Exhibit 10.3

EXECUTION VERSION

 

 

 

INCREMENTAL ASSUMPTION AGREEMENT

dated as of January 24, 2013,

relating to the

AMENDED AND RESTATED SENIOR SECURED REVOLVING CREDIT AGREEMENT

dated as of February 22, 2011,

among

FIFTH STREET FINANCE CORP.,

as Borrower,

The Several Lenders and Agents

from Time to Time Parties Thereto,

and

ING CAPITAL LLC,

as Administrative Agent

 

 

 

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INCREMENTAL ASSUMPTION AGREEMENT, dated as of January 24, 2013 (this “Assumption
Agreement”), by and among FIFTH STREET FINANCE CORP. (the “Borrower”), FSFC
Holdings, Inc. (“FSFC”), Fifth Street Fund of Funds LLC (“Fifth Street”;
collectively with FSFC, the “Subsidiary Guarantors”), ING CAPITAL LLC, in its
capacity as Administrative Agent (the “Administrative Agent”), and UBS LOAN
FINANCE, LLC, as increasing lender (the “Increasing Lender”) relating to the
AMENDED AND RESTATED SENIOR SECURED REVOLVING CREDIT AGREEMENT dated as of
February 22, 2011 (as amended by the Amendment No.1 to the Amended and Restated
Senior Secured Revolving Credit Agreement and Amendment No. 2 to the Guarantee,
Pledge and Security Agreement dated as of July 8, 2011, that certain Waiver
Letter, dated as of August 3, 2011, that certain Amendment No. 2 to Amended and
Restated Senior Secured Revolving Credit Agreement, dated as of November 29,
2011, that certain Amendment No. 3 to Amended and Restated Senior Secured
Revolving Credit Agreement, dated as of February 29, 2012, that certain
Amendment No. 4 to Amended and Restated Senior Secured Revolving Credit
Agreement, dated as of November 30, 2012, and as further amended, supplemented
or otherwise modified from time to time, the “Credit Agreement”), among the
Borrower, the Administrative Agent and the several banks and other financial
institutions or entities from time to time party to the Credit Agreement.

A. The Borrower has requested that the Increasing Lender provide an additional
Commitment in an aggregate amount equal to $10,000,000 (the “Incremental
Commitment”) pursuant to Section 2.07(f) of the Credit Agreement.

B. The Increasing Lender is willing to make such an Incremental Commitment to
the Borrower on the terms and subject to the conditions set forth herein and in
the Credit Agreement.

Accordingly, in consideration of the mutual agreements herein contained and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Defined Terms; Interpretation; Etc. Capitalized terms used and not
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. The rules of construction set forth in Section 1.03 of the Credit
Agreement shall apply equally to this Assumption Agreement. This Assumption
Agreement shall be a “Loan Document” for all purposes of the Credit Agreement
and the other Loan Documents.

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SECTION 2. Incremental Commitment. (a) Pursuant to Section 2.07(f) of the Credit
Agreement and subject to the terms and conditions hereof, the Increasing Lender
hereby agrees to make the Incremental Commitment to the Borrower effective on
and as of the Effective Date (as defined below). The Incremental Commitment
shall constitute an additional “Commitment” for all purposes of the Credit
Agreement and the other Loan Documents.

(b) The terms of the Incremental Commitment shall be the same as the other
Commitments made under the Credit Agreement.

(c) On the Effective Date, in connection with the adjustments to any outstanding
Loans and participation interests contemplated by Section 2.07(f)(iv) of the
Credit Agreement, the Incremental Lender shall make a payment to the
Administrative Agent, for account of the other Lenders, in an amount calculated
by the Administrative Agent in accordance with such section, so that after
giving effect to such payment and to the distribution thereof to the other
Lenders in accordance with such section, the Loans are held ratably by the
Lenders in accordance with the respective Commitments of such Lenders (after
giving effect to the Incremental Commitment).

SECTION 3. Conditions Precedent to Incremental Commitment. This Assumption
Agreement, and the obligations of the Increasing Lender to make the Incremental
Commitment, shall become effective on and as of the Business Day (the “Effective
Date”) occurring on or before January 24, 2013 on which the following conditions
precedent have been satisfied:

(a) the Administrative Agent shall have received counterparts of this Assumption
Agreement that, when taken together, bear the signatures of the Borrower, the
Subsidiary Guarantors, the Administrative Agent and the Increasing Lender;

(b) on the date hereof, each of the conditions set forth or referred to in
Section 2.07(f)(i) of the Credit Agreement shall be satisfied, and pursuant to
Section 2.07(f)(ii)(x) of the Credit Agreement the Administrative Agent shall
have received a certificate of a duly authorized officer of the Borrower dated
the date hereof certifying as to the foregoing;

(c) the Administrative Agent shall have received for the account of the Lenders
the amounts, if any, payable under Section 2.14 of the Credit Agreement as a
result of the adjustments of Borrowings pursuant to Section 2(c) of this
Assumption Agreement; and

(d) the Increasing Lender shall have received all documented fees and expenses
related to this Assumption Agreement owing on the date hereof, including an
up-front fee in an amount equal to 0.45% of the Incremental Commitment, due to
the Increasing Lender on the date hereof.

