Exhibit 10.1

 

Execution Copy

 

 

AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

 

among

 

WhiteHorse Finance Warehouse, 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 August 13, 2014 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page       Article I DEFINITIONS; RULES OF CONSTRUCTION; COMPUTATIONS 1    
Section 1.01 Definitions. 1 Section 1.02 Rules of Construction 53 Section 1.03
Computation of Time Periods 53 Section 1.04 Collateral Value Calculation
Procedures 53 Section 1.05 Amendment and Restatement 55       Article II
REVOLVING ADVANCES AND TERM LOAN ADVANCES UNDER THE FACILITY 56     Section 2.01
Revolving Credit and Term Loan Facility 56 Section 2.02 Advances 57 Section 2.03
Evidence of Indebtedness; Notes 58 Section 2.04 Payment of Principal and
Interest 58 Section 2.05 Prepayment of Advances 61 Section 2.06 Reductions in
Commitments 62 Section 2.07 Maximum Lawful Rate 62 Section 2.08 Several
Obligations 63 Section 2.09 Increased Costs 63 Section 2.10 Compensation;
Breakage Payments 65 Section 2.11 Illegality; Inability to Determine Rates 66
Section 2.12 Rescission or Return of Payment 67 Section 2.13 Fees Payable by
Borrower 67 Section 2.14 Post-Default Interest 67 Section 2.15 Payments
Generally 67 Section 2.16 Lenders Not Satisfying the Rating Criteria 68 Section
2.17 Applicable Row Level 68 Section 2.18 Additional Advances 69       Article
III CONDITIONS PRECEDENT 69     Section 3.01 Conditions Precedent to the
Original Closing Date 69 Section 3.02 Conditions Precedent to the Restatement
Effective Date 72 Section 3.03 Conditions Precedent to Each Borrowing 75 Section
3.04 Conditions Precedent to an Increased Commitment 76       Article IV
REPRESENTATIONS AND WARRANTIES 79     Section 4.01 Representations and
Warranties of the Borrower 79 Section 4.02 Representations and Warranties of the
Collateral Agent 84       Article V COVENANTS 85     Section 5.01 Affirmative
Covenants of the Borrower 85 Section 5.02 Negative Covenants of the Borrower 91
Section 5.03 Certain Undertakings Relating to Separateness 95 Section 5.04
Credit Estimates; Failure to Have a DBRS Long Term Rating 98       Article VI
EVENTS OF DEFAULT 99       Section 6.01 Events of Default 99       Article VII
PLEDGE OF COLLATERAL; RIGHTS OF THE COLLATERAL AGENT 102     Section 7.01 Grant
of Security 102 Section 7.02 Release of Security Interest 104

 

i

 

 

TABLE OF CONTENTS

(continued)

 

    Page       Section 7.03 Rights and Remedies 105 Section 7.04 Remedies
Cumulative 106 Section 7.05 Related Documents 106 Section 7.06 Borrower Remains
Liable 107 Section 7.07 Assignment of Collateral Management Agreement and the
Master Transfer Agreement 107 Section 7.08 Protection of Collateral 108      
Article VIII ACCOUNTS, ACCOUNTINGS AND RELEASES 109     Section 8.01 Collection
of Money 109 Section 8.02 Collection Account 110 Section 8.03 Transaction
Accounts 111 Section 8.04 The Revolving Reserve Account; Fundings 114 Section
8.05 Reinvestment of Funds in Covered Accounts; Reports by Collateral Agent 115
Section 8.06 Accountings 116 Section 8.07 Release of Collateral 118 Section 8.08
[Reserved] 119 Section 8.09 Reports to DBRS 119 Section 8.10 [Reserved] 119
Section 8.11 [Reserved] 119 Section 8.12 Closing Expense Account 119 Section
8.13 Collateral Reporting 120       Article IX APPLICATION OF MONIES 122    
Section 9.01 Disbursements of Monies from Payment Account 122       Article X
SALE AND SUBSTITUTION OF COLLATERAL OBLIGATIONS; PURCHASE OF ADDITIONAL
COLLATERAL OBLIGATIONS 127     Section 10.01 Sales and Substitutions of
Collateral Obligations 127 Section 10.02 Purchase of Additional Collateral
Obligations 130 Section 10.03 Conditions Applicable to All Purchase, Sale and
Substitution Transactions 131 Section 10.04 Additional Equity Contributions 132
      Article XI THE AGENTS 133     Section 11.01 Authorization and Action 133
Section 11.02 Delegation of Duties 133 Section 11.03 Agents' Reliance, Etc 134
Section 11.04 Indemnification 135 Section 11.05 Successor Agents 136 Section
11.06 Regarding the Collateral Agent 137 Section 11.07 Regarding the Collateral
Agent and the Custodian 139       Article XII MISCELLANEOUS 139     Section
12.01 No Waiver; Modifications in Writing 139 Section 12.02 Notices, Etc 140
Section 12.03 Taxes 142 Section 12.04 Costs and Expenses; Indemnification 145
Section 12.05 Execution in Counterparts 146 Section 12.06 Assignability;
Participation; Register 146 Section 12.08 Severability of Provisions 149

 

ii

 

 

TABLE OF CONTENTS

(continued)

 

    Page       Section 12.09 Confidentiality 149 Section 12.10 Merger 150
Section 12.11 Survival 150 Section 12.12 Submission to Jurisdiction; Waivers;
Etc 150 Section 12.13 Waiver of Jury Trial 150 Section 12.14 Service of Process
150 Section 12.15 [Reserved] 150 Section 12.16 [Reserved] 151 Section 12.17
PATRIOT Act Notice 151 Section 12.18 Legal Holidays 151 Section 12.19
Non-Petition 151 Section 12.20 Custodianship; Delivery of Collateral Obligations
and Eligible Investments 152 Section 12.21 Special Provisions Applicable to CP
Conduits 155

 

SCHEDULES

 

Schedule 1 Commitments and Percentages S-1-1 Schedule 2 Scope of Monthly Report
and Payment Date Report S-2-1 Schedule 3 Industry Diversity Score Table S-3-1
Schedule 4 DBRS Risk Scores S-4-1 Schedule 5 DBRS Industry Classifications S-5-1
Schedule 6 LIBOR Definition S-6-1 Schedule 7 DBRS Rating Procedure S-7-1
Schedule 8 Matrix S-8-1

  

EXHIBITS

 

Exhibit A-1 Form of Revolving Note A-1 Exhibit A-2 Form of Term Note A-1 Exhibit
B Form of Notice of Borrowing B-1 Exhibit C Form of Notice of Prepayment C-1
Exhibit D Form of Assignment and Acceptance D-1 Exhibit E Form of Account
Control Agreement E-1 Exhibit F Approved Appraisal Firms F-1 Exhibit G Form of
Retention of Net Economic Interest Letter G-1 Exhibit H Form of Payoff Letter
H-1

 

iii

 

  

AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

 

AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT dated as of August 13, 2014
among WhiteHorse Finance Warehouse, 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").

 

WITNESSETH:

 

WHEREAS, the Borrower, the Lenders party thereto, Natixis and the Collateral
Agent are parties to that certain Revolving Credit and Security Agreement dated
as of the Original Closing Date (as defined herein) (as amended, supplemented or
modified from time to time prior to the date hereof, the "Existing Credit
Agreement"); and

 

WHEREAS, in order to continue the existing indebtedness of Borrower, to provide
for term loan advances and to make such other amendments to the Facility as have
been agreed to by the Borrower and the Lenders, the Borrower has requested that
the Existing Credit Agreement be amended and restated (the "Amendment and
Restatement"), and the Lenders are willing to do so on the terms and subject to
the conditions set forth in this Agreement.

 

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

 

Article I

DEFINITIONS; RULES OF CONSTRUCTION; COMPUTATIONS

 

Section 1.01         Definitions.

 

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

 

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

 

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

 

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

 

"Acquisition and Disposition Standards" has the meaning assigned to such term in
Section 10.03(b).

 

1

 

 

"Additional Advances" has the meaning assigned to such term in Section 2.18(a).

 

"Additional Lender" means a Lender that has made an Additional Advance or
provided an Increased Commitment hereunder.

 

"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 Original
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

 

(b) $200,000 per annum;

 

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

 

"Administrative Expenses" means the fees (other than the Senior Collateral
Management Fee and the Subordinated Collateral Management Fee) and expenses
(including indemnities) and other amounts due or accrued of the Borrower with
respect to any Payment Date and payable in the following order by the Borrower:

 

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

 

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

 

(i)          the accountants, agents (other than the Collateral Manager),
counsel and Professional Independent Manager 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 Collateral Manager under this Agreement, the Collateral
Management Agreement, any other Facility Document or any Related Document,
including (x) fees and expenses (including fees for its accountants, agents and
counsel) incurred by the Collateral Manager in connection with the acquisition,
sale or disposition of any Collateral Obligations, and (y) any other expenses
incurred in connection with the Collateral Obligations (other than the Senior
Collateral Management Fee and the Subordinated Collateral Management Fee) and
all other amounts payable to the Collateral Manager pursuant to the Collateral
Management Agreement or any other Facility Document;

 

2

 

 

(iv)        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

 

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

 

"Advance Rate Test" means, as of any date of determination, a test that will be
satisfied if the Row Advance Rate that is in use on such date equals or exceeds
the Portfolio Advance Rate.

 

"Advances" has the meaning assigned to such term in Section 2.01(b).

 

"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 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.

 

3

 

 

"Aggregate Funded Spread" means, as of any date, in the case of each Collateral
Obligation that is not a Fixed Rate Obligation (including, for any PIK Loan,
only the required current cash pay interest required by the Related Documents
thereon and excluding the unfunded portion of any Delayed Drawdown Collateral
Loan and any Revolving Collateral Loan) the sum of the products of (i) the
excess of the scheduled coupon rate (giving effect to any floor rate) with
respect to each such Collateral Obligation 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 Credit and Security Agreement, as the same may from time
to time be amended, amended and restated, supplemented, waived or modified.

 

"AIFMD" has the meaning specified in Section 2.09(a).

 

"AIFMD Retention Requirements" means Article 17 of the AIFMD, as implemented by
Section 5 of the European Union Commission Delegated Regulation (EU) No 231/2013
of December 19, 2012 supplementing the AIFMD, including any guidance published
in relation thereto and any implementing laws or regulations in force in any
Member State of the European Union, provide that references to AIFMD Retention
Requirements shall be deemed to include any successor or replacement provisions
of Section 5 included in any European Union directive or regulation subsequent
to AIFMD or the European Union Delegated Regulation (EU) No 231/2013.

 

"Amendment and Restatement" has the meaning specified in the recitals hereto.

 

"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 (i) became effective after the Borrower or Collateral Manager provided a
certificate on the Original Closing Date specifying an Applicable Row Level or
(ii) that will become effective after the Borrower or Collateral Manager
provides a notice specifying a different Applicable Row Level than the one in
use as of the Original Closing Date as described in Section 2.17.

 

4

 

 

"Appraised Value" means, with respect to any Collateral Obligation, the value of
such Collateral Obligation, 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 Collateral Obligation or, if it has sold participation
interests in such Collateral Obligation.

 

"Approved Affiliate" means an Affiliate whose management role is consented to in
writing by the Required Lenders.

 

"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 Collateral 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 Collateral Manager and the Facility Agent.

 

"Article 404" means Articles 404-410 of Regulation (EU) No. 575/2013 of the
European Parliament and of the Council of June 21, 2013 on prudential
requirements for credit institutions and investment firms and amending
Regulation (EU) No. 648/2102 (as amended from time to time and as implemented by
the Member States of the European Union).

 

"Assigned Moody's Rating" has the meaning specified in Schedule 7.

 

"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.

 

5

 

 

"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 Borrowing Base 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 Par Amount" means the sum of the Obligor Par Amounts for all Collateral
Obligations (other than Defaulted Loans), divided by the number of Obligors in
respect of such Collateral Obligations (other than Defaulted Loans); 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.

 

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).

 

"BDC Election Date" means the date upon which, after the Transferor has filed an
election with the SEC on Form N-54A to be subject to the provisions of Sections
55 through 65 of the Investment Company Act in anticipation of (or concurrent
with) the effectiveness of its registration statement with the SEC on Form N-2
for the public offering of its securities.

 

"Bond" any fixed or floating rate debt security that is not a loan or an
interest therein.

 

6

 

 

"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 Unfunded Amount.

 

"Borrower LLC Agreement" means the Amended and Restated Limited Liability
Company Agreement of the Borrower, dated as of September 27, 2012, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof and thereof.

 

"Borrowing" means either a Revolving Borrowing or a Term Borrowing, as the
context may require.

 

"Borrowing Base" means an amount equal to the result of (i) the aggregate Loan
Amounts of all Performing Collateral Obligations, plus (ii) the aggregate amount
of cash on deposit in the Principal Collection Subaccount and the Revolving
Reserve Account, plus (iii) the Portfolio Exposure Amount, plus (iv) for all
Defaulted Loans that are also Eligible Senior Secured Loans, the lesser of (x)
the Market Value of such Defaulted Loan determined without reference to clause
(d) of the definition thereof, unless the Appraised Value of such Defaulted Loan
has otherwise been obtained or updated (A) within the immediately preceding
three months and (B) since such Defaulted Loan became defaulted, whichever of
(A) and (B) is shorter (as determined by the Collateral Manager with notice to
the Agents), and (y) 20% of the Aggregate Principal Balance of such Defaulted
Loan, less (v) the Aggregate Principal Balance of all Excess Concentration Loans
that are Performing Collateral Obligations.

 

"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,
Houston, Texas 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 Collateral Obligation" means a Collateral Obligation of an Obligor
organized in (or whose principal operations are located in) Canada (or any
province thereof).

 

"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.

 

"CFR" has the meaning specified in Schedule 7.

 

7

 

 

"Change in Control" means (i) the Borrower ceases to be a wholly owned direct
subsidiary of the Transferor or an Approved Affiliate, (ii) any Investment
Adviser Affiliate ceases to be Controlled (collectively) by Tony Tamer and Sami
Mnaymneh; provided that no "Change in Control" will occur (x) in connection with
an initial public offering of the securities of the Collateral Manager, so long
as Tony Tamer and Sami Mnaymneh (collectively) continue to beneficially own the
power to vote greater than 50% of the equity interests having direct or indirect
ordinary voting power of any such Investment Adviser Affiliate or (y) if Tony
Tamer and Sami Mnaymneh (collectively) beneficially own the power to vote less
than or equal to 50% of the equity interests having direct or indirect ordinary
voting power of any such Investment Adviser Affiliate, so long as the Required
Lenders have given their consent to such lesser percentage (such consent not to
be unreasonably withheld or delayed) or (iii) H.I.G. Capital Management, Inc.
(either directly or through any wholly owned subsidiary of H.I.G. Capital
Management, Inc. or any other Investment Advisor Affiliate so long as such
personnel are employees of H.I.G. Capital Management, Inc., any wholly owned
subsidiary of H.I.G. Capital Management, Inc. or any other Investment Advisor
Affiliate) ceases to provide all or substantially all of the personnel,
investment committee and other services necessary for the Collateral Manager to
perform its collateral management services under the Facility Documents.

 

"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 Expenses" means amounts due in respect of actions taken on or
before the Original 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 Original Closing Date
pursuant to the Engagement Letter dated as of March 29, 2012, as amended to
date, between H.I.G. Whitehorse Management, LLC and Natixis North America LLC;
(ii) the accrued fees and expenses in connection with the transactions
contemplated hereby, including, without limitation, those of (A) Ashurst LLP,
counsel to the Facility Agent and the Lender(s), (B) Sidley Austin LLP, counsel
to DBRS and (C) Chapman and Cutler LLP, counsel to the Collateral Agent; and
(iii) the fees to be received by DBRS on or prior to the Original Closing Date
pursuant to the Engagement Letter dated as of April 18, 2012 between H.I.G.
Whitehorse Holdings, LLC and DBRS.

 

"Closing Expense Account" has the meaning specified in Section 8.12.

 

"Closing Expense Account Amount" has the meaning specified in Fee Letter.

 

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

 

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

 

8

 

 

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

 

"Collateral Agent Fee Letter" means the fee letter dated April 5, 2012 between
the Collateral Agent and the Borrower setting forth the fees, expenses and
indemnities 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 Loans, in each case unless actually
received and (ii) received as equity contributions from any Equity Owner and
designated as Interest Proceeds by the Borrower) and (b) the aggregate amount of
Interest Proceeds on deposit in the Interest Collection Subaccount, in each case
during the Collection Period (and, if such Collection Period does not end on a
Business Day, the next succeeding Business Day) in which such date of
determination occurs.

 

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

 

"Collateral Manager" means the Transferor, any Approved Affiliate or any
successor in such capacity in accordance with the Collateral Management
Agreement.

 

"Collateral Obligation" means a loan or debt obligation (other than the Excluded
Loan) 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 (and is not convertible into,
or payable in, any other currency) and is governed by the law of a state of the
United States;

 

(c)          is an obligation of an Obligor organized in the United States (or
any state thereof but excluding any territory thereof other than Puerto Rico) or
organized in Canada (or any province thereof);

 

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

 

(e)          is not a Bond, Prefunded Letter of Credit or Zero Coupon
Obligation;

 

(f)          is not a Structured Finance Obligation;

 

(g)          is not a Real Estate Loan;

 

9

 

 

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

 

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

 

(j)          is not an Equity Security or a component of an Equity Security,
does not provide for conversion into or exchange for an Equity Security at the
option of the Obligor thereof or any other Person, and does not have any
attached equity warrants; provided that a Volcker Rule Consent Event has not
occurred;

 

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

 

(l)          does not constitute Margin Stock;

 

(m)          is not subject to U.S. withholding tax or foreign withholding tax
unless the Obligor of the obligation or security is required to make "gross-up"
payments constituting 100% of such withholding tax;

 

(n)          provides for the full principal balance to be payable at or prior
to its stated maturity;

 

(o)          is not a Participation Interest;

 

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

 

(q)          provides for payment of interest at least semi-annually;

 

(r)          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;

 

(s)          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;

 

(t)          is an Eligible Senior Secured Loan, an Eligible Second Lien Loan,
an Eligible Mezzanine Loan or an Unsecured Loan;

 

(u)          other than for Collateral Obligations transferred to the Borrower
under the Master Transfer Agreement on or before the Original Closing Date as
whose price will be mutually agreed by the Collateral Manager and the Facility
Agent, unless the origination or acquisition of such Collateral Obligation has
been approved in writing by the Facility Agent, is originated or acquired for an
effective price of higher than 95.0% of the principal amount thereof;

 

10

 

 

(v)         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;

 

(w)          is not a Covenant Lite Loan;

 

(x)          pays interest in cash of at least LIBOR + 2.00% for a Collateral
Obligation that is not a Fixed Rate Obligation and at least 3.00% for a
Collateral Obligation that is a Fixed Rate Obligation; and

 

(y)          is not a finance lease or chattel paper.

 

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

 

"Collateral Quality Test" means a test that is satisfied if, as of any date of
determination, in the aggregate, the Collateral Obligations (excluding Excess
Concentration Loans) owned (or in relation to a proposed purchase of a
Collateral Obligation (excluding any Excess Concentration Loan with respect
thereto), 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 Weighted Average Spread Test;

 

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

 

(d)          the Weighted Average Maturity Test; and

 

(e)          the Maximum DBRS Risk Score Test.

 

"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 Original
Closing Date, in the case of the Collection Period relating to the first Payment
Date) and ending on the 9th Business 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 the Payment in Full Date, ending on the day
preceding the Final Maturity Date or ending on such Payment in Full Date,
respectively.

 

11

 

 

"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.

 

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

 

"Commitment" means the aggregate of the Revolving Commitment and the Term
Commitment.

 

"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 Unfunded Amount over (B) the Available Unfunded
Amount.

 

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

 

"Commitment Termination Date" means the later of the last day of the
Reinvestment Period or two Business Days thereafter if necessary to permit
Advances to fund the Unfunded Amount in existence at the end of the Reinvestment
Period pursuant to Section 8.04; provided that if the Commitment Termination
Date would otherwise not be a Business Day, then the Commitment Termination Date
shall be the immediately succeeding Business Day.

 

"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 calculated in
accordance with Section 1.04 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 20% consist of Fixed Rate Obligations;

 

(b)          not more than 5% consist of obligations of any one Obligor (and
Affiliates thereof); provided that up to four Obligors (and their respective
Affiliates) may each constitute up to 7% and one Obligor (and their respective
Affiliates) may constitute up to 10%; provided further that (i) with respect to
Eligible Second Lien Loans, not more than 7% consist of obligations of any one
Obligor (and Affiliates thereof) and (ii) with respect to Qualified Real Estate
Loans, not more than 3% consist of obligations of any one Obligor (and
Affiliates thereof);

 

(c)          not more than 10% consist of Revolving Collateral Loans or Delayed
Drawdown Collateral Loans;

 

12

 

 

(d)          not more than 25% consist of Collateral Obligations that are
Eligible Second Lien Loans, Eligible Mezzanine Loans or Unsecured Loans;

 

(e)          not more than 10% consist of Collateral Obligations that are
Eligible Mezzanine Loans or Unsecured Loans;

 

(f)          not more than 12% consist of Collateral Obligations with Obligors
in any one DBRS Industry Classification, provided that one DBRS Industry
Classification may constitute up to 17% and one DBRS Industry Classification may
constitute up to 14%;

 

(g)          not more than 10% consist of DIP Loans;

 

(h)          not more than 10% 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 (h));

 

(i)          not more than 20% consist of Collateral Obligations, measured at
the time of purchase by the Borrower, that (1) (i) have a DBRS Risk Score above
22.0296 or (ii) are in the process of receiving a Credit Estimate and (2) have a
trailing twelve month EBITDA of less than $12.5 million; provided that
Collateral Obligations that receive a Credit Estimate with a DBRS Risk Score
equal to or below 22.0296 will be excluded from such 20% limitation once the
Credit Estimate is received;

 

(j)          not more than 5% consist of Collateral Obligations that are PIK
Loans, provided that if a Collateral Obligation has a "payment-in-kind"
component but pays interest in cash of at least LIBOR + 3.00% it will not
constitute a PIK Loan;

 

(k)          not more than 5% consist of Canadian Collateral Obligations;

 

(l)          not more than 5% consist of Puerto Rico Collateral Obligations;

 

(m)          not more than 5% consist of Qualified Real Estate Loans; and

 

(n)          not more than 0% consist of Collateral Obligations with Equity
Securities attached thereto as part of a "unit"; provided, that after the
occurrence of a Volcker Rule Consent Event, not more than the percentage
specified in such written consent (not to exceed 20.0%) may consist of
Collateral Obligations with Equity Securities attached thereto as part of a
"unit"; provided, further that the value of any such attached Equity Security
has a valuation at the time of purchase not exceeding 2.0% of the purchase price
(as allocated by the Collateral Manager) paid by the Borrower for such
Collateral Obligation.

 

13

 

 

"Conduit Assignee" means any multi-seller commercial paper conduit or special
purpose entity funded by a multi-seller commercial paper conduit with respect to
which, in either case, Natixis, New York Branch or an Affiliate thereof provides
credit or liquidity support.

 

"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 beneficial
ownership 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.

 

"Conversion" means the date upon which the Transferor converted by operation of
law from a Delaware limited liability company to a Delaware corporation in
anticipation of its BDC Election Date.

 

"Converted Revolving Advance" has the meaning specified in Section 2.01.

 

"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 Overcollateralization Ratio Test; and

 

(b)          the Interest Coverage Ratio Test.

 

"Covered Account" means each of the Collection Account (including the Interest
Collection Subaccount and the Principal Collection Subaccount), the Payment
Account, the Revolving Reserve Account, the Lender Funding Account (including
each Lender Funding Subaccount therein), the Custodial Account, the Excess
Concentration Loan Account and the Closing Expense Account.

 

14

 

 

"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.

 

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

 

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

 

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

 

"Credit Estimate" means, with respect to any Collateral Obligation, a numerical
value representing a credit estimate obtained from DBRS.

 

"Credit Risk Loan" means a Collateral Obligation that is not a Defaulted Loan
but which, in the reasonable business judgment of the Collateral Manager
(exercised in accordance with the Servicing Standard), has a material risk of
declining in credit quality and, with the lapse of time, becoming a Defaulted
Loan and is designated as a "Credit Risk Loan" by the Collateral Manager.

 

"CRR" means Regulation (EU) No 575/2013 of the European Parliament and of the
Council of June 26, 2013 on prudential requirements for credit institutions and
investment firms and amending Regulation (EU) No 648/2012, and published in the
Official Journal on June 27, 2013 including any accompanying directive and/or
implementing and/or delegated regulation, technical standards and guidance
related thereto.

 

"CRR Retention Requirements" means Article 404, together with any guidelines and
technical standards published in relation thereto by the European Banking
Authority (or any successor or replacement agency or authority) as may be
effective from time to time, provided that any reference to the CRR Retention
Requirements shall be deemed to include any successor or replacement provisions
of Article 404 included in any European Union directive or regulation.

 

15

 

 

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

 

"Custodian" means The Bank of New York Mellon Trust Company, N.A., 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 Collateral 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 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 Mezzanine Loan   12.50% Unsecured 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.

 

16

 

 

"Defaulted Loan" 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 the lesser of (x) any applicable grace period and (y) three
Business Days, provided that in the event the payment is received after three
Business Days but within any applicable grace period (up to a maximum of seven
Business Days), such Collateral Obligation will no longer be considered a
Defaulted Loan, (b) the nonpayment event described in clause (a) above occurs on
another material obligation for borrowed money of the Obligor that is senior or
pari passu in right of payment with such Collateral Obligation, 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" (other than the Coverage Tests which, if not
satisfied at such time, compliance therewith is maintained or improved) or
"Eligible Investments", (c) except in the case of a Collateral Obligation which
is 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 DIP Loan, such Collateral Obligation or the Obligor in
respect of such Collateral Obligation or another obligation for borrowed money
of such Obligor is rated "D" or "SD" by a Rating Agency, (e) a Specified Change
has occurred and the Borrower has not satisfied the requirements of Section
5.02(v) with respect to such Specified Change, other than any Specified Change
resulting from an amendment that the Borrower voted against or withheld its
consent or (f) that is a loan or other debt obligation that at the time of
acquisition, conversion or exchange does not satisfy the requirements of a
Collateral Obligation or Eligible Investment; or (ii) that, in the reasonable
business judgment of the Collateral Manager, is a Defaulted Loan.

 

A Collateral Obligation that has become a Defaulted Loan shall no longer
constitute a Defaulted Loan when either (a) (i) such Defaulted Loan 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 would qualify as a Collateral Obligation
(other than clause (u) of the definition thereof) and would satisfy the
Eligibility Criteria if originated or purchased at such time (other than the
Coverage Tests which, if not satisfied at such time compliance therewith is
maintained or improved) and (iii) the Collateral Manager has retained an
Approved Valuation Firm to assist in the performance of a valuation analysis of
such Defaulted Loan or (b) the Facility Agent has given its prior written
consent that such Defaulted Loan shall no longer constitute a Defaulted Loan 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 in
accordance with the preceding sentence.

 

"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.

 

17

 

 

"Deferred Senior Collateral Management Fee" means all or a portion of the Senior
Collateral Management Fee deferred by the Collateral Manager on any Payment
Date, together with any amounts so deferred on any prior Payment Date that
remain unpaid, excluding any amounts thereof that have been waived at the option
of the Collateral Manager as provided in the Collateral Management Agreement.

 

"Deferred Senior Collateral Management Fee Interest" means interest on the
Deferred Senior Collateral Management Fee from and including the related date of
deferral to but excluding the date of payment thereof at an interest rate with
respect to each related Interest Accrual Period equal to the interest rate
payable on the Notes for such Interest Accrual Period, excluding any amounts
thereof that have been waived at the option of the Collateral Manager as
provided in the Collateral Management Agreement.

 

"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) and 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;

 

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

 

18

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)          in the case of Cash or Money:

 

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

 

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

 

19

 

 

(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, causing the
filing of a Financing Statement in the office of the Secretary of State of the
State of Delaware (which Financing Statement does not need to refer to the
specific Collateral that is being Delivered and may be a Financing Statement
that was previously filed).

