Exhibit 10.1

EXECUTION COPY

 

 

 

REVOLVING CREDIT AND SECURITY AGREEMENT

among

TPG SL SPV, LLC,

as Borrower,

THE LENDERS FROM TIME TO TIME PARTIES HERETO,

NATIXIS, NEW YORK BRANCH,

as Facility Agent

and

The Bank of New York Mellon Trust Company, N.A.,

as Collateral Agent

Dated as of May 8, 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

     47   

Section 1.03 Computation of Time Periods

     47   

Section 1.04 Collateral Value Calculation Procedures

     48   

ARTICLE II ADVANCES UNDER THE FACILITY

     50   

Section 2.01 Revolving Credit Facility

     50   

Section 2.02 Advances

     50   

Section 2.03 Evidence of Indebtedness; Notes

     50   

Section 2.04 Payment of Principal and Interest

     51   

Section 2.05 Prepayment of Advances

     52   

Section 2.06 Reductions in Commitments

     53   

Section 2.07 Maximum Lawful Rate

     53   

Section 2.08 Several Obligations

     54   

Section 2.09 Increased Costs

     54   

Section 2.10 Compensation; Breakage Payments

     56   

Section 2.11 Illegality; Inability to Determine Rates

     56   

Section 2.12 Rescission or Return of Payment

     57   

Section 2.13 Fees Payable by Borrower

     57   

Section 2.14 Post-Default Interest

     57   

Section 2.15 Payments Generally

     58   

Section 2.16 Lenders Not Satisfying the Rating Criteria

     58   

Section 2.17 Applicable Row Level

     58   

Section 2.18 Replacement of Lenders

     59   

ARTICLE III CONDITIONS PRECEDENT

     60   

Section 3.01 Conditions Precedent to Closing

     60   

Section 3.02 Conditions Precedent to Each Borrowing

     62   

ARTICLE IV REPRESENTATIONS AND WARRANTIES

     63   

Section 4.01 Representations and Warranties of the Borrower

     63   

 

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TABLE OF CONTENTS

(continued)

 

     Page  

Section 4.02 Additional Representations and Warranties of the Borrower

     65   

ARTICLE V COVENANTS

     67   

Section 5.01 Affirmative Covenants of the Borrower

     67   

Section 5.02 Negative Covenants of the Borrower

     73   

Section 5.03 Certain Undertakings Relating to Separateness

     77   

Section 5.04 Credit Estimates; Failure to Have a DBRS Long Term Rating

     79   

ARTICLE VI EVENTS OF DEFAULT

     80   

Section 6.01 Events of Default

     80   

ARTICLE VII PLEDGE OF COLLATERAL; RIGHTS OF THE COLLATERAL AGENT

     84   

Section 7.01 Grant of Security

     84   

Section 7.02 Release of Security Interest

     85   

Section 7.03 Rights and Remedies

     85   

Section 7.04 Remedies Cumulative

     86   

Section 7.05 Related Documents

     87   

Section 7.06 Borrower Remains Liable

     87   

Section 7.07 Assignment of Investment Management Agreement and the Master
Transfer Agreement

     87   

Section 7.08 Protection of Collateral

     89   

Section 7.09 Acknowledgement

     89   

ARTICLE VIII ACCOUNTS, ACCOUNTINGS AND RELEASES

     90   

Section 8.01 Collection of Money

     90   

Section 8.02 Collection Account

     90   

Section 8.03 Transaction Accounts

     92   

Section 8.04 The Revolving Reserve Account; Fundings

     94   

Section 8.05 Reinvestment of Funds in Covered Accounts; Reports by Collateral
Agent

     95   

Section 8.06 Accountings

     96   

Section 8.07 Release of Securities

     98   

Section 8.08 Reports by Independent Accountants

     99   

 

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TABLE OF CONTENTS

(continued)

 

     Page  

Section 8.09 Reports to DBRS

     100   

Section 8.10 Currency Exchange Account

     100   

Section 8.11 Funded Draw Collection Account

     100   

Section 8.12 Closing Expense Account

     101   

Section 8.13 Collateral Reporting

     102   

ARTICLE IX APPLICATION OF MONIES

     103   

Section 9.01 Disbursements of Monies from Payment Account

     103   

ARTICLE X SALE OF COLLATERAL OBLIGATIONS; PURCHASE OF ADDITIONAL COLLATERAL
OBLIGATIONS

     106   

Section 10.01 Sales of Collateral Obligations

     106   

Section 10.02 Purchase of Additional Collateral Obligations

     108   

Section 10.03 Conditions Applicable to All Sale and Purchase Transactions

     108   

Section 10.04 Additional Equity Contributions

     108   

Section 10.05 Unsettled Securities

     109   

ARTICLE XI THE AGENTS

     109   

Section 11.01 Authorization and Action

     109   

Section 11.02 Delegation of Duties

     110   

Section 11.03 Agents’ Reliance, Etc

     110   

Section 11.04 Indemnification

     111   

Section 11.05 Successor Agents

     112   

Section 11.06 Regarding the Collateral Agent

     113   

ARTICLE XII MISCELLANEOUS

     114   

Section 12.01 No Waiver; Modifications in Writing

     114   

Section 12.02 Notices, Etc

     114   

Section 12.03 Taxes

     116   

Section 12.04 Costs and Expenses; Indemnification

     118   

Section 12.05 Execution in Counterparts

     119   

Section 12.06 Assignability; Participation; Register

     119   

Section 12.07 Governing Law

     122   

Section 12.08 Severability of Provisions

     122   

 

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TABLE OF CONTENTS

(continued)

 

     Page  

Section 12.09 Confidentiality

     122   

Section 12.10 Merger

     123   

Section 12.11 Survival

     123   

Section 12.12 Submission to Jurisdiction; Waivers; Etc

     123   

Section 12.13 Waiver of Jury Trial

     123   

Section 12.14 Service of Process

     124   

Section 12.15 Waiver of Immunity

     124   

Section 12.16 Judgment in Foreign Currency

     125   

Section 12.17 PATRIOT Act Notice

     125   

Section 12.18 Legal Holidays

     125   

Section 12.19 Non-Petition

     125   

Section 12.20 Custodianship; Delivery of Collateral Obligations and Eligible
Investments

     126   

Section 12.21 Special Provisions Applicable to CP Conduits

     128   

SCHEDULES

 

Schedule 1

   Initial Commitments and Percentages

Schedule 2

   Scope of Monthly Report and Payment Date Report

Schedule 3

   Industry Diversity Score Table

Schedule 4

   DBRS Risk Scores

Schedule 5

   DBRS Industry Classifications

Schedule 6

   LIBOR Definition

Schedule 7

   DBRS Rating Procedure

Schedule 8

   Matrix

Schedule 9

   Not Settled Collateral Obligations

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

   Approved Appraisal Firms

Exhibit G

   Retention of Net Economic Interest Letter

 

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REVOLVING CREDIT AND SECURITY AGREEMENT

REVOLVING CREDIT AND SECURITY AGREEMENT dated as of May 8, 2012 among TPG SL
SPV, 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 facility agent for the
Secured Parties (as hereinafter defined) (in such capacity, together with its
successors and assigns, the “Facility Agent”) and The Bank of New York Mellon
Trust Company, N.A., as collateral agent for the Secured Parties (as hereinafter
defined) (in such capacity, together with its successors and assigns, the
“Collateral Agent”).

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.

“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 Quarterly Asset Amount
on the related Determination Date; and

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(b) $200,000 per annum.

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

(a) first, to the Collateral Agent, the Custodian and the Securities
Intermediary pursuant to the Collateral Agent Fee Letter; and

(b) second, on a pro rata basis, to:

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

(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 Obligations;

(iii) the Lenders and the Agents (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 12.04, amounts sufficient to
reimburse each Lender for all amounts paid by such Lender pursuant to
Section 11.04 (and subject to the limitations therein)); and

(iv) indemnification obligations owing by the Borrower to the Borrower’s
independent managers under the Borrower LLC Agreement;

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 Replacement Investment
Management Fees) shall not constitute Administrative Expenses and (2) Closing
Date Expenses, to the extent paid for with Cash contributed by the Investment
Manager or an Affiliate thereof under Section 10.04 or with proceeds of the
Advances comprising the initial Borrowing on the Closing Date, shall not
constitute Administrative Expenses and shall be payable only from the Closing
Expense Account pursuant to Section 8.12.

“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 Person shall not be deemed to be an “Affiliate” of an
Obligor solely because it is under the

 

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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 supports the obligations of the other such Person or
Obligor).

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

“Aggregate Funded Spread” means, as of any date, in the case of each Collateral
Obligation that is not a Fixed Rate Obligation (excluding the unfunded portion
of any Delayed Drawdown Collateral Loan and any Revolving Collateral Loan)
(i) the excess of the sum of the scheduled coupon rate (giving effect to any
floor rate) over Specified 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 Obligation (excluding the unfunded portion of any Delayed
Drawdown Collateral Loan or Revolving Collateral Loan).

“Aggregate Industry Equivalent Unit Score” means, with respect to each DBRS
Industry Classification, the sum of the Equivalent Unit Scores for each Obligor
in such DBRS Industry Classification.

“Aggregate Principal Balance” means, when used with respect to all or a portion
of the Collateral Obligations, the sum of the Principal Balances of all or of
such portion of such Collateral Obligations.

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

“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 Row Level” means the column of that name as set forth in the Matrix
that becomes effective after (i) the Borrower or Investment Manager provides the
notice specifying an Applicable Row Level as described in Section 2.17(a) or
(ii) the Borrower or Investment Manager provides the notice specifying a
different Applicable Row Level than the one in use at that time as described in
Section 2.17(b).

“Appraised Value” means, with respect to any Defaulted Loan/Bond or Credit Risk
Loan/Bond, the value of (i) such Defaulted Loan/Bond or Credit Risk Loan/Bond or
(ii) the assets securing such Defaulted Loan/Bond or Credit Risk Loan/Bond, in
each case net of costs of their liquidation as determined by the applicable
Approved Appraisal Firm, as set forth in the related appraisal (or, if a range
of values is set forth therein, the midpoint of such values), adjusted
appropriately if the Borrower owns less than 100% of the total lenders’
interests secured by the assets securing any Defaulted Loan/Bond or Credit Risk
Loan/Bond or, if it has sold participation interests in such Defaulted Loan/Bond
or Credit Risk Loan/Bond.

 

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“Approved Appraisal Firm” means (a) each independent appraisal firm set forth on
Exhibit F hereto or (b) (i) with respect to a Collateral Obligation that is a
loan, an independent appraisal firm recognized as being experienced in
conducting valuations of secured loans and with respect to a Collateral
Obligation that is a debt obligation, an independent appraisal firm recognized
as being experienced in conducting valuations of debt obligations, or (ii) an
independent financial adviser of recognized standing retained by the Borrower,
the Investment Manager or the agent or lenders under any Collateral Obligation,
in the case of each of the preceding clauses (b)(i) and (b)(ii), as approved by
each of the Investment Manager and the Facility Agent.

“Assignment and Acceptance” means an Assignment and Acceptance in substantially
the form of Exhibit D hereto, entered into by a Lender, an assignee, the
Facility 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 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.

“Available Unfunded Amount” means, at any time, the lower of (A) the Commitment
minus the aggregate outstanding principal balance of the Advances and (B) the
excess of (x) the product of (i) the Principal Collateralization Amount minus
the Borrower Liabilities and (ii) the Leverage Multiple over (y) the aggregate
outstanding principal balance of the Advances. For the avoidance of doubt, no
amount calculated pursuant to this definition shall be less than zero.

“Average Maturity Date” means, as of any date of determination, with respect to
any Performing Collateral Obligation, the date calculated by adding to the
Closing Date the maturity of such Performing Collateral Obligation (expressed as
a number of months from the Closing Date) calculated by multiplying (i) the
Principal Balance (or portion thereof) of such Performing Collateral Obligation
that is then held (or in relation to a proposed purchase of a Performing
Collateral Obligation, proposed to be held) by the Borrower and that matures or
amortizes on any date subsequent to such date of determination by (ii) the
number of months from the Closing Date to the date of such maturity or
amortization, in each case as of such date.

 

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“Average Par Amount” means the sum of the Obligor Par Amounts for all Collateral
Obligations (other than Defaulted Loan/Bonds), divided by the number of Obligors
in respect of such Collateral Obligations (other than Defaulted Loan/Bonds);
provided that, for purposes of calculating the Average Par Amount, any Obligors
that are Affiliated with one another will be considered one Obligor.

“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 Facility 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 any 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 III” has the meaning assigned to such term in Section 2.09(a).

“Blocker Subsidiary” has the meaning assigned to such term in Section 5.02(p).

“Blocker Subsidiary Exempt Provisions” means the following Sections of this
Agreement: 3.01, 4.01(k) (if the Investment Manager reasonably deems it
appropriate to elect treatment as a corporation), 4.02(a) (with respect to
Monthly Reports and Payment Date Reports), 4.02(c) (to the extent relating to
Collateral that has not been transferred to such Blocker Subsidiary), 5.01(g),
5.01(h), 5.01(j) (to the extent set forth above as to 4.01(k)), Article VIII
(other than Section 8.09 and provided that one or more accounts may be
established with the Custodian for a Blocker Subsidiary, each of which shall be
subject to the Lien of and under the control of the Collateral Agent, and all
Collections shall be paid to the appropriate Covered Account of the Borrower at
the end of each Collection Period, except that, if deemed appropriate by the
Investment Manager, a reserve account for expenses may be established and funded
with

 

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equity distributable pursuant to Section 9.01(a)(i)(K)(iii) or contributed under
Section 10.04, and any remainder therein would not be paid to the Borrower until
the final Payment Date, the acceleration of the Advances or the Investment
Manager reasonably determines such reserve is no longer necessary), 10.02 (to
the extent it would restrict the transfer of Collateral to a Blocker Subsidiary
as contemplated by Section 5.02(p)) and 10.03 (to the extent it would restrict
the transfer of Collateral to a Blocker Subsidiary as contemplated by
Section 5.02(p)).

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

“Borrower Liabilities” means the sum of (a) the aggregate outstanding principal
balance of the Advances plus (b) the Portfolio Exposure Amount.

“Borrower LLC Agreement” means the Amended and Restated Limited Liability
Company Agreement of the Borrower, dated as of May 8, 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.

“Borrowing Date” means the date of a Borrowing.

“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,
Chicago, Illinois, or London, England, and days on which commercial paper
markets in the United States are closed shall not constitute Business Days.

“Calculation Agent” means the Collateral Agent, as calculation agent, for
purposes of Schedule 6.

“Canadian Dollar Subaccount” has the meaning specified in Section 8.02(a).

“Canadian Dollars” means lawful money of Canada.

“Canadian Dollar Obligation” means a Collateral Obligation denominated in
Canadian Dollars.

“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.

“Change in Control” means (i) the Borrower ceases to be a wholly owned direct
subsidiary of the Investment Manager, (ii) TSL Advisers, LLC ceases to be
Controlled by (a) David Bonderman, James Coulter, or Alan Waxman, or any of
their successors or (b) TPG Capital, L.P. or an Affiliate of TPG Capital, L.P or
(iii) the Investment Manager ceases to be managed by TSL Advisers, LLC.

 

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

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

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

“Closing Date” means May 8, 2012.

“Closing Date Expenses” means amounts due in respect of actions taken on or
before the Closing Date or in connection with the closing of the transactions
contemplated by this Agreement, including without limitation (i) the fees to be
received by Natixis on or prior to the Closing Date pursuant to the Engagement
Letter dated as of June 24th, 2011, as amended to date, between TPG Specialty
Lending, Inc. and Natixis North America LLC; (ii) the accrued fees and expenses
in connection with the transactions contemplated hereby, including, without
limitation, those of (A) Weil, Gotshal & Manges LLP, counsel to the Facility
Agent and the Lender(s) and (B) Sidley Austin LLP, counsel to DBRS; and
(iii) the fees to be received by DBRS on or prior to the Closing Date pursuant
to the Engagement Letter dated as of October 14, 2011 between TPG Specialty
Lending, Inc. and DBRS.

“Closing Expense Account” has the meaning specified in Section 8.12.

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

“Collateral Agent Fee Letter” means the fee letter dated March 14, 2012, between
the Collateral Agent and the Borrower setting forth the fees payable by the
Borrower to the Collateral Agent in connection with the transactions
contemplated by this Agreement, as the same may from time to time be amended,
supplemented, waived or modified.

“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 Loan/Bonds, in each case unless
actually received and (ii) received as equity contributions from the Investment
Manager or any of its Affiliates and designated as Interest Proceeds by the
Borrower), (b) the aggregate amount of Interest Proceeds on deposit in the
Interest Collection Subaccount, and (c) the aggregate amount, if any, due from
any Eligible Hedge Counterparty and payable to the Borrower under each Eligible
Hedge Agreement entered into by the Borrower, 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.

 

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

(a) permits purchase by, or assignment to, the Borrower and the pledge thereof
to the Collateral Agent hereunder;

(b) is denominated and payable in Dollars or Canadian Dollars;

(c) is an obligation of an Obligor organized in an Eligible Country;

(d) is not a Defaulted Loan/Bond or a Credit Risk Loan/Bond;

(e) is not a Zero Coupon Obligation;

(f) is not a Real Estate Loan or Structured Finance Obligation;

(g) 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.) as determined
by the Investment Manager in good faith;

(h) no portion thereof (including any conversion option, exchange option or
other similar component thereof) is exchangeable or convertible into equity at
the option of the related Obligor;

(i) is not an equity security or a component of an equity security (other than
an Equity Kicker received in connection with a Collateral Obligation);

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

(k) does not constitute Margin Stock;

(l) is not subject to withholding tax unless the Obligor is required to make
“gross-up” payments constituting 100% of such withholding tax;

(m) provides for a fixed amount of principal payable at or prior to its stated
maturity;

(n) if such Collateral Obligation is a Participation Interest, such
Participation Interest is from an Eligible Selling Institution;

(o) matures on or prior to the Final Maturity Date;

 

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(p) provides for payment of interest in either Dollars or Canadian Dollars, as
applicable, at least semi-annually;

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

(r) 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;

(s) is an Eligible Senior Secured Loan, Eligible Second Lien Loan, Eligible
Mezzanine Loan or an Eligible Senior Secured Bond;

(t) the purchase price of which is not less than 75.0% of the principal amount
thereof;

(u) has either (i) a public rating by Moody’s or S&P or (ii) either (a) a Credit
Estimate from DBRS or (b) is in the process of receiving a Credit Estimate from
DBRS; and

(v) is not a Covenant Lite Loan other than an Eligible Covenant Lite Loan.

“Collateral Quality Test” means a test that is satisfied if, as of any date of
determination, in the aggregate, the Collateral Obligations owned (or in
relation to a proposed purchase of a Collateral Obligation, both owned and
proposed to be owned) by the Borrower satisfy each of the tests set forth below:

(a) the Minimum Diversity Score Test;

(b) the Minimum Average Recovery Rate Test;

(c) the Minimum Weighted Average Spread Test;

(d) the Minimum Weighted Average Fixed Rate Coupon Test;

(e) the Weighted Average Maturity Date Test; and

(f) the Maximum DBRS Risk Score Test;

provided, that during the Ramp-Up Period each of the aforementioned tests shall
be subject to compliance with the proviso of clause (b) of the definition of
“Eligibility Criteria”.

“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 any Payment Date, the period
commencing immediately following the prior Collection Period (or on the Closing
Date, in the case of the Collection Period relating to the first Payment Date)
and ending on the sixth Business

 

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Day prior to such 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 day preceding 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 Obligations 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 Obligations and all
Proceeds from any sale or disposition of any such Collateral Obligations.

“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 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 2.05(b) or Section 2.06 or
increased or reduced from time to time pursuant to assignments effected in
accordance with Section 12.06(a).

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

“Commitment Shortfall” means, as of any date of determination, the positive
excess, if any, of (A) the Portfolio Exposure Amount over (B) the Available
Unfunded Amount.

“Commitment Termination Date” means the last day of the Reinvestment Period;
provided that:

(a) if the Reinvestment Period ends as a result of one or more of the
occurrences referred to in clauses (c) through (e) of the definition thereof,
then the Commitment Termination Date will be the day that is five Business Days
after the date on which the Facility Agent, the Lenders and the Borrower have
notice of such end of the Reinvestment Period; and

(b) if the Commitment Termination Date would otherwise not be a Business Day,
then the Commitment Termination Date shall be the immediately succeeding
Business Day.

“Concentration Limitations” means limitations that are satisfied if, as of any
date of determination, in the aggregate, the Aggregate Principal Balance of the
Collateral Obligations owned (or, in relation to a proposed purchase of a
Collateral Obligation, proposed to be owned) by the Borrower 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), calculated as a percentage of Total Capitalization
(unless otherwise specified):

(a) not more than 15% consist of Fixed Rate Obligations;

 

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(b) not more than 5% consist of obligations of any one Obligor (and Affiliates
thereof); provided that up to 5 Obligors (and their respective Affiliates) may
each constitute up to 7%;

(c) not more than 15.0% consist of Revolving Collateral Loans or Delayed
Drawdown Collateral Loans; subject in each case to compliance with the Funded
Draw Assignment Provisions;

(d) not more than 10.0% consist of Canadian Dollar Obligations;

(e) not more than 25% consist of Collateral Obligations that are not Eligible
Senior Secured Loans;

(f) not more than 10.0% consist of Collateral Obligations that are Eligible
Senior Secured Bonds;

(g) not more than 5.0% consist of Collateral Obligations that are Current Pay
Obligations;

(h) not more than 12.5% consist of Collateral Obligations with Obligors in any
one DBRS Industry Classification, provided that any 2 DBRS Industry
Classifications may each constitute up to 15%;

(i) not more than 20.0% consist of Participation Interests, all of which must be
from Eligible Selling Institutions (or such other Selling Institution (A) that
has been approved in writing by the Facility Agent and (B) with respect to which
the Rating Confirmation has been satisfied), provided that (x) not more than 15%
consist of Participation Interests in respect of a single Selling Institution
that has (or such Selling Institution is guaranteed by an Affiliate having) a
DBRS Long Term Rating of “AA”, (y) not more than 10.0% consist of Participation
Interests in respect of a single Selling Institutions that have (or such Selling
Institution is guaranteed by an Affiliate having) a DBRS Long Term Rating of “AA
(low)”, and (z) not more than 5% consist of Participation Interests in respect
of a single Selling Institution that has (or such Selling Institution is
guaranteed by an Affiliate having) a DBRS Long Term Rating of “A (high)”;

(j) not more than 5% consist of DIP Loans;

(k) not more than 20% consist of Collateral Obligations that permit the payment
of interest to be made less frequently than quarterly (it being understood that,
to the extent that a Collateral Obligation provides an Obligor with the option
to make interest payments at different intervals, the longest such interval that
is available to the Obligor (regardless of the interval that is in use at any
time) shall govern for purposes of this clause (k));

(l) not more than 25% consist of Collateral Obligations, measured at the time of
purchase by the Borrower, that (1) (i) have a DBRS Risk Score above 22.5401 or
(ii) are in the process of receiving a Credit Estimate and (2) have a trailing
twelve

 

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month EBITDA of less than $10 million; provided that Collateral Obligations that
receive a Credit Estimate with a DBRS Risk Score equal to or below 22.5401 will
be excluded from such 25% limitation once the Credit Estimate is received; and

(m) not more than 5.0% consist of Collateral Obligations that are Eligible
Covenant Lite Loans.

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

“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.

“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 Obligation 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 Minimum Overcollateralization Ratio Test; and

(b) the Interest Coverage Ratio Test.

“Covered Account” means each of the Collection Account (including the Interest
Collection Subaccount, the Principal Collection Subaccount, and the Canadian
Dollar Subaccount), the Payment Account, the Revolving Reserve Account, the
Lender Funding Account (including each Lender Funding Subaccount therein), the
Currency Exchange Account, the Custodial Account, the Funded Draw Collection
Account, and the Closing Expense Account.

 

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“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
include (i) Versailles Assets LLC, (ii) Bleachers Finance 1 Limited, (iii) any
other commercial paper program or vehicle established or administered by
Natixis, New York Branch, and (iv) any other commercial paper program or vehicle
established or administered by 20 Gates Management LLC.

“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 Obligation, a numerical
value representing a credit estimate obtained from DBRS.

“Credit Risk Loan/Bond” means a Collateral Obligation that is not a Defaulted
Loan/Bond but which, in the reasonable business judgment of the Investment
Manager (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/Bond and is designated as a “Credit Risk Loan/Bond” by the
Investment Manager.

“Cumulative Net Loss Amount” means, as of any date of determination, the sum of
all Net Loss Amounts as of such date, minus any amount previously paid to the
holders of the Equity pursuant to Sections 9.01(a)(i)(K) and (M) on each Payment
Date preceding such date of determination.

“Currency Exchange Account” means the currency exchange account established
pursuant to Section 8.10.

“Currency Exchange Mark-to-Market Amount” means, as of any Determination Date,
the amount, if any, by which (x) the Dollar value of the Principal Balance of
the Canadian Dollar Obligations at the Settlement Date Rate (after adjustment
for any repayments of principal) exceeds (y) the Dollar value of the Principal
Balance of the Canadian Dollar Obligations at the applicable Spot Foreign
Exchange Rate on such Determination Date. For the avoidance of doubt, no amount
calculated pursuant to this definition shall be less than zero.

“Current Pay Obligation” means any Collateral Obligation that would otherwise be
a Defaulted Loan/Bond but as to which:

(a) (x) no default has occurred and is continuing with respect to the payment of
interest and any contractual principal (if any), (y) all contractual payments
due at the relevant time of determination (including principal, interest and any
other such payments) have been paid in Cash and (z) the Borrower reasonably
expects that the next interest payment due will be paid in Cash on the scheduled
payment date (which judgment shall not subsequently be called into question as a
result of subsequent events);

(b) such Collateral Obligation has a Market Value (which is not determined
pursuant to clause (d)(ii) of the definition thereof) of no less than 80% of
par; and

 

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(c) if the Obligor in respect of such Collateral Obligation is subject to a
bankruptcy proceeding, (x) the related bankruptcy court has authorized all
payments due and payable on such Collateral Obligation and (y) all interest
payments and scheduled distributions of principal authorized by such bankruptcy
court have been paid by such Obligor in respect of such Collateral Obligation.

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

“Custodian” means the Collateral Agent, as custodian hereunder, together with
its successors.

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

“DBRS” means DBRS, Inc., together with its successors.

“DBRS Industry Classification” means each industry identified on Schedule 5.

“DBRS Long Term Rating” means a long term credit rating determined in accordance
with the provisions set forth in Schedule 7.

“DBRS Rating” means a credit rating determined in accordance with the procedures
set forth in Schedule 7.

“DBRS Recovery Rate” means for each Collateral Obligation for purposes of
determining the Weighted Average Recovery Rate, a percentage based on the most
appropriate description of the Collateral Obligation’s security position from
the following table:

 

Eligible Senior Secured Loan

     52.00 % 

Eligible Second Lien Loan

     32.50 % 

Eligible Senior Secured Bond

     32.50 % 

Eligible Mezzanine Loan

     12.50 % 

“DBRS Risk Score” means the numerical value corresponding to the DBRS Long Term
Rating for a Collateral Obligation in the table contained in Schedule 4.

“DBRS Short Term Rating” means a short term credit rating determined in
accordance with the provisions set forth in Schedule 7.

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

“Defaulted Equity Security” means any equity security delivered to the Borrower
upon acceptance of an Offer in respect of a Defaulted Loan/Bond.

 

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“Defaulted Loan/Bond” means any Collateral Obligation, (i) as to which (a) any
payment due (whether scheduled, unscheduled, by way of acceleration or
otherwise) under the Related Documents is not made when due and such nonpayment
is continuing for five Business Days, (b) any payment of principal, interest or
commitment fees due on another pari passu debt obligation of the Obligor is not
made when due and such nonpayment is continuing for 30 days and would permit the
acceleration of any principal, interest or other amounts owed under the related
Related Documents, but only until such default has been cured or waived or a
forbearance agreement has been entered into and remains in effect, and such
Collateral Obligation satisfies the criteria for inclusion in the Collateral
described in the definitions of the terms “Eligibility Criteria” or “Eligible
Investments”, (c) except in the case of a Collateral Obligation which is a
Current Pay Obligation or a DIP Loan, the Obligor in respect of such Collateral
Obligation has, or others have, instituted proceedings to have such Obligor
adjudicated as bankrupt or insolvent or placed into receivership and such
proceedings have not been stayed or dismissed and the Collateral Obligation has
not received adequate protection and current interest, or such Obligor has filed
for protection under Chapter 11 of the Bankruptcy Code, (d) except in the case
of a Collateral Obligation which is a Current Pay Obligation or a DIP Loan, such
Collateral Obligation or the Obligor in respect of such Collateral Obligation or
another obligation of such Obligor has a DBRS Long Term Rating of “D”, or had
such a rating before such rating was withdrawn, or a DBRS Long Term Rating in
respect of such Collateral Obligation or Obligor cannot be determined or has not
received a Credit Estimate, (e) such Collateral Obligation has been placed and
remains on non-accrual by the Investment Manager, or (f) a Specified Change has
occurred and the Borrower has not satisfied the requirements of Section 5.02(v)
with respect to such Specified Change; (ii) that is a Participation Interest
(a) with respect to which the related Selling Institution has defaulted in any
material respect in the performance of any of its payment obligations under the
Participation Interest, or (b) that would, if such loan or other debt security
were a Collateral Obligation, constitute a “Defaulted Loan/Bond” under clause
(i) above, or (c) with respect to which the related Selling Institution has a
DBRS Long Term Rating of “D”, or had such rating before such rating was
withdrawn, or any such debt or deposit obligations shall cease to be rated or a
DBRS Long Term Rating in respect of such Selling Institution cannot be
determined; or (d) the Selling Institution has defaulted in the performance of
any of its payment obligations with respect to such Participation Interests
under the related participation agreement; or (iii) that, in the reasonable
business judgment of the Investment Manager, is a Defaulted Loan/Bond.

