregate Percentage
Limit     Individual Percentage
Limit  

Aaa

     10 %      5 % 

Aa1

     10 %      5 % 

Aa2

     10 %      5 % 

Aa3

     10 %      5 % 

A1 and P-1 (both)

     10 %      5 % 

A2* and P-1 (both)

     7.5 %      5 % 

A2

     0 %      0 % 

 

* and not on watch for possible downgrade

“Moody’s Default Probability Rating” With respect to any Collateral Loan, the
rating determined pursuant to Schedule 8 hereto (or such other schedule provided
by Moody’s to the Borrower, the Trustee and the Collateral Servicer).

“Moody’s Derived Rating” With respect to any Collateral Loan whose Moody’s
Rating or Moody’s Default Probability Rating cannot otherwise be determined
pursuant to the definitions thereof, the rating determined for such Collateral
Loan as set forth in Schedule 8 hereto (or such other schedule provided by
Moody’s to the Borrower, the Trustee and the Collateral Servicer).

 

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“Moody’s Diversity Test” means a test that will be satisfied on any Measurement
Date if the Diversity Score (rounded to the nearest whole number) equals or
exceeds the Row Minimum Diversity Score.

“Moody’s Industry Classification” The industry classifications set forth in
Schedule 6 hereto, as such industry classifications shall be updated at the
option of the Collateral Servicer if Moody’s publishes revised industry
classifications.

“Moody’s Ramp-Up Failure” has the meaning specified in Section 2.16(b).

“Moody’s Rating” With respect to any Collateral Loan, the rating determined
pursuant to Schedule 8 hereto (or such other schedule provided by Moody’s to the
Borrower, the Trustee and the Collateral Servicer).

“Moody’s Rating Factor” For each Collateral Loan, the number set forth in the
table below opposite the Moody’s Default Probability Rating of such Collateral
Loan.

 

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    8,070

Baa3

   610    Ca or lower    10,000

For purposes of the Maximum Moody’s Rating Factor Test, any Collateral Loan on
credit watch by Moody’s that is on (a) negative watch will be treated as having
been downgraded by two rating subcategories, (b) negative outlook will be
treated as having been downgraded by one rating subcategory, (c) positive watch
will be treated as having been upgraded by one rating subcategory and
(d) positive outlook will not be treated as having been upgraded by any rating
subcategory.

“Moody’s Recovery Amount” With respect to any Collateral Loan that is a
Defaulted Loan or a Deferring Security, an amount equal to (a) the applicable
Moody’s Recovery Rate multiplied by (b) the Principal Balance of such Collateral
Loan.

 

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“Moody’s Recovery Rate” With respect to any Collateral Loan, as of any
Measurement Date, the recovery rate determined in accordance with the following,
in the following order of priority:

 

  (i) if the Collateral Loan has been specifically assigned a recovery rate by
Moody’s (for example, in connection with the assignment by Moody’s of an
estimated rating), such recovery rate;

 

  (ii) if the preceding clause does not apply to the Collateral Loan, except
with respect to DIP Loans, the rate determined pursuant to the table below based
on the number of rating subcategories difference between the Collateral Loan ‘s
Moody’s Rating and its Moody’s Default Probability Rating (for purposes of
clarification, if the Moody’s Rating is higher than the Moody’s Default
Probability Rating, the rating subcategories difference will be positive and if
it is lower, negative):

 

Number of Moody’s Ratings Subcategories Difference Between the Moody’s Rating
and
the Moody’s Default Probability Rating

   Moody’s Senior
Secured Loans

+2 or more

   60%

+1

   50%

0

   45%

-1

   40%

-2

   30%

-3 or less

   20%

 

  (iii) if the Collateral Loan is a DIP Loan (other than a DIP Loan which has
been specifically assigned a recovery rate by Moody’s), 50%.

“Moody’s RiskCalc” means Moody’s KMV RiskCalc®, as set forth in Schedule 9 and
in accordance with published rating methodologies relating to the Moody’s KMV
RiskCalc® as it applies to collateralized loan obligations (CLOs).

“Moody’s Senior Secured Loan” The meaning specified in Schedule 8 (or such other
schedule provided by Moody’s to the Issuer, the Trustee, the Administrative
Agent and the Collateral Servicer).

“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.

“Natixis” means Natixis, New York Branch.

“Net Aggregate Exposure Advance” means an Advance made on or after the
Commitment Termination Date to fund all or any portion of the Net Aggregate
Exposure Amount.

 

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“Net Aggregate Exposure Amount” means, at any time, with respect to all
Revolving Collateral Loans and Delayed Funding Loans, the excess (if any) of
(x) the aggregate of such Exposure Amounts at such time over (y) the aggregate
amount on deposit in the Future Funding Reserve Account at such time.

“Net Aggregate Exposure Commitment Amount” means, at any time on or after the
Commitment Termination Date, an amount equal to the sum of (a) the Net Aggregate
Exposure Amount and (b) the aggregate outstanding principal amount of all
Advances made prior to the Commitment Termination Date at such time.

“Net Purchased Loan Balance” means, as of any date of determination, an amount
equal to (i) the sum of (a) the Aggregate Principal Balance of all Collateral
Loans conveyed by the Originator to the Borrower under the Master Sale Agreement
prior to such date and (b) the Aggregate Principal Balance of all Collateral
Loans acquired by the Borrower other than from the Originator prior to such date
minus (b) the Aggregate Principal Balance of all Collateral Loans optionally
repurchased or substituted by the Originator pursuant to the Master Sale
Agreement prior to such date.

“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, as the same may from time to time be amended, supplemented,
waived or modified.

“Noteless Loan” A Collateral Loan with respect to which the applicable Related
Documents (i) do not require the Obligor to execute and deliver a promissory
note to evidence the indebtedness created under such Collateral Loan and/or
(ii) require any holder of the indebtedness created under such Collateral Loan
to affirmatively request a promissory note from the related Obligor, so long as
the Borrower has not requested and obtained a promissory note from such Obligor.

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

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

“Obligations” means, all indebtedness and other amounts payable, 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 under or in connection with
this Agreement, the Notes, the Fee Letter, the Trustee Fee Letter or any other
Facility Documents, including all amounts payable by the Borrower in respect of
the Advances, with interest thereon.

“Obligor” means in respect of any Collateral Loan of the Borrower, the Person
primarily obligated to pay Collections in respect of such Collateral Loan to the
Borrower.

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

“Offer” has the meaning given in Section 8.08(c).

“Opinion of Counsel” A written opinion of counsel, which opinion and counsel are
acceptable to the Administrative Agent in its sole discretion.

 

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“Originator” means NewStar Financial, Inc. together with any successor thereto
by merger, consolidation or acquisition of all or substantially all of its
assets.

“Other Taxes” has the meaning given in Section 13.03(b).

“Overcollateralization Ratio” means the ratio, without duplication, of
(A) (i) the Principal Collateralization Amount plus (ii) the Net Aggregate
Exposure Amount, minus (iii) the Caa Adjustment over (B) the sum of (x) the
aggregate outstanding principal balance of the Advances and (y) the Net
Aggregate Exposure Amount.

“Overcollateralization Ratio Test” means a test that will be satisfied at any
time if the Overcollateralization Ratio at such time is at least equal to the
Row OC Test.

“Participant” means any Person to whom a participation is sold as permitted by
Section 13.06(c).

“Participation Interest” means a participation interest in a loan or other
obligation that would, at the time of acquisition, or the Borrower’s commitment
to acquire the same, constitute a Collateral Loan.

“Passing Accountants’ Certificate” has the meaning specified in Section 2.16(a).

“PATRIOT Act” has the meaning assigned to such term in Section 13.17.

“Payment Account” means the payment account of the Trustee established pursuant
to Section 8.03(a).

“Payment Date” means the 25th day of January, April, July and October in each
year, the first of which shall be July 25, 2012; provided that, (i) if any such
day is not a Business Day, then such Payment Date shall be the next succeeding
Business Day and (ii) the final Payment Date shall be the Final Maturity Date.

“Payment Date Report” has the meaning specified in Section 8.06(b).

“Payment in Full” means payment in full of all Obligations (other than any
unasserted contingent obligations), including without limitation all principal,
interest, Commitment Fees, Administrative Expenses and fees, if any, payable
under the Fee Letter or the Trustee Fee Letter.

“Payment in Full Date” means the date on which a Payment in Full occurs and the
Commitments are terminated.

“Payoff Letter” means a letter relating to the termination and release of the
Trustee’s Lien on the Collateral in connection with a Payment in Full
substantially in the form of Exhibit H hereto.

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

 

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“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.

“Performing Collateral Loan” means a Collateral Loan that is not a Defaulted
Loan.

“Permitted Assignee” means a Lender, an Affiliate of a Lender, a CP Conduit
related to a Lender or a Liquidity Bank.

“Permitted Lien” means

(i) with respect to the interest of the Originator and/or of the Borrower in the
Collateral Loans, Equity Securities, Eligible Investments and the Covered
Accounts: (a) Liens in favor of the Borrower created pursuant to the Master Sale
Agreement and assigned to the Trustee for the benefit of the Secured Parties
pursuant to this Agreement, (b) Liens in favor of the Trustee for the benefit of
the Secured Parties pursuant to this Agreement, (c) the restrictions on
transferability imposed by the Related Documents (but only to the extent
relating to customary procedural requirements and agent consents (except where
the Collateral Servicer or any of its Affiliates is the agent) expected to be
obtained in due course and not to Obligor consents) and (d) the restrictions on
transferability imposed by any shareholder agreements in respect of Equity
Securities acquired in connection with the work-out of a Collateral Loan;

(ii) with respect to the interest of the Originator and/or of the Borrower in
the other Collateral (including any Related Property securing any Collateral
Loan or which may be acquired by the Borrower when exercising rights or remedies
with respect to any Collateral Loan): (a) materialmen’s, warehousemen’s,
mechanics’ and other Liens arising by operation of law in the ordinary course of
business for sums not due or sums that are being contested by an appropriate
person in good faith by appropriate proceedings; (b) purchase money security
interests in specific items of equipment, (c) Liens for state, municipal and
other local taxes if such taxes shall not at the time be due and payable or the
validity or amount thereof is currently being contested by an appropriate person
in good faith by appropriate proceedings and reserved for in accordance with
GAAP; (d) Liens in favor of the Borrower and assigned by the Borrower to the
Trustee for the benefit of the Secured Parties pursuant to this Agreement,
(e) Liens in favor of the Trustee for the benefit of the Secured Parties
pursuant to this Agreement, (f) the restrictions on transferability imposed by
the Related Documents (but only to the extent relating to customary procedural
requirements and agent consents (except where the Collateral Servicer or any of
its Affiliates is the agent) expected to be obtained in due course and not to
Obligor consents) and (g) the restrictions on transferability imposed by any
shareholder agreements in respect of Equity Securities acquired in connection
with the work-out of a Collateral Loan, and

 

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(iii) with respect to agented Collateral Loans, Liens in favor of the lead
agent, the collateral agent or the paying agent for the benefit of all holders
of indebtedness of such Obligor under the related Collateral Loan.

“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 any loan or Collateral Loan on which any portion of the
interest accrued for a specified period of time or until the maturity thereof
is, or at the option of the Obligor may be, added to the principal balance of
such loan or Collateral Loan or otherwise deferred rather than being paid in
Cash, provided that if a Collateral Loan has a PIK component but pays interest
in cash at a rate of at least LIBOR + 2.50% it will not constitute a PIK Loan.

“Plan” means an employee pension benefit plan within the meaning of Section 3(2)
of ERISA (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.

“Portfolio Advance Rate” means, without duplication, the percentage equivalent
of a fraction, the numerator of which is (A) the aggregate outstanding amount of
the Advances plus the Net Aggregate Exposure Amount and the denominator of which
is (B) (x) the Principal Collateralization Amount plus, (y) the Net Aggregate
Exposure Amount minus, (z) the Caa Adjustment.

“Post-Default Rate” shall have the meaning specified in the Fee Letter.

“Principal Balance” means:

(a) with respect to any Collateral Loan other than a Revolving Collateral Loan
or Delayed Funding Collateral Loan, as of any date of determination, the
outstanding principal balance of such Collateral Loan (after adjustment for any
repayments and exclusive of both capitalized interest and accrued interest); and

(b) with respect to any Revolving Collateral Loan or Delayed Funding Collateral
Loan, as of any date of determination, the outstanding principal balance of such
Revolving Collateral Loan or Delayed Funding Collateral Loan (after adjustment
for any borrowings or repayments and exclusive of both capitalized interest and
accrued interest), plus (except as expressly set forth in this Agreement) any
undrawn commitments that have not been irrevocably reduced or withdrawn with
respect to such Revolving Collateral Loan or Delayed Funding Collateral Loan;

provided, in all cases, that the Principal Balance of any Charged-Off Loan or
Equity Security shall be deemed to be zero.

 

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“Principal Collateralization Amount” As of any date, an amount equal to the sum
of the following without duplication:

(a) the aggregate outstanding principal balance of all Collateral Loans
purchased or otherwise acquired by the Borrower (other than Defaulted Loans and
Deferring Securities), provided that, Collateral Loans subject to this clause
and purchased at a purchase price (exclusive of accrued interest) or otherwise
acquired having a Market Value below 97.0% of the outstanding principal balance
thereof will be carried at their purchase price or fair value whichever is
lower;

(b) Defaulted Loans will be carried at the lowest of (i) an amount equal to the
Market Value at such time of such Defaulted Loan as applicable, (ii) the Moody’s
Recovery Amount at such time and (iii) if a Valuation has been obtained after
such Defaulted Loan became a Defaulted Loan and such Valuation is not more than
three months old, an amount equal to 75% of the Appraised Value with respect to
such Defaulted Obligation based upon such Valuation;

(c) Deferring Securities will be carried at the lowest of (i) the Principal
Balance of such Deferring Security multiplied by the Moody’s Recovery Rate for
such Deferring Security; and (ii) the Market Value for such Deferring Security;

(d) Charged-Off Loans will be carried at zero;

(e) cash and cash equivalents on hand representing Principal Proceeds (excluding
amounts on deposit in the Future Funding Reserve Account).

“Principal Collection Subaccount” has the meaning specified in Section 8.02(a).

“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 Cash capital contributions to the Borrower by the Equity
holders thereof which have not been designated or directed to be applied to some
other purpose by the Borrower, which designation or direction is consented to by
the Administrative Agent, or by the Collateral Servicer on behalf of the
Borrower by written notice to the Collateral Servicer, the Administrative Agent
and the Trustee.

“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 Authorities) but
excluding any customary procedural requirements and agents’ and/or Obligor
consents expected to be obtained in due course in connection with the transfer
of the Collateral Loans to the Borrower).

“Proceeds” has, with reference to any asset or property, the meaning assigned to
it under 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.

 

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“Prohibited Transaction” means a transaction described in Section 406(a) of
ERISA or Section 4975 of the Code that is not exempted by a statutory or
administrative or individual exemption pursuant to Section 408 of ERISA or
Section 4975 of the Code.

“Purchase Price” means (a) with respect to each Collateral Loan other than a
Revolving Collateral Loan or Delayed Funding Collateral Loan, the purchase price
paid by the Borrower to acquire such Collateral Loan and (b) with respect to
each Revolving Collateral Loan or Delayed Funding Collateral Loan, the purchase
price paid by the Borrower to acquire the fully funded portion of such
Collateral Loan.

“Ramp-Up Completion” shall mean (a) the provision of a Passing Accountants’
Certificate in accordance with the provisions of Section 2.16(a) or (b) the
provisions of a Passing Accountants’ Certificate or satisfaction of the Rating
Condition, in each case, in accordance with the provisions of Section 2.16(b).

“Ramp-Up Period” means the period from and including the Closing Date to and
excluding the earliest of (a) the date upon which Ramp-Up Completion occurs,
(b) the date of the acceleration of the maturity of the Advances pursuant to
Section 6.01, (c) the Collateral Servicer receives written notice of its removal
for “Cause” (pursuant to and as defined in the Collateral Servicing Agreement);
(d) the Collateral Servicer shall have notified the Borrower of its intention to
resign as Collateral Servicer or the occurrence of any other termination of the
Collateral Servicing Agreement, whether or not in accordance with its terms;
(e) termination of the Commitments in whole pursuant to Section 2.06(b); or
(f) the twelve month anniversary of the Closing Date.

“Rating Agency” means Moody’s or, with respect to the Collateral generally,
Moody’s (or, if, at any time Moody’s ceases to provide rating services with
respect to debt obligations, any other nationally recognized investment rating
agency selected by the Borrower or the Collateral Servicer on behalf of the
Borrower and consented to by the Administrative Agent). In the event that at any
time any of the rating agencies referred to above ceases to be a “Rating Agency”
and a replacement rating agency is selected in accordance with the preceding
sentence, then references to rating categories of such replaced rating agency in
this Agreement shall be deemed instead to be references to the equivalent
categories of such replacement rating agency as of the most recent date on which
such replacement rating agency and such replaced rating agency’s published
ratings for the type of obligation in respect of which such replacement rating
agency is used.

“Rating Condition” means, with respect to any action taken or to be taken by or
on behalf of the Borrower, a condition that is satisfied if Moody’s has
confirmed in writing (which may be in the form of a letter, press release or
other publication of a change in Moody’s published ratings criteria to this
effect) that such action will not cause the then-current rating of the Notes by
Moody’s to be reduced or withdrawn; provided that the Rating Condition will not
be applicable with respect to any action if (i) at the time of determination, no
Notes are then rated by Moody’s or (ii) the Administrative Agent and all of the
Lenders provide their written approval as to such action and written notice
thereof is given to Moody’s.

“Rating Criteria” is satisfied for any Person at any time if:

(a) such Person has a Moody’s short term rating of at least “P-1” and a Moody’s
long term rating of at least “A1” at such time; or

 

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(b) such Person’s obligations in respect of this Agreement are fully supported
by a Liquidity Facility provided by one or more Liquidity Banks, or one or more
guarantors, and each such Liquidity Banks or guarantors meets the requirements
under clause (a) above at such time; or

(c) the Rating Condition is satisfied with respect to such Person’s failure to
satisfy the requirements under either of clause (a) or (b) at such time and both
the Borrower and the Administrative Agent have consented thereto.

“Real Estate Loan” means a loan or other debt obligation (including, without
limitation, a senior secured real estate loan or a B-note loan) that is
(a) secured primarily by a mortgage, deed of trust or similar Lien on commercial
real estate (other than hotels and casinos), residential real estate or
undeveloped land or (b) a loan to a company engaged primarily in acquiring and
developing undeveloped land (whether or not such loan is secured by real
estate).

“Realized Loss” means, for any Collateral Loan, an amount equal to the loss
recognized, if any, from the difference between the Borrower’s acquisition price
for such Collateral Loan and its disposition price.

“Register” has the meaning specified in Section 13.06(d).

“Regulatory Change” has the meaning specified in Section 2.09(a).

“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 Agreement” means a guaranteed reinvestment agreement from a bank,
insurance company or other corporation or entity having Eligible Investment
Required Ratings; provided that such agreement provides that it is terminable by
the purchaser, without penalty and with the return of all invested funds, if
within 60 days after the provider of such agreement no longer satisfies the
Eligible Investment Required Ratings the provider has failed either (i) (x) to
obtain a guarantor with Eligible Investment Required Ratings to guarantee the
obligations of such provider under such agreement and (y) to satisfy the Rating
Condition and obtain the consent of the Administrative Agent or (ii) (x) to
obtain a replacement provider with Eligible Investment Required Ratings and
(y) to satisfy the Rating Condition and obtain the consent of the Administrative
Agent.

“Reinvestment Interest Diversion Ratio Test” means a test that will be satisfied
at any time if the Overcollateralization Ratio is at least equal to the Row
Diversion Test.

“Reinvestment Period” means the period from and including the Closing Date to
and excluding the earliest of (a) 18 months from Closing Date (or such later
date as may be agreed by the Borrower and each of the Lenders and notified in
writing to the Administrative Agent and the Trustee, but subject to satisfaction
of the Rating Condition with respect to each

 

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such extension), (b) the date of the acceleration of the maturity of the
Advances pursuant to Section 6.01, (c) the Collateral Servicer receives written
notice of its removal for “Cause” (pursuant to and as defined in the Collateral
Servicing Agreement); (d) the Collateral Servicer shall have notified the
Borrower of its intention to resign as Collateral Servicer or the occurrence of
any other termination of the Collateral Servicing Agreement, whether or not in
accordance with its terms; or (e) termination of the Commitments in whole
pursuant to Section 2.06(b).

“Related Documents” means, with respect to any Collateral Loan, all agreements
or documents evidencing, securing, governing or giving rise to such Collateral
Loan. As used in this Agreement, each reference to the Related Documents to
which the Borrower is a party shall be deemed to mean the Related Documents with
respect to any Collateral Loan to which the Borrower is a party or to which the
Borrower is otherwise bound.

“Related Document Modification” has the meaning assigned to such term in
Section 5.02(v).

“Related Person” has the meaning assigned to such term in Section 2.04(f).

“Related Property” means, with respect to any Collateral Loan, any property or
other assets designated and pledged or mortgaged as collateral to secure
repayment of such Collateral Loan (including, without limitation, a pledge of
the stock, membership or other ownership interests in the Obligor), including
all proceeds from any sale or other disposition of such property or other
assets.

“Repurchase and Substitution Limits” has the meaning assigned to such term in
Section 10.01(a).

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

“Required Lenders” means, as of any date of determination, Lenders whose
aggregate principal amount of outstanding Advances 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 outstanding Advances.

“Responsible Officer” means (a) in the case of (i) a corporation or (ii) a
partnership or limited liability company that, pursuant to its Constituent
Documents, has officers, any chief executive officer, chief financial officer,
president, vice president, assistant vice president, treasurer, director or
manager, and, in any case where two Responsible Officers are acting on behalf of
such corporation or other entity, the second such Responsible Officer may be a
secretary or assistant secretary, (b) without limitation of clause (a)(ii), in
the case of a limited partnership, the 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)(ii), in the case of a limited
liability company, the Responsible Officer of the sole member or managing
member, acting on behalf of the sole member or managing member in its capacity
as sole member 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

 

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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 and (f) in the case
of the Trustee or Custodian, an officer of the Trustee or Custodian, as
applicable, responsible for the administration of this Agreement.

“Restricted Junior Payment” (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 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, (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 Borrower now or hereafter outstanding, (iv) any payment
of management fees by the Borrower and (v) except as otherwise expressly set
forth in the next sentence of this definition, any other dividend, distribution
or payment to any Equity holder not made in accordance with Section 9.01. For
the avoidance of doubt, (i) payments and reimbursements due to the Collateral
Servicer in accordance with this Agreement or any other Facility Document do not
constitute Restricted Junior Payments, (ii) distributions to the Equity holders
pursuant to Section 9.01 do not constitute Restricted Junior Payments, and
(iii) distributions by the Borrower to its Equity holders of Collateral Loans or
of cash or other proceeds relating thereto which have been repurchased or
substituted in accordance with this Agreement and the Master Sale Agreement do
not constitute Restricted Junior Payments.

“Restricted Payment Test” means a test applied under Section 9.01(a)(i)(I) that
will be satisfied on the related Determination Date if (a) the aggregate
Realized Losses and the aggregate Unrealized Losses, in each case, from the
Closing Date to the related Determination Date, is less than or equal to the
aggregate amounts previously distributed for the purposes specified in
Section 9.01(a)(i)(J) on each Payment Date since the Closing Date plus any
amounts payable on a pro-forma basis under Section 9.01(a)(i)(J) on such Payment
Date and (b) the Maximum Moody’s Rating Factor Test has been satisfied.

“Retained Amount” means a retention of the Equity by the Retention Provider
equal at all times to no less than 5% (or such higher amount as may be required
by Article 122a) of the “net economic interest” (as defined in Article 122(a))
of the Facility calculated based on the Aggregate Principal Balance of all of
the Collateral Loans at the time of determination without taking into account
any deduction pursuant to the proviso to the definition of “Principal Balance”
of any Collateral Loan or any deduction or discount in respect of the purchase
price paid therefor by the Borrower.

“Retention of Net Economic Interest Letter” means a letter relating to the
retention of net economic interest in substantially the form of Exhibit F
hereto, from the Retention Provider and addressed to each Lender, each Agent and
the Borrower.

“Retention Provider” means NewStar Financial, Inc.

“Review Criteria” has the meaning assigned to such term in Section 11.02(b)(i).

 

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“Revolving Collateral Loan” means any Collateral Loan (other than a Delayed
Funding Collateral Loan) that is a loan (including, without limitation,
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 borrower by the Borrower;
provided that any such Collateral Loan will be a Revolving Collateral Loan only
until all commitments to make revolving advances to the borrower expire or are
terminated or irrevocably reduced to zero.

“Row Advance Rate” shall have the meaning specified in the Fee Letter.

“Row Diversion Test” shall have the meaning specified in the Fee Letter.

“Row Minimum Diversity Score” means the applicable Row Minimum Diversity Score
as set forth in the column of that name in the Matrix corresponding to the
Applicable Row Level.

“Row Minimum Weighted Average Spread” means the applicable Row Minimum Weighted
Average Spread as set forth in the column of that name in the Matrix
corresponding to the Applicable Row Level; provided that, during the Ramp-Up
Period, the Row Minimum Weighted Average Spread shall be 4.75%.

“Row Moody’s Rating Factor” means the applicable Row Moody’s Rating Factor as
set forth in the column of that name in the Matrix corresponding to the
Applicable Row Level; provided that, during the Ramp-Up Period, the Row Moody’s
Rating Factor shall be 3490.

“Row OC Test” shall have the meaning specified in the Fee Letter.

“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 at the time administrating the Securities Act,
the Investment Company Act or the Exchange Act.

“Second Lien Loan” means a loan or debt security, including a participation loan
(for purposes of this definition, a “loan”) that is (i) is not (and by its terms
is not permitted to become) subordinate in right of payment to any other debt
for borrowed money incurred by the Obligor under the Collateral Loan, other than
a Senior Secured First Lien Loan, (ii) is secured by a valid and perfected
security interest or lien on specified collateral securing the Obligor’s
obligations under such Collateral Loan, which security interest or lien is not
by its terms subordinate to the security interest or lien securing any other
debt for borrowed money other than a Senior Secured First Lien Loan on such
specified collateral and (iii) is not secured solely or primarily by common
stock or other equity interests; provided that with respect to clauses (i) and
(ii) above, such right of payment, security interest or lien may be subordinate
to customary permitted liens, such as, but not limited to, tax liens.

 

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“Secured Parties” means the Administrative Agent, the Trustee, the Custodian,
U.S. Bank National Association (in its capacity as a Securities Intermediary
under the Account Control Agreement), the Lenders and their respective permitted
successors and assigns.

“Securities Act” means the Securities Act of 1933, as amended, 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 provisions shall be deemed to be a reference to any successor
statutory or regulatory provision.

“Securities Intermediary” has the meaning specified in Section 8-102(a)(14) of
the UCC.

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

“Selling Institution” means an entity obligated to make payments to the Borrower
under the terms of a Participation Interest.

“Senior Secured First Lien Loan” means any loan, letter of credit reimbursement
obligation, Collateral Loan, security or participation interest under which the
Borrower and any other lenders are granted a valid, perfected first-priority
security interest in designated collateral with a senior first-out position
(whether or not they are also granted a security interest of lower priority in
additional collateral).

“Servicing Standard” means the Standard of Care as defined in the Collateral
Servicing Agreement.

“Solvent” as to any Person means that such Person is not “insolvent” within the
meaning of Section 101(32) of the Bankruptcy Code, as amended.

“Special Purpose Provisions” has the meaning assigned to such term in
Section 1.01 of the Borrower LLC Agreement.

“Specified Change” means any amendment, consent, waiver or other modification
with respect to a Related Document that (a) reduces the principal amount of a
Collateral Loan, (b) reduces the rate of interest payable on a Collateral Loan
by more than 25% for a Credit Risk Loan or a Defaulted Loan and more than 50%
for other Collateral Loans, (c) postpones the Due Date of any Scheduled
Distribution in respect of a Collateral Loan, unless the Moody’s Default
Probability Rating in respect of such Collateral Loan has been confirmed to not
be reduced or withdrawn as a result of such change and the Maximum Weighted
Average Life Test is satisfied after giving effect to such change, (d) releases
any material guarantor or co-obligor of a Collateral Loan from its obligations,
(e) terminates or releases all or substantially all of the assets securing a
Collateral Loan, except as required by the Related Documents or (f) changes any
of the provisions of a Related Document specifying the number or percentage of
lenders required to effect any of the foregoing.

“Specified LIBOR” means, at any time:

(a) if no Interest Accrual Period for Eurodollar Rate Advances is then in effect
hereunder, LIBOR determined as if (1) Eurodollar Rate Advances having an
aggregate principal balance of $10,000,000 were outstanding hereunder and
(2) the related Interest Accrual Period were in effect for the period from the
immediately preceding Payment Date (or, if prior to the first Payment Date, the
Closing Date) through the next following Payment Date;

 

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(b) if only one Interest Accrual Period for Eurodollar Rate Advances is
outstanding at such time, the LIBOR rate in effect with respect to the
Eurodollar Rate Advances for such Interest Accrual Period; and

(c) if more than one Interest Accrual Period for Eurodollar Rate Advances is
outstanding at such time, a rate per annum equal to (1) the sum of the products,
for each such Interest Accrual Period, of the LIBOR rate in effect with respect
to such Interest Accrual Period multiplied by the principal amount of Eurodollar
Rate Advances then bearing interest at a rate based on such LIBOR rate, divided
by (2) the aggregate principal amount of all Eurodollar Rate Advances
outstanding at such time, rounded to the nearest 0.01%.

“Stage I” means, with respect to the Ramp-Up Period, the period from and
including the Closing Date to and excluding the Interim Date.

“Stage II” means, with respect to the Ramp-Up Period, the period from and
including the Interim Date to and excluding the date that is the earliest of
clauses (a) through (f) in the definition of Ramp-Up Period.

“Step-Up Overcollateralization Test” A test that will be satisfied if the
Overcollateralization Ratio for the applicable quarter is at least equal to the
ratio set forth in the table below, provided that if the Step-Up
Overcollateralization Test is “Not Applicable” then the test will be assumed to
not be satisfied.

 

Quarter

   Step-Up
Overcollateralization  Test

1st quarter post
Reinvestment Period

   150%

2nd quarter post
Reinvestment Period

   157%

3rd quarter post
Reinvestment Period

   164%

4th quarter post
Reinvestment Period

   171%

5th quarter post
Reinvestment Period

   179%

6th quarter post
Reinvestment Period

   186%

7th quarter post
Reinvestment Period

   193%

 

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8th quarter post
Reinvestment Period

   200%

9th quarter post
Reinvestment Period

   250%

10th quarter post
Reinvestment Period

   250%

11th quarter post
Reinvestment Period
and after

   Not Applicable

“Structured Finance Obligation” means any debt obligation owing by a 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 any ABL Facility, loans to financial service
companies, factoring businesses, health care providers and other genuine
operating businesses do not constitute Structured Finance Obligations.

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

“Synthetic Loan” A loan or swap transaction, other than a Participation Interest
or Letter of Credit, that has payments associated with either payments of
interest on and/or principal of a reference obligation or the credit performance
of a reference obligation.

“Tape” has the meaning assigned to such term in Section 8.07(a).

“Taxes” has the meaning assigned to such term in Section 13.03(a).

“Total Capitalization” means, at any time, the sum of (a) the Principal
Collateralization Amount, (b) the Net Aggregate Exposure Amount and (c) the
remaining aggregate outstanding amount of the undrawn Advances above the Net
Aggregate Exposure Amount, but only to the extent proceeds from such undrawn
Advances may be used to purchase Collateral Loans assuming a price of 100% such
that the applicable Row Advance Rate equals or exceeds the Portfolio Advance
Rate; provided that during the Ramp-Up Period, the Total Capitalization is equal
to $230,000,000.

“Total Commitment” means (a) on or prior to the Commitment Termination Date,
$150,000,000 (as such amount may be reduced from time to time pursuant to
Section 2.06) and (b) following the Commitment Termination Date, the Net
Aggregate Exposure Commitment Amount.

“Trade Ticket” means a confirmation of the purchase and sale of a Collateral
Loan as provided by the Collateral Servicer to the Trustee in connection with
such purchase.

 

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“Trustee” US Bank, not in its individual capacity, but solely as Trustee, its
successor in interest pursuant to Section 11.03 or such Person as shall have
been appointed successor Trustee pursuant to Section 11.05 or Section 11.07.

“Trustee Fee Letter” means the fee letter dated February 16, 2012 among the
Trustee, NewStar Financial, Inc. and the Borrower setting forth the fees payable
by the Borrower to the Trustee and the Custodian in connection with the
transactions contemplated by this Agreement, and consented to by the
Administrative Agent, as the same may from time to time be amended,
supplemented, waived or modified, as consented to by the Administrative Agent.

“Trustee Termination Notice” has the meaning specified in Section 11.05.

“UCC” means the Uniform Commercial Code, as from time to time in effect in the
State of New York; 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 Trustee pursuant to this Agreement are
governed by the Uniform Commercial Code as in effect in a jurisdiction of the
United States 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.

“Unexpected Replacement” has the meaning specified in Section 5.02 (u).

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

“Unrealized Loss” means, with respect to any Defaulted Loan, Deferring Security
or Charged-Off Loan, an amount equal to the difference between the Principal
Balance of such loan and the carrying value from the definition of Principal
Collateralization Amount under subclause (b), (c) or (d), as applicable.

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

“Valuation” means, with respect to any Collateral Loan, a valuation of the
tangible and intangible assets securing such Collateral Loan and, without
duplication, the cash flow generating capability of the Obligor and any
guarantor of the related Collateral Loan that is conducted by a firm designated
under the terms of this Agreement as an “Approved Valuation Firm” on the basis
of the Appraised Value of such assets and, without duplication, the cash flow
generating capability of the Obligor and any guarantor (that is, the price that
would be paid by a willing buyer to a willing seller of such assets in an
expedited sale on an arm’s-length basis), which may be in the form of an update
or reaffirmation by an Approved Valuation Firm of a Valuation previously
performed by an Approved Valuation Firm.

“Weighted Average Coupon” means, with respect to Fixed Rate Obligations
(excluding Defaulted Loans), as of any date, the number obtained by:

(x) the sum of the products obtained by multiplying the cash-pay portion of the
interest coupon of each such Fixed Rate Obligation (plus any other fees (such as
anniversary fees, commitment fees, etc.) that are contractually required to be
paid) as of such date by the Principal Balance of each such Collateral Loan as
of such date, and

 

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(y) dividing such sum by the sum of the Aggregate Principal Balance plus the
Exposure Amount of all such Fixed Rate Obligations, and rounding the result up
to the nearest 0.001%,

provided that, if the foregoing amount is less than the Minimum Weighted Average
Coupon Test Level then all or a portion of the Weighted Average Coupon
Adjustment, if any, as of such date, to the extent not exceeding such shortfall,
shall be added to such result.

“Weighted Average Coupon Adjustment” means, as of any date, a fraction
(expressed as a percentage), the numerator of which is equal to the product of
(i) the excess, if any, of the Weighted Average Floating Spread for such date
over the Row Minimum Weighted Average Spread, and (ii) the Aggregate Principal
Balance plus the Exposure Amount of all Floating Rate Obligations (in each case
excluding Defaulted Loans), and the denominator of which is the Aggregate
Principal Balance plus Exposure Amount of all Fixed Rate Obligations (in each
case excluding Defaulted Loans). In computing the Weighted Average Coupon
Adjustment on any date, the Weighted Average Floating Spread for such
Measurement Date shall be computed as if the Weighted Average Floating Spread
Adjustment was equal to zero.

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

(a) the amount equal to (A) the Aggregate Funded Spread (with respect to all
Collateral Loans), plus (B) the Aggregate Unfunded Spread, by

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

provided that, if the foregoing amount is less than the Row Minimum Weighted
Average Spread then all or a portion of the Weighted Average Floating Spread
Adjustment, if any, as of such date, to the extent not exceeding such shortfall,
shall be added to such result.

“Weighted Average Floating Spread Adjustment” means, as of any date, a fraction
(expressed as a percentage), the numerator of which is equal to the product of
(i) the excess, if any, of the Weighted Average Coupon for such date over the
Minimum Weighted Average Coupon Test Level and (ii) the Aggregate Principal
Balance plus the Exposure Amount of all Fixed Rate Obligations (in each case
excluding Defaulted Loans), and the denominator of which is the Aggregate
Principal Balance plus the Exposure Amount of all Floating Rate Obligations as
of such date (in each case excluding Defaulted Loans). In computing the Weighted
Average Floating Spread Adjustment on any Measurement Date, the Weighted Average
Coupon for such date shall be computed as if the Weighted Average Coupon
Adjustment was equal to zero.

 

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

 

The Average Life at such time of each

such Collateral Loan

   X     

The Principal Balance of such

Collateral Loan

and dividing such sum by:

The Aggregate Principal Balance at such time of all Collateral Loans.

For the purposes of the foregoing, the “Average Life” is, on any date of
determination with respect to any Collateral Loan, the quotient obtained by
dividing (i) 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 Collateral
Loan and (b) the respective amounts of principal of such Scheduled Distributions
by (ii) the sum of all successive Scheduled Distributions of principal on such
Collateral Loan.

“Weighted Average Moody’s Rating Factor” means the number (rounded up to the
nearest whole number) determined by:

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

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

“Weighted Average Moody’s Recovery Rate” As of any Measurement Date, the number,
expressed as a percentage, obtained by summing the product of the Moody’s
Recovery Rate on such Measurement Date of each Collateral Loan and the Principal
Balance of such Collateral Loan, dividing such sum by the Aggregate Principal
Balance of all such Collateral Loans and rounding up to the first decimal place.

“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.

“WSO System” The loan administrator software system owned by Market WSO
Corporation or such other loan administration software system approved in
writing by the Administrative Agent.

“Zero Coupon Obligation” means a Collateral Loan that does not provide for
periodic payments of interest in Cash or that pays interest only at its stated
maturity.

 

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Section 1.02 Rules of Construction.

For all purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires (i) singular words shall connote the
plural as well as the singular, and vice versa (except as indicated), as may be
appropriate, (ii) the words “herein,” “hereof” and “hereunder” and other words
of similar import used in this Agreement refer to this Agreement as a whole and
not to any particular article, schedule, section, paragraph, clause, exhibit or
other subdivision, (iii) the headings, subheadings and table of contents set
forth in this Agreement are solely for convenience of reference and shall not
constitute a part of this Agreement nor shall they affect the meaning,
construction or effect of any provision hereof, (iv) references in this
Agreement 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, (v) each of the parties to this Agreement and its counsel have
reviewed and revised, or requested revisions to, this Agreement, and the rule of
construction that any ambiguities are to be resolved against the drafting party
shall be inapplicable in the construction and interpretation of this Agreement,
(vi) any definition of or reference to any Facility Document, agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (vii) any reference
herein 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), (viii) any reference to any law or regulation herein shall refer to
such law or regulation as amended, modified or supplemented from time to time,
(ix) unless otherwise specified herein, all accounting terms used herein shall
be interpreted and all accounting determinations hereunder shall be made in
accordance with GAAP as in effect from time to time and (x) unless otherwise
specified herein and unless the context requires a different meaning, all terms
used herein that are defined in Articles 8 and 9 of the UCC are used herein as
so defined.

Section 1.03 Computation of Time Periods.