 

In addition, the Collateral Manager will obtain any and all consents required by
the Related Documents relating to any Instruments, Accounts or General
Intangibles for the pledge hereunder (except (A) to the extent that the
requirement for such consent is rendered ineffective under Section 9-406 of the
UCC and (B) for any customary procedural requirements and agents' 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 Collateral Manager of any of its Affiliates
is the agent)).

 

"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

 

(e)          that has a DBRS Rating or is in the process of obtaining a DBRS
Rating.

 

"Diversity Score" means, with respect to the Collateral Obligations (other than
Defaulted Loans), the sum of each of the Industry Diversity Scores.

 

"Dodd-Frank Act" has the meaning assigned to such terms in Section 2.09(a).

 

"Dollars" and "$" mean lawful money of the United States.

 

20

 

 

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

 

"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 Collateral 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 any Equity Owner occurring on or prior to such date as
per Section 10.04, each of the following:

 

(a)          such obligation is a Collateral Obligation;

 

(b)          on a pro-forma basis, each Collateral Quality Test 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 is maintained or improved);

 

(c)          on a pro-forma basis, each Coverage Test is satisfied after giving
effect to such acquisition or commitment (or where expressly permitted under
this Agreement, if not satisfied immediately prior to such acquisition or
commitment, compliance with such Coverage Test is maintained or improved);

 

(d)          on a pro-forma basis, the Advance Rate Test is satisfied after
giving effect to such acquisition or commitment;

 

(e)          on a pro-forma basis, no Commitment Shortfall exists; and

 

(f)          on and after the Restatement Effective Date, such Collateral
Obligation is acquired from Retention Provider pursuant to the Master Transfer
Agreement.

 

"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;

 

21

 

 

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

 

(iii)        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;

 

(iv)        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

 

(v)         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 (iv) 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",
"sf" or "t" subscript assigned by S&P, (b) all, or substantially all, of the
remaining amounts payable thereunder consist of interest and not principal
payments, (c) such obligation or security is subject to U.S. withholding or
foreign withholding tax unless the issuer of the security is required to make
"gross-up" payments for the full amount of such withholding tax, (d) such
obligation or security is secured by real property, (e) such obligation or
security is purchased at a price greater than 100% of the principal or face
amount thereof, (f) such obligation or security is the subject of a tender
offer, voluntary redemption, exchange offer, conversion or other similar action
or (g) in the Collateral 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). Notwithstanding the foregoing clauses, Eligible Investments
shall exclude any investments not treated as "cash equivalents" for purposes of
Section .10(c)(8)(iii)(A) of the regulations implementing the Volcker Rule in
accordance with any applicable interpretative guidance thereunder.

 

22

 

 

"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); 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 a 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 Collateral 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 Borrower and any
other lenders are also granted a security interest of a higher or lower priority
in additional collateral), (iii) is based on the cash flow generating capability
of the Obligor and any guarantor determined as set forth below as being
sufficient, together with such collateral specified in clause (i), to pay or
refinance 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 at
the respective maturities thereof, (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 not
(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 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 the Collateral Manager's judgment
in accordance with the Servicing Standard at the time the loan is acquired by
the Borrower.

 

23

 

 

"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 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 based on the cash flow generating
capability of the Obligor and any guarantor determined as set forth below as
being sufficient, together with such collateral specified in clause (i) and the
collateral securing all Working Capital Revolvers of the Obligor, to pay or
refinance 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 not (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 applicable
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 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 the
Collateral Manager's judgment in accordance with the Servicing Standard at the
time the loan is acquired by the Borrower.

 

"Enforcement Event" has the meaning set forth in Section 9.01(c).

 

"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" means the ratio of (A) (i) the aggregate Loan Amounts of all
Performing Collateral Obligations, plus (ii) the aggregate amount of cash on
deposit in the Principal Collection Subaccount and the Revolving Reserve
Account, plus (iii) the Portfolio Exposure Amount, plus (iv) for all Defaulted
Loans that are also Eligible Senior Secured Loans, the lesser of (x) the Market
Value of such Defaulted Loan determined without reference to clause (d) of the
definition thereof, unless the Appraised Value of such Defaulted Loan has
otherwise been obtained or updated (A) within the immediately preceding three
months and (B) since such Defaulted Loan became defaulted, whichever of (A) and
(B) is shorter (as determined by the Collateral Manager with notice to the
Agents), and (y) 20% of the Aggregate Principal Balance of such Defaulted Loan,
less 80% of the Aggregate Principal Balance of all Excess Concentration Loans
that are Performing Collateral Obligations to (B) the Borrower Liabilities.

 

24

 

 

"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 Owner" means any direct owner of the Equity.

 

"Equity Security" means any equity security that does not entitle the holder
thereof to receive periodic payments of interest and one or more installments of
principal, and any other security that is not eligible for purchase by the
Borrower as a Collateral Obligation and is not an Eligible Investment (other
than a Defaulted Equity Security received in exchange for a Defaulted Loan or
portion thereof in connection with an insolvency, bankruptcy, reorganization,
debt restructuring or workout of the Obligor thereof which shall be deemed to be
a Defaulted Loan); it being understood that Equity Securities may not be
purchased by the Borrower but may be received by the Borrower in exchange for a
Collateral Obligation or a portion thereof in connection with an insolvency,
bankruptcy, reorganization, debt restructuring or workout of the issuer or
obligor thereof.

 

"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) or the failure to
make by its due date a required installment under Section 430 of the Code with
respect to any Plan; (c) the filing pursuant to Section 412(c) of the Code or
Section 302 of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (d) a determination that any Plan is, or is
expected to be, in "at risk" status (as defined in Section 430 of the Code or
Section 303 of ERISA); (e) the incurrence by the Borrower or any member of its
ERISA Group of any liability under Title IV of ERISA with respect to the
termination of any Plan; (f) (i) the receipt by the Borrower or any member of
its ERISA Group from the PBGC of a notice of determination that the PBGC intends
to seek termination of any Plan or to have a trustee appointed for any Plan, or
(ii) the filing by the Borrower or any member of its ERISA Group of a notice of
intent to terminate any Plan; (g) the incurrence by the Borrower or any member
of its ERISA Group of any liability (i) with respect to a Plan pursuant to
Sections 4063 and 4064 of ERISA, (ii) with respect to a facility closing
pursuant to Section 4062(e) of ERISA, or (iii) with respect to the withdrawal or
partial withdrawal from any Multiemployer Plan; (h) the receipt by the Borrower
or any member of its ERISA Group of any notice concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, in endangered status or critical status, within the meaning of
Section 432 of the Code or Section 305 of ERISA or is or is expected to be
insolvent or in reorganization, within the meaning of Title IV of ERISA; (i) the
failure of the Borrower or any member of its ERISA Group to make any required
contribution to a Multiemployer Plan; or (j) the incurrence of any liability (or
the reasonable expectation thereof) pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to any "employee benefit
plan" (as defined in Section 3 of ERISA), or the occurrence or existence of any
event, transaction or condition that could reasonably be expected to result in
the incurrence of any such liability, or in the imposition of any lien on any
right, property or asset pursuant to Title I or IV of ERISA or to such penalty
or excise tax provisions of the Code or to Section 436(f) of the Code or to
Sections 412 and 430 of the Code; (k) the assertion of a material claim (other
than routine claims for benefits) against any Plan or the assets thereof, in
connection with any Plan; (l) the receipt from the Internal Revenue Service of
notice of the failure of any Plan to qualify under Section 401(a) of the Code,
or the failure of any trust forming part of any Plan to qualify for exemption
from taxation under Section 501(a) of the Code; or (m) the occurrence of a
non-exempt "prohibited transaction" with respect to which the Borrower or any
member of its ERISA Group is a "disqualified person" or a "party in interest"
(within the meaning of Section 4975 of the Code or Section 406 of ERISA,
respectively) or which could reasonably be expected to result in liability to
the Borrower or any member of its ERISA Group.

 

25

 

 

"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.

 

"Estimate Period" has the meaning set forth in Section 2.04(b).

 

"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.

 

"Excess Concentration Loan Account" means the account established pursuant to
Section 8.03(d).

 

"Excess Concentration Loans" means, without duplication, any portion of the
Aggregate Principal Balance of Collateral Obligations that are in excess of the
Concentration Limitations. To the extent any Collateral Obligation exceeds more
than one Concentration Limitation, the Excess Concentration Loan for such
Collateral Obligation shall be the highest calculation of excess over the
corresponding Concentration Limitation. For purposes of determining the
distribution of excess over a specific Concentration Limitation across the
Collateral Obligations, Borrower may from time to time distribute the total
amount of excess in any amount across any combination of Collateral Obligations
that are subject to the limitation, so long as the result of subtracting Excess
Concentration Loans from the Aggregate Principal Balance satisfies each
Concentration Limitation.

 

"Excess Concentration Principal Proceeds" means, as of any date of determination
and without duplication, the sum of all Principal Proceeds received with respect
to Excess Concentration Loans, including, without limitation, scheduled payments
of principal, payment of principal at maturity, prepayments and sales proceeds
related to Excess Concentration Loans.

 

26

 

 

"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 Loan" means the Hilex Poly Co loan described on the loan list attached
to the Master Transfer Agreement, with an outstanding principal balance of
$34,331,526.

 

"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, (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 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) 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.

 

"Existing Credit Agreement" has the meaning specified in the recitals hereto.

 

"Existing Facility Documents" has the meaning specified in Section 1.05(b).

 

"Existing Obligations" has the meaning specified in Section 1.05(b).

 

"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" shall have the meaning specified in the Fee Letter.

 

"Facility Documents" means this Agreement, the Notes, the Account Control
Agreement, the Fee Letter, the Collateral Agent Fee Letter, the Collateral
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 Borrower, the Collateral Agent and/or the
Lenders in furtherance of or pursuant to any of the foregoing.

 

"Facility Margin Level" shall have the meaning specified in the Fee Letter.

 

"FAS 166/167 Regulatory Capital Rules" has the meaning specified in Section
2.09(a).

 

27

 

 

"FATCA" means Sections 1471 through 1474 of the Code, any final current or
future regulations or official interpretations thereof, any agreement entered
into pursuant to Section 1471(b) of the Code, or any U.S. or non-U.S. fiscal or
regulatory legislation, rules or practices adopted pursuant to any
intergovernmental agreement entered into in connection with the implementation
of such Sections of the Code.

 

"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 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.

 

"Federal Reserve Board": means the Board of Governors of the Federal Reserve
System.

 

"Fee Letter" means the amended and restated fee letter agreement dated August
13, 2014 between the Borrower, the Facility Agent and the initial Lender.

 

"Final Maturity Date" means September 27, 2021.

 

"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.

 

28

 

 

"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.

 

"Geographic Region"  means each of the following eight geographic regions of the
United States:  (i) North-East, consisting of Maine, New Hampshire, Vermont,
Massachusetts, Rhode Island, Pennsylvania, Delaware, Maryland and Washington,
D.C.; (ii) NYC Metro Area, consisting of Connecticut, New York and New Jersey;
(iii) South-East, consisting of Virginia, West Virginia, Kentucky, Tennessee,
North Carolina, South Carolina, Georgia, Alabama and Mississippi; (iv) Florida;
(v) Mid-West, consisting of Idaho, North Dakota, South Dakota, Wyoming, Montana,
Minnesota, Wisconsin, Iowa, Nebraska, Michigan, Indiana, Illinois and Ohio;
(vi) South-West, consisting of Utah, Colorado, Kansas, Oklahoma, Arkansas, Texas
and Louisiana; (vii) West, consisting of Alaska, Washington, Oregon, Nevada,
Arizona, New Mexico and Hawaii; and (viii) California.

 

"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.

 

"Increased Commitment Date" means the date of the effectiveness of the Increased
Commitment pursuant to the terms of this Agreement.

 

"Increased Commitment" has the meaning assigned to such term in Section 2.18(a).

 

"Incurable Default" means a Default that cannot be cured within the time period
allowing for cure or by its nature is incapable of being cured.

 

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

 

29

 

 

"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.

 

"Initial Rating" means the "AA(sf)" rating given to the Facility by DBRS as of
the Original Closing Date.

 

"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.

 

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

 

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

 

"Interest Accrual Period" means, with respect to any CP Rate Advance or
Eurodollar Rate Advance, the period from the relevant Borrowing Date to the next
succeeding Payment Date and, thereafter, each period commencing on the last day
of the immediately preceding Interest Accrual Period to 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 clause (A), clause (B) (excluding any Senior Collateral
Management Fee the Collateral Manager has determined not to pay on the following
Payment Date) and clause (C) in Section 9.01(a)(i), is greater than 200%.

 

30

 

 

"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)          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 or to the Excess Concentration Loan Account; and all interest payments
received by the Borrower during such Collection Period on Eligible Investments
purchased with Principal Proceeds;

 

(c)          all amendment and waiver fees, late payment fees (including
compensation for delayed settlement or trades), and all protection fees and
other fees and commissions received by the Borrower during such Collection
Period, unless the Collateral Manager notifies the Agents before such
Determination Date (and in no event later than 10 days following receipt
thereof) that the Collateral Manager in its sole discretion has determined that
such payments are to be treated as Principal Proceeds;

 

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

 

(e)          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 (and only so long as it remains a Defaulted
Loan), 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 since it became a Defaulted Loan equals the outstanding principal balance
of such Defaulted Loan at the time as of which it became a Defaulted Loan, and
all amounts received in excess thereof, however denominated, will constitute
Interest Proceeds;

 

31

 

 

(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 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;

 

(3)         all Cash received by the Borrower as equity contributions (however
designated) from any Equity Owner will constitute Principal Proceeds, unless
otherwise directed by the Borrower by prior written notice to the Agents
pursuant to Section 10.04; and

 

(4)         as to the Excluded Loan, any amounts or collections received in
respect of such Excluded Loan shall not constitute Interest Proceeds.

 

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 Adviser Affiliate" means each of Bayside Capital, Inc., H.I.G.
Capital Management, Inc., H.I.G. WhiteHorse Advisers, LLC and H.I.G. WhiteHorse
Administration, LLC and, prior to the BDC Election Date, H.I.G. –GP II, Inc.

 

"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.

 

"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).

 

32

 

 

"Lenders" means any Revolving Lender or Term Lender listed on Schedule 1 and any
other Revolving Lender or Term Lender that shall have become a party hereto
pursuant to an Assignment and Acceptance in accordance with the terms hereof,
other than any such Revolving Lender or Term Lender 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 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, (i) if
acquired on or before the Original Closing Date, the Loan Amount with respect
thereto as mutually agreed by the Borrower and the Facility Agent, and (ii)
otherwise, the lower of (x) the current cost basis of the seller or transferor
or (y) Market Value; provided that if the lower of (x) and (y) is equal to 95%
or more of the outstanding principal amount, such outstanding principal amount
(excluding any capitalized interest).

 

"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.

 

33

 

 

"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 by the
Federal Reserve Board, including any debt security which is by its terms
convertible into "Margin Stock".

 

"Market Value" means, with respect to any loans or other assets, the amount
(determined by the Collateral 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)          if such asset is sold to an unaffiliated third party in an arms'
length transaction, such sales price; or

 

(b)          the bid-side quote determined by any of Loan Pricing Corporation,
LoanX Inc., MarkIt Partners, Mergent, Inc., IDC, Houlihan Lokey or any other
nationally recognized loan pricing service selected by the Collateral Manager;
or

 

(c)          if such quote described in clause (b) 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

 

(d)          if the Market Value of an asset cannot be determined in accordance
with clause (a), (b) or (c) 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 or, if such
asset is a Collateral Obligation acquired from an unaffiliated third party in an
arms' length transaction within the immediately preceding 90 days and there has
been no material adverse change with respect to the Obligor or the Collateral
Obligation to the actual knowledge of a Responsible Officer of the Collateral
Manager, then the original purchase price paid for such Collateral Obligation
(after adjustment for any borrowing or repayments and exclusive of interest);

 

(e)           if such quote, bid or price described in clause (a), (b), (c) or
(d) is not available, then the Market Value of such Collateral Obligation shall
be the lower of (i) the DBRS Recovery Rate 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

 

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

 

34

 

 

"Master Transfer Agreement" means the Second Amended and Restated Loan Sale and
Contribution Agreement, dated as of the Restatement Effective Date, as amended,
restated, supplemented or otherwise modified from time to time, between the
Transferor, as seller, and the Borrower, as purchaser.

 

"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 (b) the ability of the
Borrower or the Collateral Manager to perform its obligations under this
Agreement and the other Facility Documents or (c) the rights, interests,
remedies or benefits (taken as a whole) available to the Lenders or Agents under
this Agreement and the other Facility Documents.

 

"Matrix" shall have the meaning specified in the Fee Letter.

 

"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 40.06%, provided that Defaulted Obligations shall
be excluded from such calculation.

 

"Mandatory Revolving Conversion Date" means either (a) the Stage 1 Mandatory
Revolving Conversion Date or (b) the Stage 2 Mandatory Revolving Conversion
Date.

 

"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 in the Matrix.

 

"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 10.00%.

 

"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
7.00%.

 

"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.

 

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

 

"Monthly Report Date" means the 20th day of each calendar month in each year,
the first of which occurred on October 20, 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 ninth Business Day prior to such Monthly Report Date.

 

35

 

 

"Monthly Report Period" means, with respect to any Monthly Report Date, the
period commencing immediately following the prior Monthly Report Period (or on
the Original Closing Date in the case of the Monthly Report Period relating to
the first Monthly Report Date) and ending on the Monthly Report Determination
Date 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.

 

"MV Modified Overcollateralization Ratio" means the ratio of (A) the sum of (i)
the MV Overcollateralization Amount plus (ii) the aggregate amount of cash on
deposit in the Principal Collection Subaccount and the Revolving Reserve
Account, plus (iii) the Portfolio Exposure Amount less (iv) with respect to all
Excess Concentration Loans that are Performing Collateral Obligations, the
lesser of (x) the purchase price paid for such Performing Collateral Obligation
by the Borrower; provided that, if the purchase price paid exceeds the par
amount of such Performing Collateral Obligation, the purchase price shall be
deemed to be the par amount and (y) the Market Value of such Performing
Collateral Obligation determined by the Borrower in accordance with clause
(e)(ii) of the definition thereof to (B) the Borrower Liabilities.

 

"MV Modified Overcollateralization Ratio Test" means, as of any date of
determination, a test that will be satisfied on such date if the MV Modified
Overcollateralization Ratio is greater than or equal to the Row Minimum OC Level
under clause (b) (during or after the Reinvestment Period) in the Matrix on
Schedule 8.

 

"MV Overcollateralization Amount" means, with respect to all Performing
Collateral Obligations, an aggregate amount equal to sum of, with respect to
each such Performing Collateral Obligation, the lesser of (x) the purchase price
paid for such Performing Collateral Obligation by the Borrower; provided that,
if the purchase price paid exceeds the par amount of such Performing Collateral
Obligation, the purchase price shall be deemed to be the par amount and (y) the
Market Value of such Performing Collateral Obligation determined by the Borrower
in accordance with clause (e)(ii) of the definition thereof.

 

"MV Overcollateralization Ratio" means the ratio of (A) the sum of (i) the MV
Overcollateralization Amount plus (ii) the aggregate amount of cash on deposit
in the Principal Collection Subaccount and the Revolving Reserve Account, plus
(iii) the Portfolio Exposure Amount, to (B) the Borrower Liabilities.

 

"MV Overcollateralization Ratio Test" means, as of any date of determination, a
test that will be satisfied on such date if the MV Overcollateralization Ratio
is greater than or equal to 350.00%.

 

"Natixis" has the meaning assigned to such term in the introduction to this
Agreement.

 

36

 

 

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

 

"Note" means either a Revolving Note or a Term Note.

 

"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, the 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, including any amounts
payable pursuant to Section 2.10 hereof.

 

"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.

 

"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 Loans) 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).

 

"Original Closing Date" means September 27, 2012.

 

"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 ratio of (A) the Borrowing Base to (B)
the Borrower Liabilities.

 

37

 

 

"Overcollateralization Ratio Test" means, as of any date of determination, a
test that will be satisfied on such date if the Overcollateralization Ratio is
greater than or equal to the Row Minimum OC Level in the Matrix.

 

"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 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 20th day of March, June, September and December in each
year, the first of which occurred on December 20, 2012; provided that, (i) if
any such day is not a Business Day, then such Payment Date shall be the next
succeeding Business Day and (ii) the final Payment Date shall be the Final
Maturity Date.

 

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

 

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

 

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

 

"Payoff Letter" means a letter relating to the termination and release of the
Collateral Agent's Lien on the Collateral in connection with a Payment in Full
substantially in the form of Exhibit H hereto.

 

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

 

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

 

38

 

 

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

 

"Permitted Lien" means

 

(i) with respect to the interest of the Transferor and/or of the Borrower in the
Collateral Obligations, Equity Securities, Eligible Investments and the Covered
Accounts: (a) Liens in favor of the Borrower created pursuant to the Master
Transfer Agreement and assigned to the Collateral Agent for the benefit of the
Secured Parties pursuant to this Agreement, (b) Liens in favor of the Collateral
Agent for the benefit of the Secured Parties pursuant to this Agreement, (c) the
restrictions on transferability imposed by the Related Documents (but only to
the extent relating to customary procedural requirements and agent and Obligor
consents (except where the Collateral Manager or any of its Affiliates is the
agent) expected to be obtained in due course and provided that any Obligor
consents will be obtained prior to the Delivery of the related Collateral
Obligation hereunder) and (d) the restrictions on transferability imposed by any
shareholder agreements in respect of Equity Securities acquired in connection
with the work-out, restructuring or exercise of remedies with respect to a
Collateral Obligation;

 

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

 

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

 

"Permitted Purchaser" has the meaning specified in Section 12.06(e).

 

"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.

 

39

 

 

"PIK Loan" means any loan or Collateral Obligation on which any portion of the
interest accrued for a specified period of time or until the maturity thereof
is, or at the option of the Obligor may be, added to the principal balance of
such loan or Collateral Obligation or otherwise deferred rather than being paid
in Cash, provided that if a Collateral Obligation has a "payment-in-kind"
component but pays interest in cash at a rate of at least LIBOR + 3.00% it will
not constitute a PIK Loan.

 

"Plan" means an employee pension benefit plan within the meaning of Section 3(2)
of ERISA (other than a Multiemployer Plan) which is covered by Title IV of ERISA
or subject to the minimum funding standards under Section 412 of the Code that
is sponsored by the Borrower or a member of its ERISA Group or to which the
Borrower or a member of its ERISA Group is obligated to make contributions or
has any liability.

 

"Portfolio Advance Rate" means the percentage calculated by dividing (x) the
Borrower Liabilities by (y) the Borrowing Base.

 

"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 at such time over (y) the aggregate amount on
deposit in the Revolving Reserve Account at such time.

 

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

 

"Prefunded Letter of Credit" means any letter of credit facility that requires a
lender party thereto to pre-fund in full its obligations thereunder, provided
that any such lender (a) shall have no further funding obligation thereunder and
(b) shall have a right to be reimbursed or repaid by the borrower its pro rata
share of any draws on a letter of credit issued thereunder.

 

"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

 

(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 any Equity Security shall
be deemed to be zero.

 

40

 

 

"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
10.01(a)(v) or pursuant to Section 10.04 except as otherwise directed pursuant
to Section 10.04; provided, that: (1) any amounts or collections received in
respect of the Excluded Loan shall not constitute Principal Proceeds; and (2) 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 "Principal Proceeds" hereunder.

 

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

 

"Private Authorizations" means all franchises, permits, licenses, approvals,
consents and other authorizations of all Persons (other than Authorities) but
excluding any customary procedural requirements and agents' and Obligors'
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 or Section 4975 of the Code that is not exempted by a statutory or
administrative or individual exemption pursuant to Section 408 of ERISA or
Section 4975 of the Code.

 

"Puerto Rico Collateral Obligation" means a Collateral Obligation of an Obligor
organized in (or whose principal operations are located in) Puerto Rico.

 

"Qualified Real Estate Loan" Any loan or debt obligation of an Obligor that is
in the business of acquiring and developing land and the construction of
residential or commercial properties on that land and that satisfies the
following criteria:

 

(a)          the primary security for such loan or debt obligation is located in
at least 3 Geographic Regions;

 

(b)          the Obligor of such loan or debt obligation, or, the ultimate
operating parent of such Obligor, has been in business for a minimum of 5 years;

 

(c)          the last twelve months of revenues for the Obligor of such loan or
debt obligation is at least $100,000,000; and

 

(d)          the last twelve months of operating cash flow for the Obligor of
such loan or debt obligation is positive.

 

41

 

 

"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.

 

"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
Collateral 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
DBRS has confirmed in writing (which may be in the form of a letter, press
release or other publication of a change in DBRS's published ratings criteria to
this effect) that such action will not cause the then-current rating of the
Notes by DBRS to be reduced or withdrawn; provided, however, that the Rating
Confirmation shall be deemed to have been satisfied if within 10 Business Days
following such notification by the Borrower or the Collateral Manager neither
the Borrower nor the Collateral Manager has received a written communication
relating to such action or proposed action from DBRS or if DBRS makes a public
announcement or informs the Borrower or the Collateral Manager in writing that
it believes that satisfaction of the Rating Confirmation is not required with
respect to an action or its practice is not to give such confirmation.

 

"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 Bank or guarantor 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 lien interest, in each case, on
residential, commercial, office, retail or industrial property and is
underwritten as a mortgage loan, except for any Qualified Real Estate Loan.

 

42

 

 

"Register" has the meaning specified in Section 12.06(d).

 

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

 

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

 

"Reinvestment Period" means the period from and including the Original Closing
Date to and including the earliest of (a) March 27, 2015 (provided that, by
written notice provided by the Borrower or the Collateral Manager no later than
March 13, 2015 to the Agents, the Lenders and DBRS, such date may be extended to
September 27, 2015), (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 Collateral Manager shall no longer be the Transferor
unless each of the Lenders and the Facility Agent have otherwise consented, (e)
the date on which the Collateral Manager shall have notified the Borrower of its
intention to resign as Collateral Manager and the successor is not an Approved
Affiliate or the occurrence of any other termination of the Collateral
Management Agreement, whether or not in accordance with its terms, (f) the date
on which the Commitments are terminated in whole pursuant to Section 2.06(b) or
(g) the date on which the Borrower or the Collateral Manager (or any of its
executive officers) are 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 Collateral Manager in this Agreement
and the other Facility Documents.

 

"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).

 

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

 

"Repurchase and Substitution Limit" has the meaning assigned to such term in
Section 10.01(a)(vi).

 

43

 

 

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

 

"Required Conversion Amount" means, with respect to any Converted Revolving
Advances required to be made under Section 2.01 hereof, an amount equal to, (i)
on the Stage 1 Mandatory Revolving Conversion Date, $50,000,000 and (ii) on the
Stage 2 Mandatory Revolving Conversion Date, the aggregate principal amount of
all Revolving Advances outstanding as of such date.

 

"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, managing member
or manager, acting on behalf of the sole member or managing member in its
capacity as sole member, managing member or manager, (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.

 

"Restatement Effective Date" means August 13, 2014.

 

"Restatement Effective Date Expenses" means amounts due in respect of actions
taken on or before the Restatement Effective 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 Restatement
Effective Date pursuant to the Engagement Letter dated as of July 16, 2014
between Whitehorse Finance, Inc. and Natixis Securities Americas LLC; (ii) the
accrued fees and expenses in connection with the transactions contemplated
hereby, including, without limitation, those of (A) Ashurst LLP, counsel to the
Facility Agent and the Lender(s), (B) Dechert LLP, counsel to the Borrower and
the Transferor and (C) Chapman and Cutler LLP, counsel to the Collateral Agent;
and (iii) the fees to be received by DBRS on the Restatement Effective Date.

 

44

 

 

"Restatement Effective Date Expense Account Amount" has the meaning specified in
Fee Letter.