A Collateral Obligation that has become a Defaulted Loan/Bond shall no longer
constitute a Defaulted Loan/Bond when either (a) (i) such Defaulted Loan/Bond is
current on all payments for a period of six months if such obligation pays
monthly, nine months if such obligation pays quarterly and one year if such
obligation pays semiannually, (ii) such Defaulted Loan/Bond would qualify as a
Collateral Obligation and would satisfy the Eligibility Criteria if originated
or purchased at such time and (iii) the Investment Manager has retained an
Approved Valuation Firm to assist in the performance of a valuation analysis of
such Defaulted Loan/Bond or (b) the Facility Agent has given its prior written
consent that such Defaulted Loan/Bond shall no longer constitute a Defaulted
Loan/Bond and the Borrower has obtained a Rating Confirmation in connection
therewith. The Borrower shall submit any such Collateral Obligation to DBRS for
an updated Credit Estimate promptly after it ceases to constitute a Defaulted
Loan/Bond in accordance with the preceding sentence.

 

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“Defaulting Lender” means, at any time, any Lender that, at such time has failed
for three or more Business Days after a Borrowing Date to fund its portion of an
Advance required pursuant to the terms of this Agreement (other than failures to
fund as a result of a bona fide dispute as to whether the conditions to
borrowing were satisfied on the relevant Borrowing Date); provided that a CP
Conduit that has failed so to fund an Advance shall not be deemed to be a
Defaulting Lender if the Liquidity Bank or any other Affiliate of such CP
Conduit has funded any such Advance to the Borrower.

“Deferred Replacement Investment Management Fee” has the meaning assigned to
such term in Section 9.01(a)(i)(I).

“Delayed Drawdown Collateral Loan” means a Collateral Obligation that
(a) requires the Borrower to make one or more future advances to the borrower
under the Related Documents, drawable only in the currency in which such
Collateral Obligation is denominated, (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 Obligation will be a Delayed Drawdown
Collateral Loan only to the extent of undrawn commitments and solely until all
commitments by the Borrower to make advances on such Collateral Obligation 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

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

 

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(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 acquiring the underlying Financial Asset for a Securities
Intermediary, and in either case, accepting 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;

(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,

 

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(ii) causing the Custodian to credit such Dollars to a securities 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 Investment Manager will (x) 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’ consents
expected to be obtained in due course in connection with the transfer of the
Collateral Obligations to the Borrower (except, in the case of clause (B), for
any such agents’ consents where the Investment Manager of any of its Affiliates
is the agent)) and (y) with respect to each Collateral Obligation the Obligor of
which is an Eligible Foreign Obligor, provide written notice to such Eligible
Foreign Obligor of the pledge of such Collateral Obligation to the Collateral
Agent hereunder and take such other actions and execute such other documents and
instruments (including pledges or charges under the law of such Eligible Foreign
Obligor’s jurisdiction of organization) as the Facility Agent may reasonably
request.

“Determination Date” means the last day of each Collection Period.

“DIP Loan” means an obligation:

(a) obtained or incurred after the entry of an order of relief in a case pending
under Chapter 11 of the Bankruptcy Code;

(b) to a debtor in possession as described in Chapter 11 of the Bankruptcy Code
or a trustee (if appointment of such trustee has been ordered pursuant to
Section 1104 of the Bankruptcy Code);

(c) on which the related Obligor is required to pay interest and/or principal on
a current basis;

(d) approved by a Final Order or Interim Order of the bankruptcy court so long
as such obligation is (A) fully secured by a lien on the debtor’s otherwise
unencumbered assets pursuant to Section 364(c)(2) of the Bankruptcy Code,
(B) fully secured by a lien of equal or senior priority on property of the
debtor’s estate that is otherwise subject to a lien pursuant to Section 364(d)
of the Bankruptcy Code or (C) is secured by a junior lien on the debtor’s
encumbered assets (so long as such loan is fully secured based on the most
recent current valuation or appraisal report, if any, of the debtor); and

 

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(e) that has a DBRS Rating.

“Diversity Score” means, with respect to the Collateral Obligations (other than
Defaulted Loan/Bonds), the sum of each of the Industry Diversity Scores.

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

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

“Duff & Phelps” means Duff & Phelps Credit Rating Co., together with its
successors.

“EBITDA” means with respect to an Obligor of a Collateral Obligation, for any
period, the net income of such Obligor plus the sum of interest, taxes,
depreciation, and amortization, with such adjustments as the Investment Manager
determines to be appropriate in accordance with the Servicing Standard, in each
case for such period.

“Eligibility Criteria” means, in connection with each acquisition or commitment
to acquire a Collateral Obligation, and after giving effect to any contribution
of additional equity by the Investment Manager or an Affiliate thereof occurring
on or prior to such date as per Section 10.04, each of the following:

(a) Such obligation is a Collateral Obligation;

(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, compliance with such
Collateral Quality Test and/or Concentration Limitation, as applicable, is
maintained or improved), provided that during the Ramp-Up Period, (A) the
Collateral Quality Tests (other than the Minimum Average Recovery Rate Test)
shall not apply and (B) each Collateral Obligation shall have (i) if such
Collateral Obligation is not a Fixed Rate Obligation, a spread greater than or
equal to 4.50%, (ii) a DBRS Risk Score less than or equal to 70.5414, (iii) an
Average Maturity Date on or before May 8, 2019 and (iv) if such Collateral
Obligation is a Fixed Rate Obligation, a fixed coupon greater than or equal to
6.00%.

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

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

(e) no Commitment Shortfall exists.

 

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“Eligible Country” means (a) the United States (or any state thereof),
(b) Canada and (c) any other foreign jurisdiction (i) approved in writing by the
Facility Agent and (ii) with respect to which the Rating Confirmation has been
satisfied.

“Eligible Covenant Lite Loan” means a Collateral Obligation that (i) is a
Covenant Lite Loan, (ii) is an Eligible Senior Secured Loan, (iii) has a DBRS
Rating of “B (low)” or higher, and (iv) constitutes all, or part, of a tranche
at least equal to $100 million at the time such tranche is issued.

“Eligible Foreign Obligor” means an Obligor organized (a) in Canada or (b) in
another foreign jurisdiction (i) approved in writing by the Facility Agent
(ii) with respect to which the Rating Confirmation has been satisfied.

“Eligible Hedge Agreement” means an interest rate hedge agreement entered into
by the Borrower with an Eligible Hedge Counterparty and consented to by the
Facility Agent.

“Eligible Hedge Counterparty” means, in respect of a counterparty, a party that
(a) (i) is incorporated or organized under the laws of the United States (or any
state thereof) or Canada or (ii) is the United States branch of a bank organized
outside of the United States (provided such branch of a bank organized outside
of the United States is duly authorized and licensed to transact business in the
United States) and (b) (i) has (or such counterparty is guaranteed by an
Affiliate having) a DBRS Long Term Rating of at least “A (high)” and a DBRS
Short Term Rating of at least “R-1 (middle)” or (ii) (A) is consented to by the
Facility Agent and (B) with respect to which the Rating Confirmation has been
satisfied.

“Eligible Investment Required Ratings” means, in the case of each Eligible
Investment, a DBRS Short Term Rating of at least “R-1 (middle)” and, in the case
of any Eligible Investment with a maturity of longer than 91 days, a DBRS Long
Term Rating of at least “AA”.

“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;

 

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(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 Confirmation has been satisfied and the
Facility 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;

(vii) money market funds which have, at all times, credit ratings of “AAA” by
DBRS (or, if not rated by DBRS, credit ratings of “Aaa” and “MR1+” by Moody’s
and “AAAm” or “AAAm-G” by S&P, respectively); 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) 90 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

 

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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 Investment Manager’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
Collateral Agent or any of its Affiliates, or any entity to which the Collateral
Agent provides services or receives compensation (provided that such investment
otherwise meets the applicable requirements set forth above), and in connection
therewith the Collateral Agent 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).

“Eligible Mezzanine Loan” means a Collateral Obligation that is an Eligible
Second Lien Loan or other comparable loan obligation 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), including any such loan obligation with attached warrants or
other options to acquire a share or other equity interest (whether cash pay or
non cash pay) and such obligation is evidenced by an issue of notes or similar
instruments; provided that loans to or issues by a start up company or an
Obligor with no operating history shall be excluded from the definition of
“Eligible Mezzanine Loan” unless (i) such loans or securities are fully
guaranteed by an Affiliate of the Obligor which has an established operating
history or Rating Confirmation is received; or (ii) such loans relate to the
financing of a start up company that has been spun off from a company with an
established operating history) as determined by the Investment Manager in its
reasonable business judgment, or a participation therein.

“Eligible Second Lien Loan” means a Collateral Obligation which (i) is not by
its terms (and is not expressly permitted by its terms to become) subordinate in
right of payment to any other obligation for borrowed money of the obligor of
such loan, other than, with respect to any valid first priority perfected
security interest in specified collateral, with respect to the liquidation of
such obligor or such collateral, (ii) is secured by a valid second priority
perfected security interest or lien in, to or on specified collateral securing
the obligor’s obligations under such loan (whether or not the Issuer and any
other lenders are also granted a security interest of a higher or lower priority
in additional collateral), (iii) is secured by collateral having a value
(determined as set forth below) at least equal to the outstanding principal
balance of such loan plus the aggregate outstanding principal balances of all
other loans of equal or higher seniority secured by a first or second lien or
security interest in the same collateral, (iv) is not a loan which is secured
solely or primarily by the common stock of its obligor or any of its Affiliates
(provided that the limitation set forth in this clause (iv) shall not apply with
respect to a loan made to a parent entity that is secured solely or primarily by
the stock of one or more of the subsidiaries of such parent entity to the extent
that the granting by any such subsidiary of a lien on its own property would
(1) in the case of a subsidiary that is not part of the same consolidated group
as such parent entity for U.S. Federal income tax purposes, result in a deemed
dividend by such subsidiary to such parent entity for such tax purposes,
(2) violate law or regulations applicable to such subsidiary (whether the
obligation secured is such loan or any other similar type of indebtedness owing
to third parties) or (3) cause such subsidiary to suffer adverse economic
consequences under capital adequacy or other similar rules, in each case, so
long as (x)

 

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the Related Documents limit the incurrence of indebtedness by such subsidiary
such that the net collateral value satisfies clause (iii) above, and (y) the
aggregate amount of all such indebtedness is not greater than 60% of the
aggregate value of the assets of such subsidiary, and (v) does not qualify as an
Eligible Senior Secured Loan. The determination as to whether condition (iii) of
this definition is satisfied shall be based on both (a) an appraisal or other
valuation performed on or about the date of origination or of the most recent
restructuring of the loan (to the extent constituting a Specified Change) and
(b) the Investment Manager’s judgment in accordance with the Servicing Standard
at the time the loan is acquired by the Issuer.

“Eligible Selling Institution” means, with respect to any Participation Interest
acquired or committed to be acquired by the Borrower, a Selling Institution in
respect of such Participation Interest that (a) (i) is incorporated or organized
under the laws of the United States (or any state thereof) or Canada or (ii) is
the United States branch of a bank organized outside of the United States
(provided such branch of a bank organized outside of the United States is duly
authorized and licensed to transact business in the United States) and (b) has
(or such Selling Institution is guaranteed by an Affiliate having) a DBRS Long
Term Rating of at least “A (high)” and a DBRS Short Term Rating of at least “R-1
(middle)”.

“Eligible Senior Secured Bond” means a Collateral Obligation that ranks pari
passu with the Eligible Senior Secured Loans of the same Obligor including, if
issued at the holding company level, such Obligor has no secured debt at the
operating company level and, if the Obligor has no Eligible Senior Secured Loans
outstanding, benefits from the same security package as would an Eligible Senior
Secured Loan.

“Eligible Senior Secured Loan” means a Collateral Obligation which (i) is not by
its terms (and is not expressly permitted by its terms to become) subordinate in
right of payment (except as provided in the last sentence of this definition) to
any other obligation for borrowed money (other than a Working Capital Revolver)
of the obligor of such loan, (ii) is secured by a valid first priority perfected
security interest or lien in, to or on specified collateral securing the
obligor’s obligations under such loan (whether or not the Borrower and any other
lenders are also granted a security interest of lower priority in additional
collateral), (iii) is secured by collateral having a value (determined as set
forth below), together with the collateral securing all Working Capital
Revolvers of the obligor, if any, not less than the sum of (A) the outstanding
principal balance of such loan plus (B) the aggregate outstanding principal
balances of all other loans of equal seniority secured by a first lien or
security interest in the same collateral plus (C) the aggregate maximum
commitments of all Working Capital Revolvers of the obligor, and (iv) is not a
loan which is secured solely or primarily by the common stock of its obligor or
any of its Affiliates (provided that the limitation set forth in this clause
(iv) shall not apply with respect to a loan made to a parent entity that is
secured solely or primarily by the stock of one or more of the subsidiaries of
such parent entity to the extent that the granting by any such subsidiary of a
lien on its own property would (1) in the case of a subsidiary that is not part
of the same consolidated group as such parent entity for U.S. Federal income tax
purposes, result in a deemed dividend by such subsidiary to such parent entity
for such tax purposes, (2) violate law or regulations applicable to such
subsidiary (whether the obligation secured is such loan or any other similar
type of indebtedness owing to third parties) or (3) cause such subsidiary to
suffer adverse economic consequences under capital adequacy or other similar
rules), in each case, so long as (x) the related Related Documents limit the
incurrence of indebtedness by such subsidiary, such

 

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that the net collateral value satisfies clause (iii) above, and (y) the
aggregate amount of all such indebtedness is not material relative to the
aggregate value of the assets of such subsidiary. The determination as to
whether condition (iii) of this definition is satisfied shall be based on both
(a) an appraisal or other valuation performed on or about the date of
origination or of the most recent restructuring of the loan (to the extent
constituting a Specified Change) and (b) the Investment Manager’s judgment in
accordance with the Servicing Standard at the time the loan is acquired by the
Borrower. The right to receive the proceeds of designated collateral subject to
a set of contractual payment priorities affecting debt issued under, permitted
by, or governed by the same Related Document will not prevent a loan that
satisfies the express requirements hereof from being an “Eligible Senior Secured
Loan”.

“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(g).

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

“Equity Kicker” means, with respect to any Collateral Obligation, one or more
warrants attached thereto which collectively constitute no more than 2.0% of the
purchase price (as allocated by the Investment Manager) paid by the Borrower for
such Collateral Obligation.

“Equity Security” means any (a) Equity Kicker; (b) Defaulted Equity Security;
and (c) other equity security that does not entitle the holder thereof to
receive periodic payments of interest and one or more installments of principal,
including those received by the Borrower as a result of the exercise or
conversion of an Equity Kicker or other convertible or exchangeable Collateral
Obligation.

“Equivalent Unit Score” means, with respect to each Obligor, the lesser of
(a) one and (b) the Obligor Par Amount for such Obligor divided by the Average
Par Amount.

“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); (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

 

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Plan; (f) (i) the receipt by the Borrower or any member of its ERISA Group from
the PBGC of a notice of determination that the PBGC intends to seek termination
of any Plan or to have a trustee appointed for any Plan, or (ii) the filing by
the Borrower or any member of its ERISA Group of a notice of intent to terminate
any Plan; (g) the incurrence by the Borrower or any member of its ERISA Group of
any liability (i) with respect to a Plan pursuant to Sections 4063 and 4064 of
ERISA, (ii) with respect to a facility closing pursuant to Section 4062(e) of
ERISA, or (iii) with respect to the withdrawal or partial withdrawal from any
Multiemployer Plan; (h) the receipt by the Borrower or any member of its ERISA
Group of any notice concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, in endangered
status or critical status, within the meaning of Section 432 of the Code or
Section 305 of ERISA or is or is expected to be insolvent or in reorganization,
within the meaning of Title IV of ERISA; or (i) the failure of the Borrower or
any member of its ERISA Group to make any required contribution to a
Multiemployer Plan.

“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 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.

“Excluded Article 122a Increased Costs” means the Borrower’s obligation to pay
additional amounts to a Lender pursuant to clauses (a) or (b) of Section 2.09
incurred solely as a result of a change in law or regulation applicable to the
Lender that increases the net economic interest required to be retained by the
Retention Provider to an amount that exceeds 40% of the nominal value of the
Collateral calculated based on the Aggregate Principal Balance of all of the
Collateral Obligations and the principal amount of all Eligible Investments, in
each case at the time of determination without taking into account any deduction
pursuant to the proviso to the definition of “Principal Balance” of any
Collateral Obligation or any deduction or discount in respect of the purchase
price paid therefor by the Borrower as of such date of determination.

“Excluded Taxes” means (i) Taxes imposed on (or measured by) net income or net
profits or franchise Taxes in the case of any Secured Party, (A) imposed by the
jurisdiction (or any political subdivision thereof) under the laws of which such
Secured Party is organized or in which its principal office is located, or in
the case of any Lender, in which its applicable lending office is located or
(B) that are Other Connection Taxes, (ii) branch profits Taxes imposed under
Section 884 of the Code, or any similar Taxes, (iii) Taxes that are imposed by
reason of FATCA, (iv) Taxes that are attributable to a Secured Party’s failure
to comply with the requirements of Section 12.03(g), (v) Taxes that are
attributable to a Secured Party designating a successor lending office at which
it maintains its Notes other than at the request of the Borrower

 

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and except to the extent the Secured Party was entitled, at the time that the
successor lending office is designated, to receive additional amounts from the
Borrower with respect to such Taxes pursuant to Section 12.03 and (vi) that are
U.S. withholding taxes imposed on amounts payable by the Borrower to a Secured
Party at the time such Secured Party becomes a party to this Agreement, except
to the extent that such Secured Party’s assignor (if any) was entitled, at the
time of assignment, to receive additional amounts from the Borrower with respect
to such Taxes pursuant to Section 12.03.

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

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

“Facility Agent Fee” means $10,000, payable on each quarterly Payment Date.

“Facility Documents” means this Agreement, the Notes, the Account Control
Agreement, the Collateral Agent Fee Letter, the Investment Management Agreement,
the Master Transfer 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 Collateral
Agent’s security interest and any other agreements delivered to the Facility
Agent, the Collateral Agent and/or the Lenders in furtherance of or pursuant to
any of the foregoing.

“Facility Margin Level” means 2.75% per annum.

“FAS 166/167 Regulatory Capital Rules” means 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.

“FATCA” means Sections 1471 through 1474 of the Code (or any amended versions of
Sections 1471 through 1474 of the Code that are substantively comparable and not
materially more onerous to comply with) and any regulations promulgated
thereunder and 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 Facility 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

 

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annum at which such overnight borrowings are made on that day as promptly
reported by such Lender to the Borrower, the Calculation Agent and the Agents 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.

“Final Maturity Date” means May 8, 2020.

“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.

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

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

“FINRA” means the Financial Industry Regulatory Authority, Inc. or any successor
entity.

“Fitch” means Fitch, Inc., together with its successors.

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

“Funded Draw Assignment” means (i) the sale, assignment and transfer to the
Borrower of a funded loan amount under a Revolving Collateral Loan or Delayed
Drawdown Collateral Loan by TPG Specialty Lending Inc., as “commitment holder”,
under a sale agreement in form and substance acceptable to the Facility Agent
and with respect to which the Borrower has obtained a Rating Confirmation in
connection therewith, or (ii) the funding by the Borrower under a Revolving
Collateral Loan or Delayed Drawdown Collateral Loan owned by TPG Specialty
Lending Inc. concurrently with the execution by TPG Specialty Lending Inc. and
the Borrower of a sale agreement in form and substance acceptable to the
Facility Agent and with respect to which the Borrower has obtained a Rating
Confirmation in connection therewith, in each case without the concurrent
assignment and transfer to the Borrower of any commitment or obligation as to
future fundings. For purposes hereof, Funded Draw Assignments shall be
considered to be Revolving Collateral Loans or Delayed Drawdown Collateral Loans
owned by the Borrower, except that the unfunded amount thereof shall at all
times be deemed to be zero.

“Funded Draw Collection Account” has the meaning specified in Section 8.11.

“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.

 

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“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 (including without limitation any covenant relating to
a borrowing base, asset valuation or similar asset-based requirement) only upon
the occurrence of certain actions of the borrower, including a debt issuance,
dividend payment, share purchase, merger, acquisition or divestiture.

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

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrower under this Agreement and (b) to the extent not otherwise described in
the preceding clause (a), Other Taxes.

“Independent Accountants” has the meaning assigned to such term in Section 8.08.

“Independent Manager Criteria” has the meaning assigned to such term in
Section 5.02(u).

“Industry Diversity Score” means, with respect to each DBRS Industry
Classification, the number established by reference to the Industry Diversity
Score Table set forth in Schedule 3 for the related Aggregate Industry
Equivalent Unit Score; provided that, if the Aggregate Industry Equivalent Unit
Score falls between any two numbers shown in the Industry Diversity Score Table
set forth in Schedule 3, the Aggregate Industry Equivalent Unit Score shall be
the lesser of the two.

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

 

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

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

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

“Interest Coverage Ratio Test” means a test that is satisfied at any time if the
ratio of (A) the Collateral Interest Amount at such time, to (B) the sum of all
amounts payable (or expected at such time to be payable) on the following
Payment Date pursuant to clauses (A), (B), (C), (D), and (E) in
Section 9.01(a)(i), is greater than 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 Obligations and the other Collateral,
including the accrued interest received in connection with a sale thereof during
such Collection Period;

(b) for each Collateral Obligation with a purchase price below 95% of such
Collateral Obligation’s Principal Balance, Principal Proceeds received in excess
of such Principal Balance;

(c) 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 Revolving Reserve
Account; and all interest payments received by the Borrower during such
Collection Period on Eligible Investments purchased with Principal Proceeds;

(d) 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
Investment Manager notifies the Agents before such Determination Date (and in no
event later than 10 days following receipt thereof) that the Investment Manager
in its sole discretion has determined that such payments are to be treated as
Principal Proceeds;

(e) commitment fees, origination fees, facility fees, anniversary fees, ticking
fees and other similar fees received by the Borrower during such Collection
Period unless the Investment Manager notifies the Agents before such
Determination Date (and in no event later than 10 days following receipt
thereof) that the Investment Manager in its sole discretion has determined that
such payments are to be treated as Principal Proceeds; and

 

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(f) any amounts deposited in the Collection Account from the Closing Expense
Account in accordance with Section 8.12;

provided that:

(1) as to any Defaulted Loan/Bond (and only so long as it remains a Defaulted
Loan/Bond), any amounts received in respect thereof (including without
limitation any assets received therewith or in exchange thereof, including
without limitation any Equity Security) will constitute Principal Proceeds (and
not Interest Proceeds) until the aggregate of all collections in respect of such
Defaulted Loan/Bond since it became a Defaulted Loan/Bond equals the outstanding
principal balance of such Defaulted Loan/Bond at the time as of which it became
a Defaulted Loan/Bond, and all amounts received in excess thereof, however
denominated, will constitute Interest Proceeds;

(2) in each case subject to clause (1) above, (x) any dividends paid on any
Equity Security will constitute Interest Proceeds, (y) any gain on the sale of
Equity Securities (including Equity Securities received as a result of
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
Obligation(s) of the same Obligor over (B) the Loan Amount (after adjustment for
any borrowings or repayments and exclusive of accrued interest) for such
Collateral Obligation(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 by the Borrower as equity contributions (however
designated) from the Investment Manager or any of its Affiliates will constitute
Principal Proceeds, unless otherwise directed by the Borrower by prior written
notice to the Agents pursuant to Section 10.04.

For purposes of clause (2)(y) above, “gain” means any amounts received in the
sale of an Equity Security that is in excess of the cost basis associated with
such Equity Security (excluding any amounts received in respect of an Equity
Security in exchange for defaulted debt). No amounts that are required by the
terms of any participation agreement to be paid by the Borrower to any Person to
whom the Borrower has sold a participation interest shall constitute “Interest
Proceeds” hereunder.

“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.

 

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

“Investment Manager” means TPG Specialty Lending, Inc., or any successor in such
capacity in accordance with the Investment Management Agreement.

“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.

“Lender Funding Account” means the lender funding account established pursuant
to Section 8.03(c).

“Lender Funding Subaccount” has the meaning specified in Section 8.03(c).

“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 in
accordance with the terms hereof, other than any such Person that ceases to be a
party hereto pursuant to an Assignment and Acceptance.

“Leverage Multiple” means, as of any date, the ratio of (A) the Row Advance Rate
in effect on such date over (B) 1 minus the Row Advance Rate in effect on such
date.

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

“LIBOR” has the meaning assigned to such term on Schedule 6.

“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 which is a CP Conduit pursuant to a Liquidity Facility.

“Liquidity Facility” means, for any CP Conduit, 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 CP Conduit for purposes of
funding such CP Conduit’s obligations under this Agreement.

“Loan Amount” means, with respect to a Collateral Obligation at the time of the
Borrower’s acquisition thereof, an amount equal to the least of (a) if acquired
by the Borrower for a purchase price equal to 95% or more of its outstanding
principal amount (excluding any

 

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capitalized interest) as of the date of acquisition, such outstanding principal
amount, (b) if acquired by the Borrower for a purchase price less than 95% of
its outstanding principal amount (excluding any capitalized interest) as of the
date of acquisition, such purchase price and (c) if acquired from an Affiliate
of the Borrower, the current cost basis of the seller or transferor.

“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 (including without limitation any covenant relating to
a borrowing base, asset valuation or similar asset-based requirement) 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 Investment Manager 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 Investment Manager;

(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 asset;

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

(iii) if only one such bid can be obtained, such bid; or

(c) if the Market Value of 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 Obligation has been
obtained or updated within the immediately preceding three months;

(d) if such quote or bid described in clause (a), (b) or (c) is not available,
then the Market Value of such Collateral Obligation shall be the lower of
(i) the higher of (A) the DBRS Recovery Rate and (B) 70% of the outstanding
principal amount of such Collateral Obligation and (ii) the Market Value
determined by the Borrower 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

 

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(e) if the Market Value of 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.

“Master Transfer Agreement” means the Master Sale and Contribution Agreement,
dated as of the Closing Date, as amended, restated, supplemented or otherwise
modified from time to time, between the Borrower, as assignee, and TPG Specialty
Lending, Inc., as assignor.

“Material Adverse Effect” means any event that has, or could reasonably be
expected to have, a material adverse effect on (a) the business, assets,
financial condition or operations of the Borrower or the Investment Manager
(b) the ability of the Borrower or the Investment Manager to perform its
material obligations under this Agreement and the other Facility Documents or
(c) the material rights, interests, remedies or benefits (taken as a whole)
available to the Lenders or Agents under this Agreement and the other Facility
Documents, each as determined in good faith and on a commercially reasonable
basis by the Facility Agent.

“Matrix” means the table set forth on Schedule 8 hereto.

“Maximum DBRS Risk Score Test” is a test satisfied on any date of determination
if the Weighted Average DBRS Risk Score of the Collateral Obligations as of such
date is less than or equal to the Row DBRS Average Risk Score, provided that
Defaulted Obligations shall be excluded from such calculation.

“Minimum Average Recovery Rate Test” means a test that will be satisfied on any
date of determination if the Weighted Average Recovery Rate of Performing
Collateral Obligations as of such date is greater than or equal to 46%.

“Minimum Diversity Score Test” means a test that will be satisfied on any date
of determination if the Diversity Score of the Collateral Obligations,
calculated as a single number in accordance with standard diversity scoring
methodology using DBRS Industry Classifications, equals or exceeds the Row
Diversity Score and in no event less than 6.

“Minimum Overcollateralization Ratio Test” means a test that will be satisfied
on any date of determination if the Overcollateralization Ratio at such time is
greater than or equal to the Row Minimum OC Level.

“Minimum Weighted Average Fixed Rate Coupon Test” means a test that will be
satisfied on any date of determination if the Weighted Average Fixed Rate Coupon
equals or exceeds 6.00%.

“Minimum Weighted Average Spread Test” means a test that will be satisfied on
any date of determination if the Weighted Average Spread equals or exceeds the
Row Spread Level and in no event less than 4.50%.

“Money” has the meaning specified in Section 1-201(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 15th day of each calendar month in each year,
the first of which shall be June 15, 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 sixth Business Day prior to such Monthly Report Date.

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

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

“Net Loss Amount” means, as of any date of determination, (i) in the case of a
Defaulted Obligation, the product of (x) the difference (whether a positive or
negative number) between the purchase price in respect of such Defaulted
Obligation and the Market Value in respect of such Collateral Obligation in each
case expressed as a percentage multiplied by (y) the Principal Balance in
respect of such Collateral Obligation and (ii) for each sale of a Collateral
Obligation by the Borrower to a Person that is not an Affiliate thereof, the
product of (x) the difference (whether a positive or negative number) between
the purchase price in respect of such Collateral Obligation and the sale price
obtained by the Borrower (excluding accrued interest) in respect of such
Collateral Obligation, in each case, expressed as a percentage, multiplied by
(y) the Principal Balance in respect of such Collateral Obligation.

“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.

“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, 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
Collateral Agent Fee Letter or any other Facility Document, including all
amounts payable by the Borrower in respect of the Advances, with interest
thereon, and all amounts payable hereunder.

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

 

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“Obligor Par Amount” means, on any date and with respect to each Obligor under a
Collateral Obligation, the Aggregate Principal Balances of all Collateral
Obligations (other than Defaulted Loan/Bonds) with respect to which such Obligor
is the Obligor on such date; provided that, for purposes of calculating the
Obligor Par Amount, any Obligors that are Affiliated with one another will be
considered one Obligor.