Unless otherwise stated in this Agreement, in the computation of a period of
time from a specified date to a later specified date, the word “from” means
“from and including” and the words “to” and “until” both mean “to but
excluding”. Periods of days referred to in this Agreement shall be counted in
calendar days unless Business Days are expressly prescribed.

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 Loans, 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.

 

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(a) All calculations with respect to Scheduled Distributions on the Collateral
Loans securing the Advances shall be made on the basis of information as to the
terms of each of such Collateral Loans and upon reports of payments, if any,
received on such Collateral Loans that are furnished by or on behalf of the
Obligor of such Collateral Loans 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 Defaulted Loans unless or until
such payments are actually made and (ii) ticking fees in respect of Collateral
Loans, and other similar fees, 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 Loans (other than Defaulted Loans,
which, except as otherwise provided herein, shall be assumed to have Scheduled
Distributions of zero) shall be the sum of (i) the total amount of payments and
collections to be received during such Collection Period in respect of such
Collateral Loans (including the proceeds of the sale of such Collateral Loans
received and, in the case of sales which have not yet settled, to be received
during the Collection Period) and not reinvested in additional Collateral Loans
or retained in the Collection Account for subsequent reinvestment pursuant to
Section 10.02 that, if received as scheduled, will be available in the
Collection Account at the end of the Collection Period and (ii) any such amounts
received in prior Collection Periods that were not disbursed on a previous
Payment Date or retained in the Collection Account for subsequent reinvestment
pursuant to Section 10.02.

(d) Each Scheduled Distribution receivable with respect to a Collateral Loan
shall be assumed to be received on the applicable Due Date, and each such
Scheduled Distribution shall be assumed to be immediately deposited in the
Collection Account to earn interest at the Assumed Reinvestment Rate (as
determined on each relevant date of determination). All such funds shall be
assumed to continue to earn interest until the date on which they are required
to be available in the Collection Account for application, in accordance with
the terms hereof, to payments of principal of or interest on the Advances or
other amounts payable pursuant to this Agreement.

(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,
Defaulted Loans will be included in the calculation in an amount determined as
set forth in clause (b) of the definition of Principal Collateralization Amount
and Charged-Off Loans will not be included.

(g) Except as otherwise provided herein, Defaulted Loans will not be included in
the calculation of the Collateral Quality Tests.

 

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

(i) References in this Agreement to the Borrower’s “purchase” or “acquisition”
of a Collateral Loan include references to the Borrower’s acquisition of such
Collateral Loan by way of contribution from the Collateral Servicer or an
Affiliate thereof. Portions of the same Collateral Loan acquired by the Borrower
on different dates (whether through purchase or receipt by contribution, but
excluding subsequent draws under Revolving Collateral Loans or Delayed Funding
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%.

(k) Any Specified Change that results in the transfer or release of all or
substantially all of the assets securing a Collateral Loan shall, for purposes
of the Concentration Limitations, result in the recategorizing of such
Collateral Loan as a Defaulted Loan.

ARTICLE II

ADVANCES UNDER THE FACILITY

Section 2.01 Revolving Credit Facility.

On the terms and subject to the conditions hereinafter set forth, including
Article III, each Lender severally agrees to make advances to the Borrower
(each, an “Advance” and each borrowing on any single day, a “Borrowing”) from
time to time on any Business Day during the period from the Closing Date until
the Commitment Termination Date, and to make Net Aggregate Exposure Advances to
the Borrower from time to time on any Business Day during the period from the
Commitment Termination Date until the first date on which the Net Aggregate
Exposure Amount has been permanently reduced to zero as set forth in a written
notice from the Collateral Servicer to the Administrative Agent and the Trustee,
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 Total Commitment;
provided that no such Advances (including Net Aggregate Exposure Advances) and
no prepayment of any Advances shall be made on the Business Day immediately
preceding (but not including) any Payment Date.

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.

Section 2.02 Advances.

(a) If the Borrower desires to make a Borrowing under this Agreement it shall
give each Lender and the Administrative Agent (with a copy to the Trustee) a
written notice (each, a “Notice of Borrowing”) for such Borrowing (which notice
shall be irrevocable and

 

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effective upon receipt by the Administrative Agent) not later than 10:00 a.m.
(New York City time) at least three Business Days prior to the day of the
requested Borrowing (or such lesser notice period that the Administrative Agent
deems acceptable).

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, and otherwise be appropriately completed.
The proposed Borrowing Date specified in each Notice of Borrowing shall be a
Business Day falling on or prior to the Commitment Termination Date (unless the
requested Borrowing is a Net Aggregate Exposure Advance), 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 $100,000 in excess
thereof (or, if less, the remaining unfunded Commitments hereunder).

(b) Each Lender shall not later than 2:00 p.m. (New York City time) on each
Borrowing Date in respect of an Advance make its Percentage of the applicable
Requested Amount available to the Borrower by disbursing such funds in Dollars
to the Principal Collection Subaccount.

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.

(b) The Administrative Agent shall maintain, in accordance with its usual
practices, accounts in which it will record (i) the amount of each Advance made
hereunder to the Borrower, (ii) the amount of any principal due and payable or
to become due and payable from the Borrower to each Lender hereunder and
(iii) the amount of any principal sum paid by the Borrower hereunder and each
Lender’s share thereof.

(c) The entries maintained in the accounts maintained pursuant to clauses (a)
and (b) of this Section 2.03 shall be prima facie evidence of the existence and
amounts of the Advances therein recorded; provided that the failure of the
Administrative Agent or 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.

(d) Any Lender may request that its Commitment 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 13.06(a)) be represented by a Note payable to such Lender (or registered
assigns pursuant to Section 13.06(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 clauses (a) and (b) of
this Section 2.03.

 

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Section 2.04 Payment of Principal and Interest.

The Borrower shall pay principal and interest on the Advances 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.

(b) Interest shall accrue on the unpaid principal amount of each Advance from
the date of such Advance until such principal amount is paid in full, at the
following rates per annum:

(i) Base Rate Advances. While an Advance is a Base Rate Advance, a rate per
annum equal to the sum of the Base Rate in effect from time to time plus the
Applicable Margin.

(ii) Eurodollar Rate Advances. While an Advance is a Eurodollar Rate Advance, a
rate per annum for each Interest Accrual Period for such Advance equal to the
sum of LIBOR for such Interest Accrual Period plus the Applicable Margin.

(iii) CP Rate Advances. While an Advance is a CP Rate Advance, (i) a rate per
annum for each Interest Accrual Period for such Advance equal to the CP Rate for
such Interest Accrual Period plus the Applicable Margin; and (ii) each CP Rate
Advance funded by a CP Conduit through its liquidity provider shall bear
interest on the outstanding principal amount thereof for each Interest Accrual
Period for such Advance equal to the sum of LIBOR for such Interest Accrual
Period plus the Applicable Margin, for each day in such Interest Accrual Period
prior to the day on which such funding has been refinanced through the issuance
of Commercial Paper at the CP Rate for the remainder of such Interest Accrual
Period plus the Applicable Margin.

All Advances shall constitute CP Rate Advances if made by a CP Conduit and
Eurodollar Rate Advances if made by any Lender that is not a CP Conduit (subject
to their conversion to Base Rate Advances pursuant to Section 2.11), provided
that, in the event the Borrower is no longer able to borrow CP Rate Advances or
Eurodollar Rate Advances as a result of the occurrence of any of the
circumstances set forth in Section 2.11, the Borrower may request Base Rate
Advances hereunder until such time as Eurodollar Rate Advances are available.

The Calculation Agent shall provide notice to the Administrative Agent, the
Calculation Agent, the Lenders, the Borrower and the Collateral Servicer of any
and all LIBOR rate sets on the date that any such rate set is determined.

The CP Conduit shall provide notice to the Administrative Agent, the Borrower
and the Collateral Servicer of any and all CP Rate rate sets on the date that
any such rate set is determined.

(c) Accrued interest on each Advance shall be payable in arrears (x) on each
Payment Date, and (y) together with each prepayment of principal thereof on the
principal amount so prepaid.

(d) Subject in all cases to Section 2.04(f), the obligation of the Borrower to
pay the Obligations, including the obligation of the Borrower to pay the Lenders
the outstanding

 

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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
(other than payment) which the Borrower or any other Person may have or have had
against any Secured Party or any other Person.

(e) As a condition to the payment of principal of and interest on any Advance
without the imposition of withholding tax, the Administrative Agent and the
Borrower may require certification acceptable to the Administrative Agent or the
Borrower from any recipient to enable the Borrower, the Administrative Agent and
the Trustee to determine their duties and liabilities with respect to any taxes
or other charges that they may be required to deduct or withhold from payments
in respect of such Advance under any present or future law or regulation of the
United States and any other applicable jurisdiction, or any present or future
law or regulation of any political subdivision thereof or taxing authority
therein or to comply with any reporting or other requirements under any such law
or regulation.

(f) Notwithstanding any other provision of this Agreement, the obligations of
the Borrower under this Agreement are limited recourse obligations of the
Borrower payable solely from the Collateral and, following realization of the
Collateral, and application of the proceeds thereof in accordance with the
Priority of Payments and, subject to Section 2.12, 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, Affiliate,
member, manager, agent, partner, principal or incorporator of the Borrower or
their respective successors or assigns (any “Related Person”) for any amounts
payable under this Agreement. It is understood that the foregoing provisions of
this clause (f) shall not (i) prevent recourse to (x) the Collateral for the
sums due or to become due under any security, instrument or agreement which is
part of the Collateral or (y) any Affiliate of the Borrower under any Facility
Document to which it is a party thereto 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 clause (f) 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 any such Related Person.

Section 2.05 Prepayment of Advances.

(a) Optional Prepayments. Other than in connection with a Payment in Full and
termination of this Facility which is subject to Section 2.06(b), the Borrower
(at the direction of the Collateral Servicer) may, up to three times per
Collection Period and on any Business Day, voluntarily prepay the Advances
together with accrued interest thereon in whole or in part using Principal
Proceeds, without penalty or premium; provided that the Borrower shall have
delivered to the Lenders and the Administrative Agent (with a copy to the
Trustee) written notice of such prepayment (such notice, a “Notice of
Prepayment”) in the form of Exhibit C hereto not later than 12:00 noon (New York
City time) on the Business Day that is (i) in the case of CP Rate Advances or
Eurodollar Rate Advances, three Business Days prior to the date of such
prepayment, and (ii) in the case of Base Rate Advances, one Business Day prior
to the date of

 

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such 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 of any Advance by the Borrower pursuant to this
Section 2.05(a) shall in each case be in a principal amount of at least
$1,000,000 or a whole multiple of $100,000 in excess thereof or, if less, the
entire outstanding principal amount of the Advances of the Borrower. 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. 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) Additional Prepayment Provisions. Each prepayment pursuant to this
Section 2.05 shall be (i) subject to Sections 2.04(c) and 2.10 and (ii) applied
to the Advances of the Lenders in accordance with their respective Percentages.

Section 2.06 Reductions in Commitments.

(a) Automatic Reduction and Termination. The Total Commitment (and the
Commitment of each Lender) shall be automatically reduced to the Net Aggregate
Exposure Commitment Amount at the close of each business day (New York City
time) on and after the Commitment Termination Date and shall be automatically
terminated on the first date following the Commitment Termination Date on which
the Exposure Amount has been permanently reduced to zero, as set forth in a
written notice from the Collateral Servicer to the Administrative Agent and the
Trustee.

(b) Optional Termination in Whole. Prior to the Commitment Termination Date, the
Borrower shall have the right at any time to terminate the Commitments in their
entirety upon not less than ten Business Days’ prior notice to the Lenders, the
Administrative Agent and the Trustee of any such termination, which notice shall
specify the effective date of such termination, provided that Payment in Full
occurs on such date; provided, however, if the Borrower has revoked its notice
of termination pursuant to the last sentence of this paragraph (b), the Borrower
shall only be required to give two Business Days’ prior notice of a subsequent
termination to the extent that Payment in Full occurs within ten Business Days’
of the effective date specified in the Borrower’s previous notice of
termination. On the date thereof, the Borrower may use amounts in the Covered
Accounts to effect any such Payment in Full. Such notice of termination shall be
irrevocable and effective only upon receipt and shall terminate and cancel the
Commitments of each Lender on the date specified in such notice (unless revoked
at least two Business Days prior to the effective date specified for such
termination, or such shorter period as may be consented to by the Administrative
Agent in writing; provided that the Borrower shall pay any Affected Party any
Breakage Payment with respect thereto as provided in Section 2.10).

 

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(c) Effect of Termination. The Total Commitment (and the Commitment of each
Lender) once terminated pursuant to this Section 2.06 may not be reinstated
unless otherwise agreed to in writing by each Lender.

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 of the Borrower.

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, neither the Administrative Agent nor the Trustee 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 to
be made by such other Lender.

Section 2.09 Increased Costs.

(a) Except with respect to Excluded Taxes, Other Taxes and changes in the rate
of Taxes, which shall be governed exclusively by Section 13.03, and without
duplication of amounts required to be paid or indemnified by Borrower pursuant
to Section 13.03, if, due to either (i) the introduction of or any change in or
in the interpretation, application or implementation of any Applicable Law (a
“Regulatory Change”) after the date hereof, or (ii) the compliance with any
guideline or change in the interpretation, application or implementation of any
guideline or request from any central bank or other Authority (whether or not
having the force of law) after the date hereof, there shall be any increase in
the cost to any Affected Person of agreeing to make or making, funding or
maintaining Advances to the Borrower, then the Borrower shall from time to time,
on the Payment Dates, following such Affected Person’s demand, pay in accordance
with the Priority of Payments to such Affected Person such additional amounts as
may be sufficient to compensate such Affected Person for such increased cost. A
certificate setting forth in reasonable detail the reason for and amount of such
increased cost, submitted to the Borrower by an Affected Person (with a copy to
the Administrative Agent and the Trustee), shall be conclusive and binding for
all purposes, absent manifest error.

(b) If an Affected Person determines that (i) the applicability of any law,
rule, regulation or guideline adopted after the date hereof pursuant to or
arising after the date hereof out of the July 1988 paper or the June 2006 paper
of the Basel Committee on Banking Supervision entitled: “International
Convergence of Capital Measurements and Capital Standards: a Revised Framework,”
or any successor paper or consultative package proposed by such Committee and
adopted after the date hereof (“Basel II”) or (ii) the adoption after the date

 

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hereof of any other law, rule, regulation or guideline regarding capital
adequacy affecting such Affected Person or any holding company for such Affected
Person or (iii) compliance, implementation or application, whether commenced
prior to or after the date hereof, by any Affected Person with (A) Basel II,
(B) the Dodd–Frank Wall Street Reform and Consumer Protection Act and all rules
and regulations promulgated thereunder or issued in connection therewith (the
“Dodd-Frank Act”), (C) Article 122a of the CRD and all rules and regulations
promulgated thereunder or issued in connection therewith, (D) the Alternative
Investment Fund Managers Directive and all rules and regulations promulgated
thereunder or issued in connection therewith (“AIFMD”), (E) the final rule
titled Risk-Based Capital Guidelines; Capital Adequacy Guidelines; Capital
Maintenance: Regulatory Capital; Impact of Modifications to Generally Accepted
Accounting Principles; Consolidation of Asset-Backed Commercial Paper Programs;
and Other Related Issues, adopted by the Office of the Comptroller of the
Currency, Department of the Treasury; Board of Governors of the Federal Reserve
System; Federal Deposit Insurance Corporation; and Office of Thrift Supervision,
Department of Treasury on December 15, 2009 (the “FAS 166/167 Regulatory Capital
Rules”), or any rules, regulations, guidance, interpretations or directives from
bank regulatory agencies promulgated in connection therewith or (iv) any change
arising after the date hereof in the foregoing or in the interpretation or
administration of any of the foregoing by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or (v) compliance by any Affected Person (or any lending office of such
Affected Person), or any holding company for such Affected Person which is
subject to any of the capital requirements described above, with any request or
directive issued after the date hereof regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, (A)(i) affects the amount of capital required to be maintained by such
Affected Person and that the amount of such capital is increased by or based
upon the existence of such Affected Person’s Commitment under this Agreement or
upon such Affected Person’s making, funding or maintaining Advances or
(ii) reduces the rate of return of an Affected Person to a level below that
which such Affected Person could have achieved but for such compliance (taking
into consideration such Affected Person’s policies with respect to capital
adequacy), then the Borrower shall from time to time, on the Payment Dates,
following such Affected Person’s notification, pay in accordance with the
Priority of Payments such additional amounts which are sufficient to compensate
such Affected Person for such increase in capital or reduced return. If any
Affected Person becomes entitled to claim any additional amounts pursuant to
this Section 2.09(b), it shall promptly notify the Borrower (with a copy to the
Administrative Agent and the Trustee) of the event by reason of which it has
become so entitled. A certificate setting forth in reasonable detail such
amounts submitted to the Borrower by an Affected Person shall be conclusive and
binding for all purposes, absent manifest error.

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 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.

 

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Section 2.10 Compensation; Breakage Payments.

The Borrower agrees to compensate each Affected Person from time to time, on the
Payment Dates in accordance with the Priority of Payments and on the date of any
optional prepayment of Advances hereunder, following such Affected Person’s
written request (which request shall set forth the basis for requesting such
amounts) in connection with any optional prepayment, for all reasonable losses,
expenses and liabilities (including any interest paid by such Affected Person to
lenders of funds borrowed by the Borrower to make or carry a CP Rate Advance or
a Eurodollar Rate Advance made to the Borrower and any loss sustained by such
Affected Person in connection with the re-employment of such funds but excluding
loss of anticipated profits or margin), which such Affected Person may sustain
(each, a “Breakage Payment”): (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 CP Rate Advance or Eurodollar Rate Advance
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 CP Rate Advance or Eurodollar
Rate Advance occurs on a date that is not the last day of the relevant Interest
Accrual Period, (iii) if any payment or prepayment of any CP Rate Advance or
Eurodollar Rate Advance is not made on any date specified in a Notice of
Prepayment given by the Borrower, (iv) if any CP Rate Advance or Eurodollar Rate
Advance is converted into a Base Rate Advance on a date other than the last day
of the Interest Accrual Period therefor or (v) as a consequence of any
revocation by the Borrower of a notice of termination in accordance with
Section 2.06(b). 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
Administrative Agent and the Trustee, 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.

Section 2.11 Illegality; Inability to Determine Rates.

(a) Notwithstanding any other provision in this Agreement, in the event that it
becomes unlawful for a Lender to (i) honor its obligation to make CP Rate
Advances or Eurodollar Rate Advances hereunder, or (ii) maintain CP Rate
Advances or Eurodollar Rate Advances hereunder, then such Lender shall promptly
notify the Administrative Agent, the Trustee and the Borrower thereof.
Thereafter, the obligation of the Lender to make or maintain CP Rate Advances or
Eurodollar Rate Advances hereunder, as applicable, shall be suspended until the
Lender revokes such notice, and all outstanding CP Rate Advances or Eurodollar
Rate Advances, as applicable, shall be converted into Base Rate Advances on the
date that such Lender shall specify to the Administrative Agent, the Trustee and
the Borrower. Promptly after the reason for such suspension no longer applies,
the Lender shall send written notice to the Administrative Agent, the Trustee
and the Borrower, at which time, as soon as reasonably practicable after such
Lender has specified to the Administrative Agent, the Trustee and the Borrower
that it may again make and maintain such Advances, all outstanding Base Rate
Advances shall be converted back into CP Rate Advances or Eurodollar Rate
Advances, as applicable.

(b) Upon the occurrence of any event giving rise to a Lender’s suspending its
obligation to make or maintain CP Rate Advances or Eurodollar Rate Advances, as
applicable,

 

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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 CP Rate Advances or Eurodollar Rate Advances,
as applicable; 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, either (i) the
Lender or Calculation Agent, as applicable, determines that for any reason
adequate and reasonable means do not exist for determining the rate for such
Interest Accrual Period for any CP Rate Advances or Eurodollar Rate Advances, or
(ii) the Administrative Agent determines and notifies the Calculation Agent that
the CP Rate or Eurodollar Rate with respect to such Interest Accrual Period for
any CP Rate Advances or Eurodollar Rate Advances, as applicable, does not
adequately and fairly reflect the cost to such Lender of funding such CP Rate
Advances or Eurodollar Rate Advances, the Calculation Agent will promptly so
notify the Borrower, the Administrative Agent, the Trustee and the Lender.
Thereafter, the obligation of the Lender to make or maintain CP Rate Advances or
Eurodollar Rate Advances, as applicable, shall be suspended until the Lender,
Calculation Agent or the Administrative Agent, as applicable, revokes such
notice, and all outstanding CP Rate Advances or Eurodollar Rate Advances, as
applicable, shall be converted into Base Rate Advances on the date that such
Lender, Calculation Agent or Administrative Agent, as applicable, shall specify
to the Borrower. Promptly After the reason for such suspension no longer
applies, the Lender, Calculation Agent or Administrative Agent, as applicable,
shall send written notice to the Borrower, the Administrative Agent, the Trustee
and each Lender, at which time, as soon as reasonably practicable thereafter,
all outstanding Base Rate Advances shall be converted back into CP Rate Advances
or Eurodollar Rate Advances, as applicable.

Section 2.12 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 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 2.13 Fees Payable by Borrower.

(a) The Borrower hereby agrees to pay to each Lender a commitment fee (a
“Commitment Fee”) as set forth in the Fee Letter. Commitment Fees accrued during
each Collection Period shall be payable on the related Payment Date.

 

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(b) All payments by or on behalf of the Borrower under this Section 2.13 shall
be made in accordance with the Priority of Payments.

Section 2.14 Post-Default Interest.

The Borrower shall pay interest on all Advances and all Commitment Fees and
interest owed on Advances that are not paid when due for the period from the due
date thereof until the date the same is paid in full at the Post-Default Rate.
Interest payable at the Post-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, shall be paid by the Borrower (through the
Trustee) to the applicable recipient in Dollars, in immediately available funds,
in accordance with the Priority of Payments, and all without counterclaim,
setoff, deduction, defense (other than payment), abatement, suspension or
deferment. Each Lender shall provide wire instructions to the Borrower and the
Trustee. Payments received after 2:00 p.m. (New York City time) on a Business
Day will be deemed to have been paid on the next following Business Day.

(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 an 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 Calculation Agent or the Administrative Agent under this Agreement shall be
conclusive absent manifest error.

Section 2.16 Applicable Row Level.

(a) As a condition to the end of the Ramp-Up Period (the “Effective Date”), the
Collateral Servicer shall provide, within 10 Business Days after the Effective
Date, written notice to the Administrative Agent and the Trustee (with a copy to
Moody’s and the Lenders) specifying the Applicable Row Level to be in effect for
purposes of the Matrix, including a passing accountant’s certificate (the
“Passing Accountants’ Certificate”) confirming as of the Effective Date (i) the
Aggregate Principal Balance equals or exceeds $200,000,000, (ii) the aggregate
outstanding principal balance of all Advances plus the Net Aggregate Exposure
Amount is equal to or less than $120,000,000, (iii) each Collateral Quality Test
and Concentration Limitation is satisfied, (iv) each Coverage Test is satisfied,
(v) such Row Advance Rate to be in effect for purposes of the Matrix equals or
exceeds the Portfolio Advance Rate at such time, (vi) no Commitment Shortfall
exists and (vii) specifying the procedures undertaken by them to review the data
and computations relating to such Passing Accountants’ Certificate.

(b) If the Collateral Servicer has not provided to Moody’s the Passing
Accountants’ Certificate described in clause (a) above prior to the date 10
Business Days after

 

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the Effective Date (constituting a “Moody’s Ramp-Up Failure”), then (A) the
Collateral Servicer shall either (i) provide such Passing Accountants’
Certificate to Moody’s within 20 Business Days following the Effective Date or
(ii) satisfy the Rating Condition within 20 Business Days following the
Effective Date and (B) if, by the 20th Business Day following the Effective
Date, the Collateral Servicer has not provided a Passing Accountants’
Certificate to Moody’s or satisfied the Rating Condition, Interest Proceeds and
Principal Proceeds shall be applied as provided in Sections 9.01(a)(ii) and
9.01(a)(iii) to the extent necessary to satisfy the Rating Condition.

(c) After the Ramp-Up Period, upon not less than one Business Day’s prior
written notice to the Administrative Agent and the Trustee (with a copy to
Moody’s and the Lenders), the Borrower or the Collateral Servicer may specify a
different Applicable Row Level than the one in use at that time, provided that
the Collateral Servicer (A) provides a written notice to the Administrative
Agent and the Trustee (with a copy to Moody’s and the Lenders) specifying the
Applicable Row Level to be in effect for purposes of the Matrix, and a report
showing that at such time, with respect to the Collateral Loans, (i) each
Collateral Quality Test and Concentration Limitation is satisfied, (ii) each
Coverage Test is satisfied, (iii) the Row Advance Rate that is in use at such
time equals or exceeds the Portfolio Advance Rate; (iv) no Commitment Shortfall
exists, and (v) such Collateral Loans demonstrate compliance with all of the
columns in the Matrix for both the existing and proposed Applicable Row Level,
together with a certificate of a Responsible Officer of the Borrower or
Collateral Servicer confirming the validity of the information contained in such
report.

Section 2.17 Rating Criteria for Lenders.

At any time prior to the latest date on which a Borrowing can be made in
accordance with the terms of this Agreement, each Lender (and its liquidity
provider, if applicable) will be required, so long as such Lender’s Commitment
has not expired, terminated or been reduced to zero, to satisfy the Rating
Criteria and will agree to notify the Borrower if it shall at any such time fail
to satisfy the Rating Criteria. If any such Lender (or its liquidity provider,
if applicable) shall at any time prior to the latest date on which a Borrowing
can be made in accordance with the terms of this Agreement, fail to satisfy the
Rating Criteria such Lender will be required within ten Business Days thereafter
to transfer all of its rights and obligations in respect of its Commitment to a
purchaser that satisfies the Rating Criteria and that is eligible to be an
assignee under the terms of Section 13.06 hereof. If such Lender (or its
liquidity provider, if applicable) fails to satisfy the requirement in the
immediately preceding sentence, the Borrower will have the right under this
Agreement, and shall be obligated to, use reasonable efforts to replace such
Lender (all the costs incurred by the Borrower in connection with such
replacement being for the account of such Lender) with another entity that meets
the Rating Criteria and that is eligible to be an assignee of the Commitments
under the terms of this Agreement (by requiring the replaced Lender to transfer
all of its rights and obligations in respect of its Commitment to the transferee
entity). Each of the Trustee, the Administrative Agent and the Lender being
replaced will agree to cooperate with all reasonable requests of the Borrower
for the purpose of effecting such transfer. The purchase of the Commitment
(whether in connection with the initial placement or in a subsequent transfer)
by any purchaser who does not satisfy the Rating Criteria set forth in clause
(a) of the definition thereof at the time of such purchase but who is then
entitled to the benefits of a Liquidity Facility shall be subject to the
requirement that each Rating Agency provide a Rating Confirmation.

 

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ARTICLE III

CONDITIONS PRECEDENT

Section 3.01 Conditions Precedent to Initial Borrowing.

The obligation of the Lenders to make Advances hereunder comprising the initial
Borrowing 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 satisfactory to the Administrative Agent:

(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 of the Constituent Documents of the Borrower and
the Collateral Servicer as in effect on the Closing Date;

(c) true and complete copies certified by a Responsible Officer of the Borrower
of all Governmental Authorizations, Private Authorizations and Governmental
Filings (other than the UCC financing statements to be filed pursuant to clause
(e) below and any SEC filings required by Applicable Law to be made by NewStar
Financial Inc. after the Closing Date), if any, required in connection with the
transactions contemplated by this Agreement;

(d) a certificate of (i) a Responsible Officer of the Borrower and (ii) a
Responsible Officer of the Collateral Servicer certifying (A) as to its
Constituent Documents, (B) as to its resolutions or other action of its board of
directors or members approving this Agreement and the other Facility Documents
to which it is a party and the transactions contemplated thereby, (C) that its
respective representations and warranties set forth in the Facility Documents to
which it is a party are true and correct in all material respects 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 in all material respects as of such earlier date),
(D) no Default or Event of Default has occurred and is continuing, and (E) as to
the incumbency and specimen signature of each of its respective Responsible
Officers authorized to execute the Facility Documents to which it is a party;

(e) proper financing statements, under the UCC in all jurisdictions that the
Administrative Agent deems necessary or desirable in order to perfect the
interests in the Collateral contemplated by this Agreement;

(f) copies of proper financing statements, amendments, if any, necessary to
release all security interests and other rights of any Person in the Collateral
previously granted by the Borrower or any predecessor in interest (including any
transferor);

(g) legal opinions (addressed to each of the Secured Parties and Moody’s) of
(i) Dechert LLP, counsel to the Borrower and the Collateral Servicer and
(ii) Nixon Peabody LLP, counsel to the Trustee, covering such matters as the
Administrative Agent and its counsel shall reasonably request;

 

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(h) evidence satisfactory to it that all of the Covered Accounts shall have been
established; and the Account Control Agreement shall have been executed and
delivered by the Borrower, the Trustee and the Custodian and shall be in full
force and effect;

(i) evidence satisfactory to it that the Borrower shall have paid (i) the fees
to be received by Natixis on or prior to the Closing Date pursuant to this
Agreement and each other Facility Document; (ii) the accrued reasonable fees and
expenses in connection with the transactions contemplated hereby of (A) Ashurst
LLP, counsel to the Administrative Agent and Lenders, (B) counsel to Moody’s, if
any, and (C) Nixon Peabody LLP, counsel to the Trustee; and (iii) the fees to be
received by Moody’s on or prior to the Closing Date pursuant to the engagement
letter dated as of November 4, 2011 between the Borrower and Moody’s;

(j) Delivery of the Collateral (including any promissory note, executed
assignment agreements and copies of any other Related Documents in Microsoft
Word format or portable document format (.pdf) available to the Borrower for
each initial Collateral Loan) in accordance with Section 13.20 shall have been
effected;

(k) a certificate of a Responsible Officer of the Borrower, dated as of the
Closing Date, to the effect that, in the case of each item of Collateral pledged
to the Trustee, on the Closing Date and immediately prior to the delivery
thereof on the Closing Date:

(i) the Borrower is the owner of such Collateral free and clear of any liens,
claims or encumbrances of any nature whatsoever except for (A) those which are
being released on the Closing Date, (B) those granted pursuant to this Agreement
and the Account Control Agreement and (C) Permitted Liens;

(ii) the Borrower has acquired its ownership in such Collateral in good faith
without notice of any adverse claim, except as described in clause (i) above;

(iii) the Borrower has not assigned, pledged or otherwise encumbered its
interest in such Collateral (or, if any such interest has been assigned, pledged
or otherwise encumbered, it has been released) other than interests granted
pursuant to this Agreement and the Account Control Agreement;

(iv) the Borrower has full right to grant a security interest in and assign and
pledge such Collateral to the Trustee; and

(v) upon grant by the Borrower, Delivery of the Collateral and execution of the
Account Control Agreement, the Trustee has a first priority perfected security
interest in the Collateral;

(l) a certificate of a Responsible Officer of the Borrower to the effect that
attached thereto is a true and correct copy of a rating letter satisfactory to
the Administrative Agent, delivered and signed by Moody’s and confirming that
the Facility has been assigned a rating by Moody’s;

 

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(m) evidence that NewStar Financial, Inc. has contributed at least $70,000,000
of Cash or aggregate outstanding principal balance of Collateral Loans (provided
that Collateral Loans purchased at a purchase price (exclusive of accrued
interest) below 97.0% of the outstanding principal balance thereof will be
carried at their purchase price) to the Borrower, determined after giving effect
to any and all fees, costs and expenses required by this Agreement or any other
Facility Document to be paid by the Borrower on or prior to the Closing Date;

(n) a Retention of Net Economic Interest Letter substantially in the form of
Exhibit F;

(o) a certificate of a Responsible Officer of the Collateral Servicer to the
effect that each Collateral Loan that has received a Moody’s credit estimate
rating or a Moody’s RiskCalc credit estimate rating as permitted by this
Agreement and that otherwise does not have a Moody’s public rating (i) has
received such credit estimate rating within the 12 month period prior to the
Closing Date and (ii) if such rating has not been refreshed within the six
months period prior to the Closing Date, is in-process to be refreshed by
Moody’s;

(p) such other opinions, instruments, certificates and documents from the
Borrower as the Administrative Agent or any Lender shall have reasonably
requested;

(q) all legal and due diligence matters incident to this Agreement and the other
Facility Documents shall be satisfactory to the Borrower, the Administrative
Agent, the Lenders and their respective counsel;

(r) a certificate of a Responsible Officer of the Borrower, dated as of the
Closing Date, indicating that the Collateral Loans owned by the Borrower on the
Closing Date have (i) a Diversity Score greater than or equal to 12, (ii) a
Weighted Average Floating Spread greater than or equal to 4.75%, (iii) a
Weighted Average Moody’s Rating Factor less than or equal to 3490, and (iv) a
Weighted Average Life of less than or equal to 4.0 years from the Closing Date;

(s) an agreed-upon procedures letter of Independent Accountants relating to the
Collateral Loans owned by the Borrower;

(t) evidence that the Borrower has directed the Trustee to deposit the Closing
Expense Account Amount into the Closing Expense Account for use pursuant to
Section 8.03(c); and

(u) a Notice of Borrowing prepared by the Borrower in accordance with
Section 2.02 (except that the three Business Days notice requirement contained
therein is hereby waived by the Administrative Agent) and submitted to each
Lender and the Administrative Agent requesting an amount specified in the Fee
Letter.

Section 3.02 Conditions Precedent to Each Borrowing.

The obligation of the Lenders to make each Advance (including any such Advance
in respect of the initial Borrowing) on each Borrowing Date shall be subject to
the fulfillment of the following conditions; provided that the conditions
described in clauses (d), (e),

 

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(f) and (g) (other than a Default or Event of Default described in
Sections 6.01(e) or (f)) below need not be satisfied if the proceeds of the
Borrowing are used to fund Revolving Collateral Loans or Delayed Funding
Collateral Loans then owned by the Borrower or to fund the Future Funding
Reserve Account to the extent required under Section 8.04:

(a) in the case of the initial Borrowing hereunder, the conditions precedent set
forth in Section 3.01 shall have been fully satisfied on or prior to the
applicable Borrowing Date;

(b) the Lenders and the Administrative Agent shall have received a Notice of
Borrowing with respect to such Advance delivered in accordance with
Section 2.02;

(c) immediately after the making of such Advance on the applicable Borrowing
Date, the aggregate outstanding principal amount of the Advances plus the Net
Aggregate Exposure Amount shall not exceed the Total Commitment as in effect on
such Borrowing Date;

(d) immediately after the making of such Advance on the applicable Borrowing
Date, each Coverage Test shall be satisfied;

(e) each of the representations and warranties of the Borrower contained in this
Agreement and the other 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);

(f) 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; and

(g) the provisions of Section 10.02 have been satisfied in connection with any
acquisition of additional Collateral Loans with the proceeds of the applicable
Advance.

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, each Determination Date and the date each Advance is made, as
follows:

(a) Due Organization. The Borrower 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.

(b) Due Qualification and Good Standing. The Borrower is in good standing in the
State of Delaware. 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,

 

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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 to which it is a party, requires such qualification,
except where the failure to be so qualified or in good standing could 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 performance and 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, or but for any requirement of the giving of notice or the passage
of time (or both) would constitute such a conflict with, breach or violation of,
or default under, or permit any such acceleration 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).

(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, and made all 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, and no 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.

(f) Compliance with Agreements, Laws, Etc. The Borrower has duly observed and
complied with all Applicable Laws, including the Securities Act and the

 

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Investment Company Act, relating to the conduct of its business and its assets.
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 could not reasonably be expected to result in a Material Adverse Effect.
Without limiting the foregoing, (x) to the extent applicable, the Borrower is in
compliance in all material respects with the regulations and rules promulgated
by the U.S. Department of Treasury and/or administered by the U.S. Office of
Foreign Asset Controls (“OFAC”), including U.S. Executive Order No. 13224, and
other related statutes, laws and regulations (collectively, the “Subject Laws”),
(y) the Borrower has adopted internal controls and procedures designed to ensure
its continued compliance with the applicable provisions of the Subject Laws and,
to the extent applicable, will adopt procedures consistent with the PATRIOT Act
and implementing regulations, and (z) no Equity holder in the Borrower is a
Person whose name appears on the “List of Specially Designated Nationals” and
“Blocked Persons” maintained by the OFAC.

(g) Location. The Borrower maintains the majority of its books and records in
the State of Massachusetts. The Borrower’s registered office and the
jurisdiction of organization of the Borrower is the jurisdiction referred to in
Section 4.01(a).

(h) Investment Company Act. Neither the Borrower, nor the pool of Collateral, is
required to register as an “investment company” or a company controlled by an
“investment company” required to register as an “investment company” under the
Investment Company Act.

(i) Information and Reports. Each Notice of Borrowing, each Monthly Report, 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 taken as a whole, and all
such written information provided by or on behalf of the Borrower to any Secured
Party taken as a whole, do not contain any material misstatement of fact or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which it was made, not misleading as of the
date such information is stated or certified provided that neither the Borrower
nor the Collateral Servicer shall be responsible for any factual information
furnished or omitted to be furnished to it by any third party not affiliated
with it, except to the extent that a Responsible Officer thereof has actual
knowledge that such factual information is inaccurate in any material respect or
such Responsible Officer’s lack of actual knowledge is a violation of the
standard of care of the Collateral Servicer or is the result of bad faith, gross
negligence or willful misconduct. Promptly after a Responsible Officer has
actual knowledge thereof, the Borrower or the Collateral Servicer on the
Borrower’s behalf shall notify the Administrative Agent and the Trustee in
writing.

(j) ERISA. Neither the Borrower nor 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.

(k) Taxes. The Borrower and its sole owner has filed all income tax returns and
all other tax returns which are required to be filed by it, if any, and has paid
all taxes shown to be due and payable on such returns, if any, or pursuant to
any assessment received by any such Person.

 

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(l) Tax Status. The Borrower is (i) disregarded as an entity separate from its
owner and (ii) has not made an election under U.S. Treasury
Regulation Section 301.7701-3 and is not otherwise treated as an association
taxable as a corporation. The Borrower’s direct or indirect owner for U.S.
Federal income tax purposes is and will remain a United States person that is,
for the avoidance of doubt, not a disregarded entity, as defined by
Section 7701(a)(3) of the Code.

(m) Collections. All Collections have been remitted directly to the Interest
Collection Subaccount (in the case of Interest Proceeds) or the Principal
Collection Subaccount (in the case of Principal Proceeds) as required by this
Agreement.

(n) Environmental Matters. The operations and property of the Borrower comply
with all applicable Environmental Laws.

(o) 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 would result in any of the Collateral being
treated as “plan assets” for purposes of Section 3(42) of ERISA or the
occurrence of any Prohibited Transaction in connection with the transactions
contemplated hereunder.