 

"Retained Fee" means any reasonable origination, structuring or similar closing
fee charged by the Person originating a loan on behalf of its lenders for
services it has performed in connection with such origination, which is not
customarily made available to the lenders as part of their return with respect
to such loan and provided such Person is entitled to retain the same in
accordance with Applicable Law.

 

"Retention Interest" means a "net economic interest" (as defined in paragraph
(d) of Article 405(1) of the CRR) which, in any event, shall not be less than 5%
(or such higher or lower amount as notified by the Facility Agent to the
Retention Provider is required by Article 404 of the CRR) of the nominal value
of the Collateral calculated based on the Aggregate Principal Balance of all of
the Collateral Obligations and the outstanding 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.

 

"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 and the
Facility Agent.

 

"Retention Provider" means the Transferor.

 

"Retention Requirements" means together, the CRR Retention Requirements and the
AIFMD Retention Requirements.

 

"Review Criteria" has the meaning assigned to such term in Section 12.20(b)(i).

 

"Revolving Advances" has the meaning assigned to such term in Section 2.01(a).

 

"Revolving Borrowing" has the meaning assigned to such term in Section 2.01.

 

"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.

 

45

 

 

"Revolving Commitment" means, as to each Revolving Lender, the obligation of
such Revolving Lender to make, on and subject to the terms and conditions
hereof, Revolving Advances to the Borrower pursuant to Section 2.01(a) in an
aggregate principal amount at any one time outstanding up to but not exceeding
the amount set forth opposite the name of such Revolving Lender on Schedule 1 or
in the Assignment and Acceptance pursuant to which such Revolving Lender shall
have assumed its Revolving Commitment, as applicable, as such amount may be
reduced from time to time pursuant to Section 2.05(b), Section 2.06 or increased
or reduced from time to time pursuant to assignments effected in accordance with
Section 12.06(a).

 

"Revolving Lender" means, at any time, any Lender that has a Revolving
Commitment at such time.

 

"Revolving Note" means each promissory note, if any, issued by the Borrower to a
Revolving Lender in accordance with the provisions of Section 2.03,
substantially in the form of Exhibit A-1 hereto, as the same may from time to
time be amended, supplemented, waived or modified.

 

"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 the applicable Row Advance Rate as set forth in the
column of that name in the Matrix corresponding to the Applicable Row Level.

 

"Row Diversity Score" shall have the meaning specified in the Fee Letter.

 

"Row Minimum OC Level" shall have the meaning specified in the Fee Letter.

 

"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.

 

"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.

 

46

 

 

"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.

 

"Senior Collateral Management Fee" shall have the meaning specified in the Fee
Letter, excluding any amounts thereof that have been waived at the option of the
Collateral Manager as provided in the Collateral Management Agreement.

 

"Servicing Standard" means the Standard of Care of the Collateral Manager
specified in the Collateral Management Agreement.

 

"Settled" means, with respect to a loan or other debt obligation (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 Custodian.

 

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

 

"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
1.01 of the Borrower LLC Agreement.

 

"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 1.00% per annum (whether calculated based on a spread above a
floating reference rate or a fixed rate), (c) postpones the Due Date of any
Scheduled Distribution in respect of such Collateral Obligation, provided that
any amendment, consent, waiver or other modification postponing the Due Date or
any Scheduled Distributions will not be a Specified Change if the Weighted
Average Maturity Date of the Collateral Obligations as of such Determination
Date is earlier than or on the actual Weighted Average Maturity Date at the end
of the Reinvestment Period, (d) alters the pro rata allocation or sharing of
distributions required by the Related Documents of a Collateral Obligation,
(e) releases any material guarantor or co-obligor of such Collateral Obligation
from its obligations, (f) terminates or releases all or substantially all of the
assets securing such Collateral Obligation, or(g) changes any of the provisions
of a Related Document specifying the number or percentage of lenders required to
effect any of the foregoing.

 

47

 

 

"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
Original 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%.

 

"Stage 1 Mandatory Revolving Conversion Date" means, prior to the Commitment
Termination Date, the first date on which the aggregate outstanding principal
balance of the Revolving Advances equals or exceeds $75,000,000 for 10
consecutive Business Days.

 

"Stage 2 Mandatory Revolving Conversion Date" means the Commitment Termination
Date.

 

"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).

 

"Subordinated Collateral Management Fee" shall have the meaning specified in the
Fee Letter, excluding any amounts thereof that have been waived at the option of
the Collateral Manager as provided in the Collateral Management Agreement.

 

"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.

 

48

 

 

"Term Borrowing" has the meaning assigned to such term in Section 2.01.

 

"Term Commitment" means, as to each Term Lender, the obligation of such Term
Lender to make, on and subject to the terms and conditions hereof, Term Loan
Advances to the Borrower pursuant to Section 2.01(b) in an aggregate principal
amount at any one time outstanding up to but not exceeding the amount set forth
opposite the name of such Term Lender on Schedule 1 or in the Assignment and
Acceptance pursuant to which such Term Lender shall have assumed its Term
Commitment, as applicable, as such amount may be reduced from time to time
pursuant to Section 2.05(b), Section 2.06 or increased or reduced from time to
time pursuant to assignments effected in accordance with Section 12.06(a).

 

"Term Lender" means, at any time, any Lender that has a Term Commitment or Term
Loan, as applicable, at such time.

 

"Term Loan Advances" has the meaning assigned to such term in Section 2.01(b).

 

"Term Note" means each promissory note, if any, issued by the Borrower to a Term
Lender in accordance with the provisions of Section 2.03, substantially in the
form of Exhibit A-2 hereto, as the same may from time to time be amended,
supplemented, waived or modified.

 

"Total Capitalization" means an amount equal to, without duplication (i) the
Aggregate Principal Balance of all Performing Collateral Obligations, plus (ii)
the aggregate amount of cash on deposit in the Principal Collection Subaccount
and the Revolving Reserve Account, plus (iii) the aggregate undrawn amount (if
any) of the Commitments hereunder, plus (iv) for all Defaulted Loans that are
also Eligible Senior Secured Loans, the lesser of (x) the Market Value of such
Defaulted Loan determined without reference to clause (d) of the definition
thereof, unless the Appraised Value of such Defaulted Loan has otherwise been
obtained or updated (A) within the immediately preceding three months and (B)
since such Defaulted Loan became defaulted, whichever of (A) and (B) is shorter
(as determined by the Collateral Manager with notice to the Agents), and (y) 20%
of the Aggregate Principal Balance of such Defaulted Loan, and (v) minus the
Portfolio Exposure Amount.

 

"Total Commitment" means (a) on or prior to the Commitment Termination Date, the
sum of the Total Revolving Credit Commitment and the Total Term Loan Commitment
(which sum shall not exceed $150,000,000 and as such amount may be reduced from
time to time pursuant to Section 2.06) and (b) following the Commitment
Termination Date, zero.

 

"Total Revolving Credit Commitment" means (i) prior to the Commitment
Termination Date, (x) if the Stage 1 Mandatory Revolving Conversion Date has not
occurred, $150,000,000 and (y) if the Stage 1 Mandatory Revolving Conversion
Date has occurred, $100,000,000; and (ii) on and following the Commitment
Termination Date, zero.

 

"Total Term Loan Commitment" means (i) on or prior to the Commitment Termination
Date, (x) if the Stage 1 Mandatory Revolving Conversion Date has not occurred,
$0 and (y) if the Stage 1 Mandatory Revolving Conversion Date has occurred,
$50,000,000, (ii) on the Stage 2 Mandatory Revolving Conversion Date, the
aggregate principal amount of the Revolving Advances and the Term Loan Advances
outstanding as of such date; provided that such amount shall not exceed
$150,000,000; and (iii) following the Commitment Termination Date, zero.

 

49

 

 

"Trade Ticket" means a confirmation of the purchase and/or sale of a Collateral
Obligation as provided by the Collateral Manager to the Collateral Agent and the
Custodian in connection with such purchase or sale.

 

"Transferor" means WhiteHorse Finance, Inc.

 

"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.

 

"Unfunded Amount" means the sum of (a) the Portfolio Exposure Amount and (b) all
amounts due for unsettled purchases of Collateral Obligations at such time.

 

"United States" and "U.S." mean the United States of America.

 

"Unsecured Loan" A loan that is not secured by a valid perfected security
interest on specified collateral.

 

"Volcker Rule" means Section 619 of the Dodd-Frank Act.

 

"Volcker Rule Consent Event" The receipt by the Borrower (with notice to the
Agents) of (i) the written consent of 100% of the Lenders and (ii) a written
opinion of counsel of national reputation experienced in collateralized loan
obligation transactions that (1) (x) the Borrower should not constitute a
"covered fund" under the Volcker Rule or (y) the acquisition or ownership of the
obligations specified in clause (n) of the definition of the term Concentration
Limitations by the Borrower should not cause the Borrower to constitute or be
deemed a "covered fund" as defined in and subject to the Volcker Rule, (2) the
Notes should not be deemed to constitute "ownership interests" under the Volcker
Rule or (3) ownership of the Notes will be otherwise exempt from the Volcker
Rule.

 

"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)

 

50

 

 

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 10.00%, 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 of
determination, 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 7.00%, 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
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). 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":  As of any date of determination with respect
to all Collateral Obligations other than Defaulted Loans, the date calculated by
adding to the Original Closing Date the weighted average maturity of such
Collateral Obligations (expressed as a number of months from the Original
Closing Date) calculated by (a) summing the products obtained by multiplying
(i) the Principal Balance (or portion thereof) of each such Collateral
Obligation that is then held (or in relation to a proposed purchase of such a
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 Original Closing Date to the date of such maturity or
amortization and (b) dividing such sum by the Aggregate Principal Balance of all
such Collateral Obligations identified in clause (a)(i) above.

 

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"Weighted Average Maturity Test":  A test that will be satisfied on any date of
determination if the Weighted Average Maturity Date of all Collateral
Obligations (excluding Defaulted Loans) as of such date is on or before
September 27, 2019.

 

"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 7.00%, 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 10.00% 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.

 

"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.

 

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Section 1.02         Rules of Construction.

 

For all purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires (i) singular words shall connote the
plural as well as the singular, and vice versa (except as indicated), as may be
appropriate, (ii) the words "herein," "hereof" and "hereunder" and other words
of similar import used in this Agreement refer to this Agreement as a whole and
not to any particular article, schedule, section, paragraph, clause, exhibit or
other subdivision, (iii) the headings, subheadings and table of contents set
forth in this Agreement are solely for convenience of reference and shall not
constitute a part of this Agreement nor shall they affect the meaning,
construction or effect of any provision hereof, (iv) references in this
Agreement to "include" or "including" shall mean include or including, as
applicable, without limiting the generality of any description preceding such
term, and for purposes hereof the rule of ejusdem generis shall not be
applicable to limit a general statement, followed by or referable to an
enumeration of specific matters, to matters similar to those specifically
mentioned, (v) each of the parties to this Agreement and its counsel have
reviewed and revised, or requested revisions to, this Agreement, and the rule of
construction that any ambiguities are to be resolved against the drafting party
shall be inapplicable in the construction and interpretation of this Agreement,
(vi) any definition of or reference to any Facility Document, agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (vii) any reference
herein to any Person shall be construed to include such Person's successors
(including any such successors by merger, consolidation or sale of all or
substantially all of such Person's assets) 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.

 

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.

 

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(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
Loans, which, except as otherwise provided herein, shall be assumed to have
Scheduled Distributions of zero) shall be the sum of (i) the total amount of
payments and collections to be received during such Collection Period in respect
of such Collateral 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.

 

(f)          For purposes of calculating all Concentration Limitations, in both
the numerator and the denominator of any component of the Concentration
Limitations, Defaulted Loans will be treated as having a Principal Balance equal
to zero, except that Defaulted Loans that are also Eligible Senior Secured Loans
will be treated as having a Principal Balance equal to the lesser of (i) the
Market Value of such Defaulted Loan determined without reference to clause (d)
of the definition thereof, unless the Appraised Value of such Defaulted Loan has
otherwise been obtained or updated (A) within the immediately preceding three
months and (B) since such Defaulted Loan became defaulted, whichever of (A) and
(B) is shorter (as determined by the Collateral Manager with notice to the
Agents), and (ii) 20% of the Aggregate Principal Balance of such Defaulted Loan.

 

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(g)          Except as otherwise provided herein, Defaulted Loans 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)          Except as otherwise expressly set forth with respect to
substitutions in Section 10.01(a)(vi), 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 any Equity Owners 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 any
Collateral Obligation acquired from an Affiliate of the Borrower, paid in the
aggregate in the form of cash and/or 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 Unsecured Loan.

 

(l)          For purposes of calculating the Coverage Tests, the Advance Rate
Test, the Commitment Shortfall Test, the Concentration Limits, the Collateral
Quality Tests and the EOD OC Ratio, the effect of the acquisition or disposition
of Collateral Loans and Eligible Investments shall be calculated on a trade date
basis. For the avoidance of doubt, the Excluded Loan shall not be included in
any calculations of the Coverage Tests, the Advance Rate Test, the Commitment
Shortfall Test, the Concentration Limits, the Collateral Quality Tests and the
EOD OC Ratio.

 

Section 1.05         Amendment and Restatement..

 

In order to facilitate the Amendment and Restatement:

 

(a)          Existing Credit Agreement Superseded. The Borrower, the
Administrative Agent and the Lenders hereby agree that upon the effectiveness of
this Agreement, the terms and provisions of the Existing Credit Agreement shall
be and hereby are amended and restated in their entirety by the terms,
conditions and provisions of this Agreement, and the terms and provisions of the
Existing Credit Agreement, shall be superseded by this Agreement.

 

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(b)          All of the "Obligations" (as defined in the Existing Credit
Agreement, the "Existing Obligations") outstanding under the Existing Credit
Agreement and other "Facility Documents" (as defined in the Existing Credit
Agreement, the "Existing Facility Documents") shall continue as Obligations
hereunder to the extent not repaid on the Restatement Effective Date, and each
of this Agreement and any other Facility Document that is amended and restated
in connection with this Agreement is given as a substitution of and modification
of, and not as a payment of or novation of, the indebtedness, liabilities and
Existing Obligations of the Borrower under the Existing Credit Agreement or any
Existing Facility Document, and neither the execution and delivery of such
documents nor the consummation of any other transaction contemplated hereunder
is intended to constitute a novation of the Existing Credit Agreement or of any
of the other Existing Facility Documents or any obligations thereunder.

 

Article II

REVOLVING ADVANCES AND TERM LOAN ADVANCES UNDER THE FACILITY

 

Section 2.01         Revolving Credit and Term Loan Facility.

 

On the terms and subject to the conditions hereinafter set forth, including
Article III:

 

(a)          each Revolving Lender (i) has made, pursuant to the Existing Credit
Agreement, certain advances to the Borrower from the Original Closing Date to
the Restatement Effective Date which remain outstanding and (ii) severally
agrees to continue to make advances to the Borrower (each existing and future
revolving advance described in subclauses (i) and (ii), a "Revolving Advance")
from time to time on any Business Day during the period from the Restatement
Effective 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 Revolving Lender's Commitment and, as to all Revolving Lenders, in an
aggregate principal amount up to but not exceeding the Total Revolving Credit
Commitment; provided, that no such Revolving Advances and no prepayment of any
Revolving Advances shall be made on the Business Day immediately preceding (but
not including) any Payment Date.

 

(b)          each Term Lender severally agrees to make advances to the Borrower
(each, a "Term Loan Advance" and, together with the Revolving Advances, the
"Advances") on each Mandatory Revolving Conversion Date in the applicable
Required Conversion Amount and in an aggregate principal amount up to but not
exceeding such Term Lender's Commitment and, as to all Term Lenders, in an
aggregate principal amount up to but not exceeding the Total Term Loan
Commitment on such Mandatory Revolving Conversion Date.

 

Each such borrowing of a Revolving Advance on any single day is referred to
herein as a "Revolving Borrowing"; each such borrowing of a Term Loan Advance on
any single day is referred to herein as a "Term Borrowing"; and Revolving
Borrowings and Term Borrowings are referred to herein collectively as
"Borrowings".

 

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Within such limits and subject to the other terms and conditions of this
Agreement, the Borrower may borrow (and, with respect to Revolving Advances,
re-borrow) any Advances under this Section 2.01 and prepay such Advances under
Section 2.05. For the avoidance of doubt, Term Loan Advances once repaid may not
be re-borrowed.

 

Notwithstanding the foregoing provisions of this Section 2.01 or any other
provision herein or in any other Facility Document to the contrary, on each
Mandatory Revolving Conversion Date, the Revolving Advances outstanding as of
such date shall without further action or consent of any kind be converted to
Term Loan Advances in an amount equal to the Required Conversion Amount (which
Required Conversion Amount shall be allocated to each Revolving Lender
proportionately based on the outstanding principal balance of such Revolving
Lender’s Revolving Advances to the total aggregate outstanding principal balance
of Revolving Advances at such time) and, upon such conversion, (i) each Term
Lender shall fund its Percentage of the applicable Required Conversion Amount in
accordance with Section 2.02(c) (and the Collateral Agent shall remit these
amounts to the Borrower pursuant to Section 8.02(e)) and (ii) the Borrower shall
make a corresponding deposit into the Principal Collection Subaccount to repay
each Revolving Lender in an amount equal to its Percentage of the Required
Conversion Amount (and the Collateral Agent shall remit these amounts to each
Revolving Lender pursuant to Section 8.02(e)); provided, however, that any
amounts described in subclauses (i) and (ii) shall automatically be netted if a
Revolving Lender is also a Term Lender on such Mandatory Revolving Conversion
Date; provided, further, that each Revolving Lender and the Borrower shall
cooperate to evidence the repayment and cancellation of any Revolving Note, as
well as the issuance of any Term Note pursuant to Section 2.03(c). For all
purposes hereunder, the Revolving Advances converted on each Mandatory Revolving
Conversion Date shall constitute and be referred to as a Term Loan Advance
hereunder (each such Term Loan Advance referred to herein at times as a
"Converted Revolving Advance"). On each Mandatory Revolving Conversion Date, the
Total Revolving Credit Commitment shall automatically be reduced by the
aggregate principal amount of all Converted Revolving Advances and converted
into Term Loan Advances on such date.

 

Section 2.02         Advances.

 

(a)          If the Borrower desires to make a Revolving 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
Revolving Borrowing (which notice shall be irrevocable and effective upon
receipt by the Facility Agent) not later than 11:00 a.m. at least two Business
Days prior to the day of the requested Revolving Borrowing.

 

Each Notice of Borrowing shall be substantially in the form of Exhibit B hereto,
dated the date the request for the related Revolving 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 Revolving Borrowing requested in such Notice of Borrowing
(the "Requested Amount") shall be equal to at least $1,000,000 or an integral
multiple of $250,000 in excess thereof (or, if less, the remaining unfunded
Revolving Commitments hereunder).

 

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

 

(c)          In accordance with Section 2.01 hereof, without further action or
consent of any kind, each Term Lender shall not later than 2:00 p.m. on any
Mandatory Revolving Conversion Date in respect of a Converted Revolving Advance
make its Percentage of the applicable Required Conversion Amount available to
the Borrower by disbursing such funds in Dollars to the Principal Collection
Subaccount; provided that if any Term Lender is also a Revolving Lender, it
shall net the Borrower's repayment of its Percentage of the Required Conversion
Amount.

 

Section 2.03         Evidence of Indebtedness; Notes.

 

(a)          Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to it and
resulting from the Advances made by such Lender to the Borrower, from time to
time, including the amounts of principal and interest thereon and paid to it,
from time to time hereunder.

 

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

 

(c)          With respect to any Mandatory Revolving Conversion Date, each
Revolving Lender that holds a Revolving Note in respect of a Converted Revolving
Advance shall cooperate with the Borrower to either (i) deliver such Revolving
Note for cancellation to the extent that the Revolving Commitment of such
Revolving Lender is terminated in full or (ii) make a notation on Schedule I to
the Revolving Note to reduce the principal amount of Revolving Advances
outstanding thereunder in respect of any Converted Revolving Advances, and
simultaneously with any such cancellation or notation described in subclauses
(i) and (ii) above, the Borrower shall cooperate with each respective Term
Lender to execute and deliver a Term Note in respect of the Converted Revolving
Advance that is payable to such Term Lender.

 

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.

 

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(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.

 

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

 

All Advances shall constitute CP Rate Advances if made by a CP Conduit
established or administered by Natixis, New York Branch and Eurodollar Rate
Advances if made by any other Lender (subject to their conversion to Base Rate
Advances pursuant to Section 2.11), provided that, in the event the Borrower is
no longer able to borrow CP Rate Advances or Eurodollar Rate Advances as a
result of the occurrence of any of the circumstances set forth in Section 2.11,
the Borrower may request Base Rate Advances hereunder until such time as
Eurodollar Rate Advances are available.

 

The Calculation Agent shall provide notice to the Facility Agent, the Lenders,
the Borrower and the Collateral Manager of any and all LIBOR rate sets on the
date that any such rate set is determined. Each CP Conduit (or its
administrator) shall notify the Facility Agent, the Calculation Agent, the
Collateral Agent, the Borrower and the Collateral Manager of the CP Rate for the
related Interest Accrual Period on or prior to the related Determination Date in
connection with the provision of its invoice or otherwise upon written request. 
The CP Rate for each CP Conduit shall be calculated, for each day during the
period between the date of such notice and the last day of each Interest Accrual
Period (the "Estimate Period"), on the basis of such CP Conduit's good faith
estimate of its funding costs for such Estimate Period, and the amount of
interest payable to such CP Conduit in respect of the following Interest Accrual
Period shall be increased by the amount, if any, by which interest at the actual
CP Rates for such CP Conduit for the Estimate Period exceeds the amount
estimated or shall be decreased by the amount, if any, by which the amount of
interest at the estimated CP Rates for such Estimate Period exceeds the amount
of interest accrued at the actual CP Rates.  However, on the Final Maturity Date
of the Advances, any such increase or decrease that would be due pursuant to the
preceding sentence shall instead be settled and paid on such Final Maturity
Date.  Each CP Conduit shall supply a reconciliation of such amounts as provided
in this Section 2.04(b) for each such period to the Facility Agent, the Borrower
and the Collateral Manager and, absent manifest error, such reconciliation shall
be conclusive and binding on all parties hereto.  The interest rate payable to a
CP Conduit shall reflect proportionately the different sources of funding used
during each Interest Accrual Period by the CP Conduit to finance its outstanding
revolving loans.

 

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

 

(e)          As a condition to the payment of principal of and interest on any
Advance without the imposition of withholding tax, 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 it is 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.

 

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Section 2.05         Prepayment of Advances.

 

(a)          Optional Prepayments. Other than in connection with a Payment in
Full and termination of the Facility which is subject to Section 2.06(b), the
Borrower may from time to time on any Business Day other than the Business Day
immediately preceding any Payment Date, voluntarily prepay the Revolving
Advances and/or the Term Loan Advances together with accrued interest thereon in
whole or in part using Principal Proceeds, without penalty or premium; provided
that the Borrower shall have delivered to the Lenders and the Facility Agent
(with a copy to the Collateral 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 CP Rate Advances or
Eurodollar Rate Advances, three Business Days prior to the date of such
prepayment, and (ii) in the case of Base Rate Advances, one Business Day prior
to the date of 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 $250,000 in excess thereof or, if less, the
entire outstanding principal amount of the related type of 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. Any optional prepayment of
Revolving Advances may be re-borrowed in accordance with Section 2.02. Term Loan
Advances once repaid may not be re-borrowed.

 

(b)          Mandatory Prepayments. The Borrower shall prepay the Revolving
Advances and/or the Term Loan 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
Report, notice of the aggregate amounts of the Revolving Advances and/or the
Term Loan 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. Notwithstanding the foregoing, the Borrower shall repay,
subject to the automatic netting of amounts between any Revolving Lender that is
also a Term Lender, (i) $50,000,000 in aggregate principal amount of the
Revolving Advances outstanding on the Stage 1 Mandatory Revolving Conversion
Date, if applicable and (ii) the entire aggregate principal amount of the
Revolving Advances outstanding on the Stage 2 Mandatory Revolving Conversion
Date, and in either case, re-issue such Revolving Advances as Term Loan Advances
in accordance with Section 2.01 and Section 2.03(c). Term Loan Advances once
repaid may not be re-borrowed.

 

(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.

 

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Section 2.06         Reductions in Commitments.

 

(a)          Automatic Reduction and Termination. The Total Commitment (and the
applicable Term Commitment or Revolving Commitment of each Term Lender or
Revolving Lender) shall be automatically reduced (i) in part, with respect to
the Term Commitment of each Term Lender, to the extent provided in connection
with any optional or mandatory prepayments of Term Loan Advances made pursuant
to Section 2.05(a) or Section 2.05(b), as applicable, and (ii) to zero at the
close of business on the Commitment Termination Date. The Borrower shall not
terminate or reduce the Total Commitment 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 Payment in Full
occurs on such date. The Borrower may use amounts in the Covered Accounts to
effect any such Payment in Full. Such notice of termination shall be irrevocable
and effective only upon receipt and shall terminate and cancel the Commitments
of each Lender on the date specified in such notice.

 

(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 or any portion thereof 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, the amount of any such
reduction and the allocation to the Term Commitment and/or Revolving Commitment,
as applicable, provided that no such reduction will reduce the Total Commitments
below the aggregate principal amount of Advances outstanding at such time. Any
such notice of reduction shall be irrevocable.

 

(d)          Effect of Termination or Reduction. Any reduction (i) with respect
to the Term Commitment (and the Term Commitment of each Term Lender), pursuant
to Section 2.06(a)(i) or (ii) with respect to the Total Commitment (and the
applicable Term Commitment or Revolving Commitment of each Term Lender or
Revolving Lender), to the extent provided in connection with any optional
reduction of the Total Commitment made pursuant to Section 2.06(c), once reduced
may not be reinstated. Any termination of the Total Commitment (and the
Commitment of each Lender) under Section 2.06(b) and Section 2.06 (c), once
terminated may not be reinstated.

 

Section 2.07         Maximum Lawful Rate.

 

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

 

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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)          Except with respect to Taxes which shall be governed exclusively by
Section 12.03, and without duplication of amounts required to be paid or
indemnified by Borrower pursuant to Section 12.04, if, due to either (i) the
introduction of or any change in or in the interpretation, application or
implementation of any Applicable Law (a "Regulatory Change") after the date
hereof, or (ii) the compliance with any guideline or change in the
interpretation, application or implementation of any guideline or request from
any central bank or other Authority (whether or not having the force of law)
after the date hereof, there shall be any increase in the cost to any Affected
Person of agreeing to make or making, funding or maintaining Advances to the
Borrower, then the Borrower shall from time to time, on the Payment Dates (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 (A) 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"), (B) Article 404 of the CRR and all rules and
regulations promulgated thereunder or issued in connection therewith, (C) 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"), (D) the EU
Directive 2011/61/EU on Alternative Investment Fund Managers (as amended from
time to time and as implemented by Member States of the European Union) together
with any implemented or delegated regulation, technical standards and guidance
related thereto as may be amended, supplemented  or replaced from time to time
("AIFMD"), (E) the final rule titled Risk-Based Capital Guidelines; Capital
Adequacy Guidelines; Capital Maintenance: Regulatory Capital; Impact of
Modifications to Generally Accepted Accounting Principles; Consolidation of
Asset-Backed Commercial Paper Programs; and Other Related Issues, adopted by the
Office of the Comptroller of the Currency, Department of the Treasury; Board of
Governors of the Federal Reserve System; Federal Deposit Insurance Corporation;
and Office of Thrift Supervision, Department of Treasury on December 15, 2009
(the "FAS 166/167 Regulatory Capital Rules"), or any rules, regulations,
guidance, interpretations or directives from bank regulatory agencies
promulgated in connection therewith and (F) 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, Article 404 of
the CRR, AIFMD or FAS 166/167 Regulatory Capital Rules (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
Original Closing Date, thereby constituting a Regulatory Change hereunder with
respect to the Affected Parties as of the Original Closing Date, regardless of
the date enacted, adopted or issued provided, however, that the Borrower shall
not be responsible for any increased costs relating to Article 404 of the CRR
and all rules and regulations promulgated thereunder or issued in connection
therewith so long as the Borrower is in compliance with Section 5.01(l)
hereunder.

