Exhibit 10.2

 

 

MASTER LOAN SALE AGREEMENT

 

among

 

TICC CAPITAL CORP.,
as the Transferor,

 

and

 

TICC CLO 2012-1 LLC,
as the Issuer

 

 

 

Dated as of August 23, 2012

 

 
 
 

 

 

TABLE OF CONTENTS

 

Page

 

ARTICLE I DEFINITIONS 1 Section 1.1. Definitions 1 Section 1.2. Other Terms 3
Section 1.3. Computation of Time Periods 3 Section 1.4. Interpretation 3 Section
1.5. References 4 ARTICLE II TRANSFER OF THE CONVEYED COLLATERAL 4 Section 2.1.
Transfer of the Conveyed Collateral 4 Section 2.2. Conveyance of Conveyed
Collateral 5 Section 2.3. Acceptance of Conveyed Collateral 6 Section 2.4.
Delivery of Documents 6 ARTICLE III REPRESENTATIONS AND WARRANTIES 6 Section
3.1. Representations and Warranties of the Transferor 6 Section 3.2.
Representations and Warranties Regarding the Collateral Obligations 10 Section
3.3. Representations and Warranties of the Issuer 10 ARTICLE IV PERFECTION OF
TRANSFER AND PROTECTION OF SECURITY INTEREST 12 Section 4.1. Custody of
Collateral Obligation 12 Section 4.2. Filing 12 Section 4.3. Changes in Name,
Corporate Structure or Location 12 Section 4.4. Costs and Expenses 12 Section
4.5. Sale Treatment 12 Section 4.6. Separateness 13 ARTICLE V COVENANTS 13
Section 5.1. Covenants of the Transferor 13 ARTICLE VI INDEMNIFICATION BY THE
TRANSFEROR 14 Section 6.1. Indemnification 14 Section 6.2. Liabilities to
Obligors 15 Section 6.3. Operation of Indemnities 15 ARTICLE VII MISCELLANEOUS
15

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Table of Contents

(continued)

 

Page

 

Section 7.1. Amendment 15 Section 7.2. Governing Law 16 Section 7.3. Notices 16
Section 7.4. Severability of Provisions 17 Section 7.5. Third Party
Beneficiaries 17 Section 7.6. Counterparts 17 Section 7.7. Headings 17 Section
7.8. No Bankruptcy Petition; Disclaimer 17 Section 7.9. Jurisdiction 18 Section
7.10. Prohibited Transactions with Respect to the Issuer 18 Section 7.11. No
Partnership 18 Section 7.12. Successors and Assigns 18 Section 7.13. Duration of
Agreement 18 Section 7.14. Limited Recourse 18

 

Schedule 1 Schedule of Conveyed Collateral

Schedule 2 Notice Information

 

 

ii

 

THIS MASTER LOAN SALE AGREEMENT, dated as of August 23, 2012 (as amended,
modified, restated, or supplemented from time to time, this “Agreement”), is
made by and among TICC CAPITAL CORP., a Maryland corporation (together with its
successors and assigns in such capacity, the “Transferor”) and TICC CLO 2012-1
LLC, a Delaware limited liability company (together with its successors and
assigns in such capacity, the “Issuer”).

 

PREAMBLE

 

WHEREAS, in the regular course of its business, the Transferor originates and/or
otherwise acquires Collateral Obligations;

 

WHEREAS, the Issuer desires to acquire the Collateral Obligations from the
Transferor on the Closing Date (the “Collateral Obligations”) listed on Schedule
1 hereto, together with certain related property, as more fully described as the
“Assets” in the Indenture, dated as of the date hereof (as amended, modified,
restated or supplemented from time to time, the “Indenture”), between the
Issuer, as issuer, and The Bank of New York Mellon Trust Company, National
Association, as trustee (together with its successors and assigns in such
capacity, the “Trustee”); and

 

WHEREAS, it is a condition to the Issuer’s acquisition of the Collateral
Obligations from the Transferor that the Transferor make certain
representations, warranties and covenants regarding all Collateral Obligations
and related Assets transferred pursuant to this Agreement for the benefit of the
Issuer.

 

NOW, THEREFORE, based upon the above recitals, the mutual premises and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

 

ARTICLE I
Definitions

 

Section 1.1. Definitions.