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

(q) Representations Relating to the Collateral. The Borrower hereby represents
and warrants that:

(i) it owns and has legal and beneficial title to all Collateral Loans and other
Collateral free and clear of any Lien, claim or encumbrance of any Person, other
than Permitted Liens;

(ii) other than the security interest granted to the Trustee 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 against
the Borrower that include a description of collateral covering the Collateral
other than any Financing Statement relating to the security interest granted to
the Trustee hereunder or that has been terminated; and the Borrower is not aware
of any judgment, PBGC liens or tax lien filings against the Borrower;

(iii) the Collateral constitutes Money, Cash, Accounts, Instruments, General
Intangibles, 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);

 

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(iv) all Covered Accounts constitute “securities accounts” under
Section 8-501(a) of the UCC or “deposit accounts” under Section 9-102(a)(29) of
the UCC;

(v) this Agreement creates a valid, continuing and, upon Delivery of Collateral
and execution of the Account Control Agreement, perfected security interest (as
defined in Section 1-201(b)(35) of the UCC) in the Collateral in favor of the
Trustee, for the benefit and security of the Secured Parties, which security
interest is prior to all other liens, claims and encumbrances and is enforceable
as such against creditors of and purchasers from the Borrower;

(vi) the Borrower has received all consents and approvals required by the terms
of the Collateral to the pledge hereunder to the Trustee of all of its interest
and rights in the Collateral (but only to the extent relating to customary
procedural requirements and agent consents (except where the Collateral Servicer
or any of its Affiliates is the agent) expected to be obtained in due course and
not to Obligor consents);

(vii) with respect to the Collateral that constitutes Security Entitlements, all
such Collateral has been and will have been credited to the Custodial Account;

(viii) 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 Trustee, for the
benefit and security of the Secured Parties, hereunder, and the Borrower hereby
agrees that any such Financing Statement may be an “all assets” filing; and

(ix) each loan listed in Schedule 3 and each loan acquired after the Closing
Date, in each case as of the date of the acquisition by the Borrower thereof,
complies with the criteria set forth in the definition of “Collateral Loan”.

(r) Article 122a. As of the Closing Date, the Borrower shall ensure (by
obtaining a signed Retention of Net Economic Interest Letter from a Responsible
Officer of the Retention Provider) that the Retention Provider (i) at all times
holds the Retained Amount in accordance with option (d) of paragraph 1 of
Article 122a, (ii) has not changed and will not change the manner in which it
retains the Retained Amount, except to the extent permitted under Article 122a
and (iii) has not entered and will not enter into any credit risk mitigation,
short position or any other credit risk hedge or credit risk hedging arrangement
of any kind with respect to the Retained Amount, except to the extent permitted
under Article 122a.

(s) Financial Information.

(i) Immediately prior to giving effect to the transactions contemplated by this
Agreement, the Borrower has no assets, liabilities or contingent liabilities
other than any under the 17g-5 letter between Moody’s and the Borrower, any
contract establishing the Borrower’s 17g-5 website and any contract with its
Independent Manager.

 

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(ii) Since the date described in (i) above, (a) there has been no change that
has had a Material Adverse Effect and (b) the Borrower has not incurred any
Indebtedness or Contingent Obligation except pursuant to the Facility Documents.

(t) Litigation. There is no action, suit or proceeding pending against,
threatened against or adversely affecting, (i) the Borrower, (ii) the Loan
Documents or any of the transactions contemplated by the Facility Documents or
(iii) any of the Borrower’s assets, before any court, arbitrator or any
governmental body, agency or official which has had or could reasonably be
expected to have a Material Adverse Effect.

(u) Patents, Trademarks, Etc. The Borrower has obtained and holds in full force
and effect all patents, trademarks, service marks, trade names, copyrights and
other such rights, free from any burdensome restrictions, which are necessary
for the operation of its business as presently conducted, the impairment of
which has had or could reasonably be expected to have a Material Adverse Effect.

(v) No Default. No Default or Event of Default exists under or with respect to
any Transaction Document other than any with respect to which the Borrower has
given notice as required pursuant to this Agreement. The Borrower is not in
default under or with respect to any agreement, instrument or undertaking to
which it is a party or by which it or any of its properties is bound in any
respect, the existence of which default has had or could reasonably be expected
to have a Material Adverse Effect.

(w) Concentration Account. The Concentration Account and the Collection Account
are the only accounts to which Obligors have been instructed by the Borrower, or
the Collateral Servicer on the Borrower’s behalf, to send Principal Proceeds and
Interest Proceeds on the Collateral Loans. Except as contemplated by the
Intercreditor Agreement, the Borrower has not granted any Person other than the
Trustee an interest in the Concentration Account. The Concentration Account is
subject only to the interests of the parties to the Intercreditor Agreement.

(x) CP Conduit. As of the Closing Date and based solely on a review of Moody’s
website as of 10:00 a.m. (New York City time) on the Closing Date, the CP
Conduit complies with the Rating Criteria.

Section 4.02 Representations and Warranties of the Trustee.

The Trustee in its individual capacity and as Trustee represents and warrants as
follows (and any successor Trustee appointed pursuant to Sections 11.05 and
11.07 represents and warrants as follows in its individual capacity and as
Trustee):

(a) Due Organization. The Trustee is a duly organized and validly existing
national banking association in good standing under the laws of the United
States. It has full corporate power, authority and legal right to execute,
deliver and perform its obligations as Trustee under this Agreement.

 

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(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 action on its part, either in its individual
capacity or as Trustee, 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 the Trustee is a party or by which it or any of its
property is bound.

(d) No Violation. 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 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 Authority applicable to the Trustee, required in
connection with the execution and delivery of this Agreement, the performance by
the Trustee of the transactions contemplated hereby and the fulfillment by the
Trustee of the terms hereof have been obtained.

(f) Validity, Etc. This Agreement constitutes the legal, valid and binding
obligation of the Trustee, enforceable against the Trustee 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.

(g) Non-Affiliated. The Trustee is not affiliated, as that term is defined in
Rule 405 under the Securities Act, with the Borrower or with any Person involved
in the organization or operation of the Borrower.

(h) Qualified Institutions. The Trustee meets the requirements of Rule
3a-7(a)(4)(i) under the Investment Company Act.

ARTICLE V

COVENANTS

Section 5.01 Affirmative Covenants of the Borrower.

The Borrower covenants and agrees that, until the Payment in Full Date:

(a) Compliance with Agreements, Laws, Etc. It shall (i) duly observe, comply
with and conform to all Applicable Laws applicable 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
could not reasonably be expected to result in a Material Adverse Effect,
(iv) comply in all material respects with the terms and conditions applicable to
it of each Facility Document, the Borrower LLC Agreement 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

 

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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, the Borrower LLC Agreement and the
Related Documents to which it is a party.

(b) Enforcement. (i) It shall not take any action, and will use its commercially
reasonable best efforts not to permit any action to be taken by others, that
would release any Person from any of such Person’s covenants or obligations
under any instrument included in the Collateral, except to the extent not
restricted by Section 5.02(v) and otherwise in conformity with this Agreement or
as required under any Related Document.

(ii) It will not, without the prior written consent of the Administrative Agent
(at the direction of the Required Lenders) (except in the case of the Collateral
Servicing Agreement, in which case no consent shall be required), contract with
other Persons for the performance of actions and obligations to be performed by
the Borrower hereunder and under the Collateral Servicing Agreement by such
Persons. Notwithstanding any such arrangement, the Borrower shall remain
primarily liable with respect to the Borrower’s obligations under any Facility
Document to which it is a party. In the event of such contract, the performance
of any of Borrower’s such actions and obligations by such Persons shall be
deemed to be performance of such actions and obligations by the Borrower. The
Borrower will punctually perform, and use its best efforts to cause the
Collateral Servicer and any such other Person to perform in all material
respects, all of their respective obligations and agreements contained in the
Collateral Servicing Agreement, this Agreement or any such other agreement.

(c) Further Assurances. It shall promptly upon the request of either the
Administrative Agent or the Trustee, at the Borrower’s expense, execute and
deliver such further instruments and take such further action in order to
maintain and protect the Trustee’s first-priority perfected security interest in
the Collateral pledged by the Borrower to the Trustee for the benefit of the
Secured Parties free and clear of any Liens (other than Permitted Liens). At the
request of either the Administrative Agent or the Trustee, 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 or desirable 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. Subject to Section 7.02,
the Borrower authorizes the Trustee and the Administrative Agent to file or
record, without the Borrower’s signature, UCC-1 financing statements (including
financing statements describing the Collateral as “all assets” or the
equivalent) that name the Borrower as debtor and the Trustee as secured party,
and ratifies any such filings or recordings made within 30 days prior to the
date hereof, and other filing or recording documents or instruments with respect
to the Collateral in such form and in such offices as such Administrative Agent
or Trustee, as applicable, determines appropriate to perfect the security
interests of the Trustee under this Agreement.

In addition, the Borrower will take such reasonable action from time to time as
shall be necessary or prudent to ensure that all assets (including all Covered
Accounts) of the Borrower constitute “Collateral” hereunder. Subject to the
foregoing, the Borrower will upon

 

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the request of either the Administrative Agent or the Trustee, at the Borrower’s
expense, take such other action (including executing and delivering or
authorizing for filing any required UCC financing statements) as shall be
necessary or desirable to create and perfect a valid and enforceable
first-priority security interest on all Collateral acquired by the Borrower as
collateral security for the Obligations and will in connection therewith deliver
such proof of corporate action, incumbency of officers, opinions of counsel and
other documents as is consistent with those delivered by the Borrower pursuant
to Section 3.01 on the Closing Date or as the Administrative Agent shall have
requested.

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

(i) as soon as possible, and in any event within two Business Days (in the case
of clauses (A), (B), and (C) below) or within one Business Day (in the case of
clause (D) below) after a Responsible Officer of the Collateral Servicer or the
Borrower obtains actual knowledge of the occurrence and continuance of any
(A) Default, (B) Event of Default, (C) early termination of the Reinvestment
Period as a result of the occurrence of an event referred to in clause (d) of
the definition of Reinvestment Period, (D) litigation or governmental proceeding
pending or actions threatened against the Borrower’s rights in the Collateral
Loans; or (E) any failure to satisfy the Interest Coverage Ratio Test or the
Overcollateralization Ratio Test, a certificate of a Responsible Officer of the
Borrower setting forth the details thereof and the action which the Borrower is
taking or proposes to take, if any, with respect thereto;

(ii) from time to time such additional information regarding the Borrower’s
financial position or business and the Collateral (including reasonably detailed
calculations of each Coverage Test and Collateral Quality Test) as the
Administrative Agent or the Required Lenders (through the Administrative Agent)
may request, or as the Lenders may require in order to comply with the FAS
166/167 Regulatory Capital Rules or Basel II or their respective obligations
under Article 122a or AIFMD (including a refreshed Retention of Net Economic
Interest Letter from the Retention Provider) in each such case if reasonably
available to the Borrower; and

(iii) promptly after the occurrence of any ERISA Event, notice of such ERISA
Event and copies of any communications with all Authorities or any Multiemployer
Plan with respect to such ERISA Event.

(e) Access to Records and Documents. It shall cause the Collateral Servicer to
permit (at the Borrower’s expense) the Administrative Agent and each Lender, or
their designees, to, upon reasonable advance notice and during normal business
hours, visit and inspect and make copies of (i) the Collateral Servicer’s books,
records and accounts relating to the Collateral and/or to the Collateral
Servicer’s and the Borrower’s performance under the Facility Documents and the
Related Documents and to the Collateral Servicer’s loan platform, including,
without limitation, all financial and other materials received by the Collateral
Servicer from or with respect to any Obligor with respect to any Collateral Loan
owned by the Borrower, and to discuss the foregoing with the Collateral
Servicer’s Responsible Officers and accountants, and (ii) all of the Related
Documents reasonably available to the Collateral Servicer; provided

 

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that neither the Borrower nor the Collateral Servicer shall be required to
disclose any information which it is required by law or contract to keep
confidential unless a confidentiality agreement is otherwise entered into and
provided further that, so long as no Event of Default has occurred and is
continuing, rights under this clause (e) and under Section 11.10 (other than any
audit pursuant to the last sentence of Section 11.10 which may be exercised as
provided therein) may be exercised by any or all of the Persons entitled to do
so in the aggregate no more frequently than twice in any consecutive 12 month
period.

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

(i) to fund or pay the purchase price of Collateral Loans or Eligible
Investments acquired by the Borrower in accordance with the terms and conditions
set forth herein;

(ii) to fund additional extensions of credit under Revolving Collateral Loans
and Delayed Funding Collateral Loans purchased in accordance with the terms of
this Agreement;

(iii) to fund the Future Funding Reserve Account to the extent the Future
Funding Reserve Account is required to be funded pursuant to Section 8.04; and

(iv) to fund a cash distribution in the amount specified in the Fee Letter to
NewStar Financial, Inc. on the Closing Date.

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.

(g) Opinions as to Collateral. On or before July 25th in each calendar year,
commencing in 2013, the Borrower shall furnish to the Administrative Agent, the
Trustee and Moody’s an opinion of counsel, addressed to the Borrower, the
Administrative Agent, the Trustee and Moody’s, relating to the continued
perfection of the security interest granted by the Borrower to the Trustee
hereunder.

(h) Rating Monitoring. On or before February 16th in each calendar year,
commencing in 2013, the Borrower shall pay for the ongoing monitoring of the
rating of the Facility from Moody’s. Promptly after a Responsible Officer of the
Borrower has actual knowledge thereof, the Borrower shall notify the
Administrative Agent, the Trustee and the Collateral Servicer in writing (and
the Administrative Agent shall promptly provide the Lenders with a copy of such
notice) if at any time the rating of the Facility has been, or is known will be,
changed or withdrawn, the rating outlook on the Facility has been, or is known
will be, changed or the Borrower has received any communication from Moody’s
that any such action will occur or is pending.

(i) No Other Business. From and after the Closing Date, the Borrower shall not
engage in any business or activity other than borrowing Advances pursuant to
this Agreement, funding, acquiring, owning, holding, administering, selling,
enforcing, lending,

 

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exchanging, redeeming, pledging, contracting for the management of and otherwise
dealing with Collateral Loans, Eligible Investments and the other Collateral in
connection therewith (including assets received upon enforcement or work-out)
and entering into and performing its obligations under the Facility Documents,
any applicable Related Documents and any other agreements contemplated by this
Agreement and any business incidental or ancillary thereto.

(j) Tax Matters. The Borrower shall (and each Lender hereby agrees to) treat the
Facility and the Notes as debt for U.S. Federal income tax purposes and will
take no contrary position unless otherwise required by appropriate taxing
authorities. The Borrower shall at all times maintain its status as an entity
disregarded as an entity separate from its owner for U.S. Federal income tax
purposes. The Borrower shall at all times ensure that for U.S. Federal income
tax purposes its direct or indirect owner is and will remain a United States
person that is, for the avoidance of doubt, not a disregarded entity, as defined
by Section 7701(a)(30) of the Code and, if such owner is an indirect owner, that
each intermediate owner of the Borrower is at all times also a disregarded
entity for U.S. Federal income tax purposes. Notwithstanding any contrary
agreement or understanding, the Collateral Servicer, the Borrower, the
Administrative Agent, the Trustee 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 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 tax treatment of the transaction under applicable
U.S. Federal, state or local law.

(k) Provision of Information. With respect to each Collateral Loan, the Borrower
will provide to each Rating Agency, Agent or Lender all information reasonably
requested by such Rating Agency, Agent or Lender that is in its possession or
can be reasonably obtained by it without undue burden or expense, including,
without limitation, all Related Documents and all financial and other materials
received by the Collateral Servicer from or with respect to any Obligor provided
that neither the Borrower nor the Collateral Servicer will be required to
disclose any information which it is required by law or contract to keep
confidential. In addition, the Borrower will cause the Collateral Servicer to
provide to the Administrative Agent copies of all information provided by the
Collateral Servicer to any Rating Agency in connection with any Credit Estimate.

(l) Article 122a of the CRD. The Borrower shall ensure (by obtaining a signed
Retention of Net Economic Interest Letter from a Responsible Officer of the
Retention Provider from time to time upon the written request of the
Administrative Agent) that the Retention Provider (i) at all times holds the
Retained Amount in accordance with option (d) of paragraph 1 of Article 122a,
(ii) has not changed and will not change the manner in which it retains the
Retained Amount, except to the extent permitted under Article 122a and (iii) has
not entered and will not enter into any credit risk mitigation, short position
or any other credit risk hedge or credit risk hedging arrangement of any kind
with respect to the Retained Amount, except to the extent permitted under
Article 122a.

 

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(m) Confidentiality Restrictions in Related Documents. In the event any
provision of any Related Document prohibits or otherwise restricts disclosure of
such Related Document or any information contained therein by the Borrower or
the Collateral Servicer to the Administrative Agent or any Lender, upon
acquisition of the related Collateral Loan, the Borrower shall promptly use its
commercially reasonable efforts to obtain such consent or waiver as is necessary
to permit such disclosure or otherwise enter into confidentiality agreements.

(n) Trustee May Perform.

(i) If the Borrower fails to perform any agreement contained herein to be
performed by it, the Trustee may, upon the written instructions of the
Administrative Agent or a majority of the Lenders, itself file, record, make,
execute and deliver all such notices, instruments, statements and other
documents, and take such acts, as the Administrative Agent or a the majority of
the Lenders may determine to be necessary or desirable from time to time to
perfect, preserve or otherwise protect the security interest of the Trustee, for
the benefit of itself and the Secured Parties and otherwise perform, or cause
performance of, any other such actions as the majority of the Lenders shall
determine is necessary or desirable, and the reasonable expenses of the Trustee
incurred in connection therewith shall be payable by the Borrower.

(ii) The powers conferred on the Trustee hereunder are solely to protect its
interest (on behalf of the Secured Parties) in the Collateral and shall not
impose any duty on it to exercise any such powers or release or diminish the
Borrower’s or the Collateral Servicer’s obligations hereunder. Except for
reasonable care of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Trustee shall have no duty as to
any Collateral or responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not the Trustee has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral.

Section 5.02 Negative Covenants of the Borrower.

The Borrower covenants and agrees that, until the Payment in Full Date:

(a) Restrictive Agreements. It shall not enter into or suffer to exist or become
effective any agreement that prohibits, limits or imposes any condition upon its
ability to create, incur, assume or suffer to exist any Lien 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 and any other Permitted Lien.

(b) Liquidation; Merger; Sale of Collateral. It shall not consummate any plan of
liquidation, dissolution, partial liquidation, merger or consolidation (or
suffer any liquidation or dissolution or partial liquidation) nor sell,
transfer, exchange or otherwise dispose of any of its assets or enter into or
engage in any business with respect to any part of its assets, except as
expressly permitted by this Agreement or any other Facility Documents.

 

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(c) Amendments to Constituent Documents and Facility Documents. Except as
otherwise provided in this Agreement, it shall not amend, change, waive or
otherwise modify or take any action in contravention of any of its Constituent
Documents or any Facility Document (other than the Fee Letter (provided that any
amendment, change, waiver or modification of such Fee Letter shall require the
prior written consent of the Borrower and the Administrative Agent and
satisfaction of the Rating Condition) and the Trustee Fee Letter (provided that
any amendment, change, waiver or modification of such Trustee Fee Letter shall
require the prior written consent of the Borrower, the Trustee and the
Administrative Agent), or any document contained in clause (ii) of the
definition of Facility Documents, in each case, without the consent of the
Required Lenders. In the event any action is taken by the Borrower in connection
with the foregoing, it will promptly notify Moody’s of such action.

(d) ERISA. It shall not (i) establish any Plan or Multiemployer Plan and shall
not become a member of an ERISA Group and (ii) take, or omit to take, any action
which would result in any of the assets of the Borrower or any of the Collateral
being treated as “plan assets” for purposes of Section 3(42) of ERISA or the
occurrence of any Prohibited Transaction in connection with the transactions
contemplated hereunder.

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

(f) Margin Requirements. 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 any provision of the Regulations of
the Board of Governors, including, to the extent applicable, Regulation U and
Regulation X, or for any purpose that would cause any of the Lenders to be in
violation of Regulation T or Regulation U.

(g) 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 thirty days’ prior written notice to the Administrative Agent and the
Trustee and takes all actions that either the Administrative Agent or the
Trustee, as applicable, reasonably determines to be necessary to protect and
perfect the Trustee’s perfected security interest in the Collateral of the
Borrower contemplated by this Agreement.

(h) Transactions with Affiliates. Subject to Article X, and the Master Sale
Agreement, 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
(including, without limitation, sales of Defaulted Loans, Credit Risk Loans and
other Collateral Loans), 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.

 

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(i) Investment Company Restriction. It shall not and it shall not permit the
pool of Collateral to become required to register as an “investment company”
under the Investment Company Act.

(j) 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 List of Specially
Designated Nationals and Blocked Persons maintained by OFAC or otherwise in
violation of any Subject Laws.

(k) 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
Facility 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.

(l) Indebtedness; Guarantees; Securities; Other Assets. It shall not incur,
assume, suffer to exist or guarantee any indebtedness or other liabilities, or
issue any securities, (other than its Equity) whether debt or equity, in each
case other than as expressly permitted by this Agreement and the other Facility
Documents. The Borrower shall not acquire any Collateral Loans or other property
other than as expressly permitted under the Facility Documents.

(m) 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 covenants or obligations with respect to this Agreement, except as may be
permitted hereby or by the Collateral Servicing Agreement and (ii) except for
Permitted Liens and as otherwise permitted by this Agreement, take any action
that would result in the lien of this Agreement to no longer constitute a valid
first priority security interest in the Collateral.

(n) Collateral Servicing Agreement. It shall not amend the Collateral Servicing
Agreement except pursuant to the terms thereof and Sections 5.02(c) and 7.07 of
this Agreement.

(o) Priority of Payments. Except for the payment of transaction expenses made in
accordance with the terms of this Agreement, it shall not make any distributions
from the Collection Account or the Payment Account other than in accordance with
the Priority of Payments or as otherwise expressly permitted by this Agreement.

(p) Subsidiaries. It shall not have or permit the formation of any subsidiaries
without (i) the prior written consent of the Administrative Agent not to be
unreasonably withheld or delayed and (ii) satisfaction of the Rating Condition.

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

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

 

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(s) Non-Petition. The Borrower shall not be party to any agreement without
including 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 any Related Document or any other agreement related to the
purchase and sale of any Collateral Loans which contains customary purchase or
sale terms or which is documented using customary loan trading documentation, in
each case, if such Related Document or agreement does not contain any provision
providing for recourse to the Borrower, including, without limitation, any
indemnification obligation.

(t) 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 Servicer).

(u) Independent Manager. Without limiting anything in the Borrower LLC
Agreement, the Borrower shall at all times, except while an Unexpected
Replacement is being obtained as provided herein and in the Borrower LLC
Agreement, maintain at least one independent manager who (A) for the five year
period prior to his or her appointment as independent manager has not been, and
during the continuation of his or her service as independent manager is not:
(i) a stockholder (or other interest holder, including membership interests),
director, officer, manager, trustee, employee, partner, member, attorney or
counsel of the Borrower, the Collateral Servicer or any of their Affiliates;
(ii) a creditor, customer or supplier (other than as a supplier of registered
agent or registered office services) of Borrower or any of its Affiliates (other
than his or her services as an independent manager or special member of Borrower
or other Affiiliates that are structured to be “bankruptcy remote”), or other
Person who derives any of its purchases or revenues from its activities with,
the Borrower, the Collateral Servicer or any of their Affiliates; (iii) a Person
controlling or under common control with any Person excluded from serving as
independent manager under clause (i) or (ii) above; or (iv) a member of the
immediate family by blood or marriage of any Person excluded from serving as
independent manager under clause (i), (ii) or (iii) above; and (B) is a
Professional Independent Manager (as defined below). The criteria set forth
above in this Section 5.02(u) are referred to herein as the “Independent Manager
Criteria”.

A natural person who satisfies the Independent Manager Criteria other than
clause (i) above solely by reason of being the independent director or
independent manager of a Special Purpose Entity affiliated with the Borrower
shall not be disqualified from serving as an independent manager of the Borrower
if such individual is a Professional Independent Manager. A natural person who
satisfies the Independent Manager Criteria other than clause (ii) above shall
not be disqualified from serving as an independent manager of the Borrower if
such individual is a Professional Independent Manager. For purposes of this
Section 5.02(u):

“Professional Independent Manager” means an individual who is employed by a
nationally-recognized company that provides professional independent directors
or independent managers for Special Purpose Entities and other corporate
services in the ordinary course of its business.

 

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“Special Purpose Entity” means a limited liability company or other business
entity that is created with the purpose of being “bankruptcy remote” and whose
organizational documents contain restrictions on its activities and impose
requirements intended to preserve such entity’s separateness that are
substantially similar to the special purpose provisions of the Borrower LLC
Agreement.

Without limiting anything in the Borrower LLC Agreement, in the event that the
manager of the Borrower intends to appoint a new independent manager, the
manager of the Borrower shall provide written notice to the Administrative Agent
not less than ten days prior to the effective date of such appointment and shall
certify in such notice that the designated Person satisfies the Independent
Manager Criteria, provided that, if:

(i) an independent manager of the Borrower dies, becomes incapacitated or no
longer is employed by the firm that is then providing independent managers for
the Borrower; or

(ii) the firm referred to in clause (i) is no longer in the business of
providing independent managers or directors for Special Purpose Entities
generally,

(either of the circumstances in clause (i) or (ii) above, an “Unexpected
Replacement”) then the manager of the Borrower shall (A) provide written notice
to the Administrative Agent as soon as possible thereafter and (B) unless the
Administrative Agent otherwise objects, promptly appoint a new independent
manager from the same firm as the deceased or incapacitated or formerly employed
independent manager (in the case of clause (i)) or from another firm that is in
the business of providing independent managers or directors for Special Purpose
Entities generally (in the case of clause (ii)), in each case as to which the
manager of the Borrower shall certify that the designated Person satisfies the
Independent Manager Criteria.

The Borrower hereby confirms that, as of the Closing Date, the independent
manager of the Borrower (Ricardo Beausoleil) satisfies the Independent Manager
Criteria.

(v) Changes to Related Documents. The Borrower shall not consent to or execute
any amendment, consent, waiver or other modification with respect to a Related
Document (each, a “Related Document Modification”) that would effect a Specified
Change without the prior written consent of the Administrative Agent; provided,
however, with prior written notice to the Administrative Agent, the Borrower may
enter into a Related Document Modification that effects a Specified Change to a
Related Document without the prior written consent of the Administration Agent
provided that such Collateral Loan thereafter shall be deemed to be a Defaulted
Loan (unless the written consent of the Administrative Agent is obtained) as
provided in clause (v) of the definition thereof or a Charged-Off Loan (unless
the written consent of the Administrative Agent (at the direction of the
Required Lenders) to such Specified Change is obtained) as provided in clause
(ii) of the definition thereof, as applicable.

(w) Investments; Retention of Funds.

(i) The Borrower shall not make any investment other than in (A) Collateral
Loans, (B) Eligible Investments and (C) Equity Securities permitted to be
acquired by the Borrower in connection with a work out or restructuring of a
Collateral Loan or the exercise of remedies in connection therewith.

 

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(ii) All Interest Proceeds and Principal Proceeds will be applied by the
Borrower only as provided in Sections 9.01 and in Article X.

(x) Hedge Agreements. The Borrower shall not enter into any hedge agreement
without (i) the prior written consent of the Administrative Agent and
(ii) satisfaction of the Rating Condition.

(y) Fiscal Year; Fiscal Quarter. The Borrower shall not change its fiscal year
or any of its fiscal quarters, without the Administrative Agent’s prior written
consent, which consent shall not be unreasonably withheld or delayed.

(z) Changes in Payment Instructions to Obligors under the Intercreditor
Agreement. The Borrower will not add or terminate the Concentration Account at
the Concentration Account Bank or make any change, or permit the Collateral
Servicer, in its capacity as Concentration Account Servicer, to make any change,
in its instructions to Obligors regarding payments to be made with respect to
the Collateral to the Concentration Account Bank (other than the instructions
directing Obligors to make payments directly to the Collection Account), unless
the Administrative Agent has consented to such addition, termination or change
(which consent shall not be unreasonably withheld, conditioned or delayed) and
has received duly executed copies of the Intercreditor Agreement (incorporating
appropriate amendments).

(aa) Restricted Payments. The Borrower shall not make any Restricted Junior
Payment, except that, so long as no Event of Default has occurred and is
continuing or would result therefrom, the Borrower may declare and make
distributions to its Equity holders on their membership interests in accordance
with the Priority of Payments.

Section 5.03 Certain Undertakings Relating to Separateness.

(a) Without limiting any, and subject to all, other covenants of the Borrower
contained in this Agreement, the Borrower shall conduct its business and
operations separate and apart from that of any other Person (including the
Collateral Servicer and any of its Affiliates, the holders of the Equity and
their respective Affiliates) and in furtherance of the foregoing:

(1) The Borrower shall maintain its accounts, financial statements, books,
accounting and other records, and other Borrower documents separate from those
of any other Person (without limiting the foregoing, it is acknowledged that for
accounting purposes, the Borrower may be consolidated with another Person as
required by GAAP and included in such Person’s consolidated financial
statements).

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

(3) The Borrower shall conduct its own business in its own name and, for all
purposes, shall not operate, or purport to operate, collectively as a single or
consolidated

 

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business entity with respect to any Person (except as may be required for U.S.
federal income tax purposes and except that for accounting purposes, the
Borrower may be consolidated with another Person as required by GAAP and
included in such Person’s consolidated financial statements).

(4) The Borrower shall pay its own debts, liabilities and expenses (including
overhead expenses, if any) only out of its own assets as the same shall become
due.

(5) The Borrower has observed, and shall observe all (A) Delaware limited
liability company formalities and (B) other organizational formalities, in each
case to the extent necessary or advisable to preserve its separate existence,
and shall preserve its existence, and it shall not, nor shall it permit any
Affiliate or any other Person to, amend, modify or otherwise change its limited
liability company agreement in a manner that would adversely affect the
existence of the Borrower as a bankruptcy-remote special purpose entity without
the prior written consent of the Required Lenders.

(6) The Borrower does not, and 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 as
permitted by or pursuant to the Facility Documents.

(7) The Borrower shall, at all times, hold itself out to the public as a legal
entity separate and distinct from any other Person.

(8) Except as may be required by the Code and regulations thereunder, the
Borrower shall not identify itself as a division of any other Person.

(9) Except as otherwise contemplated under the Intercreditor Agreement, the
Borrower shall maintain its assets in such a manner that it will not be costly
or difficult to segregate, ascertain or identify its individual assets from
those of any Affiliate or any other Person.

(10) The Borrower shall not use its separate existence to perpetrate a fraud in
violation of applicable law.

(11) The Borrower shall not, in connection with the Facility Documents, act with
an intent to hinder, delay or defraud any of its creditors in violation of
applicable law.

(12) The Borrower shall maintain an arm’s length relationship with its
Affiliates and the Collateral Servicer.

(13) Except as permitted by or pursuant to the Facility Documents, the Borrower
shall not grant a security interest or otherwise pledge its assets for the
benefit of any other Person.

 

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(14) Except as provided in the Facility Documents, the Borrower shall not
acquire any securities or debt instruments of the Collateral Servicer, its
Affiliates or any other Person.

(15) 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.

(16) The Borrower shall make no transfer of all or substantially all of its
assets except as permitted by or pursuant to the Facility Documents.

(17) The Borrower shall file its own tax returns separate from those of any
other Person or entity, except to the extent that the Borrower is not required
to file tax returns under applicable law or is not permitted to file its own tax
returns separate from those of any other Person.

(18) [Reserved].

(19) The Borrower shall use separate stationary, invoices and checks.

(20) The Borrower shall correct any known misunderstanding regarding its
separate identity.

(21) The Borrower shall intend to maintain adequate capital in light of its
contemplated business operations.

(22) The Borrower shall at all times be organized as a single-purpose entity
with organizational documents substantially similar to those in effect on the
Closing Date, together with any amendments or modifications thereto as permitted
thereunder.

(23) The Borrower shall at all times conduct its business so that any
assumptions made with respect to the Borrower in any “substantive
non-consolidation” opinion letter delivered in connection with the Facility
Documents will continue to be true and correct in all material respects.

ARTICLE VI

EVENTS OF DEFAULT

Section 6.01 Events of Default.

“Event of Default”, wherever used herein, means 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 (i) any interest on the
Advances or any Commitment Fee in respect of the Facility and such default
continues for three Business Days or (ii) any principal (including deferred
interest) of any Advance on the Final Maturity Date or in connection with any
Notice of Prepayment given by the Borrower of an optional prepayment in whole;
provided that, a failure to pay any interest, when due and payable, under
Sections 9.01(a)(i)(E) or 9.01(a)(ii)(E) shall not constitute an Event of
Default; or

 

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(b) the failure on any Payment Date to disburse amounts available in the Payment
Account in accordance with the Priority of Payments and such default continues
for three Business Days; provided that, in the case of a failure to disburse due
to an administrative error or omission by the Trustee or the Calculation Agent,
such failure continues for three Business Days after the Trustee receives
written notice or has actual knowledge of such administrative error or omission;
or

(c) either of the Borrower or the pool of Collateral becomes an investment
company required to be registered under the Investment Company Act; or

(d) except as otherwise provided in this Section 6.01, a default in the
performance, or breach, of any representation, warranty, covenant or agreement
of the Borrower under any Facility Document or in any certificate or other
writing delivered pursuant thereto to be correct in any material respect when
made (other than (w) defaults, breaches or failures that individually or
collectively could not reasonably be expected to have a Material Adverse Effect
on the Borrower or the ability of the Borrower to perform its obligations under
any Facility Document, (x) the covenant to satisfy any of the Concentration
Limitations, Collateral Quality Tests or either of the Coverage Tests, or
(y) specified covenants, representations, warranties or agreements, a default in
the performance or breach or failure of which is otherwise specifically dealt
with in the other clauses to this Section 6.01) and, in each case, such default,
breach or failure (i) is not susceptible of cure or (ii) continues for a period
of 30 days after the earlier of (1) notice thereof to the Borrower (which may be
by e-mail) by either the Administrative Agent or the Trustee, in each case
specifying such default, breach or failure and requiring it to be remedied and
stating that such notice is a “Notice of Default” hereunder and (2) actual
knowledge by any Responsible Officer of the Borrower or the Collateral Servicer,
as applicable; or

(e) the entry of a decree or order by a court having competent jurisdiction
adjudging the Borrower as bankrupt or insolvent, or approving as properly filed
a petition seeking reorganization, arrangement, adjustment or composition of or
in respect of the Borrower under the Bankruptcy Code or any other similar
applicable law, or appointing a receiver, liquidator, assignee, or sequestrator
(or other similar official) of the Borrower or of any substantial part of its
property, respectively, or ordering the winding up or liquidation of its
affairs, respectively, and the continuance of any such decree or order unstayed
and in effect for a period of 60 consecutive days; or

(f) the institution by the Borrower of proceedings to be adjudicated as bankrupt
or insolvent, or the consent of the Borrower to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under the Bankruptcy Code or any
other similar applicable law, or the consent by the Borrower to the filing of
any such petition or to the appointment in a proceeding of a receiver,
liquidator, assignee, trustee or sequestrator (or other similar official) of the
Borrower or of any substantial part of its property, respectively, or the making
by Borrower of an assignment for the benefit of creditors, or the admission by
the Borrower in writing of its inability to pay its debts generally as they
become due, or the taking of any action by the Borrower in furtherance of any
such action; or

 

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(g) [Reserved]; or

(h) the failure of the Overcollateralization Ratio (calculated for this purpose
assuming that the Caa Adjustment equals zero) to be at least 115% for longer
than three consecutive Business Days (an “EoD OC Ratio Failure”); or

(i) (1) 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 Borrower (exclusive
of judgment amounts fully covered by insurance), and the Borrower 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 20 days from the date of entry
thereof, or (2) the Borrower shall have made payments of amounts in excess of
$1,000,000 in the settlement of any litigation, claim or dispute (excluding
payments made from insurance proceeds or if funded solely with new cash capital
contributions to the Borrower from its Equity holders or amounts that are
available to be disbursed to the Equity holders pursuant to the Priority of
Payments); or

(j) a default in the performance of or compliance with or a breach of any
obligation of the Borrower contained in any of the Special Purpose Provisions or
Section 5.02(u) such that reputable counsel of national standing could no longer
render a substantive non-consolidation opinion with respect thereto; or

(k) an Event of Bankruptcy relating to the Collateral Servicer occurs; or

(l) (1) any Facility Document shall (except in accordance with its terms)
terminate, cease to be effective or cease to be the legally valid, binding and
enforceable obligation of the Borrower or the Collateral Servicer, (2) the
Borrower or the Collateral Servicer shall, directly or indirectly, contest in
any manner the effectiveness, validity, binding nature or enforceability of any
Facility Document or any Lien or security interest thereunder, or (3) any Lien
or security interest securing any obligation under any Facility Document shall,
in whole or in part (other than in respect of a de minimis amount of
Collateral), cease to be a first priority perfected security interest of the
Trustee except for Permitted Liens and as otherwise expressly permitted in
accordance with the applicable Facility Document; or

(m) (1) the Internal Revenue Service shall file notice of a Lien pursuant to
Section 6323 of the Code with regard to any assets of the Borrower and such Lien
shall not have been released within ten Business Days of the date that the
Borrower is notified in writing of such Lien, (2) the PBGC shall file notice of
a Lien pursuant to Section 4068 of ERISA with regard to any of the assets of the
Borrower and such Lien shall not have been released within five Business Days,
unless in each case a reserve has been established therefor in accordance with
GAAP and such action is being diligently contested in good faith by appropriate
proceedings (except to the extent that the amount secured by such Lien exceeds
$500,000) or (3) the occurrence of an ERISA Event; or

 

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(n) [Reserved]; or

(o) the occurrence of (i) an act by (a) the Borrower (b) the Collateral
Servicer, or (c) any executive officer of the Borrower or the Collateral
Servicer that constitutes fraud or a felony in the performance of its
obligations under the Facility Documents or (ii) the Collateral Servicer or any
of its executive officers primarily responsible for administration of the
Collateral (in the performance of his or her investment management duties) being
indicted for a criminal offense materially related to its commercial lending
business; or

(p) a Commitment Shortfall exists for longer than three Business Days; or

(q) the Collateral Servicer is not NewStar Financial, Inc. or one of its
Affiliates.

Upon a Responsible Officer obtaining knowledge of the occurrence of an Event of
Default, each of (i) the Borrower, (ii) the Trustee and (iii) the Collateral
Servicer shall notify each other, specifying the specific Event of Default(s)
that occurred as well as all other Events of Default that are then known to be
continuing. Upon the occurrence of an Event of Default known to a Responsible
Officer of the Trustee, the Trustee shall promptly notify the Administrative
Agent (which will notify the Lenders promptly) and Moody’s of such Event of
Default in writing, specifying the specific Event of Default(s) that occurred as
well as all other Events of Default that are then known to be continuing.

Section 6.02 Remedies.

If an Event of Default shall have occurred and be continuing, in addition to all
rights and remedies specified in this Agreement and the other Facility
Documents, including Article VII, and, subject to Section 7.03(b), the rights
and remedies of a secured party under Applicable Law, including the UCC, the
Administrative Agent (at the direction of the Required Lenders), by notice to
the Borrower, may do any one or more of the following:

(a) declare the Commitments to be terminated forthwith, whereupon the
Commitments shall forthwith terminate provided that the undrawn Commitments may
not be reduced or terminated to an amount less than the Net Aggregate Exposure
Amount plus the aggregate of unsettled purchases of Collateral Loans, and

(b) declare the principal of and the accrued interest on the Advances and the
Notes and all other amounts whatsoever payable by the Borrower hereunder
(including any amounts payable under Section 2.10) 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, and any such amounts payable shall be paid in
accordance with Section 9.01(a)(iv);

provided that, upon the occurrence of any Event of Default described in
clause (e) or (f) of Section 6.01, 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.