 

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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 404 of the CRR, AIFMD or FAS 166/167 Regulatory Capital Rules or any
rules, regulations, guidance, interpretations or directives from bank regulatory
agencies promulgated in connection therewith or (iv) any change arising after
the date hereof in the foregoing or in the interpretation or administration of
any of the foregoing by any governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or (v)
compliance by any Affected Person (or any lending office of such Affected
Person), or any holding company for such Affected Person which is subject to any
of the capital requirements described above, with any request or directive
issued after the date hereof regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency,
(A) 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.
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.

 

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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, the Borrower shall have the right to replace such Lender (the
"Replaced Lender") with one or more other assignees meeting the requirements set
forth in Section 12.06 hereof which will not result in additional amounts being
payable pursuant to clauses (a) or (b) of this Section 2.09 (collectively, the
"Replacement Lender"), provided that (i) all fees and expenses incurred by the
Replaced Lender in connection with such assignment shall be paid by the Borrower
and (ii) the Replacement Lender shall acquire all of the Commitments and
outstanding Advances of the Replaced Lender and, in connection therewith, shall
pay to the Replaced Lender in respect thereof an amount equal to the principal
of, and all accrued interest on, all outstanding Advances of the Replaced Lender
and all related fees and expenses in connection with the Facility Documents.

 

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 CP Rate Advance or a Eurodollar Rate
Advance made to the Borrower and any loss sustained by such Affected Person in
connection with the re-employment of such funds but excluding loss of
anticipated profits or margin), which such Affected Person may sustain: (i) if
for any reason (including any failure of a condition precedent set forth in
Article III but excluding a default by the applicable Lender) a Borrowing of any
CP Rate Advance or Eurodollar Rate Advance by the Borrower does not occur on the
Borrowing Date specified therefor in the applicable Notice of Borrowing
delivered by the Borrower, (ii) if any payment, prepayment or conversion of any
of the Borrower's CP Rate Advances or 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 CP Rate Advance or Eurodollar Rate Advance is not
made on any date specified in a Notice of Prepayment given by the Borrower,
(iv) if any 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 CP Rate Advances
or 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.

 

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Section 2.11         Illegality; Inability to Determine Rates.

 

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

 

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

 

(c)          Upon the occurrence of any event giving rise to a Lender's
suspending its obligation to make or maintain CP Rate Advances or Eurodollar
Rate Advances, the Borrower shall have the right to replace such Lender (the
"Replaced Lender") with one or more other assignees meeting the requirements set
forth in Section 12.06 hereof and whose obligation to make or maintain CP Rate
Advances or Eurodollar Rate Advances is not suspended (collectively, the
"Replacement Lender"), provided that (i) all fees and expenses incurred by the
Replaced Lender in connection with such assignment shall be paid by the Borrower
and (ii) the Replacement Lender shall acquire all of the Commitments and
outstanding Advances of the Replaced Lender and, in connection therewith, shall
pay to the Replaced Lender in respect thereof an amount equal to the principal
of, and all accrued interest on, all outstanding Advances of the Replaced Lender
and all related fees and expenses in connection with the Facility Documents.

 

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

 

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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") as set forth in the Fee
Letter. Commitment Fees accrued during each Collection Period shall be payable
in accordance with Section 9.01(a) 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.

 

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.

 

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(b)          Except as otherwise expressly provided herein, all computations of
interest, fees and other Obligations shall be made on the basis of a year of
360 days for the actual number of days elapsed in computing interest on any
Advance, the date of the making of 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, (i) the Facility Agent will provide written notice thereof
to DBRS, and (ii) the Borrower may, at its option, replace such Lender (all the
costs incurred by the Borrower in connection with such replacement being for the
account of such Lender) with another entity that meets the Rating Criteria and
that is eligible to be an assignee of the Commitments under the terms of this
Agreement (by requiring the replaced Lender to transfer all of its rights and
obligations in respect of its Commitment to the transferee entity at a price
equal to the principal of, and all accrued interest on, all outstanding Advances
of the replaced Lender). Each of the Collateral Agent, the Facility Agent and
the Lender being replaced will agree to cooperate with all reasonable requests
of the Borrower for the purpose of effecting such transfer.

 

Section 2.17         Applicable Row Level.

 

The Borrower or the Collateral Manager may specify a different Applicable Row
Level than the one currently selected by the Collateral Manager 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 Collateral 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 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 the proposed Applicable
Row Level.

 

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Section 2.18         Additional Advances.

 

(a)          Subject to the terms and conditions set forth herein, the Borrower
shall have the right, at any time during the Reinvestment Period, to incur
additional indebtedness in the form of a one time only increase to the Revolving
Commitment and/or the Term Commitment (such increase, an "Increased Commitment"
and any loans made to the Borrower pursuant to such Increased Commitment,
"Additional Advances") by notice to the Agents and DBRS, up to an aggregate
maximum amount equal to $50,000,000; provided that (i) the Borrower shall
satisfy the conditions of Section 3.04 (including the DBRS rating letter
described in 3.04(e)), (ii) any such request for an increase shall be in a
minimum amount of $5,000,000; (iii) the net proceeds of any Additional Advances
are used (x) to purchase or originate additional Collateral Obligations, (y) to
pay fees and expenses of the Agents in connection therewith and/or (z) as
Principal Proceeds for purposes permitted hereunder; and (iv) the written
consent of the Lenders has been obtained.

 

(b)          The terms and conditions (other than the Facility Margin Level) of
the Additional Advances issued pursuant to this Section 2.18 will be identical
to those of the initial Advances (except that the interest due on the Additional
Advances will accrue from the issue date of such Additional Advances). Interest
on the Additional Advances will be payable commencing on the first applicable
Payment Date following the issue date of such Additional Advances. The
Additional Advances will rank pari passu in all respects with the initial
Advances.

 

(c)          Any Increased Commitment issued pursuant to this Section 2.18 will
be offered first to the existing Lenders, in such amounts as are necessary to
preserve their pro rata holdings of the Advances.

 

(d)          Each Additional Lender shall satisfy the Rating Criteria and, upon
the making of an Additional Advance or the extension of an Increased Commitment,
shall be deemed to be a Lender for all purposes hereunder.

 

Article III

CONDITIONS PRECEDENT

 

Section 3.01         Conditions Precedent to the Original Closing Date.

 

The obligation of the Lenders to have made Advances hereunder comprising the
initial Borrowing was subject to the conditions precedent that the Facility
Agent shall have received on or before the Original 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 Collateral Manager as in effect on the Original Closing Date;

 

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(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 (f) 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 or manager 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 Original 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 Collateral Manager
certifying (i) as to its Constituent Documents, (ii) as to its resolutions or
other action of its board of directors or manager 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 Original 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, amendments, if any,
necessary to release all security interests and other rights of any Person in
the Collateral previously granted by the Borrower or any predecessor in interest
(including any transferor);

 

(h)          legal opinions (addressed to each of the Secured Parties and DBRS)
of (i) Dechert LLP, counsel to the Borrower and the Collateral 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;

 

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(j)          evidence satisfactory to it that the Borrower shall have paid (i)
the fees to be received by Natixis on or prior to the Original Closing Date
pursuant to this Agreement and each other Facility Document; (ii) the accrued
fees and expenses in connection with the transactions contemplated hereby of (A)
Ashurst LLP, counsel to the Facility Agent and Lenders, (B) Sidley Austin LLP,
counsel to DBRS, and (C) Chapman and Cutler LLP, counsel to the Collateral
Agent; and (iii) the fees to be received by DBRS on or prior to the Original
Closing Date pursuant to the engagement letter dated as of April 18, 2012
between H.I.G. Whitehorse Holdings, LLC and DBRS.

 

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

 

(l)          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;

 

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

 

(n)          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(sf)" rating by DBRS;

 

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

 

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

 

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

 

(i)          each Collateral Quality Test is satisfied;

 

(ii)         each Coverage Test is satisfied;

 

(iii)        the Advance Rate Test is satisfied;

 

(iv)        no Commitment Shortfall exists; 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
Original Closing Date.

 

(r)          evidence that the Borrower has directed the Collateral Agent to
deposit the Closing Expense Account Amount into the Closing Expense Account for
use pursuant to Section 8.12;

 

(s)          a certificate of a Responsible Officer of the Borrower or the
Collateral Manager, dated as of the Original Closing Date, specifying the
Applicable Row Level to be in effect for purposes of the Matrix; and

 

(t)          a certificate of a Responsible Officer of the Collateral Manager,
dated as of the Original Closing Date, certifying that each Collateral
Obligation owned by the Borrower as of the Original Closing Date satisfies the
requirements of the definition of "Collateral Obligation".

 

Section 3.02         Conditions Precedent to the Restatement Effective Date.

 

The obligation of the Lenders to make Advances hereunder comprising the
Borrowing shall be subject to the conditions precedent that the Facility Agent
shall have received on or before the Restatement Effective Date the following,
each in form and substance satisfactory to the Facility Agent:

 

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

 

(b)          true and complete copies of the Constituent Documents of the
Borrower and the Collateral Manager as in effect on the Restatement Effective
Date;

 

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(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 (f) below and any filings required to be made by WhiteHorse
Finance, Inc. after the Restatement Effective Date under the Investment Company
Act, the Investment Advisers Act of 1940, as amended, the Securities Act or the
Exchange Act, which shall be made in accordance with Applicable Law), 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 or manager 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 Restatement Effective 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 Collateral Manager
certifying (i) as to its Constituent Documents, (ii) as to its resolutions or
other action of its board of directors or manager 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 Restatement Effective 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 (including amendments to existing
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, amendments, if any,
necessary to release all security interests and other rights of any Person in
the Collateral previously granted by the Borrower or any predecessor in interest
(including any transferor);

 

(h)          legal opinions (addressed to each of the Secured Parties and DBRS)
of (i) Dechert LLP, counsel to the Borrower and the Collateral 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)          [reserved];

 

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(j)          evidence satisfactory to it that the Borrower shall have paid (i)
the fees to be received by Natixis on or prior to the Restatement Effective Date
pursuant to this Agreement and each other Facility Document; (ii) the accrued
fees and expenses in connection with the transactions contemplated hereby of (A)
Ashurst LLP, counsel to the Facility Agent and Lenders, (B) Dechert LLP, counsel
to the Borrower and the Transferor and (C) Chapman and Cutler LLP, counsel to
the Collateral Agent; and (iii) the fees to be received by DBRS on the
Restatement Effective Date.

 

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

 

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

 

(m)          a certificate of a Responsible Officer of the Borrower, dated as of
the Restatement Effective Date, to the effect that, in the case of each item of
Collateral pledged to the Collateral Agent, as of the Restatement Effective
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 Restatement Effective 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;

 

(n)          the Facility Agent has received a rating letter satisfactory to the
Facility Agent, delivered and signed by DBRS and confirming that the rating of
the Revolving Notes is not lower than the Initial Rating, and assigning a rating
that is not lower than the Initial Rating to the Term Notes;

 

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

 

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

 

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

 

(i)          each Collateral Quality Test is satisfied;

 

(ii)         each Coverage Test is satisfied;

 

(iii)        the Advance Rate Test is satisfied;

 

(iv)        no Commitment Shortfall exists; 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
Restatement Effective Date.

 

(r)          evidence that the Borrower has directed the Collateral Agent to
deposit the Restatement Effective Date Expense Account Amount into the Closing
Expense Account for use pursuant to Section 8.12;

 

(s)          [reserved]; and

 

(t)          a certificate of a Responsible Officer of the Collateral Manager,
dated as of the Restatement Effective Date, certifying that each Collateral
Obligation owned by the Borrower as of the Restatement Effective Date satisfies
the requirements of the definition of "Collateral Obligation".

 

Section 3.03         Conditions Precedent to Each Borrowing.

 

The obligation of the Lenders to make each Advance on each Borrowing Date shall
be subject to the fulfillment of the following conditions; provided that (1)
except as otherwise expressly permitted in Section 8.04, such Borrowing Date
shall occur prior to the end of the Reinvestment Period, and (2) the conditions
described in clauses (d), (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)          [reserved.]

 

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

 

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(c)          immediately after the making of such Advance on the applicable
Borrowing Date, the Commitment Shortfall Test shall be satisfied (on a pro-forma
basis);

 

(d)          immediately after the making of such Advance on the applicable
Borrowing Date, each Coverage Test shall be satisfied (on a pro-forma basis) 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)          other than in connection with Advances obtained on the Original
Closing Date which are used for purposes other than the acquisition of
additional Collateral Obligations, 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;
and;

 

(h)          immediately after the making of such Advance on the applicable
Borrowing Date, the aggregate outstanding amount of Revolving Advances shall not
exceed applicable Total Revolving Credit Commitment then in effect.

 

Section 3.04         Conditions Precedent to an Increased Commitment.

 

The effectiveness of the Increased Commitment and the obligation of any Lender
to make an initial Additional Advance of either a Term Borrowing or a Revolving
Borrowing during the Reinvestment Period is subject to the satisfaction of the
following conditions:

(a)          The Agents shall have received a certificate of a Responsible
Officer of the Borrower:

 

(i)          to the effect that, as of the Increased Commitment Date (A) all
conditions set forth in this Section 3.04 have been fulfilled; (B) all
representations and warranties of the Borrower set forth in this Agreement and
each of the other Facility Documents are true and correct in all material
respects, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct
as of such earlier date; and (C) no Default or Event of Default has occurred and
is continuing on the part of such Borrower; and (D) as to the incumbency and
specimen signature of the Responsible Officer authorized to execute such
certificate to which it is a party; and

 

(ii)         certifying as to and attaching (A) its Constituent Documents; (B)
its resolutions or other action of its board of directors or members approving
the Increased Commitments, the Additional Advances and any other matters related
thereto; and (C) a good standing certificate from its state or jurisdiction of
incorporation or organization and any other state or jurisdiction in which it is
qualified to do business in which the failure to be so qualified could
reasonably be expected to have a Material Adverse Effect.

 

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(b)          The Agents shall have received a certificate of a Responsible
Officer of the Collateral Manager certifying as to and attaching (A) its
Constituent Documents; (B) its resolutions or other action of its board of
directors or members approving the Increased Commitment, the Additional Advances
and any other matters related thereto; (C) the incumbency and specimen signature
of the Responsible Officer authorized to execute such certificate to which it is
a party; and (D) a good standing certificate from its state or jurisdiction of
incorporation or organization and any other state or jurisdiction in which it is
qualified to do business in which the failure to be so qualified could
reasonably be expected to have a Material Adverse Effect.

 

(c)          The Agents shall have received legal opinions (addressed to each of
the Secured Parties) from counsel to the Borrower and the Collateral Manager,
dated the Increased Commitment Date, substantially in the form of the legal
opinions delivered at the Original Closing Date, each with additions or
deletions reflecting the Increased Commitment and Additional Advances.

 

(d)          The Agents shall have received a certificate of a Responsible
Officer of the Borrower, to the effect that, in the case of each item of
Collateral pledged to the Collateral Agent, as of the Increased Commitment 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 Increased Commitment 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;

 

(e)          The Facility Agent shall have received a letter from DBRS addressed
to the Facility Agent and the Borrower confirming that the rating of the
existing Notes is not lower than the Initial Rating and assigning a rating that
is not lower than the Initial Rating for the Notes issued in connection with the
Additional Advances.

 

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(f)          The Agents shall have received from each of the Borrower and the
Collateral Manager either (A) a certificate thereof or other official document
evidencing the due authorization, approval or consent of any governmental body
or bodies, at the time having jurisdiction in the premises, together with an
opinion of counsel of Borrower and the Collateral Manager, as applicable, that
no other authorization, approval or consent of any governmental body is required
for the making of the Advances contemplated hereby, or (B) an opinion of counsel
of each of the Borrower and the Collateral Manager that no such authorization,
approval or consent of any governmental body is required for the making of the
Advances contemplated hereby except as have been given.

 

(g)          The Facility Agent and the Lenders shall have received a Retention
of Net Economic Interest Letter including with any changes determined to be
necessary or prudent by the Lenders or the Facility Agent to comply with
then-existing risk retention requirements; provided that if the Facility Agent,
Lenders and Retention Provider cannot agree on such changes, the Borrower may
withdraw its request for an Increased Commitment.

 

(h)          The Borrower shall have paid all fees and expenses (including
reasonable fees and expenses of respective counsel to the Agents and the
Lenders) in connection with the Increased Commitment.

 

(i)          The Facility Agent and the Lenders shall have received a
certificate of a Responsible Officer of the Borrower, dated as of the Increased
Commitment Date, to the effect that, in the case of the Collateral Obligations
owned by the Borrower on the Increased Commitment Date:

 

(i)          each Collateral Quality Test is satisfied;

 

(ii)         each Coverage Test is satisfied;

 

(iii)        the Advance Rate Test is satisfied;

 

(iv)        no Commitment Shortfall exists; 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
Increased Commitment Date.

 

(j)          The Agents shall have received such other documents as they may
reasonably require in connection with the Increased Commitment.

 

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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 Original Closing Date, the Restatement Effective Date, each Determination
Date and the date each Advance is made, as follows:

 

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

 

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

 

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

 

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

 

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(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 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 Florida. 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. The Collateral Manager is a "business
development company" subject to the provisions of Sections 55 through 65 of the
Investment Company Act but exempt from Sections 1 through 53 thereof except to
the extent provided in Sections 59 through 65 of the Investment Company Act.
Neither the Borrower nor the pool of Collateral is required to register as an
"investment company" under the Investment Company Act.

 

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

 

(j)          ERISA. Neither the Borrower nor any member of its ERISA Group has,
or during the past five years had, any liability or obligation with respect to
any Plan or Multiemployer Plan.

 

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

 

(l)          Tax Status. The Borrower is (i) disregarded as an entity separate
from its owner and (ii) has not made an election under U.S. Treasury
Regulation Section 301.7701-3 and is not otherwise treated as an association
taxable as a corporation. The Borrower's direct or indirect owner for U.S.
Federal income tax purposes is and will remain a United States person that is,
for the avoidance of doubt, not a disregarded entity, as defined by Section
7701(a)(30) of the Code.

 

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

 

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

 

(o)          Plan Assets. The assets of the Borrower are not treated as "plan
assets" for purposes of Section 3(42) of ERISA and the Collateral is not deemed
to be "plan assets" for purposes of Section 3(42) of ERISA. The Borrower has not
taken, or omitted to take, any action which would result in any of the
Collateral being treated as "plan assets" for purposes of Section 3(42) of ERISA
or the occurrence of any Prohibited Transaction in connection with the
transactions contemplated hereunder.

 

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

 

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(q)          Collateral Obligations. Each loan or debt obligation sold and/or
contributed by the Collateral Manager to the Borrower on or before the Original
Closing Date, as of the Restatement Effective Date and as of each Purchase Date
(as defined in the Master Transfer Agreement) complies with the criteria set
forth in the definition of "Collateral Obligation".

 

(r)          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;

 

(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 or "deposit accounts" under Section 9-102(a)(29) of
the UCC;

 

(v)         this Agreement creates a valid, continuing and, upon Delivery of
Collateral and execution of the Account Control Agreement, perfected security
interest (as defined in Section 1-201(37) of the UCC) in the Collateral in favor
of the Collateral Agent, for the benefit and security of the Secured Parties,
which security interest is prior to all other liens, 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;

 

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(viii)      with respect to Collateral that constitutes Accounts or General
Intangibles, the Borrower has caused or will have caused, on or prior to the
Original 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; and

 

(ix)         each loan owned by the Borrower on the Original Closing Date and
each loan acquired after the Original Closing Date, in each case as of the date
of the acquisition by the Borrower thereof, complies with the criteria set forth
in the definition of "Collateral Obligation."

 

(s)          Retention Requirements. As of the Restatement Effective 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 Retention Interest in accordance with
paragraph (d) of Article 405(1) of the CRR and Article 51(d) of the AIFMD Level
2 Regulation, (ii) has not changed and will not change the manner in which it
retains the Retained Interest, except to the extent permitted under the
Retention Requirements 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 Retention Interest,
except to the extent permitted under the Retention Requirements.

 

(t)          Financial Information. Since the Original Closing Date and as of
the Restatement Effective Date, (a) there has been no change that has had a
Material Adverse Effect and (b) the Borrower has not incurred any Indebtedness
or Contingent Obligation except pursuant to the Facility Documents.

 

(u)          Litigation. There is no action, suit or proceeding pending against,
threatened against or adversely affecting, (i) the Borrower, (ii) the Facility
Documents or any of the transactions contemplated by the Facility Documents or
(iii) any of the Borrower's assets, before any court, arbitrator or any
governmental body, agency or official which has had or could reasonably be
expected to have a Material Adverse Effect.

 

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

 

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

 

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Section 4.02         Representations and Warranties of the Collateral Agent.

 

Each of the Collateral Agent and Custodian represents and warrants as follows:

 

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

 

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

 

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

 

(d)          No Violation. The execution and delivery of this Agreement, the
performance of the transactions contemplated hereby and the fulfillment of the
terms hereof will not conflict with or violate, in any material respect, any
Applicable Law governing the banking or trust powers of the Collateral Agent.

 

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

 

(f)          Validity, Etc. This Agreement constitutes the legal, valid and
binding obligation of the Collateral Agent and Custodian, enforceable against
the Collateral Agent and Custodian in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally or general principles of equity, regardless of whether considered in a
proceeding in equity or at law.

 

(g)          Non-Affiliated. Neither the Collateral Agent nor Custodian is
affiliated, as that term is defined in Rule 405 under the Securities Act, with
the Borrower or with any Person involved in the organization or operation of the
Borrower.

 

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Article V

COVENANTS

 

Section 5.01         Affirmative Covenants of the Borrower.

 

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

 

(a)          Compliance with Agreements, Laws, Etc. It shall (i) duly observe,
comply with and conform to all Applicable Laws, (ii) preserve and keep in full
force and effect its legal existence, (iii) preserve and keep in full force and
effect its rights, privileges, qualifications and franchises, except where the
failure to do so could not reasonably be expected to result in a Material
Adverse Effect, (iv) comply in all respects with the terms and conditions
applicable to it of each Facility Document, the Borrower LLC Agreement and each
Related Document to which it is a party and (v) obtain, maintain and keep in
full force and effect all Governmental Authorizations, Private 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.

 

(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 not restricted by Section 5.02(v) or as required
under any Related Documents or amendments to Related Documents that govern
Defaulted Loans and (ii) enforcement actions taken or work-outs with respect to
any Defaulted Loan in accordance with the provisions hereof, and (C) actions by
the Collateral Manager under the Collateral Management Agreement and in
conformity with this Agreement.

 

(i)          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
Collateral 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 Collateral Management
Agreement by such Persons. Notwithstanding any such arrangement, the Borrower
shall remain primarily liable with respect to the Borrower's obligations under
any Facility Document to which it is a party. In the event of such contract, the
performance of any of Borrower's actions and obligations by such Persons shall
be deemed to be performance of such actions and obligations by the Borrower. The
Borrower will punctually perform, and use its best efforts to cause the
Collateral Manager and such other Person to perform in all material respects,
all of their obligations and agreements contained in the Collateral Management
Agreement, this Agreement or any such other agreement.

 

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(c)          Further Assurances. It shall promptly upon the 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 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 3.02 on the
Restatement Effective 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)          within 120 days after the end of each fiscal year of the Transferor
(or such other Person with whom the Borrower is consolidated) (on a consolidated
basis) (beginning with the year ended December 31, 2012), from a firm of
independent certified public accountants of nationally recognized standing,
audited financial statements of the Transferor (or such other Person with whom
the Borrower is consolidated) (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 2012 in comparative form the figures for the
previous fiscal year;

 

(ii)         within 60 days after the end of each of the first three fiscal
quarters of each fiscal year of the Transferor (or such other Person with whom
the Borrower is consolidated) (on a consolidated basis) (beginning with the
quarter ended December 31, 2012), unaudited financial statements of the
Transferor (or such other Person with whom the Borrower is consolidated) (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 December 31, 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 Transferor (or such other Person
with whom the Borrower is consolidated);

 

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(iii)        simultaneously with the delivery of each set of annual financial
statements referred to in clause (i) above, (x) a certificate of the Transferor
(or such other Person with whom the Borrower is consolidated) certifying that
such financial statements fairly present the financial condition and the results
of operations of the Transferor (or such other Person with whom the Borrower is
consolidated) on the dates and periods indicated in such financial statements
and (y) a certificate of the Borrower and the Collateral Manager certifying 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 Collateral
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 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 404 of the CRR or AIFMD, in each such case, if reasonably
available to the Borrower; and, on each Monthly Report Date, a confirmation from
the Collateral Agent whether or not it has received during the Collection Period
confirmation (which may be by way of email) from the Retention Provider of its
continued compliance with the covenants set out at Section 2(a) and (b) of the
Retention of Net Economic Interest Letter as the Lenders shall require in order
to comply with their respective obligations under Article 404 of the CRR or
AIFMD;

 

(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

 

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(vii)       promptly after the receipt thereof, a copy of any financial
statements with respect to the Obligor under any Collateral Obligation received
by the Borrower pursuant to the Related Documents.

 

(e)          Access to Records and Documents. It shall cause the Collateral
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 Collateral Manager's books, records
and accounts relating to the Collateral and the Borrower's business, financial
condition, operations, assets and the Collateral Manager's and the Borrower's
performance under the Facility Documents and the Related Documents and to
discuss the foregoing with the Collateral Manager's officers, partners,
employees and accountants, and (ii) all of the Related Documents available to
the Collateral Manager; provided that neither the Borrower nor the Collateral
Manager shall be required to disclose any information which it is required by
law or contract to keep confidential unless a confidentiality agreement is
otherwise entered into and provided, further, that except if (i) an Event of
Default has occurred and is continuing or (ii) any person involved in the
management or administration of the Collateral Manager, the Borrower or the
Collateral Obligations is alleged to have engaged in fraud or illegal activity
by a governmental or self-regulatory authority or in a civil complaint
materially related to the performance by such person of investment advisory
services comparable to those contemplated to be provided by the Collateral
Manager in this Agreement and the other Facility Documents, each Person entitled
to so visit and inspect the Collateral Manager's records under this clause (e)
may exercise its rights under this clause (e) no more than twice in any
consecutive twelve month period and only one such visit per annum shall be at
the Borrower's expense;

 

(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);

 

(iv)        with respect to the initial Borrowing made on the Original 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
Original Closing Date to and including the Determination Date relating to the
initial Payment Date following the Original Closing Date and to fund
distributions to the Equity Owner;

 

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(v)         [reserved];

 

(vi)        to fund disbursements to any Equity Owner on any day during the
Reinvestment Period occurring after the BDC Election Date provided that the
Borrower requests that any such Advance be deposited in the Principal Collection
Subaccount and complies with the provisions of Section 9.01(e) of this Agreement
in connection with any such disbursement thereof.

 

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 December 31st in each
calendar year, commencing in 2013, the Borrower shall furnish to the Agents, the
Lenders and DBRS an opinion of counsel, addressed to the Agents, the Lenders 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 December 31st in each calendar
year, commencing in 2013, the Borrower shall pay for the ongoing monitoring of
the rating of the Facility from DBRS. Promptly after a Responsible Officer of
the Borrower has actual knowledge thereof, the Borrower shall promptly notify
the Agents and the Collateral 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. Since the Original Closing Date, the Borrower
has not and 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 entering into and performing its obligations under the Facility Documents,
any applicable Related Documents and any other agreements contemplated by this
Agreement and any business incidental or ancillary thereto.