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

“Offer” has the meaning given in Section 8.07(c).

“Other Connection Taxes” means, in the case of any Secured Party, any Taxes
imposed by any jurisdiction by reason of such Secured Party having any present
or former connection with such jurisdiction (other than a connection arising
solely from entering into, receiving any payment under or enforcing its rights
under this Agreement, the Notes or any other Facility Document).

“Other Taxes” has the meaning given in Section 12.03(b).

“Overcollateralization Ratio” means the percentage equivalent of a fraction, the
numerator of which is the Principal Collateralization Amount and the denominator
of which is the Borrower Liabilities.

“Participant” means any Person to whom a participation is sold as permitted by
Section 12.06(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 Obligation.

“PATRIOT Act” has the meaning assigned to such term in Section 12.17.

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

“Payment Date” means the 15th day of January, April, July and October in each
year, the first of which shall be July 15, 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).

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

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

 

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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
the assigning 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 Obligation” means a Collateral Obligation that is not a
Defaulted Loan/Bond.

“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) the Lien in favor of the Collateral Agent for the
benefit of the Secured Parties, (ii) the restrictions on transferability imposed
by the Related Documents (but only to the extent relating to customary
procedural requirements and agent consents expected to be obtained in due course
and not to Obligor consents) and (iii) inchoate Liens for taxes not yet payable
and mechanics’ or suppliers’ liens for services or materials supplied the
payment of which is not yet overdue or for which adequate reserves have been
established.

“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.

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

“Portfolio Advance Rate” means the percentage equivalent of a fraction, the
numerator of which is the Borrower Liabilities and the denominator of which is
the Principal Collateralization Amount.

“Portfolio Exposure Amount” means, at any time, the excess (if any) of (x) the
aggregate unfunded amounts in respect of all Revolving Collateral Loans and
Delayed Drawdown Collateral Loans and all amounts due for unsettled purchases at
such time over (y) the aggregate amount on deposit in the Revolving Reserve
Account at such time.

“Post-Default Rate” means a rate per annum equal to the rate of interest
otherwise in effect pursuant to this Agreement plus 2.0% per annum.

“Principal Balance” means:

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

 

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(b) with respect to any Revolving Collateral Loan or Delayed Drawdown Collateral
Loan, as of any date of determination, the Loan Amount of such Revolving
Collateral Loan or Delayed Drawdown 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 Drawdown Collateral Loan;

provided, in all cases, that the Principal Balance of (i) any Equity Security
shall be deemed to be zero and (ii) any Unsettled Security shall be deemed to be
zero.

“Principal Collateralization Amount” means an amount equal to the result of
(i) the Aggregate Principal Balance of all Performing Collateral Obligations
(provided that for such purposes, each Collateral Obligation whose purchase
price is below 95% will be carried at its purchase price expressed as a
percentage, times its outstanding principal balance), plus (ii) the aggregate
amount of cash on deposit in the Principal Collection Subaccount.

“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 sales and unapplied
proceeds of the Advances and any Cash equity contributions pursuant to
Section 10.04.

“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’ consents expected to
be obtained in due course in connection with the transfer of the Collateral
Obligations 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.

“Professional Independent Manager” has the meaning assigned to such term in
Section 5.02(u).

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

“Qualified Purchaser” has the meaning specified in Section 12.06(e).

 

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“Quarterly Asset Amount” means, for any Payment Date, the sum of (i) the Daily
Average Collateral Obligation Commitment Amount for such Payment Date and
(ii) the daily average balance of cash on deposit in the Principal Collection
Subaccount for the Collection Period related to such Payment Date.

“Ramp-Up Period” means the period from and including the Closing Date to and
including the earlier of (I) the date on which the Reinvestment Period ends and
(II) the date on which the Borrower or Investment Manager provides the Agents
with the notice described in Section 2.17(a).

“Rating Agency” means DBRS or, with respect to the Collateral generally,
Moody’s, Fitch, S&P or DBRS (or, if, at any time Moody’s, Fitch, S&P or DBRS
ceases to provide rating services with respect to debt obligations, any other
nationally recognized investment rating agency selected by the Borrower or the
Investment Manager and consented to by the Facility 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 Confirmation” means, with respect to any action or proposed action, a
condition that is satisfied (and upon satisfaction of such condition, the
related Rating Confirmation shall be deemed to have been satisfied) if DBRS has
been notified in writing by the Borrower of such action or proposed action and
none of the Borrower, the Investment Manager or any of the Secured Parties has
received a written communication relating to such action or proposed action from
DBRS within 10 Business Days following such notification by the Borrower.

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

(a) such Person has a DBRS Short Term Rating of at least “R-1 (middle)” and a
DBRS Long Term Rating of at least “A (high)” at such time; or

(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) a Rating Confirmation is obtained 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 Facility Agent have consented thereto.

“Real Estate Loan” means any debt obligation that is directly or indirectly
secured by a mortgage or deed of trust or any security interest, in each case,
on residential, commercial, office, retail or industrial property and is
underwritten as a mortgage loan (including, for the avoidance of doubt, a debt
obligation of an Obligor whose operating cash flow is primarily derived from the
sale or liquidation of the aforementioned types of property).

 

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

“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 to obtain either
(i) (x) a guarantor with Eligible Investment Required Ratings to guarantee the
obligations of such provider under such agreement and (y) a Rating Confirmation
or (ii) (x) a replacement provider with Eligible Investment Required Ratings and
(y) a Rating Confirmation.

“Reinvestment Period” means the period from and including the Closing Date to
and including the earliest of (a) the date that is 18 months after the Closing
Date (or such later date as may be agreed in writing by the Borrower and each of
the Lenders and notified in writing to the Agents, but subject to the Rating
Confirmation having been satisfied with respect to each such extension), (b) the
date of the acceleration of the maturity of the Advances pursuant to
Section 6.01, (c) the occurrence of any Change in Control; (d) the date on which
the Investment Manager shall no longer be TPG Specialty Lending, Inc. unless
each of the Lenders and the Facility Agent have otherwise consented, (e) the
date on which the Investment Manager shall have notified the Borrower of its
intention to resign as Investment Manager or the occurrence of any other
termination of the Investment Management Agreement, whether or not in accordance
with its terms; or (f) termination of the Commitments in whole pursuant to
Section 2.06(b).

“Related Documents” means, with respect to any Collateral Obligation, all
agreements or documents evidencing, securing, governing or giving rise to such
Collateral Obligation. 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 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).

“Replacement Investment Management Fee” means the fee that may be payable to, or
at the direction of, the Lenders in arrears on each Payment Date, in an amount,
if payable, equal to 0.25% per annum of the Quarterly Asset Amount.

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

 

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“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;
provided, however, that if any Lender shall be a Defaulting Lender at such time,
then there shall be excluded from the determination of Required Lenders such
Defaulting Lender’s unfunded Commitments.

“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 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) when used with respect to
the Custodian and the Collateral Agent, any officer assigned to the corporate
trust department (or any successor thereto) of such Person, including any Vice
President, Assistant Vice President, Trust Officer, or any other officer of the
Custodian or the Collateral Agent, as the case may be, customarily performing
functions similar to those performed by any of the above designated officers, in
each case having direct responsibility for the administration of this Agreement.

“Retained Amount” means a “net economic interest” (as defined in Article 122(a)
of the CRD) which, in any event, shall not be less than 5% (or such higher or
lower amount as notified by the Facility Agent to, and agreed by, the Retention
Provider as may be required by Article 122a of the CRD; provided that the
Retention Provider shall have no obligation to agree to any such higher amount
that results in the net economic interest required to be retained by the
Retention Provider to exceed 40% of the nominal value of the Collateral
calculated based on the Aggregate Principal Balance of all of the Collateral
Obligations and the principal amount of all Eligible Investments, in each case
at the time of determination without taking into account any deduction pursuant
to the proviso to the definition of “Principal Balance” of any Collateral
Obligation or any deduction or discount in respect of the purchase price paid
therefor by the Borrower as of such date of determination) of the nominal value
of the Collateral calculated based on the Aggregate Principal Balance of all of
the Collateral Obligations and the principal amount of all Eligible Investments,
in each case at the time of determination without taking into account any
deduction pursuant to the proviso to the definition of “Principal Balance” of
any Collateral Obligation or any deduction or discount in respect of the
purchase price paid therefor by the Borrower.

 

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

“Retention Provider” means TPG Specialty Lending, Inc.

“Revolving Collateral Loan” means any Collateral Obligation (other than a
Delayed Drawdown Collateral Loan) that is a loan (including, without limitation,
revolving credit 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 Obligation 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.

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

“Revolving Reserve Required Amount” has the meaning set forth in Section 8.04.

“Row Advance Rate” means, (i) prior to the Commitment Termination Date, the
applicable Row Advance Rate as set forth in the column of that name in the
Matrix corresponding to the Applicable Row Level; provided that (a) during the
first twelve months of the Ramp-Up Period the Row Advance Rate shall equal 37.5%
and (b) if the Ramp-Up Period has not ended prior to the end of such twelve
month period, the Row Advance Rate shall equal 30.0% for the remainder of the
Ramp-Up Period; and (ii) on any date after the Commitment Termination Date, the
Row Advance Rate shall equal zero.

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

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

“Row Minimum OC Level” means the applicable Row Minimum OC Level 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 OC Level shall equal
213.33%.

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

“S&P” means Standard & Poor’s Ratings Group, together with its successors.

“Scheduled Distribution” means, with respect to any Collateral Obligation, 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 Obligation.

 

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“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.

“Secured Parties” means the Facility Agent, the Collateral Agent, the Custodian,
The Bank of New York Mellon Trust Company, N.A. (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.

“Servicing Standard” means the standard of care of the Investment Manager
specified in Section 2(a) of the Investment Management Agreement.

“Settled” means, with respect to a loan, other debt obligation or Participation
Interest (for purposes of this definition, a “loan”), that (a) such loan is
owned by the Borrower and has been fully paid for by the Borrower, (b) all
requisite consents and acceptances required in connection with the Borrower’s
ownership of such loan have been obtained and (c) all documentation establishing
the Borrower’s ownership of such loan is valid, binding and enforceable and is
in the possession (including electronically) of the Collateral Agent.

“Settlement Date Rate” means with respect to a Canadian Dollar Obligation, the
applicable Spot Foreign Exchange Rate as of the date that such Canadian Dollar
Obligation has Settled.

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

“Special Purpose Entity” has the meaning assigned to such term in
Section 5.02(u).

“Special Purpose Provisions” has the meaning assigned to such term in
Section 9(j) of the Borrower LLC Agreement.

 

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“Specified Change” means, with respect to any Collateral Obligation, any
amendment, consent, waiver or other modification with respect to a Related
Document that (a) reduces the principal amount of such Collateral Obligation,
(b) reduces the rate of interest payable on such Collateral Obligation by
greater than 3% per annum (whether calculated based on a spread above a floating
reference rate or a fixed rate), (c) reduces the aggregate amount of principal
payable on any one or more scheduled amortization or other redemption dates
within any 12-month period by greater than 25%, provided that there is no
reduction in the absolute amount of principal due, (d) increases the advance
rate or other borrowing base formula utilized with such Collateral Obligation by
greater than 10%, (e) postpones the Due Date of any Scheduled Distribution in
respect of such Collateral Obligation, (f) releases any material guarantor or
co-obligor of such Collateral Obligation from its obligations, (g) transfers or
otherwise releases all or substantially all of the assets securing such
Collateral Obligation, (h) changes any of the provisions of a Related Document
specifying the number or percentage of lenders required to effect any of the
foregoing or (i) changes (I) any covenant therein (other than a financial
covenant) in a manner that is material and favorable to the respective Obligor
or (II) any financial covenant therein (whether expressed as a covenant, event
of default or otherwise) in a manner that is favorable to the respective
Obligor, but, in the case of this clause (i), only if the Investment Manager or
any of its Affiliates (other than the Borrower) either (A) owns or controls
33-1/3% or more of the voting rights or economic interest of the related Obligor
or (B) is a controlling equity holder of the related Obligor.

“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;

(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 outstanding principal amount
of Eurodollar Rate Advances then bearing interest at a rate based on such LIBOR
rate, divided by (2) the aggregate outstanding principal amount of all
Eurodollar Rate Advances outstanding at such time, rounded to the nearest 0.01%.

“Spot Foreign Exchange Rate” means on any date the spot rate for conversion of
Canadian Dollars into United States Dollars as published on Reuters page FXFX at
11:00 a.m. New York time. For the avoidance of doubt, the Spot Foreign Exchange
Rate shall be expressed as the number of Canadian Dollars that may be purchased
with one Dollar.

 

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“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 ABL Facilities, 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).

“Taxes” means any and all present or future taxes, and similar levies, imposts,
deductions, charges, withholdings (including backup withholding), assessments,
fees and other charges imposed by any governmental Authority, and all
liabilities (including penalties, interest and expenses) with respect thereto.

“Total Capitalization” means, at any time, the higher of (I) $162,500,000 and
(II) the result of (i) the Aggregate Principal Balance of all Performing
Collateral Obligations, plus (ii) the aggregate amount of cash on deposit in the
Principal Collection Subaccount, plus (iii) the aggregate unfunded Commitments
hereunder, minus (iv) the Portfolio Exposure Amount.

“Total Commitment” means (a) on or prior to the Commitment Termination Date,
$100,000,000 (as such amount may be reduced from time to time pursuant to
Section 2.05(b) or Section 2.06) and (b) following the Commitment Termination
Date, zero.

“Treasury Regulations” means the regulations issued by the Internal Revenue
Service under the Code, as such regulations may be amended from time to time.

“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 Collateral Agent 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.

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

“Unsettled Security” means any Collateral Obligation set forth on Schedule 9
hereto that has not Settled on or prior to May 1, 2012.

 

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“Weighted Average DBRS Risk Score” means, as of any date of determination, the
number (rounded to the nearest hundredth) determined by summing the products
obtained by multiplying:

 

The Principal Balance of each Collateral Obligation

  X       The DBRS Risk Score of such Collateral Obligation (as determined as
provided on Schedule 4 hereto)

and dividing such sum by:

The Aggregate Principal Balance of all such Collateral Obligations.

“Weighted Average Fixed Rate Coupon” means, as of any date, the number,
expressed as a percentage, determined by summing the products obtained by
multiplying:

 

The sum, for each Fixed Rate Obligation, of the stated interest coupon on such
Collateral Obligation

  X       The Principal Balance of such Collateral Obligation (excluding the
unfunded portion of any Delayed Drawdown Collateral Loans or Revolving
Collateral Loans)

and dividing such sum by:

the Aggregate Principal Balance of all Fixed Rate Obligations as of such date
(in each case, excluding the unfunded portion of any Delayed Drawdown Collateral
Loans or Revolving Collateral Loans that are Fixed Rate Obligations);

provided that if the foregoing amount is less than 6.00%, then all or a portion
of the Weighted Average Fixed Rate Coupon Adjustment, if any, as of such date,
to the extent not exceeding such shortfall, shall be added to such result.

“Weighted Average Fixed Rate 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 Spread for such date
over the Row Spread Level in effect as of such date, and (ii) the Aggregate
Principal Balance of all Collateral Obligations that are not Fixed Rate
Obligations as of such date, and the denominator of which is the Aggregate
Principal Balance of all Fixed Rate Obligation as of such date (in each case,
excluding the unfunded portion of any Delayed Drawdown Collateral Loans or
Revolving Collateral Loans that are Fixed Rate Obligations). In computing the
Weighted Average Fixed Rate Coupon Adjustment on any date, the Weighted Average
Spread for such date shall be computed as if the Weighted Average Spread
Adjustment was equal to zero.

“Weighted Average Maturity Date” means, as of any date of determination, with
respect to all Performing Collateral Obligations, the date calculated by adding
to the Closing Date the weighted average maturity of such Performing Collateral
Obligations (expressed as a number of months from the Closing Date) calculated
by (a) summing the Average Maturity Dates of such Performing Collateral
Obligations and (b) dividing such sum by the Aggregate Principal Balance of such
Performing Collateral Obligations, in each case as of such date.

“Weighted Average Maturity Date Test” means a test that will be satisfied on any
date of determination if the Weighted Average Maturity Date of all Performing
Collateral Obligations as of such date is on or before May 8, 2019.

 

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“Weighted Average Recovery Rate” means, as of any date, the number determined by
summing the products obtained by multiplying:

 

The DBRS Recovery Rate with respect to each Performing Collateral Obligation

  X   The Principal Balance of such Performing Collateral Obligation as of such
date

and dividing such sum by:

The Aggregate Principal Balance of such Performing Collateral Obligations as of
such date.

“Weighted Average Spread” means, as of any date, the number determined by
summing the number obtained by adding:

 

The Aggregate Funded Spread (with respect to all Collateral Obligations that are
not Fixed Rate Obligations)

  +   The Aggregate Unfunded Spread

and dividing such sum by:

The Aggregate Principal Balance of all Collateral Obligations that are not Fixed
Rate Obligations as of such date;

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

“Weighted Average 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 Fixed Rate Coupon for such date
over 6.00% and (ii) the Aggregate Principal Balance of all Fixed Rate
Obligations as of such date (in each case, excluding the unfunded portion of any
Delayed Drawdown Collateral Loans or Revolving Collateral Loans that are Fixed
Rate Obligations), and the denominator of which is the Aggregate Principal
Balance of all Collateral Obligations that are not Fixed Rate Obligations as of
such date. In computing the Weighted Average Spread Adjustment on any date, the
Weighted Average Fixed Rate Coupon for such date shall be computed as if the
Weighted Average Fixed Rate Coupon Adjustment was equal to zero.

“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.

“Working Capital Revolver” means a revolving lending facility secured by all or
a portion of the current assets of the related obligor.

 

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

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. Unless otherwise
indicated herein, all references to time of day refer to Eastern Standard Time
or Eastern daylight saving time, as in effect in New York City on such day.

 

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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 Obligations,
or any payments on any other assets included in the Collateral, with respect to
the sale of and reinvestment in Collateral Obligations, and with respect to the
income that can be earned on Scheduled Distributions on such Collateral
Obligations 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.

(a) All calculations with respect to Scheduled Distributions on the Collateral
Obligations securing the Advances shall be made on the basis of information as
to the terms of each of such Collateral Obligations and upon reports of
payments, if any, received on such Collateral Obligations that are furnished by
or on behalf of the Obligor of such Collateral Obligations 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 ticking fees
in respect of Collateral Obligations, 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 Obligations (other than Defaulted
Loan/Bonds, 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 Obligations (including the proceeds of the sale of such
Collateral Obligations 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 Obligations 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
Obligation 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.

 

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

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

(h) For purposes of determining the Minimum Weighted Average 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 Obligation include references to the Borrower’s acquisition of
such Collateral Obligation by way of contribution from the Investment Manager or
an Affiliate thereof. Portions of the same Collateral Obligation acquired by the
Borrower on different dates (whether through purchase or receipt by
contribution, but excluding subsequent draws under Revolving Collateral Loans or
Delayed Drawdown Collateral Loans) will, for purposes of determining the
purchase price of such Collateral Obligation, be treated as separate purchases
on separate dates (and not a weighted average purchase price for any particular
Collateral Obligation). The “purchase price” for all or part of any Collateral
Obligation acquired from an Affiliate of the Borrower, paid in the form of a
contribution to the capital of the Borrower, shall be consistent with the amount
that would be paid in an arms-length transaction with a non-Affiliate.

(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 Obligation shall, for
purposes of the Concentration Limitations, result in the recategorizing of such
Collateral Obligation as an Equity Security.

(l) As of any date of determination, for purposes of all calculations under this
Agreement, each Canadian Dollar Obligation and all cashflows in respect thereto
(whether existing or anticipated) shall be expressed in Dollars applying the
Settlement Date Rate relating to such Canadian Dollar Obligation; provided that
if as of such date of determination the Settlement Date Rate relating to such
Canadian Dollar Obligation is less than the prevailing Spot Foreign Exchange
Rate as of such date of determination, then such Canadian Dollar Obligation
shall be expressed in Dollars applying the prevailing Spot Foreign Exchange Rate
as of such date of determination.

 

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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, 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 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 Facility Agent (with a copy to the Collateral Agent) a
written notice (each, a “Notice of Borrowing”) for such Borrowing (which notice
shall be irrevocable and effective upon receipt by the Facility Agent) not later
than 11:00 a.m. at least three Business Days prior to the day of the requested
Borrowing (or such lesser notice period that the Facility Agent deems acceptable
in its sole discretion).

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, and the
amount of the Borrowing requested in such Notice of Borrowing (the “Requested
Amount”) shall be equal to at least $1,000,000 or an integral multiple of
$500,000 in excess thereof (or, if less, the remaining unfunded Commitments
hereunder).

(b) Each Lender shall not later than 2:00 p.m. 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.

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 12.06(a)) be represented by a Note payable to such Lender (or registered
assigns pursuant to Section 12.06(a)), except to the extent that such Lender (or
assignee) subsequently returns any such Note for cancellation and requests that
such Advances once again be evidenced as described in 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
Facility Margin Level.

(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 Facility Margin Level.

All Advances shall constitute Eurodollar Rate Advances (subject to their
conversion to Base Rate Advances pursuant to Section 2.11), provided that,
(i) in the event the Borrower is no longer able to borrow 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 and (ii) after the occurrence and
during the continuation of any Event of Default, all Eurodollar Rate Advances
will be converted to Base Rate Advances at the end of the applicable Interest
Accrual Period if so directed by the Facility Agent (at the direction of the
Required Lenders).

The Calculation Agent shall provide notice to the Facility Agent and the Lenders
of any and all LIBOR 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) on each date of prepayment of principal thereof, on the
principal amount so prepaid to but excluding the date of prepayment.

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

 

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(e) As a condition to the payment of principal of and interest on any Advance
without the imposition of withholding tax, each Agent and the Borrower may
require certification acceptable to such Agent or the Borrower from any
recipient to enable the Borrower and the Agents 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 only 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 they are 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. The Borrower may, from time to time on any Business
Day, voluntarily prepay the Advances in whole or in part, without penalty or
premium; provided that the Borrower shall have delivered to the Lenders and the
Facility Agent written notice of such prepayment (such notice, a “Notice of
Prepayment”) in the form of Exhibit C hereto not later than 12:00 noon on the
Business Day that is (i) in the case of 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 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 $500,000 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 and make
deposits in the Revolving Reserve Account 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

 

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Report, notice of the aggregate amounts of Advances that are to be prepaid on
the related Payment Date and amounts to be deposited in the Revolving Reserve
Account in accordance with the Priority of Payments. In connection with such
prepayment and deposit to be made in the Revolving Reserve Account on any
Payment Date in an amount necessary to result in the satisfaction of the
Coverage Tests, the corresponding Commitment as of such date shall be terminated
in an amount equal to the lesser of (i) the amount so deposited in the Revolving
Reserve Account at such Payment Date, and (ii) the Total Commitment as in effect
on such date.

(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 zero at the close
of business on the Commitment Termination Date. The Borrower shall not terminate
or reduce the Total Commitment (including, without limitation, pursuant to
Section 2.05(b)) if, to the extent that after giving effect to such reduction or
termination, a Commitment Shortfall shall exist.

(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 5 Business Days’ prior notice to the Lenders and the
Facility Agent of any such termination, which notice shall specify the effective
date of such termination, provided that all amounts due under this Agreement and
the other Facility Documents are satisfied in full, including without limitation
all principal, interest, Commitment Fees and Administrative Expenses. 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.

(c) Optional Reductions in Part. Prior to the Commitment Termination Date, the
Borrower shall have the right at any time to reduce permanently in an aggregate
amount of at least $10,000,000 the unused amount of the Total Commitment upon
not less than 5 Business Days’ prior notice to the Lenders and the Facility
Agent of any such reduction, which notice shall specify the effective date of
such reduction and the amount of any such reduction, provided that no such
reduction will reduce the Total Commitments below the aggregate principal amount
of Advances at such time. Such notice of reduction shall be irrevocable.

(d) Effect of Termination or Reduction. The Total Commitment (and the Commitment
of each Lender) once terminated or reduced may not be reinstated. Each reduction
of the Total Commitment pursuant to this Section 2.06 shall be applied ratably
among the Lenders in accordance with their respective Commitments.

Section 2.07 Maximum Lawful Rate.

It is the intention of the parties hereto that the interest on the Advances
shall not exceed the maximum rate permissible under Applicable Law. Accordingly,
anything herein or in any Note to the contrary notwithstanding, in the event any
interest is charged to, collected from or received from or on behalf of the
Borrower by the Lenders pursuant hereto or thereto in

 

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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 Agent 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) 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, (A) other than with respect to Taxes, of
agreeing to make or making, funding or maintaining Advances to the Borrower,
(B) as a result of Taxes (other than (I) Indemnified Taxes, (II) Taxes described
in clause (iii) through (vi) of the definition of Excluded Taxes and (III)
Connection Taxes) on Advances, Notes or Commitments, or reserves, other
liabilities or capital attributable thereto or (C) other than Excluded Article
122a Increased Costs, then the Borrower shall from time to time, on the Payment
Dates (but subject in all cases to Section 2.04(f)), 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 amount of such increased cost, submitted to the Borrower
by an Affected Person (with a copy to the Agents and DBRS), shall be conclusive
and binding for all purposes, absent manifest error. Notwithstanding anything
herein to the contrary, each of (i) 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”), (ii) Article 122a of the
CRD and all rules and regulations promulgated thereunder or issued in connection
therewith, (iii) any law, request, rule, guideline or directive promulgated by
the Bank of International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III (“Basel
III”), and (iv) any existing or future rules, regulations, guidance,
interpretations or directives from the U.S. bank regulatory agencies relating to
the Dodd-Frank Act, Basel III or Article 122a of the CRD (whether or not having
the force of law), and all rules and regulations promulgated thereunder or
issued in connection therewith shall be deemed to have been introduced after the
Closing Date, thereby constituting a Regulatory Change hereunder with respect to
the Affected Parties as of the Closing Date, regardless of the date enacted,
adopted or issued.

 

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(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 out of Basel III or (ii) the adoption after the date 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 the Dodd-Frank Act, Basel
III, Article 122a of CRD 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) 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 (B) 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 (but
subject in all cases to Section 2.04(f)), following such Affected Person’s
demand, 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 (other than in respect of Excluded Article 122a
Increased Costs). 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 Agents and DBRS) 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.
Notwithstanding anything to the contrary in this Section 2.09, the Borrower
shall not be required to compensate a Lender pursuant to this Section 2.09 for
any amounts incurred more than nine months prior to the date that such Lender
notifies the Borrower of such Lender’s intention to claim compensation therefor;
provided that, if the circumstances giving rise to such claim have a retroactive
effect, then such nine-month period shall be extended to include the period of
such retroactive effect.

 

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Notwithstanding the foregoing, if the Borrower is otherwise in compliance with
its covenants and representations in this Agreement with respect to Article 122a
of CRD, and the reason for the increased cost incurred by an Affected Party
pursuant to this Section 2.09 is the negligence or willful failure of such
Affected Party or an Affiliate thereof to comply with Article 122a, the Borrower
shall not be obligated to compensate such Affected Party for such increased
costs.

Section 2.10 Compensation; Breakage Payments.

The Borrower agrees to compensate each Affected Person from time to time, on the
Payment Dates, following such Affected Person’s written request (which request
shall set forth the basis for requesting such amounts), in accordance with the
Priority of Payments, 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 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: (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 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 Eurodollar Rate
Advances occurs on a date that is not the last day of the relevant Interest
Accrual Period, (iii) if any payment or prepayment of any Eurodollar Rate
Advance is not made on any date specified in a Notice of Prepayment given by the
Borrower, (iv) if any 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 other default by the Borrower to repay
its Eurodollar Rate Advances when required by the terms of this Agreement. A
certificate as to any amounts payable pursuant to this Section 2.10 submitted to
the Borrower by any Lender (with a copy to the Agents and DBRS, 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 Eurodollar
Rate Advances hereunder, or (ii) maintain Eurodollar Rate Advances hereunder,
then such Lender shall promptly notify the Agents and the Borrower thereof (with
a copy to DBRS), and such Lender’s obligation to make or maintain Eurodollar
Rate Advances hereunder shall be suspended until such time as such Lender may
again make and maintain Eurodollar Rate Advances, and such Lender’s outstanding
Eurodollar Rate Advances shall be automatically converted into Base Rate
Advances on the date that such Lender shall specify to the Agents and the
Borrower.

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

 

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(c) If prior to the first day of any Interest Accrual Period, either (i) the
Calculation Agent determines that for any reason adequate and reasonable means
do not exist for determining LIBOR for such Interest Accrual Period for any
Eurodollar Rate Advances, or (ii) the Facility Agent determines and notifies the
Calculation Agent that the Eurodollar Rate with respect to such Interest Accrual
Period for any Eurodollar Rate Advances does not adequately and fairly reflect
the cost to such Lenders of funding such Eurodollar Rate Advances, the
Calculation Agent will promptly so notify the Borrower, the Agents, each Lender
and DBRS. Thereafter, the obligation of the Lenders to make or maintain
Eurodollar Rate Advances shall be suspended until the Facility Agent revokes
such notice, and all outstanding Eurodollar Rate Advances shall be converted
into Base Rate Advances on the date that the Facility Agent shall specify to the
Borrower.

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, other than a Defaulting
Lender, a commitment fee (a “Commitment Fee”) on the daily average unused amount
of the Commitment of such Lender, for each day during the period from the date
hereof until the Commitment Termination Date, at a rate equal to 0.75% per
annum. Commitment Fees accrued during each Collection Period shall be payable on
the related Payment Date.

(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 Obligations 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.