 

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ARTICLE VII

PLEDGE OF COLLATERAL; RIGHTS OF THE TRUSTEE

Section 7.01 Grant of Security.

(a) The Borrower hereby grants, pledges, transfers and collaterally assigns to
the Trustee, 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”):

(i) all Collateral Loans, Equity Securities and Eligible Investments, 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, the Equity Securities and the Eligible Investments which the Borrower is
entitled to receive, including all Collections;

(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 Facility 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 Trustee under this Agreement;

(v) all Cash or Money in possession of the Borrower or delivered to the Trustee
(or its bailee);

(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 other property of the Borrower or which is otherwise delivered to the
Trustee by or on behalf of the Borrower (whether or not constituting Collateral
Loans, Equity Securities or Eligible Investments), including equity or
equity-like

 

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investments (including, without limitation, any warrant that is received in
connection with a Collateral Loan) in Obligors and their Affiliates where the
Borrower owns a debt obligation;

(viii) all security interests, liens, collateral, 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 that are defined in the UCC shall have
the respective meanings assigned to such terms in the UCC.

Section 7.02 Release of Lien on Collateral.

(a) Upon deposit into the Payment Account of all required amounts then required
to be deposited to effect a Payment in Full in accordance with this Agreement
and termination of all Commitments in accordance with this Agreement, and upon
receipt of a certificate of a Responsible Officer of the Borrower or of the
Collateral Servicer on behalf of the Borrower as provided in Section 8.08(e) and
written request therefor, the Trustee, on behalf of the Secured Parties, shall,
upon execution of the Payoff Letter, terminate and release its Lien on the
Collateral and transfer, assign and set-over to the Borrower, without recourse,
representation or warranty, all the right, title and interest of the Trustee,
for the benefit of the Secured Parties in, to and under the related Collateral
and all future monies due or to become due with respect thereto, any Related
Property and all Proceeds of such Collateral, and recoveries relating thereto,
all rights to security for any such Collateral, and all Proceeds and products of
the foregoing. In addition, the Trustee, at the expense of the Borrower, will
(i) execute such instruments of release with respect to the Collateral in
recordable form if necessary, in favor of the Borrower or its designees as the
Borrower or the Collateral Servicer may reasonably request, (ii) deliver to the
Borrower or its designees any portion of the Collateral (including the
applicable Related Documents) in its possession as identified to it by the
Borrower or by the Collateral Servicer with the consent thereto of the
Administrative Agent required pursuant to Section 11.09 and (iii) otherwise take
such actions as requested by the Borrower or by the Collateral Servicer as are
necessary and appropriate to release the Lien of the Trustee for the benefit of
the Secured Parties in the Collateral and transfer the same to the Borrower or
its designees.

(b) Except as otherwise provided in Section 7.02(a) in connection with a Payment
in Full and the termination of the Commitments, upon the sale, substitution or
disposition of any Collateral by the Borrower or by the Collateral Servicer on
behalf of the Borrower in compliance with the terms and conditions of this
Agreement (including Article 10 and the delivery of the certification required
by Section 10.03(b)), on the date of any such sale, substitution or other
disposition upon deposit into the Collection Account of all required amounts
then required to be deposited with respect thereto under this Agreement, the
Trustee, on behalf of the Secured Parties, shall automatically and without
further action be deemed to and hereby does terminate and release its Lien on
the related Collateral and, at the expense of the Borrower, transfer, assign and
set-over to the Borrower, without recourse, representation or warranty, all

 

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the right, title and interest of the Trustee, for the benefit of the Secured
Parties in, to and under the related Collateral and all future monies due or to
become due with respect thereto, any Related Property and all Proceeds of such
Collateral, and recoveries relating thereto, all rights to security for any such
Collateral, and all Proceeds and products of the foregoing. In addition, the
Trustee, at the expense of the Borrower, will (i) execute such instruments of
release with respect to the portion of the Collateral to be so sold, substituted
or transferred in recordable form if necessary, in favor of the Borrower or its
designee as the Borrower or the Collateral Servicer may reasonably request,
(ii) deliver to the Borrower or its designee any portion of the Collateral
(including the applicable Related Documents) to be so sold, substituted or
transferred in its possession as identified to it by the Borrower or by the
Collateral Servicer and (iii) otherwise take such actions as requested by the
Borrower or the Collateral Servicer as are necessary and appropriate to release
the Lien of the Trustee for the benefit of the Secured Parties on the portion of
the Collateral to be so sold, substituted or transferred.

(c) Any and all actions under this Section 7.02 in respect of the Collateral
shall be without any recourse to, or representation or warranty by, the Trustee
or any Secured Party and shall be at the sole cost and expense of the Borrower.

Section 7.03 Rights and Remedies.

The Trustee (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.

(a) Upon the occurrence and during the continuance of an Event of Default, the
Trustee or its designees shall at the written direction of the Administrative
Agent (at the direction of the Required Lenders), and in each case, where
applicable subject to the terms of the Related Documents (i) instruct the
Borrower to deliver any or all of the Collateral, the Related Documents and any
other documents relating to the Collateral to the Trustee or its designees and
otherwise give all instructions for the Borrower regarding the Collateral;
(ii) take control of the Proceeds of any such Collateral; (iii) subject to the
provisions of the applicable Related Documents, exercise any consensual or
voting rights in respect of the Collateral; (iv) release, make extensions,
discharges, exchanges or substitutions for, or surrender, all or any part of the
Collateral; (v) enforce the Borrower’s rights and remedies with respect to the
Collateral; (vi) institute and prosecute legal and equitable proceedings to
enforce collection of, or realize upon, any of the Collateral; (vii) make copies
of all books, records and documents relating to the Collateral; and
(viii) 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.

(b) Upon an acceleration of the Advances after an Event of Default, the Trustee
or its designees shall at the written direction of the Administrative Agent (at
the direction of the Required Lenders), and in each case, where applicable
subject to the terms of the Related Documents (i) require that the Borrower
(with written notice to the Collateral Servicer) immediately take all
preparatory actions necessary to facilitate any the sale, liquidation or other
disposition of the Collateral and (ii) with ten Business Days written notice to
the Collateral Servicer and the Borrower, unless a Payment in Full is made prior
to the expiration of such ten Business Day time period, sell, liquidate or
otherwise dispose of the Collateral, all without judicial process or
proceedings, in order to pay all amounts due and payable in respect of the
Obligations, in accordance with the terms of the Related Documents and the
priority set forth in Section 9.01(a)(iv).

 

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The Borrower hereby agrees that, upon the occurrence and during the continuance
of an Event of Default or upon an acceleration of the Advances after an Event of
Default, as applicable, at the request of the Trustee (acting at the direction
of the Administrative Agent) or the Administrative Agent but subject to the
requirements of the Related Documents, it shall execute all documents and
agreements which are necessary or appropriate to have the Collateral to be
assigned to the Trustee or its designee. For purposes of taking the actions
described in paragraphs (a) and (b) of this Section 7.03 the Borrower hereby
irrevocably appoints the Trustee as its attorney-in-fact (which appointment
being coupled with an interest and is irrevocable while any of the Obligations
remain unpaid and which can be exercised only if such Event of Default is
continuing), with power of substitution, in the name of the Trustee (or its
designee) or in the name of the Borrower or otherwise, for the use and benefit
of the Trustee for the benefit of the Secured Parties, but at the cost and
expense of the Borrower and, except as permitted by applicable law, without
notice to the Borrower.

All sums paid or advanced by the Trustee or the Lenders in connection with the
foregoing and all out-of-pocket costs and expenses (including reasonable and
documented attorneys’ fees and expenses) incurred in connection therewith,
together with interest thereon at the Post-Default Rate from the date of payment
until repaid in full, shall be paid by the Borrower to the Trustee or the
Lenders, as applicable, from time to time on demand in accordance with
Section 9.01(a)(iv) and shall constitute and become a part of the Obligations
secured hereby.

Without the prior written consent of all of the Lenders, credit bidding by any
Lender (or any other Person) in connection with any foreclosure sale hereunder
shall not be permitted.

Section 7.04 Remedies Cumulative.

Each right, power, and remedy of the Administrative Agent, the Trustee 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 either of the Administrative Agent, the Trustee 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) The Borrower hereby agrees that after the occurrence and during the
continuance of an Event of Default, it shall (i) upon the written request of
either the Administrative Agent or the Trustee promptly forward to the
Administrative Agent or the Trustee, as applicable, all information and notices
which it receives under or in connection with the Related Documents within two
Business Days of receipt and (ii) upon the written request of

 

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either the Administrative Agent or the Trustee, act and refrain from acting in
respect of any request, act, decision or vote under or in connection with the
Related Documents only in accordance with the direction of the Administrative
Agent or the Trustee, as applicable.

(b) The Borrower agrees that, to the extent the same shall be in the Borrower’s
possession, it will hold all Related Documents in trust for the Trustee on
behalf of the Secured Parties, and upon request of either the Administrative
Agent or the Trustee following the occurrence and during the continuance of an
Event of Default or as otherwise provided herein, promptly deliver the same to
the Trustee or its designee.

Section 7.06 Borrower Remains Liable.

(a) Except as may be necessary in connection with any assignment of the
Collateral to the Trustee or its designee pursuant to the first sentence of the
second paragraph of Section 7.03, (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.

(b) Except as may be necessary in connection with any assignment of the
Collateral to the Trustee or its designee pursuant to the first sentence of the
second paragraph of Section 7.03, no obligation or liability of the Borrower is
intended to be assumed by the Administrative Agent, the Trustee or any other
Secured Party under or as a result of this Agreement or the other Facility
Documents, and the transactions contemplated hereby and 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, the Trustee and the other Secured Parties expressly
disclaim any such assumption. The Borrower agrees to indemnify, defend and hold
harmless the Administrative Agent, the Trustee and the other Secured Parties
from any loss, liability or expense incurred as a result of any claim that any
such obligation or liability has been so assumed.

Section 7.07 Assignment of Collateral Servicing Agreement and the Master Sale
Agreement.

(a) The Borrower hereby acknowledges that its grant contained in Section 7.01
includes all of the Borrower’s estate, right, title and interest in, to and
under the Collateral Servicing Agreement and the Master Sale Agreement,
including (i) the right to give all notices, consents and releases thereunder,
(ii) the right to give all notices of termination and to take any legal action
upon the breach of an obligation of the Collateral Servicer thereunder,
including the commencement, conduct and consummation of proceedings at law or in
equity, (iii) the right to receive all notices, accountings, consents, releases
and statements thereunder and (iv) the right to do any and all other things
whatsoever that the Borrower is or may be entitled to do thereunder; provided
that notwithstanding anything herein to the contrary, neither the Administrative
Agent nor the Trustee shall have the authority to exercise any of the rights set
forth in (i) through (iv) above or that may otherwise arise as a result of the
grant until the occurrence of an Event of Default hereunder and such authority
shall terminate at such time, if any, as such Event of Default is cured or
waived.

 

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(b) The assignment made hereby is executed as collateral security, and the
execution and delivery hereby shall not in any way impair or diminish the
obligations of the Borrower under the provisions of the Collateral Servicing
Agreement or the other documents referred to in paragraph (a) above, nor shall
any of the obligations contained in the Collateral Servicing Agreement or such
other documents be imposed on the Administrative Agent or the Trustee.

(c) Upon the occurrence of the Final Maturity Date (or, if earlier, the Payment
in Full of all of the Obligations (other than any unasserted contingent
obligations) and the termination of all of the Commitments) and the release of
the Collateral from the lien of this Agreement, this assignment and all rights
herein assigned to the Trustee for the benefit of the Secured Parties shall
cease and terminate and all the estate, right, title and interest of the Trustee
in, to and under the Collateral Servicing Agreement and the other documents
referred to in this Section 7.07 shall revert to the Borrower and no further
instrument or act shall be necessary to evidence such termination and reversion
but the Trustee will provide such instruments upon request of the Borrower or
the Collateral Servicer on its behalf pursuant to Section 7.02(b).

(d) The Borrower represents that the Borrower has not executed any other
assignment of the Collateral Servicing Agreement or the Master Sale Agreement.

(e) The Borrower agrees that this assignment is irrevocable until the Payment in
Full Date, and that it will not take any action which is inconsistent with this
assignment or make any other assignment inconsistent herewith. The Borrower
will, from time to time, execute all instruments of further assurance and all
such supplemental instruments with respect to this assignment as may be
necessary to continue and maintain the effectiveness of such assignment.

(f) The Borrower hereby agrees, and hereby undertakes to obtain the agreement
and consent of the Collateral Servicer in the Collateral Servicing Agreement, to
the following:

(i) The Collateral Servicer shall consent to the provisions of this assignment
and agree to perform any provisions of this Agreement applicable to the
Collateral Servicer subject to the terms of the Collateral Servicing Agreement.

(ii) The Collateral Servicer shall acknowledge that the Borrower is assigning
all of its right, title and interest in, to and under the Collateral Servicing
Agreement to the Trustee for the benefit of the Secured Parties.

(iii) Neither the Borrower nor the Collateral Servicer will enter into any
agreement amending, modifying or terminating the Collateral Servicing Agreement
without complying with the applicable terms thereof.

 

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Section 7.08 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, continuation statements, instruments of further assurance
and other instruments, and shall take such other action as may be necessary or
advisable to secure the rights and remedies of the Secured Parties hereunder and
to:

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

(ii) maintain, preserve and perfect any grant of security made or to be made by
this Agreement including, without limitation, the first priority nature of the
lien (subject to clause (ii) of the definition of Permitted Liens) or carry out
more effectively the purposes hereof;

(iii) perfect, publish notice of or protect the validity of any grant made or to
be made by this Agreement (including, without limitation, any and all actions
necessary or desirable as a result of changes in law or regulations)

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

(v) preserve and defend title to the Collateral and the rights therein of the
Trustee and the other Secured Parties in the Collateral against the claims of
all Persons and parties;

(vi) pay or cause to be paid any and all taxes levied or assessed upon all or
any part of the Collateral; and

(vii) file precautionary UCC-1 financing statements and related continuation
statements, in each case, naming the Borrower as secured party and the assignor
under the Master Sale Agreement as debtor in respect of the Collateral Loans
from time to time purchased by the Borrower thereunder.

The Borrower hereby designates the Trustee as its agent and attorney in fact to
prepare and file all UCC-1 financing statements, continuation statements and
other instruments, and take all other actions, required pursuant to this
Section 7.08. Such designation shall not impose upon the Trustee, or release or
diminish, the Borrower’s obligations under this Section 7.08.

ARTICLE VIII

ACCOUNTS, ACCOUNTINGS AND RELEASES

Section 8.01 Collection of Money.

(a) Payments to Concentration Account. (i) As long as the Intercreditor
Agreement shall remain in effect, the Collateral Servicer, in its capacity as
Concentration

 

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Account Servicer, shall instruct all Obligors to make all payments in respect of
the Collateral Loans directly to the Concentration Account maintained by the
Concentration Account Bank on or before the applicable Cut-Off Date and
(ii) after the Intercreditor Agreement has terminated, the Collateral Servicer,
in its capacity as Concentration Account Servicer, shall, and if the
Concentration Account Servicer fails to do so the Trustee shall, instruct all
Obligors to make all payments in respect of the Collateral Loans directly to the
Collection Account on or before the applicable Cut-Off Date. The Collateral
Servicer shall promptly identify (with the assistance of the Trustee, if
necessary) any collections as being on account of Interest Proceeds or Principal
Proceeds or other Collections, whether received by it in its capacity as
Concentration Account Servicer under the Intercreditor Agreement or on deposit
in the Custodial Account or otherwise, and shall transfer or cause to be
transferred to the Collection Account all such Collections which are in the form
of available funds by the close of business on the second Business Day after
such Collections are so received. Upon the transfer of Collections to the
Collection Account, and on the basis of information received from the Collateral
Servicer, the Trustee shall segregate Principal Proceeds and Interest Proceeds
and transfer the same to the corresponding Principal Collection Subaccount and
Interest Collection Subaccount, as applicable, in accordance with
Section 8.02(a).

(b) Deposits. On and after each Cut-Off Date, the Concentration Account Servicer
will (or will cause the Concentration Account Bank to) deposit (in immediately
available funds) into the Collection Account all Collections received on and
after the applicable Cut-Off Date.

Except as otherwise expressly provided in the Intercreditor Agreement and
herein, the Trustee may 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
Trustee pursuant to this Agreement, including all payments due on the
Collateral, in accordance with the terms and conditions of such Collateral. The
Trustee shall segregate and hold all such Money and property received by it in a
Covered Account and in trust for the Secured Parties and shall apply it as
provided in this Agreement. Each Covered Account shall be established as a
single segregated trust account and maintained under the Account Control
Agreement with (a) a federal or state-chartered depository institution having
Moody’s short-term rating of at least at least “P-1” and a long-term rating of
at least “A1” and, if such institution’s Moody’s ratings falls below such
levels, then the assets held in such Covered Account shall, upon direction of
the Administrative Agent to the Trustee, the Borrower and the Collateral
Servicer following notice to the Administrative Agent, the Borrower and the
Collateral Servicer from the Trustee, be moved within 30 days to another
institution that has such Moody’s ratings or (b) in segregated trust accounts
with the corporate trust department of a federal or state-chartered deposit
institution (including the Trustee) subject to regulations regarding fiduciary
funds on deposit similar to Title 12 of the Code of Federal
Regulation Section 9.10(b). Any Covered Account may contain any number of
subaccounts for the convenience of the Trustee or as required by the Collateral
Servicer 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
Trustee shall, on or prior to the Closing Date, establish at the Custodian a
single, segregated

 

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trust account in the name “NewStar Commercial Loan Funding 2012-1 LLC Collection
Account, subject to the lien of the Trustee”, which shall be designated as the
“Collection Account”, which shall be maintained with the Custodian in accordance
with the Account Control Agreement and which shall be subject to the lien of the
Trustee. In addition, the Trustee shall establish two segregated subaccounts
within the Collection Account, one of which will be designated the “Interest
Collection Subaccount” and one of which will be designated the “Principal
Collection Subaccount”. The Trustee shall from time to time deposit into the
Interest Collection Subaccount, in addition to the deposits required pursuant to
Section 8.05(a), immediately upon receipt thereof all Interest Proceeds received
by the Trustee. The Trustee shall deposit immediately upon receipt thereof all
other amounts remitted to the Collection Account into the Principal Collection
Subaccount including, in addition to the deposits required pursuant to
Section 8.05(a), all Principal Proceeds (unless, as directed by the Collateral
Servicer, simultaneously reinvested in additional Collateral Loans in accordance
with Article X or in Eligible Investments or required to be deposited in the
Future Funding Reserve Account pursuant to Section 8.04) received by the
Trustee. All Monies deposited from time to time in the Collection Account
pursuant to this Agreement shall be held by the Trustee as part of the
Collateral and shall be applied to the purposes herein provided. All amounts in
the Collection Account shall be reinvested pursuant to Section 8.05(a).

(b) The Trustee, within one Business Day after receipt of any distribution or
other proceeds in respect of the Collateral which are not Cash or Collateral
Loans, shall so notify the Borrower and the Collateral Servicer and the Borrower
shall use its commercially reasonable efforts to, within twenty Business Days
after the end of the later of (i) the end of the Reinvestment Period or (ii) the
receipt of such property, sell such distribution or other proceeds for Cash in
an arm’s length transaction and deposit the proceeds thereof in the Collection
Account; provided that the Borrower need not sell such distributions or other
proceeds pursuant to this Section 8.02(b) if (x) it obtains the consent of the
Required Lenders or (y) such distribution or proceeds are otherwise permitted to
be held by the Borrower hereunder, it being understood that such distributions
or other proceeds may be required to be sold pursuant to other provisions of
this Agreement, including with respect to Margin Stock, in accordance with
Section 10.01(a)(iii)(y).

(c) At any time when reinvestment is permitted pursuant to Article X, the
Collateral Servicer on behalf of the Borrower may by delivery of a certificate
of a Responsible Officer of the Collateral Servicer direct the Trustee to, and
upon receipt of such certificate the Trustee shall, withdraw funds on deposit in
the Principal Collection Subaccount 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 or exercise a warrant held in the Collateral, in each case in accordance
with the requirements of Article X and such certificate. At any time as of which
no funds are on deposit in the Future Funding Reserve Account, the Collateral
Servicer on behalf of the Borrower may by delivery of a certificate of a
Responsible Officer direct the Trustee to, and upon receipt of such certificate
the Trustee shall, withdraw funds on deposit in the Principal Collection
Subaccount representing Principal Proceeds and remit such funds as so directed
by the Collateral Servicer to meet the Borrower’s funding obligations in respect
of Delayed Funding Collateral Loans or Revolving Collateral Loans.

 

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(d) The Trustee shall transfer to the Payment Account, from the Collection
Account for application pursuant to Section 9.01(a), on or before the Business
Day preceding each Payment Date, any amounts then held in the Collection Account
other than Interest Proceeds or Principal Proceeds received after the end of the
Collection Period with respect to such Payment Date (and not otherwise
designated for reinvestment by the Collateral Servicer or to be used to settle
binding commitments (entered into prior to the Determination Date) for the
purchase of Collateral Loans or to be used to meet the Borrower’s funding
obligations in respect of Delayed Funding Collateral Loans or Revolving
Collateral Loans) and as described in the Payment Date Report for such Payment
Date.

Section 8.03 Transaction Accounts.

(a) Payment Account. In accordance with this Agreement and the Account Control
Agreement, the Trustee shall, on or prior to the Closing Date, establish at the
Custodian a single, segregated trust account in the name “NewStar Commercial
Loan Funding 2012-1 LLC Payment Account, subject to the lien of the Trustee for
the benefit of the Secured Parties”, which shall be designated as the “Payment
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 Trustee. The only permitted withdrawal from or application of funds
on deposit in, or otherwise to the credit of, the Payment Account shall be to
pay amounts due and payable under the Priority of Payments on the Payment Dates
in accordance with their terms and the provisions of this Agreement.

(b) Custodial Account. In accordance with this Agreement and the Account Control
Agreement, the Trustee shall, on or prior to the Closing Date, establish at the
Custodian a single, segregated custodial account in the name “NewStar Commercial
Loan Funding 2012-1 LLC Custodial Account, subject to the lien of the Trustee”,
which shall be designated as the “Custodial Account”, which shall be maintained
by the Borrower with the Custodian in accordance with this Agreement and the
Account Control Agreement and which shall be subject to the lien of the Trustee.
The only permitted withdrawals from the Custodial Account shall be in accordance
with the provisions of this Agreement. The Trustee agrees to give the Borrower
prompt notice if (to the Trustee’s actual knowledge) the Custodial Account or
any assets or securities on deposit therein, or otherwise to the credit of the
Custodial Account, shall become subject to any writ, order, judgment, warrant of
attachment, execution or similar process.

(c) Closing Expense Account. In accordance with this Agreement and the Account
Control Agreement, the Trustee shall, on or prior to the Closing Date, establish
at the Custodian a single, segregated custodial account in the name “NewStar
Commercial Loan Funding 2012-1 LLC Closing Expense Account, subject to the lien
of the Trustee”, which shall be designated as the “Closing Expense Account”,
which shall be maintained by the Borrower with the Custodian in accordance with
this Agreement and the Account Control Agreement and which shall be subject to
the lien of the Trustee. The only permitted withdrawals from the Closing Expense
Account shall be in accordance with the provisions of this Agreement. The
Borrower shall direct the Trustee to deposit the amount specified in
Section 3.01(t) to the Closing Expense Account. On any Business Day from the
Closing Date until the end of the Ramp-Up Period, the Trustee shall apply funds
from the Closing Expense Account, as directed by the Collateral Servicer, to pay
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establishment of the Borrower, fees of the Lenders and Administrative Agent and
any other costs associated with maintaining the Facility. At the end of the
Ramp-Up Period, all funds in the Closing Expense Account will be deposited in
the Collection Account as Interest Proceeds and/or Principal Proceeds (in the
respective amounts directed by the Collateral Servicer in its sole
discretion) and the Closing Expense Account will be closed. Any income earned on
amounts deposited in the Closing Expense Account will be deposited in the
Interest Collection Subaccount as Interest Proceeds as it is received.

Section 8.04 The Future Funding Reserve Account; Fundings.

In accordance with this Agreement and the Account Control Agreement, the Trustee
shall, on or prior to the Closing Date, establish at the Custodian a single,
segregated trust account in the name “NewStar Commercial Loan Funding 2012-1 LLC
Future Funding Reserve Account, subject to the lien of the Trustee”, which shall
be designated as the “Future Funding 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 Trustee. The only
permitted deposits to or withdrawals from the Future Funding Reserve Account
shall be in accordance with the provisions of this Agreement.

Upon the purchase of any Delayed Funding Collateral Loan or Revolving Collateral
Loan or, if necessary, on the Commitment Termination Date, the Collateral
Servicer or Borrower shall cause funds to be withdrawn from the Principal
Collection Subaccount and deposited and at all times maintained by the Trustee
in the Future Funding Reserve Account, in an amount (the “Future Funding Reserve
Required Amount”) sufficient to ensure no Commitment Shortfall exists as of such
time.

Fundings of Revolving Collateral Loans and Delayed Funding Collateral Loans
shall be made, as directed by the Collateral Servicer, using, first, amounts on
deposit in the Future Funding Reserve Account, then amounts on deposit in the
Principal Collection Subaccount and finally, available Borrowings.

Amounts on deposit in the Future Funding Reserve Account will be invested in
overnight funds that are Eligible Investments selected by the Collateral
Servicer pursuant to Section 8.05 and earnings from all such investments will be
deposited in the Interest Collection Subaccount as Interest Proceeds. So long as
no Event of Default pursuant to Section 6.01(e) or (f) has occurred and is then
continuing, all funds in the Future Funding Reserve Account (other than earnings
from Eligible Investments therein) will be available solely to cover drawdowns
on the Delayed Funding 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 Future Funding Reserve Required Amount, the Trustee (at the
direction of the Collateral Servicer) shall promptly remit such excess to the
Principal Collection Subaccount.

Section 8.05 Reinvestment of Funds in Covered Accounts; Reports by Trustee.

(a) By delivery of a certificate of a Responsible Officer (which may be in the
form of standing instructions), the Borrower (or the Collateral Servicer on
behalf of the Borrower) shall at all times direct the Trustee to, and, upon
receipt of such certificate, the

 

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Trustee shall, invest all funds on deposit in the Collection Account and the
Future Funding Reserve Account as so directed 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 Trustee shall seek instructions from the Collateral
Servicer within three Business Days after the transfer of any funds to such
accounts and shall promptly invest an Eligible Investment of the type described
in clause (vii) of the definition of the term “Eligible Investments” that mature
overnight. If the Trustee does not thereafter receive written instructions from
the Collateral Servicer within five Business Days after the transfer of such
funds to such accounts, it shall invest and reinvest the funds held in such
accounts, as fully as practicable, as directed by the Administrative Agent, but
only in one or more Eligible Investments of the type described in clause
(vii) of the definition of the term “Eligible Investments” maturing no later
than the Business Day immediately preceding the next Payment Date (or such
shorter maturities expressly provided herein). If, after the occurrence of an
Event of Default, the Borrower shall not have given such investment directions
to the Trustee for three consecutive days, the Trustee shall notify the
Administrative Agent thereof and, at the direction of the Administrative Agent,
shall invest and reinvest such Monies as fully as practicable in an Eligible
Investment of the type described in clause (vii) of the definition of the term
“Eligible Investments” maturing not later than the earlier of (i) thirty 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). Should any such specific Eligible
Investment be unavailable, and in the absence of another proper investment
instruction, all such funds shall be held uninvested. Except to the extent
expressly provided otherwise herein, all interest and other income from such
investments shall be deposited in the Interest Collection Subaccount, any gain
realized from such investments shall be credited to the Principal Collection
Subaccount upon receipt, and any loss resulting from such investments shall be
charged to the Principal Collection Subaccount. The Collateral Servicer shall
not in any way be held liable by reason of any insufficiency of such accounts
which results from any loss relating to any such investment, except with respect
to investments in obligations of the Collateral Servicer or any Affiliate
thereof.

(b) The Trustee 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 Trustee or an entity organized and doing business under the
laws of the United States or of any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $200,000,000, subject to supervision or examination by federal or state
authority, having a long-term debt rating of at least “Baa1” by Moody’s and
having an office within the United States.

(c) The Trustee shall supply, in a timely fashion, to the Borrower, Moody’s and
the Collateral Servicer any information regularly maintained by the Trustee that
the Borrower, Moody’s or the Collateral Servicer 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 Trustee by reason of its acting as Trustee hereunder and
required to be provided by Section 8.06 or to permit the Collateral Servicer to

 

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perform its obligations under the Collateral Servicing Agreement or the
Borrower’s obligations hereunder that have been delegated to the Collateral
Servicer. The Trustee shall promptly forward to the Collateral Servicer copies
of notices, requests for consent and other writings received by it from the
Obligor or guarantor of any Collateral Loan, the issuer of any Equity Security
or from the issuer or any Clearing Agency with respect to any Eligible
Investment (including, without limitation, requests to vote, requests with
respect to amendments or waivers and notices of prepayments and redemptions) as
well as all periodic financial reports received from any Obligor or guarantor or
issuer or Clearing Agency with respect to any Collateral.

Section 8.06 Accountings.

(a) Monthly. On each Monthly Report Date, beginning in April 2012 the Borrower
or the Collateral Servicer on behalf of the Borrower shall compile and provide
(or cause to be compiled and provided) to Moody’s, the Administrative Agent, the
Trustee, the Collateral Servicer and the Lenders, a monthly report on a
settlement basis (each a “Monthly Report”), determined as of the close of
business on the related Monthly Report Determination Date. The Monthly Report
for a calendar month shall contain the information with respect to the
Collateral Loans and Eligible Investments included in the Collateral set forth
in Part 1 of Schedule 2 hereto.

In addition, the Collateral Servicer shall provide on a quarterly basis to the
Administrative Agent, the Trustee and the Lenders a portfolio monitoring report
setting forth in reasonable detail each amendment, modification or waiver under
any Related Document for each Collateral Loan that became effective during the
quarterly period covered by such report.

(b) Payment Date Accounting. The Borrower or the Collateral Servicer on behalf
of the Borrower shall render 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 Borrower, the
Administrative Agent, the Trustee, the Collateral Servicer, the Independent
Accountants, Moody’s and each Lender not later than the Business Day preceding
the related Payment Date. The Payment Date Report shall contain the information
set forth in Part 2 of Schedule 2 hereto.

(c) Interest Rate Notice. The Borrower shall include in each Payment Date Report
a notice setting forth the interest rate for the Advances for the Interest
Accrual Period preceding the next Payment Date, as established by the
Calculation Agent.

(d) Failure to Provide Accounting. If the Trustee shall not have received any
accounting provided for in this Section 8.06 on the first Business Day after the
date on which such accounting is due to the Trustee, the Trustee shall notify
the Collateral Servicer who shall use all reasonable efforts to obtain such
accounting by the applicable Payment Date. To the extent the Collateral Servicer
is required to provide any information or reports pursuant to this Section 8.06
as a result of the failure of the Borrower to provide such information or
reports, the Collateral Servicer shall be entitled to retain an independent
certified public accountant in connection therewith and the reasonable costs
incurred by the Collateral Servicer for such independent certified public
accountant shall be paid by the Borrower.

 

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Section 8.07 Other Data; Obligor Financial Information.

(a) Not later than 4:00 p.m. (Eastern time) two Business Days after the 15th day
of each calendar month, the Collateral Servicer shall provide to the Trustee (in
a format agreed to by the Trustee and the Collateral Servicer) such information
(the “Tape”). The Tape shall include, but not be limited to, the information set
forth in Part 2 of Schedule 2 (in the case of Payment Date Reports) and Part 1
of Schedule 2 (in the case of Monthly Reports). The Trustee shall not be
obligated to verify, recompute, reconcile or recalculate any such information or
data or compare any such information to any Daily Statement and shall have no
liability for any errors in such data or information, except to the extent that
such errors are caused by the Trustee’s own fraud, bad faith, willful
misfeasance, gross negligence or reckless disregard of its duties hereunder. The
Trustee shall retain each Tape delivered to it during the term of this
Agreement.

(b) In addition, the Collateral Servicer shall, upon the request of the Trustee,
the Administrative Agent or any Rating Agency, furnish the Trustee, the
Administrative Agent or Rating Agency, as the case may be, such underlying data
in the possession of the Collateral Servicer used to generate a Monthly Report
or Payment Date Report as may be reasonably requested. The Collateral Servicer
will also forward to the Trustee, the Administrative Agent and Moody’s
(i) within 60 days after each calendar quarter (except the fourth calendar
quarter), commencing with the quarter ending June 30, 2012, the unaudited
quarterly financial statements of the Collateral Servicer and (ii) within
120 days after each fiscal year of the Collateral Servicer, commencing with the
fiscal year ending December 31, 2012, the audited annual financial statements of
the Collateral Servicer, together with the related report of the independent
accountants to the Collateral Servicer; provided that so long as the Collateral
Servicer is required under the Securities Act to file its financial statements
with the Securities and Exchange Commission, the foregoing requirement to
provide such financial statements to the Trustee and Moody’s shall not apply.
The Trustee will have no obligation to review any such statements.

(c) At the end of each Business Day, the Collateral Servicer shall provide to
the Trustee (in a format agreed to by the Trustee and the Collateral Servicer
and acceptable to the Administrative Agent) a statement (the “Daily Statement”)
of (i) all collections received and deposited in the Principal Collection
Subaccount and the Interest Collection Subaccount on such Business Day, (ii) all
disbursements from or deposits to the Future Funding Reserve Account on such
Business Day, (iii) a holdings report setting forth (with respect to such
Business Day) (1) all acquisitions, substitutions and dispositions of Collateral
Loans, (2) all payments received with respect to any Collateral Loan, (3) all
Exposure Amounts funded by the Borrower with respect to any Delayed Funding
Collateral Loan or Revolving Collateral Loan, (4) the Exposure Amount with
respect to each Delayed Funding Collateral Loan and Revolving Collateral Loan as
well as the commitment fee rate for each such Loan, (5) the outstanding
principal amount of each Collateral Loan, (6) the base rate or spread payable
with respect to each Collateral Loan, (7) the contract reset date for each
Collateral Loan, (8) the Moody’s Industry Classification of each Collateral
Loan, (9) certain amendment or modification activity on the Collateral Loans and
(10) certain changes in the rating and recovery rate of any Collateral Loan. The
Trustee shall retain in an accessible format each Daily Statement until delivery
of a Tape for the preceding Collection Period, and following receipt by the
Trustee of a Tape for a Collection Period, the Trustee shall have no obligation
to retain any Daily Statements received by it prior to the delivery of such

 

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Tape. The Trustee shall provide access to any Daily Statement in its possession
to the Administrative Agent, any successor Collateral Servicer and otherwise
only as directed by (and at the expense of) the Collateral Servicer. Nothing
herein shall impose any obligation on the Trustee to maintain or update a
database of information of the Collateral.

(d) With respect to every Collateral Loan included in the Collateral that has
received a Moody’s credit estimate, on the six month anniversary of such initial
estimate or the most recent annual refresh of such estimate, the Collateral
Servicer shall provide to Moody’s the most recent (audited or unaudited)
financial statements with respect to the related Obligor actually in the
possession of the Collateral Servicer on such date, until such time as the
related Collateral Loan has been paid in full or is no longer part of the
Collateral.

(e) The Collateral Servicer will forward to Moody’s promptly upon request any
additional financial information in the Collateral Servicer’s possession or
reasonably obtainable by the Collateral Servicer as Moody’s shall reasonably
request with respect to an Obligor as to which any Scheduled Distribution is
past due for at least ten days.

(f) Upon any Collateral Loan becoming a Defaulted Loan, without any request
therefor by Moody’s, and promptly after receipt thereof by the Collateral
Servicer, the Collateral Servicer will use its commercially reasonable efforts
to obtain updated financial information with respect to the related Obligor,
which, promptly after receipt thereof, it will forward to Moody’s (with a copy
to the Administrative Agent).

(g) The Collateral Servicer will provide to Moody’s such financial information,
documents and other materials in the Collateral Servicer’s possession or
reasonably obtainable by the Collateral Servicer (including information relating
to any amendment, modification, waiver or variance effected pursuant to
Section 5.02(v)) as Moody’s shall reasonably request in connection with any
annual review and/or re-grading of the Collateral Loans and the related Obligors
which Moody’s may undertake.

 

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Section 8.08 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 Servicer,
deliver to the Trustee at least three Business Days (or such lesser time as is
acceptable to the Trustee or the Custodian, as applicable) prior to the
settlement date for any sale of any 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 Trustee to release
or cause to be released such Collateral from the Lien of this Agreement in
accordance with Section 7.02(b) and, upon receipt of such certificate, the
Trustee (or Custodian) shall promptly deliver any such Collateral, if in
physical form, duly endorsed to the Person designated in such certificate or, if
such Collateral 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 Servicer in such certificate; provided
that the Trustee (or Custodian) may deliver any such Collateral in physical form
for examination in accordance with street delivery custom.

(b) Subject to the terms of this Agreement, the Trustee (or Custodian) shall
upon the delivery of a certificate of a Responsible Officer of the Borrower
(i) deliver any Collateral, and release or cause to be released such Collateral
from the Lien of this Agreement in accordance with Section 7.02(b), 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 and (ii) provide notice thereof to the Collateral Servicer.

(c) Upon a Responsible Officer of the Trustee receiving actual notice of any
tender offer, voluntary redemption, exchange offer, conversion or other similar
action (an “Offer”) or any request for a waiver, consent, amendment or other
modification, in each case, with respect to any Collateral, the Trustee shall
notify the Collateral Servicer of such Offer or request. Unless the Advances
have been accelerated following an Event of Default, the Collateral Servicer may
direct (x) the Borrower to accept or participate in or decline or refuse to
participate in such Offer and, in the case of acceptance or participation, to
release from the Lien of this Agreement such Collateral in accordance with the
terms of the Offer against receipt of payment or exchange therefor, or (y) the
Borrower or the Trustee to agree to or otherwise act with respect to such
consent, waiver, amendment or modification.

(d) As provided in Section 8.02(a), the Trustee shall deposit any proceeds
received by it from the disposition of any Collateral in the applicable
subaccount of the Collection Account, unless simultaneously applied to the
purchase or substitution of additional Collateral Loans or Eligible Investments
as permitted under and in accordance with the requirements of this Article VIII
and Article X.

(e) The Trustee shall, upon receipt of a certificate of a Responsible Officer of
the Borrower to the effect that there are no Commitments outstanding and Payment
in Full has occurred or will contemporaneously occur in connection with the
release of the Collateral from the Lien of this Agreement, and upon written
request therefor, release any remaining Collateral from the Lien of this
Agreement in accordance with Section 7.02(a).

 

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(f) Any Collateral or amounts that are released pursuant to Section 8.08(a),
(b) or (c) shall be, and hereby are, released from the Lien of this Agreement.

Section 8.09 Reports by Independent Accountants.