 

(j)          Tax Matters. The Borrower shall (and each Lender hereby agrees to)
treat the Facility and the Notes as debt for U.S. Federal income tax purposes
and will take no contrary position unless otherwise required by appropriate
taxing authorities. The Borrower shall at all times maintain its status as an
entity disregarded as an entity separate from its owner for U.S. Federal income
tax purposes. The Borrower shall at all times ensure that for U.S. Federal
income tax purposes its direct or indirect owner is and will remain a United
States person that is, for the avoidance of doubt, not a disregarded entity, as
defined by Section 7701(a)(30) of the Code and, if such owner is an indirect
owner, that each intermediate owner of the Borrower is at all times also a
disregarded entity for U.S. Federal income tax purposes. Notwithstanding any
contrary agreement or understanding, the Collateral Manager, the Borrower, the
Facility Agent, the Collateral Agent and the Lenders (and each of their
respective employees, representatives or other agents) may disclose to any and
all Persons, without limitation of any kind, the tax treatment and tax structure
of the transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to them relating to
such tax treatment and tax structure. The foregoing provision shall apply from
the beginning of discussions between the parties. For this purpose, the tax
treatment of a transaction is the purported or claimed tax treatment of the
transaction under applicable U.S. Federal, state or local law, and the tax
structure of a transaction is any fact that may be relevant to understanding the
purported or claimed tax treatment of the transaction under applicable
U.S. Federal, state or local law.

 

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(k)          Provision of Information. With respect to each Collateral
Obligation, the Borrower will provide to each Rating Agency, each Agent or any
Lender all information reasonably requested by such Rating Agency, such Agent or
such Lender that is in its possession in its capacity as a lender under such
Collateral Obligation or can be obtained by it in such capacity without
unreasonable expense provided that neither the Borrower nor the Collateral
Manager will be required to disclose any information which it is required by law
or contract to keep confidential.

 

(l)          Retention Requirements. 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 Retention
Interest in accordance with paragraph (d) of Article 405(1) of the CRR and
Article 51(d) of the AIFMD Level 2 Regulation, (ii) has not changed and will not
change the manner in which it retains the Retention Interest, except to the
extent permitted under the Retention Requirements 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 Retention Interest, except to the extent permitted under the Retention
Requirements.

 

(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.

 

(o)          Excess Concentration Loans. Upon any change in the Principal
Balance of any Excess Concentration Loan, including, without limitation, as a
result of any purchase or sale of an Excess Concentration Loan, the Borrower
shall provide the Collateral Agent and the Facility Agent with an updated list
of each Excess Concentration Loan and the Principal Balance thereof.

 

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Section 5.02         Negative Covenants of the Borrower.

 

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

 

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

 

(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 or 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 (other
than the Collateral Agent Fee Letter), in each case, without the consent of the
Facility Agent. In the event any action is taken in connection with the
foregoing, it will promptly notify DBRS of such action.

 

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

 

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

 

(f)          Margin Requirements. It shall not (i) extend credit to others for
the purpose of buying or carrying any Margin Stock in such a manner as to
violate Regulation T or Regulation U or (ii) use all or any part of the proceeds
of any Advance, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that violates any provision of the
Regulations of the Board of Governors, including, to the extent applicable,
Regulation U and Regulation X, or for any purpose that would cause any of the
Lenders to be in violation of Regulation T or Regulation U.

 

(g)          Changes to Filing Information. It shall not change its name or its
jurisdiction of organization from that referred to in Section 4.01(a), unless it
gives thirty days' prior written notice to the Agents and takes all actions that
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.

 

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(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 Loans, Credit Risk
Loans 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.

 

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

 

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

 

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

 

(l)          Indebtedness; Guarantees; Securities; Other Assets. It shall not
incur, assume, suffer to exist or guarantee any indebtedness or other
liabilities, or issue any securities (other than its Equity), whether debt or
equity, in each case other than (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 Collateral 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)          Collateral Management Agreement. It shall not amend the Collateral
Management Agreement except pursuant to the terms thereof and Sections 5.02(c)
and 7.07 of this Agreement.

 

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(o)          Priority of Payments. Except for the payment of transaction
expenses payable in connection with the Original Closing Date and the
Restatement Effective Date as contemplated in Section 3.01(j) and Section
3.02(r), respectively, the funding of the Closing Expense Account and
distributions made to the Equity Owner on the Original Closing Date, 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 or as otherwise expressly permitted by this Agreement.

 

(p)          Subsidiaries. It shall not have or permit the formation of any
subsidiaries without (i) the prior written consent of the Facility Agent not to
be unreasonably withheld, delayed or conditioned and (ii) satisfaction of the
then-current general criteria of DBRS for bankruptcy remote entities which
includes, in its Constituent Documents, provisions analogous to the Special
Purpose Provisions (as defined in the Borrower LLC Agreement).

 

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

 

(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, officer,
manager, owner, agent, trustee, employee, partner, member, attorney or counsel
of the Borrower, the Collateral Manager or any of their Affiliates; (ii) a
creditor, customer, supplier of (other than as a supplier of registered agent or
registered offices services) of Borrower or any of its Affiliates (other than
his or her services as an independent manager, independent director or special
member of the Borrower or other Affiliates that are structured to be "bankruptcy
remote"), or other Person who derives any of its purchases or revenues from its
activities with, the Borrower, the Collateral 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".

 

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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,

 

(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.

 

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The Borrower hereby confirms that, since the Original Closing Date and as of the
Restatement Effective Date, each independent manager or independent director of
the Borrower (initially, Jennifer A. Schwartz and Ricardo Beausoleil) 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, other than any Specified Change resulting from an amendment that the
Borrower voted against or withheld its consent (a "Related Document
Modification"); provided that during the Reinvestment Period the consent of the
Facility Agent shall not be required if, after giving effect to such Related
Document Modification, (w) the relevant Collateral Obligation would be eligible
to be acquired by the Borrower hereunder, (x) a DBRS Rating is obtained, or
updated, for such Collateral Obligation, (y) 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) and (z)
no Default or Event of Default shall have occurred and be continuing; provided
further that if the Borrower requests the consent of the Facility Agent in
connection with a Related Document Modification and the Borrower does not
receive a response (either consenting or declining to consent) from the Facility
Agent within 10 Business Days of its receipt of such request, then the Facility
Agent shall be deemed to have consented to the relevant action.

 

(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 and (C) any
Equity Securities.

 

(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, 2.06 and 9.01 and in Article X.

 

(x)          Hedge Agreements. The Borrower shall not enter into any hedge
agreement without (i) the prior written consent of the Facility Agent and (ii)
obtaining a Rating Confirmation.

 

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

 

Section 5.03         Certain Undertakings Relating to Separateness.

 

(a)          Without limiting any, and subject to all, other covenants of the
Borrower contained in this Agreement, the Borrower shall conduct its business
and operations separate and apart from that of any other Person (including the
Collateral Manager and any Equity Owners 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 (without limiting the foregoing, it is acknowledged
that for accounting purposes, the Borrower may be consolidated with another
Person as required by GAAP and included in such Person's consolidated financial
statements).

 

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

 

(3)         The Borrower shall conduct its own business in its own name and, for
all purposes, shall not operate, or purport to operate, collectively as a single
or consolidated business entity with respect to any Person (except as may be
required for U.S. federal income tax purposes and except for accounting purposes
and Investment Company Act purposes, the Borrower may be consolidated with
another Person as required by GAAP and included in such Person's consolidated
financial statements).

 

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

 

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

 

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

 

(7)         Except for income tax and consolidated accounting 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.

 

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

 

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

 

(12)        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 Collateral 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 Collateral 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 issued by
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 Original Closing Date together with any amendments or modifications thereto
as permitted thereunder.

 

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

 

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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.

 

(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,
48.2625, 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) 48.2625
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) 77.4104 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 77.4104.

 

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Article VI

EVENTS OF DEFAULT

 

Section 6.01         Events of Default.

 

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

 

(a)          a default in the payment, when due and payable, of (i) any interest
on the Advances or any Commitment Fee in respect of the Facility and such
default continues for three Business Days or (ii) any principal of any Advance
on the Final Maturity Date; provided that, in the case of a failure to pay due
to an administrative error or omission by the Collateral Agent, such failure
continues for three Business Days after a Responsible Officer of the Collateral
Agent or Collateral Manager 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; provided that, in the case
of a failure to disburse due to an administrative error or omission by the
Collateral Agent, such failure continues for three Business Days after a
Responsible Officer of the Collateral Agent or Collateral Manager receives
written notice or has actual knowledge of such administrative error or omission;
or

 

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

 

(d)          except as otherwise provided in this Section 6.01, a default in a
material respect in the performance, or breach in a material respect, of any
other covenant or other agreement of the Borrower or the Collateral 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, Coverage Test or the Advance
Rate Test is not an Event of Default), or the failure of any representation or
warranty of the Borrower or the Collateral Manager made in any Facility Document
to which it is a party or in any certificate or other writing delivered by it
pursuant thereto or in connection therewith to be correct in each case in all
material respects when the same shall have been made (other than any such
defaults, breaches or failures that individually or collectively could not
reasonably be expected to have a Material Adverse Effect, and the continuation
of such default, breach or failure for a period of thirty days after the earlier
of (x) written notice thereof to the Borrower or the Collateral Manager, as
applicable (which may be by e-mail) by either Agent or the Collateral 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 by any Responsible Officer of the Borrower or the
Collateral Manager, as applicable; or

 

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(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 EOD OC Ratio is less than 120% (an "EOD OC Ratio Failure") for
more than three 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 $1,000,000 against the Borrower
(exclusive of judgment amounts fully covered by insurance), and the Borrower
shall not have either (x) discharged or provided for the discharge of any such
judgment, decree or order in accordance with its terms or (y) perfected a timely
appeal of such judgment, decree or order and caused the execution of same to be
stayed during the pendency of the appeal, in each case, within 15 days from the
date of entry thereof, or (2) the Borrower shall have made payments of amounts
in excess of $1,000,000 in the settlement of any litigation, claim or dispute
(excluding payments made from insurance proceeds or if funded solely with new
contributions of cash equity or amounts that are available to be disbursed to
the Borrower 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) such that reputable counsel of national standing
could no longer render a substantive non-consolidation opinion with respect
thereto; or

 

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

 

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(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 Collateral Manager,
(2) the Borrower or the Collateral Manager shall, directly or indirectly,
contest in any manner the effectiveness, validity, binding nature or
enforceability of any Facility Document or any Lien 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, (2) the PBGC shall file
notice of a Lien pursuant to Section 4068 of ERISA with regard to any of the
assets of the Borrower and such Lien shall not have been released within five
Business Days, unless in each case a reserve has been established therefor in
accordance with GAAP and such action is being diligently contested in good faith
by appropriate proceedings (except to the extent that the amount secured by such
Lien exceeds $500,000), or (3) the occurrence of an ERISA Event; or

 

(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 the Borrower or any subsidiary of the Borrower being
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 by it, if any, of investment advisory services comparable to those
contemplated to be provided by the Collateral Manager in connection with this
Agreement and the other Facility Documents; or

 

(o)          (1) the occurrence of one or more acts (including any failure(s) to
act) by the Collateral Manager or any of its executive officers that constitutes
fraud (as determined in an adjudication by a court of competent jurisdiction) in
the performance of its, his or her 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 Collateral Manager under
this Agreement and any other Facility Document; or (2) the Collateral Manager,
or any executive officer of the Collateral Manager is indicted for a criminal
felony offense materially related to the performance of its, his or her
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 Collateral 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 any Investment Adviser Affiliate or any executive officer thereof or
any employee thereof who acts as an executive officer of the Collateral Manager
that constitutes fraud (as determined in an adjudication by a court of competent
jurisdiction) in the performance of investment advisory services comparable to
those contemplated to be provided by the Collateral Manager under this Agreement
and the other Facility Documents and such event would reasonably be expected to
have a Material Adverse Effect; or (4) any Investment Adviser Affiliate or any
executive officer thereof is indicted for a criminal felony offense materially
related to the performance of investment advisory services comparable to those
contemplated to be provided by the Collateral Manager in this Agreement and the
other Facility Documents and such event would reasonably be expected to have a
Material Adverse Effect; or

 

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(p)          None of the Transferor, an Approved Affiliate or any successor
Collateral Manager appointed in accordance with the provisions of the Collateral
Management Agreement is the Collateral Manager.

 

Upon a Responsible Officer thereof obtaining written notice or actual knowledge
of the occurrence of an Event of Default, each of (i) the Borrower, (ii) the
Collateral Agent and (iii) the Collateral 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 a Responsible Officer thereof obtaining actual
knowledge of a failure to pay or a failure to disburse due to an administrative
error or omission, each of the Collateral Agent and the Collateral Manager shall
notify the other party within one Business Day of obtaining such actual
knowledge.

 

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 Collateral Agent and 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, and any such amounts payable shall be paid in accordance with Section
9.01(c); 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.

 

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"):

 

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(i)          all Collateral Obligations, Equity Securities and Eligible
Investments, both now and hereafter owned, including all collections and other
proceeds thereon or with respect thereto;

 

(ii)         each Covered Account and all money, 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, Equity Securities and Eligible Investments which the
Borrower is entitled to receive, including all Collections;

 

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

 

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

 

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

 

For the avoidance of doubt, the Excluded Loan shall not be a part of the
Collateral granted to the Collateral Agent pursuant to this Section 7.01(a).

 

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(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.

 

(a)          Upon deposit into the Payment Account of all required amounts then
required to be deposited to effect a Payment in Full in accordance with this
Agreement and termination of all Commitments in accordance with this Agreement,
and upon receipt of a certificate of a Responsible Officer of the Borrower or of
the Collateral Manager on behalf of the Borrower as provided in Section 8.07(e)
and written request therefor, the Collateral Agent, on behalf of the Secured
Parties, shall, upon execution of the Payoff Letter, terminate and release its
Lien on the Collateral and transfer, assign and set-over to the Borrower,
without recourse, representation or warranty, all the right, title and interest
of the Collateral Agent, for the benefit of the Secured Parties in, to and under
the related Collateral and all future monies due or to become due with respect
thereto, any Related Property and all Proceeds of such Collateral, and
recoveries relating thereto, all rights to security for any such Collateral, and
all Proceeds and products of the foregoing. In addition, the Collateral Agent,
at the expense of the Borrower, will (i) execute such instruments of release
with respect to the Collateral in recordable form if necessary, in favor of the
Borrower or its designees as the Borrower or the Collateral Manager may
reasonably request, (ii) deliver to the Borrower or its designees any portion of
the Collateral (including the applicable Related Documents) in its possession as
identified to it by the Borrower or by the Collateral Manager and (iii)
otherwise take such actions as requested by the Borrower or by the Collateral
Manager in writing as are necessary and appropriate to release the Lien of the
Collateral Agent for the benefit of the Secured Parties in the Collateral and
transfer the same to the Borrower or its designees.

 

(b)           Except as otherwise provided in Section 7.02(a) in connection with
a Payment in Full and the termination of the Commitments, upon the sale,
substitution or disposition of any Collateral by the Borrower or by the
Collateral Manager on behalf of the Borrower in compliance with the terms and
conditions of this Agreement (including Article 10 and the delivery of the
certification required by Section 10.01(a)), on the date of any such sale,
substitution or other disposition upon deposit into the Collection Account of
all required amounts then required to be deposited with respect thereto under
this Agreement, the Collateral Agent, on behalf of the Secured Parties, shall
automatically and without further action be deemed to and hereby does terminate
and release its Lien on the related Collateral and, at the expense and the
written direction of the Borrower, transfer, assign and set-over to the
Borrower, without recourse, representation or warranty, all the right, title and
interest of the Collateral Agent, for the benefit of the Secured Parties in, to
and under the related Collateral and all future monies due or to become due with
respect thereto, any Related Property and all Proceeds of such Collateral, and
recoveries relating thereto, all rights to security for any such Collateral, and
all Proceeds and products of the foregoing. In addition, the Collateral Agent,
at the expense of the Borrower, will (i) execute such instruments of release
with respect to the portion of the Collateral to be so sold, substituted or
transferred in recordable form if necessary, in favor of the Borrower or its
designee as the Borrower or the Collateral Manager may reasonably request,
(ii) deliver to the Borrower or its designee any portion of the Collateral
(including the applicable Related Documents) to be so sold, substituted or
transferred in its possession as identified to it by the Borrower or by the
Collateral Manager and (iii) otherwise take such actions as requested by the
Borrower or the Collateral Manager in writing as are necessary and appropriate
to release the Lien of the Collateral Agent for the benefit of the Secured
Parties on the portion of the Collateral to be so sold, substituted or
transferred.

 

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(c)          Any and all actions under this Section 7.02 in respect of the
Collateral shall be without any recourse to, or representation or warranty by,
the Collateral Agent or 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) if Advances have been accelerated following an
Event of Default, sell or otherwise dispose of the Collateral, all without
judicial process or proceedings, unless the Borrower (x) within five Business
Days of such acceleration gives written notice to the Agents that it intends to
make a Payment in Full and (y) makes a Payment in Full within five Business Days
of giving such notice; provided that, for the avoidance of doubt, the Borrower
and any of its Affiliate may bid for the Collateral in any such sale; (iii) take
control of the Proceeds of any such Collateral; (iv) subject to the provisions
of the applicable Related Documents, exercise any consensual or voting rights in
respect of the Collateral; (v) release, make extensions, discharges, exchanges
or substitutions for, or surrender, all or any part of the Collateral;
(vi) enforce the Borrower's rights and remedies with respect to the Collateral;
(vii) institute and prosecute legal and equitable proceedings to enforce
collection of, or realize upon, any of the Collateral; (viii) require that the
Borrower 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 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 Collateral Agent and the Secured Parties agree that the Collateral Agent
will not, nor will any Secured Party direct the Collateral Agent to, deliver a
Notice of Exclusive Control (as such term is defined in the Account Control
Agreement) or instruction under the Account Control Agreement until the
occurrence of an Event of Default.

 

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 for the benefit of
the Secured Parties, but at the cost and expense of the Borrower and, except as
permitted by applicable law, without notice to the Borrower.

 

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

 

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.

 

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 within two Business Days of receipt 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.

 

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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 Collateral 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 Collateral 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 Collateral 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 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 Collateral Management
Agreement or the other documents referred to in paragraph (a) above, nor shall
any of the obligations contained in the Collateral 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 Secured Parties shall cease and
terminate and all the estate, right, title and interest of the Collateral Agent
in, to and under the Collateral 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
but the Collateral Agent will provide such instruments upon request of the
Borrower or the Collateral Manager on its behalf pursuant to Section 7.02(a).

 

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

 

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

 

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

 

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

 

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

 

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

 

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;

 

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(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.

 

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, the Borrower and the Collateral Manager 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 the Collateral Manager for convenience in administering the Covered Account
or the Collateral.

 

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Section 8.02         Collection Account.

 

(a)          In accordance with this Agreement and the Account Control
Agreement, the Collateral Agent, on or prior to the Original Closing Date, has
established at the Custodian a single, segregated securities account held in
trust and titled the "WhiteHorse Finance Warehouse, LLC Collection Account,
subject to the lien of the Collateral Agent", which was designated as the
"Collection Account", which has been and shall be maintained with the Custodian
in accordance with the Account Control Agreement and which has been and shall be
subject to the lien of the Collateral Agent. In addition, the Collateral Agent
has maintained within the Collection Account two segregated subaccounts, one of
which has been designated the "Interest Collection Subaccount" and one of which
has been designated the "Principal Collection 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 received by the Collateral Agent,
unless, as directed by the Collateral Manager, simultaneously 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 or required to be deposited into the Excess
Concentration Loan Account pursuant to Section 8.03(d)). 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 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. In the event the Collateral Agent receives any amounts or
collections in respect of the Excluded Loan, the Collateral Agent shall, upon
receiving a written direction of the Collateral Manager, which may be in the
form of standing instructions, remit such amounts or collections to an account
to be designated by the Collateral Manager.

 

(b)          [reserved].

 

(c)          At any time when reinvestment is permitted pursuant to Article X,
the Collateral Manager may by delivery of a certificate of a Responsible Officer
of the Collateral 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, 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 Collateral 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 Collateral Manager to meet the
Borrower's funding obligations in respect of Delayed Drawdown Collateral Loans
or Revolving Collateral Loans.

 

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(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 deposit into the Revolving Reserve Account or the
Excess Concentration Loan Account or for reinvestment by the Collateral 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.

 

(e)          In connection with any Mandatory Revolving Conversion Date, subject
to the automatic netting of amounts between any Revolving Lender that is also a
Term Lender pursuant to Section 2.01, the Collateral Agent shall, at the
direction of the Borrower, (i) withdraw funds on deposit in the Principal
Collection Subaccount representing the Borrower's repayment of the Required
Conversion Amount to the applicable Revolving Lenders and remit such funds as
directed by the applicable Revolving Lender; and (ii) disburse funds on deposit
in the Principal Collection Subaccount representing each Term Lender's
Percentage of the applicable Required Conversion Amount to and as directed by
the Borrower.

 

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 Original Closing
Date, has established at the Custodian a single, segregated securities account
held in trust and titled the "WhiteHorse Finance Warehouse, LLC Payment Account,
subject to the lien of the Collateral Agent", which has been designated as the
"Payment Account", which has been and shall be maintained by the Borrower with
the Custodian in accordance with the Account Control Agreement and which has
been and 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 Original
Closing Date, has established at the Custodian a single, segregated securities
account held in trust and titled the "WhiteHorse Finance Warehouse, LLC
Custodial Account, subject to the lien of the Collateral Agent", which has been
designated as the "Custodial Account", which has been and shall be maintained by
the Borrower with the Custodian in accordance with this Agreement and the
Account Control Agreement and which has been and 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 Borrower shall
have legal, equitable and beneficial interest in the Custodial Account in
accordance with this Agreement and the Priority of Payments.

 

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(c)          Lender Funding Account.

 

(i)          The Collateral Agent, on or prior to the Original Closing Date, has
established at the Custodian a single, segregated securities account held in
trust and titled the "WhiteHorse Finance Warehouse, LLC Lender Funding Account,
subject to the lien of the Collateral Agent", which shall be designated as the
"Lender Funding Account", which has been and shall be maintained by the Borrower
with the Custodian and which has been and 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 as directed by the
Facility Agent. 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.

 

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(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 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 the Collateral Agent 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 the BNY Mellon Cash Reserve, which is an
Eligible Investment of the type described in clause (ii) 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 Collateral 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.

 

(d)          Excess Concentration Loan Account.

 

(i)          The Collateral Agent, on or prior to the Original Closing Date, has
established at the Custodian a single, segregated securities account held in
trust and titled the "WhiteHorse Finance Warehouse, LLC Excess Concentration
Loan Account, subject to the lien of the Collateral Agent", which has been
designated as the "Excess Concentration Loan Account", which has been and shall
be maintained by the Borrower with the Custodian and which has been and shall be
subject to the lien of the Collateral Agent. The only permitted deposits to or
withdrawals from the Excess Concentration Loan Account shall be in accordance
with the provisions of this Agreement. The Borrower shall have legal, equitable
and beneficial interest in the Excess Concentration Loan Account in accordance
with this Agreement.

 

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(ii)         The Collateral Agent shall from time to time deposit into the
Excess Concentration Loan Account immediately upon notice from the Collateral
Manager to do so, that portion of the Excess Concentration Principal Proceeds
received by the Collateral Agent and held in the Principal Collection Subaccount
that are directed by the Collateral Manager to be deposited into the Excess
Concentration Loan Account. All Monies deposited from time to time in the Excess
Concentration Loan 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. If the Borrower receives any Excess Concentration Principal
Proceeds directly, the Borrower shall remit any such Excess Concentration
Principal Proceeds to the Collection Account within two (2) Business Days after
receipt thereof.

 

(iii)        The Collateral Agent shall transfer to the Principal Collection
Subaccount any Excess Concentration Principal Proceeds remaining on deposit in
the Excess Concentration Loan Account on the Determination Date following
deposit of such Excess Concentration Principal Proceeds to the extent that such
amounts have not been distributed pursuant to Section 9.01(d).

 

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 Original Closing Date, has established at
the Custodian a single, segregated securities account held in trust and titled
the "WhiteHorse Finance Warehouse, LLC Revolving Reserve Account, subject to the
lien of the Collateral Agent", which has been designated as the "Revolving
Reserve Account", which has been and shall be maintained by the Borrower with
the Custodian in accordance with the Account Control Agreement and which has
been and 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, within two Business Days following the
Commitment Termination Date, funds shall be withdrawn by the Collateral Agent at
the direction of the Collateral 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, within two Business Days after the last day of
the Reinvestment Period, equal to the aggregate unfunded commitments in respect
of all Revolving Collateral Loans and Delayed Drawdown Collateral Loans;
provided that, if funds in the Principal Collection Subaccount are not
sufficient under this clause (ii) then an Advance under this Facility shall be
made (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 or on the Commitment Termination Date, available Borrowings.

 

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Amounts on deposit in the Revolving Reserve Account will be invested in
overnight funds that are Eligible Investments selected by the Collateral 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 pursuant to Section 6.01(e) or (f) 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 Manager shall
promptly notify the Collateral Agent in writing of the amount thereof, the
Collateral Agent shall remit such excess to the Principal Collection Subaccount,
and such amounts will be treated as Principal Proceeds.

 

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

 

(a)          Prior to the occurrence of an Event of Default, unless otherwise
directed by the Collateral Manager, the Collateral Agent shall invest all funds
on deposit in the Collection Account and the Revolving Reserve Account in the
BNY Mellon Cash Reserve, which is an Eligible Investment of the type described
in clause (ii) of the definition of the term "Eligible Investments" maturing not
later than the earlier of (i) thirty days after the date of such investment
(unless putable at par to the issuer thereof) or (ii) the Business Day
immediately preceding the next Payment Date (or such shorter maturities
expressly provided herein). If, after the occurrence of an Event of Default, the
Facility Agent shall not have given investment directions to the Collateral
Agent for three consecutive days, the Collateral Agent shall invest and reinvest
such Monies as fully as practicable in the BNY Mellon Cash Reserve, which is an
Eligible Investment of the type described in clause (ii) of the definition of
the term "Eligible Investments" maturing not later than the earlier of
(i) thirty days after the date of such investment (unless putable at par to the
issuer thereof) or (ii) the Business Day immediately preceding the next Payment
Date (or such shorter maturities expressly provided herein). Should any such
specific Eligible Investment be unavailable, and in the absence of another
proper investment instruction, all such funds shall be held uninvested. Except
to the extent expressly provided otherwise herein, all interest and other income
from such investments shall be deposited in the Interest Collection Subaccount,
any gain realized from such investments shall be credited to the Principal
Collection Subaccount upon receipt, and any loss resulting from such investments
shall be charged to the Principal Collection Subaccount. The Collateral Agent
shall not in any way be held liable by reason of any insufficiency of such
accounts which results from any loss relating to any such investment, except
with respect to investments in obligations of the Collateral Agent or any
Affiliate thereof.

 

(b)          The Collateral Agent agrees to promptly give the Borrower any
notice a Responsible Officer of it receives relating to any Covered Account or
any funds on deposit in any Covered Account, or otherwise to the credit of a
Covered Account, including any notice that states any Covered Account or any
funds on deposit or otherwise credited to a Covered Account has 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.

 

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(c)          The Collateral Agent shall supply, in a timely fashion, to the
Borrower, DBRS and the Collateral Manager any information regularly maintained
by the Collateral Agent that the Borrower, DBRS or the Collateral 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 Collateral Manager to perform its obligations under the Collateral
Management Agreement or the Borrower's obligations hereunder that have been
delegated to the Collateral Manager. The Collateral Agent shall promptly forward
to the Collateral Manager copies of notices, requests for consent and other
writings received by it from the Obligor or guarantor of any Collateral
Obligation, the issuer of any Equity Security or from any Clearing Agency with
respect to any Eligible Investment (including, without limitation, requests to
vote, requests for consent with respect to amendments or waivers and notices of
prepayments and redemptions) as well as all periodic financial reports received
from any such Obligor, guarantor or issuer.

 

Section 8.06         Accountings.

 

(a)          Monthly. On each Monthly Report Date, the Borrower (or the
Collateral Agent on its behalf) shall compile and provide (or cause to be
compiled and provided) to DBRS, the Agents, the Collateral 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 was delivered in October 2012 and
the final Monthly Report shall be delivered on the Final Maturity Date. The
Monthly Report for a Monthly Report Period 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 Monthly
Report Period.