 

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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
Collateral Agent) to the applicable recipient in Dollars, in immediately
available funds, in accordance with the Priority of Payments, and all without
counterclaim, setoff, deduction, defense, abatement, suspension or deferment.
Each Lender shall provide wire instructions to the Borrower and the Collateral
Agent. Payments received after 1:00 p.m. 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 Facility Agent under this Agreement shall be
conclusive absent manifest error.

Section 2.16 Lenders Not Satisfying the Rating Criteria.

If and for so long as any Lender fails to satisfy the Rating Criteria, such
Lender may deposit, in accordance with Section 8.03(c), an amount equal to such
Lender’s undrawn Commitment at such time in the appropriate Lender Funding
Subaccount, and all principal payments in respect of the Advances which would
otherwise be made to such Lender shall be diverted to the appropriate Lender
Funding Subaccount, in accordance with Section 8.03(c), and any amounts in such
Lender Funding Subaccount shall be applied to any future funding obligations of
such Lender. If, within 20 Business Days after the date as of which any Lender
has ceased to satisfy the Rating Criteria, such Lender has not deposited an
amount equal to such Lender’s undrawn Commitment in the appropriate Lender
Funding Subaccount, the Facility Agent will provide written notice thereof to
DBRS.

Section 2.17 Applicable Row Level.

(a) At any time, the Borrower or Investment Manager may designate the end of the
Ramp-Up Period and specify the Applicable Row Level to be in effect for purposes
of the Matrix by delivery of written notice to the Agents (with a copy to DBRS,
the Collateral Agent, and the Lenders), signed by a Responsible Officer of the
Borrower or Investment Manager, as applicable, certifying that (i) each
Collateral Quality Test and Concentration Limitation is satisfied at such time,
(ii) each Coverage Test is satisfied at such time, (iii) the Row Advance Rate to
be in effect for purposes of the Matrix equals or exceeds the Portfolio Advance
Rate at such time; and (iv) no Commitment Shortfall exists at such time,
together with a report demonstrating compliance with each requirement set forth
in the aforementioned clauses (i) through (iv).

(b) At any time after the delivery of the certification required in
Section 2.17(a), the Borrower or the Investment Manager may specify a different
Applicable Row Level than the one in use at that time by delivery of written
notice to the Agents (with a copy to DBRS,

 

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the Collateral Agent and the Lenders), signed by a Responsible Officer of the
Borrower or Investment Manager, as applicable, upon not more than five Business
Days and not less than one Business Day prior to the day on which such different
Applicable Row Level is to become effective for purposes of the Matrix
certifying that (i) each Collateral Quality Test and Concentration Limitation is
satisfied at such time, (ii) each Coverage Test is satisfied at such time,
(iii) the Row Advance Rate that is in use at such time equals or exceeds the
Portfolio Advance Rate at such time; and (iv) no Commitment Shortfall exists at
such time, together with a report demonstrating compliance with each requirement
set forth in the aforementioned clauses (i) through (iv) as well as compliance
with all columns in the Matrix for both the existing and proposed Applicable Row
Level.

Section 2.18 Replacement of Lenders.

(a) Notwithstanding anything to the contrary contained herein, in the event that
any Affected Person shall request reimbursement for amounts owing pursuant to
Section 2.09 (each such Affected Person, a “Potential Terminated Purchaser”),
the Borrower shall be permitted, upon no less than ten (10) days notice to the
Facility Agent and the Potential Terminated Purchaser, to (i)(1) elect to
terminate the Commitment, if any, of such Potential Terminated Purchaser on the
date specified in such termination notice, and (2) prepay on the date of such
termination the outstanding principal amount of the Advances and all accrued and
unpaid interest thereon of such Potential Terminated Purchaser, or (ii) elect to
cause such Potential Terminated Purchaser to (and the Potential Terminated
Purchaser must) assign 100% of its Commitment to a replacement purchaser (a
“Replacement Purchaser”) (any such Potential Terminated Purchaser with respect
to which the Borrower has made any such election, a “Terminated Purchaser”).

(b) The Borrower shall not make an election described in the preceding paragraph
unless (a) no Default or Event of Default shall have occurred and be continuing
at the time of such election (unless such Default or Event of Default would no
longer be continuing after giving effect to such election), (b) in respect of an
election described in clause (ii) of the immediately preceding paragraph only,
on or prior to the effectiveness of the applicable assignment, the Terminated
Purchaser shall have been paid the outstanding principal amount of the Advances
and all accrued and unpaid interest thereon of such Terminated Purchaser by or
on behalf of the related Replacement Purchaser. Each Terminated Purchaser hereby
agrees to take all actions reasonably necessary, at the expense of the Borrower,
to permit a Replacement Purchaser to succeed to its rights and obligations
hereunder. Upon the effectiveness of any such assignment to a Replacement
Purchaser, (i) such Replacement Purchaser shall become a “Lender” hereunder for
all purposes of this Agreement and the other Facility Documents, (ii) such
Replacement Purchaser shall have a Commitment in the amount not less than the
Terminated Purchaser’s Commitment assumed by it and (iii) the Commitment of the
Terminated Purchaser shall be terminated in all respects.

 

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ARTICLE III

CONDITIONS PRECEDENT

Section 3.01 Conditions Precedent to Closing.

The obligation of the Lenders to make Advances hereunder comprising the initial
Borrowing shall be subject to the conditions precedent that the Facility Agent
shall have received on or before the Closing Date the following, each in form
and substance satisfactory to the Facility 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 Investment Manager 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), if any, required in connection with the transactions contemplated by
this Agreement;

(d) a certificate of a Responsible Officer of the Borrower certifying (i) as to
its Constituent Documents, (ii) 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,
(iii) that its 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), (iv) no Default or Event of Default has occurred and is continuing, and
(v) as to the incumbency and specimen signature of each of its Responsible
Officers authorized to execute the Facility Documents to which it is a party;

(e) a certificate of a Responsible Officer of the Investment Manager certifying
(i) as to its Constituent Documents, (ii) as to its resolutions or other action
of its board of directors approving this Agreement and the other Facility
Documents to which it is a party and the transactions contemplated thereby,
(iii) that its 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), (iv) to the best of its knowledge, no Default or Event of Default has
occurred and is continuing, and (v) as to the incumbency and specimen signature
of each of its Responsible Officers authorized to execute the Facility Documents
to which it is a party;

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

(g) copies of proper financing statements, 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);

 

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(h) legal opinions (addressed to each of the Secured Parties and DBRS) of
(i) Orrick, Herrington & Sutcliffe LLP, counsel to the Borrower and the
Investment Manager and (ii) Chapman and Cutler LLP, counsel to the Collateral
Agent, covering such matters as the Facility Agent and its counsel shall
reasonably request;

(i) 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 Collateral Agent and the Custodian and shall be
in full force and effect;

(j) a Retention of Net Economic Interest Letter substantially in the form of
Exhibit G;

(k) 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 Obligation) in accordance with Section 12.20 shall have
been effected;

(l) 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 Collateral Agent, 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 Collateral Agent; and

(v) upon grant by the Borrower, Delivery of the Collateral and execution of the
Account Control Agreement, the Collateral Agent has a first priority (subject to
clause (ii) of the definition of Permitted Liens) perfected security interest in
the Collateral;

(m) the Facility Agent has received a rating letter satisfactory to the Facility
Agent, delivered and signed by DBRS and confirming that the Facility has been
assigned at least a “AA” rating by DBRS;

 

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(n) evidence that the Aggregate Principal Balance of the Collateral Obligations
contributed by TPG Specialty Lending Inc. to the Borrower (calculated as of the
Closing Date) equals or exceeds $62.5 million;

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

(p) a certificate of a Responsible Officer of the Borrower, dated as of the
Closing Date, to the effect that, in the case of the Collateral Obligations
owned by the Borrower on the Closing Date:

(i) the Borrower is the owner of 7 or more Collateral Obligations from 5 or more
different Obligors from 3 or more industries identified on Schedule 5;

(ii) such Collateral Obligations have (i) a Weighted Average Spread greater than
or equal to 4.50% and (ii) a Weighted Average DBRS Risk Score less than or equal
to 49.7747;

(iii) each of the Minimum Weighted Average Recovery Rate Test, the Weighted
Average Maturity Date Test, and the Minimum Weighted Average Fixed Rate Coupon
Test shall be satisfied;

(iv) the Aggregate Principal Balance of the Collateral Obligations consisting of
Eligible Senior Secured Loans equals or exceeds $56.25 million; and

(v) with respect to any Collateral Obligation with a Credit Estimate, such
Credit Estimate has been assigned by DBRS within one year prior to the Closing
Date.

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 (1) such Borrowing
Date shall occur prior to the end of the Reinvestment Period, and (2) the
conditions described in clauses (e) and (f) (other than a Default or Event of
Default described in Sections 6.01(c), (e) or (f)) below need not be satisfied
if the proceeds of the Borrowing are used to fund Revolving Collateral Loans or
Delayed Drawdown Collateral Loans then owned by the Borrower or to fund the
Revolving Reserve Account to the extent required under Section 8.04:

(a) in the case of the initial Borrowing hereunder, (i) the conditions precedent
set forth in Section 3.01 shall have been fully satisfied on or prior to the
applicable Borrowing Date and (ii) the Facility Agent shall have received
evidence that after giving effect to the Advances in respect of the initial
Borrowing, the result of (A) the Aggregate Principal Balance of the Collateral
Obligations that have Settled and have been contributed by TPG Specialty Lending
Inc. to the Borrower (calculated as of the applicable Borrowing Date) minus
(B) the principal amount of such Advance in respect of the initial Borrowing,
equals or exceeds $62.5 million.

 

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(b) the Lenders and the Facility 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 Borrower Liabilities
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 and the Row Advance Rate that is in
use at such time equals or exceeds the Portfolio Advance Rate;

(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 as of the date of
purchase in connection with any acquisition of additional Collateral Obligations
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 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, 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.

 

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(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
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

 

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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 investor 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 Texas. 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, the Investment Manager nor the
pool of Collateral is required to register as an “investment company” or a
company controlled by an “investment company” under the Investment Company Act.

(i) 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.

(j) Taxes. The Borrower has filed all income tax returns and all other material
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.

(k) Tax Status. For U.S. federal income tax purposes, assuming that the Facility
constitutes debt for such purposes, the Borrower is not a publicly traded
partnership or an association taxable as a corporation.

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

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

(n) Initial Collateral Obligations. Each loan, debt obligation, or Participation
Interest contributed by the Investment Manager to the Borrower on the Closing
Date complies with the criteria set forth in the definition of “Collateral
Obligation”.

Section 4.02 Additional Representations and Warranties of the Borrower.

The Borrower represents and warrants to each of the Secured Parties on and as of
the Closing Date, each Determination Date, the date each Advance is made, and
each date on which a Collateral Obligation is granted to the Trustee hereunder,
as follows:

 

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(a) 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.

(b) 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.

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

(i) it owns and has legal and beneficial title to all Collateral Obligations and
other Collateral free and clear of any Lien, claim or encumbrance of any Person,
other than Permitted Liens (or, in the case of an asset of a Blocker Subsidiary,
the Borrower has a first priority, perfected security interest in the Blocker
Subsidiary’s interest in such asset);

(ii) other than the security interest granted to the Collateral Agent 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 Collateral Agent 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, securities accounts, deposit accounts, 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);

(iv) all Covered Accounts constitute “securities accounts” under
Section 8-501(a) 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(37) of the UCC) in the Collateral in favor of the
Collateral

 

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Agent, 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 Collateral Agent of all of its
interest and rights in the Collateral;

(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 Collateral Agent,
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.

(d) Article 122a of the CRD. 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 of the CRD, (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 of the CRD 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 to the extent prohibited by Article 122a of the CRD.

ARTICLE V

COVENANTS

Section 5.01 Affirmative Covenants of the Borrower.

The Borrower covenants and agrees that, until the Final Maturity Date (and
thereafter until the date that all Obligations have been paid in full):

(a) Compliance with Agreements, Laws, Etc. It shall (i) duly observe, comply
with and conform to all Applicable Laws, (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 with the terms and conditions 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 Authorizations and Governmental Filings which are
necessary 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.

 

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(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 in the case of
(A) repayment of Collateral Obligations, (B) subject to the other terms of this
Agreement, (i) amendments to Related Documents that govern Defaulted Loan/Bonds
and (ii) enforcement actions taken or work-outs with respect to any Defaulted
Loan/Bond in accordance with the provisions hereof, and (C) actions by the
Investment Manager under the Investment Management Agreement and in conformity
with this Agreement or as otherwise required hereby.

(ii) It will not, without the prior written consent of the Facility Agent (at
the direction of the Required Lenders) (except in the case of the Investment
Management 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 Investment Management Agreement by such
Persons. Notwithstanding any such arrangement, the Borrower shall remain
primarily liable with respect thereto. The Borrower will punctually perform, and
use its best efforts to cause the Investment Manager and such other Person to
perform in all material respects, all of their obligations and agreements
contained in the Investment Management Agreement, this Agreement or any such
other agreement.

(c) Further Assurances. It shall promptly upon the reasonable request of either
Agent, at the Borrower’s expense, execute and deliver such further instruments
and take such further action in order to maintain and protect the Collateral
Agent’s first-priority perfected security interest in the Collateral pledged by
the Borrower for the benefit of the Secured Parties free and clear of any Liens
(other than Permitted Liens). At the reasonable request of either Agent, the
Borrower shall promptly take, at the Borrower’s expense, such further action in
order to establish and protect the rights, interests and remedies created or
intended to be created under this Agreement in favor of the Secured Parties in
the Collateral, including all actions which are necessary to (x) enable the
Secured Parties to enforce their rights and remedies under this Agreement and
the other Facility Documents, and (y) effectuate the intent and purpose of, and
to carry out the terms of, the Facility Documents. Subject to Section 7.02, the
Borrower authorizes the Collateral Agent and the Facility 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 Collateral Agent 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 Agent
determines appropriate to perfect the security interests of the Collateral Agent
under this Agreement.

In addition, the Borrower will take such reasonable action from time to time as
shall be necessary to ensure that all assets (including all Covered Accounts) of
the Borrower constitute “Collateral” hereunder. Subject to the foregoing, the
Borrower will upon the reasonable request of either Agent, at the Borrower’s
expense, take such other action (including

 

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executing and delivering or authorizing for filing any required UCC financing
statements) as shall be necessary 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 either Agent shall have reasonably
requested.

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

(i) as soon as available and in any event within 120 days after the end of each
fiscal year of TPG Specialty Lending, Inc. (on a consolidated basis) (beginning
with the year ended December 31, 2011), from a firm of Independent certified
public accountants of nationally recognized standing, audited financial
statements of TPG Specialty Lending, Inc. (on a consolidated basis), including
balance sheet, income statement, statement of cash flows and the accompanying
footnotes for such fiscal year prepared in accordance with GAAP, setting forth
in the case of each fiscal year ending after 2011 in comparative form the
figures for the previous fiscal year;

(ii) as soon as available and in any event within 60 days after the end of each
of the first three fiscal quarters of each fiscal year of TPG Specialty Lending,
Inc. (on a consolidated basis) (beginning with the quarter ended March 30,
2012), unaudited financial statements of TPG Specialty Lending, Inc. (on a
consolidated basis), including balance sheet, income statement, statement of
cash flows (and the accompanying footnotes, solely relating to “related
transactions” and any swap transactions, if any) for such fiscal quarter and for
the portion of the fiscal year ended at the end of such fiscal quarter setting
forth in the case of each fiscal quarter ending on or after March 30, 2012 in
comparative form the figures for the corresponding fiscal quarter and the
corresponding portion of the previous fiscal year, all certified as to fairness
of presentation, GAAP and consistency by the Investment Manager;

(iii) simultaneously with the delivery of each set of annual financial
statements referred to in clause (a) above, a certificate of the Borrower
certifying (x) that such financial statements fairly present the financial
condition and the results of operations of the Borrower on the dates and periods
indicated in such financial statements and (y) that no Default or Event of
Default occurred during such period or if any Default or Event of Default
occurred during such period, setting forth the details thereof and the action
which the Borrower is taking or proposes to take with respect thereto;

(iv) as soon as possible, and in any event within five Business Days (in the
case of clauses (A), (B), (C) and (D) below) or within one Business Day (in the
case of clause (E) below) after a Responsible Officer of the Investment Manager
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
Obligations; or (E) EoD OC

 

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Ratio Failure, 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;

(v) 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 Facility
Agent or the Required Lenders (through the Facility Agent) may request, or as
the Lenders may require in order to comply with the FAS 166/167 Regulatory
Capital Rules or Basel III or their respective obligations under Article 122a of
the CRD (including a refreshed Retention of Net Economic Interest Letter from
the Retention Provider on each Payment Date and as the Lenders may require in
order to comply with their respective obligations under Article 122a of the CRD)
in each such case if reasonably available to the Borrower; provided that unless
the Retention Provider provides the Facility Agent and the Lenders with a
refreshed Retention of Net Economic Interest Letter on a Payment Date, the
Retention Provider shall be deemed to have provided the Facility Agent and the
Lenders with a refreshed Retention of Net Economic Interest Letter on any such
Payment Date certifying that on such Payment Date the information contained in
the prior Retention of Net Economic Interest Letter delivered by the Retention
Provider remains unchanged; provided, further that notwithstanding the
immediately preceding proviso, the Retention Provider shall deliver a Net
Economic Interest Letter to the Facility Agent and the Lenders no less
frequently than annually;

(vi) 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; and

(vii) within 10 Business Days after each Determination Date, a report prepared
by the Investment Manager, with respect to the Collateral Obligations, providing
summary balance sheet, earnings and performance data (including without
limitation EBITDA and relevant leverage metrics) with respect to each of the
related Obligors, in each case determined as of the related Determination Date.

(e) Access to Records and Documents. It shall cause the Investment Manager to
permit (at the Borrower’s expense) the Facility Agent, or its designees, to,
upon reasonable advance notice and during normal business hours, visit and
inspect and make copies of (i) the Investment Manager’s books, records and
accounts relating to the Investment Manager’s and the Borrower’s business,
financial condition, operations, assets and performance under the Facility
Documents and the Related Documents and to discuss the foregoing with the
Investment Manager’s officers, partners, employees and accountants, and (ii) all
of the Related Documents available to the Investment Manager; provided that, so
long as no Event of Default has occurred and is continuing, each Person entitled
to so visit and inspect the Investment Manager’s records under this clause (e)
may only exercise its rights under this clause (e) once during any fiscal
quarter of the Investment Manager and only one such quarterly visit per annum
shall be at the Borrower’s expense;

 

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(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 Obligations or Eligible
Investments acquired or originated 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 Drawdown Collateral Loans purchased in accordance with the terms of
this Agreement;

(iii) to fund the Revolving Reserve Account on or prior to the Commitment
Termination Date to the extent the Revolving Reserve Account is required to be
funded pursuant to Section 8.04 (and the Borrower shall submit a Notice of
Borrowing requesting a Borrowing for a Borrowing Date falling no more than five
Business Days and no less than one Business Day prior to the Commitment
Termination Date with a Requested Amount sufficient to fully fund the Revolving
Reserve Account under Section 8.04); and

(iv) if a Borrowing is made on the Closing Date, solely in respect of the
proceeds of the Advances hereunder comprising such initial Borrowing, to fund
the Closing Expense Account in an amount sufficient to pay all Closing Date
Expenses on any Business Day from the Closing Date to and including the
Determination Date relating to the initial Payment Date following 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 September 30 in each calendar year,
commencing in 2012, the Borrower shall furnish to the Agents and DBRS an opinion
of counsel, addressed to the Borrower, the Agents and DBRS, relating to the
continued perfection of the security interest granted by the Borrower to the
Collateral Agent hereunder.

(h) Rating Monitoring. On or before September 30 in each calendar year,
commencing in 2012, the Borrower shall pay for the ongoing monitoring of the
rating of the Facility from DBRS. The Borrower shall promptly notify the Agents
and the Investment Manager in writing (and the Facility Agent shall promptly
provide the Lenders with a copy of such notice) if at any time the rating of the
Facility has been changed or withdrawn or the rating outlook on the Facility has
been changed.

(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, originating, funding, acquiring, owning, holding, administering,
selling, enforcing, lending, exchanging, redeeming, pledging, contracting for
the management of and otherwise dealing with Collateral Obligations, Eligible
Investments and the other Collateral in connection therewith (including assets
received upon enforcement or work-out and establishing and maintaining Blocker
Subsidiaries) and entering into the Facility Documents, any agreements

 

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whereby the Borrower lends funds to a Blocker Subsidiary for purposes of
acquiring assets not permitted to be held directly by the Borrower under this
Agreement, any applicable Related Documents and any other agreements
contemplated by this Agreement and any business 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 (i) due to a change of law
occurring after the date hereof, (ii) pursuant to a closing agreement with the
U.S. Internal Revenue Service or (iii) pursuant to a non-appealable judgment of
a court of competent jurisdiction. Assuming that such treatment is correct, the
Borrower shall at all times maintain its status as an entity that is not a
publicly traded partnership or an association taxable as a corporation for U.S.
federal income tax purposes. The Borrower shall at all times ensure that its
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.

(k) Provision of Information. With respect to each Collateral Obligation, 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 obtained by it without unreasonable expense.

(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 Facility
Agent) that the Retention Provider (i) at all times holds the Retained Amount in
accordance with option (d) of paragraph 1 of Article 122a of the CRD, (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 of the CRD 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 to the extent prohibited by Article
122a of the CRD.

(m) Credit Estimate. With respect to each Collateral Obligation which has
received a Credit Estimate from DBRS, the Borrower, on or prior to the 367th day
after the date of assignment of such Credit Estimate, shall provide updated
information available to it relating to such Collateral Obligation as may
reasonably be requested by DBRS, and apply to DBRS for an updated Credit
Estimate within such 367 day period. Promptly upon the Borrower’s receipt of any
such updated Credit Estimate from DBRS, the Borrower shall deliver such updated
Credit Estimate to the Collateral Agent.

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

 

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Section 5.02 Negative Covenants of the Borrower.

The Borrower covenants and agrees that, until the Final Maturity Date (and
thereafter until the date that all Obligations have been paid in full):

(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.

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

(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 inconsistent with any of the Special Purpose
Provisions, any of its Constituent Documents or any Facility Document, in each
case, without the consent of the Facility Agent.

(d) ERISA. It shall not establish any Plan or Multiemployer Plan and shall not
become a member of an ERISA Group.

(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 sixty days’ prior written notice to the Agents and takes all actions that
the either Agent reasonably determines to be necessary to protect and perfect
the Collateral Agent’s perfected security interest in the Collateral of the
Borrower contemplated by this Agreement.

(h) Transactions with Affiliates. Except as permitted in this Agreement and the
other Facility Documents, 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 Loan/Bonds, Credit
Risk Loan/Bonds and other Collateral Obligations), 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, whether debt or equity, in each case other than (i) as
expressly permitted by this Agreement and the other Facility Documents
(ii) obligations under its Constituent Documents or (iii) pursuant to
indemnification, expense reimbursement and similar provisions under the Related
Documents. The Borrower shall not acquire any Collateral Obligations 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 Investment Management 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) Reserved.

(o) Priority of Payments. Except for the payment of transaction expenses payable
in connection with the Closing Date as contemplated in Section 3.01(j), it (or
the Collateral Agent on its behalf) shall not disburse any amounts from the
Collection Account or Payment Account other than in accordance with the Priority
of Payments.

(p) Subsidiaries. It shall not have or permit the formation of any subsidiaries
(other than subsidiaries, each of which (x) meets the then-current general
criteria of DBRS for bankruptcy remote entities and that includes, in its
Constituent Documents, provisions analogous to the Special Purpose Provisions
(as defined in the Borrower LLC Agreement), and (y) is formed for the sole
purpose of holding stock or other equity interests in one or more corporations
or other Persons or other assets received in a workout of a Defaulted Loan/Bond
or otherwise

 

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acquired in connection with a workout of a Collateral Obligation (each, a
“Blocker Subsidiary”); provided that a Rating Confirmation must be obtained with
respect to each formation of a Blocker Subsidiary and the Facility Agent shall
have consented thereto, except that, if due to exigent circumstances, a Blocker
Subsidiary must be formed immediately, the Borrower may proceed with formation
of the Blocker Subsidiary if it has not received a response from the Facility
Agent within two Business Days of its request. The Borrower shall ensure that
each Blocker Subsidiary (i) is wholly owned by the Borrower, (ii) will not sell,
transfer, exchange or otherwise dispose of, or pledge, mortgage, hypothecate or
otherwise encumber (or permit such to occur or suffer such to exist) any part of
its assets, except in compliance with the Borrower’s rights and obligations
under this Agreement and with such subsidiary’s constituent documents,
(iii) will not have any subsidiaries, (iv) will comply with Articles III through
VIII and X through XII (mutatis mutandis) as if it were named as the Borrower in
said Articles, excluding the Blocker Subsidiary Exempt Provisions, (v) will not
incur or guarantee any indebtedness except indebtedness with respect to which
the Borrower is the sole creditor, (vi) will include in its constituent
documents a limitation on its business such that it may only engage in the
acquisition of assets permitted under this Agreement and the disposition of such
assets and the proceeds thereof to the Borrower (and activities ancillary
thereto) and (vii) will distribute (including by way of interest payment) 100%
of the proceeds of the assets acquired by it (net of applicable taxes and
expenses payable by such subsidiary) to the Borrower, and the Borrower will
ensure that 100% of the shares of stock and all other equity interest in each
Blocker Subsidiary are pledged to the Collateral Agent hereunder.

(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).

(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 Obligations 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 Investment Manager).

(u) Independent Managers. Without limiting anything in the Borrower LLC
Agreement, the Borrower shall at all times maintain at least two independent
managers or independent directors, each of who (A) for the five year period
prior to his or her appointment as independent manager or independent director
has not been, and during the continuation of his or her service as independent
manager is not: (i) a stockholder (or other interest holder), director,

 

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officer, manager, owner, agent, trustee, employee, partner, member, attorney or
counsel of the Borrower, the Investment Manager or any of their Affiliates;
(ii) a creditor, customer, supplier of, or other Person who derives any of its
purchases or revenues from its activities with, the Borrower, the Investment
Manager or any of their Affiliates; (iii) a Person controlling or under common
control with any Person excluded from serving as independent manager or
independent director 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 or independent director 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 or independent
director 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 or independent director 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.

“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 or
independent director, the manager or sole member of the Borrower shall provide
written notice to the Facility 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 or independent director of the Borrower dies, becomes
incapacitated or no longer is employed by the firm that is then providing
independent managers or independent directors for the Borrower; or

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

 

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(either of the circumstances in clause (i) or (ii) above, an “Unexpected
Replacement”) then the manager or sole member of the Borrower shall (A) provide
written notice to the Facility Agent as soon as possible thereafter and
(B) unless the Facility Agent otherwise objects in writing within 10 days of
receipt of such notice, promptly appoint a new independent manager or
independent director from the same firm as the deceased or incapacitated or
formerly employed independent manager or independent director (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 or sole member of the
Borrower shall certify that the designated Person satisfies the Independent
Manager Criteria.

The Borrower hereby confirms that, as of the Closing Date, each independent
manager or independent director of the Borrower (initially, Gregory F. Lavelle
and Donald J. Puglisi) satisfies the Independent Manager Criteria.

(v) Changes to Related Documents. The Borrower shall not enter into any
amendment, consent, waiver or other modification with respect to a Related
Document without the prior written consent of the Facility Agent if such
amendment, consent, waiver or other modification would effect a Specified Change
(a “Related Document Modification”); provided that the consent of the Facility
Agent shall not be required if, after giving effect to such Related Document
Modification, (x) the relevant Collateral Obligation would be eligible to be
acquired by the Borrower hereunder, (y) a DBRS Rating is obtained, or updated,
for such Collateral Obligation and (z) all Coverage Tests and Collateral Quality
Tests would be satisfied (or if any such Collateral Quality Test is not
satisfied, such Collateral Quality Test shall be maintained or improved).

(w) Investments; Retention of Funds.

(i) The Borrower shall not make any investment or acquire any property other
than in (A) Collateral Obligations, (B) Eligible Investments, (C) Blocker
Subsidiaries in accordance with Section 5.02(p) and (D) any stock or other
equity interests in one or more corporations or other Persons or other assets
received in a workout of a Defaulted Loan/Bond or otherwise acquired in
connection with a workout of a Collateral Obligation.

(ii) All Interest Proceeds and Principal Proceeds will be applied by the
Borrower (or the Collateral Agent on its behalf) only as provided in
Sections 2.05(a), Sections 9.01 and 10.02.

(x) Hedge Agreements. The Borrower shall not enter into any hedge agreement that
is not an Eligible Hedge Agreement.

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 any other Person (including the
Investment Manager and any of its Affiliates, the holders of the Equity and
their respective Affiliates) and in furtherance of the foregoing:

 

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(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.

(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 business entity with respect to any Person.

(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.

(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) Except for income tax purposes, 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 for income tax purposes, the Borrower shall not identify itself as a
division of any other Person.

(9) 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.

 

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(12) Except as permitted by this Agreement and the other Facility Documents, the
Borrower shall maintain an arm’s length relationship with its Affiliates and the
Investment Manager.

(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.

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

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

(16) The Borrower shall make no transfer 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) The Borrower shall not acquire obligations or securities of its members.

(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.

(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 respects.

Section 5.04 Credit Estimates; Failure to Have a DBRS Long Term Rating.

(a) If at any time a Collateral Obligation does not have a DBRS Long Term
Rating, then the Borrower shall, within 10 Business Days after (x) the
origination or purchase of such Collateral Obligation or (y) the withdrawal of a
DBRS Long Term Rating from such Collateral Obligation, apply to DBRS for a
Credit Estimate, which shall be the DBRS Risk Score for such Collateral
Obligation; provided that if the DBRS Risk Score of a Collateral Obligation is
determined based on a Credit Estimate, such Credit Estimate must be updated at
least annually.