(a) On or prior to the Closing Date, the Borrower shall appoint one or more
firms of independent certified public accountants, independent auditors or
independent consultants of recognized international reputation (together with
its successors, the “Independent Accountants”) for purposes of reviewing and
delivering the reports or certificates 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 Borrower or the Collateral Servicer. The Borrower may remove
any firm of Independent Accountants at any time upon notice to, but without the
consent of any of, the Lenders. Upon any resignation by such firm or removal of
such firm by the Borrower, the Borrower (or the Collateral Servicer on behalf of
the Borrower) shall promptly appoint by a certificate of a Responsible Officer
of the Borrower delivered to the Trustee, the Administrative Agent and Moody’s a
successor thereto that shall also be a firm of independent certified public
accountants, independent auditors or independent consultants of recognized
international reputation, which may be a firm of independent certified public
accountants, independent auditors or independent consultants that performs
accounting services for the Borrower or the Collateral Servicer. If the Borrower
shall fail to appoint a successor to the Independent Accountant which has
resigned within thirty days after such resignation, the Borrower shall promptly
notify the Trustee and the Administrative Agent of such failure in writing and
the Administrative Agent shall appoint a successor Independent Accountant of
recognized international reputation. The fees of such Independent Accountants
and any successor shall be payable by the Borrower.

(b) The Borrower shall cause to be delivered to the Administrative Agent, the
Trustee, the Collateral Servicer, each Lender upon written request therefor and
Moody’s a statement from a firm of Independent Accountants (i) in respect of the
Closing Date, listing the Aggregate Principal Balance of the Collateral Loans
and the outstanding principal balance and/or other relevant information relating
to the characteristics of all other Collateral as of the Closing Date and
(ii) on a quarterly basis after the Closing Date, for each Payment Date Report
received since the last statement, (x) indicating that the calculations within
those Payment Date Reports have been performed in accordance with the applicable
provisions of this Agreement and (y) listing the Aggregate Principal Balance of
the Collateral Loans and the outstanding principal balance and/or other relevant
information relating to the characteristics of all other Collateral as of the
immediately preceding Determination Dates; provided that in the event of a
conflict between such firm of Independent Accountants and the Borrower with
respect to any matter in this Section 8.09, the determination by such firm of
Independent Accountants shall be conclusive.

Section 8.10 Reports to Moody’s.

In addition to the information and reports specifically required to be provided
to Moody’s pursuant to the terms of this Agreement, the Borrower or the
Collateral Servicer on behalf of the Borrower shall provide Moody’s with such
additional information as Moody’s may from time to time reasonably request which
is in the possession thereof or otherwise is

 

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reasonably obtainable thereby without undue burden or expense, including
notification to Moody’s regarding any material amendment to any Collateral Loan
that has received a Moody’s credit estimate rating. Moody’s may, at its option,
redetermine the credit estimate rating of any such Collateral Loan which is
subject to a Specified Change.

ARTICLE IX

APPLICATION OF MONIES

Section 9.01 Disbursements of Monies from Payment Account.

(a) Notwithstanding any other provision in this Agreement, but subject to the
other subsections of this Section 9.01, on each Payment Date, the Trustee shall
disburse amounts transferred from the Collection Account to the Payment Account
pursuant to Section 8.02 in accordance with the following priorities (the
“Priority of Payments”), as set forth in the Payment Date Report prepared by the
Collateral Servicer.

(i) Unless an Enforcement Event has occurred and is continuing, on each Payment
Date during the Ramp-Up Period, Interest Proceeds on deposit in the Interest
Collection Subaccount, 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) and that are transferred into the Payment Account,
shall be applied in the following order of priority:

(A) (1) first, to pay taxes, registration and filing fees, if any, of the
Borrower; and (2) second, to pay all Administrative Expenses in accordance with
the priorities specified in the definition thereof; provided that the aggregate
amount applied under clause (A)(2) for such Payment Date shall not exceed the
Administrative Expense Cap for such Payment Date;

(B) to the payment of accrued and unpaid Collateral Servicing Fees;

(C) to the payment of accrued and unpaid interest on the Advances and Commitment
Fees due to the Lenders and amounts payable to the Lenders or any Affected
Person under Section 2.10; provided that the amount applied under this clause
(C) for such Payment Date shall not exceed the Interest Cap for such Payment
Date;

(D) if the Coverage Tests are not satisfied as of the related Determination
Date, (1) to the repayment of principal in respect of the Advances, or (2) if
but only if the outstanding principal amount of the Advances equals zero (after
giving effect to any payment made pursuant to clause (1)), to deposit in the
Future Funding Reserve Account, in each case in the amount necessary to result
in the satisfaction of the Coverage Tests (on a pro forma basis as of such
Determination Date);

(E) to the payment or application of amounts referred to in clause (C) above, to
the extent not paid in full pursuant to applications under said clause (C) for
such Payment Date together with any accrued and previously unpaid amounts owing
from any prior Payment Dates;

 

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(F) (1) first, if the Interim Date has not occurred on the sixth month
anniversary of the Closing Date and Ramp-Up Completion has not occurred, to the
repayment of Advances in the amount necessary to satisfy the Rating Condition,
(2) second, if the Interim Date has not occurred on the sixth month anniversary
of the Closing Date and Ramp-Up Completion has not occurred, for deposit into
the Future Funding Reserve Account up to an amount that would result in the Net
Aggregate Exposure Amount equaling zero and (3) third, to the payment or
application of amounts referred to in clause (A)(2) above, to the extent not
paid in full pursuant to applications under said clause (A)(2) (other than any
indemnification payments owed to the Collateral Servicer by the Borrower
pursuant to the Collateral Servicing Agreement);

(G) to pay accrued and unpaid amounts owing to the Secured Parties and any other
Affected Person (if any) under Sections 2.09 and 13.03;

(H) to the payment of costs and expenses of the Borrower (including any costs
and expenses to be reimbursed or other amounts owed to the Collateral Servicer
in accordance with the Facility Documents);

(I) during Stage II of the Ramp-Up Period, at the discretion of the Collateral
Servicer, and so long as the Restricted Payment Test is satisfied, to pay a
dividend to the holders of the Equity;

(J) to the payment of one or more of the following, at the discretion of the
Collateral Servicer: (i) to the Principal Collection Subaccount for the purchase
of additional Collateral Loans (including funding Revolving Collateral Loans and
Delayed Funding Collateral Loans), (ii) for deposit into the Future Funding
Reserve Account up to an amount that would result in the Net Aggregate Exposure
Amount equaling zero, and/or (iii) to prepay Advances;

(K) with notice to the Administrative Agent, to pay any obligations of the
Borrower or to establish any reserves determined by the Borrower to be necessary
or desirable, including, without limitation, with respect to any indemnities
owed to the Collateral Servicer; and

(L) the remainder to the holders of the Equity.

(ii) Unless an Enforcement Event has occurred and is continuing, on each Payment
Date after the end of the Ramp-Up Period, Interest Proceeds on deposit in the
Interest Collection Subaccount, 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) and that are transferred into the Payment Account,
shall be applied in the following order of priority:

(A) (1) first, to pay taxes, registration and filing fees, if any, of the
Borrower; and (2) second, to pay all Administrative Expenses in accordance with
the priorities specified in the definition thereof; provided that the aggregate
amount applied under clause (A)(2) for such Payment Date shall not exceed the
Administrative Expense Cap for such Payment Date;

 

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(B) to the payment of accrued and unpaid Collateral Servicing Fees;

(C) to the payment of accrued and unpaid interest on the Advances and Commitment
Fees due to the Lenders and amounts payable to the Lenders or any Affected
Person under Section 2.10; provided that the amount applied under this clause
(C) for such Payment Date shall not exceed the Interest Cap for such Payment
Date;

(D) if the Coverage Tests are not satisfied as of the related Determination
Date, (1) to the repayment of principal in respect of the Advances, or (2) if
but only if the outstanding principal amount of the Advances equals zero (after
giving effect to any payment made pursuant to clause (1)), to deposit in the
Future Funding Reserve Account, in each case in the amount necessary to result
in the satisfaction of the Coverage Tests (on a pro forma basis as of such
Determination Date);

(E) to the payment or application of amounts referred to in clause (C) above, to
the extent not paid in full pursuant to applications under said clause (C) for
such Payment Date together with any accrued and previously unpaid amounts owing
from any prior Payment Dates;

(F) (1) first, if a Moody’s Ramp-Up Failure has occurred, to the repayment of
Advances in the amount necessary to satisfy the Rating Condition, (2) second, if
a Moody’s Ramp-Up Failure has occurred, for deposit into the Future Funding
Reserve Account up to an amount that would result in the Net Aggregate Exposure
Amount equaling zero and (3) third, to the payment or application of amounts
referred to in clause (A)(2) above, to the extent not paid in full pursuant to
applications under said clause (A)(2) (other than any indemnification payments
owed to the Collateral Servicer by the Borrower pursuant to the Collateral
Servicing Agreement);

(G) to pay accrued and unpaid amounts owing to the Secured Parties and any other
Affected Person (if any) under Sections 2.09 and 13.03;

(H) during the Reinvestment Period, if the Reinvestment Interest Diversion Ratio
Test is not satisfied on a pro forma basis after application of all amounts to
be applied on such Payment Date pursuant to 9.01(a)(ii)(A) through (G) then, as
determined by the Collateral Servicer, (i) to the Principal Collection
Subaccount and/or, (ii) to prepay the Advances, in each case in the amount
necessary to result in the satisfaction of the Reinvestment Interest Diversion
Ratio Test;

 

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(I) during the Reinvestment Period, to the payment of costs and expenses of the
Borrower (including any costs and expenses to be reimbursed or other amounts
owed to the Collateral Servicer in accordance with the Facility Documents);

(J) during the Reinvestment Period, the remainder to be allocated at the
Collateral Servicer’s option (in written notice to the Administrative Agent and
the Trustee delivered on or prior to the related Determination Date) to any one
or more of the following payments: (i) for distribution to the holders of the
Equity, (ii) to the Principal Collection Subaccount for the purchase of
additional Collateral Loans (including funding Revolving Collateral Loans and
Delayed Funding Collateral Loans), and/or (iii) to prepay the Advances, and/or
(iv) for deposit into the Future Funding Reserve Account up to an amount that
would result in the Net Aggregate Exposure Amount equaling zero and/or (v) with
notice to the Administrative Agent, to pay any obligations of the Borrower or to
establish any reserves it deems necessary or desirable;

(K) after the Reinvestment Period, to the extent that the Step-Up
Overcollateralization Test is not satisfied on a pro forma basis after
application of all amounts to be applied on such Payment Date pursuant to this
Section 9.01, then, first to the repayment of the Advances in the amount
necessary to result in the satisfaction of the Step-Up Overcollateralization
Test, and second, for deposit into the Future Funding Reserve Account until the
Net Aggregate Exposure Amount equals zero;

(L) after the Reinvestment Period, to the payment of costs and expenses of the
Borrower (including any costs and expenses to be reimbursed or other amounts
owed to the Collateral Servicer in accordance with the Facility Documents);

(M) after the Reinvestment Period, with notice to the Administrative Agent, to
pay any obligations of the Borrower or to establish any reserves determined by
the Borrower to be necessary or desirable, including, without limitation, with
respect to any indemnities owed to the Collateral Servicer; and

(N) after the Reinvestment Period, the remainder to the holders of the Equity.

(iii) Unless an Enforcement Event has occurred and is continuing, on each
Payment Date, Principal Proceeds on deposit in the Principal Collection
Subaccount that are received on or before the related Determination Date (or if
such Determination Date is not a Business Day, the next succeeding Business Day)
and that are transferred to the Payment Account and not designated for
reinvestment by the Collateral Servicer in accordance with the terms of the
Facility Documents shall be applied, except for any Principal Proceeds that will
be used to settle binding commitments (entered into prior to the Determination
Date) for the purchase of Collateral Loans, in the following order of priority:

(A) (1) first, to the payment of unpaid amounts under clause (C) in clause (i)
or (ii) above, as applicable, to the extent not paid in full thereunder
(2) second, if the Interim Date has not occurred on the sixth month anniversary
of the Closing Date and Ramp-Up Completion has not occurred, to the repayment of
Advances in the amount necessary to satisfy the Rating Condition, (3) third, if
the Interim Date has not occurred on the sixth month anniversary of the Closing
Date and Ramp-Up Completion has not occurred, for deposit into the Future
Funding Reserve Account up to an amount that would result in the Net Aggregate
Exposure Amount equaling zero and (4) fourth, to the payment of unpaid amounts
under clauses (A), (B), (D) and (E) in clause (i) or (ii) above, as applicable,
(in the same order of priority specified therein), to the extent not paid in
full thereunder;

 

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(B) (1) first, if a Moody’s Ramp-Up Failure has occurred, to the repayment of
Advances in the amount necessary to satisfy the Rating Condition, and
(2) second, during the Reinvestment Period, at the discretion of the Collateral
Servicer, (i) to the Principal Collection Subaccount for the purchase of
additional Collateral Loans (including funding Revolving Collateral Loans and
Delayed Funding Collateral Loans), and/or (ii) to prepay the Advances, and/or
(iii) for deposit into the Future Funding Reserve Account up to an amount that
would result in the Net Aggregate Exposure Amount equaling zero;

(C) after the Reinvestment Period, to the repayment of the Advances until paid
in full;

(D) after the Reinvestment Period, for deposit into the Future Funding Reserve
Account until the Net Aggregate Exposure Amount equals zero;

(E) after the Reinvestment Period, to the payment of amounts referred to in
clauses (F), (G), (H) and (K) of clause (i) above or in clauses (F), (I),
(L) and (M) of clause (ii) above, as applicable, (in the same order of priority
specified therein), to the extent not paid in full thereunder; and

(F) after the Reinvestment Period, the remainder to the holders of the Equity.

(iv) Notwithstanding the provisions of the foregoing Sections 9.01(a)(i),
9.01(a)(ii) and 9.01(a)(iii), if declaration of acceleration of the maturity of
the Advances has occurred following an Event of Default and such Event of
Default is continuing and has not been cured or waived (an “Enforcement Event”),
on each date or dates fixed by the Trustee at the written direction of the
Required Lenders, all Interest Proceeds, Principal Proceeds and any other
proceeds from the liquidation of the Collateral will be applied in the following
order of priority:

(A) (1) first, to pay taxes, registration and filing fees, if any, of the
Borrower; and (2) second, to pay all Administrative Expenses in accordance with
the priorities specified in the definition thereof; provided that the aggregate
amount applied under clause (A)(2) for such Payment Date shall not exceed the
Administrative Expense Cap for such Payment Date;

 

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(B) to the payment of accrued and unpaid interest on the Advances and Commitment
Fees due to the Lenders and amounts payable to the Lenders or any Affected
Person under Section 2.10, without regard for the Interest Cap;

(C) for deposit into the Future Funding Reserve Account until the Net Aggregate
Exposure Amount equals zero;

(D) to the repayment of principal in respect of the Advances;

(E) to the payment or application of amounts referred to in clause (A)(2) above,
to the extent not paid in full pursuant to applications under said
clause (A)(2);

(F) to pay accrued and unpaid amounts owing to the Secured Parties and any other
Affected Person (if any) under Sections 2.09 and 13.03;

(G) to the payment of accrued and unpaid Collateral Servicing Fees and interest
at the Base Rate on such Collateral Servicing Fees from and including that date
such Collateral Servicing Fees would have been payable according to this
Section 9.01 to but not including the date of payment;

(H) to the payment of costs and expenses of the Borrower (including any costs
and expenses to be reimbursed or other amounts owed to the Collateral Servicer
in accordance with the Facility Documents);

(I) with notice to the Administrative Agent, to pay any obligations of the
Borrower or to establish any reserves determined by the Borrower to be necessary
or desirable; and

(J) the remainder to the holders of the Equity.

(b) If on any Payment Date the amount available in the Payment Account is
insufficient to make the full amount of the disbursements required by the
Payment Date Report, the Trustee 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 AND SUBSTITUTION OF COLLATERAL LOANS;

PURCHASE OF ADDITIONAL COLLATERAL LOANS

Section 10.01 Sales and Substitutions of Collateral Loans.

(a) Sales and Substitutions. Subject to the satisfaction of the conditions
specified in Section 10.03 and provided that (A) no Event of Default has
occurred and is continuing or would result upon giving effect thereto, (B) on or
prior to the trade date for such

 

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sale, transfer, exchange, substitution or other disposition, the Collateral
Servicer has certified to the Trustee and the Administrative Agent that each of
the conditions applicable to such sale, transfer, exchange, substitution or
other disposition has been satisfied (including without limitation those set
forth in the following proviso) and (C) upon giving effect thereto and the
application of the proceeds thereof or the substitution of the Collateral Loan,
each Coverage Test is satisfied and each Collateral Quality Test is satisfied
(other than in connection with any sale after the Reinvestment Period) (or if
any such Collateral Quality Test is not satisfied, such test is maintained or
improved after giving effect to such sale (other than in connection with a sale
after the Reinvestment Period) or substitution), the Borrower may, but will not
be required to, direct the Trustee to sell and the Trustee shall sell or
substitute in the manner directed by Borrower any Collateral Loan (or any
portion thereof) provided that such sale or substitution also meets the
requirements of clauses (i) through (viii) of this Section 10.01(a) that are
applicable to it:

(i) Credit Risk Loans. The Borrower may direct the Trustee in writing to sell
any Credit Risk Loan at any time during or after the Reinvestment Period without
restriction.

(ii) Defaulted Loans. The Borrower may direct the Trustee in writing to sell any
Defaulted Loan at any time during or after the Reinvestment Period without
restriction.

(iii) Equity Securities. The Borrower (A) may direct the Trustee in writing to
sell any Equity Security (other than Margin Stock) at any time without
restriction and (B) shall direct the Trustee in writing to sell (x) any
distribution or other proceeds in respect of the Collateral which are not Cash
or Collateral Loans, within twenty Business Days after the end of the later of
(a) the end of the Reinvestment Period or (b) the receipt of such property,
(unless the consent of the Required Lenders is obtained in accordance with
Section 8.02(b)) and (y) any Margin Stock, regardless of price, within 30 days
of receipt, by the Borrower thereof unless such sale is prohibited by Applicable
Law, in which case such Margin Stock shall be sold as soon as such sale is
permitted by Applicable Law.

(iv) Discretionary Sales by the Borrower. The Borrower or the Collateral
Servicer on behalf of the Borrower, at its option, may direct the Trustee in
writing to sell or substitute any Collateral Loan at any time provided that any
substitution of a Collateral Loan after the Reinvestment Period shall require
the consent of the Required Lenders and satisfaction of the Rating Condition and
provided, further, that, as certified to the Trustee and the Administrative
Agent by a Responsible Officer of the Borrower or the Collateral Servicer, the
Aggregate Principal Balance of all Performing Collateral Loans (excluding Credit
Risk Loans) sold or substituted (other than Credit Risk Loans) pursuant to this
Section 10.01(a)(iv) since the Closing Date is not greater than 10% of the
maximum Total Capitalization (for the avoidance of doubt, such limitation shall
accrue starting at 1/12 of the limitation and increase by 1/12 of the limitation
for each month until the end of the first annual period subsequent to the
Closing Date, at which time the limitation shall be 10% per each annual period
thereafter, and after the Reinvestment Period, shall increase to 15% per annual
period).

 

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(v) Optional Repurchases or Substitutions by the Originator Pursuant to the
Master Sale Agreement. Subject to Section 10.03 and the restrictions on the
Borrower set forth in clause (iv) of this Section 10.01(a), the Originator may
optionally repurchase and substitute Collateral Loans pursuant to and in
accordance with the Master Sale Agreement and the Borrower shall sell and
transfer Collateral Loans to the Originator in connection therewith provided
that, as certified to the Trustee and the Administrative Agent by a Responsible
Officer of the Borrower or the Collateral Servicer, (A) the Aggregate Principal
Balance of all (i) Charged-Off Loans, (ii) Defaulted Loans (other than any
Defaulted Loans that would not otherwise be Defaulted Loans but for the
provisions of clause (v) or (vi) of the definition thereof), (iii) Collateral
Loans for which a Specified Change has occurred of a type specified in clause
(a) of the definition thereof or (iv) Collateral Loans for which an extension or
delay of the scheduled maturity date thereof occurs as a result of the credit
impairment of such Collateral Loan or the related Obligor or guarantor which are
optionally repurchased or substituted by the Originator pursuant to the Master
Sale Agreement may not exceed an amount equal to, as of any date of
determination, 10% of the Net Purchased Loan Balance, and (B) the Aggregate
Principal Balance of all Collateral Loans optionally repurchased or substituted
by the Originator pursuant to the Master Sale Agreement may not exceed an amount
equal to, as of any date of determination, 20% of the Net Purchased Loan Balance
(the limitations set forth in clause (A) and clause (B) referred to herein as
the “Repurchase and Substitution Limits”).

(vi) Sales of Collateral Loans to Non-Affiliates. One or more (or any portion of
any) Collateral Loans may be sold from time to time by the Borrower, or the
Collateral Servicer on the Borrower’s behalf, to Persons who are not Affiliates
of the Borrower or the Collateral Servicer, only if such sale is on an arm’s
length basis and for fair market value.

(vii) Sales of Collateral Loans to Affiliates. One or more (or any portion of
any) Collateral Loans may be sold from time to time by the Borrower, or the
Collateral Servicer on the Borrower’s behalf, to the Collateral Servicer or an
Affiliate thereof or to any account or fund for which the Collateral Servicer or
an Affiliate thereof acts as investment advisor with discretionary authority,
only if (A) the terms and conditions thereof are no less favorable to the
Borrower than the terms it would obtain in a comparable, timely sale with a
non-Affiliate, (B) the transactions are effected in accordance with all
Applicable Laws, (C) such sale is for an amount equal to or greater than (1) to
the extent such Collateral Loan is neither a Defaulted Loan nor a Credit Risk
Loan, the higher of (I) the current cost basis of the Borrower with respect to
such Collateral Loan (as evidenced in writing containing a reasonably detailed
description of the basis therefor delivered to the Administrative Agent by the
Collateral Servicer) and (II) the Market Value with respect to such Collateral
Loan and (2) to the extent such Collateral Loan is a Defaulted Loan or a Credit
Risk Loan, (I) the highest bid provided by an unaffiliated loan market
participant after obtaining bids from three unaffiliated loan market
participants (or, if the Collateral Servicer is unable to obtain bids from three
such participants, then such lesser number of bids from unaffiliated loan market
participants from which the Collateral Servicer can obtain bids using efforts
consistent with the Servicing Standard) or (II) if the Collateral Servicer is
unable to obtain a bid for such Credit Risk Loan or Defaulted Loan from an
unaffiliated loan market participant, the Appraised Value of such Collateral
Loan set forth in an Appraisal with respect thereto.

 

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(viii) Sale Proceeds of Credit Risk and Defaulted Loans. With regard to the
acquisition of Collateral Loans with (A) sale proceeds of Credit Risk Loans or
(B) sale proceeds of Defaulted Loans, such acquired Collateral Loans (i) shall
have an aggregated Principal Balance of not less than 100% of the sale proceeds
(or, in the case of any below-par security, the purchase price, excluding
accrued interest, expressed as a percentage of par and multiplied by the
outstanding principal balance thereof) of the Collateral Loan being sold and
(ii) shall not have a purchase price above par.

(b) Terms of Sales. All sales of Collateral Loans and other property of the
Borrower under the provisions above in this Section 10.01 must be exclusively
for Cash provided that any sale or substitution of Collateral Loans or other
property of the Borrower to or with the Equity holder of the Borrower may be
made in Cash, as capital contributions or as a substitution of assets, and in
accordance with the applicable provisions of the Facility Documents.

(c) Sales in Connection with Payment in Full and Termination of the Facility.
Notwithstanding any other provision in the Facility Documents, the Borrower or
the Collateral Manager on behalf of the Borrower, may direct the Trustee in
writing to sell, assign, transfer and release all or any portion of the
Collateral in connection with the Payment in Full of all Obligations (other than
any unasserted contingent obligations), termination of the Commitments and
release of the Lien of the Trustee for the benefit of the Secured Parties in the
Collateral as provided in Section 7.02(a) of this Agreement.

(d) Purchases of Collateral Loans During the Ramp-Up Period. Each Collateral
Loan acquired during Stage I of the Ramp-Up Period or acquired during Stage II
of the Ramp-Up Period shall be funded as specified in the Fee Letter.

Section 10.02 Purchase of Additional Collateral Loans.

On any date during the Reinvestment Period (or after the Reinvestment Period,
with the consent of the Required Lenders and satisfaction of the Rating
Condition), if, as certified to the Trustee and the Administrative Agent by the
Borrower or the Collateral Servicer on behalf of the Borrower, no Default or
Event of Default has occurred and is continuing, and if each of the applicable
conditions specified in this Section 10.02 and Section 10.03 is met, the
Borrower, or the Collateral Servicer on behalf of the Borrower, may direct the
Trustee to 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, and the Trustee
shall invest such proceeds. The Borrower shall ensure that all such investments
in Collateral Loans are settled during the Reinvestment Period such that no
amounts are payable thereunder in respect of the purchase price thereof after
the end of the Reinvestment Period.

(a) Investment Criteria. No Collateral Loan may be purchased unless such
Collateral Loan satisfies the Eligibility Criteria as of the date the Borrower,
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Servicer on behalf of the Borrower, commits to make such purchase, in each case
after giving effect to such purchase and all other sales or purchases previously
or simultaneously committed to.

(b) Investment in Eligible Investments. Cash on deposit in any Covered Account
may be invested at any time in Eligible Investments in accordance with
Article VIII.

(c) Purchase of Additional Collateral Loans from Affiliates. Additional
Collateral Loans may be purchased or acquired from time to time by the Borrower,
or the Collateral Servicer on the Borrower’s behalf, from the Collateral
Servicer or any of its Affiliates only if (i) the terms and conditions thereof
are no less favorable to the Borrower than the terms it would obtain in a
comparable, timely purchase or acquisition with a non-Affiliate and (ii) the
transactions are effected in accordance with all Applicable Laws.

Section 10.03 Conditions Applicable to All Sale and Purchase Transactions.

(a) Delivery of Collateral. Upon any acquisition of a Collateral Loan pursuant
to this Article X, a security interest in all of the Borrower’s right, title and
interest to such Collateral Loan shall be and hereby is granted to the Trustee
pursuant to this Agreement, such Collateral shall be Delivered as required
pursuant to this Agreement, and, if applicable, the Borrower shall receive the
Collateral Loan and any related Collateral for which one or more Collateral
Loans were substituted. On or before June 30th in each calendar year, commencing
in 2013, the Borrower shall furnish to the Administrative Agent, the Trustee and
the Lenders an Opinion of Counsel relating to the security interest granted by
the Borrower to the Trustee, stating that, as of the date of such opinion, the
lien and security interest created by this Agreement with respect to the
Collateral remains in effect and that no further action (other than as specified
in such opinion) needs to be taken to ensure the continued effectiveness of such
lien over the next year.

(b) Acquisition and Disposition Standards. The Borrower shall not, nor shall the
Collateral Servicer 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 Asset, (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, (d) the
Collateral Servicer reasonably believes that such acquisition or disposition
will not result in a downgrade or withdrawal of any rating assigned by a Rating
Agency to the Facility and (e) the Collateral Servicer shall certify in writing
delivered to the Trustee and the Administrative Agent not less than 3 Business
Days in advance of the relevant acquisition or disposition to the satisfaction
of the foregoing as a condition precedent to each such acquisition or
disposition. The requirements set forth in clauses (a), (b), (c) and (d) of this
Section 10.03(b) are referred to as the “Collateral Acquisition and Disposition
Standards”.

 

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Section 10.04 Additional Capital Contributions.

Subject to Section 10.03, the Equity holders of the Borrower may, but shall have
no obligation to, at any time or from time to time make capital contributions to
the Borrower, including without limitation for the purpose of curing any Default
(but, for the avoidance of doubt, no such contribution shall cure any Event of
Default without the consent of each Lender), satisfying any Coverage Test or
Collateral Quality Test, enabling the acquisition or sale of any Collateral Loan
or satisfying any conditions under Section 3.02. Each capital contribution shall
either be made (i) in Cash or (ii) by assignment and contribution of an Eligible
Investment or (iii) by assignment and contribution of a Collateral Loan. Unless
otherwise directed by the Borrower by prior or contemporaneous written notice to
the Collateral Servicer, the Administrative Agent and the Trustee, all Cash
contributed to the Borrower shall be treated as Principal Proceeds except to the
extent that such Cash is used to pay expenses incurred in connection with the
Closing Date.

ARTICLE XI

THE TRUSTEE AND DOCUMENT CUSTODIAN

Section 11.01 Designation of Trustee.

(a) Initial Trustee. The role of Trustee hereunder shall be conducted by the
Person designated as Trustee hereunder from time to time in accordance with this
Section 11.01. Until the Administrative Agent shall give to US Bank a Trustee
Termination Notice and the provisions of Section 11.05 have been satisfied, US
Bank is hereby designated as, and hereby agrees to perform the duties and
obligations of, Trustee pursuant to the terms hereof.

(b) Successor Trustee. Upon the Trustee’s receipt of a Trustee Termination
Notice from the Administrative Agent of the designation and acceptance of
appointment of a successor Trustee pursuant to the provisions of Section 11.05,
the Trustee agrees that it will terminate its activities as Trustee hereunder.

(c) Secured Party. The Administrative Agent and the Lenders hereby appoint US
Bank, in its capacity as Trustee, as their trustee for purposes of perfection of
a security interest in the Collateral. US Bank, in its capacity as Trustee,
hereby accepts such appointment and agrees to perform the duties set forth in
Section 11.02(b) and (c).

Section 11.02 Duties of Trustee.

(a) Appointment. The Borrower and the Administrative Agent each hereby appoints
US Bank to act as Trustee for the benefit of the Secured Parties. The Trustee
hereby accepts such appointment and agrees to perform the duties and obligations
with respect thereto set forth herein subject to the provisions hereof.

(b) Duties. Until its removal pursuant to Section 11.05, the Trustee or the
Custodian, as applicable, shall perform on behalf of the Administrative Agent
and the Secured Parties the following duties and obligations:

(i) The Custodian hereunder, shall take and retain custody of the Related
Documents delivered by the Borrower pursuant to Sections 3.01 and 3.02 hereof in
accordance with the terms and conditions of this Agreement, all for the benefit
of the

 

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Secured Parties. Within five Business Days of its receipt (excluding, for the
avoidance of doubt, any Related Documents in the custody of the Trustee or
Custodian as of the Closing Date) of any Related Documents, the Custodian shall
review the specified Related Documents (as identified on the related Collateral
Loan Checklist) to confirm that (A) such documents have been properly executed
and have no missing or mutilated pages, (B) as identified on the Collateral Loan
Checklist, there is evidence in the file that UCC and other filings (required by
the Related Documents) have been made, (C) if listed on the Collateral Loan
Checklist, an Insurance Policy exists with respect to any real or personal
property constituting the Related Property, and (D) the original principal
balance of such Collateral Loan, loan number and Obligor name with respect to
such Collateral Loan is referenced on the related electronic file delivered with
such loan documents as specified below and, on its face, is not a duplicate
Collateral Loan (such items (A) through (D) collectively, the “Review
Criteria”). In order to facilitate the foregoing review by the Trustee, in
connection with each delivery of Related Documents hereunder to the Trustee or
Custodian, the Collateral Servicer shall provide to the Custodian an electronic
file (in EXCEL or a comparable format) that contains the related Collateral Loan
Checklist or that otherwise contains the Collateral Loan identification number,
the original principal balance of such Collateral Loan and the name of the
Obligor with respect to each related Collateral Loan. If, at the conclusion of
such review, the Custodian shall determine that (i) the original principal
balance of each Collateral Loan for which it has received Related Documents is
less than as set forth on the electronic file, the Custodian shall promptly
notify the Administrative Agent and the Collateral Servicer of such discrepancy,
and (ii) any Review Criteria are not satisfied, the Custodian shall within one
Business Day notify the Collateral Servicer of such determination and provide
the Collateral Servicer with a list of the non-complying Collateral Loans and
the applicable Review Criteria that they fail to satisfy. The Collateral
Servicer shall have five Business Days to correct any non-compliance with any
Review Criteria. In addition, if the Collateral Servicer does not cure any such
non-compliance, it shall provide a written request to the Custodian (such
request subject to the approval of the Administrative Agent) for the return by
the Custodian to the Borrower of any Collateral Loan which fails to satisfy any
Review Criteria. Other than the foregoing, neither the Trustee nor the Custodian
shall have any responsibility for reviewing any Related Documents.

(ii) In taking and retaining custody of the Related Documents, the Trustee or
Custodian, as applicable, shall be deemed to be acting as the agent of the
Administrative Agent and the Secured Parties; provided that the Trustee makes no
representations as to the existence, perfection or priority of any Lien on the
Related Documents or the instruments therein; and provided further that the
Trustee’s and Custodian’s duties as agent shall be limited to those expressly
contemplated herein.

(iii) All Related Documents shall be kept in fire resistant vaults, rooms or
cabinets at the locations specified on Schedule 10 attached hereto, or at such
other office as shall be specified to the Administrative Agent and the
Collateral Servicer by the Trustee or Custodian in a written notice delivered at
least 45 days prior to such change. All Related Documents shall be placed
together with an appropriate identifying label and maintained in such a manner
so as to permit retrieval and access. All Related Documents shall be clearly
segregated from any other documents or instruments maintained by the Trustee and
Custodian.

 

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(iv) On each Monthly Report Date, the Trustee shall provide a written report to
the Administrative Agent and the Collateral Servicer (in a form acceptable to
the Administrative Agent) identifying each Collateral Loan for which it (or the
Custodian) holds Related Documents, the non-complying Collateral Loans and the
applicable Review Criteria that any non-complying Collateral Loan fails to
satisfy.

(v) Prior to acquiring a Collateral Loan, the Borrower or the Collateral
Servicer will provide the Trustee and Custodian with a Trade Ticket, together
with the Notice of Borrowing to be used in connection therewith.

(vi) [Reserved].

(vii) Promptly after receipt thereof, the Trustee shall provide to the
Collateral Servicer a copy of all written notices and written communications
identified as being sent to it in connection with the Collateral held hereunder
which it receives from the related Obligor or any other Person. In no instance
shall the Trustee be under any duty or obligation to take any action on behalf
of the Collateral Servicer (or Borrower) in respect of the exercise of any
voting or consent rights, or similar actions, unless it timely receives specific
written instructions from the Collateral Servicer (prior to the occurrence of an
Event of Default) or the Administrative Agent (after the occurrence of an Event
of Default) in which event the Trustee shall vote, consent or take such other
action in accordance with such instructions.

(viii) In performing its duties, the Trustee and Custodian, as applicable, shall
use the same degree of care and attention as it employs with respect to similar
collateral that it holds as Trustee for others.

(c) Additional Duties. Until its removal pursuant to Section 11.05 (after which
the successor Trustee or successor Custodian, as applicable, shall perform the
duties of the Trustee or Custodian hereunder), the Trustee or Custodian, as
applicable, shall perform, on behalf of the Borrower and the Collateral
Servicer, the following duties and obligations:

(i) No later than 11:00 a.m. on each Business Day, the Trustee shall deliver to
the Collateral Servicer either via e-mail or via the Trustee’s Internet website
a daily “cash availability report” which will detail all cash receipts with
respect to the Collateral Loans received as of the close of business of the
prior Business Day, identifying which portion thereof constitutes Interest
Proceeds, which portion thereof constitutes Principal Proceeds and any other
amounts received not classified as either Interest Proceeds or Principal
Proceeds. No later than the close of business on the Business Day the Collateral
Servicer receives such a daily cash availability report, the Collateral Servicer
shall review the same and identify any discrepancies between the cash receipts
shown on the Trustee’s daily cash availability report and the cash receipts
relating to the Collateral Loans shown on the WSO System. Thereafter the Trustee
and the Collateral Servicer will cooperate to promptly resolve any
discrepancies.

 

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(ii) The Custodian shall provide a list of all Related Documents held in custody
by the Custodian pursuant to this Agreement to the Administrative Agent and the
Collateral Servicer on at least a monthly basis, either via e-mail or via the
Trustee’s Internet website.

(iii) The Trustee and Custodian shall maintain all necessary or appropriate
records, operating procedures and systems with respect to its express duties
under this Agreement and shall provide with reasonable promptness such
additional reports and information (which information is reasonably available to
the Trustee or Custodian) as may be reasonably requested from time to time by
the Collateral Servicer.

(iv) The Trustee shall make payments pursuant to the terms of the Payment Date
Report in accordance with the Priority of Payments contained in Section 9.01
(the “Payment Duties”).

(d) (i) Each of the Administrative Agent, each Lender and each Secured Party
further authorizes the Trustee to take such action as Trustee hereunder and to
exercise such powers under this Agreement and the other Facility Documents as
are delegated to the Trustee by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto; provided however that,
notwithstanding the foregoing and for the avoidance of doubt, the parties hereto
acknowledge that the Trustee shall not be obligated to exercise any such power
or take any action unless provided indemnity reasonably satisfactory to it. In
furtherance, and without limiting the generality of the foregoing, each Secured
Party hereby appoints the Trustee (acting at the direction of the Administrative
Agent) as its agent to execute and deliver all further instruments and
documents, and take all further action that the Administrative Agent deems
necessary in order to perfect, protect or more fully evidence the security
interests granted by the Borrower hereunder, or to enable any of them to
exercise or enforce any of their respective rights hereunder, including, without
limitation, the execution by the Trustee as secured party/assignee of such
financing or continuation statements, or amendments thereto or assignments
thereof, relative to all or any of the Collateral Loans now existing or
hereafter arising, and such other instruments or notices, as may be necessary or
appropriate for the purposes stated hereinabove. Nothing in this
Section 11.02(d)(i) shall be deemed to relieve the Collateral Servicer or
Borrower of its obligation to protect the interest of the Trustee (for the
benefit of the Secured Parties) in the Collateral, including to file financing
and continuation statements in respect of the Collateral in accordance with
Section 5.01(c) or deemed to require the Administrative Agent or the Trustee to
assume any of the obligations of the Collateral Servicer or the Borrower.

(ii) The Administrative Agent may direct the Trustee to take any action
hereunder in the exercise of its powers under this Agreement and to take any
other incidental action hereunder. With respect to other actions which are
incidental to the actions specifically delegated to the Trustee hereunder, the
Trustee shall not be required to take any such action hereunder, but shall be
required to act or to refrain from acting (and shall be fully protected in
acting or refraining from acting) upon the written direction of the
Administrative Agent; provided that the Trustee shall not be required to take
any action hereunder or under any other Facility Document if the taking of such
action, in the reasonable determination of the Trustee, (x) shall be in
violation of any Applicable Law or contrary to any provisions of this Agreement
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Trustee to liability hereunder or otherwise (unless it has received an indemnity
reasonably satisfactory to it with respect thereto). In the event the Trustee
requests the consent of the Administrative Agent and the Trustee does not
receive a response (either consenting or declining to consent) from the
Administrative Agent within 10 Business Days of its receipt of such request,
then the Administrative Agent shall be deemed to have declined to consent to the
relevant action.

(iii) Except as expressly provided herein, the Trustee shall not be under any
duty or obligation to take any affirmative action to exercise or enforce any
power, right or remedy available to it under this Agreement or any of the
Related Documents (x) unless and until expressly so directed by the
Administrative Agent and provided with indemnity reasonably satisfactory to it
against the costs, expenses and liabilities which may be incurred in complying
with or performing such request or direction or (y) prior to the occurrence of
the Commitment Termination Date (and upon such occurrence, the Trustee shall act
in accordance with the written instructions of the Administrative Agent pursuant
to clause (x)). The Trustee shall not be liable for any action taken, suffered
or omitted by it in accordance with the request or direction of any Secured
Party, to the extent that this Agreement provides such Secured Party has the
right to so direct the Trustee, or the Administrative Agent. The Trustee shall
not be deemed to have notice or knowledge of any matter hereunder, including an
Event of Default, unless a Responsible Officer of the Trustee has knowledge of
such matter or written notice thereof (specifically identifying this Agreement
and stating that it is a notice of an Event of Default) is received by the
Trustee.