 

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

 

In addition, the Collateral 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 Monthly Report Period.

 

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Three Business Days prior to each Monthly Report Date, the Borrower (or the
Collateral Agent on its behalf) shall deliver to the Collateral Manager a draft
of the Monthly Report relating to such Monthly Report Date. Upon receipt of each
draft Monthly Report, the Collateral 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 Collateral Manager with respect to the Collateral.
In the event that any discrepancy exists, the Collateral Agent and the
Collateral Manager shall attempt to resolve the discrepancy. If such discrepancy
cannot be promptly resolved, the Collateral Manager shall within one Business
Day request that a firm of independent certified public accountants of
nationally recognized standing appointed by the Borrower review such draft
Monthly Report and the records of the Collateral Agent to determine the cause of
such discrepancy. If such review reveals an error in the Monthly Report or the
records of the Collateral Agent, the Monthly Report or the records of the
Collateral Agent 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 (or the Collateral Agent on
its behalf) 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
Collateral Manager, 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 as established
by the Calculation Agent pursuant to Section 2.04(b).

 

(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 Collateral Manager who shall use
all reasonable efforts to obtain such accounting by the applicable Payment Date.
To the extent the Collateral Manager is required to provide any information or
reports pursuant to this Section 8.06 as a result of the failure of the Borrower
(or the Collateral Agent on its behalf) to provide such information or reports,
the Collateral Manager shall be entitled to retain an independent certified
public accountant in connection therewith and the reasonable costs incurred by
the Collateral Manager for such independent certified public accountant shall be
paid by the Borrower.

 

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Section 8.07         Release of Collateral.

 

(a)          If no Event of Default has occurred and is continuing, the Borrower
or the Collateral 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 or substitution of Collateral certifying that the
sale or substitution of such Collateral is being made in accordance with
Section 10.01 and such sale complies with all applicable requirements of
Section 10.01, direct the Collateral Agent to release or cause to be released
such Collateral from the Lien of this Agreement and, upon receipt of such
certificate, the Collateral Agent shall promptly deliver any such Collateral, if
an instrument in physical form, duly endorsed to the Person 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 or replacement Collateral Obligation therefor as specified by the
Borrower or the Collateral Manager in such certificate; provided that the
Collateral Agent may deliver any Collateral which is a 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 Collateral Manager) (i) deliver any Collateral, and release or cause to be
released such Collateral 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 Collateral 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, the Collateral Agent shall notify the
Collateral Manager of such Offer or request. Unless the Advances have been
accelerated following an Event of Default, the Collateral 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 in accordance with the
terms of the Offer against receipt of payment or exchange therefor, or (y) the
Borrower or the Collateral Agent to agree to or otherwise act with respect to
such consent, waiver, amendment or modification.

 

(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 or substitution 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 Payment in Full has
occurred or will contemporaneously occur in connection with the release of the
Collateral from the Lien of this Agreement and that all other conditions
precedent to the release of the Collateral from the Lien of this Agreement have
been satisfied, and upon written request therefor, release any remaining
Collateral from the Lien of this Agreement in accordance with Section 7.02(a).

 

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

 

Section 8.08         [Reserved].

 

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 with respect to the Borrower or the Collateral as
DBRS may from time to time reasonably request; provided that the Borrower shall
not be required to deliver any information which it is required by law or
contract to keep confidential.

 

Section 8.10         [Reserved].

 

Section 8.11         [Reserved].

 

Section 8.12         Closing Expense Account.

 

In accordance with this Agreement and the Account Control Agreement, the
Collateral Agent, on or prior to the Original Closing Date, has established at
the Custodian a single, segregated securities account held in trust and titled
the "WhiteHorse Finance Warehouse, LLC Closing Expense Account, subject to the
lien of the Collateral Agent", which has been designated as the "Closing Expense
Account", which has been and shall be maintained by the Borrower with the
Custodian in accordance with the Account Control Agreement and which has been
and shall be subject to the lien of the Collateral Agent. The only permitted
withdrawals 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 Original Closing Date, the Borrower deposited the Closing Expense Account
Amount into the Closing Expense Account. On any Business Day from the Original
Closing Date to and including the Determination Date relating to the initial
Payment Date following the Original Closing Date, the Collateral Agent applied
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, Ashurst
LLP, Sidley Austin LLP, Chapman and Cutler LLP and DBRS that have been invoiced
for payment on the Original Closing Date in respect of Closing Date Expenses
were paid by the Borrower on the Original Closing Date. On the Determination
Date relating to the initial Payment Date following the Original Closing Date,
all funds remaining in the Closing Expense Account after payment of the Closing
Date Expenses on or prior to such Determination Date were deposited in the
Collection Account as Interest Proceeds.

 

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On the Restatement Effective Date, the Borrower shall deposit the Restatement
Date Expense Account Amount into the Closing Expense Account. On any Business
Day from the Restatement Effective Date to and including the Determination Date
relating to the Payment Date following the Restatement Effective Date, the
Collateral Agent shall apply funds from the Closing Expense Account, as directed
by the Borrower, to pay all Restatement Effective Date Expenses; provided that
the fees and expenses of Natixis, Ashurst LLP, Dechert LLP, Chapman and Cutler
LLP and DBRS that have been invoiced for payment on the Restatement Effective
Date in respect of Restatement Effective Date Expenses shall be paid by the
Borrower on the Restatement Effective Date. On the Determination Date relating
to the second Payment Date following the Restatement Effective Date, all funds
remaining in the Closing Expense Account after payment of the Restatement
Effective 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 Collateral 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.

 

Section 8.13         Collateral Reporting.

 

(a)          The Collateral Agent shall perform (or shall have performed in the
case of clause (i) below) the following functions:

 

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

 

(ii)         permit access to the information in the Collateral database to the
Collateral 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 Collateral Manager with such other information as may be
reasonably requested by the Collateral Manager and as is within the possession
of the Collateral Agent.

 

(b)          Not later than 3 Business Days prior to each Monthly Report Date or
the close of business on each Determination Date preceding a Payment Date with
respect to each Monthly Report or Payment Date Report required to be provided by
the Borrower pursuant to Sections 8.06(a) and 8.06(b)), as applicable, 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 Collateral Manager of information with
respect to the Collateral that is not contained in such Collateral database or
normally maintained by the Collateral Agent, each item required to be stated in
such Monthly Report or Payment Date Report.

 

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(c)          Upon notification by the Collateral Manager of a proposed purchase
of any Collateral Obligation pursuant to this Agreement (accompanied by such
information concerning the Collateral Obligation 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 (other than
clause (a) thereof) 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 Collateral Manager, and
provide the results of such calculations to the Collateral Manager so that the
Collateral Manager may determine whether such purchase is permitted by this
Agreement. The Collateral Agent shall deliver a draft of such calculation to the
Collateral Manager reasonably promptly but in no event later than two Business
Days after the later of (i) notification of such proposed purchase by the
Collateral 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 Collateral
Manager will timely advise the Collateral Agent) whether any item of Collateral
meets the definition of "Collateral Obligation", "Credit Risk Loan", "Equity
Security", "Defaulted Loan" or "Excess Concentration Loan".

 

(d)          Upon written notification by the Collateral 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 Collateral Manager so that the Collateral Manager may
determine whether such sale is permitted by this Agreement. The Collateral Agent
shall deliver a draft of such calculations to the Collateral Manager reasonably
promptly but in no event later than two Business Days after the later of (i)
notification of such proposed sale by the Collateral Manager and (ii) delivery
of all information to the Collateral Agent necessary to complete such
calculations.

 

(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 Collateral 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 Collateral
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 Collateral 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 Collateral 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.

 

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(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 Collateral 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"), as set forth in the Payment Date Report
prepared by the Borrower.

 

(i)          Unless an Enforcement Event has occurred and is continuing, 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:

 

(A)         (1) first, to pay taxes, registration and filing fees, if any, of
the Borrower; (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, the Custodian and the Securities
Intermediary; 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 Revolving Advances, Term Loan 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)         at the discretion of the Collateral Manager, to the payment of the
Senior Collateral Management Fee (excluding any waived Senior Collateral
Management Fee, at the Collateral Manager's discretion for such Payment Date, or
any Deferred Senior Collateral Management Fee);

 

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(C)         to the payment, on a pro rata basis, of accrued and unpaid interest
on the Revolving Advances, Term Loan Advances and Commitment Fees due to the
Lenders and amounts payable to the Lenders or any Affected Person under Section
2.10;

 

(D)         if the Coverage Tests are not satisfied as of the related
Determination Date, (1) to the repayment of principal on the Revolving Advances
and/or the Term Loan Advances (such repayment to be allocated among the
outstanding Revolving Advances and/or Term Loan Advances at the direction of the
Collateral Manager) or (2) solely at the discretion of the Collateral Manager,
if, but only if the outstanding principal amount of the Revolving Advances and
Term Loan 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);

 

(E)         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) and without regard to the Administrative Expense Cap;

 

(F)         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;

 

(G)         at the discretion of the Collateral Manager, to the payment of the
Subordinated Collateral Management Fee and the Deferred Senior Collateral
Management Fee (excluding any waived Subordinated Collateral Management Fee
and/or any waived Deferred Senior Collateral Management Fee, at the Collateral
Manager's discretion for such Payment Date);

 

(H)         during the Reinvestment Period and so long as no Event of Default
has occurred and is continuing, the remainder to be allocated at the discretion
of the Collateral Manager (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: (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
in accordance with Section 2.05(a) hereof any Revolving Advances and/or Term
Loan Advances (such repayment to be allocated among the outstanding Revolving
Advances and/or Term Loan Advances at the direction of the Collateral Manager)
and/or (3) for deposit into the Revolving Reserve Account up to an amount that
would result in the Portfolio Exposure Amount equaling zero, (4) for
distribution to the Borrower including for distributions with respect to its
Equity and/or (5) for payment of the Deferred Senior Collateral Management Fee
Interest (excluding any thereof waived at the Collateral Manager's discretion
for such Payment Date);

 

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(I)         so long as an Event of Default has occurred and is continuing and
the maturity of the Advances has not been accelerated, to the repayment of the
Revolving Advances and/or the Term Loan Advances (such repayment to be allocated
among the outstanding Revolving Advances and/or Term Loan Advances at the
direction of the Collateral Manager) until paid in full;

 

(J)         after the Reinvestment Period, at the discretion of the Collateral
Manager, to any one or more of the following payments: (1) to prepay in
accordance with Section 2.05(a) the Advances, (2) for deposit into the Revolving
Reserve Account up to an amount that would result in the Portfolio Exposure
Amount equaling zero, (3) for distribution to the Borrower including for
distributions with respect to its Equity and/or (4) for payment of the Deferred
Senior Collateral Management Fee Interest (excluding any thereof waived at the
Collateral Manager's discretion for such Payment Date);

 

(ii)         Unless an Enforcement Event has occurred and is continuing, on each
Payment Date, Principal Proceeds on deposit in the Principal Collection
Subaccount that are received 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 or transfer to the Excess Concentration Loan
Account by the Collateral 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:

 

(A)         to the payment of unpaid amounts under clauses (A) through (D) 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 Collateral
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 in accordance with
Section 2.05(a) hereof any Revolving Advances and/or Term Loan Advances (such
repayment to be allocated among the outstanding Revolving Advances and/or Term
Loan Advances at the direction of the Collateral Manager), 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)         for deposit into the Revolving Reserve Account up to an amount that
would result in the Portfolio Exposure Amount equaling zero;

 

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(E)         to the payment of amounts referred to in clauses (E), (F) and (G) of
clause (i) above, to the extent not paid in full thereunder, and to the payment
of the Deferred Senior Collateral Management Fee Interest excluding any waived
Deferred Senior Collateral Management Fee Interest, at the Collateral Manager's
discretion for such Payment Date; and

 

(F)         the remainder to the Borrower.

 

(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.

 

(c)          Notwithstanding the provisions of the foregoing Sections
9.01(a)(i), 9.01(a)(ii), 9.01(d) and 9.01(e), if declaration of acceleration of
the maturity of the Advances has occurred following an Event of Default and such
Event of Default is continuing and has not been cured or waived (an "Enforcement
Event"), on each date or dates fixed by the Collateral Agent at the written
direction of the Required Lenders, all Interest Proceeds, Principal Proceeds and
any other proceeds from the liquidation of the Collateral will be applied in the
following order of priority:

 

(A)         (1) first, to pay taxes, registration and filing fees, if any, of
the Borrower; (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 such Payment Date, shall not exceed the
Administrative Expense Cap for such Payment Date;

 

(B)         to the payment, on a pro rata basis, of accrued and unpaid interest
on the Revolving Advances, Term Loan Advances and Commitment Fees due to the
Lenders and amounts payable to the Lenders or any Affected Person under Section
2.10;

 

(C)         for deposit into the Revolving Reserve Account up to an amount that
would result in the Portfolio Exposure Amount equaling zero;

 

(D)         to the repayment of principal in respect of the Advances;

 

(E)         to the payment or application of amounts referred to in clauses
(A)(3) and (4) above, to the extent not paid in full pursuant to applications
under said clauses (A)(3) and (4);

 

(F)         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;

 

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(G)         to the payment of accrued and unpaid Senior Collateral Management
Fees, Subordinated Collateral Management Fees, Deferred Senior Collateral
Management Fees and Deferred Senior Collateral Management Fee Interest
(excluding any waived Senior Collateral Management Fee, waived Subordinated
Collateral Management Fee, any waived Deferred Senior Collateral Management Fee
or any waived Deferred Senior Collateral Management Fee Interest ) from and
including that date each such amount would have been payable according to this
Section 9.01 to but not including the date of payment;

 

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

 

(I)         with notice to the Facility Agent, to pay any obligations of the
Borrower or to establish any reserves determined by the Borrower to be necessary
or desirable; and

 

(J)         the remainder to the Borrower including for distributions with
respect to its Equity.

 

(d)          Notwithstanding any other provision in this Agreement but subject
to Section 9.01(c), the Collateral Agent shall at the direction of the
Collateral Manager on any day transfer Excess Concentration Principal Proceeds
to the Excess Concentration Loan Account and/or disburse amounts on deposit in
the Excess Concentration Loan Account to any Equity Owner on any day at the
written direction of the Borrower, together with a certification with respect to
any such disbursement signed by a Responsible Officer of the Borrower certifying
that, on a pro forma basis after giving effect to such distribution, (i) each
Collateral Quality Test is satisfied, or, if not satisfied on such day, is
maintained or improved, (ii) the Advance Rate Test is satisfied, (iii) each
Coverage Test is satisfied; (iv) no Commitment Shortfall exists; and (v) no
Default or Event of Default has occurred and is continuing, together with a
certificate to such effect from the Borrower and a report delivered by the
Collateral Agent demonstrating compliance with each requirement set forth in the
aforementioned clauses (i) through (iv) (which report may be based on
information provided to the Collateral Agent by the Borrower or the Collateral
Manager).

 

(e)          Notwithstanding any other provision in this Agreement but subject
to Section 9.01(c), the Collateral Agent shall disburse amounts on deposit in
the Principal Collection Subaccount to any Equity Owner on any day during the
Reinvestment Period occurring after the BDC Election Date at the written
direction of the Borrower, together with a certification signed by a Responsible
Officer of the Borrower certifying that, on a pro forma basis after giving
effect to such distribution, (i) each Collateral Quality Test is satisfied, or,
if not satisfied on such day, is maintained or improved, (ii) the Advance Rate
Test is satisfied, (iii) each Coverage Test is satisfied; (iv) no Commitment
Shortfall exists; (v) no Default or Event of Default has occurred and is
continuing and (vi) the MV Overcollateralization Ratio Test is satisfied,
together with a certificate to such effect from the Borrower and a report
delivered by the Collateral Agent demonstrating compliance with each requirement
set forth in the aforementioned clauses (i) through (iv) and (vi) (which report
may be based on information provided to the Collateral Agent by the Borrower or
the Collateral Manager).

 

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Article X

SALE AND SUBSTITUTION OF COLLATERAL OBLIGATIONS;
PURCHASE OF ADDITIONAL COLLATERAL OBLIGATIONS

 

Section 10.01          Sales and Substitutions of Collateral Obligations.

 

(a)          Sales and Substitutions. Subject to the satisfaction of the
conditions specified in Section 10.03 and provided that (A) no Default or Event
of Default has occurred and is continuing or would result upon giving effect
thereto (unless, in the case of a Default, (1) such Default will be cured upon
giving effect to such sale and the application of the proceeds thereof, (2) a
Responsible Officer of the Borrower or the Collateral Manager certifies to the
Facility Agent that it is in the process of curing such Default (unless it is a
Default that is an Incurable Default), (3) such sale or substitution is of a
Credit Risk Loan, Defaulted Loan or Equity Security or (4) the Facility Agent
consents to such sale or substitution), (B) on or prior to the trade date for
such sale, transfer, exchange, substitution or other disposition, the Collateral
Manager has certified to the Collateral Agent and the Facility Agent that each
of the conditions applicable to such sale, transfer, exchange, substitution or
other disposition has been satisfied (including without limitation those set
forth in clauses (i) through (viii) of this Section 10.01(a) that are applicable
to it), (C) during the Reinvestment Period, other than with respect to sales or
substitutions pursuant to clauses (i), (ii), (iii), (iv) and (vi) below, 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 such
Collateral Quality Test is not satisfied, such test is maintained or improved
after giving effect to such sale), and (D) except as provided in clause (v)
below, such sale is made for a purchase price at least equal to the purchase
price of such Collateral Obligations paid by the Borrower (after adjustment for
any borrowings or repayments and exclusive of accrued interest) or, in the case
of assets sold pursuant to clauses (i), (ii), (iii) and (iv) below, the Market
Value thereof, the Borrower (or, in each case described in this Section 10.01,
the Collateral Manager on the Borrower's behalf) may, but will not be required
to, direct the Collateral Agent to sell and the Collateral Agent shall sell or
substitute in the manner directed thereby any Collateral Obligation (or any
portion thereof) or other asset described below provided that such sale or
substitution also meets the requirements of clauses (i) through (viii) of this
Section 10.01(a) that are applicable to it:

 

(i)          Credit Risk Loans. The Borrower may direct the Collateral Agent in
writing to sell any Credit Risk Loans at any time during or after the
Reinvestment Period.

 

(ii)         Defaulted Loans. The Borrower may direct the Collateral Agent in
writing to sell any Defaulted Loan at any time during or after the Reinvestment
Period.

 

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(iii)        Equity Securities and Certain Other Property. The Borrower at any
time during or after the Reinvestment Period (A) may direct the Collateral Agent
in writing to sell any Equity Security (other than Margin Stock) and (B) shall
direct the Collateral Agent in writing to sell (x) any Margin Stock and (y) any
Equity Security or property (other than Cash, Eligible Investments or Collateral
Obligations), which, in the sole judgment of the Facility Agent by written
notice to the Borrower and the Collateral Manager, may expose the Facility to
any material claims or liabilities or otherwise could have a Material Adverse
Effect), in each case, regardless of price, within 30 days of receipt by the
Borrower of such Margin Stock or such notice from the Facility Agent, as
applicable, unless such sale is prohibited by Applicable Law, in which case such
Margin Stock, property or Equity Security, as applicable, shall be sold as soon
as such sale is permitted by Applicable Law.

 

(iv)        Excess Concentration Loans. The Borrower may direct the Collateral
Agent in writing to sell any Excess Concentration Loan at any time during or
after the Reinvestment Period and shall specify in writing to the Collateral
Agent and the Facility Agent the amount of proceeds of any such sale.

 

(v)         Discretionary Sales by the Borrower. The Borrower may direct the
Collateral Agent in writing to sell any Collateral Obligation at any time during
or after the Reinvestment Period provided that, the Collateral Manager may sell
a Collateral Obligation for a price below the amount specified in clause (D)
above if (1) after giving effect to such sale the Aggregate Principal Balance of
all Collateral Obligations (excluding Credit Risk Loans, Defaulted Loans and
Excess Concentration Loans) sold pursuant to this Section 10.01(a)(v) during the
calendar year is not greater than 15% during the Reinvestment Period (or after
the Reinvestment Period, is not greater than 10%) of the maximum Total
Capitalization at the beginning of the calendar year (which applicable
limitation shall accrue pro rata for each calendar year or any part thereof
during and after the Reinvestment Period, starting at 1/12 of the limitation
then in effect for the first month and increasing by 1/12 of the limitation for
each subsequent month of such calendar year or part thereof) and (2) the
Collateral Manager reasonably believes prior to any such sale during the
Reinvestment Period that it will be able to enter into binding commitments to
reinvest proceeds of such sale within the next 10 Business Days in one or more
additional Collateral Obligations; provided that, with respect to any such sale
during or after the Reinvestment Period, (a) on a pro forma basis, the MV
Modified Overcollateralization Ratio Test is satisfied and (b) the sales price
of such Collateral Obligation (exclusive of interest) is equal to or greater
than 85% of the outstanding principal amount of such Collateral Obligation that
has been sold; provided further that, notwithstanding anything herein to the
contrary, the Collateral Manager may also sell a Collateral Obligation for a
price below the amount specified in clause (D) above if an Equity Owner, at its
sole option, makes an equity contribution in Cash to the Borrower in an amount
equal to the difference between such sale price and the purchase price (after
adjustment for any borrowings and repayments and exclusive of accrued interest)
of such Collateral Obligation that has been sold and such equity contribution is
treated as Principal Proceeds.

 

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(vi)        Optional Repurchases or Substitutions by the Transferor Pursuant to
the Master Transfer Agreement. Subject to Section 10.03, the Transferor may
optionally repurchase or substitute Credit Risk Loans, Defaulted Loans and
Excess Concentration Loans pursuant to and in accordance with the Master
Transfer Agreement and, if the Transferor exercises such option, the Borrower
shall sell and transfer Credit Risk Loans, Defaulted Loans and Excess
Concentration Loans to the Transferor in connection therewith at any time during
or after the Reinvestment Period provided that, as certified to the Collateral
Agent and the Facility Agent by a Responsible Officer of the Borrower and the
Collateral Manager, (A) the Aggregate Principal Balance of all Credit Risk
Loans, Defaulted Loans and Excess Concentration Loans optionally repurchased or
substituted by the Transferor pursuant to the Master Transfer Agreement may not
exceed an amount equal to, as of any date of determination, 15% of the Net
Purchased Obligation Balance, (B) any such substituted loan meets the definition
of Collateral Obligation, (C) the outstanding aggregate principal balance of
such substituted loan(s) is greater than or equal to that of the replaced Credit
Risk Loan, Defaulted Loan or Excess Concentration Loan, (D) such optional
repurchase or substitution will not cause a Default or an Event of Default
(unless, in the case of a Default, (1) such Default will be cured upon giving
effect to such optional repurchase or substitution and the application of the
proceeds thereof, (2) a Responsible Officer of the Borrower or the Collateral
Manager certifies to the Facility Agent that it is in the process of curing such
Default (unless it is a Default that is an Incurable Default) or (3) the
Facility Agent consents to such optional repurchase or substitution), (E) each
Coverage Test and each Collateral Quality Test is maintained or improved after
giving effect to such repurchase or substitution (irrespective of whether such
Coverage Test or Collateral Quality Test is passing or not), (F) such
substituted loan either exceeds or maintains the lien priority of the replaced
Credit Risk Loan, Defaulted Loan or Excess Concentration Loan, (G) such
substituted loan will not fall under clauses (g), (i), (j), (k) or (l) of the
definition of Concentration Limitations herein, unless the replaced Credit Risk
Loan, Defaulted Loan or Excess Concentration Loan was among those categories and
(H) such substituted loan meets the requirements in Section 10.02(c) (the
limitations set forth in clauses (A) through (H) referred to herein as the
"Repurchase and Substitution Limits").

 

(vii)       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 Collateral Manager, to Persons who are not Affiliates of the
Borrower or the Collateral Manager, on an arm's length basis;

 

(viii)      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 Collateral Manager, to the Collateral 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, a Credit
Risk Loan or an Excess Concentration Loan, such sale shall be for an amount
equal to the Market Value (exclusive of clauses (e) and (f) of the definition
thereof) with respect to such Collateral Obligation and (D) the Collateral
Obligation is not a Defaulted Loan, Credit Risk Loan or Excess Concentration
Loan, the higher of (1) the Market Value thereof and (2) except with the prior
written consent of the Facility Agent, an amount no 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.

 

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(b)          Terms of Sales. All sales of Collateral Obligations and other
property of the Borrower under the provisions above in this Section 10.01
(excluding any substitution permitted pursuant to clause (vi) thereof) must be
exclusively for Cash provided that so long as no Default or Event of Default is
continuing or would result upon giving effect thereto and the applications
thereof (unless, in the case of a Default, (1) such Default will be cured upon
giving effect to such sale and the application of the proceeds thereof, (2) a
Responsible Officer of the Borrower or the Collateral Manager certifies to the
Facility Agent that it is in the process of curing such Default (unless it is a
Default that is an Incurable Default), (3) such sale or substitution is of a
Credit Risk Loan, Defaulted Loan or Equity Security or (4) the Facility Agent
consents to such sale or substitution) (i) 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,
and (ii) any sale or substitution of Collateral Obligations or other property of
the Borrower to or with the Equity Owner of the Borrower may be made in Cash, as
capital contributions or as substitution of assets, and in accordance with the
applicable provisions of the Facility Documents.

 

(c)          Sales in Connection with Payment in Full and Termination of the
Facility. Notwithstanding any other provision in the Facility Documents, the
Borrower or the Collateral Manager on behalf of the Borrower, may direct the
Collateral Agent in writing to sell, assign, transfer and release all or any
portion of the Collateral in connection with the Payment in Full of all
Obligations (other than any unasserted contingent obligations), termination of
the Commitments and release of the Lien of the Collateral Agent for the benefit
of the Secured Parties in the Collateral as provided in Section 7.02(a) of this
Agreement.

 

Section 10.02          Purchase of Additional Collateral Obligations.

 

On any date during the Reinvestment Period (or after the Reinvestment Period,
with the consent of the Required Lenders and satisfaction of the Rating
Confirmation), if no Default or Event of Default has occurred and is continuing
or would result therefrom (unless, in the case of a Default, (1) such Default
will be cured upon giving effect to such purchase of additional Collateral
Obligations, (2) a Responsible Officer of the Borrower or the Collateral Manager
certifies to the Facility Agent that it is in the process of curing such Default
(unless it is a Default that is an Incurable Default) or (3) the Facility Agent
consents to such purchase of additional Collateral Obligations), the Borrower,
or the Collateral 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 other than with respect to any Collateral Obligations which
the Borrower is permitted to purchase after the Reinvestment Period in
accordance with this Section 10.02. Any contemporaneous sale of a Collateral
Obligation and purchase of another Collateral Obligation in accordance with the
Facility Documents by the Borrower with the same counterparty may be settled by
netting the sales and purchase prices against each other as directed by the
Collateral Manager.

 

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(a)          Investment Criteria. No Collateral Obligation may be purchased
pursuant to this Section 10.02 unless such loan or debt obligation satisfies the
Eligibility Criteria as of the date the Borrower, or the Collateral 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 Collateral Manager, from the Collateral Manager or any of its
Affiliates only if (v) if the purchase is from the Transferor, 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) if such
purchase is for an amount greater than the original purchase price paid by the
Collateral Manager or such Affiliate (after adjustment for any borrowings or
repayments and exclusive of interest) with respect to such Collateral
Obligation, either (i) the prior written consent of the Facility Agent is
obtained or (ii) the Borrower or the Collateral Manager provides to the Facility
Agent an appraisal conducted no earlier than 90 days prior to such proposed
purchase from an Approved Appraisal Firm reflecting a value not lower than the
purchase price to be paid by the Borrower and (z) written notice thereof is
provided to DBRS.

 

Section 10.03          Conditions Applicable to All Purchase, Sale and
Substitution Transactions.

 

(a)          Delivery of Collateral. 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.