 

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(b) If the Borrower is in the process of obtaining a Credit Estimate in respect
of a Collateral Obligation, at all times until the DBRS Risk Score for such
Collateral Obligation (based on a Credit Estimate) is assigned, the DBRS Risk
Score of such Collateral Obligation shall be:

(i) if the Aggregate Principal Balance of all such Collateral Obligations with
respect to which the Borrower is in the process of obtaining a Credit Estimate
is equal to or less than 20% of the Total Capitalization, 49.7747, and

(ii) if the Aggregate Principal Balance of all such Collateral Obligations with
respect to which the Borrower is in the process of obtaining a Credit Estimate
is in excess of 20% of the Total Capitalization, (a) 49.7747 with respect to the
portion of the Aggregate Principal Balance of such Collateral Obligations equal
to and less than 20% of the Total Capitalization and (b) 90.6642 with respect to
the portion of the Aggregate Principal Balance of such Collateral Obligations in
excess of 20% of the Total Capitalization.

(c) If the Borrower is not in the process of obtaining a Credit Estimate or DBRS
declines to, or is unable to, provide a Credit Estimate in respect of any
Collateral Obligation and such Collateral Obligation does not have a DBRS Long
Term Rating, such Collateral Obligation will be deemed to have a DBRS Risk Score
of 90.6642.

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 Commitment Fee in respect of the Facility and such default continues
for three Business Days or (ii) any principal of any Advance on the Final
Maturity Date; provided in each case that, in the case of a failure to make
payment due to an administrative error or omission by either Agent or the
Calculation Agent, such failure continues for three Business Days after the
Collateral Agent receives written notice or has actual knowledge of such
administrative error or omission; or

(b) (i) 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; or (ii) a default in the payment of any
amounts due and owing on any Payment Date in respect of the Facility, other than
any amounts described under clauses (a) and (b)(i) of this Section 6.01, and
such default continues for three Business Days; or

 

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(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 a material
respect in the performance, or breach in a material respect, of any other
covenant or other agreement of the Borrower or the Investment Manager under any
Facility Document to which it is party (it being understood, without limiting
the generality of the foregoing, that any failure to meet any Concentration
Limitation, Collateral Quality Test or Coverage Test is not an Event of
Default), or the failure of any representation or warranty of the Borrower or
the Investment Manager made in any Facility Document or in any certificate or
other writing delivered pursuant thereto or in connection therewith to be
correct in each case in all material respects when the same shall have been
made, and the continuation of such default, breach or failure for a period of
thirty days after the earlier of (x) written notice to the Borrower or the
Investment Manager, as applicable (which may be by e-mail) by either Agent or
the Investment Manager, 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 (y) actual knowledge of the Borrower or the Investment
Manager, 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

(g) The Overcollateralization Ratio is less than 115% (an “EoD OC Ratio
Failure”) for more than 15 consecutive Business Days; or

(h) (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 $5,000,000 against the Borrower (exclusive
of judgment amounts fully

 

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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 10 days from the date of entry thereof, or (2) the
Borrower shall have made payments of amounts in excess of $5,000,000 in the
settlement of any litigation, claim or dispute (excluding payments made from
insurance proceeds or if funded solely with new contributions of cash equity or
amounts that are available to be disbursed to the equity holders pursuant to the
Priority of Payments); or

(i) 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); or

(j) an Insolvency Event relating to the Investment Manager occurs; or

(k) (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 Investment Manager, (2) the
Borrower or the Investment Manager 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
Collateral Agent except for Permitted Liens and as otherwise expressly permitted
in accordance with the applicable Facility Document; or

(l) (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 or (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 $1,000,000); or

(m) the occurrence of a Change in Control; or

(n) the occurrence of an act (or failure to act) by the Borrower or any
subsidiary of the Borrower, if any, that constitutes gross negligence, willful
misconduct or fraud or results in an indictment for criminal activity in the
performance of its obligations under the Facility Documents or any such Person
being indicted for a criminal offense materially related to the performance of
its obligations under the Facility Documents or in the performance of investment
advisory services comparable to those contemplated to be provided by the
Investment Manager in connection with the Facility Documents; or

(o) (1) the occurrence of one or more acts (including any failure(s) to act) by
the Investment Manager that constitutes fraud (as determined in an adjudication
by a court of competent jurisdiction) in the performance of its obligations
under this Agreement or any other

 

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Loan Document or in the performance of investment advisory services comparable
to those contemplated to be provided by the Investment Manager under this
Agreement and the other Facility Documents; or (2) the Investment Manager, or
any senior officer of the Investment Manager is indicted for a criminal offense
materially related to the performance of its obligations under this Agreement or
any other Facility Document or in the performance of investment advisory
services comparable to those contemplated to be provided by the Investment
Manager in this Agreement and the other Facility Documents; or (3) the
occurrence of one or more acts (including any failure(s) to act) by TSL
Advisers, LLC or any senior officer thereof or any employee of Affiliates of TSL
Advisers, LLC who exercise managerial responsibility for TSL Advisers, LLC that
constitutes fraud (as determined in an adjudication) in the performance of
investment advisory services comparable to those contemplated to be provided by
the Investment Manager under this Agreement and the other Facility Documents and
such event would reasonably be expected to have a Material Adverse Effect; or
(4) TSL Advisers, LLC or any senior officer thereof or any employee of
Affiliates of TSL Advisers, LLC who exercise managerial responsibility for TSL
Advisers, LLC is indicted for a criminal offense materially related to the
performance of investment advisory services comparable to those contemplated to
be provided by the Investment Manager in this Agreement and the other Facility
Documents and such event would reasonably be expected to have a Material Adverse
Effect.

Upon a Responsible Officer obtaining knowledge of the occurrence of an Event of
Default, each of (i) the Borrower, (ii) the Collateral Agent and (iii) the
Investment Manager 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 the
Collateral Agent, the Collateral Agent shall promptly notify the Facility Agent
(which will notify the Lenders promptly) and DBRS 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.

Upon the occurrence of any Event of Default, in addition to all rights and
remedies specified in this Agreement and the other Facility Documents, including
Article VII, and the rights and remedies of a secured party under Applicable
Law, including the UCC, the Facility Agent (at the direction of 100% of the
Lenders), by notice to the Borrower, may do any one or more of the following:
(1) declare the Commitments to be terminated forthwith, whereupon the
Commitments shall forthwith terminate, and (2) declare the principal of and the
accrued interest on the Advances and 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;
provided that, upon the occurrence of any Event of Default described in
clause (e) or (f) of this 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 COLLATERAL AGENT

Section 7.01 Grant of Security.

(a) The Borrower hereby grants, pledges, transfers and collaterally assigns to
the Collateral Agent, for the benefit of the Secured Parties, as 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 Obligations, both now and hereafter owned, including all
collections and other proceeds thereon or with respect thereto;

(ii) each Covered Account and all money, all instruments, all investment
property (including all securities, all security entitlements with respect to
such Covered Account and all financial assets carried in such Covered Account),
and all other property 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
Obligations 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 Collateral Agent under this
Agreement;

(v) all Cash or Money in possession of the Borrower or delivered to the
Collateral Agent (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 of the Borrower, including any of the same relating to
the assets and property described in the foregoing clauses (i) through (v) (in
each case as defined in the UCC);

(vii) all other property of the Borrower, including any such other property
otherwise delivered to the Collateral Agent by or on behalf of the Borrower
(whether or not constituting Collateral Obligations or Eligible Investments),
including equity or equity-like investments (including, without limitation, any
warrant that is received in connection with a Collateral Obligation) in Obligors
and their Affiliates where the Borrower owns a debt obligation;

 

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(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;

(ix) the Borrower’s rights in all assets owned by any Blocker Subsidiary, the
Borrower’s rights under any agreement with any Blocker Subsidiary, and 100% of
the equity of each Blocker Subsidiary; and

(x) 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 Security Interest.

If and only if all Obligations under the Facility (other than unasserted
contingent obligations) have been paid in full and all Commitments have been
terminated, the Secured Parties shall, at the expense of the Borrower, promptly
execute, deliver and file or authorize for filing such instruments as the
Borrower shall reasonably request in order to reassign, release or terminate the
Secured Parties’ security interest in the Collateral. The Secured Parties
acknowledge and agree that upon the sale or disposition of any Collateral by the
Borrower in compliance with the terms and conditions of this Agreement, the
security interest of the Secured Parties in such Collateral shall immediately
terminate and the Secured Parties shall, at the expense of the Borrower,
execute, deliver and file or authorize for filing such instrument as the
Borrower shall reasonably request to reflect or evidence such termination. Any
and all actions under this Article VII in respect of the Collateral shall be
without any recourse to, or representation or warranty by, any Secured Party and
shall be at the sole cost and expense of the Borrower.

Section 7.03 Rights and Remedies.

The Collateral Agent (for itself and on behalf of the other Secured Parties)
shall have all of the rights and remedies of a secured party under the UCC and
other Applicable Law. Upon the occurrence and during the continuance of an Event
of Default, the Collateral Agent or its designees may, and shall at the
direction of the Facility Agent (at the direction of 100% of the 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 Collateral
Agent or its designees and otherwise give all instructions for the Borrower
regarding the Collateral; (ii) sell or otherwise dispose of the Collateral, all
without judicial process or proceedings; (iii) take control of the Proceeds of
any such Collateral; (iv) subject to the provisions of the applicable Related
Documents, exercise any consensual or voting rights in respect of the
Collateral; (v) release, make extensions, discharges, exchanges or substitutions
for, or surrender, all or any part of the Collateral; (vi) enforce the
Borrower’s rights and remedies with respect to the Collateral; (vii) institute
and

 

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prosecute legal and equitable proceedings to enforce collection of, or realize
upon, any of the Collateral; (viii) require that the Borrower immediately take
all actions necessary to cause the liquidation of the Collateral in order to pay
all amounts due and payable in respect of the Obligations, in accordance with
the terms of the Related Documents; (ix) redeem or withdraw or cause the
Borrower to redeem or withdraw any asset of the Borrower to pay amounts due and
payable in respect of the Obligations; (x) make copies of or, if necessary,
remove from the Borrower’s and its agents’ respective places of business all
books, records and documents relating to the Collateral; and (xi) endorse the
name of the Borrower upon any items of payment relating to the Collateral or
upon any proof of claim in bankruptcy against an account debtor.

The Borrower hereby agrees that, upon the occurrence and during the continuance
of an Event of Default, at the request of the Collateral Agent or the Facility
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 Collateral Agent or its designee. For purposes
of taking the actions described in clauses (i) through (xi) of this Section 7.03
the Borrower hereby irrevocably appoints the Collateral Agent as its
attorney-in-fact (which appointment being coupled with an interest and is
irrevocable while any of the Obligations remain unpaid and which can be
exercised only if such Event of Default is continuing), with power of
substitution, in the name of the Collateral Agent or in the name of the Borrower
or otherwise, for the use and benefit of the Collateral Agent, 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 Collateral Agent 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 Collateral Agent from
time to time on demand in accordance with the Priority of Payments and shall
constitute and become a part of the Obligations secured hereby, and any costs of
an advisor or agent retained to exercise foregoing remedies shall be paid from
the Replacement Management Fee.

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

 

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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 Agent promptly forward to such Agent all information and notices which it
receives under or in connection with the Related Documents relating to the
Collateral and (ii) upon the written request of either Agent, act and refrain
from acting in respect of any request, act, decision or vote under or in
connection with the Related Documents relating to the Collateral only in
accordance with the direction of such Agent.

(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 Collateral Agent
on behalf of the Secured Parties, and upon request of either Agent following the
occurrence and during the continuance of an Event of Default or as otherwise
provided herein, promptly deliver the same to the Collateral Agent or its
designee.

Section 7.06 Borrower Remains Liable.

(a) Except as may be necessary in connection with any assignment of the
Collateral to the Collateral Agent 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) No obligation or liability of the Borrower is intended to be assumed by
either Agent 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 Agents and the other Secured Parties expressly disclaim any such
assumption. The Borrower agrees to indemnify, defend and hold harmless the
Agents 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 Investment Management Agreement and the Master
Transfer 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 Investment Management Agreement and the Master Transfer 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 Investment Manager 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

 

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Borrower is or may be entitled to do thereunder; provided that notwithstanding
anything herein to the contrary, the Agents shall not 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.

(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 Investment Management
Agreement or the other documents referred to in paragraph (a) above, nor shall
any of the obligations contained in the Investment Management Agreement or such
other documents be imposed on the Agents.

(c) Upon the occurrence of the Final Maturity Date (or, if earlier, the payment
in full of all of the Obligations and the termination of all of the
Commitments), the payment of all Obligations and the release of the Collateral
from the lien of this Agreement, this assignment and all rights herein assigned
to the Collateral Agent for the benefit of the Lenders shall cease and terminate
and all the estate, right, title and interest of the Collateral Agent in, to and
under the Investment Management 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.

(d) The Borrower represents that the Borrower has not executed any other
assignment of the Investment Management Agreement or the Master Transfer
Agreement.

(e) The Borrower agrees that this assignment is irrevocable until the
Obligations (other than unasserted contingent obligations) have been repaid in
full and all Commitments have terminated, 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 Investment Manager in the Investment Management Agreement, to
the following:

(i) The Investment Manager shall consent to the provisions of this assignment
and agree to perform any provisions of this Agreement applicable to the
Investment Manager subject to the terms of the Investment Management Agreement.

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

(iii) Neither the Borrower nor the Investment Manager will enter into any
agreement amending, modifying or terminating the Investment Management 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
Collateral Agent 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 Transfer Agreement as debtor in respect of the Collateral
Obligations from time to time purchased by the Borrower thereunder.

The Borrower hereby designates the Collateral Agent 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 Collateral Agent, or
release or diminish, the Borrower’s obligations under this Section 7.08.

Section 7.09 Acknowledgement.

In connection with any contemplated secured financing by TPG Specialty Lending
Inc., upon the request of the Borrower and at the expense of TPG Specialty
Lending Inc., the Facility Agent agrees to cooperate in good faith and in a
commercially reasonable manner in assisting the Borrower to identify the assets
included in the Collateral; provided, however, that unless the lender to such
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Agent with an acknowledgement that it has no interest in the assets so
identified as being included in the Collateral, the Facility Agent shall be
under no obligation to provide such lender with a similar identification of the
assets subject to the lien in favor of such lender.

ARTICLE VIII

ACCOUNTS, ACCOUNTINGS AND RELEASES

Section 8.01 Collection of Money.

Except as otherwise expressly provided herein, the Collateral Agent 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 Collateral Agent pursuant to
this Agreement, including all payments due on the Collateral, in accordance with
the terms and conditions of such Collateral. The Collateral Agent shall
segregate and hold all such Money and property received by it in 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
securities account held in trust and maintained under the Account Control
Agreement with (a) a federal or state-chartered depository institution having
DBRS Ratings of at least “A (high)” and “R-1 (middle)” and, if such
institution’s DBRS Ratings falls below such levels, then the assets held in such
Covered Account shall, upon direction of the Facility Agent following notice to
the Facility Agent from the Collateral Agent, be moved within 30 days to another
institution that has such DBRS Ratings or (b) in segregated securities accounts
held in trust with the corporate trust department of a federal or
state-chartered deposit institution 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 Collateral Agent or as required by this
Agreement for convenience in administering the Covered Account or the
Collateral.

Section 8.02 Collection Account.

(a) In accordance with this Agreement and the Account Control Agreement, the
Collateral Agent, on or prior to the Closing Date, shall establish at the
Custodian a single, segregated securities account held in trust and titled the
“TPG SL SPV, LLC Collection Account, subject to the lien of the Collateral
Agent”, 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 Collateral Agent. In addition, the
Collateral Agent shall establish three segregated subaccounts within the
Collection Account, one of which will be designated the “Interest Collection
Subaccount”, one of which will be designated the “Principal Collection
Subaccount”, and one of which will be designated the “Canadian Dollar
Subaccount”. The Collateral Agent 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 Collateral Agent. The Collateral Agent 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 simultaneously

 

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reinvested in additional Collateral Obligations in accordance with Article X or
in Eligible Investments or required to be deposited in the Revolving Reserve
Account pursuant to Section 8.04) received by the Collateral Agent. All Monies
deposited from time to time in the Collection Account pursuant to this Agreement
shall be held by the Collateral Agent 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). The Borrower shall instruct all
Obligors to remit all their payments in respect of the Collateral Obligations
into the Collection Account (or one or more subaccounts thereof) in accordance
with this Agreement. If the Borrower receives any Collections directly, the
Borrower shall remit any such Collections to the Collection Account (or one or
more subaccounts thereof) within 2 Business Days of receipt thereof.

(b) The Collateral Agent, within one Business Day after receipt of any
distribution or other proceeds in respect of the Collateral which are not Cash,
shall so notify the Borrower and the Investment Manager, and the Borrower shall
use its commercially reasonable efforts to, within fifteen Business Days of
receipt of such notice from the Collateral Agent (or as soon as practicable
thereafter), 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 delivers a certificate of a
Responsible Officer to the Collateral Agent certifying that such distributions
or other proceeds constitute Collateral Obligations or Eligible Investments 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.

(c) At any time when reinvestment is permitted pursuant to Article X, the
Investment Manager may by delivery of a certificate of a Responsible Officer of
the Investment Manager direct the Collateral Agent to, and upon receipt of such
certificate the Collateral Agent shall, withdraw funds on deposit in the
Principal Collection Subaccount representing Principal Proceeds and from
Interest Proceeds but only to the extent used to pay for accrued interest on an
additional Collateral Obligation and reinvest such funds in additional
Collateral Obligations 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 Revolving Reserve Account,
the Investment Manager may by delivery of a certificate of a Responsible Officer
direct the Collateral Agent to, and upon receipt of such certificate the
Collateral Agent shall, withdraw funds on deposit in the Principal Collection
Subaccount representing Principal Proceeds and remit such funds as so directed
by the Investment Manager to meet the Borrower’s funding obligations in respect
of Delayed Drawdown Collateral Loans or Revolving Collateral Loans.

(d) The Collateral Agent 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 Investment Manager or to be
used to settle binding commitments (entered into prior to the Determination
Date) for the purchase of Collateral Obligations) and as described in the
Payment Date Report for such Payment Date.

 

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(e) The “Canadian Dollar Subaccount” may include sub-subaccounts for Interest
Proceeds and Principal Proceeds. Collections received in respect of any Canadian
Dollar Obligation shall be identified by the Collateral Agent as such and
deposited in the Canadian Dollar Subaccount. Within one Business Day of receipt
of any distribution under a Canadian Dollar Obligation, the Collateral Agent
shall convert the amount of such distribution to Dollars applying the Spot
Foreign Exchange Rate as of the date of such conversion and deposit such Dollars
in the Interest Collection Subaccount or the Principal Collection Subaccount, as
applicable. Whenever it is provided in this Agreement that the Collateral Agent
is required or permitted to convert any distribution or other amount received in
Canadian Dollars into Dollars at the Spot Foreign Exchange Rate or words of
similar import, it is expressly agreed that (unless the Collateral Agent shall
have received other express written instruction from the Facility Agent,
together with the designation and establishment of any arrangements or
facilities needed to carry out such instructions), the Collateral Agent shall be
entitled to carry out such conversion by means of the foreign exchange
facilities of the Collateral Agent or any of its Affiliates, at whatever rates
and terms the Collateral Agent then makes available to its customers, and in
connection therewith the Collateral Agent 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).

Section 8.03 Transaction Accounts.

(a) Payment Account. In accordance with this Agreement and the Account Control
Agreement, the Collateral Agent, on or prior to the Closing Date, shall
establish at the Custodian a single, segregated securities account held in trust
and titled the “TPG SL SPV, LLC Payment Account, subject to the lien of the
Collateral Agent”, 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
Collateral Agent. 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. The Borrower
shall have legal, equitable and beneficial interest in the Payment Account in
accordance with this Agreement and the Priority of Payments.

(b) Custodial Account. In accordance with this Agreement and the Account Control
Agreement, the Collateral Agent, on or prior to the Closing Date, shall
establish at the Custodian a single, segregated securities account held in trust
and titled the “TPG SL SPV, LLC Custodial Account, subject to the lien of the
Collateral Agent”, 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 Collateral Agent. All Collateral Obligations shall be credited to
the Custodial Account. The only permitted withdrawals from the Custodial Account
shall be in accordance with the provisions of this Agreement. The Collateral
Agent agrees to give the Borrower prompt notice if (to the actual knowledge of a
Responsible Officer of the Collateral Agent) the Custodial Account or any assets
or securities on deposit therein, or otherwise to the credit of the Custodial

 

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Account, shall become subject to any writ, order, judgment, warrant of
attachment, execution or similar process. The Borrower shall have legal,
equitable and beneficial interest in the Custodial Account in accordance with
this Agreement and the Priority of Payments.

(c) Lender Funding Account.

(i) The Collateral Agent, on or prior to the Closing Date, shall establish at
the Custodian a single, segregated securities account held in trust and titled
the “TPG SL SPV, LLC Lender Funding Account, subject to the lien of the
Collateral Agent”, which shall be designated as the “Lender Funding Account”,
which shall be maintained by the Borrower with the Custodian and which shall be
subject to the lien of the Collateral Agent. The Lender Funding Account may
contain any number of subaccounts for the purposes described in this
Section 8.03(c). The only permitted deposits to or withdrawals from the Lender
Funding Account shall be in accordance with the provisions of this Agreement.
The Borrower shall have legal, equitable and beneficial interest in the Lender
Funding Account in accordance with this Agreement.

(ii) If any Lender shall at any time deposit any amount in the Lender Funding
Account in accordance with Section 2.16, then (x) the Collateral Agent shall
create a segregated subaccount of the Lender Funding Account with respect to
such Lender (the “Lender Funding Subaccount” of such Lender) and (y) the
Collateral Agent shall deposit all funds received from such Lender into such
Lender Funding Subaccount. The only permitted withdrawal from or application of
funds credited to a Lender Funding Subaccount shall be as specified in this
Section 8.03(c).

(iii) With respect to any Lender, the deposit of any funds in the applicable
Lender Funding Subaccount by such Lender shall not constitute a Borrowing by the
Borrower and shall not constitute a utilization of the Commitment of such
Lender, and the funds so deposited shall not constitute principal outstanding
under the Advances. However, from and after the establishment of a Lender
Funding Subaccount, the obligation of such Lender to advance funds as part of
any Borrowing under this Agreement shall be satisfied by the Collateral Agent
withdrawing funds from such Lender Funding Subaccount in the amount of such
Lender’s pro rata share of such Borrowing. All payments of principal from the
Borrower with respect to Advances made by such Lender (whether or not originally
funded from such Lender Funding Subaccount) shall be made by depositing the
related funds into such Lender Funding Subaccount and all other payments from
the Borrower (including without limitation all interest and Commitment Fees)
shall be made to such Lender in accordance with the order specified in the
Priority of Payments. The Collateral Agent shall have full power and authority
to withdraw funds from each such Lender Funding Subaccount at the time of, and
in connection with, the making of any such Borrowing and to deposit funds into
each such Lender Funding Subaccount, all in accordance with the terms of and for
the purposes set forth in this Agreement.

(iv) On any Business Day, any Lender may provide written notice to the
Collateral Agent, certifying as to the amount of such Lender’s undrawn
Commitment as of such date. If the sum of the amount of funds on deposit in the
applicable Lender

 

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Funding Subaccount with respect to such Lender as of such date exceeds such
Lender’s undrawn Commitment at such time (whether due to a reduction in the
Total Commitment or otherwise), then the Collateral Agent shall remit to such
Lender a portion of the funds then held in the related Lender Funding Subaccount
in an aggregate amount equal to such excess.

(v) If at any time a Lender provides written notice to the Borrower and the
Agents that it no longer wishes to maintain funds in its Lender Funding
Subaccount, then all funds then held in the relevant Lender Funding Subaccount
(after giving effect to any Borrowings in respect of the Advances that are to be
made on such date) shall be withdrawn from such Lender Funding Subaccount and
remitted to such Lender, and thereafter all payments with respect to Advances
made by such Lender shall be paid directly to such Lender in accordance with the
terms of this Agreement; provided that such Lender has provided prior written
notice to DBRS and is no longer subject to Section 2.16.

(vi) Except as otherwise provided in this Agreement, for so long as any amounts
are on deposit in any Lender Funding Subaccount, the Collateral Agent shall
invest and reinvest such funds in Dreyfus Treasury Fund (DTRXX), which is an
Eligible Investment of the type described in clause (vii) of the definition of
the term “Eligible Investments” that mature overnight. Interest received on such
Eligible Investments shall be retained in such Lender Funding Subaccount and be
invested and reinvested as aforesaid. Any gain realized from such investments
shall be credited to such Lender Funding Subaccount, and any loss resulting from
such investments shall be charged to such Lender Funding Subaccount. None of the
Borrower, the Investment Manager or the Collateral Agent shall in any way be
held liable by reason of any insufficiency of such Lender Funding Subaccount
resulting from any loss relating to any such investment.

Section 8.04 The Revolving Reserve Account; Fundings.

In accordance with this Agreement and the Account Control Agreement, the
Collateral Agent, on or prior to the Closing Date, shall establish at the
Custodian a single, segregated securities account held in trust and titled the
“TPG SL SPV, LLC Revolving Reserve Account, subject to the lien of the
Collateral Agent”, which shall be designated as the “Revolving Reserve Account”,
which shall be maintained by the Borrower with the Custodian in accordance with
the Account Control Agreement and which shall be subject to the lien of the
Collateral Agent. The only permitted deposits to or withdrawals from the
Revolving Reserve Account shall be in accordance with the provisions of this
Agreement. The Borrower shall have legal, equitable and beneficial interest in
the Revolving Reserve Account in accordance with this Agreement and the Priority
of Payments.

Upon the purchase of any Delayed Drawdown Collateral Loan or Revolving
Collateral Loan or, if necessary, on the Commitment Termination Date, funds
shall be withdrawn by the Collateral Agent at the direction of the Investment
Manager from the Principal Collection Subaccount and deposited in the Revolving
Reserve Account, (i) during the Reinvestment Period, in an amount sufficient to
ensure no Commitment Shortfall exists as of such time, and (ii) at all times
after the last day of the Reinvestment Period, equal to the aggregate unfunded

 

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commitments in respect of all Revolving Collateral Loans and Delayed Drawdown
Collateral Loans (the amount required to be on deposit at all times in the
Revolving Reserve Account pursuant to such clause (i) or (ii), as applicable,
the “Revolving Reserve Required Amount”).

Fundings of Revolving Collateral Loans and Delayed Drawdown Collateral Loans
shall be made using, first, amounts on deposit in the Revolving Reserve Account,
then amounts on deposit in the Principal Collection Subaccount and finally,
prior to the Commitment Termination Date, available Borrowings.

Amounts on deposit in the Revolving Reserve Account will be invested in
overnight funds that are Eligible Investments selected by the Investment Manager
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 has occurred and is then continuing, all funds in the
Revolving Reserve Account (other than earnings from Eligible Investments
therein) will be available solely to cover drawdowns on the Delayed Drawdown
Collateral Loans and Revolving Collateral Loans; provided that, to the extent
that the aggregate amount of funds on deposit therein at any time exceeds the
Revolving Reserve Required Amount, the Collateral Agent shall promptly notify
the Investment Manager and remit such excess to the Principal Collection
Subaccount, and such amounts will be treated as Principal Collections.

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

(a) By delivery of a certificate of a Responsible Officer (which may be in the
form of standing instructions), the Borrower or the Investment Manager shall at
all times direct the Collateral Agent to, and, upon receipt of such certificate,
the Collateral Agent shall, invest all funds on deposit in the Collection
Account and the Revolving 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 Collateral Agent shall seek instructions from
the Investment Manager within three Business Days after the transfer of any
funds to such accounts and shall immediately invest in Dreyfus Treasury Fund
(DTRXX), which is an Eligible Investment of the type described in clause
(vii) of the definition of the term “Eligible Investments” that mature
overnight. If the Collateral Agent does not thereafter receive written
instructions from the Investment Manager 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, 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 Collateral Agent for three
consecutive days, the Collateral Agent shall invest and reinvest such Monies as
fully as practicable in Dreyfus Treasury Fund (DTRXX), which is 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

 

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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 Investment Manager 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 Investment Manager or any Affiliate thereof.

(b) The Collateral Agent agrees to give the Borrower prompt notice if any
Covered Account or any funds on deposit in any Covered Account, or otherwise to
the credit of a Covered Account, shall become subject to any writ, order,
judgment, warrant of attachment, execution or similar process. All Covered
Accounts shall remain at all times with the Custodian 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 DBRS Ratings of at least “A
(high)” and “R-1 (middle)” and having an office within the United States.

(c) The Collateral Agent shall supply, in a timely fashion, to the Borrower,
DBRS and the Investment Manager any information regularly maintained by the
Collateral Agent that the Borrower, DBRS or the Investment Manager may from time
to time reasonably request with respect to the Collateral Obligations, the
Covered Accounts and the other Collateral and provide any other requested
information reasonably available to the Collateral Agent by reason of its acting
as Collateral Agent hereunder and required to be provided by Section 8.06 or to
permit the Investment Manager to perform its obligations under the Investment
Management Agreement or the Borrower’s obligations hereunder that have been
delegated to the Investment Manager. The Collateral Agent shall promptly forward
to the Investment Manager copies of notices and other writings received by it
from the issuer of any Collateral Obligation or from any Clearing Agency with
respect to any Collateral Obligation which notices or writings advise the
holders of such Collateral Obligation of any rights that the holders might have
with respect thereto (including, without limitation, requests to vote with
respect to amendments or waivers and notices of prepayments and redemptions) as
well as all periodic financial reports received from such issuer and Clearing
Agencies with respect to such issuer.