Section 11.03 Merger or Consolidation.

Any Person (i) into which the Trustee or Custodian may be merged or
consolidated, (ii) that may result from any merger or consolidation to which the
Trustee or Custodian shall be a party, or (iii) that may succeed to the
properties and assets of the Trustee or Custodian substantially as a whole,
which Person in any of the foregoing cases executes an agreement of assumption
to perform every obligation of the Trustee or Custodian hereunder, shall be the
successor to the Trustee or Custodian under this Agreement without further act
of any of the parties to this Agreement.

Section 11.04 Trustee and Custodian Compensation.

As compensation for its activities hereunder, the Trustee and Custodian shall be
entitled to a fee (the “Trustee Fee”) from the Collateral Servicer in accordance
with the Trustee Fee Letter and as consented to by the Administrative Agent. To
the extent that such Trustee Fee is not paid by the Collateral Servicer, the
Trustee shall be entitled to receive the unpaid balance of its Trustee Fee to
the extent of funds available therefor pursuant to the provision of
Section 9.01. The Trustee’s entitlement to receive the Trustee Fee shall cease
on the earlier to occur of: (i) its removal as Trustee pursuant to Section 11.05
or (ii) the termination of this Agreement.

The Trustee shall be reimbursed for fees and expenses as provided in
Section 13.04. To the extent not paid by the Borrower, such fees and expenses
shall be paid by the Collateral Servicer.

 

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Section 11.05 Trustee Removal.

The Trustee may be removed, with or without cause, by the Administrative Agent
by notice given in writing to the Trustee (the “Trustee Termination Notice”) at
least 15 days prior to such removal; provided that, notwithstanding its receipt
of a Trustee Termination Notice, the Trustee shall continue to act in such
capacity until a successor Trustee has been appointed (with, so long as an Event
of Default has not occurred and is not continuing, the consent of the Borrower,
such consent not to be unreasonably withheld or delayed), has agreed to act as
Trustee hereunder, has made the representations and warranties contained in
Section 4.02, and has received all Related Documents held by the previous
Trustee.

Section 11.06 Limitation on Liability.

(a) The Trustee undertakes to perform only such duties and obligations as are
specifically set forth in this Agreement, it being expressly understood by all
parties hereto that there are no implied duties or obligations of the Trustee
hereunder. Without limiting the generality of the foregoing, the Trustee, except
as expressly set forth herein, shall have no obligation to supervise, verify,
monitor or administer the performance of the Collateral Servicer or the
Borrower. The Trustee may act through its agents, nominees, attorneys and
custodians (each selected with due care) in performing any of its duties and
obligations under this Agreement; provided that the Trustee shall not be
responsible for any misconduct or negligence on the part of any non-affiliated
agent appointed and supervised, or non-affiliated attorney appointed, with due
care by it hereunder. Neither the Trustee nor any of its officers, directors,
employees or agents shall be liable, directly or indirectly, for any damages or
expenses arising out of the services performed under this Agreement other than
damages or expenses that result from the gross negligence or willful misconduct
of it or them.

(b) The Trustee and Custodian shall not be liable for any obligation of the
Collateral Servicer, the Administrative Agent or the Borrower contained in this
Agreement or for any errors of the Collateral Servicer or the Borrower contained
in any computer tape, certificate or other data or document delivered to the
Trustee and Custodian hereunder or on which the Trustee and Custodian must rely
in order to perform its obligations hereunder, and the Secured Parties, the
Administrative Agent and the Trustee and Custodian each agree to look only to
the Collateral Servicer or the Borrower to perform such obligations. The Trustee
shall have no responsibility and shall not be in default hereunder or incur any
liability for any failure, error, malfunction or any delay in carrying out any
of its duties under this Agreement if such failure or delay results from the
Trustee acting in accordance with information prepared or provided by a Person
other than the Trustee or the failure of any such other Person to prepare or
provide such information. The Trustee shall have no responsibility, shall not be
in default and shall incur no liability for (i) any act or failure to act of any
third party, including the Borrower, the Collateral Servicer or the
Administrative Agent, (ii) any inaccuracy or omission in a notice or
communication received by the Trustee or the Custodian from any third party,
(iii) the invalidity or unenforceability of any Collateral under Applicable Law,
(iv) the breach or inaccuracy of any representation or warranty made with
respect to any Collateral, or (v) the acts or omissions of any successor Trustee
or Custodian that is not an affiliate of the Trustee.

 

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(c) The Trustee and Custodian may conclusively rely on and shall be fully
protected in acting upon any certificate (including any Officer’s Certificate of
the Collateral Servicer, the Borrower or the Administrative Agent), instrument,
opinion, notice, letter, telegram or other document delivered to it and that in
good faith it reasonably believes to be genuine and that has been signed by the
proper party or parties. The Trustee and Custodian may rely conclusively on and
shall be fully protected in acting upon (i) the written instructions of any
designated or authorized officer of the Administrative Agent or the Lenders or
(ii) the verbal instructions of the Administrative Agent or the Lenders. The
Trustee and Custodian shall not be liable for any action taken by it in good
faith and reasonably believed by it to be within the discretion or 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) The Trustee may consult counsel satisfactory to it (including, without
limitation, counsel to the Borrower, Collateral Servicer or Administrative
Agent) 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
by it hereunder in good faith and in accordance with the advice or opinion of
such counsel.

(e) The Trustee shall not 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 and in the case of the negligent
performance of its Payment Duties and in the case of its negligent performance
of its duties in taking and retaining custody of the Related Documents.

(f) The Trustee makes no warranty or representation and shall have no
responsibility (except as expressly set forth in this Agreement) as to the
content, enforceability, completeness, validity, sufficiency, value,
genuineness, ownership or transferability of the Collateral, and will not be
required to and will not make any representations as to the validity or value
(except as expressly set forth in this Agreement) of any of the Collateral. The
Trustee shall not be obligated to take any legal or other action hereunder that
might in its judgment involve any expense or liability unless it has been
furnished with an indemnity reasonably satisfactory to it.

(g) The Trustee shall have no duties or responsibilities except such duties and
responsibilities as are specifically set forth in this Agreement and no
covenants or obligations shall be implied in this Agreement against the Trustee.

(h) The Trustee shall not be required to expend or risk its own funds in the
performance of its duties hereunder or to take any action that could in its
judgment cause it to incur any cost, expenses or liability, unless it is
provided indemnity reasonably acceptable to it against any such expenditure,
risk, costs, expense or liability.

(i) It is expressly agreed and acknowledged that the Trustee is not guaranteeing
performance of or assuming any liability for the obligations of the other
parties hereto or any parties to the Collateral.

 

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(j) In case any reasonable question arises as to its duties hereunder, the
Trustee may, prior to the occurrence of an Event of Default or the Commitment
Termination Date, request instructions from the Collateral Servicer and may,
after the occurrence of an Event of Default or the Commitment Termination Date,
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 Servicer or the Administrative Agent, as applicable, except where
it would be grossly negligent to do so. The Trustee shall in all events have no
liability, risk or cost for any action taken pursuant to and in compliance with
the instruction of the Collateral Servicer or the Administrative Agent. In no
event shall the Trustee be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action.

(k) The Trustee shall not be liable for failing to perform or delay in
performing its specified duties hereunder which results from or is caused by a
failure or delay on the part of the Borrower or the Collateral Servicer or
another Person in furnishing necessary, timely and accurate information to the
Trustee.

(l) The Trustee shall be without liability to the Borrower, Collateral Servicer
or any Secured Party for any damage or loss resulting from or caused by events
or circumstances beyond the Trustee’s reasonable control including
nationalization, expropriation, currency restrictions, the interruption,
disruption or suspension by any Authority of any securities market, power,
mechanical, communications or other technological failures or interruptions,
computer viruses or the like, fires, floods, earthquakes or other natural
disasters, civil and military disturbance, acts of war or terrorism, riots,
revolution, acts of God, work stoppages, strikes, national disasters of any
kind, or other similar events or acts; errors by the Borrower, the Collateral
Servicer or any Secured Party in its instructions to the Trustee; or changes in
applicable law, regulation or orders.

(m) Whether or not expressly stated herein or in any other Facility Document,
the Bank in its capacity as Custodian and in all other capacities hereunder and
thereunder shall be entitled to the same rights, protections and immunities as
are afforded to it in its capacity as Trustee.

(n) To the extent required by any applicable law (or pursuant to a voluntary
agreement entered into by the Borrower with the IRS or any other taxing
authority), the Trustee may withhold from any payment to any Lender an amount
equivalent to any applicable withholding tax, except where it would be grossly
negligent to do so. If any payment has been made to any Lender by the Trustee
without the applicable withholding tax being withheld from such payment and the
Trustee has paid over the applicable withholding tax to the IRS or any other tax
authority, or the IRS or any other tax authority asserts a claim that
the Trustee did not properly withhold tax from amounts paid to or for the
account of any Lender because the appropriate form was not delivered or was not
properly executed or because such Lender failed to notify the Trustee of a
change in circumstance which rendered the exemption from, or reduction of,
withholding tax ineffective, such Lender shall indemnify the Trustee fully for
all amounts paid, directly or indirectly, by the Trustee as tax or otherwise and
including any penalties or interest, other than any amounts paid, directly or
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negligence of the Trustee. Each Lender hereby authorizes the Trustee to set off
and apply any and all amounts at any time owing to such Lender under any Note,
Facility Document, or otherwise payable by the Trustee to the Lender from any
other source against any amount due to the Trustee under this paragraph (n).

(o) The Trustee shall not be charged with knowledge or notice of any matter
unless actually known to a Responsible Officer of the Trustee responsible for
the administration of this Agreement, or unless and to the extent written notice
of such matter is received by the Trustee at its address in accordance with
Section 13.02. Any permissive grant of power to the Trustee hereunder shall not
be construed to be a duty to act.

Section 11.07 The Trustee Not to Resign.

The Trustee shall not resign from the obligations and duties hereby imposed on
it except upon (x) the Trustee’s determination that (i) the performance of its
duties hereunder is or becomes impermissible under Applicable Law and (ii) there
is no reasonable action that the Trustee could take to make the performance of
its duties hereunder permissible under Applicable Law or (y) obtaining the prior
written consent of the Collateral Servicer and Administrative Agent prior to an
Event of Default (or the prior written consent of the Administration Agent only
after an Event of Default); provided, however, in the case of any resignation
pursuant to clause (x) or (y) above, the Trustee shall give prompt notice of
such resignation to Moody’s. Any such determination permitting the resignation
of the Trustee shall be evidenced as to clause (i) above by an Opinion of
Counsel to such effect delivered to the Administrative Agent and each Lender. No
such resignation shall become effective until a successor Trustee (which
successor Trustee, so long as an Event of Default has not occurred and is not
continuing, shall be reasonably acceptable to Borrower) shall have assumed the
responsibilities and obligations of the Trustee hereunder and has made the
representations and warranties contained in Section 4.02.

Section 11.08 Release of Documents.

(a) Release for Servicing. From time to time and as appropriate for the
enforcement or servicing of any of the Collateral, each of the Trustee and
Document Custodian is hereby authorized (provided that upon the occurrence and
during the continuance of an Event of Default such authorization may be revoked
in writing by the Administrative Agent), upon written receipt from the
Collateral Servicer of a request for release of documents and receipt in the
form annexed hereto as Exhibit G, to release to the Collateral Servicer the
specified Related Documents or the documents set forth in such request and
receipt to the Collateral Servicer. All documents so released to the Collateral
Servicer shall be held by the Collateral Servicer in trust for the Trustee for
the benefit of the Secured Parties in accordance with the terms of this
Agreement. The Collateral Servicer shall return to the Document Custodian the
Related Documents or other such documents (i) immediately upon the request of
the Administrative Agent, or (ii) when the Collateral Servicer’s need therefor
in connection with such foreclosure or servicing no longer exists, unless the
Collateral Loan shall be liquidated, in which case, upon receipt of an
additional request for release of documents and receipt certifying such
liquidation from the Collateral Servicer to the Trustee and Document Custodian
in the form annexed hereto as Exhibit G, the Collateral Servicer’s request and
receipt submitted pursuant to the first sentence of this subsection shall be
released by the Document Custodian to the Collateral Servicer.

 

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(b) Limitation on Release. The foregoing provision respecting release to the
Collateral Servicer of the Related Documents and documents by the Trustee or
Document Custodian upon request by the Collateral Servicer shall be operative
only to the extent that at any time the Trustee or Document Custodian shall not
have released to the Collateral Servicer active Related Documents (including
those requested) pertaining to more than 15 Collateral Loans at the time being
serviced by the Collateral Servicer under this Agreement. Any additional Related
Documents or documents requested to be released by the Collateral Servicer may
be released only upon written authorization of the Administrative Agent (other
than with respect to the release of Related Documents in connection with
Sections 10.01, and 10.02). The limitations of this paragraph shall not apply to
the release of Related Documents to the Collateral Servicer pursuant to the
immediately succeeding subsection.

(c) Release for Payment. Upon receipt by the Trustee or Document Custodian of
the Collateral Servicer’s request for release of documents and receipt in the
form annexed hereto as Exhibit G (which certification shall include a statement
to the effect that all amounts received in connection with such payment or
repurchase have been credited to the Collection Account as provided in this
Agreement), the Trustee or Document Custodian, as applicable, shall promptly
release the specified Related Documents to the Servicer.

Section 11.09 Return of Related Documents.

The Borrower may, with the prior written consent of the Administrative Agent
(such consent not to be unreasonably withheld and, in any event, not required in
connection with a release of Related Documents pursuant to Section 7.02(b)),
require that the Trustee or Document Custodian, as applicable, return each
Related Document (a) delivered to the Trustee or Document Custodian, as
applicable, in error, (b) as to which the lien on the Related Property has been
released pursuant to Section 7.02, or (c) that is required to be redelivered to
the Borrower in connection with the termination of this Agreement, in each case
by submitting to the Trustee, the Document Custodian and the Administrative
Agent a written request in the form of Exhibit G hereto (signed by the Borrower
and, when required to be signed by the Administrative Agent, by the
Administrative Agent) specifying the Collateral to be so returned and reciting
that the conditions to such release have been met (and specifying the Section or
Sections of this Agreement being relied upon for such release). The Trustee or
Document Custodian, as applicable, shall upon its receipt of each such request
for return executed by the Borrower and the Administrative Agent (when required
to be signed by the Administrative Agent) promptly, but in any event within five
Business Days, return the Related Documents so requested to the Borrower.

Section 11.10 Access to Certain Documentation and Information Regarding the
Collateral; Audits.

The Trustee and Document Custodian shall provide to the Administrative Agent and
each Lender access to the Related Documents and all other documentation
regarding the Collateral including in such cases where the Administrative Agent
and each Lender is required in connection with the enforcement of the rights or
interests of the Secured Parties, or by applicable statutes or regulations, to
review such documentation, such access being afforded without charge but only
(i) upon five Business Days prior written request, (ii) during normal business
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(iii) subject to the Collateral Servicer’s, Trustee’s and Document Custodian’s
normal security and confidentiality procedures. Prior to the Closing Date and
periodically thereafter at the discretion of the Administrative Agent and each
Lender, the Administrative Agent and each Lender may, without duplication of any
such rights under Section 5.01(e), review the Collateral Servicer’s collection
and administration of the Collateral in order to assess compliance by the
Collateral Servicer with the credit and collection policy and the Servicing
Standard, as well as with this Agreement and may conduct an audit of the
Collateral and Related Documents in conjunction with such a review. Such review
shall be reasonable in scope and shall be completed in a reasonable period of
time. Prior to the occurrence of an Event of Default, the Collateral Servicer
shall be required to undergo no more than two such reviews hereunder or under
Section 5.01(e) within any 12-month period, the expenses of which shall be borne
by the Collateral Servicer. On and after the occurrence of an Event of Default,
the Collateral Servicer shall be required to undergo and bear the expense of all
such reviews. Without limiting the foregoing provisions of this Section 11.10,
from time to time on request of the Administrative Agent, the Trustee and
Document Custodian shall permit certified public accountants or other auditors
acceptable to the Administrative Agent to conduct, at the Collateral Servicer’s
expense, a review of the Related Documents and all other documentation regarding
the Collateral; provided that prior to the occurrence of an Event of Default,
the Administrative Agent may require such a review no more than twice within any
12-month period.

Section 11.11 Indemnification.

Subject to the terms of Section 13.21 with respect to any CP Conduit, each of
the Lenders agrees to indemnify and hold each of the Trustee and the Custodian
and the respective officers, directors, employees or agents (each, a
“Trustee/Custodian Indemnified Party”) harmless (to the extent not reimbursed by
or on behalf of the Borrower pursuant to Section 13.04 or otherwise) from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without limitation,
attorneys fees and expenses) or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against a Trustee/Custodian
Indemnified Party 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 a Trustee/Custodian Indemnified Party under this Agreement or any other
Facility Document or any Related Document; provided that, prior to an Event of
Default, no Lender or Lenders shall be liable to a Trustee/Custodian Indemnified
Party for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements (for
purposes hereof, “Liabilities”) unless such Liabilities are imposed on, incurred
by, or asserted against a Trustee/Custodian Indemnified Party as a result of any
action taken, or not taken, by the Trustee or the Custodian, as applicable, at
the direction of such Lender or Lenders, as the case may be, in accordance with
the terms and conditions set forth in this Agreement (it being understood that
the Trustee or the Custodian 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 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 of the other Facility Documents, unless such Lenders shall
have provided to the Trustee or the Custodian, as applicable, 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 11.11 or otherwise).

 

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The rights of the Trustee and the Custodian and obligations of the Lenders under
or pursuant to this Section 11.11 shall survive the termination of this
Agreement, and the earlier removal or resignation of the Trustee hereunder.

ARTICLE XII

THE ADMINISTRATIVE AGENT

Section 12.01 Authorization and Action.

Each Lender hereby irrevocably appoints and authorizes the Administrative 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 Administrative Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto, subject to the
terms hereof. The Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in the other
Facility Documents, or any fiduciary relationship with any Secured Party, and no
implied covenants, functions, responsibilities, duties or obligations or
liabilities on the part of such Administrative Agent shall be read into this
Agreement or any other Facility Document to which such Administrative Agent is a
party (if any) as duties on its part to be performed or observed. The
Administrative Agent shall not have or be construed to have any other duties or
responsibilities in respect of this Agreement and the transactions contemplated
hereby. As to any matters not expressly provided for by this Agreement or the
other Facility Documents, the Administrative Agent shall not 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; provided
that such Administrative Agent shall not be required to take any action which
exposes such Administrative 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 such Administrative Agent’s reasonable discretion, or provide to
a similar effect, it shall not in its instructions (or, by refusing to provide
instruction) to such Administrative Agent withhold its consent or exercise its
discretion in an unreasonable manner.

Section 12.02 Delegation of Duties.

The Administrative 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. The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.

 

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Section 12.03 Administrative Agent’s Reliance, Etc.

(a) Neither the Administrative Agent nor any of its 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 or
willful misconduct. Without limiting the generality of the foregoing, the
Administrative Agent: (i) may consult with legal counsel (including, without
limitation, counsel for the Borrower or the Collateral Servicer or any of their
Affiliates) and independent public accountants and other experts selected by it
and shall not be liable for any action taken 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 ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions of this Agreement,
the other Facility Documents or any Related Documents on the part of the
Borrower or the Collateral Servicer or any other Person or to inspect the
property (including the books and records) of the Borrower or the Collateral
Servicer; (iv) shall not be responsible to any Secured Party or any other Person
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of any Collateral, this Agreement, the other Facility
Documents, any Related Document or any other instrument or document furnished
pursuant hereto or thereto; and (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,
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) believed by it to be genuine and believe by it to be signed or
sent by the proper party or parties. The Administrative Agent shall not have any
liability to the Borrower or any Lender or any other Person for the Borrower’s
or any Lender’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.

(b) The Administrative Agent shall not be liable for the actions of omissions of
the Trustee (including without limitation concerning the application of funds),
or under any duty to monitor or investigate compliance on the part of the
Trustee with the terms or requirements of this Agreement, any Facility Document
or any Related Document, or their duties thereunder. The Administrative 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, without limitation, each Notice of Borrowing received hereunder).
The Administrative Agent shall not 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 without limitation 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 any Lender to
provide, written instruction to exercise such discretion or grant such consent
from any such Lender, as applicable). The Administrative Agent shall not be
liable for any error of judgment made in good faith unless it shall be proven
that such Administrative Agent was grossly negligent in ascertaining the
relevant facts. Nothing herein or in any Facility Documents or Related Documents
shall obligate the Administrative Agent to advance, expend or risk its own
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reasonable judgment may cause it to incur any expense or financial or other
liability for which it is not adequately indemnified. The Administrative Agent
shall not be liable for any indirect, special or consequential damages (included
but not limited to lost profits) whatsoever, even if it has been informed of the
likelihood thereof and regardless of the form of action. The Administrative
Agent shall not be charged with knowledge or notice of any matter unless
actually known to an officer of such Administrative Agent responsible for the
administration of this Agreement, or unless and to the extent written notice of
such matter is received by such Administrative Agent at its address in
accordance with Section 13.02. Any permissive grant of power to the
Administrative Agent hereunder shall not be construed to be a duty to act.
Before acting hereunder, the Administrative Agent shall be entitled to request,
receive and rely upon such certificates and opinions as it may reasonably
determine appropriate with respect to the satisfaction of any specified
circumstances or conditions precedent to such action.

(c) The Administrative Agent shall not be responsible or liable for delays or
failures in performance resulting from acts beyond its control. Such acts shall
include but not be limited to acts of God, strikes, lockouts, riots, acts of
war, epidemics, governmental regulations superimposed after the fact, fire,
communication line failures, computer viruses, power failures, earthquakes or
other disasters.

(d) To the extent required by any applicable law (or pursuant to a voluntary
agreement entered into with the IRS or any other taxing authority),
the Administrative Agent may withhold from any payment to any Lender an amount
equivalent to any applicable withholding tax. If any payment has been made to
any Lender by the Administrative Agent without the applicable withholding tax
being withheld from such payment and the Administrative Agent has paid over the
applicable withholding tax to the IRS or any other tax authority, or the IRS or
any other tax authority asserts a claim that the Administrative Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
because the appropriate form was not delivered or was not properly executed or
because such Lender failed to notify the Administrative Agent of a change in
circumstance which rendered the exemption from, or reduction of, withholding tax
ineffective or for any other reason, such Lender shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as tax or otherwise, including any penalties or interest
and together with all expenses (including legal expenses, allocated internal
costs and out-of-pocket expenses) incurred. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Note, Facility Document, or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (d).

Section 12.04 Indemnification.

Subject to the terms of Section 13.21 with respect to any CP Conduit, each of
the Lenders agrees to indemnify and hold the Administrative Agent harmless (to
the extent not reimbursed by or on behalf of the Borrower pursuant to
Section 13.04 or otherwise) from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, attorneys fees and expenses) or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against the Administrative Agent in any way relating to or
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Facility Document or any Related Document or any action taken or omitted by the
Administrative Agent under this Agreement or any other Facility Document or any
Related Document; provided that no Lender shall be liable to the Administrative
Agent for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Administrative Agent’s gross negligence or willful misconduct.

The rights of the Administrative Agent and obligations of the Lenders under or
pursuant to this Section 12.04 shall survive the termination of this Agreement,
and the earlier removal or resignation of the Administrative Agent hereunder.

Section 12.05 Successor Administrative Agent.

Subject to the terms of this Section 12.05, the Administrative Agent may, upon
thirty days’ notice to the Lenders and the Borrower, resign as Administrative
Agent. If the Administrative Agent shall resign, then the Required Lenders,
during such thirty or ten day period (as applicable), shall appoint a successor
administrative agent. If for any reason a successor administrative agent is not
so appointed and does not accept such appointment during such thirty or ten day
period (as applicable) (the last day of such period, the “Appointment Cut-off
Date”), such Administrative Agent may appoint a successor administrative agent.
The appointment of any successor Administrative 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 (i) an Event of Default shall have occurred
and be continuing, (ii) if such assignee is a Lender or an Affiliate of such
Administrative Agent or any Lender; or (iii) for any reason no successor has
been appointed within 30 days after the relevant Appointment Cut-off Date and
the Borrower has theretofore not entered into an agreement in principle with a
potential successor that would be qualified to act as such Administrative Agent
hereunder. Any resignation of the Administrative Agent shall be effective upon
the appointment of a successor administrative agent pursuant to this
Section 12.05 and the acceptance of such appointment by such successor. After
the effectiveness of any retiring Administrative Agent’s resignation hereunder
as Administrative Agent, the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder and under the other Facility Documents
(but not in its capacity as a Lender, if applicable) and the provisions of this
Article XII and Section 12.05 shall continue in effect for its benefit with
respect to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and under the other Facility
Documents.

 

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ARTICLE XIII

MISCELLANEOUS

Section 13.01 No Waiver; Modifications in Writing.

(a) No failure or delay on the part of any Secured Party exercising any right,
power or remedy hereunder or with respect to the Advances 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, and any consent to any departure by any party to this Agreement from
the terms of any provision of this Agreement, shall be effective only in the
specific instance and for the specific purpose for which given. No notice to or
demand on the Borrower in any case shall entitle the Borrower 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 (i) it is signed by the Borrower and the Required Lenders (or
the Administrative Agent on behalf of the Required Lenders), (ii) it is
consented to by the Collateral Servicer, (iii) if it affects the rights or
obligations of the Originator with respect to any Facility Document, it is
consented to by the Originator, and (iv) notice thereof has been delivered to
the Rating Agency, provided that:

(i) no such amendment, modification, supplement or waiver shall, unless by an
instrument signed by all of the Lenders (or the Administrative Agent on behalf
of all of the Lenders), (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 such payment of principal, (D) reduce the rate at which interest
is payable thereon or any fee is payable hereunder, (E) release all or
substantially all of the Collateral, except as permitted or required hereunder,
(F) alter the terms of Section 9.01 or this Section 13.01(b), or (G) modify in
any manner the number or percentage of the Lenders required to make any
determinations or waive any rights hereunder or to modify any provision hereof;
and

(ii) any amendment, modification, supplement or waiver of Article VIII, Article
XI, Article XII, or of any of the other rights or duties of the Administrative
Agent or Trustee hereunder, shall require the consent of the Administrative
Agent or Trustee, as applicable.

Section 13.02 Notices, Etc.

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 and shall be
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, and shall be deemed to be given for purposes of this Agreement
on the day that such writing is received by the intended recipient thereof in

 

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accordance with the provisions of this Section 13.02. Unless otherwise specified
in a notice sent or delivered in accordance with the foregoing provisions of
this Section 13.02, 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) indicated below,
and, in the case of telephonic instructions or notices, by calling the telephone
number or numbers indicated for such party below:

 

If to the Administrative Agent:   

Natixis, New York Branch

9 West 57th Street, 36th Floor

New York, New York 10019

  

Attention: Yazmin Vasconez

Telephone No.: 212-891-6176

   Facsimile No.: 646-282-2361    Email: agent_group@us.natixis.com

If to the Trustee / Custodian

(other than the Document Custodian)

  

U.S. Bank National Association

Corporate Trust Services

   One Federal Street, Third Floor    Boston, MA 02110    Attention: Seth Frink
   Phone: 617-603-6539    Fax: 866-350-5276    Email: seth.frink@usbank.com If
to the Document Custodian:   

U.S. Bank National Association

Document Custody Services

1719 Range Way

  

Florence, SC 29501

Attention: Steven Garrett

Phone: 843-676-8901

  

Fax: 843-673-0162

Email: steven.garrett@usbank.com

If to the Borrower:   

NewStar Commercial Loan Funding 2012-1 LLC

500 Boylston Street

Suite 1250

  

Boston, MA 02116

Attention: Brian Forde

Phone: 617-848-4373

  

Fax: 617-848-4300

Email: bforde@newstarfin.com

 

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With a copy to the    Collateral Servicer:   

NewStar Financial, Inc.

500 Boylston Street

Suite 1250

  

Boston, MA 02116

Attention: Brian Forde

Phone: 617-848-4373

  

Fax: 617-848-4300

Email: bforde@newstarfin.com

If to the Lender:    Versailles Assets LLC    c/o Global Securitization Services
LLC    68 South Service Road, Suite 120    Melville, NY 11747    Attention:
Andrew Stidd    Telecopy: (631) 587-4700    Telephone: (212) 302-8767    Email:
versailles_transactions@cm.natixis.com If to any other Lender:    As provided in
the Assignment and Acceptance pursuant to which such other Lender becomes a
Lender hereunder. If to Moody’s:   

Moody’s Investors Service, Inc.

7 World Trade Center

250 Greenwich Street

  

New York, New York 10007 United States

Attention: CDO Monitoring Department

Fax: 212-553-0344

   Email: cdomonitoring@moodys.com

Section 13.03 Taxes.

(a) Any and all payments by or on behalf of the Borrower under this Agreement
and the Notes shall be made, in accordance with this Agreement, free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities (including
penalties, interest and expenses) with respect thereto, excluding, income,
franchise and branch profits taxes imposed (i) by the jurisdiction (or any
political subdivision thereof) under the laws of which any 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) by any
jurisdiction by reason of any Secured Party having any other present or former
connection with such jurisdiction (other than a connection arising solely from
entering into, receiving any payment under or enforcing its rights under this
Agreement, the Notes or any other Facility Document) (each an “Excluded Tax” and
any taxes, levies, imposts, deductions, charges, withholdings and liabilities
other than such Excluded Taxes being hereinafter referred to as “Taxes”). If the
Borrower shall be required by law (or by the interpretation or administration
thereof) to deduct any Taxes from or in respect of any sum payable by it
hereunder, under any Note or under any other Facility Document to any Secured
Party, (i) the sum payable by the Borrower shall be increased as may be
necessary so that after

 

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making all required deductions (including deductions applicable to additional
sums payable under this Section 13.03) such Secured Party receives an amount
equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions, and (iii) the Borrower shall
timely pay the full amount deducted to the relevant Authority in accordance with
Applicable Law.

(b) In addition, the Borrower agrees to timely pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made by the Borrower hereunder, under the
Notes or under any other Facility Document or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the Notes or
under any other Facility Document (hereinafter referred to as “Other Taxes”).

(c) The Borrower agrees to indemnify each of the Secured Parties for the full
amount of Taxes or Other Taxes (including any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section 13.03) paid
by any Secured Party in respect of the Borrower, whether or not such Taxes or
Other Taxes were correctly or legally imposed or asserted. Payments by the
Borrower pursuant to this indemnification shall be made promptly following the
date the Secured Party makes written demand therefor, which demand shall be
accompanied by a certificate describing in reasonable detail the basis thereof.
Such certificate shall be presumed to be correct absent manifest error.

(d) The Borrower shall not be required to indemnify any Secured Party, or pay
any additional amounts to any Secured Party, in respect of United States Federal
withholding tax or United States federal backup withholding tax to the extent
that (i) the obligation to pay such additional amounts would not have arisen but
for a failure by such Secured Party to comply with paragraphs (g) or
(h) below, except to extent that the relevant Lender’s assignor or transferor
(if any) was entitled at the time of assignment or transfer to receive an
increased amount under paragraph (c) with respect to such Tax or Other Taxes;
provided that, so long as the relevant Lender has complied with paragraphs
(g) or (h) below, any Taxes resulting from any change in law (or interpretation,
administration or application of any law or treaty or any published practice or
published concession of any relevant taxing authority) after the date such
relevant Lender becomes a Lender shall be compensated pursuant to paragraph
(c) above or (ii) such amount is imposed under FATCA.

(e) Promptly after the date of any payment of Taxes or Other Taxes, the Borrower
will furnish to the Administrative Agent the original or a certified copy of a
receipt issued by the relevant Authority evidencing payment thereof (or other
evidence of payment as may be reasonably satisfactory to such Administrative
Agent).

(f) If any payment is made by or on behalf of the Borrower to or for the account
of any Secured Party after deduction for or on account of any Taxes or Other
Taxes, and an indemnity payment or additional amounts are paid by the Borrower
pursuant to this Section 13.03, then, if such Secured Party in its sole
discretion, exercised in good faith, determines that it has received a refund of
such Taxes or Other Taxes, such Secured Party shall, to the extent that it can
do so without prejudice to the retention of the amount of such refund, reimburse
to the Borrower such amount of any refund received (net of out-of-pocket
expenses

 

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incurred) as such Secured Party shall determine in its reasonable discretion to
be attributable to the relevant 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 refund to such Secured Party.
Notwithstanding anything to the contrary in this paragraph (f), in no event will
the Secured Party be required to pay any amount to an indemnifying party
pursuant to this paragraph (f) 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 indemnification payments or additional amounts giving rise
to such refund had never been paid.

(g) Each Secured Party that is a U.S. person as that term is defined in
Section 7701(a)(30) of the Code (a “U.S. Person”) hereby agrees that it shall,
no later than the Closing Date or, in the case of a Secured Party that becomes a
party hereto after the Closing Date or pursuant to Section 13.06, the date upon
which such Secured Party becomes a party hereto, deliver to the Administrative
Agent and the Borrower, if applicable, two accurate, complete and signed
originals of U.S. Internal Revenue Service Form W-9 or successor form,
certifying that such Secured Party is a U.S. Person under the Code and on the
date of delivery thereof entitled to an exemption from United States backup
withholding tax or, after any change after the date it became a Lender under
this Agreement in (or in the interpretation, administration or application of)
any law or treaty or any published practice or published concession of any
relevant taxing authority, the greatest amount of such exemption as is then
available to be claimed by such Lender. Each Secured Party that is not a U.S.
Person under the Code (a “Non-U.S. Lender”) shall deliver, no later than the
Closing Date or, in the case of a Secured Party that becomes a party hereto
after the Closing date or pursuant to Section 13.06, the date upon which such
Secured Party becomes a party hereto, to the Administrative Agent and the
Borrower two properly completed and duly executed originals of either
U.S. Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY or any subsequent
versions thereof or successors thereto or other applicable forms prescribed by
the IRS, in each case, claiming complete exemption from, U.S. Federal
withholding tax (other than any tax imposed under FATCA) with respect to
payments hereunder or, after any change after the date it became a Lender under
this Agreement in (or in the interpretation, administration or application of)
any law or treaty or any published practice or published concession of any
relevant taxing authority, the greatest amount of such exemption as is then
available to be claimed by such Lender. In addition, in the case of a
Non-U.S. Lender claiming exemption from U.S. Federal withholding tax under
Section 871(h) or 881(c) of the Code, such Non-U.S. Lender hereby represents,
and will provide a certification, that such Non-U.S. Lender is not a bank for
purposes of Section 881(c) of the Internal Revenue Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue
Code) of the Borrower and is not a controlled foreign corporation related to the
Borrower (within the meaning of Section 864(d)(4) of the Code), and such
Non-U.S. Lender agrees that it shall promptly notify the Administrative Agent
and the Borrower in the event any such representation is no longer accurate.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement. In addition, each Non-U.S. Lender and U.S.
Lender shall deliver such forms as promptly as practicable after receipt of a
written request therefor from the Administrative Agent or the Borrower (but only
if such Non-U.S. Lender is legally able to deliver such forms). Each Lender
agrees that when it is aware that a change in circumstances has rendered any
previous delivered documentation pursuant to this paragraph (g) obsolete or
inaccurate, it shall notify the Borrower and the Administrative Agent in writing
and promptly deliver to the Borrower and Administrative Agent a properly
completed

 

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and executed documentation as may be required in order to confirm or establish
the entitlement to a continued exemption from or reduction in Tax, if that
Lender continues to be so entitled to such exemption or reduction.

(h) If any Lender requires the Borrower to pay any additional amount to any
Secured Party or any taxing Authority for the account of any Lender or to
indemnify a Secured Party pursuant to this Section 13.03, 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
Lender determines, in its sole discretion, exercised in good faith, that such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 13.03 in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.

(i) If a payment made to a Lender under any Note or other Facility Document
would be subject to United States 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 Administrative
Agent (at such time or times reasonably requested by the Borrower or the
Administrative Agent) such documentation reasonably requested by the Borrower or
the Administrative Agent as may be necessary for the Borrower or the
Administrative Agent to comply with their obligations under FATCA and to
determine either that such Lender has complied with such Lender’s obligations
under FATCA or the amount to deduct and withhold from such payment. Solely for
purposes of this clause (i), “FATCA” shall include any amendments made to FATCA
after the date of this Agreement.

(j) Nothing in this Section 13.03 shall be construed to require the 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.

Section 13.04 Costs and Expenses; Indemnification.

(a) The Borrower agrees to promptly pay on demand upon receipt of reasonably
detailed invoices with respect thereto all reasonable and documented
out-of-pocket costs and expenses of the Administrative Agent and the Trustee (in
all its capacities, including as Custodian) in connection with the preparation,
review, negotiation, reproduction, execution and delivery of this Agreement and
the other Facility Documents, including the reasonable fees and disbursements of
one outside counsel and one local counsel in each relevant jurisdiction for each
of the Administrative Agent and the Trustee (in all its capacities hereunder),
UCC filing fees and all other related fees and expenses in connection therewith;
and in connection with the administration and any waiver, consent, modification,
amendment or similar agreement in respect of this Agreement, the Notes or any
other Facility Document and advising the Administrative Agent and the Trustee
(in all its capacities hereunder) as to their respective rights, remedies and
responsibilities. The Borrower agrees to promptly pay on demand all 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 the
reasonable and documented fees and disbursements of one outside counsel and one
local counsel in each relevant jurisdiction for each of the Administrative Agent
and the Trustee in connection therewith.

 

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(b) The Borrower agrees to indemnify and hold harmless each Secured Party 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 claims, damages, losses,
liabilities, obligations, expenses, penalties, actions, suits, judgments and
disbursements of any kind or nature whatsoever (including the reasonable and
documented fees and disbursements of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, 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) (collectively, the
“Liabilities”), 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 contained in any Facility Document; (iii) any representation or
warranty made or deemed made by the Borrower 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 to
comply with any Applicable Law or contractual obligation binding upon it;
(v) any failure to vest, or delay in vesting, in the Secured Parties a
first-priority perfected security interest in all of the Collateral free and
clear of all Liens; (vi) any action or omission, not expressly authorized by the
Facility Documents or otherwise permitted or required by the Facility Documents,
by the Borrower or any Affiliate of the Borrower which has the effect of
reducing or impairing the Collateral or the rights of the Administrative Agent,
the Trustee or the Secured Parties with respect thereto; (vii) any Default or
Event of Default and (viii) any failure of the Concentration Account Bank to
remit any amounts held in a Concentration Account pursuant to the instructions
of the Collateral Servicer or the Trustee (to the extent such Person is entitled
to give such instructions in accordance with the terms hereof and of the
Intercreditor Agreement); except to the extent any such Liability is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted primarily from such Indemnified Party’s gross negligence or willful
misconduct; provided that any payment hereunder which relates to taxes, levies,
imposes, deductions, charges and withholdings, and all liabilities (including
penalties, interest and expenses) with respect thereto, or additional sums
described in Section 13.03, shall be covered by Section 13.03 and shall not be
covered by this Section 13.04(b).