 

(b)          Acquisition and Disposition Standards. The Borrower shall not, nor
shall the Collateral Manager on behalf of the Borrower, acquire (whether by
purchase or substitution) or dispose of any Collateral Obligation unless each of
the following conditions is met: (i) the Collateral Obligation is acquired or
disposed of in accordance with the terms of this Agreement (ii) the Borrower
reasonably believes that such acquisition and disposition will not result in a
downgrade or withdrawal of any rating assigned by a Rating Agency and (iii) the
Collateral Manager shall certify in writing delivered to the Collateral Agent
and Facility Agent on the date of the relevant acquisition or disposition to the
satisfaction of the foregoing as a condition precedent to each such acquisition
or disposition. The requirements set forth in clauses (i), (ii) and (iii) of
this Section 10.03(b) are referred to as the "Acquisition and Disposition
Standards."

 

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Section 10.04          Additional Equity Contributions.

 

Subject to Section 10.03, any Equity Owner may, but shall have no obligation to,
at any time or from time to time contribute additional equity to the Borrower
for the purpose specified by such Equity Owner, including without limitation for
the purpose of curing any Default (but, for the avoidance of doubt, no such
contribution shall cure any Event of Default without the consent of the Required
Lenders), satisfying any Coverage Test or Collateral Quality Test, enabling the
acquisition or sale of any Collateral Obligation or satisfying any conditions
under Section 3.03. 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 specified in clauses (a), (b) and (e) of the definition of
Eligibility Criteria). Unless otherwise directed by the Borrower, with the prior
written consent of the Facility Agent and prior written notice to the Collateral
Agent, all Cash contributed to the Borrower shall be treated as Principal
Proceeds except to the extent that such Cash was used to pay expenses incurred
in connection with the occurrence of the Original Closing Date.

 

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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.

 

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.

 

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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 Collateral 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, the Lenders or the Collateral
Manager or any other Person or to inspect the property (including the books and
records) of the Borrower or the Collateral Manager; (iv) shall not be
responsible to any Secured Party or any other Person for the due execution,
legality, validity, enforceability, 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 facsimile, email, cable or telex, if acceptable to it) believed by
it to be genuine and believed by it to be signed or sent by the proper party or
parties. No Agent shall have any liability to the Borrower, the Collateral
Manager or any Lender or any other Person for the Borrower's, Collateral
Manager'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 or 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, the Borrower or the Collateral Manager to
provide, written instruction to exercise such discretion or grant such consent
from any such Lender, the Borrower or the Collateral Manager, 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 indemnified to its reasonable
satisfaction. No Agent 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 at its address in accordance with
Section 12.02. Any permissive grant of power to an Agent hereunder shall not be
construed to be a duty to act. 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.

 

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(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.

 

(d)          To the extent required by any applicable law (or pursuant to a
voluntary agreement entered into with the IRS or any other taxing authority),
the  Agents may withhold from any payment to any Lender an amount equivalent to
any applicable withholding tax (including any taxes imposed in respect of, or in
connection with, FATCA). If any payment has been made to any Lender by the
Agents without the applicable withholding tax being withheld from such payment
and the Agents have paid over the applicable withholding tax to the IRS or any
other tax authority, or the IRS or any other tax authority asserts a claim that
the Agents did not properly withhold tax from amounts paid to or for the account
of any Lender because the appropriate form was not delivered or was not properly
executed or because such Lender failed to notify the Agents of a change in
circumstance which rendered the exemption from, or reduction of, withholding tax
ineffective or for any other reason, such Lender shall indemnify the Agents
fully for all amounts paid, directly or indirectly, by the Agents as tax or
otherwise, including any penalties or interest and together with all expenses
(including legal expenses, allocated internal costs and out-of-pocket expenses)
incurred.  Each Lender hereby authorizes the Agents to set off and apply any and
all amounts at any time owing to such Lender under any Note, Facility Document,
or otherwise payable by the Agents to the Lender from any other source against
any amount due to the Agents under this paragraph (d).

 

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, claims, 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, claims, expenses or disbursements resulting from such Agent's gross
negligence, willful misconduct; and

 

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(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, claims, 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 being understood that the Collateral Agent shall be under no
obligation to exercise or to honor any of the rights or powers vested in it by
this Agreement at the request or direction of 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 or, with the prior
written consent of the Required Lenders, the Collateral Manager, 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 Collateral 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 fifteen-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 fifteen-day period (as applicable), shall appoint a
successor agent with written notice thereof and evidence of the acceptance of
such appointment by such successor Facility Agent to the Borrower, the
Collateral Agent and the Collateral Manager. If for any reason a successor agent
is not so appointed and does not accept such appointment during such thirty
period (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 or the Collateral Manager 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 after the resignation
of the Collateral Agent 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 Collateral 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 (other than any such duties and
obligations arising prior to the effective date of its retirement) 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 Collateral
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 Collateral 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. If acceptance by a successor collateral agent has
not have been effected within 60 days after the giving of such removal, the
Collateral Agent may petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent. The Collateral 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 (other than any such duties and obligations arising prior
to the effective date of its retirement) 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 Borrower 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 indirect,
special, exemplary, punitive or consequential damages of any kind whatsoever,
including but not limited to lost profits, whether or not foreseeable, even if
the Collateral Agent has been advised of the possibility thereof and regardless
of the form of action in which such damages are sought.

 

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

 

(d)          The Collateral Agent may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, note or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties.

 

(e)          The Collateral Agent shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, note or
other paper or document, but the Collateral Agent, in its discretion, may, and
upon the written direction of any Lender, shall make such further inquiry or
investigation into such facts or matters as it may see fit or as it shall be
directed.

 

(f)          Except as otherwise expressly set forth herein, nothing herein
shall be construed to impose an obligation on the part of the Collateral Agent
to recalculate, evaluate, verify or independently determine the accuracy of any
report, certificate or information received from the Borrower, any Lender, the
Facility Agent or the Collateral Manager.

 

(g)          Except as otherwise expressly set forth herein, the Collateral
Agent shall be under no obligation to monitor, supervise or perform the
functions of the Borrower, the Collateral Manager or the Facility Agent under
any Facility Document and shall be entitled to assume that the Borrower, the
Collateral Manager and the Facility Agent are properly performing their
functions and obligations thereunder and the Collateral Agent shall not be
responsible for any diminution in the value of or loss occasioned to the assets
subject thereto by reason of the act or omission by the Borrower, the Collateral
Manager and the Facility Agent in relation to their functions thereunder.

 

(h)          The Collateral Agent shall have no responsibility whatsoever to the
Borrower, any Lender, the Facility Agent or the Collateral Manager for any
deficiency which might arise because the Collateral Agent is subject to any tax
in respect of the Facility Documents, the security created thereby or any part
thereof or any income therefrom or any proceeds thereof.

 

(i)          The delivery of reports, certificates or other information required
to be provided hereunder to a Person other than a Responsible Officer of the
Collateral Agent shall not constitute actual or constructive notice or knowledge
of the contents thereof.

 

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(j)          No later than 11:00 a.m. on each Business Day, the Collateral Agent
shall deliver to the Collateral Manager via such means of communication as they
shall mutually agree a daily "cash availability report" which will detail all
cash receipts with respect to the Collateral Obligations received as of the
close of business of the prior Business Day, identifying which portion thereof
constitutes Interest Proceeds, which portion thereof constitutes Principal
Proceeds and any other amounts received not classified as either Interest
Proceeds or Principal Proceeds. No later than the close of business on the
Business Day the Collateral Manager receives such a daily cash availability
report, the Collateral Manager shall review the same and identify any
discrepancies that it becomes aware of between the cash receipts shown on the
Collateral Agent's daily cash availability report and the cash receipts relating
to the Collateral Obligations shown on the Collateral Manager's records.
Thereafter the Collateral Agent and the Collateral Manager will cooperate to
promptly resolve any discrepancies.

 

Section 11.07          Regarding the Collateral Agent and the Custodian.

 

The Collateral Agent and the Custodian shall each maintain all necessary or
appropriate records, operating procedures and systems with respect to their
respective duties under this Agreement and any other Facility Document and shall
provide with reasonable promptness such additional reports and information
(which information is reasonably available to any thereof as may be reasonably
requested from time to time by the Collateral Manager or the Borrower.

 

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
or the Fee Letter shall be effective unless (i) it is signed by the Borrower and
the Required Lenders (or the Facility Agent on behalf of the Required Lenders),
(ii) if it diminishes the rights or increases the obligations of the Collateral
Manager, it is consented to by the Collateral Manager, (iii) if it diminishes
the rights or increases the obligations of the Transferor with respect to any
Facility Documents, it is consented to by the Transferor and (iv) 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

 

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(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.

 

(c)          Notwithstanding anything to the contrary set forth herein, 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.

 

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:

 

If to the Facility Agent: Natixis, New York Branch   1251 Avenue of the Americas
  New York, New York 10020   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.   601 Travis Street, 16th Floor  
Houston, TX 77002

 

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  Attention: Corporate Trust- WhiteHorse Finance Warehouse, LLC- Kod Odimgbe  
Tel:  713-483-6464   Fax:  713-483-6004   Email:  kod.odimgbe@bnymellon.com    
If to the Borrower: WhiteHorse Finance Warehouse, LLC   1450 Brickell Avenue  
Miami, FL 33131   Attention: Mr. Richard Siegel   Tel:  (305) 379-2322  
Fax:  (305) 381-4180   Email: rsiegel@higcapital.com     With a copy to:        
WhiteHorse Finance, Inc.   600 Fifth Avenue, 19th Floor   New York, NY 10020  
Attention: Gerhard Lombard   Tel:  (212) 314-1053   Fax:  (212) 314-1016  
Email: glombard@whitehorsefinance.com     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

 

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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 such 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").

 

(c)          The Borrower agrees to indemnify each of the Secured Parties for
the full amount of Indemnified Taxes (including any Indemnified 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 Indemnified 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 (i) the obligation to pay such additional amounts would not have
arisen but for a failure by such Secured Party to comply with paragraphs (g) or
(h) below, except to the extent that the relevant Lender's assignor or
transferor (if any) was entitled at the time of assignment or transfer to
receive an increased amount under paragraph (c) with respect to such Indemnified
Taxes; provided that, any Indemnified Taxes resulting from any change in law (or
interpretation, administration or application of any law or treaty or any
published practice or published concession of any relevant taxing authority)
after the date such relevant Lender becomes a Lender shall be compensated
pursuant to paragraph (c) above or (ii) such amount is imposed under FATCA.

 

(e)          Promptly after the date of any payment of Taxes or Other Taxes, the
Borrower will furnish to 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).

 

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(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 in its sole
discretion exercised in good faith determines that it has received a refund of
such Taxes or Other Taxes, such Secured Party shall, to the extent that it can
do so without prejudice to the retention of the amount of such refund, reimburse
to the Borrower such amount of any refund received (net of out-of-pocket
expenses incurred) as such Secured Party shall determine in its reasonable
discretion to be attributable to the relevant Taxes or Other Taxes, provided
that in the event that such Secured Party is required to repay such refund to
the relevant taxing Authority, the Borrower agrees to return the refund to such
Secured Party. Notwithstanding anything to the contrary in this paragraph (f),
in no event will the Secured Party be required to pay any amount to an
indemnifying party pursuant to this paragraph (f) the payment of which would
place the Secured Party in a less favorable net after-tax position than
the Secured Party would have been in if the indemnification payments or
additional amounts giving rise to such refund had never been paid.

 

(g)          Each Secured Party (other than the Collateral Agent or the
Custodian) that is a United States 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 Original Closing Date or, in the case of a Secured Party that
becomes a party hereto after the Original Closing Date or 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, certifying that such Secured Party is a U.S. Person under the Code and on
the date of delivery thereof entitled to an exemption from United States backup
withholding tax or, after any change after the date it became a Lender under
this Agreement in (or in the interpretation, administration or application of)
any law or treaty or any published practice or published concession of any
relevant taxing authority, the greatest amount of such exemption as is then
available to be claimed by such Lender. Each Secured Party that is not a U.S.
Person under the Code (a "Non-U.S. Lender") shall deliver, no later than the
Original Closing Date or, in the case of a Secured Party that becomes a party
hereto after the Original Closing Date or pursuant to Section 12.06, the date
upon which such Secured Party becomes a party hereto, to each Agent and the
Borrower two properly completed and duly executed originals of either
U.S. Internal Revenue Service Form W-8BEN, W-8BEN-E, W-8ECI or W-8IMY or any
subsequent versions thereof or successors thereto or other applicable forms
prescribed by the IRS, in each case, claiming complete exemption from,
U.S. Federal withholding tax (other than any tax imposed under FATCA) with
respect to payments hereunder or, after any change after the date it became a
Lender under this Agreement in (or in the interpretation, administration or
application of) any law or treaty or any published practice or published
concession of any relevant taxing authority, the greatest amount of such
exemption as is then available to be claimed by such Lender. In addition, in the
case of a Non-U.S. Lender claiming exemption from U.S. Federal withholding tax
under Section 871(h) or 881(c) of the Code, such Non-U.S. Lender hereby
represents, and will provide a certification, that such Non-U.S. Lender is not a
bank described in Section 881(c)(3)(A) 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. Such forms shall be delivered by
each Non-U.S. Lender on or before the date it becomes a party to this Agreement.
In addition, each Non-U.S. Lender and U.S. Lender shall deliver such forms as
promptly as practicable after receipt of a written request therefor from an
Agent or the Borrower (but only if such Non-U.S. Lender is legally able to
deliver such forms). Each Lender agrees that when it is aware that a change in
circumstances has rendered any previous delivered documentation pursuant to this
paragraph (g) obsolete or inaccurate, it shall notify the Borrower and each
Agent in writing and promptly deliver to the Borrower and each Agent a properly
completed and executed documentation as may be required in order to confirm or
establish the entitlement to a continued exemption from or reduction in Tax, if
that Lender continues to be so entitled to such exemption or reduction.

 

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(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.

 

Upon the occurrence of any event giving rise to the Borrower's obligation to pay
additional amounts to a Lender pursuant to this Section 12.03(h), the Borrower
shall have the right to replace such Lender with one or more other assignees
meeting the requirements set forth in Section 12.06 hereof which will not result
in additional amounts being payable pursuant to this Section 12.03(h), provided
that (i) all fees and expenses incurred by such replaced Lender in connection
with such assignment shall be paid by the Borrower and (ii) the assignee(s)
shall acquire all of the Commitments and outstanding Advances of such replaced
Lender and, in connection therewith, shall pay to the replaced Lender in respect
thereof an amount equal to the principal of, and all accrued interest on, all
outstanding Advances of the replaced Lender and all related fees and expenses in
connection with the Facility Documents.

 

(i)          If a payment made to a Lender under any Note or other Facility
Document would be subject to United States federal withholding tax imposed by
FATCA if such Lender were to fail to comply with the applicable reporting
requirements of FATCA (including those contained in Section 1471(b) or 1472(b)
of the Code, as applicable), such Lender shall deliver to the Borrower and each
Agent (at such time or times reasonably requested by the Borrower or an Agent)
such documentation reasonably requested by the Borrower or an Agent as may be
necessary for the Borrower or an Agent to comply with their obligations under
FATCA and to determine either that such Lender has complied with such Lender's
obligations under FATCA or the amount to deduct and withhold from such payment. 
Solely for purposes of this clause (i), "FATCA" shall include any amendments
made to FATCA after the date of this Agreement.

 

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(j)          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, any Related Document 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.

 

(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 (and, in the case of any Related Document, only after the occurrence
and during the continuance of an Event of Default) 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
or otherwise permitted or required by the Facility Documents, by the Borrower or
any Affiliate of the Borrower which has the effect of reducing or impairing the
Collateral or the rights of the 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 provided that any payment hereunder which
related to taxes, levies, imposes, deductions, charges and withholdings, and all
liabilities (including penalties, interest and expenses) with respect thereto,
or additional sums described in Section 12.03, shall be covered by Section 12.03
and shall not be covered by this Section 12.04(b).

 

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Section 12.05          Execution in Counterparts.

 

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

 

Section 12.06          Assignability; Participation; Register.

 

(a)          Each Lender may assign to an assignee all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
outstanding Advances or interests therein owned by it, together with ratable
portions of its Commitment); provided that:

 

(i)          if such assignment occurs prior to the Commitment Termination Date,
such assignee satisfies the Rating Criteria at the time of the assignment
(except in the case of an assignment to the Facility Agent);

 

(ii)         such assignment is exempt from the registration requirements of the
Securities Act and any applicable state securities laws or is made in accordance
with the Securities Act and such laws, and is made only to (A) either an
"accredited investor" as defined in paragraphs (a)(1), (2), (3), or (7) of Rule
501 of Regulation D under the Securities Act (or any entity in which all of the
equity owners are entities described within such paragraphs) or to a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act and (B) a
"qualified purchaser" for purposes of the Investment Company Act;

 

(iii)        the Facility Agent has consented thereto;

 

(iv)        any assignment of a Revolving Commitment that occurs prior to the
Stage 2 Mandatory Revolving Conversion Date and involves a Revolving Lender that
is also a Term Lender, shall require that such Lender assign a pro rata share of
its Term Commitment at the time of such assignment;

 

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(v)         any assignment by a Revolving Lender of its Revolving Commitment or
its Revolving Advances prior to the Stage 2 Mandatory Revolving Conversion Date,
shall require that such Revolving Lender assign the same percentage of both its
Revolving Commitment and its Revolving Advances; and

 

(vi)        the Borrower has consented thereto (such consent not to be
unreasonably withheld, delayed or conditioned), provided that the consent of the
Borrower shall not be required if (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 that in each case satisfies the Rating
Criteria, or (C) an Event of Default has occurred and is continuing.

 

The parties to each such assignment shall execute and deliver to the Facility
Agent and the Borrower 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 which can be withheld for any
reason in their sole and absolute discretion.

 

(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, Section 12.09 and Section 12.03. In the event
that any Lender sells participations in any portion of its rights and
obligations hereunder:

 

(i)          the agreement pursuant to which such Lender sells such
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification, supplement or waiver that requires the consent of all
of the Lenders. Sections 2.09, 2.10 and 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

 

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(ii)         such Lender, as nonfiduciary agent for the Borrower, shall maintain
a register on which it enters the name of all participants in the Advances held
by it and the principal amount (and stated interest thereon) of the portion of
the Advance which is the subject of the participation (the "Participant
Register"). An Advance may be participated in whole or in part only by
registration of such participation on the Participant Register (and each Note,
if any, shall expressly so provide). Any participation of such Advance may be
effected only by the registration of such participation on the Participant
Register. The Participant Register shall be available for inspection by the
Borrower and the Collateral Manager at any reasonable time and from time to time
upon reasonable prior notice.

 

(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 and
any Commitments of 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
Collateral Manager, 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, the Collateral Manager 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, the Borrower and the
Collateral Manager from time to time at the request of the Collateral Agent, the
Borrower or the Collateral Manager 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) either an "accredited investor" as defined in paragraphs
(a)(1), (2), (3), or (7) of Rule 501 of Regulation D under the Securities Act
(or any entity in which all of the equity owners are entities described within
such paragraphs) or to a "qualified institutional buyer" as defined in Rule 144A
under the Securities Act and (B) a "qualified purchaser" as defined in the
Investment Company Act (a "Permitted 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 Permitted Purchaser;

 

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(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 Permitted 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" as defined in the Investment
Company Act 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.

 

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 and each Participant agrees to keep confidential all
information provided to it by the Borrower or the Collateral Manager with
respect to the Borrower, the Collateral Manager, their respective 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 bona 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) or (h) in connection with any
suit, action, proceedings or investigation (whether in law or in equity or
pursuant to arbitration) involving any of the Facility Documents).

 

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Section 12.10          Merger.

 

This Agreement, the Notes and the other Facility Documents executed by the
Borrower, the Collateral 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.

 

Section 12.13          Waiver of Jury Trial.

 

EACH OF THE PARTIES HERETO and any Lender that may become a party 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, (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 overnight
mail, postage prepaid, to the Process Agent at its address specified above in
this Section 12.14, with a copy thereof contemporaneously mailed by overnight
mail to the Borrower at its address specified in Section 12.02. 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          [Reserved].

 

150

 

  

Section 12.16          [Reserved].

 

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 one
year and one day, or if longer, the applicable preference period then in effect
plus one day, after the Payment in Full Date; 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 one
year and one day period, or if longer the applicable preference period then in
effect plus one day, in (a) any case or proceeding voluntarily filed or
commenced by the Borrower or (b) any involuntary insolvency proceeding filed or
commenced against the Borrower by a Person other than any 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.

 

151

 

  

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

 

(a)          The Collateral 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 Borrower and 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 and the Facility Agent.

 

(b)          The Collateral Agent or the Custodian, as applicable, shall perform
on behalf of the Facility Agent and the Lenders the following duties and
obligations:

 

(i)          The Custodian hereunder, shall take and retain custody of the
Related Documents delivered by the Borrower pursuant to Article III hereof in
accordance with the terms and conditions of this Agreement, as custodian for the
benefit of the Borrower subject to the lien of the Collateral Agent for the
benefit of the Secured Parties hereunder. In connection with each delivery of
Related Documents hereunder to the Custodian, the Collateral Manager shall
provide to the Custodian an electronic file (in EXCEL or a comparable format)
that contains the related Collateral Obligation Checklist or that otherwise
contains the Collateral Obligation identification number, the original principal
balance of such Collateral Obligation and the name of the Obligor with respect
to each related Collateral Obligation.

 

(ii)         In taking and retaining custody of the Related Documents, the
Custodian shall be deemed to be acting as the agent of the Borrower, subject to
the lien of the Collateral Agent for the benefit of the Secured Parties
hereunder, and as agent for the Collateral Agent for the benefit of the Secured
Parties as necessary to perfect the security interest of the Collateral Agent in
the Related Documents, and the Collateral Agent shall be deemed to be acting as
the agent of the Facility Agent and the Secured Parties; provided that the
Collateral Agent makes no representations as to the existence, perfection or
priority of any Lien on the Related Documents or the instruments therein; and
provided further that the Collateral Agent's and Custodian's duties as agent
hereunder shall be limited to those expressly contemplated herein.

 

(iii)        [Reserved].

 

(iv)        [Reserved].

 

(v)         Prior to acquiring a Collateral Obligation, the Borrower or the
Collateral Manager will provide the Collateral Agent and Custodian with a Trade
Ticket, together with the Notice of Borrowing to be used in connection
therewith.

 

(vi)        [Reserved].

 

152

 

  

(vii)       Promptly after receipt thereof, the Collateral Agent or the
Custodian, as applicable, shall provide to the Collateral Manager a copy of all
written notices and written communications identified as being sent to it in
connection with the Collateral held hereunder which it receives from the related
Obligor or any other Person. In no instance shall the Collateral Agent be under
any duty or obligation to take any action on behalf of the Collateral Manager
(or Borrower) in respect of the exercise of any voting or consent rights, or
similar actions, unless it timely receives specific written instructions from
the Collateral Manager (prior to the occurrence of an Event of Default) or the
Facility Agent (after the occurrence of an Event of Default) in which event the
Collateral Agent shall vote, consent or take such other action in accordance
with such instructions.

 

(viii)      In performing its duties, the Collateral Agent and Custodian, as
applicable, shall use the same degree of care and attention as it employs with
respect to similar collateral that it holds as Collateral Agent or as Custodian,
as applicable, for others.

 

(c)          Each time that the Collateral 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 Borrower subject to the lien of the Collateral Agent for the benefit of
the Secured Parties 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.

 

(d)          The Custodian hereby agrees to accept the Collateral Delivered to
it as set forth in Sections 12.20(a) and (c), 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
Collateral 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 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 by the
Collateral Agent in accordance with this Agreement.

 

153

 

  

(e)          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. Except as otherwise expressly set forth in
this Section 12.20, the Custodian shall have all of the rights and protections
afforded to the Collateral Agent pursuant to this Agreement.

 

(f)          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.

 

(g)          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 successor Custodian as shall be appointed by
the Borrower, with the prior written consent of the Facility Agent (such consent
not to be unreasonably withheld or delayed), whereupon all the Custodian's
obligations hereunder shall cease and terminate; provided that no such
resignation shall be effective until a successor has accepted such appointment.
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.

 

(h)          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 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.

 

(i)          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.

 

154

 

  

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 one year 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 one year and one day
period, or if longer the applicable preference period then in effect plus one
day, in (a) any case or proceeding voluntarily filed or commenced by 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 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.

 

155

 

  

In the event neither a CP Conduit nor its Liquidity Provider is able to fund or
pay a CP Conduit's Commitment required to be paid or funded in accordance with
the terms of this Agreement, and the inability to fund continues for 3 Business
Days after the expiration of a CP Conduit's obligation to fund an Advance on any
Borrowing Date, the Borrower shall have the right to replace such CP Conduit
with one or more other assignees meeting the requirements set forth in Section
12.06 hereof, provided that (i) all fees and expenses incurred by such replaced
CP Conduit in connection with such assignment shall be paid by the Borrower and
(ii) the assignee(s) shall acquire all of the Commitments and outstanding
Advances of such replaced CP Conduit and, in connection therewith, shall pay to
the replaced CP Conduit in respect thereof an amount equal to the principal of,
and all accrued interest on, all outstanding Advances of the replaced CP Conduit
and all related fees and expenses in connection with the Facility Documents.

 

(e)          Notwithstanding any provisions contained in this Agreement, a CP
Conduit may, from time to time, with prior or concurrent notice to the Borrower
and the Facility Agent, in one transaction or a series of transactions, assign
all or a portion of its rights and obligations under this Agreement and the
other Facility Documents (including all or a portion of its Commitment and the
Loans at the time owing to it) to a Conduit Assignee which meets the Rating
Criteria. Upon and to the extent of such assignment by the CP Conduit to a
Conduit Assignee (i) such Conduit Assignee shall become a CP Conduit, (ii) such
Conduit Assignee (as Lender) shall be the owner of the assigned portion of the
rights and obligations under this Agreement and the other Facility Documents
(iii) such Conduit Assignee, any multi-seller commercial paper conduit that
issues commercial paper, the proceeds of which are loaned to or are otherwise
the CP Conduit's source of funding the CP Conduit's acquisition or maintenance
of its funding obligations hereunder, if such Conduit Assignee does not itself
issue commercial paper, and other related parties shall have the benefit of all
the rights and protections provided to the CP Conduit and in the other Facility
Documents (including any limitation on recourse against such Conduit Assignee or
related parties, any agreement not to file or join in the filing of a petition
to commence an insolvency proceeding against such Conduit Assignee, and the
right to assign to another Conduit Assignee as provided in this paragraph),
(iv) such Conduit Assignee shall assume all (or the assigned or assumed portion)
of the CP Conduit's obligations, if any, hereunder or any other Facility
Document, and the Conduit Lender shall be released from such obligations, in
each case to the extent of such assignment, and the obligations of the CP
Conduit and such Conduit Assignee shall be several and not joint, (v) all
distributions in respect of the obligations hereunder assigned shall be made to
the Facility Agent, on behalf of the CP Conduit and such Conduit Assignee on a
pro rata basis according to their respective interests, and (vi) if requested by
the Facility Agent with respect to the Conduit Assignee, the parties will
execute and deliver such further agreements and documents and take such other
actions as such Facility Agent may reasonably request to evidence and give
effect to the foregoing.

 

(f)          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, its monthly transaction surveillance reports, and any of the
terms and provisions of the Facility Documents that it may deem necessary or
advisable and such other information as may be requested by a rating agency.

 

156

 

  

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

 

(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 Collateral
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]

 

157

 

 

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.