Section 8.06 Accountings.

(a) Monthly. On each Monthly Report Date, the Borrower shall compile and provide
(or cause to be compiled and provided) to DBRS, the Agents, the Investment
Manager 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 first Monthly Report shall be delivered in May 2012 and
shall be determined with respect to the Monthly Report Determination Date that
is six Business Days prior to the Monthly Report Date in May 2012. The final
Monthly Report shall be delivered on the Final Maturity Date and shall be
determined with respect to the Monthly Report Determination Date that is six
Business Days

 

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prior to the Final Maturity Date. The Monthly Report for a calendar month shall
contain the information with respect to the Facility and the Collateral
Obligations and Eligible Investments included in the Collateral set forth in
Part 1 of Schedule 2 hereto, and shall be determined as of the Monthly Report
Determination Date for such calendar month.

Simultaneous with the delivery of each Monthly Report, the Borrower (or the
Investment Manager) shall provide a certificate certifying that no Default or
Event of Default occurred during the period covered by such Monthly Report or if
any Default or Event of Default occurred during such period, setting forth the
details thereof and the action which the Borrower is taking or proposes to take
with respect thereto.

In addition, the Investment Manager shall provide for inclusion in each Monthly
Report a statement setting forth in reasonable detail each amendment,
modification or waiver under any Related Document for each Collateral Obligation
that became effective during the one month period ending on the Monthly Report
Determination Date for the immediately prior Monthly Report (or, in respect of
the first Monthly Report, from the Closing Date).

Three Business Days prior to each Monthly Report Date, the Borrower shall
deliver to the Investment Manager a draft of the Monthly Report relating to such
Monthly Report Date. Upon receipt of each draft Monthly Report, the Investment
Manager shall compare the information contained in such Monthly Report to the
information contained in its records with respect to the Collateral and shall,
within two Business Days after receipt of such draft Monthly Report, notify the
Borrower and the Collateral Agent if the information contained in the draft
Monthly Report does not conform to the information maintained by the Investment
Manager with respect to the Collateral. In the event that any discrepancy
exists, the Collateral Agent and the Investment Manager shall attempt to resolve
the discrepancy. If such discrepancy cannot be promptly resolved, the Investment
Manager shall within 1 Business Day request that the Independent Accountants
appointed by the Borrower pursuant to Section 8.08 review such draft Monthly
Report and the Collateral Agent’s records to determine the cause of such
discrepancy. If such review reveals an error in the Monthly Report or the
Collateral Agent’s records, the Monthly Report or the Collateral Agent’s records
shall be revised accordingly and, as so revised, shall be utilized in making all
calculations pursuant to this Agreement and notice of any error in the Monthly
Report shall be sent as soon as practicable by the Borrower to all recipients of
such report which may be accomplished by making a notation of such error in the
subsequent Monthly Report.

(b) Payment Date Accounting. 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 Agents, the Investment Manager, the Independent Accountants, DBRS
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 Collateral Agent 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.

 

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(d) Failure to Provide Accounting. If the Collateral Agent 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 Collateral Agent, the
Collateral Agent shall notify the Investment Manager who shall use all
reasonable efforts to obtain such accounting by the applicable Payment Date. To
the extent the Investment Manager 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 Investment Manager shall be entitled
to retain an independent certified public accountant in connection therewith and
the reasonable costs incurred by the Investment Manager for such independent
certified public accountant shall be paid by the Borrower.

Section 8.07 Release of Securities.

(a) If no Event of Default has occurred and is continuing, the Borrower or the
Investment Manager may, by delivery of a certificate of a Responsible Officer,
deliver to the Collateral Agent at least one Business Day prior to the
settlement date for any sale of a security certifying that the sale of such
security is being made in accordance with Section 10.01 and such sale complies
with all applicable requirements of Section 10.01, direct the Collateral Agent
to release or cause to be released such security from the lien of this Agreement
and, upon receipt of such certificate, the Collateral Agent shall promptly
deliver any such security, if in physical form, duly endorsed to the broker or
purchaser designated in such certificate or, if such security 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 Borrower or
the Investment Manager in such certificate; provided that the Collateral Agent
may deliver any such security in physical form for examination in accordance
with street delivery custom.

(b) Subject to the terms of this Agreement, the Collateral Agent shall upon the
delivery of a certificate of a Responsible Officer of the Borrower (or the
Investment Manager) (i) deliver any Collateral, and release or cause to be
released such security from the lien of this Agreement, which is set for any
mandatory call or redemption or payment in full to the appropriate paying agent
on or before the date set for such call, redemption or payment, in each case
against receipt of the call or redemption price or payment in full thereof and
(ii) provide notice thereof to the Investment Manager.

(c) Upon 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 Obligation, the Collateral Agent shall notify the
Investment Manager of such Offer or request. Unless the Advances have been
accelerated following an Event of Default, the Investment Manager may direct
(x) the Collateral Agent 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 Obligation in accordance
with the terms of the Offer against receipt of payment therefor, or (y) the
Borrower or the Collateral Agent to agree to or otherwise act with respect to
such consent, waiver, amendment or modification.

 

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(d) As provided in Section 8.02(a), the Collateral Agent 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 of additional Collateral Obligations or Eligible Investments as
permitted under and in accordance with the requirements of this Article VIII and
Article X.

(e) The Collateral Agent shall, upon receipt of a certificate of a Responsible
Officer of the Borrower to the effect that there are no Commitments outstanding
and all Obligations (other than unasserted contingent obligations) have been
satisfied in full, and upon written request therefor, release any remaining
Collateral from the lien of this Agreement.

(f) Any security, Collateral Obligation or amounts that are released pursuant to
Section 8.07(a), (b) or (c) shall be released from the lien of this Agreement.

Section 8.08 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 Investment Manager. The Borrower may remove any
firm of Independent Accountants at any time upon notice to, but without the
consent of any of, the Lenders and the Collateral Agent. Upon any resignation by
such firm or removal of such firm by the Borrower, the Borrower (or the
Investment Manager) shall promptly appoint by a certificate of a Responsible
Officer of the Borrower delivered to the Collateral Agent and DBRS 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 Investment Manager. 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
Collateral Agent and the Investment Manager of such failure in writing and the
Investment Manager 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) Annually, on or before the business day immediately preceding the Payment
Date occurring in July of each year, commencing in 2013, the Borrower shall
cause to be delivered to the Agents, the Investment Manager, each Lender upon
written request therefor and DBRS a statement from a firm of Independent
Accountants for each Payment Date Report received since the last statement (i)
indicating that the calculations within those Payment Date Reports have been
performed in accordance with the applicable provisions of this Agreement and
(ii) listing the Aggregate Principal Balance of the Collateral Obligations and
the principal balance and/or other relevant information relating to the value of
all other Collateral as of each immediately preceding Determination Date;
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 8.08,
the determination by such firm of Independent Accountants shall be conclusive.

 

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Section 8.09 Reports to DBRS.

In addition to the information and reports specifically required to be provided
to DBRS pursuant to the terms of this Agreement, the Borrower shall provide DBRS
with all information or reports delivered to the Collateral Agent hereunder, and
such additional information as DBRS may from time to time reasonably request.

Section 8.10 Currency Exchange Account.

In accordance with this Agreement and the Account Control Agreement, the
Collateral Agent, on or prior to the Closing Date, shall establish at the
Custodian a single, segregated securities account held in trust and titled the
“TPG SL SPV, LLC Currency Exchange Account, subject to the lien of the
Collateral Agent”, which shall be designated as the “Currency Exchange Account”,
which shall be maintained by the Borrower with the Custodian in accordance with
the Account Control Agreement and which shall be subject to the lien of the
Collateral Agent. The only permitted deposits to or withdrawals from the
Currency Exchange Account shall be in accordance with the provisions of this
Agreement. The Borrower shall not have any legal, equitable or beneficial
interest in the Currency Exchange Account other than in accordance with this
Agreement and the Priority of Payments. During the Reinvestment Period, on any
Determination Date on which the Currency Exchange Mark-to-Market Amount equals
zero, the Collateral Agent, at the direction of the Investment Manager, shall
withdraw all amounts in the Currency Exchange Account and deposit such amounts
into the Interest Collection Subaccount for application of payment on the
related Payment Date. After the last day of the Reinvestment Period, all amounts
in the Currency Exchange Account shall be transferred by the Collateral Agent
into the Principal Collection Subaccount.

Section 8.11 Funded Draw Collection Account.

In accordance with this Agreement and the Account Control Agreement, the
Collateral Agent, on or prior to the Closing Date, shall establish at the
Custodian a single, segregated securities account held in trust and titled the
“TPG SL SPV, LLC Funded Draw Collection Account, subject to the lien of the
Collateral Agent”, which shall be designated as the “Funded Draw Collection
Account”, which shall be maintained by the Borrower with the Custodian in
accordance with the Account Control Agreement and which shall be subject to the
lien of the Collateral Agent. The only permitted deposits to or withdrawals from
the Funded Draw Collection Account shall be in accordance with the provisions of
this Agreement. The Borrower shall not have any legal, equitable or beneficial
interest in the Funded Draw Collection Account other than in accordance with
this Agreement and the Priority of Payments.

Each obligor and, if applicable, agent that will make payments under a Funded
Draw Assignment shall be directed by the Borrower to make all payments of
principal, interest, fees or other amounts in respect of such Funded Draw
Assignment (and all other amounts owing in respect of such Funded Draw
Assignment, and all other amounts owing to the Borrower under the Related
Documents in respect of such loan or tranche) directly into the Funded Draw
Collection Account. Within one Business Day of receipt of any such payment, the
Collateral Agent shall (i) in the case of Principal Proceeds, transfer such
Principal Proceeds to the Collection Account for further transfer into the
Principal Collection Subaccount, (ii) in the case

 

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of Interest Proceeds (except as provided in clause (iii) below), transfer such
Interest Proceeds to the Collection Account for further transfer into the
Interest Collection Subaccount and (iii) in the case of any commitment fee,
unused line fee, ticking fee or similar fee that is paid in respect of the
unused portion of the commitment under the Revolving Collateral Loan or Delayed
Drawdown Collateral Loan to which such Funded Draw Assignment relates, such fee
shall be remitted to the Borrower, free and clear of the lien of this Agreement,
in accordance with instructions provided by the Investment Manager. The
Collateral Agent agrees to give the Borrower prompt notice if (to the Collateral
Agent’s actual knowledge) the Funded Draw Collection Account or any assets or
securities on deposit therein, or otherwise to the credit of the Funded Draw
Collection Account, shall become subject to any writ, order, judgment, warrant
of attachment, execution or similar process known to a Responsible Officer of
the Collateral Agent.

Section 8.12 Closing Expense Account.

In accordance with this Agreement and the Account Control Agreement, the
Collateral Agent, on or prior to the Closing Date, shall establish at the
Custodian a single, segregated securities account held in trust and titled the
“TPG SL SPV, LLC Closing Expense Account, subject to the lien of the Collateral
Agent”, which shall be designated as the “Closing Expense Account”, which shall
be maintained by the Borrower with the Custodian in accordance with the Account
Control Agreement and which shall be subject to the lien of the Collateral
Agent. The only permitted withdrawal from or application of funds on deposit in,
or otherwise to the credit of, the Closing Expense Account shall be in
accordance with the provisions of this Section 8.12. The Borrower shall not have
any legal, equitable or beneficial interest in the Closing Expense Account other
than in accordance with this Agreement and the Priority of Payments.

On the Closing Date, the Borrower shall deposit $2,575,000 into the Closing
Expense Account. On any Business Day from the Closing Date to and including the
Determination Date relating to the initial Payment Date following the Closing
Date, the Collateral Agent shall apply funds from the Closing Expense Account,
as directed by the Borrower, to pay all Closing Date Expenses; provided that the
fees and expenses of Natixis, Weil, Gotshal & Manges LLP, Sidley Austin LLP, and
DBRS that have been invoiced for payment on the Closing Date in respect of
Closing Date Expenses shall be paid by the Borrower on the Closing Date. On the
Determination Date relating to the initial Payment Date following the Closing
Date, all funds remaining in the Closing Expense Account after payment of the
Closing Date Expenses on or prior to such Determination Date shall be deposited
in the Collection Account as Interest Proceeds and the Closing Expense Account
will be closed. By delivery of a certification of a Responsible Officer (which
may be in the form of standing instructions), the Borrower or the Investment
Manager may at any time direct the Collateral Agent to, and, upon receipt of
such certification, the Collateral Agent shall, invest all funds remaining in
the Closing Expense Account as so directed in Eligible Investments. Any income
earned on amounts deposited in the Closing Expense Account will be deposited in
the Interest Collection Account as Interest Proceeds as it is received.

 

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Section 8.13 Collateral Reporting.

(a) The Collateral Agent shall perform the following functions:

(i) create a Collateral database within 30 days of the Closing Date;

(ii) permit access to the information in the Collateral database to the
Investment Manager and the Borrower;

(iii) update the Collateral database promptly for ratings changes;

(iv) update the Collateral database promptly for Collateral Obligations, Equity
Securities and Eligible Investments acquired or sold or otherwise disposed of
and for any amendments or changes to loan amounts or interest rates;

(v) prepare and arrange for the delivery of each Monthly Report and Payment Date
Report; and

(vi) provide the Investment Manager with such other information as may be
reasonably requested by the Investment Manager and as is within the possession
of the Collateral Agent.

(b) Not later than the day on which each Monthly Report or Payment Date Report
is required to be provided by the Borrower, the Collateral Agent shall
calculate, using the information contained in the Collateral database created by
the Collateral Agent and any other Collateral information normally maintained by
the Collateral Agent, and subject to the Collateral Agent’s receipt from the
Investment Manager of information with respect to the Collateral that is not
contained in such Collateral database or normally maintained by the Collateral
Agent, as Trustee, each item required to be stated in such Monthly Report or
Payment Date Report.

(c) Upon notification by the Investment Manager of a proposed purchase of any
security pursuant to this Agreement (accompanied by such information concerning
the security to be purchased as may be necessary to make the calculations
referred to below), the Collateral Agent shall calculate each criterion included
in the Eligibility Criteria as a condition to such purchase in accordance with
this Agreement, in all cases, based upon information contained in the Collateral
database and information furnished by the Borrower and Investment Manager, and
provide the results of such calculations to the Investment Manager so that the
Investment Manager may determine whether such purchase is permitted by this
Agreement. The Collateral Agent shall deliver a draft of such calculation to the
Investment Manager reasonably promptly after the later of (i) notification of
such proposed purchase by the Investment Manager and (ii) delivery of all
information to the Collateral Agent necessary to complete such calculations. For
the avoidance of doubt, the Collateral Agent shall have no obligation to
determine (and the Investment Manager will timely advise the Collateral Agent)
whether any item of Collateral meets the definition of “Collateral Obligation”,
“Credit Risk Loan/Bond”, “Equity Security” or “Defaulted Loan/Bond”.

(d) Upon written notification by the Investment Manager of a proposed sale of
any Collateral Obligation pursuant to Section 10.01 of this Agreement, the
Collateral Agent shall calculate each criterion set forth in the Section 10.01,
if any, as a condition to such disposition and provide the results of such
calculations to the Investment Manager so that the Investment Manager may
determine whether such sale is permitted by this Agreement. The Collateral Agent
shall deliver a draft of such calculations to the Investment Manager reasonably
promptly after the later of (i) notification of such proposed sale by the
Investment Manager and (ii) delivery of all information to the Collateral Agent
necessary to complete such calculations.

 

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(e) With respect to the calculations to be provided by the Collateral Agent set
forth in Sections 8.13(c) and (d) above, in no event shall the Collateral Agent
be required to deliver such calculations earlier than one Business Day following
the receipt by the Collateral Agent of all information necessary to complete
such calculations. In the event the Investment Manager does not provide the
Collateral Agent the items necessary to complete the calculations required by
Sections 8.13(c) and (d) above and/or the Investment Manager proceeds with a
sale or purchase of the applicable Collateral prior to the time the Collateral
Agent delivers such calculations, the Collateral Agent shall not be responsible
for determining whether the provisions of this Agreement have been satisfied
(including compliance with the Eligibility Criteria) and the Collateral Agent
shall be entitled to rely upon the instructions of the Investment Manager in all
respects, including but not limited to instructions (which may be in the form of
trade tickets) to release the applicable Collateral from the lien of this
Agreement or to acquire the applicable Collateral. In the event the Investment
Manager consummates a sale or purchase prior to receiving the calculations of
the Collateral Agent, the Collateral Agent shall be under no duty, and shall
incur no liability, to perform the calculations set forth in Sections 8.13(c)
and (d) above.

(f) Subject to the mutual agreement of the parties hereto regarding reasonable
compensation for the Collateral Agent, perform such other calculations and
prepare such other reports as the Investment Manager may reasonably request in
writing and that are required by this Agreement and as the Collateral Agent may
agree to in writing, which agreement shall not be unreasonably withheld.

(g) Nothing herein shall prevent the Collateral Agent or any of its Affiliates
from engaging in other businesses or from rendering services of any kind to any
Person.

(h) The Collateral Agent shall have no obligation to determine Market Value or
price in connection with any actions or duties under this Agreement.]

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 Collateral
Agent 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”).

(i) On each Payment Date, Interest Proceeds on deposit in the Interest
Collection Subaccount, to the extent received by the Collateral Agent 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:

 

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(A) (1) first, to pay taxes, registration and filing fees, if any, of the
Borrower or any Blocker Subsidiary; (2) second, to pay all out-of-pocket costs
and expenses of the Collateral Agent (in each case expressly excluding any
amounts in respect of indemnities) payable under Section 7.03; (3) third, to pay
other Administrative Expenses payable to the Collateral Agent; and (4) fourth,
to pay all other Administrative Expenses in accordance with the priorities
specified in the definition thereof; provided that the aggregate amount applied
under clauses (A)(3) and (4) for each Payment Date prior to the Commitments
terminating and the principal of and the accrued interest on the Advances and
the Notes and all other amounts whatsoever payable by the Borrower hereunder
becoming due and payable pursuant to Section 6.01, shall not exceed the
Administrative Expense Cap for such Payment Date;

(B) to the payment of amounts due and payable under each Eligible Hedge
Agreement entered into by the Borrower;

(C) following the occurrence of an Event of Default specified in Section 6.01(j)
or (o), to the Lenders in an amount not to exceed the accrued and unpaid
Replacement Investment Management Fees (other than Deferred Replacement
Investment Management Fees);

(D) to the payment of Commitment Fees due to the Lenders;

(E) to the payment of accrued and unpaid interest on the Advances and amounts
payable to the Lenders or any Affected Person under Section 2.10;

(F) 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 (both
before and after giving effect to any payment made pursuant to clause (1)), to
deposit in the Revolving 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), and in conjunction with such repayment or deposit, the
corresponding Commitment shall be terminated in accordance with Section 2.05(b);

(G) to the payment or application of amounts referred to in clauses (A) (3) and
(4) above (in the same order of priority specified therein), to the extent not
paid in full pursuant to applications under said clauses (A)(3) and (4);

(H) to pay accrued and unpaid amounts owing to the Secured Parties and any other
Affected Person (if any) under Sections 2.09 and 12.03;

(I) to the payment of any Replacement Investment Management Fees that the
Lenders have elected in a written notice delivered to the Agents prior to the
related Determination Date, to be paid on such Payment Date (such deferred fees,
the “Deferred Replacement Investment Management Fees”);

 

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(J) to the Currency Exchange Account, in an amount equal to the excess (if any)
of the Currency Exchange Mark-to-Market Amount over the amount on deposit in the
Currency Exchange Account prior to the application of payment under this clause
(J), in each case on such Payment Date;

(K) during the Reinvestment Period and so long as no Event of Default has
occurred and is continuing, the remainder to be allocated at the Investment
Manager’s option (as evidenced in a written notice delivered to the Agents
delivered on or prior to the related Determination Date) to any one or more of
the following payments: (i) to the Principal Collection Subaccount for the
purchase of additional Collateral Obligations (including funding Revolving
Collateral Loans and Delayed Drawdown Collateral Loans), and/or (ii) to prepay
the Advances, and/or (iii) to the Borrower, free and clear of the lien of this
Agreement, so long as in connection with any payment made pursuant to this
clause (iii) each Coverage Test is satisfied as of the related Determination
Date immediately prior to and immediately after the making of such payment to
the Borrower, and/or (iv) for deposit into the Revolving Reserve Account up to
an amount that would result in the Portfolio Exposure Amount equaling zero;

(L) so long as an Event of Default has occurred and is continuing, to the
repayment of the Advances until paid in full;

(M) after the Reinvestment Period, as of the related Determination Date, if
(i) the Diversity Score of the Collateral Obligations, calculated as a single
number in accordance with standard diversity scoring methodology using DBRS
Industry Classifications, equals or exceeds 10, and (ii) either (I) the
Overcollateralization Ratio at such time is at least equal to the ratio of
(a) 1.20 over (b) the Row Advance Rate that is in effect as of the end of the
Reinvestment Period or (II) the Cumulative Net Loss Amount is equal to or less
than zero, to the Borrower, free and clear of the lien of this Agreement;

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

(O) after the Reinvestment Period, and after the repayment of the Advances in
full, the remainder to the Borrower, free and clear of the lien of this
Agreement.

(ii) On each Payment Date, Principal Proceeds on deposit in the Principal
Collection Subaccount that are received by the Collateral Agent 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 Investment Manager 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 Obligations, in the following order of priority:

 

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(A) to the payment of unpaid amounts under clauses (A) through (F) in clause (i)
above (in the same order of priority specified therein), to the extent not paid
in full thereunder;

(B) during the Reinvestment Period, at the discretion of the Investment Manager,
(1) to the Principal Collection Subaccount for the purchase of additional
Collateral Obligations (including funding Revolving Collateral Loans and Delayed
Drawdown Collateral Loans), and/or (2) to prepay the Advances, and/or (3) for
deposit into the Revolving Reserve Account up to an amount that would result in
the Portfolio Exposure Amount equaling zero;

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

(D) to the payment of amounts referred to in clauses (G), (H) and (I) of
clause (i) above (in the same order of priority specified therein), to the
extent not paid in full thereunder; and

(E) after the Reinvestment Period, and after the repayment of the Advances in
full, the remainder to the Borrower, free and clear of the lien of this
Agreement.

(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 Collateral Agent shall make the disbursements called
for in the order and according to the priority set forth under Section 9.01(a)
to the extent funds are available therefor.

ARTICLE X

SALE OF COLLATERAL OBLIGATIONS;

PURCHASE OF ADDITIONAL COLLATERAL OBLIGATIONS

Section 10.01 Sales of Collateral Obligations.

(a) Investment Manager-Directed Sales. Subject to the satisfaction of the
conditions specified in Section 10.03 and provided that (x) no Default or Event
of Default has occurred and is continuing or would result upon giving effect
thereto (unless, in the case of such a Default, such Default will be cured upon
giving effect to such sale and the application of the proceeds thereof),
(y) upon giving effect thereto and the application of the proceeds thereof, each
Coverage Test is satisfied and each Collateral Quality Test is satisfied, or, if
any Collateral Quality Test is not satisfied, such Collateral Quality Test shall
be maintained or improved, and (z) such sale is made for a purchase price at
least equal to the Loan Amount of such Collateral Obligations (after adjustment
for any borrowings or repayments and exclusive of accrued interest), the
Investment Manager may, but will not be required to, direct the Collateral Agent
to sell and the Collateral Agent shall sell in the manner directed by the
Investment Manager any Collateral Obligation (or any portion thereof) if such
sale meets the requirements set forth below provided that, the restrictions in
clauses (y) and (z) above in this Section 10.01(a) shall not apply to sales of
Credit Risk Loan/Bonds or Defaulted Loan/Bonds to such non-Affiliates:

 

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(i) Sales of Collateral Obligations to Non-Affiliates. One or more (or any
portion of any) Collateral Obligations may be sold from time to time by the
Borrower, or the Investment Manager, to Persons who are not Affiliates of the
Borrower or the Investment Manager, on an arm’s length basis;

(ii) Sales of Collateral Obligations to Affiliates. One or more (or any portion
of any) Collateral Obligations may be sold from time to time by the Borrower, or
the Investment Manager, to the Investment Manager or any of its Affiliates 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) the Collateral Obligation is a Defaulted Loan/Bond or
Credit Risk Loan/Bond, such sale shall be for an amount equal to the Appraised
Value with respect to such Collateral Obligation, (D) the Collateral Obligation
is not a Defaulted Loan/Bond or Credit Risk Loan/Bond, the prior written consent
of the Facility Agent is obtained if such sale is for an amount less than the
original purchase price paid by the Borrower (after adjustment for any
borrowings or repayments and exclusive of interest) with respect to such
Collateral Obligation and (E) the prior written consent of the Facility Agent is
obtained if the Collateral Obligation is a Defaulted Loan/Bond or Credit Risk
Loan/Bond.

Notwithstanding the foregoing terms of this Section 10.01(a), in connection with
the sale of any Credit Risk Loan/Bond, a Rating Confirmation must be obtained as
a condition to the Borrower consummating such sale if (x) the cumulative amount
of losses in respect of one or more sales of any Credit Risk Loan/Bond(s) that
is sold for a purchase price that is less than 80.0% of its Loan Amount (after
adjustment for any borrowings or repayments and exclusive of accrued interest)
exceeds $35,000,000 and (y) the ratio as calculated pursuant to the
Overcollateralization Ratio Test at such time (after giving effect to such sale
on a pro forma basis) is less than the Row Minimum OC Level that is in use at
such time.

So long as no Default or Event of Default is continuing or would result upon
giving effect thereto and the application of the proceeds thereof, the Borrower
may sell any Equity Security or any asset held by any Blocker Subsidiary at any
time without restriction, and shall effect the sale of any Equity Security,
regardless of price, within 30 days of receipt if such Equity Security
constitutes Margin Stock, unless such sale is prohibited by Applicable Law, in
which case the Borrower shall notify the Facility Agent and such Equity Security
shall be sold as soon as such sale is permitted by Applicable Law.

(b) Terms of Sales. All sales of Collateral Obligations and other property of
the Borrower under the provisions above in this Section 10.01 must be
exclusively for Cash. So long as no Default or Event of Default is continuing or
would result upon giving effect thereto and the application of the proceeds
thereof, a sale of a Collateral Obligation that is otherwise permitted by the
terms above in this Section 10.01 may be effected by the sale by the Borrower of
participation interests in such Collateral Obligation, provided that no
participations may be sold by the Borrower in any Revolving Collateral Loan or
Delayed Drawdown Collateral Loan.

 

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Section 10.02 Purchase of Additional Collateral Obligations.

On any date during the Reinvestment Period, if no Default or Event of Default
has occurred and is continuing or would result therefrom, the Borrower, or the
Investment Manager, may, if each of the conditions specified in this
Section 10.02 and Section 10.03 is met, direct the Collateral Agent to invest
Principal Proceeds (and accrued interest received with respect to any Collateral
Obligation to the extent used to pay for accrued interest on additional
Collateral Obligations) in additional Collateral Obligations, and the Collateral
Agent shall invest such proceeds in accordance with such instructions. The
Borrower shall ensure that all such investments in Collateral Obligations 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 Obligation may be purchased unless such
loan, debt obligation, or Participation Interest satisfies the Eligibility
Criteria as of the date the Borrower, or the Investment Manager, 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. To the extent Article VIII does not provide for cash on deposit in
a Covered Account to be invested in Eligible Investments, such cash will remain
uninvested.

(c) Purchase of Additional Collateral Obligations from Affiliates. Additional
Collateral Obligations may be purchased from time to time by the Borrower, or
the Investment Manager, from the Investment Manager or any of its Affiliates
only if (v) such purchase or acquisition is effected pursuant to the Master
Transfer Agreement, (w) 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, (x) the transactions are effected in accordance with all
Applicable Laws, (y) the prior written consent of the Facility Agent is obtained
if such purchase is for an amount greater than the original purchase price paid
by the Investment Manager or such Affiliate (after adjustment for any borrowings
or repayments and exclusive of interest) with respect to such Collateral
Obligation and (z) written notice thereof is provided to DBRS.

Section 10.03 Conditions Applicable to All Sale and Purchase Transactions.

Upon any acquisition of a Collateral Obligation pursuant to this Article X, a
security interest in all of the Borrower’s right, title and interest to the
Collateral shall be granted to the Collateral Agent pursuant to this Agreement,
such Collateral shall be Delivered to the Collateral Agent, and, if applicable,
the Borrower shall receive the Collateral for which the Collateral was
substituted, free and clear of the lien of this Agreement.

Section 10.04 Additional Equity Contributions.

Subject to Section 10.03, the Investment Manager or an Affiliate thereof may,
but shall have no obligation to, at any time or from time to time contribute
additional equity to the Borrower, including without limitation for the purpose
of curing any Default (but, for the

 

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avoidance of doubt, not any Event of Default), satisfying any Coverage Test or
Collateral Quality Test, enabling the acquisition or sale of any Collateral
Obligation or satisfying any conditions under Section 3.02. Each equity
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 Obligation (in compliance with the Eligibility Criteria). Unless
otherwise directed by the Borrower by prior written notice to the Agents, 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 occurrence of the Closing Date.

Section 10.05 Unsettled Securities.

Any Collateral Obligation that is an Unsettled Security shall no longer
constitute an Unsettled Security as of the date on which such Collateral
Obligation has Settled.

ARTICLE XI

THE AGENTS

Section 11.01 Authorization and Action.