 

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Section 13.05 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 13.06 Assignability; Participation; Register.

(a) Each Lender may assign to an assignee all or a portion of its rights and
obligations under this Agreement (including all or a portion of its outstanding
Advances or interests therein owned by it, together with ratable portions of its
Commitment); provided that:

(i) if such assignment occurs prior to the Commitment Termination Date, such
assignee satisfies the Rating Criteria at the time of the assignment (except in
the case of an assignment to the Administrative Agent);

(ii) such assignment is exempt from the registration requirements of the
Securities Act and any applicable state securities laws or is made in accordance
with the Securities Act and such laws, and is made only to (A) either an
“accredited investor” as defined in paragraphs (a)(1), (2), (3), or (7) of Rule
501 of Regulation D under the Securities Act (or any entity in which all of the
equity owners are entities described within such paragraphs) or to a “qualified
institutional buyer” as defined in Rule 144A under the Securities Act and (B) a
“qualified purchaser” for purposes of the Investment Company Act; and

(iii) the Administrative Agent and the Borrower have consented thereto (which
Borrower consent shall not be unreasonably withheld or delayed and shall not be
required after the occurrence and during the continuation of an Event of
Default); provided, that such consent of the Borrower shall not be required in
the case of an assignment to a CP Conduit where Natixis, or an Affiliate of
Natixis, is providing liquidity support.

The parties to each such assignment shall execute and deliver to the
Administrative Agent and the Borrower an Assignment and Acceptance in the form
of Exhibit D hereto and send notification of such assignment to Moody’s.
Notwithstanding any other provision of this Section 13.06, 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.

(b) The Borrower may not assign any of its rights hereunder or any interest
herein or delegate any of its obligations hereunder without the prior written
consent of the Administrative Agent, the Trustee and the Lenders which can be
withheld for any reason in their sole and absolute discretion.

 

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(c) Any Lender may, without the consent of any Person, sell participations to
one or more banks or other entities (a “Participant”) in all or a portion of
such Lender’s rights and obligations under this Agreement; 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 Administrative Agent,
the Trustee 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 13.06(c), Section 13.09 and Section 13.03. In the event that any Lender
sells participations in any portion of its rights and obligations hereunder:

(i) the agreement pursuant to which such Lender sells such 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 amendment, modification,
supplement or waiver that requires the consent of all of the Lenders.
Sections 2.09, 2.10 and 13.03 shall apply to each Participant as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (a) of
this Section; provided that no Participant shall be entitled to any amount under
Section 2.09, 2.10 or 13.03 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; and

(ii) 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). Any participation of such Advance may be effected only by
the registration of such participation on the Participant Register. The
Participant Register shall be available for inspection by the Borrower and the
Collateral Servicer at any reasonable time and from time to time upon reasonable
prior notice.

(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 13.02 or such other address as the Administrative Agent shall
designate in writing to the Lenders, a copy of this Agreement and each signature
page hereto and each Assignment and Acceptance delivered to and accepted by it
and a register (the “Register”) for the recordation of the names and addresses
of the Lenders and the aggregate outstanding principal amount of the outstanding
Advances 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 Collateral Servicer, the
Administrative Agent, the Trustee and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for

 

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all purposes of this Agreement. The Register shall be available for inspection
by the Borrower, the Collateral Servicer 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, if any,
shall expressly so provide). The Administrative Agent shall update and furnish
to the Trustee, the Borrower and the Collateral Servicer from time to time at
the request of the Trustee, the Borrower or the Collateral Servicer an updated
version of Schedule 1 reflecting the then-current allocation of the Commitments.

Section 13.07 Governing Law.

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK.

Section 13.08 Severability of Provisions.

Any provision of this Agreement 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 13.09 Confidentiality.

Each Secured Party and each Participant agrees to keep confidential all
information provided to it under any Facility Document with respect to the
Borrower, the Collateral Servicer, their respective Affiliates, the Collateral,
the Related Documents, the Obligors or any other information furnished to any
Secured Party pursuant to this Agreement or any other Facility Document
(collectively, the “Borrower Information”); provided that nothing herein shall
prevent any Secured Party from disclosing any Borrower Information (a) to any
Secured Party or any Affiliate of a Secured Party, any of their respective
Affiliates, employees, directors, agents, attorneys, accountants and other
professional advisors (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, (c) upon the request or demand of any Authority
with jurisdiction over any Secured Party or any of its Affiliates or any Secured
Party Representative, (d) in response to any order of any court or other
Authority or as may otherwise be required to be disclosed pursuant to any
Applicable Law, (e) 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, (f) any nationally recognized
rating agency that requires access to information about a Secured Party’s
investment portfolio in connection with ratings issued with respect to such
Secured Party, it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Borrower

 

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Information and instructed to keep such Borrower Information confidential,
(g) in connection with the exercise of any remedy hereunder or under any other
Facility Document (including, without limitation, under Article VII) or (h) in
connection with any suit, action, proceeding or investigation (whether in law or
in equity or pursuant to arbitration) involving any of the Facility Documents.

Section 13.10 Merger.

This Agreement, the Notes and the other Facility Documents executed by the
Borrower, the Collateral Servicer, the Administrative Agent, the Trustee or the
Lenders taken as a whole incorporate the entire agreement between the parties
thereto concerning the subject matter thereof and such Facility Documents
supersede any prior agreements among the parties relating to the subject matter
thereof.

Section 13.11 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 2.04(f), 2.09, 2.10, 2.12, the penultimate paragraph of 7.03, 7.06(b),
11.11, 12.04, 13.03, 13.04, 13.09, 13.16 and 13.19 and this Section 13.11 shall
survive the termination of this Agreement in whole or in part and the payment in
full of the principal of and interest on the Advances.

Section 13.12 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,
the courts of the United States 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 13.12(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) 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 13.02 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 or shall limit the right to sue in
any other jurisdiction or court; and

 

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(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.

Section 13.13 Waiver of Jury Trial.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL
BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY
OTHER FACILITY DOCUMENT OR FOR ANY COUNTERCLAIM THEREIN OR RELATING THERETO.

Section 13.14 Service of Process.

The Borrower hereby irrevocably designates, appoints and empowers The
Corporation Trust Company, (the “Process Agent”), with an office on the date
hereof at 1209 Orange Street, Wilmington, Delaware 19801, as its designee,
appointee and agent to receive, accept and acknowledge for and on its behalf,
and its properties, assets and revenues, service for any and all legal process,
summons, notices and documents which may be served in any action, suit or
proceeding brought in the courts listed in Section 13.12 in connection with or
arising out of this Agreement or any other Facility Document. If for any reason
the Process Agent shall cease to act as such, the Borrower agrees to promptly
designate new designees, appointees and agents in New York, New York on the
terms and for the purposes of this Section 13.14 satisfactory to the
Administrative Agent, which new designees, appointees and agents shall
thereafter be deemed to be the Process Agent for all purposes of this Agreement
and the other Facility Documents. The Borrower further hereby irrevocably
consents and agrees to the service of any and all legal process, summonses,
notices and documents out of any of the aforesaid courts in any such action,
suit or proceeding by serving a copy thereof upon the Process Agent (whether or
not the appointment of the Process Agent shall for any reason prove to be
ineffective or the Process Agent shall accept or acknowledge such service) or by
mailing copies thereof by regular or overnight mail, postage prepaid, to the
Process Agent at its address specified above in this Section 13.14. The Borrower
agrees that the failure of the Process Agent to give any notice of such service
to it shall not impair or affect in any way the validity of such service or any
judgment rendered in any action or proceeding based thereon. Nothing herein
shall in any way be deemed to limit the ability of any Secured Party to serve
any such legal process, summons, notices and documents in any other manner
permitted by Applicable Law or to obtain jurisdiction over the Borrower or bring
actions, suits or proceedings against the Borrower in such other jurisdictions,
and in a manner, as may be permitted by Applicable Law.

Section 13.15 [Reserved].

Section 13.16 [Reserved].

 

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Section 13.17 PATRIOT Act Notice.

The Trustee and each Lender hereby notifies the Borrower that pursuant to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into
law on October 26, 2001)) (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 the
Lenders 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 by any Lender or the Trustee
in order to assist such Lender in maintaining compliance with the PATRIOT Act.

Section 13.18 Legal Holidays.

In the event that the date of any Payment Date, date of prepayment or Final
Maturity Date shall not be a Business Day, then notwithstanding any other
provision of this Agreement or any 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 Payment Date, 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 13.19 Non-Petition.

Each of the Administrative Agent, the Trustee and each Lender 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 proceedings or other
proceedings 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 the Advances and the termination of
all Commitments; provided that nothing in this Section 13.19 shall preclude, or
be deemed to stop, the Administrative Agent, the Trustee and each Lender
(i) 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 plus one day, in (a) any case or proceeding voluntarily filed or
commenced by the Borrower or (b) any involuntary insolvency proceeding filed or
commenced against the Borrower by a Person other than any such Administrative
Agent, Trustee or Lender, or (ii) 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. The provisions of this Section 13.19 shall survive the termination of this
Agreement.

Section 13.20 Custodianship; Delivery of Collateral Loans and Eligible
Investments.

(a) The Collateral Servicer, on behalf of the Borrower, shall deliver or cause
to be delivered to U.S. Bank, as custodian (in such capacity, the “Custodian”),
as agent for and on behalf of the Trustee, and which is so appointed hereby by
the Borrower and the Trustee, on behalf of the Secured Parties, all Collateral
in accordance with the definition of the term

 

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“Deliver”. The Custodian (other than the Document Custodian) shall at all times
be a Securities Intermediary. Any successor custodian shall be a state or
national bank or trust company that has capital and surplus of at least
$200,000,000, has a Moody’s rating of at least “Baa1” and is a Securities
Intermediary. The Trustee or the Custodian, as applicable, shall hold (i) all
Eligible Investments, Cash and other investments purchased in accordance with
this Agreement and (ii) any other property (other than general intangibles) of
the Borrower otherwise Delivered to the Trustee or the Custodian, as applicable,
by or on behalf of the Borrower, in the relevant Covered Account established and
maintained pursuant to Article VIII; as to which in each case the Trustee, the
Borrower and the Administrative Agent shall have entered into an agreement with
the Custodian substantially in the form of Exhibit E; provided, however, that
the Related Documents shall be held by the Custodian at its Document Custodian
Facilities.

(b) Each time that the Collateral Servicer on behalf of the Borrower directs or
causes the acquisition of any Collateral Loan, Eligible Investment, or other
investment, the Borrower shall, if the Collateral Loan, Eligible Investment, or
other investment is required to be, but has not already been, transferred to the
relevant Covered Account or for which the Related Documents have not been
Delivered to the Custodian, cause the Collateral Loan, Eligible Investment, or
other investment to be Delivered to the Custodian to be held in the Custodial
Account (or, in the case of any such investment that is not a Collateral Loan,
in the Covered Account in which the funds used to purchase the investment are
held in accordance with Article X) for the benefit of the Trustee in accordance
with this Agreement. The security interest of the Trustee in the funds or other
property used in connection with the acquisition shall, immediately and without
further action on the part of the Trustee, be released. The security interest of
the Trustee shall nevertheless come into existence and continue in the
Collateral Loan, Eligible Investment, or other investment so acquired, including
all interests of the Borrower in any contracts related to and proceeds of such
Collateral Loan, Eligible Investment, or other investment.

(c) The Custodian hereby agrees to accept the Collateral Delivered to it as set
forth in Sections 13.20(a) and (b), to hold the Collateral in safekeeping in a
separate account or accounts, or clearly segregated from other assets held by
the Custodian in the case of Collateral Loans evidenced by Related Documents or
other physical assets, and to invest, release and transfer the same only in
accordance with the written instructions of the Trustee or as otherwise provided
herein or in any other Facility Document. Interest, dividends and any other
proceeds received by the Custodian with respect to the Collateral shall be
distributed pursuant to the written instructions of the Trustee; provided that
the Custodian may from time to time deduct from the Custodial Account amounts
owed to it by the Borrower pursuant to the provisions of this Agreement.

(d) The Custodian shall be obligated only for the performance of such duties as
are specifically set forth in this Agreement and the Account Control Agreement
and may rely and shall be protected in acting or refraining from acting on any
written notice, request, waiver, consent or instrument believed by it to be
genuine and to have been signed or presented by the proper party or parties. The
Custodian shall have no duty to determine or inquire into the happening or
occurrence of any event or contingency, and it is agreed that its duties
hereunder are purely ministerial in nature. The Custodian may consult with and
obtain advice from legal counsel as to any provision hereof or its duties
hereunder. The Custodian shall not be liable for

 

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any action taken or omitted by it in good faith and believed by it to be
authorized hereby or taken or omitted by it in accordance with the advice of its
counsel, except, in each case, to the extent such action or omission constitutes
gross negligence or willful misconduct by the Custodian.

(e) Notwithstanding anything herein to the contrary, delivery of the Collateral
Loans acquired by the Borrower which constitute Noteless Loans or Participation
Interests 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 (i) in the case of a Noteless
Loan, a copy of the loan register with respect to such Noteless Loan evidencing
the 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 effective assignment agreement in
favor of the Borrower as assignee, and (ii) in the case of a Participation
Interest, a copy of the related participation agreement. 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 any such Related Documents and other documents delivered to it, and
any related instrument, security, credit agreement, assignment agreement and/or
other agreements or documents, if any (collectively, “Financing Documents”),
that may be delivered to it. The Custodian, in the absence of gross negligence,
bad faith or willful misconduct, may assume the genuineness of any such
Financing Document it may receive and the genuineness and due authority of any
signatures appearing thereon, and shall be entitled to assume that each such
Financing Document it may receive is what it purports to be. 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.

Section 13.21 Special Provisions Applicable to CP Conduits.

Each of the parties hereby covenants and agrees that:

(a) It shall not institute against, or encourage, cooperate with or join any
other Person in instituting against, any CP Conduit any bankruptcy, examination,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under bankruptcy or similar law until at least one year and one day
after the latest maturing commercial paper notes issued by (x) any limited
purpose entity providing funding to any CP Conduit or (y) such CP Conduit, is
paid in full.

(b) It 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 Conduit against and on account of the
obligations and liabilities of such CP Conduit to such party under this
Agreement.

(c) Notwithstanding any provisions contained in this Agreement or the other
Facility Documents to the contrary, the Commitment of any CP Conduit and any
other amounts

 

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payable by such CP Conduit under this Agreement and the other Facility Documents
shall be without recourse to any officer, director, employee, stockholder,
member, agent or manager of such CP Conduit and shall be solely the corporate
obligations of such CP Conduit.

(d) Notwithstanding any provisions contained in this Agreement or the other
Facility Documents to the contrary, no CP Conduit shall, or shall be obligated
to, fund or pay any amount pursuant to its Commitment or any other obligation
under this Agreement unless such CP Conduit has received funds which may be used
to make such funding or other payment and which funds are not required to repay
commercial paper notes issued by a conduit providing funding to such CP Conduit,
or finance activities of, such CP Conduit when due, and after giving effect to
such payment, either (i) such CP Conduit (or, if applicable, the limited purpose
entity which finances the CP Conduit) could issue commercial paper to refinance
all of such CP Conduit’s outstanding commercial paper (assuming such outstanding
commercial paper matured at such time) in accordance with the program documents
governing its commercial paper program or (ii) all of the commercial paper of
such CP Conduit (or, if applicable, the limited purpose entity which finances
such CP Conduit) is paid in full. Any amount which such CP Conduit does not
advance pursuant to the operation of this paragraph shall not constitute a claim
(as defined in Section 101 of the Bankruptcy Code) against or obligation of such
CP Conduit for any such insufficiency.

(e) Notwithstanding any provisions contained in this Agreement, a CP Conduit
may, from time to time, with prior or concurrent notice to the Borrower and the
Administrative Agent, in one transaction or a series of transactions, assign all
or a portion of its rights and obligations under this Agreement and the other
Loan Documents (including all or a portion of its Commitment and the Loans at
the time owing to it) to a Conduit Assignee. Upon and to the extent of such
assignment by the CP Conduit to a Conduit Assignee, (i) such Conduit Assignee
shall become a CP Conduit, (ii) such Conduit Assignee (as Lender) shall be the
owner of the assigned portion of the rights and obligations under this Agreement
and the other Facility Documents (iii) such Conduit Assignee, any multi-seller
commercial paper conduit that issues commercial paper, the proceeds of which are
loaned to or are otherwise the CP Conduit’s source of funding the CP Conduit’s
acquisition or maintenance of its funding obligations hereunder, if such Conduit
Assignee does not itself issue commercial paper, and other related parties shall
have the benefit of all the rights and protections provided to the CP Conduit
and in the other Facility Documents (including any limitation on recourse
against such Conduit Assignee or related parties, any agreement not to file or
join in the filing of a petition to commence an insolvency proceeding against
such Conduit Assignee, and the right to assign to another Conduit Assignee as
provided in this paragraph), (iv) such Conduit Assignee shall assume all (or the
assigned or assumed portion) of the CP Conduit’s obligations, if any, hereunder
or any other Facility Document, and the Conduit Lender shall be released from
such obligations, in each case to the extent of such assignment, and the
obligations of the CP Conduit and such Conduit Assignee shall be several and not
joint, (v) all distributions in respect of the obligations hereunder assigned
shall be made to the Administrative Agent, on behalf of the CP Conduit and such
Conduit Assignee on a pro rata basis according to their respective interests,
and (vi) if requested by the Administrative Agent with respect to the Conduit
Assignee, the parties will execute and deliver such further agreements and
documents and take such other actions as such Administrative Agent or
Administrator may reasonably request to evidence and give effect to the
foregoing.

 

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(f) Notwithstanding any provisions contained in this Agreement or the other
Facility Documents to the contrary, but subject in all respects to Section 13.09
hereof, each CP Conduit may disclose to its respective support providers, any
Affiliates of any such party and Authorities having jurisdiction over such CP
Conduit, such support provider, any Affiliate of such party and any rating
agency that issues a rating on such CP Conduit’s commercial paper notes, the
identities of (and other material information regarding) the Borrower, any other
obligor on, or in respect of, an Advance made by such CP Conduit, collateral for
such an Advance, its monthly transaction surveillance reports, any of the terms
and provisions of the Facility Documents that it may deem necessary or advisable
and such other information as may be requested by a rating agency.

(g) The provisions of Sections 13.21(a), (c) and (d) shall survive the
termination of this Agreement.

(h) No amendment or waiver under this Agreement or any other Facility Document
that would affect a CP Conduit, a support provider of a CP Conduit or an Advance
made by such CP Conduit in a manner that is disproportionate and adverse
relative to other Lenders shall be effective without the consent of such CP
Conduit.

(i) No pledge and/or collateral assignment by any CP Conduit to a support
provider under a support facility of an interest in the rights of such CP
Conduit in any Advance made by such CP Conduit and the Obligations shall
constitute an assignment and/or assumption of such CP Conduit’s obligation under
this Agreement, such obligations in all cases remaining with such CP Conduit.
Moreover, any such pledge and/or collateral assignment of the rights of such CP
Conduit 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 Conduit’s right hereunder notwithstanding anything
to the contrary in this Agreement.

(j) Each CP Conduit may act hereunder by and through its investment manager or
its administrator.

(k) This Section 13.21 shall not be amended or waived without the written
consent of each CP Conduit.

[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]

 

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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.

 

NEWSTAR COMMERCIAL LOAN FUNDING 2012-1 LLC,

as Borrower

By: NewStar Financial, Inc., as its Designated Manager By:  

/s/ JOHN J. FRISHKOPF

 

Name: John J. Frishkopf

Title: Treasurer

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

1

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U.S. BANK NATIONAL ASSOCIATION, as Trustee and Calculation Agent By:  

/s/ SETH FRINK

  Name: Seth Frink   Title: Assistant Vice President

U.S. BANK NATIONAL ASSOCIATION,

as Custodian

By:  

/s/ SETH FRINK

  Name: Seth Frink   Title: Assistant Vice President

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

2

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VERSAILLES ASSETS LLC, as Lender By:  

/s/ BERNARD J. ANGELO

  Name: Bernard J. Angelo   Title: Senior Vice President NATIXIS, NEW YORK
BRANCH, as Administrative Agent By:  

/s/ HENRY J. SANDLASS

  Name: Henry J. Sandlass   Title: Managing Director By:  

/s/ MICHAEL E. HOPSON

  Name: Michael E. Hopson   Title: Managing Director

 

3

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SCHEDULE 1

Initial Commitments And Percentages

 

Name of Lender

   Commitment      Percentage  

Versailles Assets LLC

   $ 150,000,000         100.00 %    

 

 

    

 

 

 

TOTAL

   $ 150,000,000         100.00 % 

 

1

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SCHEDULE 2

Scope of Monthly Report and Payment Date Report 1

Part 1: Monthly Reporting Scope

 

  1. Loan Tape Attributes:

 

  a. Issuer Name

 

  b. Asset Name

 

  c. Commitment

 

  d. Outstanding

 

  e. Exposure

 

  f. Moody’s Recovery Rate

 

  g. Moody’s Rating (excluding Credit Estimates and ratings determined in
accordance with Schedule 8(d) under the title “Moody’s Default Probability
Rating”)

 

  h. Moody’s Industry

 

  i. Country

 

  j. Lien Position

 

  k. LIBOR Spread

 

  l. LIBOR Floor

 

  m. Prime Spread

 

  n. Prime Floor

 

  o. Float/Fixed

 

  p. Payment Frequency

 

  q. Weighted Avg Life

 

  r. Participations

 

  s. Loan Type

 

  t. Maturity Date

 

  u. Purchase Price

 

  v. Original Global Tranche Size

 

  w. TTM EBITDA

 

  x. TTM Leverage

 

  y. Uses RiskCalc for Moody’s Rating (Yes or No)

 

  z. If uses RiskCalc for Moody’s Rating, date of most recent update for
RiskCalc

 

  aa. If a Credit Estimate, then the date it was mostly recently refreshed

 

  2. Concentration Limitation Tests:

 

  a. Fixed Rate Obligations

 

  b. Single Obligor

 

  c. Revolvers and Delayed Draw

 

  d. Moody’s Industry

 

  e. Caa Ratings

 

1 

Monthly Reports to be delivered each month (including months during which there
is a Payment Date) and Payment Date Reports to contain all necessary figures and
calculations relating to the waterfall and balances, and changes in balances, in
the accounts of the Borrower.

 

2

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  f. Participations

 

  g. Letters of Credit

 

  3. Coverage Tests

 

  a. Overcollateralization Test

 

  b. Interest Coverage Test

 

  4. Collateral Quality Tests

 

  a. Moody’s Diversity Test

 

  b. Minimum Floating Spread Test Computed without LIBOR Floors

 

  c. Minimum Floating Spread Test Computed with LIBOR Floors

 

  d. Minimum Weighted Avg Coupon Test

 

  e. Maximum Wtd. Avg. Life Test

 

  f. Maximum Moody’s WARF Test

 

  g. Minimum Wtd. Avg. Moody’s Recovery Rate

 

  5. Collateral Loans acquired, substituted or sold

 

  a. Facility Name

 

  b. Trade/Settlement Dates

 

  c. Reason for sale/ transaction motivation (e.g. Discretionary Sale, Defaulted
Loan, Credit Risk)

 

  d. Purchaser or seller is an affiliate of the Borrower

 

  e. Par amount

 

  f. Price

 

  g. Proceeds

 

  h. Accrued interest

 

3

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Part 2: Payment Date Reporting Scope

 

  1. Payment Date Reporting Scope will include all items listed in Part 1 of
Schedule 2 hereof

 

  2. Data on all Covered Accounts, including beginning and ending balance

 

  3. Payment Date waterfall list application of all Interest Proceeds and
Principal Proceeds pursuant to Section 9.01(a)

 

1

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SCHEDULE 3

Initial Collateral Loans

Portfolio Guidelines:

 

Number of Collateral Loans

     24   

Number of Obligors

     23   

Number of Industries

     11   

Recovery Rate

     52.1 % 

WARF

     3061   

Diversity Score

     14.3   

Spread over LIBOR

     5.45 % 

Principal Balance

   $ 63,953,734   

1st Lien Senior Secured

     100% of the portfolio   

 

1

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SCHEDULE 4

Diversity Score Calculation

The Diversity Score is calculated as follows:

 

(a) An “Issuer Par Amount” is calculated for each issuer of a Collateral Loan,
and is equal to the Aggregate Principal Balance of all Collateral Loans issued
by that issuer and all affiliates.

 

(b) An “Average Par Amount” is calculated by summing the Issuer Par Amounts for
all issuers, and dividing by the number of issuers.

 

(c) An “Equivalent Unit Score” is calculated for each issuer, and is equal to
the lesser of (x) one and (y) the Issuer Par Amount for such issuer divided by
the Average Par Amount.

 

(d) An “Aggregate Industry Equivalent Unit Score” is then calculated for each of
the Moody’s industry classification groups, shown on Schedule 6, and is equal to
the sum of the Equivalent Unit Scores for each issuer in such industry
classification group.

 

(e) An “Industry Diversity Score” is then established for each Moody’s industry
classification group, shown on Schedule 6, by reference to the following table
for the related Aggregate Industry Equivalent Unit Score; provided that if any
Aggregate Industry Equivalent Unit Score falls between any two such scores, the
applicable Industry Diversity Score will be the lower of the two Industry
Diversity Scores:

 

Aggregate

Industry

Equivalent

Unit Score

 

Industry
Diversity

Score

 

Aggregate

Industry
Equivalent

Unit Score

 

Industry

Diversity

Score

 

Aggregate

Industry
Equivalent

Unit Score

 

Industry

Diversity

Score

 

Aggregate

Industry
Equivalent

Unit Score

 

Industry

Diversity

Score

0.0000   0.0000   5.0500   2.7000   10.1500   4.0200   15.2500   4.5300 0.0500  
0.1000   5.1500   2.7333   10.2500   4.0300   15.3500   4.5400 0.1500   0.2000  
5.2500   2.7667   10.3500   4.0400   15.4500   4.5500 0.2500   0.3000   5.3500  
2.8000   10.4500   4.0500   15.5500   4.5600 0.3500   0.4000   5.4500   2.8333  
10.5500   4.0600   15.6500   4.5700 0.4500   0.5000   5.5500   2.8667   10.6500
  4.0700   15.7500   4.5800 0.5500   0.6000   5.6500   2.9000   10.7500   4.0800
  15.8500   4.5900 0.6500   0.7000   5.7500   2.9333   10.8500   4.0900  
15.9500   4.6000 0.7500   0.8000   5.8500   2.9667   10.9500   4.1000   16.0500
  4.6100 0.8500   0.9000   5.9500   3.0000   11.0500   4.1100   16.1500   4.6200
0.9500   1.0000   6.0500   3.0250   11.1500   4.1200   16.2500   4.6300 1.0500  
1.0500   6.1500   3.0500   11.2500   4.1300   16.3500   4.6400 1.1500   1.1000  
6.2500   3.0750   11.3500   4.1400   16.4500   4.6500 1.2500   1.1500   6.3500  
3.1000   11.4500   4.1500   16.5500   4.6600 1.3500   1.2000   6.4500   3.1250  
11.5500   4.1600   16.6500   4.6700 1.4500   1.2500   6.5500   3.1500   11.6500
  4.1700   16.7500   4.6800

 

1

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Aggregate

Industry

Equivalent

Unit Score

 

Industry
Diversity

Score

 

Aggregate

Industry
Equivalent

Unit Score

 

Industry

Diversity

Score

 

Aggregate

Industry
Equivalent

Unit Score

 

Industry

Diversity

Score

 

Aggregate

Industry
Equivalent

Unit Score

 

Industry

Diversity

Score

1.5500   1.3000   6.6500   3.1750   11.7500   4.1800   16.8500   4.6900 1.6500  
1.3500   6.7500   3.2000   11.8500   4.1900   16.9500   4.7000 1.7500   1.4000  
6.8500   3.2250   11.9500   4.2000   17.0500   4.7100 1.8500   1.4500   6.9500  
3.2500   12.0500   4.2100   17.1500   4.7200 1.9500   1.5000   7.0500   3.2750  
12.1500   4.2200   17.2500   4.7300 2.0500   1.5500   7.1500   3.3000   12.2500
  4.2300   17.3500   4.7400 2.1500   1.6000   7.2500   3.3250   12.3500   4.2400
  17.4500   4.7500 2.2500   1.6500   7.3500   3.3500   12.4500   4.2500  
17.5500   4.7600 2.3500   1.7000   7.4500   3.3750   12.5500   4.2600   17.6500
  4.7700 2.4500   1.7500   7.5500   3.4000   12.6500   4.2700   17.7500   4.7800
2.5500   1.8000   7.6500   3.4250   12.7500   4.2800   17.8500   4.7900 2.6500  
1.8500   7.7500   3.4500   12.8500   4.2900   17.9500   4.8000 2.7500   1.9000  
7.8500   3.4750   12.9500   4.3000   18.0500   4.8100 2.8500   1.9500   7.9500  
3.5000   13.0500   4.3100   18.1500   4.8200 2.9500   2.0000   8.0500   3.5250  
13.1500   4.3200   18.2500   4.8300 3.0500   2.0333   8.1500   3.5500   13.2500
  4.3300   18.3500   4.8400 3.1500   2.0667   8.2500   3.5750   13.3500   4.3400
  18.4500   4.8500 3.2500   2.1000   8.3500   3.6000   13.4500   4.3500  
18.5500   4.8600 3.3500   2.1333   8.4500   3.6250   13.5500   4.3600   18.6500
  4.8700 3.4500   2.1667   8.5500   3.6500   13.6500   4.3700   18.7500   4.8800
3.5500   2.2000   8.6500   3.6750   13.7500   4.3800   18.8500   4.8900 3.6500  
2.2333   8.7500   3.7000   13.8500   4.3900   18.9500   4.9000 3.7500   2.2667  
8.8500   3.7250   13.9500   4.4000   19.0500   4.9100 3.8500   2.3000   8.9500  
3.7500   14.0500   4.4100   19.1500   4.9200 3.9500   2.3333   9.0500   3.7750  
14.1500   4.4200   19.2500   4.9300 4.0500   2.3667   9.1500   3.8000   14.2500
  4.4300   19.3500   4.9400 4.1500   2.4000   9.2500   3.8250   14.3500   4.4400
  19.4500   4.9500 4.2500   2.4333   9.3500   3.8500   14.4500   4.4500  
19.5500   4.9600 4.3500   2.4667   9.4500   3.8750   14.5500   4.4600   19.6500
  4.9700 4.4500   2.5000   9.5500   3.9000   14.6500   4.4700   19.7500   4.9800
4.5500   2.5333   9.6500   3.9250   14.7500   4.4800   19.8500   4.9900 4.6500  
2.5667   9.7500   3.9500   14.8500   4.4900   19.9500   5.0000 4.7500   2.6000  
9.8500   3.9750   14.9500   4.5000     4.8500   2.6333   9.9500   4.0000  
15.0500   4.5100     4.9500   2.6667   10.0500   4.0100   15.1500   4.5200    

 

(f) The Diversity Score is then calculated by summing each of the Industry
Diversity Scores for each Moody’s industry classification group shown on
Schedule 6.

 

(g) For purposes of calculating the Diversity Score, affiliated issuers in the
same Industry are deemed to be a single issuer except as otherwise agreed to by
Moody’s.

 

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SCHEDULE 5

[Intentionally Omitted]

 

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SCHEDULE 6

Moody’s Industry Classification Group List

 

CORP - Aerospace & Defense

     1   

CORP - Automotive

     2   

CORP - Banking, Finance, Insurance & Real Estate

     3   

CORP - Beverage, Food & Tobacco

     4   

CORP - Capital Equipment

     5   

CORP - Chemicals, Plastics, & Rubber

     6   

CORP - Construction & Building

     7   

CORP - Consumer goods: Durable

     8   

CORP - Consumer goods: Non-durable

     9   

CORP - Containers, Packaging & Glass

     10   

CORP - Energy: Electricity

     11   

CORP - Energy: Oil & Gas

     12   

CORP - Environmental Industries

     13   

CORP - Forest Products & Paper

     14   

CORP - Healthcare & Pharmaceuticals

     15   

CORP - High Tech Industries

     16   

CORP - Hotel, Gaming & Leisure

     17   

CORP - Media: Advertising, Printing & Publishing

     18   

CORP - Media: Broadcasting & Subscription

     19   

CORP - Media: Diversified & Production

     20   

CORP - Metals & Mining

     21   

CORP - Retail

     22   

CORP - Services: Business

     23   

CORP - Services: Consumer

     24   

CORP - Sovereign & Public Finance

     25   

CORP - Telecommunications

     26   

CORP - Transportation: Cargo

     27   

CORP - Transportation: Consumer

     28   

CORP - Utilities: Electric

     29   

CORP - Utilities: Oil & Gas

     30   

CORP - Utilities: Water

     31   

CORP - Wholesale

     32   

 

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SCHEDULE 7

LIBOR

With respect to each Interest Accrual Period, LIBOR will be determined by the
Calculation Agent in accordance with the following provisions:

(i) LIBOR for such Interest Accrual Period shall equal the offered rate, as
determined by the Calculation Agent, for Dollar deposits in Europe of the
Designated Maturity which appears on Reuters Page 3750 (or such other page as
may replace such Reuters Page 3750 for the purpose of displaying comparable
rates) as reported by Bloomberg Financial Markets Commodities News (or, in the
event that Bloomberg Financial Markets Commodities News ceases to report LIBOR
for Dollar deposits, by another recognized financial reporting service) or the
BBAM screen on the Bloomberg LP terminal (the “Screen Page”) as of 11:00 a.m.
(London time) on the applicable LIBOR Determination Date. “LIBOR Determination
Date” means, with respect to any Interest Accrual Period, the second London
Banking Day prior to the first day of such Interest Accrual Period.

(ii) If, on any LIBOR Determination Date, such rate does not appear on the
Screen Page, the Calculation Agent shall determine the arithmetic mean of the
offered quotations of the Reference Banks to prime banks in the London interbank
market for U.S. Dollar deposits in Europe of the Designated Maturity (except
that in the case where such Interest Accrual Period shall commence on a day that
is not a LIBOR Business Day, for a term of the Designated Maturity commencing on
the next following LIBOR Business Day), by reference to requests for quotations
as of approximately 11:00 a.m. (London time) on such LIBOR Determination Date
made by the Calculation Agent to the Reference Banks. If, on any LIBOR
Determination Date, at least two of the Reference Banks provide such quotations,
LIBOR shall equal such arithmetic mean of such quotations. If, on any LIBOR
Determination Date, fewer than two Reference Banks provide such quotations,
LIBOR shall be deemed to be the arithmetic mean of the offered quotations that
leading banks in New York City selected by the Calculation Agent (after
consultation with the Borrower) are quoting on the relevant LIBOR Determination
Date for Dollar deposits in Europe for the term of such Interest Accrual Period
(except that in the case where such Interest Accrual Period shall commence on a
day that is not a LIBOR Business Day, for a term of the Designated Maturity
commencing on the next following LIBOR Business Day), to the principal London
offices of leading banks in the London interbank market.

(iii) In respect of any Interest Accrual Period having a Designated Maturity
other than three months, LIBOR shall be determined through the use of straight
line interpolation by reference to two rates calculated in accordance with
clauses (i) and (ii) above, one of which shall be determined as if the maturity
of the Dollar deposits referred to therein were the period of time for which
rates are available next shorter than the Interest Accrual Period and the other
of which shall be determined as if such maturity were the period of time for
which rates are available next longer than the Interest Accrual Period; provided
that, if an Interest Accrual Period is less than or equal to seven days,

 

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then LIBOR shall be determined by reference to a rate calculated in accordance
with clauses (i) and (ii) above as if the maturity of the Dollar deposits
referred to therein were a period of time equal to seven days.

(iv) If the Calculation Agent is unable to determine a rate in accordance with
at least one of the procedures described above, LIBOR with respect to such
Interest Accrual Period shall be the arithmetic mean of the Base Rate for each
day during such Interest Accrual Period.

For purposes of clauses (i), (iii) and (iv) above, all percentages resulting
from such calculations shall be rounded, if necessary, to the nearest one
hundred thousandth of a percentage point. For the purposes of clause (ii) above,
all percentages resulting from such calculations shall be rounded, if necessary,
to the nearest one thirty second of a percentage point.

As used herein:

“Designated Maturity” means, in respect of any Interest Accrual Period, the
length of such Interest Accrual Period.

“LIBOR Business Day” means a day on which commercial banks and foreign exchange
markets settle payments in Dollars in New York and London.

“Reference Banks” means four major banks in the London interbank market selected
by the Calculation Agent.

 

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SCHEDULE 8

Moody’s Rating Definitions

MOODY’S DEFAULT PROBABILITY RATING

(a) With respect to a Collateral Loan that is a Moody’s Senior Secured Loan or
Participation Interest in a Moody’s Senior Secured Loan, if the obligor of such
Collateral Loan has a corporate family rating by Moody’s, then such corporate
family rating;

(b) With respect to a Collateral Loan that is a Moody’s Senior Secured Loan or
Participation Interest in a Moody’s Senior Secured Loan, if not determined
pursuant to clause (a) above, if such Collateral Loan (A) is publicly rated by
Moody’s, such public rating, or (B) is not publicly rated by Moody’s but for
which a rating or rating estimate has been assigned by Moody’s upon the request
of the Borrower or the Collateral Servicer, such rating or the corporate family
rating estimate, as applicable;

(c) With respect to a Collateral Loan, if not determined pursuant to clause
(a) or (b) above, (A) if the obligor of such Collateral Loan has one or more
senior unsecured obligations publicly rated by Moody’s, then the Moody’s public
rating on any such obligation (or, if such Collateral Loan is a Moody’s Senior
Secured Loan, the Moody’s rating that is one subcategory higher than the Moody’s
public rating on any such senior unsecured obligation) as selected by the
Collateral Servicer in its sole discretion or, if no such rating is available,
(B) if such Collateral Loan is publicly rated by Moody’s, such public rating or,
if no such rating is available, (C) if a rating or rating estimate has been
assigned to such Collateral Loan by Moody’s upon the request of the Issuer, the
Collateral Servicer or an affiliate of the Collateral Servicer, such rating or,
in the case of a rating estimate, the applicable rating estimate for such
obligation or (D) if such Collateral Loan is a DIP Loan, the Moody’s Derived
Rating set forth in clause (a) in the definition thereof;

(d) With respect to a Collateral Loan, if not determined pursuant to clause (a),
(b) or (c) above, the rating may, in the Collateral Servicer’s sole discretion,
be determined in accordance with Moody’s RiskCalc as set forth Schedule 9 hereto
as of the date of acquisition of such Collateral Loan, subject to the
satisfaction of the qualifications set forth therein; provided that such
Collateral Loans represent not more than 20 % of the Total Capitalization;

(e) With respect to a Collateral Loan, if not determined pursuant to clause (a),
(b), (c) or (d) above, the Moody’s Derived Rating.

For purposes of calculating a Moody’s Default Probability Rating in connection
with a Moody’s Rating Factor, each applicable rating on credit watch by Moody’s
with negative implication at the time of calculation will be treated as having
been downgraded by two rating subcategories. For purposes of calculating a
Moody’s Default Probability Rating in connection with a Moody’s Rating Factor,
each applicable rating with a negative outlook by Moody’s at the time of
calculation will be treated as having been downgraded by one rating subcategory.