 

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SECTION 4. Representations and Warranties of the Borrower. To induce the other
parties hereto to enter into this Assumption Agreement, the Borrower represents
and warrants to the Administrative Agent and the Increasing Lender that, as of
the date hereof:

(a) This Assumption Agreement has been duly authorized, executed and delivered
by the Borrower and the Subsidiary Guarantors, and constitutes a legal, valid
and binding obligation of the Borrower and the Subsidiary Guarantors in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).

(b) Each of the representations and warranties made by the Borrower and the
Subsidiary Guarantors in or pursuant to the Loan Documents are true and correct
in all material respects as if made on such date (except to the extent they
relate specifically to an earlier date, in which case they are true and correct
in all material respects as of such earlier date, and unless a representation or
warranty is already qualified by materiality or by Material Adverse Effect, in
which case it is true and correct in all respects).

(c) No Default or Event of Default has occurred and is continuing on the date
hereof or shall result from the Incremental Commitment.

SECTION 5. Representations, Warranties and Covenants of the Increasing Lender.
The Increasing Lender (a) represents and warrants that (i) from and after the
Effective Date, it shall have the obligations of a Lender under the Credit
Agreement to the extent of its existing Commitment as increased by the
Incremental Commitment, and (ii) it has received a copy of such documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assumption Agreement and to make the Incremental
Commitment on the basis of which it has made such analysis and decision
independently and without reliance on the Administrative Agent or any other
Lender; and (b) agrees that (i) it will, independently and without reliance on
the Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents, and
(ii) it will continue to perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

SECTION 6. Consent and Reaffirmation. (a) Each Subsidiary Guarantor hereby
consents to this Assumption Agreement and the transactions contemplated hereby,
(b) the Borrower and each Subsidiary Guarantor agree that, notwithstanding the
effectiveness of this Assumption Agreement, the Guarantee and Security Agreement
and each of the other Security Documents continue to be in full force and
effect, (c) the Borrower and each Subsidiary Guarantor acknowledge that the
terms “Credit Agreement Obligations,” “Guaranteed Obligations” and “Secured
Obligations” (each as defined in the Guarantee and Security Agreement) include
any and all Loans made now or in the future by the Increasing Lender in respect
of the Incremental Commitment and all interest and other amounts owing in
respect thereof under the Loan Documents (including all interest and

 

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expenses accrued or incurred subsequent to the commencement of any bankruptcy or
insolvency proceeding with respect to the Borrower, whether or not such interest
or expenses are allowed as a claim in such proceeding), and (d) each Subsidiary
Guarantor confirms its guarantee of the Guaranteed Obligations and the Borrower
and each Subsidiary Guarantor confirm their grant of a security interest in
their assets as Collateral for the Secured Obligations, all as provided in the
Loan Documents as originally executed (and amended prior to the date hereof and
supplemented hereby).

SECTION 7. Notices. All notices hereunder shall be given in accordance with the
provisions of Section 9.01 of the Credit Agreement.

SECTION 8. Expenses. The Borrower agrees to pay all reasonable and documented
out-of-pocket expenses incurred by the Administrative Agent in connection with
this Assumption Agreement in accordance with the Credit Agreement, including the
reasonable and documented fees, charges and disbursements of one outside counsel
for the Administrative Agent.

SECTION 9. Counterparts. This Assumption Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same contract.
Delivery of an executed counterpart of a signature page of this Assumption
Agreement by facsimile or electronic transmission shall be as effective as
delivery of a manually executed counterpart hereof.

SECTION 10. Applicable Law; Jurisdiction; Consent to Service of Process; Other.
THIS ASSUMPTION AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. THE PROVISIONS OF SECTION
9.09 OF THE CREDIT AGREEMENT (AND ALL OTHER APPLICABLE PROVISIONS OF ARTICLE IX
OF THE CREDIT AGREEMENT) ARE HEREBY INCORPORATED BY REFERENCE.

SECTION 11. Headings. The headings of this Assumption Agreement are for purposes
of reference only and shall not limit or otherwise affect the meaning hereof.

SECTION 12. No Third Party Beneficiaries. This Assumption Agreement is intended
to be solely for the benefit of the parties hereto and is not intended to confer
any benefits upon, or create any rights in favor of, any other person or entity.
No person or entity other than the parties hereto shall have any rights under or
be entitled to rely upon this Assumption Agreement.

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

 

FIFTH STREET FINANCE CORP., as Borrower By:     Name:   Title:  

 

FSFC HOLDINGS, INC., as Subsidiary Guarantor By:     Name:   Title:  

 

FIFTH STREET FUND OF FUNDS LLC, as Subsidiary Guarantor By:     Name:   Title:  

Signature Page to Incremental Assumption Agreement

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ING CAPITAL LLC, as Administrative Agent By:       Name:   Title:

Signature Page to Incremental Assumption Agreement

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UBS LOAN FINANCE, LLC, as Increasing Lender By     Name:   Title:  

 

By:     Name:   Title:  

Signature Page to Incremental Assumption Agreement