Each Lender hereby irrevocably appoints and authorizes the Facility Agent and
the Collateral Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and, to the extent applicable, the other
Facility Documents as are delegated to such Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto, subject
to the terms hereof. No Agent shall have any duties or responsibilities, except
those expressly set forth herein or in the other Facility Documents, or any
fiduciary relationship with any Secured Party, and no implied covenants,
functions, responsibilities, duties or obligations or liabilities on the part of
such Agent shall be read into this Agreement or any other Facility Document to
which such Agent is a party (if any) as duties on its part to be performed or
observed. No Agent shall have or be construed to have any other duties or
responsibilities in respect of this Agreement and the transactions contemplated
hereby. As to any matters not expressly provided for by this Agreement or the
other Facility Documents, no Agent shall be required to exercise any discretion
or take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
written instructions of the Required Lenders; provided that such Agent shall not
be required to take any action which exposes such Agent, in its judgment, to
personal liability, cost or expense or which is contrary to this Agreement, the
other Facility Documents or Applicable Law, or would be, in its judgment,
contrary to its duties hereunder, under any other Facility Document or under
Applicable Law. Each Lender agrees that in any instance in which the Facility
Documents provide that an Agent’s consent may not be unreasonably withheld,
provide for the exercise of such Agent’s reasonable discretion, or provide to a
similar effect, it shall not in its instructions (or, by refusing to provide
instruction) to such Agent withhold its consent or exercise its discretion in an
unreasonable manner.

 

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Section 11.02 Delegation of Duties.

Each Agent may execute any of its duties under this Agreement and each other
Facility Document by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
No Agent shall be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

Section 11.03 Agents’ Reliance, Etc.

(a) Neither 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, each Agent: (i) may consult
with legal counsel (including, without limitation, counsel for the Borrower or
the Investment Manager 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 Investment Manager or any
other Person or to inspect the property (including the books and records) of the
Borrower or the Investment Manager; (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.
No Agent shall 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) No Agent shall be liable for the actions of omissions of any other Agent
(including without limitation concerning the application of funds), or under any
duty to monitor or investigate compliance on the part of any other Agent with
the terms or requirements of this Agreement, any Facility Document or any
Related Document, or their duties thereunder. Each Agent shall be entitled to
assume the due authority of any signatory and genuineness of any signature
appearing on any instrument or document it may receive (including, without
limitation, each Notice of Borrowing received hereunder). No Agent shall be
liable for any action taken in good faith and reasonably believed by it to be
within the powers conferred upon it, or taken by it pursuant to any direction or
instruction by which it is governed, or omitted to be taken by it by reason of
the lack of direction or instruction required hereby for such action (including
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,

 

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written instruction to exercise such discretion or grant such consent from any
such Lender, as applicable). No Agent shall be liable for any error of judgment
made in good faith unless it shall be proven that such Agent was grossly
negligent in ascertaining the relevant facts. Nothing herein or in any Facility
Documents or Related Documents shall obligate any Agent to advance, expend or
risk its own funds, or to take any action which in its reasonable judgment may
cause it to incur any expense or financial or other liability for which it is
not adequately indemnified. No Agents shall 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. No Agent shall be charged with knowledge or notice of any matter
unless actually known to a Responsible Officer of such Agent responsible for the
administration of this Agreement, or unless and to the extent written notice of
such matter is received by such agent had its address in accordance with
Section 12.02. Any permissive grant of power to an Agent hereunder shall not be
construed to be a duty to act. Before acting hereunder, an 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) No Agent shall 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.

Section 11.04 Indemnification.

Subject to the terms of Section 12.21 with respect to any CP Conduit, each of
the Lenders agrees to indemnify and hold the Agents harmless (to the extent not
reimbursed by or on behalf of the Borrower pursuant to Section 12.04 or
otherwise) from and against any and all liabilities, 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
Agents in any way relating to or arising out of this Agreement or any other
Facility Document or any Related Document or any action taken or omitted by the
Agents under this Agreement or any other Facility Document or any Related
Document; provided that:

(i) no Lender shall be liable to any Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent’s gross negligence, willful
misconduct; and

(ii) no Lender or Lenders shall be liable to the Collateral Agent 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 the Collateral Agent as a result of any action taken, or not taken, by
the Collateral Agent 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
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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 Collateral Agent security or
indemnity reasonably satisfactory to it against the costs, expenses (including
reasonable and documented attorney’s fees and expenses) and Liabilities which
might reasonably be incurred by it in compliance with such request or direction,
whether such indemnity is provided under this Section 11.04 or otherwise).

The rights of the Agents and obligations of the Lenders under or pursuant to
this Section 11.04 shall survive the termination of this Agreement, and the
earlier removal or resignation of any Agent hereunder.

Section 11.05 Successor Agents.

(a) Subject to the terms of this Section 11.05(a), each Agent may, upon thirty
days’ notice to the Lenders and the Borrower, resign as Facility Agent or
Collateral Agent, as applicable. If the Collateral Agent shall be in material
breach of its obligations hereunder, the Required Lenders may, following a
period of fifteen days during which the Collateral Agent may cure such breach,
remove the Collateral Agent upon notice to the Borrower, the Investment Manager,
the Lenders and the Agents. If the Collateral Agent shall resign or be removed
pursuant to this Section 11.05(a), then the Facility Agent (at the direction of
the Required Lenders), during such thirty- or ten-day period (as applicable),
shall appoint a successor agent. If the Facility Agent shall resign or be
removed pursuant to this Section 11.05(a), then the Required Lenders, during
such thirty- or ten-day period (as applicable), shall appoint a successor agent.
If for any reason a successor 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 Agent may appoint a
successor Agent. The appointment of any successor Agent pursuant to this
Section 11.05(a) 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 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
Agent hereunder. Any resignation or removal of an Agent pursuant to this
Section 11.05(a) shall be effective upon the appointment of a successor Agent
pursuant to this Section 11.05(a) and the acceptance of such appointment by such
successor. The Investment Manager shall provide DBRS notice of the acceptance of
such appointment by such successor. After the effectiveness of any retiring
Agent’s resignation hereunder as Agent, the retiring 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 XI and Section 11.05(a) shall continue in effect for its benefit with
respect to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and under the other Facility Documents.

 

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(b) Subject to the terms of this Section 11.05(b), the Investment Manager may,
upon thirty days’ notice to the Collateral Agent, the Lenders and the Borrower,
remove and discharge the Collateral Agent from the performance of its
obligations under this Agreement and under the other Facility Documents without
cause at any time. If the Collateral Agent shall be removed pursuant to this
Section 11.05(b), then the Investment Manager during such thirty-day period
shall appoint a successor Collateral Agent. The appointment of any successor
Collateral Agent pursuant to this Section 11.05(b) shall be subject to the prior
written consent of the Facility Agent (which consent shall not be unreasonably
withheld or delayed). If the Collateral Agent is removed pursuant to this
Section 11.05(b), the Collateral Agent shall be removed in all other capacities
in which it serves under this Agreement and under any of the other Facility
Documents (including, without limitation, in its capacity as Calculation Agent
and Custodian). Any removal of the Collateral Agent pursuant to this
Section 11.05(b) shall be effective upon the appointment of a successor
Collateral Agent pursuant to this Section 11.05(b) and the acceptance of such
appointment by such successor. The Investment Manager shall provide DBRS notice
of the acceptance of such appointment by such successor. After the effectiveness
of any removal of the Collateral Agent pursuant to this Section 11.05(b), the
Collateral Agent shall be discharged from its duties and obligations hereunder
and under the other Facility Documents (but not in its capacity as Lender, if
applicable) and the provisions of this Article XI and Section 11.05(b) shall
continue in effect for its benefit with respect to any actions taken or omitted
to be taken by it while it was Collateral Agent under this Agreement and under
the other Facility Documents. In the event that the Collateral Agent is removed
pursuant to this Section 11.05(b), the Investment Manager shall bear any costs
related to such removal and appointment of a successor Collateral Agent.

Section 11.06 Regarding the Collateral Agent.

(a) The Collateral Agent shall have no liability for losses arising from (i) any
cause beyond its control, (ii) any delay, error, omission or default of any
mail, telegraph, cable or wireless agency or operator, or (iii) the acts or
edicts of any government or governmental agency or other group or entity
exercising governmental powers.

(b) The Collateral Agent shall not be responsible for any special, exemplary,
punitive or consequential damages.

(c) The Collateral Agent shall not be responsible for the preparation or filing
of any UCC financing statements or the correctness of any financing statements
filed in connection with this Agreement or the validity or perfection of any
lien or security interest created pursuant to this Agreement.

(d) The Collateral Agent shall not be liable for interest on any money received
by it except as the Collateral Agent may agree in writing with the Borrower.

 

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ARTICLE XII

MISCELLANEOUS

Section 12.01 No Waiver; Modifications in Writing.

(a) No failure or delay on the part of any Secured Party exercising any right,
power or remedy hereunder 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 it is signed by the Borrower and the Required Lenders (or the
Facility Agent on behalf of the Required Lenders) and a Rating Confirmation is
obtained, provided that:

(i) no such amendment, modification, supplement or waiver shall, unless by an
instrument signed by all of the Lenders (or the Facility 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 in connection with dispositions permitted hereunder,
(F) alter the terms of Section 9.01 or this Section 12.01(b), (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
or (H) extend the Reinvestment Period; and

(ii) any amendment, modification, supplement or waiver of Article VIII, Article
XI, or of any of the other rights or duties of either Agent (including the
Collateral Agent in its role as Custodian) hereunder, shall require the consent
of such Agent.

Section 12.02 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
accordance with the provisions of this Section 12.02. Unless otherwise specified
in a notice sent or delivered in accordance with the foregoing provisions of
this Section 12.02, notices, demands, instructions and other communications in
writing shall be given to or made upon the respective parties hereto at their
respective addresses (or to their respective facsimile numbers) indicated below,
and, in the case of telephonic instructions or notices, by calling the telephone
number or numbers indicated for such party below:

 

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If to the Facility 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: Versaillestransaction@us.natixis.com     

  fiona.chan@db.com

    

  rajesh.rampersaud@db.com

If to the Collateral Agent:

     The Bank of New York Mellon Trust Company, N.A.      525 William Penn
Place, 8th Floor      Pittsburgh, PA 15259      Ryan Janoski – Relationship
Manager      Tel: 412-234-9521      Fax: 412-236-1141     
Ryan.janoski@bnymellon.com

If to the Borrower:

     TPG SL SPV, LLC      850 Library Avenue, Suite 204-F      Newark, Delaware
19711      Attention: Don Puglisi      Tel: 302-738-6680      Fax: 302-738-7210
     Email: dpuglisi@puglisiassoc.com      With a copy to:      TPG Specialty
Lending, Inc.      301 Commerce Street      Suite 3300      Fort Worth, TX 76102
     Attention: Craig Hamrah      Tel: 817-871-4095      Email: CHamrah@tpg.com
     With a copy to:      TSL Advisers, LLC      301 Commerce Street      Suite
2500      Fort Worth, Texas 76102        Attention: David Reintjes     
Telephone: 817-871-4095      Email: DReintjes@tpg.com

 

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If to the Lender:

     Versailles Assets LLC      c/o Global Securitization Services, LLC      68
South Service Road, Suite 120      Melville, NY 11747      Attention: Bernard J.
Angelo      Telephone No.: (631) 930-7203      Facsimile No.: (212) 302-8267
     Email: jrangelo@gssnyc.com and dveidt@gssnyc.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 DBRS:

     DBRS, Inc.      Structured Credit Surveillance      140 Broadway, 35th
Floor      New York, NY 10005 United States      Phone: +1 (212) 806-3277 (main
reception)      Fax: +l (212) 806-3201      SC_Surveillance@dbrs.com

Section 12.03 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 Taxes unless such deduction is required by law (or
by the interpretation or administration thereof). 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) if any such
deductions are in respect of Indemnified Taxes, the sum payable by the Borrower
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 12.03) such Secured Party receives an amount equal to the sum it
would have received had no deductions in respect of Indemnified Taxes 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 except any such Taxes that are Other
Connection Taxes (hereinafter referred to as “Other Taxes”).

 

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(c) Borrower agrees to indemnify each of the Secured Parties for the full amount
of Indemnified Taxes or Other Taxes (including any Indemnified Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable under this
Section 12.03), together with all interest, penalties, reasonable costs and
expenses arising therefrom, 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 conclusive 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 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.

(e) Promptly after the date of any payment of Taxes or Other Taxes, the Borrower
will furnish to each 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 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 12.03, then, if such Secured Party has received a
refund of such Taxes or Other Taxes, such Secured Party shall reimburse to the
Borrower such amount of any refund received 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.

(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 which becomes
a party hereto pursuant to Section 12.06, the date upon which such Secured Party
becomes a party hereto, deliver to each Agent and the Borrower, if applicable,
two accurate, complete and signed originals of U.S. Internal Revenue Service
Form W-9 or successor form. Each Secured Party that is not a U.S. Person (a
“Non-U.S. Lender”), other than an assignee pursuant to Section 12.06, , on or
prior to the Closing Date, shall deliver to each 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, in each case, establishing a complete exemption from U.S.
federal withholding tax (other than in the case of a change of law occurring
subsequent to the date hereof). Each Non-U.S. Lender that is an assignee
pursuant to Section 12.06 (a “Non-U.S. Assignee Lender”) shall, other than in
the case of a change in law occurring subsequent to the date hereof, on or prior
to the date that it becomes a Lender hereunder, deliver to each 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

 

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thereof or successors thereto, in each case, establishing a complete exemption
from U.S. federal withholding tax. 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 that such Non-U.S.
Lender is not a bank for purposes of Section 881(c) of the Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the 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 each Agent and the Borrower
in the event any such representation is no longer accurate. In addition, each
Non-U.S. Lender shall deliver such forms as promptly as practicable if any such
previously delivered from becomes obsolete or incorrect and after receipt of a
written request therefor from an Agent or the Borrower (in each case, only if
such Non-U.S. Lender is legally able to deliver such forms). Each Secured Party
shall deliver to the Borrower and each Agent such documentation reasonably
requested by the Borrower or such Agent sufficient for the Borrower and each
Agent to comply with their withholding, reporting and other obligations under
FATCA.

(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 12.03, then such Secured
Party shall use reasonable efforts to designate a different lending office for
funding or booking its Advances hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if such
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 2.09 or Section 12.03, as the case may be, 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) Nothing in this Section 12.03 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 12.04 Costs and Expenses; Indemnification.

(a) The Borrower agrees to promptly pay on demand all reasonable and documented
out-of-pocket costs and expenses of the Agents 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 Agents 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 Facility Agent and
the Collateral Agent 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, other than Permitted Liens; (vi) any action or omission, not
expressly authorized by the Facility Documents, by the Borrower or any Affiliate
of the Borrower which has the effect of reducing or impairing the Collateral or
the rights of the Agents or the Secured Parties with respect thereto; and
(vii) any Default or Event of Default; except to the extent any such Liability
is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party’s gross negligence or
willful misconduct.

Section 12.05 Execution in Counterparts.

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

Section 12.06 Assignability; 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) the Facility Agent has consented thereto; and

(ii) the Borrower has consented thereto (such consent not to be unreasonably
withheld, delayed or conditioned), unless (A) the assignee is a Permitted
Assignee with respect to such assignor, (B) the assignee is Natixis, an
Affiliate of Natixis, or any commercial paper program or vehicle established or
administered by Natixis or an Affiliate of Natixis or for which Natixis or an
Affiliate of Natixis provides liquidity support, or (C) an Event of Default has
occurred and is continuing.

 

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The parties to each such assignment shall execute and deliver to the Facility
Agent an Assignment and Acceptance. Notwithstanding any other provision of this
Section 12.06, any Lender may at any time pledge or grant a security interest in
all or any portion of its rights (including rights to payment of principal and
interest) under this Agreement to secure obligations of such Lender, including
any pledge or security interest granted to a Federal Reserve Bank, without
notice to or consent of the Borrower or the Facility 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. Any purported assignment to an assignee that does not
comply with the requirements of this Section 12.06 will be null and void ab
initio.

(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 Agents and the Lenders.

(c) Any Lender may sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Lender’s rights and obligations under
this Agreement; provided that (A) such Lender’s obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (C) the Borrower,
the Agents and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement and (D) each Participant shall have agreed to be bound by this
Section 12.06(c), Section 12.06(e) and Section 12.09(b). 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 12.03 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 12.03 which is greater than the amount the related Lender
would have been entitled to under any such Sections or provisions if the
applicable participation had not occurred; 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 at any
reasonable time and from time to time upon reasonable prior notice.

 

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(d) The Facility Agent, on behalf of and acting solely for this purpose as the
nonfiduciary agent of the Borrower, shall maintain at its address specified in
Section 12.02 or such other address as the Facility 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 (i) the names and addresses of
the Lenders (ii) the amount of each Advance made hereunder by each Lender to the
Borrower, (iii) the amount of any principal due and payable or to become due and
payable from the Borrower to each Lender hereunder, (iv) the amount of any
principal sum paid by the Borrower hereunder and each Lender’s share thereof and
(v) the aggregate outstanding principal amount of the outstanding Advances
maintained by each Lender under this Agreement (and any stated interest thereon)
after giving effect to any assignment hereunder. The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agents and the Lenders shall treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The entries maintained in the accounts and Register maintained
pursuant Section 2.03(a) and Section 12.06(d) shall be prima facie evidence of
the existence and amounts of the Advances therein recorded; provided that the
failure of the Facility 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. The Register
shall be available for inspection by the Borrower 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 Facility Agent shall update and
furnish to the Collateral Agent and the Borrower from time to time at the
request of the Collateral Agent or the Borrower an updated version of Schedule 1
reflecting the then-current allocation of the Commitments.

(e) Notwithstanding anything to the contrary set forth herein or in any other
Facility Document, each Lender hereunder, and each Participant, must at all
times be a “qualified purchaser” as defined in the Investment Company Act (a
“Qualified Purchaser”). Accordingly:

(i) each Lender represents to the Borrower, (A) on the date that it becomes a
party to this Agreement (whether by being a signatory hereto or by entering into
an Assignment and Acceptance) and (B) on each date on which it makes an Advance
hereunder, that it is a Qualified Purchaser;

(ii) each Lender agrees that it shall not assign, or grant any participations
in, any of its Advances or its Commitment to any Person unless such Person is a
Qualified Purchaser; and

(iii) the Borrower agrees that, to the extent it has the right to consent to any
assignment or participation herein, it shall not consent to such assignment or
participation hereunder unless it reasonably believes that the assignee or
participant is a Qualified Purchaser and that such assignment or participation
will not cause the Borrower or the pool of Collateral to be required to register
as an investment company under the Investment Company Act.

 

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Section 12.07 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 12.08 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 12.09 Confidentiality.

Each Secured Party agrees to keep confidential all information provided to it by
the Borrower or the Investment Manager with respect to the Borrower, its
Affiliates, the Collateral, the Related Documents, the Obligors or any other
information furnished to any other 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 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).

 

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Section 12.10 Merger.

This Agreement, the Notes and the other Facility Documents executed by the
Borrower, the Investment Manager, the Agents 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 12.11 Survival.

All representations and warranties made hereunder, in the other Facility
Documents and in any certificate delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery of
this Agreement and the making of the Advances hereunder. The agreements in
Sections 2.04(f), 2.09, 2.10, 2.12, the penultimate paragraph of 7.03, 7.06(b),
11.04, 12.03, 12.04, 12.09, 12.16 and 12.19 and this Section 12.11 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 12.12 Submission to Jurisdiction; Waivers; Etc.

Each party hereto hereby irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement or the other Facility Documents to which it is a
party, or for recognition and enforcement of any judgment in respect thereof, to
the non-exclusive general jurisdiction of the courts of the State of New York,
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 12.12(a) and waives to the fullest extent permitted by
Applicable Law any objection that it may now or hereafter have to the venue of
any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such party at its
address set forth in Section 12.02 or at such other address as may be permitted
thereunder;

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction or court; and

(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding against any Secured Party
arising out of or relating to this Agreement or any other Facility Document any
special, exemplary, punitive or consequential damages.

 

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Section 12.13 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 12.14 Service of Process.

The Borrower hereby irrevocably designates, appoints and empowers CT Corporation
System, (the “Process Agent”), with an office on the date hereof at 111 Eighth
Avenue, New York, NY 10011, 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 12.12 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 12.14 satisfactory to the Facility 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 12.14. 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 12.15 Waiver of Immunity.

To the extent that the Borrower or any of its properties, assets or revenues may
have or may hereafter become entitled to, or have attributed to it, any right of
immunity, on the grounds of sovereignty or other similar grounds, from any legal
action, suit or proceeding in connection with or arising out of this Agreement
or any other Facility Document, from the giving of any relief in any thereof,
from setoff or counterclaim, from the jurisdiction of any court, from service of
process, from attachment upon or prior to judgment, from attachment in aid of
execution of judgment, or from execution of judgment, or other legal process or
proceeding for the giving of any relief or for the enforcement of any judgment,
in any jurisdiction in which proceeding may at any time be commenced, with
respect to its obligations, liabilities or any other matter under or arising out
of or in connection with this Agreement or any other Facility Document, the
Borrower hereby irrevocably and unconditionally waives to the fullest extent
permitted by Applicable Law, and agrees for the benefit of each of the Secured
Parties not to plead or claim, any such immunity, and consents to such relief
and enforcement.

 

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Section 12.16 Judgment in Foreign Currency.

The Borrower agrees to indemnify each of the Secured Parties against any loss
incurred by any such payee as a result of any judgment or order being given or
made for any amount due hereunder and such judgment or order being expressed and
paid in a currency (the “Judgment Currency”) other than Dollars and as a result
of any variation as between (i) the rate of exchange at which the Dollar amount
is converted into the Judgment Currency for the purpose of such judgment or
order, and (ii) the rate of exchange at which such payee upon receipt of the
Judgment Currency could have purchased Dollars with the amount of Judgment
Currency actually received by such payee. The foregoing indemnity shall
constitute a separate and independent obligation of the Borrower and shall
continue in full force and effect notwithstanding any such judgment or order as
aforesaid. The term “rate of exchange” shall include any premiums and costs of
exchange payable in connection with the purchase of, or conversion into, the
relevant currency.

Section 12.17 PATRIOT Act Notice.

Each Lender and the Collateral Agent hereby notify 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 Collateral Agent in order to assist such Person in maintaining compliance
with the PATRIOT Act.

Section 12.18 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 12.19 Non-Petition.

Each of the Agents, each Lender and each Secured Party hereby agrees not to
institute against, or join, cooperate with or encourage any other Person in
instituting against, the Borrower any bankruptcy, reorganization, receivership,
arrangement, insolvency, moratorium or liquidation proceedings or other
proceedings under federal or state bankruptcy or similar laws until at least two
years 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 12.19 shall preclude, or
be deemed to stop, each Agent and each Lender (i) from taking any action prior
to the expiration of the aforementioned two years and one day period, or if
longer the applicable preference period then in effect plus one day, in

 

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(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 Agent, Lender or Secured Party, 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 12.19 shall survive the termination of this Agreement.

Section 12.20 Custodianship; Delivery of Collateral Obligations and Eligible
Investments.

(a) The Investment Manager shall deliver or cause to be delivered to The Bank of
New York Mellon Trust Company, N.A., as custodian (in such capacity, the
“Custodian”) and which is so appointed hereby by the Borrower, all Collateral in
accordance with the definition of the term “Deliver”. The 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 DBRS Ratings of at least “A (high)” and “R-1 (middle)” and is
a Securities Intermediary. The Collateral Agent or the Custodian, as applicable,
shall hold (i) all Collateral Obligations, Eligible Investments, Cash and other
investments purchased in accordance with this Agreement and (ii) any other
property of the Borrower otherwise Delivered to the Collateral Agent 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 Collateral Agent shall have entered into an agreement with the
Custodian substantially in the form of Exhibit E providing, inter alia, that the
establishment and maintenance of such Covered Account will be governed by a law
of a jurisdiction satisfactory to the Borrower, the Collateral Agent and the
Facility Agent.

(b) Each time that the Investment Manager directs or causes the acquisition of
any Collateral Obligation, Eligible Investment, or other investment, the
Borrower shall, if the Collateral Obligation, Eligible Investment, or other
investment is required to be, but has not already been, transferred to the
relevant Covered Account, cause the Collateral Obligation, 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
Obligation, 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
Collateral Agent in accordance with this Agreement. The security interest of the
Collateral Agent in the funds or other property used in connection with the
acquisition shall, immediately and without further action on the part of the
Collateral Agent, be released. The security interest of the Collateral Agent
shall nevertheless come into existence and continue in the Collateral
Obligation, Eligible Investment, or other investment so acquired, including all
interests of the Borrower in any contracts related to and proceeds of such
Collateral Obligation, Eligible Investment, or other investment.

(c) The Custodian hereby agrees to accept the Collateral Delivered to it as set
forth in Sections 12.20(a) and (b), to hold the Collateral in safekeeping in the
applicable Account or Accounts and to invest, release and transfer the same only
in accordance with the written instructions of the Investment Manager (prior to
the occurrence of an Event of Default) or the Collateral Agent (after the
occurrence and continuation of an Event of Default) or as otherwise

 

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provided herein or in the Account Control Agreement; provided, however that in
the event of any conflict, the provisions of the Account Control Agreement shall
control. Interest, dividends and any other proceeds received by the Custodian
with respect to the Collateral shall be distributed pursuant to the Payment Date
Report; provided that the Custodian may from time to time deduct from the
Custodial Account amounts owed to it by the Borrower pursuant to the Account
Control 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 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. The Custodian shall have all of the rights and
protections afforded to the Collateral Agent pursuant to this Agreement.

(e) Should any controversy arise between the undersigned with respect to the
Collateral held by the Custodian, the Custodian shall have the right to consult
with counsel and/or follow the instructions of the Collateral Agent acting at
the direction of the Facility Agent on behalf of the Secured Parties.

(f) The Custodian may at any time resign hereunder by giving written notice of
its resignation to the Borrower and the Facility Agent at least ninety days
prior to the date specified for such resignation to take effect, and, upon the
effective date of such resignation, the Collateral held by the Custodian shall
be delivered by it to such Person as may be designated in writing by the
Collateral Agent acting at the direction of the Facility Agent on behalf of the
Secured Parties, whereupon all the Custodian’s obligations hereunder shall cease
and terminate. If no such Person shall have been designated by such date, all
obligations of the Custodian hereunder shall nevertheless cease and terminate.
The Custodian’s sole responsibility thereafter shall be to keep safely all
Collateral then held by it and to deliver the same to a Person designated by the
Collateral Agent acting at the direction of the Facility Agent on behalf of the
Secured Parties or in accordance with the direction of a final order or judgment
of a court of competent jurisdiction.

(g) The Custodian shall have no responsibility under this Agreement other than
to render the services called for hereunder in good faith and without willful
misfeasance, gross negligence or reckless disregard of its duties hereunder. The
Custodian shall incur no liability to anyone in acting upon any signature,
instrument, statement, notice, resolution, request, direction, consent, order,
certificate, report, opinion, bond or other document or paper reasonably
believed by it to be genuine and reasonably believed by it to be signed by the
proper party or parties. Neither the Custodian nor any of its affiliates,
directors, officers, shareholders, agents or employees shall be liable to any
other party hereto, except by reason of acts or

 

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omission constituting bad faith, willful misfeasance, gross negligence or
reckless disregard of the Custodian’s duties hereunder. Anything in this
Agreement notwithstanding, in no event shall the Custodian be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including lost profits), even if the Custodian has been advised of such loss or
damage and regardless of the form of action, except in the case of bad faith,
willful misfeasance, gross negligence or reckless disregard of the Custodian’s
duties hereunder.

(h) The Custodian shall have no liability for losses arising from (i) any cause
beyond its control, including, but not limited to, the act, failure or neglect
of any agent or correspondent selected with due care by the Custodian for the
remittance of funds, (ii) any delay, error, omission or default of any mail,
telegraph, cable or wireless agency or operator, or (iii) the acts or edicts of
any government or governmental agency or other group or entity exercising
governmental powers.

Section 12.21 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 two years and one day
after the latest maturing commercial paper notes or other rated indebtedness
issued by (x) any limited purpose entity providing funding to any CP Conduit or
(y) such CP Conduit, is paid in full; provided that nothing in this
Section 12.21 shall preclude, or be deemed to stop, (i) from taking any action
prior to the expiration of the aforementioned two years 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 such CP Conduit or
(b) any involuntary insolvency proceeding filed or commenced against such CP
Conduit by a Person other than it, or (ii) from commencing against such CP
Conduit or any properties of the CP Conduit 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.

(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 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

 

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which funds are not required to repay commercial paper notes or other short term
funding backing its 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 or the other
Facility Documents to the contrary, but subject in all respects to Section 12.09
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 and any of the terms and provisions of the Facility Documents
that it may deem necessary or advisable.

(f) The provisions of Sections 12.21(a), (c) and (d) shall survive the
termination of this Agreement.

(g) 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.

(h) 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.

(i) Each CP Conduit may act hereunder by and through its investment manager or
its administrator.

(j) This Section 12.21 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.