For purposes of calculating a Moody’s Default Probability Rating in connection
with a Moody’s Rating Factor, each applicable rating on credit watch by Moody’s
with positive implication at the

 

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time of calculation will be treated as having been upgraded by one rating
subcategory. For purposes of calculating a Moody’s Default Probability Rating in
connection with a Moody’s Rating Factor, each applicable rating with a positive
outlook by Moody’s at the time of calculation will not be treated as having been
upgraded by any rating subcategory.

MOODY’S RATING

(a) With respect to a Collateral Loan that (A) is publicly rated by Moody’s,
such public rating, or (B) is not publicly rated by Moody’s but for which a
rating or rating estimate has been assigned by Moody’s upon the request of the
Borrower or the Collateral Servicer, such rating or, in the case of a rating
estimate, the applicable rating estimate for such obligation.

(b) With respect to a Collateral Loan that is a Moody’s Senior Secured Loan or
Participation Interest in a Moody’s Senior Secured Loan (if not determined
pursuant to clause (a) above), if the obligor of such Collateral Loan has a
corporate family rating by Moody’s, then such corporate family rating.

(c) With respect to a Collateral Loan, if not determined pursuant to clause
(a) or (b) above, if the obligor of such Collateral Loan has one or more senior
unsecured obligations publicly rated by Moody’s, then the Moody’s public rating
on any such obligation (or, if such Collateral Loan is a Moody’s Senior Secured
Loan, the Moody’s rating that is one subcategory higher than the Moody’s public
rating on any such senior unsecured obligation) as selected by the Collateral
Servicer in its sole discretion.

(d) With respect to a Collateral Loan, if not determined pursuant to clause (a),
(b) or (c) above, the Moody’s Derived Rating.

For purposes of calculating a Moody’s Rating in connection with a Moody’s Rating
Factor, each applicable rating on credit watch by Moody’s with negative
implication at the time of calculation will be treated as having been downgraded
by two rating subcategories. For purposes of calculating a Moody’s Rating in
connection with a Moody’s Rating Factor, each applicable rating with a negative
outlook by Moody’s at the time of calculation will be treated as having been
downgraded by one rating subcategory.

For purposes of calculating a Moody’s Rating in connection with a Moody’s Rating
Factor, each applicable rating on credit watch by Moody’s with positive
implication at the time of calculation will be treated as having been upgraded
by one rating subcategory. For purposes of calculating a Moody’s Rating in
connection with a Moody’s Rating Factor, each applicable rating with a positive
outlook by Moody’s at the time of calculation will not be treated as having been
upgraded by any rating subcategory.

 

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MOODY’S DERIVED RATING

With respect to a Collateral Loan whose Moody’s Rating or Moody’s Default
Probability Rating cannot otherwise be determined pursuant to the definitions
thereof, such Moody’s Rating or Moody’s Default Probability Rating shall be
determined as set forth below.

 

  (a) With respect to any DIP Loan, one subcategory below the facility rating
(whether public or private) of such DIP Loan rated by Moody’s.

 

  (b) If not determined pursuant to clause (a) above, if the obligor of such
Collateral Loan has a long-term issuer rating by Moody’s, then such long-term
issuer rating.

 

  (c) If not determined pursuant to clause (a) or (b) above, if another
obligation of the obligor is rated by Moody’s, then by adjusting the rating of
the related Moody’s rated obligations of the related obligor by the number of
rating sub-categories according to the table below:

 

Obligation Category of Rated Obligation

   Rating of
Rated Obligation    Number of Subcategories
Relative to Rated
Obligation Rating

Senior secured obligation

   greater than or equal to B2    -1

Senior secured obligation

   less than B2    -2

Subordinated obligation

   greater than or equal to B3    +1

Subordinated obligation

   less than B3    0

 

  (d) If not determined pursuant to clause (a), (b) or (c) above, if the obligor
of such Collateral Loan has a corporate family rating by Moody’s, then one
subcategory below such corporate family rating.

 

  (e) If not determined pursuant to clause (a), (b), (c) or (d) above, then if
such Collateral Loan is not rated by Moody’s and no other security or obligation
of the issuer of such Collateral Loan is rated by Moody’s, and if Moody’s has
been requested by the Borrower, the Collateral Servicer or the issuer of such
Collateral Loan to assign a rating or rating estimate with respect to such
Collateral Loan but such rating or rating estimate has not been received,
pending receipt of such estimate, the Moody’s Rating or Moody’s Default
Probability Rating of such Collateral Loan shall be either “B3” if the
Collateral Servicer certifies to the Trustee that the Collateral Servicer
believes that such estimate will be at least “B3” and if the Aggregate Principal
Balance of Collateral Loans determined pursuant to this clause (e) does not
exceed 5% of the Principal Collateralization Amount of all Collateral Loans or
otherwise, “Caa1”.

For purposes of calculating a Moody’s Derived Rating in connection with a
Moody’s Rating Factor, each applicable rating on credit watch by Moody’s with
negative implication at the time of calculation will be treated as having been
downgraded by two rating subcategories. For purposes of calculating a Moody’s
Derived Rating in connection with a Moody’s Rating Factor, each applicable
rating with a negative outlook by Moody’s at the time of calculation will be
treated as having been upgraded or downgraded by one rating subcategory.

 

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For purposes of calculating a Moody’s Derived Rating in connection with a
Moody’s Rating Factor, each applicable rating on credit watch by Moody’s with
positive implication at the time of calculation will be treated as having been
upgraded by one rating subcategory. For purposes of calculating a Moody’s
Derived Rating in connection with a Moody’s Rating Factor, each applicable
rating with a positive outlook by Moody’s at the time of calculation will not be
treated as having been upgraded by any rating subcategory.

MOODY’S SENIOR SECURED LOAN

 

  (a) A loan that:

(i) is not (and cannot by its terms become) subordinate in right of payment to
any other debt obligation of the Obligor of the loan;

(ii) (x) is secured by a valid first priority perfected security interest or
lien in, to or on specified collateral securing the Obligor’s obligations under
the loan and (y) such specified collateral does not consist entirely of equity
securities or common stock; provided that any loan that would be considered a
Moody’s Senior Secured Loan but for clause (y) above shall be considered a
Moody’s Senior Secured Loan if it is a loan made to a parent entity and as to
which the Collateral Servicer determines in good faith that the value of the
common stock of the subsidiary (or other equity interests in the
subsidiary) securing such loan at or about the time of acquisition of such loan
by the Issuer has a value that is at least equal to the outstanding principal
balance of such loan and the outstanding principal balances of any other
obligations of such parent entity that are pari passu with such loan, which
value may include, among other things, the enterprise value of such subsidiary
of such parent entity; and

(iii) the value of the collateral securing the loan together with other
attributes of the Obligor (including, without limitation, its general financial
condition, ability to generate cash flow available for debt service and other
demands for that cash flow) is adequate (in the commercially reasonable judgment
of the Collateral Servicer) to repay the loan in accordance with its terms and
to repay all other loans of equal seniority secured by a first lien or security
interest in the same collateral; or

 

  (b) a loan that:

(i) is not (and cannot by its terms become) subordinate in right of payment to
any other debt obligation of the Obligor of the loan, except that such loan can
be subordinate with respect to the liquidation of such obligor or the collateral
for such loan;

(ii) with respect to such liquidation, is secured by a valid perfected security
interest or lien that is not a first priority in, to or on specified collateral
securing the Obligor’s obligations under the loan;

(iii) the value of the collateral securing the loan together with other
attributes of the Obligor (including, without limitation, its general financial
condition, ability to

 

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generate cash flow available for debt service and other demands for that cash
flow) is adequate (in the commercially reasonable judgment of the Collateral
Servicer) to repay the loan in accordance with its terms and to repay all other
loans of equal or higher seniority secured in the same collateral; and

(iv) (x) has a Moody’s facility rating and the obligor of such loan has a
Moody’s corporate family rating and (y) such Moody’s facility rating is not
lower than such Moody’s corporate family rating; and

 

  (c) the loan is not:

(i) a DIP Loan; or

(ii) a loan for which the security interest or lien (or the validity or
effectiveness thereof) in substantially all of its collateral attaches, becomes
effective, or otherwise “springs” into existence after the origination thereof.

 

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SCHEDULE 9

MOODY’S RISKCALC CALCULATION

1. Defined Terms. The following terms shall be used in this Schedule 9 with the
meanings provided below.

“.EDF” means, with respect to any Loan, the lowest 5-year expected default
frequency for such Loan as determined by running the current version Moody’s
RiskCalc in both the Financial Statement Only (“FSO”) and the Credit Cycle
Adjusted (“CAA”) modes. In respect of the CAA mode, Moody’s RiskCalc will be run
for both the current period and the five years prior.

“Moody’s Industries” means any one of the Moody’s industrial classification
groups as published by Moody’s from time to time.

“Pre-Qualifying Conditions” means, with respect to any Loan, conditions that
will be satisfied if the obligor with respect to the applicable Loan (the
“Obligor”) satisfies the following criteria:

 

  (a) the independent accountants of such Obligor shall have issued an
unqualified audit opinion with respect to the most recent fiscal year financial
statements, including no explanatory paragraph addressing “going concern” or
other issues;

 

  (b) the Obligor’s EBITDA is equal to or greater than $5,000,000;

 

  (c) the Obligor’s annual sales are equal to or greater than $10,000,000;

 

  (d) the Obligor’s book assets are equal to or greater than $10,000,000;

 

  (e) the Obligor represents not more than 4.0% of the Aggregate Principal
Amount of all Collateral Debt Obligations that are Loans;

 

  (f) the Obligor is a private company with no public rating from Moody’s;

 

  (g) for the current and prior fiscal year, such Obligor’s:

 

  (i) EBIT/interest expense ratio is greater than 1.0:1.0 and 1.25:1.00 with
respect to retail (adjusted for rent expense);

 

  (ii) debt/EBITDA ratio is less than 6.0:1.0, provided, however, that the
debt/EBITDA ratio is less than 8.0:1.0 for any Loans with respect to the
following Moody’s Industries: (A) Telecommunications (Moody’s industrial
classification group #29), (B) Printing and Publishing (Moody’s industrial
classification group #26) or (C) Broadcasting and Entertainment (Moody’s
industrial classification group #33);

 

1

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  (h) no greater than 25% of the company’s revenue is generated from any one
customer of the Obligor;

 

  (i) the Obligor is a for-profit operating company in any one of the Moody’s
Industries with the exception of (i) Buildings and Real Estate (Moody’s
industrial classification group US291538 116788-0044 Page 17 #5), (ii) Finance
(Moody’s industrial classification group #14), and (iii) Insurance (Moody’s
industrial classification group #20); and

 

  (j) over the most recent three-month period the Obligor shall (i) not have
modified or waived a financial covenant and (ii) not have modified or waived any
underlying terms of the obligation.

2. The Collateral Servicer shall calculate the .EDF for each of the Loans to be
rated pursuant to this Schedule 9. Upon utilizing this Schedule 9 for a Loan,
the Collateral Servicer shall also provide Moody’s with the .EDF and the
information necessary to calculate such .EDF. Moody’s shall have the right (in
its sole discretion) to (i) amend or modify any of the information utilized to
calculate the .EDF and recalculate the .EDF based upon such revised information,
in which case such .EDF shall be determined using the table in paragraph 3 below
in order to determine the applicable Moody’s Default Probability Rating, or
(ii) have a Moody’s credit analyst provide a credit estimate for any Loan rated
pursuant to this Schedule 9, in which case such credit estimate provided by such
credit analyst shall be the applicable Moody’s Default Probability Rating.

3. As of each date of determination specified in clause (f) of the definition of
“Moody’s Default Probability Rating”, the Moody’s Default Probability Rating for
each Loan that satisfies the Pre-Qualifying Conditions shall be the lower of
(i) the Collateral Servicer’s internal rating or (ii) the rating based on the
.EDF for such Loan, in accordance with the table below:

 

Lowest .EDF

  

Moody’s Default Probability Rating

less than or equal to .baa    Ba3 .ba1    B1 .ba2, .ba3 or .b1    B2 .b2 or .b3
   B3 .caa    Caa1

provided, however, that the Moody’s Default Probability Rating determined
pursuant to the table above will be reduced by an additional one-half rating
subcategory for Loans originated in connection with leveraged buyout
transactions.

 

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4. As of each date of determination specified in clause (f) of the definition of
“Moody’s Default Probability Rating”, the Moody’s Recovery Rate for each Loan
that meets the Pre-Qualifying Conditions shall be the lower of (i) the
Collateral Servicer’s internal recovery rate or (ii) the recovery rate as
determined in accordance with the table below:

 

Type of Loan

  

Moody’s Recovery Rate

senior secured, first priority, first lien
and first out    50% all other loans    25%

provided, however, that Moody’s shall have the right (in its sole discretion) to
issue a recovery rate assigned by one of its credit analysts, in which case such
recovery rate provided by such credit analyst shall be the applicable Moody’s
Recovery Rate.

 

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SCHEDULE 10

LOCATION OF RELATED DOCUMENTS

U.S. Bank National Association

Document Custody Services

1719 Range Way

Florence, SC 29501

Attention: Steven Garrett

 

1

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EXHIBIT A

[FORM OF NOTE]

 

$                                ,     

FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to
SAILORLAUNCH & CO., as nominee of State Street Bank, as custodian for Deutsche
Bank Trust Company Americas, as Collateral Trustee for Versailles Assets LLC,
and other parties (the “Lender”) and its registered assigns on the Final
Maturity Date (as defined in the Revolving Credit Agreement hereinafter referred
to) the principal sum of [DOLLAR AMOUNT] Dollars (or such lesser amount as shall
equal the aggregate unpaid principal amount of the Advances made by the Lender
to the Borrower under the Revolving Credit Agreement), in immediately available
funds and in lawful money of the United States, and to pay interest on the
unpaid principal amount of each such Advance, in like funds and money, from the
Borrowing Date thereof until the principal amount thereof shall have been paid
in full, at the rates per annum and on the dates provided in the Revolving
Credit Agreement. Capitalized terms used but not otherwise defined herein shall
have the respective meanings assigned to such terms in the Revolving Credit
Agreement.

This promissory note is a Note referred to in the Revolving Credit and Security
Agreement dated as of February 16, 2012 (as from time to time amended, the
“Revolving Credit Agreement”) among the Borrower, as borrower, the Lender, as
lender, the other lenders from time to time parties thereto, Natixis, New York
Branch, as administrative agent and U.S. Bank National Association, as trustee.
The date and principal amount of each Advance (and stated interest thereon) made
to the Borrower and of each repayment of principal thereon shall be recorded by
the Lender or its designee on Schedule I attached to this Note, and the
aggregate unpaid principal amount shown on such schedule shall be prima facie
evidence of the principal amount owing and unpaid on the Advances made by the
Lender. The failure to record or any error in recording any such amount on such
schedule shall not, however, limit or otherwise affect the obligations of the
Borrower hereunder or under the Revolving Credit Agreement to repay the
principal amount of the Advances together with all interest accrued thereon.

Except as permitted by Section 13.06 of the Revolving Credit Agreement, this
Note may not be participated by the Lender to any other Person. Without limiting
the generality of the foregoing, this Note may be participated in whole or in
part only by registration of such participation on the Participant Register.

Except as permitted by Section 13.06 of the Revolving Credit Agreement, this
Note may not be assigned by the Lender to any other Person. Without limiting the
generality of the foregoing, this Note may be assigned or sold in whole or in
part only by registration of such assignment or sale on the Register.

[Remainder of Page Intentionally Left Blank]

 

1

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THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

 

NEWSTAR COMMERCIAL LOAN FUNDING 2012-1 LLC By: NewStar Financial, Inc., as its
Designated Manager By:  

 

  Name:   Title:

 

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SCHEDULE I

This Note evidences Advances made by VERSAILLES ASSETS LLC, (the “Lender”) to
NEWSTAR COMMERCIAL LOAN FUNDING 2012-1 LLC (the “Borrower”) under the Revolving
Credit and Security Agreement dated as of February 16, 2012 among the Borrower,
as borrower, the Lender, as lender, the other lenders from time to time parties
thereto, Natixis, New York Branch, as administrative agent, and U.S. Bank
National Association, as trustee, in the principal amounts and on the dates set
forth below, subject to the payments and prepayments of principal set forth
below:

 

DATE

   PRINCIPAL
AMOUNT
ADVANCED    PRINCIPAL
AMOUNT PAID
OR PREPAID    PRINCIPAL
BALANCE
OUTSTANDING    NOTATION BY                        

 

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EXHIBIT B

[FORM OF NOTICE OF BORROWING]

[Date]

Natixis, New York Branch,

as Administrative Agent

9 West 57th Street

36th Floor

New York, New York 10019

The Lenders party to the Revolving

Credit Agreement referred to below

NOTICE OF BORROWING

This Notice of Borrowing is made pursuant to Section 2.02 of that certain
Revolving Credit and Security Agreement dated as of February 16, 2012 (as the
same may from time to time be amended, supplemented, waived or modified, the
“Revolving Credit Agreement”) among NewStar Commercial Loan Funding 2012-1 LLC,
as borrower (the “Borrower”), the Lenders from time to time parties thereto
(collectively, the “Lenders”), Natixis, New York Branch, as administrative agent
(the “Administrative Agent”), and U.S. Bank National Association, as trustee.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings assigned to such terms in the Revolving Credit Agreement.

 

1. The Borrower hereby requests that on                 ,      (the “Borrowing
Date”) it receive Borrowings under the Revolving Credit Agreement in an
aggregate principal amount of                      Dollars ($            ) (the
“Requested Amount”).

 

2. The Borrower hereby gives notice of its request for Advances in the aggregate
principal amount equal to the Requested Amount to the Lenders and the
Administrative Agent pursuant to Section 2.02 of the Revolving Credit Agreement
and requests the Lenders to remit, or cause to be remitted, the proceeds thereof
to the Principal Collection Subaccount in its respective Percentage of the
Requested Amount.

 

3. The Borrower certifies that immediately after giving effect to the proposed
Borrowing on the Borrowing Date each of the applicable conditions precedent set
forth in Section 3.02 of the Credit Agreement is satisfied, including:

 

  (1) in the case of the initial Borrowing under the Revolving Credit Agreement,
the conditions precedent set forth in Section 3.01 shall have been fully
satisfied on or prior to the Borrowing Date referred to above;

 

  (2) the Lenders and the Administrative Agent shall have received a copy of
this Notice of Borrowing with respect to such Advance delivered in accordance
with Section 2.02 of the Revolving Credit Agreement;

 

1

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  (3) immediately after the making of the Advance requested herein on the
Borrowing Date, the aggregate outstanding principal amount of the Advances plus
the Net Aggregate Expense Amount shall not exceed the Total Commitment as in
effect on such Borrowing Date;

 

  [(4) immediately after the making of such Advance on the Borrowing Date, each
Coverage Test shall be satisfied;]1

 

  [(5) each of the representations and warranties of the Borrower contained in
Article IV of the Revolving Credit Agreement and the other Facility Documents is
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 are true and correct in
all material respects as of such earlier date);]2

 

  (6) no Event of Default described in Sections 6.01(e) or (f) of the Revolving
Credit Agreement shall have occurred and be continuing at the time of the making
of such Advance or shall result upon the making of such Advance;

 

  [(7) no other Default or Event of Default shall have occurred and be
continuing at the time of the making of the Advance or shall result upon the
making of such Advance; and]3

 

  [(8) the provisions of Section 10.02 have been satisfied in connection with
any acquisition of additional Collateral Loans with the proceeds of the
applicable Advance.]4

WITNESS my hand on this      day of                 ,     .

 

NEWSTAR COMMERCIAL LOAN FUNDING 2012-1 LLC,

as Borrower

By: NewStar Financial, Inc., as its Designated Manager By:  

 

  Name:   Title:

 

1  Paragraph (4) may be omitted if, and only if, not required under
Section 3.02.

2  Paragraph (5) may be omitted if, and only if, not required under
Section 3.02.

3  Paragraph (7) may be omitted if, and only if, not required under
Section 3.02.

4  Paragraph (8) may be omitted if, and only if, not required under
Section 3.02.

 

2

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EXHIBIT C

[FORM OF NOTICE OF PREPAYMENT]

Natixis, New York Branch,

as Administrative Agent

9 West 57th Street

36th Floor

New York, New York 10019

The Lenders party to the Revolving

Credit Agreement referred to below

NOTICE OF PREPAYMENT

This Notice of Prepayment is made pursuant to Section 2.05(a) of that certain
Revolving Credit and Security Agreement dated as of February 16, 2012 among
NewStar Commercial Loan Funding 2012-1 LLC, as borrower (the “Borrower”), the
lenders from time to time parties thereto (collectively, the “Lenders”),
Natixis, New York Branch, as administrative agent and U.S. Bank National
Association, as trustee (as the same may from time to time be amended,
supplemented, waived or modified, the “Revolving Credit Agreement”). Capitalized
terms used but not otherwise defined herein shall have the respective meanings
assigned to such terms in the Revolving Credit Agreement.

 

1. The Borrower hereby gives notice that on                 ,      (the
“Prepayment Date”) it will make a prepayment under the Revolving Credit
Agreement in the principal amount of                      Dollars
($            ) (the “Prepayment Amount”).

 

2. The Borrower hereby gives notice of intent to prepay in the aggregate
principal amount equal to the Prepayment Amount to the Lenders pursuant to
Section 2.05(a) of the Revolving Credit Agreement and will remit, or cause to be
remitted, the proceeds thereof to the account of each Lender set forth in
Schedule I hereto in an amount equal to its respective Percentage of the
Prepayment Amount.

WITNESS my hand on this      day of                 ,     .

 

NEWSTAR COMMERCIAL LOAN FUNDING 2012-1 LLC,

as Borrower

By: NewStar Financial, Inc., as its Designated Manager By:  

 

  Name:   Title:

 

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Schedule I

[Describe accounts of the Lenders]

 

2

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EXHIBIT D

[FORM OF ASSIGNMENT AND ACCEPTANCE]

Reference is made to the Revolving Credit and Security Agreement dated as of
February 16, 2012 (as amended, supplemented or otherwise modified from time to
time, the “Revolving Credit Agreement”) among [INSERT NAME OF ASSIGNING LENDER]
(the “Assignor”), the other lenders from time to time parties thereto (together
with the Assignor, the “Lenders”), Natixis, New York Branch, as administrative
agent for the Lenders (in such capacity, together with its successors and
assigns, the “Administrative Agent”), NewStar Commercial Loan Funding 2012-1
LLC, as borrower (the “Borrower”) and U.S. Bank National Association, as trustee
(the “Trustee”). Capitalized terms used but not otherwise defined herein shall
have the respective meanings assigned to such terms in the Revolving Credit
Agreement.

The Assignor and the “Assignee” referred to on Schedule I hereto agree as
follows:

1. As of the Effective Date (as defined below), the Assignor hereby absolutely
and unconditionally sells and assigns, without recourse, to the Assignee, and
the Assignee hereby purchases and assumes, without recourse to or representation
of any kind (except as set forth below) from Assignor, an interest in and to the
Assignor’s rights and obligations under the Revolving Credit Agreement and under
the other Facility Documents equal to the percentage interest specified on
Schedule I hereto, including the Assignor’s percentage interest specified on
Schedule I hereto of the outstanding principal amount of the Advances to the
Borrower (such rights and obligations assigned hereby being the “Assigned
Interests”). After giving effect to such sale, assignment and assumption, the
Assignee’s “Percentage” will be as set forth on Schedule I hereto.

2. The Assignor (i) represents and warrants that immediately prior to the
Effective Date it is the legal and beneficial owner of the Assigned Interest
free and clear of any Lien created by the Assignor; (ii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Facility
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
or ownership interest created or purported to be created under or in connection
with, the Facility Documents or any other instrument or document furnished
pursuant thereto or the condition or value of the Assigned Interest, Collateral
relating to the Borrower, or any interest therein; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
condition (financial or otherwise) of the Borrower, the Administrative Agent,
the Collateral Servicer or any other Person, or the performance or observance by
any Person of any of its obligations under any Facility Document or any
instrument or document furnished pursuant thereto.

3. The Assignee (i) confirms that it has received a copy of the Revolving Credit
Agreement and the other Facility Documents, together with copies of any
financial statements delivered pursuant to Section 5.01 of the Revolving Credit
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without

 

1

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reliance upon the Administrative Agent, the Assignor, or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under or in connection with any of the Facility Documents; (iii) appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers and discretion under the Facility Documents as are
delegated to the Administrative Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; and (iv) agrees that
it will perform in accordance with their terms all of the obligations that by
the terms of the Facility Documents are required to be performed by it as a
Lender.

4. The Assignee, by checking the box below, (i) acknowledges that it is required
to be a Qualified Purchaser for purposes of the Investment Company Act at the
time it becomes a Lender and on each date on which an Advance is made under the
Revolving Credit Agreement and (ii) represents and warrants to the Assignor, the
Borrower, the Administrative Agent and the Trustee that the Assignee is a
Qualified Purchaser:

 

¨ By checking this box, the Assignee represents and warrants that it is a
Qualified Purchaser.

5. The Assignee, by checking the box below, (i) acknowledges that the Assigned
Interests are not registered under the Securities Act of 1933, as amended (the
“Securities Act”) or any state securities laws and are being transferred to us
in a transaction that is exempt from the registration requirements of the
Securities Act and any applicable state securities laws, and (ii) represents and
warrants to the Assignor, the Borrower the Administrative Agent and the Trustee
that the Assignee is (a) a “qualified institutional buyer” as defined in Rule
144A under the Securities Act, or (b) we are an “accredited investor” as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act:

 

¨ is (a) a “qualified institutional buyer” as defined in Rule 144A under the
Securities Act, or (b) we are an “accredited investor” as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act.

6. Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance (the
“Effective Date”) shall be the date of acceptance hereof by the Administrative
Agent, unless a later effective date is specified on Schedule I hereto.

7. Upon such acceptance and recording by the Administrative Agent, as of the
Effective Date, (i) the Assignee shall be a party to and bound by the provisions
of the Revolving Credit Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Lender thereunder and under
any other Facility Document, (ii) without limiting the generality of the
foregoing, the Assignee expressly acknowledges and agrees to its obligations of
indemnification to the Trustee and the Administrative Agent pursuant to and as
provided in Sections 11.11 and 12.04 thereof, and (iii) the Assignor shall, to
the extent provided in this Assignment and Acceptance, relinquish its rights and
be released from its obligations under the Revolving Credit Agreement and under
any other Facility Document.

 

2

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8. Upon such acceptance and recording by the Administrative Agent, from and
after the Effective Date, the Borrower shall make all payments under the
Revolving Credit Agreement in respect of the Assigned Interest to the Assignee.
The Assignor and Assignee shall make all appropriate adjustments in payments
under the Revolving Credit Agreement and the Assigned Interests for periods
prior to the Effective Date directly between themselves.

9. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.

10. This Assignment and Acceptance may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
Schedule I to this Assignment and Acceptance by telecopier shall be effective as
a delivery of a manually executed counterpart of this Assignment and Acceptance.

IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule I to this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.

 

3

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Schedule I

 

Percentage interest       transferred by Assignor:          % Assignor:    
[INSERT NAME OF ASSIGNOR],    

as Assignor

    By:  

 

      Authorized Signatory, Assignee:     [INSERT NAME OF ASSIGNEE]    

as Assignee

    By:  

 

      Authorized Signatory

 

Accepted this      day of             ,         

NATIXIS, NEW YORK BRANCH,

as Administrative Agent

By:  

 

  Authorized Signatory By:  

 

  Authorized Signatory

 

1

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Consented to this      day of

            ,         

 

NEWSTAR COMMERCIAL LOAN FUNDING 2012-1 LLC,

as Borrower

By: NewStar Financial, Inc., as its Designated Manager By:  

 

Name:   Title:  

 

2

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EXHIBIT E

[FORM OF ACCOUNT CONTROL AGREEMENT]

(see Account Control Agreement)

 

1

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EXHIBIT F

FORM OF RETENTION OF NET ECONOMIC INTEREST LETTER

[Form of letter to be provided, which will include the following language]

The Retention Provider, acting in its capacity as originator, hereby agrees for
the benefit of each Lender and each Administrative Agent:

 

a. that it has and will retain, on an ongoing basis, a material net economic
interest in the securitisation position comprised by the Loans which, in any
event, shall not be less than 5% of the nominal value of the Collateral Loans
and Eligible Investments;

 

b. that it will retain such interest by retention of the first loss tranche and,
if necessary, other tranches having the same or a more severe risk profile than
those transferred or sold to investors (being the Lenders) and not maturing any
earlier than those transferred or sold to investors, so that the retention
equals in total no less than 5% of the nominal value of the Collateral Loans and
Eligible Investments;

 

c. confirms that the retention of the net economic interest will be measured at
the origination (being the occasion of each origination or acquisition of a
Collateral Loan or Eligible Investment) and shall be maintained on an ongoing
basis. The retention of such interest shall not be subject to any credit risk
mitigation or any short positions or any other hedge, unless permitted by
Article 122a; and

 

d. agrees that it will take such further actions and provide such information as
may be requested by any Lender or the Administrative Agent so as to ensure
compliance with the provisions of Article 122a.

As used in this letter, the terms “retention of net economic interest”,
“original lender”, “originator”, “securitisation position”, “securitisations”,
“ongoing basis”, “securitised exposures” and “tranche” shall have the meanings
given thereto for the purposes of Article 122a and in the guidelines to Article
122a published on December 31, 2010 by the European Banking Authority (formerly
the Committee of European Banking Supervisors).

 

1

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EXHIBIT G

FORM OF RELEASE OF RELATED DOCUMENTS6

[Delivery Date]

BY FACSIMILE

U.S. Bank National Association

Document Custody Services

1719 Range Way

Florence, SC 29501

Attention: Steven Garrett

Phone: 843-676-8901

Fax: 843-673-0162

U.S. Bank National Association

Corporate Trust Services

One Federal Street, Third Floor

Boston, MA 02110

Attention: Seth Frink

Phone: 617-603-6539

Fax: 866-350-5276

[Natixis, New York Branch,

as Administrative Agent

9 West 57th Street

36th Floor

New York, New York 10019]7

 

Re: Revolving Credit and Security Agreement dated as of February 16, 2012 (as
the same may from time to time be amended, supplemented, waived or modified, the
“Credit Agreement”) among NewStar Commercial Loan Funding 2012-1 LLC, as
borrower (the “Borrower”), the Lenders from time to time parties thereto
(collectively, the “Lenders”), Natixis, New York Branch, as administrative agent
(the “Administrative Agent”), and U.S. Bank National Association, as trustee
(the “Trustee”).

Ladies and Gentlemen:

In connection with the administration of the Related Documents held by U.S. Bank
National Association as the Trustee for the benefit of the Secured Parties under
the Credit Agreement, we request the release of the Related Documents (or such
documents as specified below) for the Collateral Loans described below, for the
reason indicated. All capitalized terms used but not defined herein shall have
the meaning given thereto in the Credit Agreement.

Obligor’s Name, Address & Zip Code:

 

6  Form to be provided

7  Include Administrative Agent as an addressee in connection with a request
under Section 11.09

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

Collateral Loan Number:

Collateral Loan File:

Reason for Requesting Documents (check one):

 

¨ 1. Collateral Loan paid in full. (The Collateral Servicer hereby certifies
that all amounts received in connection with such Collateral Loan have been
credited to the Collection Account.)

 

¨ 2. Collateral Loan liquidated by                             . (The Collateral
Servicer hereby certifies that all proceeds (net of liquidation expenses which
the Collateral Servicer may retain to pay such expenses) of foreclosure,
insurance, condemnation or other liquidation have been finally received and
credited to the Collection Account.)

 

¨ 3. Collateral Loan in foreclosure.

 

¨ 4. Other (explain).

If box 1 or 2 above is checked, and if all or part of the Related Documents were
previously released to us, please release to us the Related Documents, requested
in our previous request and receipt on file with you, as well as any additional
documents in your possession relating to the specified Loan.

If box 3 or 4 above is checked, upon our return of all of the above Related
Documents to you as the Trustee, please acknowledge your receipt by signing in
the space indicated below, and returning this form.

[In accordance with [Section 11.08(b)]/[Section 11.09], the Administrative Agent
has indicated its consent to this request by signing in the space indicated
below.]8

 

8  Include for requests pursuant to Section 11.08(b) or Section 11.09.

 

-3-

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NEWSTAR FINANCIAL, INC.,

as the Collateral Servicer

By:  

 

Name:   Title:   Date:  

Acknowledgment of Related Documents returned to the Trustee:

 

U.S. BANK NATIONAL ASSOCIATION,

as the Trustee

By:  

 

Name:   Title:   Date:  

 

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Consent of Administrative Agent if required under the Credit Agreement:

 

NATIXIS, NEW YORK BRANCH,

as the Administrative Agent

By:  

 

Name:   Title:   Date:  

 

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EXHIBIT H

FORM OF PAYOFF LETTER

NOTICE, PAYOFF AND RELEASE AGREEMENT

[Date]

U.S. Bank National Association,

as Trustee and Custodian

One Federal Street, 3rd Floor

Boston, Massachusetts 02110

Attention: Seth Frink

U.S. Bank National Association,

as Document Custodian

1719 Range Way

Florence, South Carolina 29501

Attention: Steven Garrett

Natixis, New York Branch,

as Administrative Agent

9 West 57th Street, 36th Floor

New York, New York 10019

Attention: Yazmin Vasconez

[Versailles Assets LLC, as Lender

c/o Global Securitization Services LLC

68 South Service Road, Suite 120

Melville, New York 11747

Attention: Andrew Stidd]

Ladies and Gentlemen:

Pursuant to Section 2.06(b) of the Revolving Credit and Security Agreement,
dated as of February 16, 2012, among NewStar Commercial Loan Funding 2012-1 LLC
(“Borrower”), as borrower (in such capacity, the “Borrower”), the Lenders from
time to time parties thereto, Natixis, New York Branch, as Administrative Agent
and U.S. Bank National Association, as trustee, custodian and document custodian
(in such capacity as trustee, the “Trustee”) (as amended, modified, waived,
supplemented, restated or replaced from time to time, the “Credit Agreement”;
capitalized terms not defined herein are used as defined in the Credit
Agreement), the Borrower hereby (i) notifies the above addressees of its
intention to cause a Payment in Full and a termination of the Commitments in
their entirety on                      (the “Payment in Full Date”) and
(ii) requests a release of all of the Collateral Loans and of all other
Collateral (other than the Payment Account) from the Lien of the Credit
Agreement upon such Payment in Full as provided herein. This letter agreement
constitutes notice of termination under Section 2.06(b) of the Credit Agreement,
a certificate of a Responsible Officer of the Borrower and written request

 

-6-

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as provided in Section 7.02(a) and Section 8.08(e) of the Credit Agreement and a
direction as provided in Section 10.01(c) of the Credit Agreement. This notice
is revocable as provided in Section 2.06(b) of the Credit Agreement.

The Borrower hereby represents and warrants that (i) all conditions precedent
under the Credit Agreement to the Payment in Full described herein have been or
will be satisfied by the applicable parties on the Payment in Full Date (except
to the extent expressly waived herein by the Trustee and the Administrative
Agent), and (ii) all conditions precedent under the Credit Agreement to the
Payment in Full, termination of the Commitments, release of Collateral (other
than the Payment Account) and release and delivery of the Related Documents (as
modified by this letter agreement) have been or will be satisfied on the Payment
in Full Date (except to the extent expressly waived herein by the Trustee and
the Administrative Agent).

The Borrower hereby certifies to the Trustee and the Administrative Agent that
the Borrower will have sufficient funds on the Payment in Full Date to effect
the contemplated Payment in Full and termination of the Commitments in
accordance with the Credit Agreement and this letter agreement. The Borrower
hereby certifies that upon remittance by the Trustee of the amounts set forth in
Exhibit A to the applicable parties set forth in Exhibit A, all Obligations
owing the Secured Parties under the Credit Agreement or under the other Facility
Documents will have been paid in full.

The Administrative Agent hereby confirms that [Versailles Assets LLC is the sole
Lender][                     are the only Lenders] under the Credit Agreement.

The Borrower agrees to pay to the Trustee, for remittance by the Trustee (in
accordance with Exhibit A) to the Lender(s), the Administrative Agent, the
Custodian, the Document Custodian, and itself, as applicable, on the Payment in
Full Date, each of the amounts set forth on Exhibit A attached hereto
(collectively, the “Payoff Amount”) and may transfer funds to the Payment
Account from the Collection Account and the Future Funding Reserve Account as
directed by the Collateral Servicer to pay such Payoff Amount. Upon receipt by
the Trustee of the Payoff Amount:

(i) each of the Trustee, the Custodian, the Document Custodian, the
Administrative Agent and the Lender, acknowledges and agrees that such payment
will constitute payment in full of all of the obligations under the Facility
Documents owed to it and that all Obligations under the Facility Documents shall
be fully satisfied and the Facility Documents shall be terminated (other than
the provisions of the Facility Documents which by their terms expressly survive
the termination thereof);

(ii) the Borrower confirms that all of its Obligations under the Credit
Agreement or under the other Facility Documents have been satisfied and the
Commitments have been terminated in their entirety. The Borrower confirms that
all conditions precedent provided for in the Credit Agreement related to all of
the proposed actions in this letter agreement, as modified or waived by this
letter agreement, have been satisfied, and (as referenced above) this letter
agreement shall serve as a certificate of a Responsible Officer of the Borrower;

 

-7-

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(iii) the Trustee shall be deemed to have released the Lien of the Credit
Agreement on the Collateral (other than the Payment Account) in favor of the
Trustee and the other Secured Parties and hereby does automatically (a) release,
transfer, assign and convey any and all right, title, claim and interest in the
Collateral to the Borrower free and clear of all liens and encumbrances created
by or through it, (b) authorize the Borrower or the Collateral Servicer on its
behalf to file any requisite UCC-3 termination statements in respect thereof,
and (c) direct the Document Custodian and the Custodian to release the Related
Property and other Collateral held by it, at the expense of the Borrower, to the
Borrower or its designee(s) as directed by the Borrower; and

(iv) without limiting clause (iii) above, the Trustee agrees to execute and
deliver to the Borrower any assignment and release of Collateral and UCC-3
termination statements reasonably requested by the Borrower, at the expense of
the Borrower.

The Administrative Agent agrees that it has or will cause the Note to be
cancelled and returned to the Borrower upon Payment in Full.

THIS LETTER AGREEMENT, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK, SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE
LAWS OF ANY OTHER JURISDICTION.

This letter agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. Delivery of an executed counterpart of a signature page by
telecopier or other electronic transmission shall be effective as delivery of a
manually executed counterpart.

 

-8-

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Very truly yours, NEWSTAR COMMERCIAL LOAN FUNDING 2012-1 LLC, as Borrower By:  
NEWSTAR FINANCIAL, INC., its Designated Manager   By:  

 

    Name:     Title:

 

Notice, Waiver, Payoff and Release Letter

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U.S. BANK NATIONAL ASSOCIATION, as Trustee, Custodian and Document Custodian

By:  

 

  Name:  

 

  Title:  

 

NATIXIS, NEW YORK BRANCH, as Administrative Agent

By:  

 

  Name:  

 

  Title:  

 

By:  

 

  Name:  

 

  Title:  

 

[VERSAILLES ASSETS, LLC, as Lender]

By:  

 

  Name:  

 

  Title:  

 

 

Notice, Waiver, Payoff and Release Letter

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EXHIBIT A

[See attached]

 

Notice, Waiver, Payoff and Release Letter