 

  WhiteHorse Finance Warehouse, LLC,   as Borrower         By:     WHITEHORSE
FINANCE, INC., its   Designated Manager         By:       Name:     Title:

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

1

 

 

  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]

 

2

 

 

  VERSAILLES ASSETS LLC   as Lender         By:       Name:     Title:        
NATIXIS, NEW YORK BRANCH,   as Facility Agent         By:       Name:     Title:
        By:       Name:     Title:

 

3

 

 

SCHEDULE 1

 

Commitments And Percentages
Prior to the Stage 1 Mandatory Revolving Conversion Date

 

Name of Lender  Revolving
Commitment   Term
Commitment   Percentage  Versailles Assets LLC  $150,000,000   $0    100.00%   
              TOTAL  $150,000,000   $0    100.00%

 

Commitments And Percentages
on and after a Stage 1 Mandatory Revolving Conversion Date

 

Name of Lender  Revolving
Commitment   Term
Commitment   Percentage  Versailles Assets LLC  $100,000,000   $50,000,000  
 100.00%                  TOTAL  $100,000,000   $50,000,000    100.00%

 

Commitments And Percentages
on the Stage 2 Mandatory Revolving Conversion Date

 

Name of Lender  Revolving
Commitment   Term
Commitment   Percentage  Versailles Assets LLC  $0   $150,000,000    100.00%   
              TOTAL  $0   $150,000,000*   100.00%

 

*The Total Term Commitment of the Term Lenders shall be the lesser of (i) the
aggregate principal amount of all of the Revolving Advance and Term Loan
Advances outstanding as of such date and (ii) $150,000,000.

 

S-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 and the
Principal Collection Subaccount)

b.The Payment Account

c.The Revolving Reserve Account

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

e.The Custodial Account

f.The Closing Expense Account

g.The Excess Concentration Loan 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), the Excess Concentration Loan
Account and the Revolving Reserve Account

5.Compliance level of Coverage Tests vs. test level

a.Calculation of Overcollateralization Ratio Test

b.Calculation of Interest Coverage Ratio Test

c.Calculation of MV Overcollateralization Ratio Test

6.Compliance with Advance Rate Test

a.Calculation of Advance Rate Test

7.Compliance with Collateral Quality Tests

a.the Minimum Diversity Score Test

b.the Minimum Weighted Average Spread Test

c.the Minimum Weighted Average Fixed Rate Coupon Test

d.the Weighted Average Maturity Test

e.the Maximum DBRS Risk Score Test

8.Compliance with Concentration Limitations

a.Fixed Rate Obligations

b.Obligor concentrations

c.Revolving Collateral Loans or Delayed Drawdown Collateral Loans

d.Eligible Second Lien Loans, Eligible Mezzanine Loan and Unsecured Loans

e.Eligible Mezzanine Loan and Unsecured Loans

f.DBRS Industry Classification

g.DIP Loans

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

i.Collateral Obligations with DBRS Risk Score above 22.0296/ Credit Estimate and
trailing 12 month EBITDA of less than 12.5 million

j.PIK Loans

k.Covenant Lite Loans

9.Listing of all Collateral Obligations with attributes including

a.Obligor name and identifying number

b.Principal Balance

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

 

S-2-1

 

 

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, Unsecured Loan)

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 or Defaulted Loan

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.Derived method of DBRS Long Term Rating (from DBRS Rating Procedure, Part A:
(1), (2), (3), or (4)) (or Credit Estimate)

t.Credit Estimate issue date (if applicable)

u.Date of expiry of Credit Estimate (if applicable)

v.           Date of last amendment

10.Listing of all Collateral Obligations with Specified Changes including

a.Obligor name and identifying number

b.Principal Balance

c.The date of such Specified Change

d.Nature of Specified Change

11.Listing of all Excess Concentration Loans with attributes including

a.Obligor name and identifying number

b.Principal Balance

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, Unsecured Loan)

i.Whether the Excess Concentration Loan 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 Excess Concentration Loan is a Credit Risk Loan or Defaulted Loan

o.Country of domicile

p.Frequency of interest payment

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

 

S-2-2

 

 

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

12.For Defaulted Loans

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.Borrowing Base

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

i.Whether such asset is an Excess Concentration Loan

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

15.Confirmation from the Collateral Agent whether or not it has received during
the Collection Period confirmation (which may be by way of email) from the
Retention Provider of its continued compliance with the covenants set out at
Section 2(a) and (b) of the Retention of Net Economic Interest Letter in the
form of Exhibit G to this Agreement.

 

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 (including, the aggregate amounts of Revolving Advances and/or Term
Loan Advances that are to be prepaid on the related Payment Date and amounts to
be deposited in the Revolving Reserve Account)

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

4.Beginning and ending balance of all Covered Accounts

 

S-2-3

 

 

SCHEDULE 3

Industry Diversity Score Table

 

AAggregate
Industry/
Regional
Equivalent
Unit Score   Industry
Diversity
Score   AAggregate
Industry/
Regional
Equivalent
Unit
Score   Industry
Diversity
Score   AAggregate
Industry/
Regional
Equivalent
Unit Score   Industry
Diversity
Score   AAggregate
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 

 

S-3-1

 

 

AAggregate
Industry/
Regional
Equivalent
Unit Score   Industry
Diversity
Score   AAggregate
Industry/
Regional
Equivalent
Unit
Score   Industry
Diversity
Score   AAggregate
Industry/
Regional
Equivalent
Unit Score   Industry
Diversity
Score   AAggregate
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           

 

S-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   0.0987% AA (high)   0.1539% AA   0.2091% AA (low)   0.2994% A (high)  
0.4801% A   0.5704% A (low)   0.9643% BBB (high)   1.7521% BBB   2.1460% BBB
(low)   2.9528% BB (high)   6.9863% BB   8.5997% BB (low)   11.9572% B (high)  
17.3292% B   22.0296% B (low)   31.8670% CCC (high)   48.2625% CCC   54.8208%
CCC (low)   77.4104% C   100.0000%

 

S-4-1

 

 

SCHEDULE 5

 

DBRS Industry Classifications

 

Name

1Aerospace & Defense

2Air transport

3Automotive

4Beverage & Tobacco

5Radio & Television

6Brokers, Dealers & Investment houses

7Building & Development

8Business equipment & services

9Cable & satellite television

10Chemicals & plastics

11Clothing/textiles

12Conglomerates

13Containers & glass products

14Cosmetics/toiletries

15Drugs

16Ecological services & equipment

17Electronics/electrical

18Equipment leasing

19Farming/agriculture

20Financial intermediaries

21Food/drug retailers

22Food products

23Food service

24Forest products

25Health care

26Home furnishings

27Lodging & casinos

28Industrial equipment

29Insurance

30Leisure goods/activities/movies

31Nonferrous metals/minerals

32Oil & gas

33Publishing

34Rail industries

35Retailers (except food & drug)

36Steel

37Surface transport

38Telecommunications

39Utilities

40Miscs

41Sovereign

 

S-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.

 

S-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.

 

S-6-2

 

 

SCHEDULE 7

 

DBRS Rating Procedure

 

The "DBRS Rating" for an Obligor, Lender 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.

 

Part B: Short Term Ratings

 

The "DBRS Short Term Rating" for a Lender 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:

 

S-7-1

 

 

(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+ 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

 

S-7-2

 

 

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.

 

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

 

S-7-3

 

 

(i)with respect to an Obligor on a Collateral Obligation that is an Eligible
Senior Secured Loan (or an Obligor that is a Lender 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, 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, the Moody's rating that is
one subcategory higher than the Moody's public rating on any such senior
unsecured obligation) as selected by the Collateral 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 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.

 

S-7-4

 

  

SCHEDULE 8

 

Matrix

 

"Matrix" shall mean:

 

(a) until the date occurring 1 year following the end of the Reinvestment
Period:

 

Applicable
Row Level  Row
Advance
Rate   Row
Diversity
Score  Row
Minimum
OC Level  1   40.00%  0   200.00% 2   45.00%  5   177.78% 3   50.00%  10 
 160.00% 4   55.00%  15   145.45%

 

and

 

(b) thereafter:

 

Applicable
Row Level  Row
Advance
Rate   Row
Diversity
Score  Row
Minimum
OC Level  1   40.00%  0   250.00% 2   45.00%  5   222.22% 3   50.00%  10 
 200.00% 4   55.00%  15   181.82%

 

S-8-1

 

 

EXHIBIT A-1

 

[FORM OF REVOLVING NOTE]

 

$__________
                                                                                                                                                               _________,
____

 

FOR VALUE RECEIVED, the undersigned (the "Borrower") hereby promises to pay to
[INSERT NAME OF REVOLVING LENDER] (the "Lender") and its registered assigns on
the Stage 2 Mandatory Revolving Conversion Date (as defined in the 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 Revolving Advances made by the Lender to the Borrower under the 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
Revolving 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 Credit Agreement. Capitalized terms
used but not otherwise defined herein shall have the respective meanings
assigned to such terms in the Credit Agreement.

 

This promissory note is a Revolving Note referred to in the Amended and Restated
Credit and Security Agreement dated as of August 13, 2014 (as the same has been
and may further be amended, amended and restated, supplemented, waived or
otherwise modified from time to time, the "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 Revolving 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 Revolving 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 Revolving 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 Credit Agreement to repay the principal
amount of the Revolving Advances together with all interest accrued thereon.

 

Except as permitted by Section 12.06 of the Credit Agreement, this Revolving
Note may not be participated by the Lender to any other Person. Without limiting
the generality of the foregoing, this Revolving 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 Credit Agreement, this Revolving
Note may not be assigned by the Lender to any other Person. Without limiting the
generality of the foregoing, this Revolving 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]

 

A-1

 

 

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

 

  WhiteHorse Finance Warehouse, LLC           By: WhiteHorse Finance, Inc., its
Designated     Manager         By:       Name:     Title:

 

A-2

 

 

SCHEDULE I

 

This Revolving Note evidences Revolving Advances made by [INSERT NAME OF
REVOLVING LENDER], (the "Lender") to WhiteHorse Finance Warehouse, LLC (the
"Borrower") under the Amended and Restated Credit and Security Agreement dated
as of August 13, 2014 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

 

 

EXHIBIT A-2

 

[FORM OF TERM NOTE]

 

$__________                                                                                                                                                                 
_________, ____

 

FOR VALUE RECEIVED, the undersigned (the "Borrower") hereby promises to pay to
[INSERT NAME OF TERM LENDER] (the "Lender") and its registered assigns on the
Final Maturity Date (as defined in the 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 Term Loan Advances made by
the Lender to the Borrower under the 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 Term Loan Advance, in like funds and money,
from the applicable Mandatory Revolving Conversion 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 Credit Agreement. Capitalized terms used but
not otherwise defined herein shall have the respective meanings assigned to such
terms in the Credit Agreement.

 

This promissory note is a Term Note referred to in the Amended and Restated
Credit and Security Agreement dated as of August 13, 2014 (as the same has been
and may further be amended, amended and restated, supplemented, waived or
otherwise modified from time to time, the "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 Term Loan 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 Term 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 Term Loan 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 Credit Agreement to repay the principal
amount of the Term Loan Advances together with all interest accrued thereon.

 

Except as permitted by Section 12.06 of the Credit Agreement, this Term Note may
not be participated by the Lender to any other Person. Without limiting the
generality of the foregoing, this Term 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 Credit Agreement, this Term Note may
not be assigned by the Lender to any other Person. Without limiting the
generality of the foregoing, this Term 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]

 

A-1

 

 

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

 

  WhiteHorse Finance Warehouse, LLC         By: WhiteHorse Finance, Inc., its
Designated     Manager         By:       Name:     Title:

 

A-2

 

 

SCHEDULE I

 

This Term Note evidences Term Loan Advances made by [INSERT NAME OF TERM
LENDER], (the "Lender") to WhiteHorse Finance Warehouse, LLC (the "Borrower")
under the Amended and Restated Credit and Security Agreement dated as of August
13, 2014 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

 

 

EXHIBIT B

 

[FORM OF NOTICE OF BORROWING]

 

[Date]

 

Natixis, New York Branch,
as Facility Agent
1251 Avenue of the Americas
New York, New York 10020

The Lenders party to the
Credit Agreement referred to below

 

Cc:

 

The Bank of New York Mellon Trust Company, N.A.
601 Travis Street, 16th Floor
Houston, TX 77002
Attention: Corporate Trust- WhiteHorse Finance Warehouse, LLC- Kod Odimgbe

 

NOTICE OF BORROWING

 

This Notice of Borrowing is made pursuant to Section 2.02 of that certain
Amended and Restated Credit and Security Agreement dated as of August 13, 2014
(as the same has been and may further be amended, amended and restated,
supplemented, waived or otherwise modified from time to time, the "Credit
Agreement") among WhiteHorse Finance Warehouse, 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 Credit Agreement.

 

1.The Borrower hereby requests that on ______________, ____ (the "Borrowing
Date") it receive a Revolving Borrowing under the Credit Agreement in an
aggregate principal amount of _____________ Dollars ($_______) (the "Requested
Amount").

 

2.The Borrower hereby gives notice of its request for Revolving 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 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
Revolving Borrowing on the Borrowing Date each of the applicable conditions
precedent set forth in Section 3.03 of the Credit Agreement is satisfied,
including:

 

B-1

 

 

(1)in the case of the initial Borrowing on the Original Closing Date under the
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 Revolving Advance requested herein on the
Borrowing Date, the Commitment Shortfall Test shall be satisfied (on a pro-forma
basis);

 

(3)[immediately after the making of such Revolving Advance on the Borrowing
Date, each Coverage Test shall be satisfied (on a pro-forma basis) and the Row
Advance Rate that is in use at such time equals or exceeds the Portfolio Advance
Rate;] 1

 

(4)[each of the representations and warranties of the Borrower contained in
Article IV of the Credit Agreement and the other Facility Documents is true and
correct in all material respects as of such Borrowing Date (except to the extent
such representations and warranties expressly relate to any earlier date, in
which case such representations and warranties are true and correct in all
material respects as of such earlier date);] 2

 

(5)[no Default or Event of Default shall have occurred and be continuing at the
time of making of the Revolving Advance or shall result upon the making of such
Revolving Advance;]/[no Default or Event of Default described in
Sections 6.01(c), (e) or (f) of the Credit Agreement shall have occurred and be
continuing at the time of the making of such Revolving Advance or shall result
upon the making of such Revolving Advance;]3

 

(6)[other than in connection with Revolving Advances obtained on the Original
Closing Date which are used for purposes other than the acquisition of
additional Collateral Obligations,]4 the provisions of Section 10.02 have been
satisfied as of the date of acquisition in connection with any acquisition of
additional Collateral Obligations with the proceeds of the applicable Revolving
Advance.

 

WITNESS my hand on this ____ day of _________, ____.

 

  WhiteHorse Finance Warehouse, LLC,   as Borrower         By: WhiteHorse
Finance, Inc., its Designated Manager         By:       Name:     Title:

 

1 Paragraphs (3) may be omitted if, and only if, not required under Section
3.03.

 

2 Paragraphs (4) may be omitted if, and only if, not required under Section
3.03.

 

3 Choose between bracketed text in paragraph (5) depending on requirements under
Section 3.03.

 

4 Insert bracketed text only in connection with the Notice of Borrowing on the
Original Closing Date.

 

B-2

 

 

EXHIBIT C

 

[FORM OF NOTICE OF PREPAYMENT]

 

Natixis, New York Branch,
as Facility Agent
1251 Avenue of the Americas
New York, New York 10020

 

The Lenders party to the
Credit Agreement referred to below

 

Cc:

 

The Bank of New York Mellon Trust Company, N.A.
601 Travis Street, 16th Floor
Houston, TX 77002
Attention: Corporate Trust- WhiteHorse Finance Warehouse, LLC- Kod Odimgbe

 

NOTICE OF PREPAYMENT

 

This Notice of Prepayment is made pursuant to Section 2.05 of that certain
Amended and Restated Credit and Security Agreement dated as of August 13, 2014
among WhiteHorse Finance Warehouse, 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 has been and may further
be amended, amended and restated, supplemented, waived or otherwise modified
from time to time, the " Credit Agreement"). Capitalized terms used but not
otherwise defined herein shall have the respective meanings assigned to such
terms in the Credit Agreement.

 

1.The Borrower hereby gives notice that on ______________, ____ (the "Prepayment
Date") it will make a prepayment of a [Revolving Advance][and a][Term Loan
Advance] under the Credit Agreement in the principal amount of [_____________
Dollars ($_______)with respect to such Revolving Advance][and][_____________
Dollars ($_______) with respect to such Term Loan Advance] (the "Prepayment
Amount").

 

2.The Borrower hereby gives notice of intent to prepay (through the Collateral
Agent) a [Revolving Advance][and a][Term Loan Advance] in the aggregate
principal amount equal to the Prepayment Amount to the [Revolving
Lenders][and][Term Lenders] pursuant to Section 2.05 of the Credit Agreement and
will remit, or cause to be remitted through the Collateral Agent, the proceeds
thereof to the account of each [Revolving Lender][and][Term 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 _________, ____.

 

C-1

 

 

  WhiteHorse Finance Warehouse, LLC,   as Borrower         By: WhiteHorse
Finance, Inc., its Designated   Manager         By:       Name:     Title:

 

C-2

 

 

Schedule I

[Describe accounts of the Lenders]

 

C-3

 

 

EXHIBIT D

 

[FORM OF ASSIGNMENT AND ACCEPTANCE]

 

Reference is made to the Amended and Restated Credit and Security Agreement
dated as of August 13, 2014 (as the same has been and may further be amended,
amended and restated, supplemented, waived or otherwise modified from time to
time, the " 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 WhiteHorse Finance Warehouse, LLC, as borrower (the "Borrower").
Capitalized terms used but not otherwise defined herein shall have the
respective meanings assigned to such terms in the 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 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 [Revolving][Term Loan] 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
Collateral 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.

 

D-1

 

 

3.          The Assignee (i) confirms that it has received a copy of the Credit
Agreement and the other Facility Documents, together with copies of any
financial statements delivered pursuant to Section 5.01 of the Credit Agreement
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without 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 [Revolving][Term]
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 [Revolving][Term] Lender and on each date on which a
[Revolving][Term Loan] Advance is made under the 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.

 

5.          The Assignee, by checking the box below, (i) acknowledges that the
Assigned Interests are not registered under the Securities Act of 1933, as
amended (the "Securities Act") or any state securities laws and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Securities Act and any applicable state securities laws, and
(ii) represents and warrants to the Assignor, the Borrower the Administrative
Agent and the Trustee that the Assignee is (a) a "qualified institutional buyer"
as defined in Rule 144A under the Securities Act, or (b) we are an "accredited
investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act:

 

¨is (a) a "qualified institutional buyer" as defined in Rule 144A under the
Securities Act, or (b) we are an "accredited investor" as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act.

 

6.          The Assignee specifies that its Liquidity Provider, if any, is
________________ and its jursidiction of incorporation is ______________.  The
[Revolving][Term] Lender's holding company is _____________ and its jursidiction
of incorporation is ____________.  The Liquidity Provider's, if any, holding
company is _____________ and its jurisdiction of incorporation is ____________.

 

7.          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.

 

D-2

 

 

8.          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 Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a [Revolving][Term] 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 Credit Agreement and under any other Facility Document.

 

9.          Upon such acceptance and recording by the Facility Agent, from and
after the Effective Date, the Borrower shall make all payments under the Credit
Agreement in respect of the Assigned Interest to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under the Credit
Agreement and the Assigned Interests for periods prior to the Effective Date
directly between themselves.

 

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

 

11.         This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule I to this Assignment and Acceptance by facsimile 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:     [INSERT NAME OF ASSIGNOR],
Assignor: as Assignor       By:       Authorized Signatory,       [INSERT NAME
OF ASSIGNEE] 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   _______________, ____
      WhiteHorse Finance Warehouse, LLC,   as Borrower       By:    
             Name:                Title:]1  

 

1 Insert in an Assignment and Acceptance if Borrower consent is required

 

D-4

 

 

EXHIBIT E

 

[FORM OF ACCOUNT CONTROL AGREEMENT]

 

(see Account Control Agreement)

 

E-1

 

 

EXHIBIT F

 

APPROVED APPRAISAL FIRMS

 

A. G. Edwards & Sons, Inc.

Axiom Valuation Solutions

Bank of America

Barclays Capital

Cantor Fitzgerald

CIBC World Markets

Citigroup

Credit Research & Trading

Credit Suisse

Dabney Flannigan

Delaware Bay, Inc.

Deutsche Bank

Dresdner Kleinwort Wasserstein

Duff & Phelps

Empire Valuation Consultants

Goldman Sachs & Co.

Houlihan Lokey Howard & Zukin

J.P. Morgan Chase

Jefferies & Company, Inc.

Lazard Freres

Lincoln Partners Advisors, an affiliate of Lincoln International

Morgan Stanley

Murray Devine

Raymond James

TD Securities

The Blackstone Group

Union Bank

Wells Fargo

William Blair & Company

 

F-1

 

 

EXHIBIT G

Retention of Net Economic Interest Letter

 

[To be provided]

 

G-1

 

 

EXHIBIT H

 

FORM OF PAYOFF LETTER

 

NOTICE, PAYOFF AND RELEASE AGREEMENT

 

[Date]

 

The Bank of New York Mellon Trust Company, N.A.,
as Collateral Agent and Calculation Agent
601 Travis Street, 16th Floor
Houston, TX 77002
Attention: Corporate Trust- WhiteHorse Finance Warehouse, LLC- Kod Odimgbe

 

The Bank of New York Mellon Trust Company, N.A.,
as Custodian
601 Travis Street, 16th Floor
Houston, TX 77002
Attention: Corporate Trust- WhiteHorse Finance Warehouse, LLC- Kod Odimgbe

 

Natixis, New York Branch,
as Facility Agent
1251 Avenue of the Americas
New York, New York 10020
Attention: Yazmin Vasconez

 

[Versailles Assets LLC, as Lender
c/o Global Securitization Services LLC
68 South Service Road, Suite 120
Melville, New York 11747
Attention: Andrew Stidd]

 

Ladies and Gentlemen:

 

Pursuant to Section 2.06(b) of the Amended and Restated Credit and Security
Agreement, dated as of August 13, 2014, among WhiteHorse Finance Warehouse, LLC
("Borrower"), as borrower (in such capacity, the "Borrower"), the 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 for the
Secured Parties (in such capacity as trustee, the "Collateral Agent") (as the
same has been and may further be amended, amended and restated, supplemented,
waived or otherwise modified from time to time, the " Credit Agreement");
capitalized terms not defined herein are used as defined in the Credit
Agreement), the Borrower hereby (i) notifies the above addressees of its
intention to cause a Payment in Full and a termination of the Commitments in
their entirety on ___________ (the "Payment in Full Date") and (ii) requests a
release of all of the Collateral Obligations and of all other Collateral (other
than the Payment Account) from the Lien of the Credit Agreement upon such
Payment in Full as provided herein. This letter agreement constitutes notice of
termination under Section 2.06(b) of the Credit Agreement, a certificate of a
Responsible Officer of the Borrower and written request as provided in Section
7.02(a) and Section 8.07(e) of the Credit Agreement and a direction as provided
in Section 10.01(c) of the Credit Agreement. This notice is irrevocable as
provided in Section 2.06(b) of the Credit Agreement.

 

H-1

 

  

The Borrower hereby represents and warrants that (i) all conditions precedent
under the Credit Agreement to the Payment in Full described herein have been or
will be satisfied by the applicable parties on the Payment in Full Date (except
to the extent expressly waived herein by the Collateral Agent and the Facility
Agent), and (ii) all conditions precedent under the Credit Agreement to the
Payment in Full, termination of the Commitments, release of Collateral (other
than the Payment Account) and release and delivery of the Related Documents (as
modified by this letter agreement) have been or will be satisfied on the Payment
in Full Date (except to the extent expressly waived herein by the Collateral
Agent and the Facility Agent).

 

The Borrower hereby certifies to the Collateral Agent and the Facility Agent
that the Borrower will have sufficient funds on the Payment in Full Date to
effect the contemplated Payment in Full and termination of the Commitments in
accordance with the Credit Agreement and this letter agreement. The Borrower
hereby certifies that upon remittance by the Collateral Agent of the amounts set
forth in Exhibit A to the applicable parties set forth in Exhibit A, all
Obligations owing the Secured Parties under the Credit Agreement or under the
other Facility Documents will have been paid in full.

 

The Facility Agent hereby confirms that [Versailles Assets LLC is the sole
Lender][____________ are the only Lenders] under the Credit Agreement.

 

The Borrower agrees to pay to the Collateral Agent, for remittance by the
Collateral Agent (in accordance with Exhibit A) to the Lender(s), the Facility
Agent, the Custodian, and itself, as applicable, on the Payment in Full Date,
each of the amounts set forth on Exhibit A attached hereto (collectively, the
"Payoff Amount") and may transfer funds to the Payment Account from the
Collection Account and the Revolving Reserve Account as directed by the
Collateral Manager to pay such Payoff Amount. Upon receipt by the Collateral
Agent of the Payoff Amount:

 

(i) each of the Collateral Agent, the Custodian, the Facility Agent and the
Lender, acknowledges and agrees that such payment will constitute payment in
full of all of the obligations under the Facility Documents owed to it and that
all Obligations under the Facility Documents shall be fully satisfied and the
Facility Documents shall be terminated (other than the provisions of the
Facility Documents which by their terms expressly survive the termination
thereof);

 

(ii) the Borrower confirms that all of its Obligations under the Credit
Agreement or under the other Facility Documents have been satisfied and the
Commitments have been terminated in their entirety. The Borrower confirms that
all conditions precedent provided for in the Credit Agreement related to all of
the proposed actions in this letter agreement, as modified or waived by this
letter agreement, have been satisfied, and (as referenced above) this letter
agreement shall serve as a certificate of a Responsible Officer of the Borrower;

 

H-2

 

  

(iii) the Collateral Agent shall be deemed to have released the Lien of the
Credit Agreement on the Collateral (other than the Payment Account) in favor of
the Collateral Agent and the other Secured Parties and hereby does automatically
(a) release, transfer, assign and convey any and all right, title, claim and
interest in the Collateral to the Borrower free and clear of all liens and
encumbrances created by or through it, (b) authorize the Borrower or the
Collateral Manager on its behalf to file any requisite UCC-3 termination
statements in respect thereof, and (c) direct the Custodian to release the
Related Property and other Collateral held by it, at the expense of the
Borrower, to the Borrower or its designee(s) as directed by the Borrower; and

 

(iv) without limiting clause (iii) above, the Collateral Agent agrees to execute
and deliver to the Borrower any assignment and release of Collateral and UCC-3
termination statements reasonably requested by the Borrower, at the expense of
the Borrower.

 

The Facility Agent agrees that it has or will cause the Note[s] to be cancelled
and returned to the Borrower upon Payment in Full.

 

THIS LETTER AGREEMENT, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK, SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE
LAWS OF ANY OTHER JURISDICTION.

 

This letter agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. Delivery of an executed counterpart of a signature page by
telecopier or other electronic transmission shall be effective as delivery of a
manually executed counterpart.

 

H-3

 

 

Very truly yours,         WHITEHORSE FINANCE WAREHOUSE LLC, as Borrower        
By: WhiteHorse Finance, Inc., its Designated Manager         By:       Name:    
Title:

 

Notice, Waiver, Payoff and Release Letter

 

H-4

 

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Collateral Agent, Calculation Agent and Custodian

 

By:         Name:       Title:             NATIXIS, NEW YORK BRANCH,     as
Facility Agent           By:         Name:       Title:             By:        
Name:       Title:             [VERSAILLES ASSETS, LLC, as Lender]           By:
        Name:       Title:    

 

Notice, Waiver, Payoff and Release Letter

 

H-5

 

 

EXHIBIT A

 

Payoff Amount in Detail

 

Principal:   $[_]         Interest:   $[_]         Commitment Fees:   $[_]    
    Funded Fee:   $[_]         Administrative Expenses:      Collateral Agent,
Custodian & Securities Intermediary Fees:   
$[_]  Facility Agent Fee:   $[_]  Total Administrative Expenses Due:   $[_]    
    Total Payoff Amount:   $[_] 

 

To be wired to [Versailles Assets, LLC]-   $[_]  Account Title: [____________] 
    Bank Name:  [____________]      Account Number:  [____________]     
ABA/Routing Number:  [____________]      Reference: [____________]     

 

To be wired to Collateral Agent, the Custodian and the Securities Intermediary- 
 $[_]  Account Title: [____________]      Bank Name:  [____________]     
Account Number:  [____________]      ABA/Routing Number:  [____________]     
Reference:  [____________]     

 

Notice, Waiver, Payoff and Release Letter 

 

H-6