 

TPG SL SPV, LLC,

as Borrower

By:       Name:   Title:

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

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

The Bank of New York Mellon Trust Company, N.A.,

as Collateral Agent and Calculation Agent

By:       Name:   Title:

 

The Bank of New York Mellon Trust Company, N.A.,

as Custodian

By:       Name:   Title:

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

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

VERSAILLES ASSETS LLC

as Lender

By:       Name:   Title:

 

NATIXIS, NEW YORK BRANCH,

as Facility Agent

By:       Name:   Title: By:       Name:   Title:

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

SCHEDULE 1

Initial Commitments And Percentages

 

Name of Lender

   Commitment      Percentage  

Versailles Assets LLC

   $ 100,000,000         100.00 %    

 

 

    

 

 

 

TOTAL

   $ 100,000,000         100.00 % 

 

Schedule 1-1

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

SCHEDULE 2

Scope of Monthly Report and Payment Date Report

Part 1: Monthly Reporting Scope

 

  1. The Aggregate Principal Balance of all Collateral Obligations and Equity
Securities

 

  2. The balance of all Eligible Investments and cash in each of:

 

  a. The Collection Account (including the Interest Collection Subaccount, the
Principal Collection Subaccount, and the Canadian Dollar Subaccount)

 

  b. The Payment Account

 

  c. The Revolving Reserve Account

 

  d. The Lender Funding Account (including each Lender Funding Subaccount
therein)

 

  e. The Currency Exchange Account

 

  f. The Custodial Account

 

  g. The Funded Draw Collection Account

 

  h. The Closing Expense Account

 

  3. Commitment and aggregate outstanding principal amount of all Advances

 

  4. The nature, source and amount of any proceeds in the Collection Account
(including Principal Proceeds and Interest Proceeds received since the Monthly
Report Determination Date or Determination Date relating to the last Monthly
Report or Payment Date Report, respectively) and the Revolving Reserve Account

 

  5. Compliance level of Coverage Tests vs. test level

 

  a. Calculation of Minimum Overcollateralization Ratio Test

 

  b. Calculation of Interest Coverage Ratio Test

 

  6. Compliance with Collateral Quality Tests

 

  a. the Minimum Diversity Score Test

 

  b. the Minimum Average Recovery Rate Test

 

  c. the Minimum Weighted Average Spread Test

 

  d. the Minimum Weighted Average Fixed Rate Coupon Test

 

  e. the Weighted Average Maturity Date Test

 

  f. the Maximum DBRS Risk Score Test

 

  7. Compliance with Concentration Limitations

 

  a. Fixed Rate Obligations

 

  b. Obligor concentrations

 

  c. Revolving Collateral Loans or Delayed Drawdown Collateral Loans

 

  d. Canadian Dollar Obligations

 

  e. Eligible Senior Secured Loans

 

  f. Eligible Senior Secured Bonds

 

  g. Current Pay Obligations

 

  h. DBRS Industry Classification

 

  i. Participation Interests

 

  j. DIP Loans

 

  k. Collateral Obligations that permit payment of interest less frequently than
quarterly

 

  l. Collateral Obligation with DBRS Rating below “B” / Credit Estimate and
trailing 12 month EBITDA

 

  m. Covenant Lite Loans

 

  8. Listing of all Collateral Obligations with attributes including

 

  a. Obligor name and identifying number

 

  b. Principal Balance

 

Schedule 2-2

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

  c. DBRS rating (if public) and the last date of the Credit Estimate (if a
Credit Estimate)

 

  d. Fitch rating (if public)

 

  e. Moody’s rating (if public)

 

  f. S&P rating (if public)

 

  g. DBRS Industry Classification

 

  h. lien position (Eligible Senior Secured Loan, Eligible Second Lien Loan,
Eligible Mezzanine Loan, or Eligible Senior Secured Bond)

 

  i. Whether the Collateral Obligation is fixed or floating

 

  j. For floating rate obligations, the index over which interest is calculated
(e.g., LIBOR, prime or other)

 

  k. Cash-pay coupon (for Fixed Rate Obligations)

 

  l. Cash-pay spread (for floating rate obligations)

 

  m. Maturity date

 

  n. Whether the Collateral Obligation is a Credit Risk Loan/Bond, Defaulted
Loan/Bond, or Current Pay Obligation

 

  o. Country of domicile

 

  p. Frequency of interest payment

 

  q. Whether such Collateral Obligation is a Revolving Collateral Loan or a
Delayed Drawdown Collateral Loan

 

  r. The unfunded amount, if any, in respect of a Revolving Collateral Loan or a
Delayed Drawdown Collateral Loan

 

  s. For each Canadian Dollar Obligation, the Settlement Date Rate for such
Canadian Dollar Obligation and the Spot Foreign Exchange Rate as of the
applicable Monthly Report Determination Date

 

  9. For Defaulted Loan/Bonds

 

  a. Default Date

 

  b. Days in default

 

  c. Principal Balance

 

  d. If an appraisal has been received in last 3 months

 

  e. Appraised Value

 

  f. Principal Collateralization Amount

 

  10. Participations

 

  a. All obligations owned via participation

 

  b. Revolving Collateral Loans and Delayed Drawdown Collateral Loans sold via
participation

 

  c. Participation counterparty for each participation

 

  d. DBRS Rating for each participation counterparty

 

  11. Calculation of Overcollateralization Ratio

 

  12. Calculation of the Diversity Score

 

  13. Assets purchased or sold within the Collection Period including

 

  a. Facility name

 

  b. Trade/settlement dates

 

  c. Reason for sale / Transaction motivation (e.g. Discretionary, Credit Risk,
Credit Improved.)

 

  d. Purchaser or seller is an affiliate of the Borrower?

 

  e. Par amount

 

  f. Price

 

  g. Proceeds

 

  h. Accrued interest

 

  14. Interest rate for the Advances for the Interest Accrual Period preceding
the next Payment Date

 

Schedule 2-3

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

Part 2: Payment Date Reporting Scope

 

  1. All information included in a Monthly Report under Part 1 above

 

  2. Payment Date waterfall list application of all Interest Proceeds and
Principal Proceeds

 

  3. Beginning and ending aggregate outstanding principal amount of all Advances

 

  4. Beginning and ending balance of all Covered Accounts

 

Schedule 2-4

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

SCHEDULE 3

Industry Diversity Score Table

 

Aggregate

Industry/

Regional

Equivalent

Unit Score

   Industry
Diversity
Score    Aggregate
Industry/
Regional
Equivalent
Unit Score    Industry
Diversity
Score    Aggregate
Industry/
Regional
Equivalent
Unit Score    Industry
Diversity
Score    Aggregate
Industry/
Regional
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

1.5500

   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

 

Schedule 3-1

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

Aggregate

Industry/

Regional

Equivalent

Unit Score

   Industry
Diversity
Score    Aggregate
Industry/
Regional
Equivalent
Unit Score    Industry
Diversity
Score    Aggregate
Industry/
Regional
Equivalent
Unit Score    Industry
Diversity
Score    Aggregate
Industry/
Regional
Equivalent
Unit Score    Industry
Diversity
Score

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      

 

Schedule 3-2

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

SCHEDULE 4

DBRS Risk Scores

The “DBRS Risk Score” relating to any Collateral Obligation at any time is the
percentage set forth in the table below opposite the DBRS Long Term Rating of
such Collateral Obligation at such time:

 

DBRS Long Term Rating

 

DBRS Risk Score

AAA

 

0.1771

AA (high)

 

0.2705

AA

 

0.3729

AA (low)

 

0.4351

A (high)

 

0.5023

A

 

0.6066

A (low)

 

0.8085

BBB (high)

 

1.3445

BBB

 

2.1542

BBB (low)

 

3.6344

BB (high)

 

7.2478

BB

 

10.0962

BB (low)

 

13.4563

B (high)

 

17.7695

B

 

22.5401

B (low)

 

31.2211

CCC (high)

 

49.7747

CCC

 

70.5414

CCC (low)

 

90.6642

C

 

100.0000

 

Schedule 4-1

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

SCHEDULE 5

DBRS Industry Classifications

Name

 

  1 Aerospace & Defense

 

  2 Air transport

 

  3 Automotive

 

  4 Beverage & Tobacco

 

  5 Radio & Television

 

  6 Brokers, Dealers & Investment houses

 

  7 Building & Development

 

  8 Business equipment & services

 

  9 Cable & satellite television

 

  10 Chemicals & plastics

 

  11 Clothing/textiles

 

  12 Conglomerates

 

  13 Containers & glass products

 

  14 Cosmetics/toiletries

 

  15 Drugs

 

  16 Ecological services & equipment

 

  17 Electronics/electrical

 

  18 Equipment leasing

 

  19 Farming/agriculture

 

  20 Financial intermediaries

 

  21 Food/drug retailers

 

  22 Food products

 

  23 Food service

 

  24 Forest products

 

  25 Health care

 

  26 Home furnishings

 

  27 Lodging & casinos

 

  28 Industrial equipment

 

  29 Insurance

 

  30 Leisure goods/activities/movies

 

  31 Nonferrous metals/minerals

 

  32 Oil & gas

 

  33 Publishing

 

  34 Rail industries

 

  35 Retailers (except food & drug)

 

  36 Steel

 

  37 Surface transport

 

  38 Telecommunications

 

  39 Utilities

 

  40 Miscs

 

  41 Sovereign

 

Schedule 5-1

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

SCHEDULE 6

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 Screen LIBOR01 Page (or such other
page as may replace such Reuters Screen LIBOR01 Page 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) (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, 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.

 

Schedule 6-1

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

(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.

 

Schedule 6-2

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

SCHEDULE 7

DBRS Rating Procedure

The “DBRS Rating” for an Obligor, Lender, Selling Institution or other Person
(collectively referred to as the “Obligor” for purposes of this Schedule) means
the DBRS Long Term Rating for such Obligor determined in accordance with Part A
of this Schedule or the DBRS Short Term Rating for such Obligor determined in
accordance with Part B of this Schedule, in each case as the context requires.
The DBRS Rating of the Obligors shall be updated at least annually.

Part A: Long Term Ratings

The “DBRS Long Term Rating” for an Obligor will, on any date, be the rating of
such Obligor determined as provided below:

 

(1) if there is a DBRS public long term rating of such Obligor at such date,
such DBRS public long term rating;

 

(2) if a DBRS Long Term Rating for such Obligor cannot be determined under
clause (1) above, but a Moody’s Rating, S&P Rating and Fitch Rating (each, a
“public long term rating”) are all available at such date, the DBRS Long Term
Rating will be the DBRS Equivalent of such public long term rating remaining
after disregarding the highest and lowest such public long term ratings from
such Rating Agencies. For this purpose, if more than one public long term rating
has the same highest DBRS Equivalent or the same lowest DBRS Equivalent, then in
each case one of such public long term ratings shall be so disregarded;

 

(3) if a DBRS Long Term Rating for such Obligor cannot be determined under
clauses (1) through (2) above, but public long term ratings of such Obligor by
any two of Moody’s, Fitch and S&P are available at such date, the DBRS
Equivalent of the lower such public long term rating;

 

(4) if a DBRS Long Term Rating for such Obligor cannot be determined under
clauses (1) through (3) above, but a public long term rating of such Obligor by
only one of Moody’s, Fitch or S&P is available at such date, the DBRS Equivalent
of such available public long term rating; and

 

(5) if at any time a DBRS Long Term Rating for an Obligor cannot be determined
under clauses (1) through (4) above, then such Obligor will be deemed not to
have a DBRS Long Term Rating at such time and the Borrower shall be required to
comply with Section 5.04 in respect of such Obligor.

 

Schedule 7-1

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

Part B: Short Term Ratings

The “DBRS Short Term Rating” for a Lender, Selling Institution or other Person
(collectively referred to as the “Obligor” for purposes of this definition)
will, on any date, be the rating of such Obligor determined as provided below:

 

(1) if there is a DBRS public short term rating of such Obligor at such date,
such DBRS public short term rating;

 

(2) if a DBRS Short Term Rating for such Obligor cannot be determined under
clause (1) above, but public short term ratings of such Obligor by each of
Moody’s, Fitch and S&P are all available at such date, the DBRS Short Term
Rating will be the DBRS Equivalent of the public short term rating remaining
after disregarding the highest and lowest public short term ratings from such
Rating Agencies. For this purpose, if more than one public short term rating has
the same highest DBRS Equivalent or the same lowest DBRS Equivalent, then in
each case one of such public short term ratings shall be so disregarded;

 

(3) if a DBRS Short Term Rating for such Obligor cannot be determined under
clauses (1) through (2) above, but public short term ratings of such Obligor by
any two of Moody’s, Fitch and S&P are available at such date, the DBRS
Equivalent of the lower such short term rating;

 

(4) if a DBRS Short Term Rating for such Obligor cannot be determined under
clauses (1) through (3) above, but a public short term rating of such Obligor by
only one of Moody’s, Fitch or S&P is available at such date, the DBRS Equivalent
of such available short term rating; and

 

(5) if a DBRS Short Term Rating for such Obligor cannot be determined under
clauses (1) through (4) above, then for purposes of this Agreement there shall
be no DBRS Short Term Rating for such Obligor as at such date.

Part C: Other Definitions

The “DBRS Equivalent” of any rating by Moody’s, Fitch or S&P will be the rating
set forth below under the heading “DBRS Rating” opposite the applicable rating
by Moody’s, Fitch or S&P:

Long Term Rating Equivalents

 

DBRS Rating

   Moody’s    S&P    Fitch

AAA

   Aaa    AAA    AAA

AA (high)

   Aa1    AA+    AA+

AA

   Aa2    AA    AA

AA (low)

   Aa3    AA-    AA-

A (high)

   A1    A+    A+

A

   A2    A    A

A (low)

   A3    A-    A-

BBB (high)

   Baa1    BBB+    BBB+

 

Schedule 7-2

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

BBB

   Baa2    BBB    BBB

BBB (low)

   Baa3    BBB-    BBB-

BB (high)

   Ba1    BB+    BB+

BB

   Ba2    BB    BB

BB (low)

   Ba3    BB-    BB-

B (high)

   B1    B+    B+

B

   B2    B    B

B (low)

   B3    B-    B-

CCC (high)

   Caa1    CCC+    CCC+

CCC

   Caa2    CCC    CCC

CCC (low)

   Caa3    CCC-    CCC-

CC

   Ca    CC    CC

D

   D    D    D

Short Term Rating Equivalents

 

DBRS Rating

   Moody’s    S&P    Fitch

R-1 (high)A-1+

   F1+      

R-1 (middle)

   P-1    A-1    F1

R-1 (low)

        

R-2 (high)

        

R-2 (middle)

   P-2    A-2    F2

R-2 (low)

        

R-3 (high)

        

R-3 (middle)

   P-3    A-3    F3

R-3 (low)

        

–B

   B      

–C

   C      

D

   NP    D    D

“Fitch Rating” means, for any Obligor at any time, the rating determined as
follows:

 

(i) if there is a publicly available issuer rating or senior unsecured rating by
Fitch, such issuer rating, if no issuer rating is available then the senior
unsecured rating; and

 

(ii) if the rating is not available as defined in the first clause above, but
there is a rating by Fitch on another obligation of the same Obligor, then the
rating will be as follows:

 

  (a) if such rating is on a senior secured obligation, one subcategory below
such rating; and

 

  (b) if such rating in on a subordinate obligation, one subcategory above such
rating.

If a Fitch Rating for an Obligor cannot be determined under clause (i) or
(ii) above at any time, then such Obligor will be deemed not to have a Fitch
Rating at such time.

 

Schedule 7-3

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

“Moody’s Rating” means, with respect to any Obligor as of any date of
determination, the rating determined in accordance with the following
methodology:

 

(i) with respect to an Obligor on a Collateral Obligation that is an Eligible
Senior Secured Loan or a Participation Interest in an Eligible Senior Secured
Loan (or an Obligor that is a Lender, Selling Institution or other Person), if
such Obligor has a corporate family rating by Moody’s, then such corporate
family rating;

 

(ii) with respect to an Obligor on a Collateral Obligation that is an Eligible
Senior Secured Loan or a Participation Interest in an Eligible Senior Secured
Loan, if not determined pursuant to clause (i) above, if such Collateral
Obligation is publicly rated by Moody’s, such public rating; and

 

(iii) with respect to an Obligor on a Collateral Obligation, if not determined
pursuant to clause (i) or (ii) above, (A) if such Obligor 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 Obligor is an Obligor on a Collateral
Obligation that is an Eligible Senior Secured Loan or a Participation Interest
in an Eligible 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 Investment Manager in its sole discretion or, if no such
rating is available, (B) if such Collateral Obligation is publicly rated by
Moody’s, such public rating or, if no such rating is available, (C) if such
Collateral Obligation is a DIP Loan, with respect to any DIP Loan, one
subcategory below the facility rating (whether public or private) of such DIP
Loan rated by Moody’s,

provided that, for purposes of calculating a Moody’s Rating, each applicable
rating on credit watch by Moody’s with positive or negative implication at the
time of calculation will be treated as having been upgraded or downgraded by one
rating subcategory, as the case may be, and each applicable rating with negative
outlook by Moody’s at the time of calculation will be treated as having been
downgraded by one rating subcategory. If a Moody’s Rating for an Obligor cannot
be determined under clause (i), (ii) or (iii) above at any time, then such
Obligor will be deemed not to have a Moody’s Rating at such time.

“S&P Rating” means, with respect to any Obligor, as of any date of
determination, the rating determined in accordance with the following
methodology:

 

(iv)

(a) if there is an issuer credit rating of such Obligor by S&P as published by
S&P, or the guarantor which unconditionally and irrevocably guarantees such
Collateral Obligation pursuant to a form of guaranty approved by S&P, then the
S&P Rating shall be such rating (regardless of whether there is a published
rating by S&P on the Collateral Obligations of such Obligor held by the
Borrower) or (b) if there is no issuer credit rating of the Obligor by S&P but
(1) there is a senior secured rating on any obligation or security of the
Obligor, then the S&P Rating of such Obligor shall be one sub-category below
such rating; (2) if clause (1) above does not apply, but there is a senior
unsecured rating on any obligation or security of the Obligor, the S&P Rating of
such Obligor shall equal such rating; and (3) if neither clause (1) nor
clause (2) above applies, but there is a subordinated rating on any obligation
or security of the Obligor, then the S&P Rating of

 

Schedule 7-4

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

  such Collateral Obligation shall be one sub-category above such rating if such
rating is higher than “BB+”, and shall be two sub-categories above such rating
if such rating is “BB+” or lower; and

 

(v) with respect to any Collateral Obligation that is a DIP Loan, the S&P Rating
thereof shall be the credit rating assigned to such issue by S&P;

provided that, for purposes of the determination of the S&P Rating, (x) if the
applicable rating assigned by S&P to an Obligor or its obligations is on “credit
watch positive” by S&P, such rating will be treated as being one sub-category
above such assigned rating and (y) if the applicable rating assigned by S&P to
an Obligor or its obligations is on “credit watch negative” by S&P, such rating
will be treated as being one sub-category below such assigned rating. If a S&P
Rating for an Obligor cannot be determined under clause (i) or (ii) above at any
time, then such Obligor will be deemed not to have an S&P Rating at such time.

 

Schedule 7-5

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

SCHEDULE 8

Matrix

 

Applicable

Row Level

   Row
Advance
Rate   Row
Diversity
Score    Row
Spread
Level   Row DBRS
Average
Risk Score    Row
Minimum
OC Level 1    37.5%   6    4.500%   49.7747    213.33% 2    45.0%   10    4.500%
  44.4116    177.78% 3    45.0%   10    5.375%   44.7739    177.78% 4    45.0%  
10    6.375%   45.1363    177.78% 5    45.0%   12    4.500%   46.5858    177.78%
6    45.0%   12    5.375%   47.3105    177.78% 7    45.0%   12    6.375%  
48.0353    177.78% 8    45.0%   14    4.500%   48.7600    177.78% 9    45.0%  
14    5.375%   49.4848    177.78% 10    45.0%   14    6.375%   50.1348   
177.78% 11    45.0%   16    4.500%   53.1358    177.78% 12    45.0%   16   
5.375%   53.7360    177.78% 13    45.0%   16    6.375%   54.3362    177.78% 14
   45.0%   20    4.500%   57.3371    177.78% 15    45.0%   20    5.375%  
57.9373    177.78% 16    45.0%   20    6.375%   58.5375    177.78% 17    50.0%  
16    4.500%   41.5126    160.00% 18    50.0%   16    5.375%   42.2373   
160.00% 19    50.0%   16    6.375%   42.9621    160.00% 20    50.0%   20   
4.500%   44.4116    160.00% 21    50.0%   20    5.375%   45.1363    160.00% 22
   50.0%   20    6.375%   45.8610    160.00% 23    60.0%   16    4.500%  
24.0057    133.33% 24    60.0%   16    5.375%   24.5694    133.33% 25    60.0%  
16    6.375%   25.1331    133.33% 26    60.0%   20    4.500%   25.6968   
133.33% 27    60.0%   20    5.375%   26.2605    133.33% 28    60.0%   20   
6.375%   26.8242    133.33%

 

Schedule 8-1

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SCHEDULE 9

Not Settled Collateral Obligations

None.

 

Schedule 9-1

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EXHIBIT A

[FORM OF NOTE]

 

$                            ,             

FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to
[INSERT NAME OF LENDER] (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 May 8, 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
Facility Agent and The Bank of New York Mellon Trust Company, N.A., as
collateral agent. 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 12.06 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 12.06 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]

 

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THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

 

TPG SL SPV, LLC By:       Name:   Title:

 

A-2

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SCHEDULE I

This Note evidences Advances made by [INSERT NAME OF LENDER], (the “Lender”) to
TPG SL SPV, LLC (the “Borrower”) under the Revolving Credit and Security
Agreement dated as of May 8, 2012 among the Borrower, as borrower, the Lender,
as lender, the other lenders from time to time parties thereto, Natixis, New
York Branch, as Facility Agent, and The Bank of New York Mellon Trust Company,
N.A., as collateral agent, 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

 

A-3

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EXHIBIT B

[FORM OF NOTICE OF BORROWING]

[Date]

Natixis, New York Branch,

as Facility 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 May 8, 2012 (as the same may
from time to time be amended, supplemented, waived or modified, the “Revolving
Credit Agreement”) among TPG SL SPV, LLC, as borrower (the “Borrower”), the
Lenders from time to time parties thereto (collectively, the “Lenders”),
Natixis, New York Branch, as Facility Agent (the “Facility Agent”), and The Bank
of New York Mellon Trust Company, N.A., as collateral agent. 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 Facility
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) immediately after the making of the Advance requested herein on the
Borrowing Date, the aggregate outstanding principal amount of the Borrower
Liabilities shall not exceed the Total Commitment as in effect on such Borrowing
Date;

 

B-1

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  (3) immediately after the making of such Advance on the Borrowing Date, each
Coverage Test shall be satisfied and the Row Advance Rate that is in use at such
time equals or exceeds the Portfolio Advance Rate;

 

  (4) 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); and

 

  (5) no Default or Event of Default described in Sections 6.01(c), (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.

 

  (6) the provisions of Section 10.02 have been satisfied as of the date of
purchase in connection with any acquisition of additional Collateral Obligations
with the proceeds of the applicable Advance.

WITNESS my hand on this             day of             ,             .

 

TPG SL SPV, LLC,

as Borrower

By:       Name:   Title:

cc: Collateral Agent

 

B-2

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EXHIBIT C

[FORM OF NOTICE OF PREPAYMENT]

Natixis, New York Branch,

as Facility 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 of that certain
Revolving Credit and Security Agreement dated as of May 8, 2012 among TPG SL
SPV, LLC, as borrower (the “Borrower”), the lenders from time to time parties
thereto (collectively, the “Lenders”), Natixis, New York Branch, as Facility
Agent and The Bank of New York Mellon Trust Company, N.A., as collateral agent
(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 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             ,             .

 

TPG SL SPV, LLC,

as Borrower

By:       Name:   Title:

 

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Schedule I

[Describe accounts of the Lenders]

 

C-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
May 8, 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”), The Bank of New York Mellon Trust Company, N.A.,
as Collateral Agent, Natixis, New York Branch, as Facility Agent for the Lenders
(in such capacity, together with its successors and assigns, the “Facility
Agent”), and TPG SL SPV, LLC, as borrower (the “Borrower”). 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 Facility Agent, the
Investment Manager 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

 

D-1

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without reliance upon the Facility 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 Facility 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 Facility 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 and the Agents that the Assignee is a Qualified
Purchaser:

 

¨ By checking this box, the Assignee represents and warrants that it is a
Qualified Purchaser.]

[SUBJECT TO CONFIRMATION THAT THE BORROWER IS RELYING ON 3(c)(7)]

5. Following the execution of this Assignment and Acceptance, it will be
delivered to the Facility Agent for acceptance and recording by the Facility
Agent. The effective date for this Assignment and Acceptance (the “Effective
Date”) shall be the date of acceptance hereof by the Facility Agent, unless a
later effective date is specified on Schedule I hereto.

6. Upon such acceptance and recording by the Facility 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 Agents pursuant to and as provided in Section 11.04
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.

7. Upon such acceptance and recording by the Facility 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.

8. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.

9. 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

 

D-2

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

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.

 

D-3

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

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 Facility Agent

By:       Authorized Signatory By:       Authorized Signatory

[Consented to this              day of

                                 ,             

[            ],

as Borrower

By:      

Name:

 

Title:]1

 

 

1 

Insert in an Assignment and Acceptance if Borrower consent is required

 

D-4

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EXHIBIT E

[FORM OF ACCOUNT CONTROL AGREEMENT]

(see Account Control Agreement)

 

E-1

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EXHIBIT F

APPROVED APPRAISAL FIRMS

A. G. Edwards & Sons, Inc.

Bank of America

Barclays Capital

Cantor Fitzgerald

CIBC World Markets

Citigroup

Credit Research & Trading

Credit Suisse

Dabney Flannigan

Delaware Bay, Inc.

Deloitte & Touche

Deutsche Bank

Dresdner Kleinwort Wasserstein

Duff & Phelps

Ernst & Young

Goldman Sachs & Co.

Houlihan Lokey Howard & Zukin

J.P. Morgan Chase

Jefferies & Company, Inc.

KPMG International

Lazard Freres

Lincoln Partners Advisors, an affiliate of Lincoln International

Morgan Stanley

PriceWaterhouseCoopers

Raymond James

TD Securities

The Blackstone Group

Union Bank

Wells Fargo

William Blair & Company

 

F-1

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

EXHIBIT G

RETENTION OF NET ECONOMIC INTEREST LETTER

TPG Specialty Lending, Inc.

301 Commerce Street

Suite 3300

Fort Worth, TX 76102

[DATE]

Natixis, New York Branch

9 West 57th Street, 36th Floor

New York, New York 10019

Attention: Yazmin Vasconez

Versailles Assets LLC

c/o Global Securitization Services LLC

68 South Service Road, Suite 120

Melville, NY 11747

Attention: Andrew Stidd

TPG SL SPV, LLC

850 Library Avenue, Suite 204-F

Newark, Delaware 19711

 

  Re: Retention of Net Economic Interest

This letter is being delivered in connection with the Revolving Credit and
Security Agreement dated as of May 8, 2012 (the “Credit Agreement”), among TPG
SL SPV, LLC, as borrower (the “Borrower”), Natixis, New York Branch, as facility
agent (the “Facility Agent”) and The Bank of New York Mellon Trust Company,
N.A., as collateral agent (the “Collateral Agent”). All capitalized terms used
but not defined herein have the respective meanings give to such terms in the
Credit Agreement as in effect on the date hereof.

The undersigned Retention Provider, acting in its capacity as originator, hereby
agrees for the benefit of the addressees of this letter and each other Lender
that is a credit institution:

 

a. that it has and will retain, on an ongoing basis, a material net economic
interest which, in any event, shall not be less than 5% (or such higher or lower
amount as notified by the Facility Agent to, and agreed by, the Retention
Provider as may be required by Article

Retention of Net Economic Interest Letter

 

G-1

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

  122a of the CRD; provided that the Retention Provider shall have no obligation
to agree to any such higher amount that results in the net economic interest
required to be retained by the Retention Provider to exceed 40% of the nominal
value of the Collateral calculated based on the Aggregate Principal Balance of
all of the Collateral Obligations and the principal amount of all Eligible
Investments, in each case at the time of determination without taking into
account any deduction pursuant to the proviso to the definition of “Principal
Balance” of any Collateral Obligation or any deduction or discount in respect of
the purchase price paid therefor by the Borrower as of such date of
determination) of the nominal value of the Collateral calculated based on the
Aggregate Principal Balance of all of the Collateral Obligations and the
principal amount of all Eligible Investments, in each case at the time of
determination without taking into account any deduction pursuant to the proviso
to the definition of “Principal Balance” of any Collateral Obligation or any
deduction or discount in respect of the purchase price paid for such Collateral
Obligation or Eligible Investment by the Borrower;

 

b. that it will retain the net economic interest referred to in clause (a) above
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;

 

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 Obligation or Eligible Investment) and shall be maintained on an
ongoing basis. The retention of such net economic interest shall not be subject
to any credit risk mitigation or any short positions or any other hedge that is
prohibited by Article 122a of the CRD; and

 

d. agrees that it will take such further actions and provide such information as
may be reasonably requested by any Lender or the Facility Agent so as to ensure
compliance with the provisions of Article 122a of the CRD, so long as any such
Lender or the Facility Agent, as applicable, agrees to keep confidential such
information provided to it by the Retention Provider in accordance with the
terms and conditions of Section 12.09 of the Credit Agreement, provided that any
such Lender or the Facility Agent may share such information with any Authority
(including any bank regulatory agency) as may be necessary to ensure compliance
with the provisions of Article 122a of the CRD.

As used in this letter, the terms “retention of net economic interest”,
“original lender”, “originator”, “credit instititutions”, “securitisation
position”, “securitisations”, “ongoing basis”, “securitised exposures” and
“tranche” shall have the meanings given thereto for the purposes of Article 122a
of the CRD and in the guidelines to Article 122a published on December 31, 2010
by the European Banking Authority (formerly the Committee of European Banking
Supervisors).

The representations, warranties, covenants and agreements of the Retention
Provider herein are being made, delivered and agreed to solely for purposes of
compliance with Article 122a of the CRD and for no other purpose and by
acceptance of this letter, each of the addressees expressly acknowledges the
same.

[Remainder of page intentionally left blank]

 

G-2

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Very Truly Yours,

 

TPG Specialty Lending, Inc.

By:       Name:   Title:

 

G-3