 

Capitalized terms used but not otherwise defined herein shall have the meanings
attributed to such terms in the Indenture. In addition, as used herein, the
following defined terms, unless the context otherwise requires, shall have the
following meanings:

 

“Collateral Obligations”. As defined in the Preamble of this Agreement.

 

“Conveyed Collateral”: The meaning specified in Section 2.1(a).

 

“Indemnified Party”: The meaning specified in Section 6.1.

 

“Insolvency Law”: The Bankruptcy Code and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, suspension of payments, or similar debtor relief
laws from time to time in effect affecting the rights of creditors generally.

 

 

 

“Issuer”: TICC CLO 2012-1 LLC, together with its successors and assigns.

 

“Noteless Collateral Obligation”: A Collateral Obligation with respect to which
(a) the related Underlying Documents do not require the Obligor to execute and
deliver an Underlying Note to evidence the indebtedness created under such
Collateral Obligation and (b) no Underlying Notes are outstanding with respect
to the portion of the Collateral Obligation transferred to the Issuer.

 

“Permitted Liens”: With respect to the interest of the Transferor and the Issuer
in the Collateral Obligations included in the Assets: (i) security interests,
liens and other encumbrances in favor of the Issuer created pursuant to this
Agreement, (ii) security interests, liens and other encumbrances in favor of the
Trustee created pursuant to the Indenture and/or this Agreement, (iii) with
respect to agented Collateral Obligations, security interests, liens and other
encumbrances in favor of the lead agent, the collateral agent or the paying
agent on behalf of all holders of indebtedness of such Obligor under the related
facility, (iv) with respect to any Equity Security, any security interests,
liens and other encumbrances granted on such Equity Security to secure
indebtedness of the related Obligor and/or any security interests, liens and
other rights or encumbrances granted under any governing documents or other
agreement between or among or binding upon the Issuer as the holder of equity in
such Obligor and (v) security interests, liens and other encumbrances, if any,
which have priority over first priority perfected security interests in the
Collateral Obligations or any portion thereof under the UCC or any other
applicable law.

 

“Required Loan Documents”: For each Collateral Obligation, the items set forth
below:

 

(i) (x) other than in the case of a Noteless Collateral Obligation or a
Participation Interest, the original or, if accompanied by a “lost note”
affidavit and indemnity, a copy of the Underlying Note, endorsed by the prior
holder of record either in blank or to the Trustee (and evidencing an unbroken
chain of endorsements from the prior holder(s) thereof evidenced in the chain of
endorsements in blank or to the Trustee), with any endorsement to the Trustee to
be in the following form: “The Bank of New York Mellon Trust Company, National
Association, its successors and assigns, as Trustee for the Secured Parties,”
and (y) in the case of a Noteless Collateral Obligation or a Participation
Interest, a copy of each transfer document or assignment agreement relating to
such Noteless Collateral Obligation or Participation Interest evidencing the
assignment of such Noteless Collateral Obligation or Participation Interest to
the Transferor and from the Transferor to the Issuer; and

 

(ii) originals or copies of each of the following, to the extent applicable to
the related Collateral Obligation: any related loan agreement or credit
agreement.

 

“Transferor”: TICC Capital Corp., together with its successors and assigns.

 

“Trustee”: As defined in the Preamble of this Agreement.

 

“Underlying Note”: One or more promissory notes executed by the applicable
Obligor evidencing a Collateral Obligation.

 

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Section 1.2. Other Terms.

 

All accounting terms used but not specifically defined herein shall be construed
in accordance with generally accepted accounting principles as in effect from
time to time in the United States.

 

Section 1.3. 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”, the words “to” and “until” each mean “to but excluding”,
and the word “within” means “from and excluding a specified date and to and
including a later specified date”.

 

Section 1.4. Interpretation.

 

In this Agreement, unless a contrary intention appears:

 

(i) the singular number includes the plural number and vice versa;

 

(ii) reference to any Person includes such Person’s successors and assigns but,
if applicable, only if such successors and assigns are permitted by the
Transaction Documents;

 

(iii) reference to any gender includes each other gender;

 

(iv) reference to day or days without further qualification means calendar days;

 

(v) unless otherwise stated, reference to any time means New York, New York
time;

 

(vi) references to “writing” include printing, typing, lithography, electronic
or other means of reproducing words in a visible form;

 

(vii) reference to any agreement (including any Transaction Document), document
or instrument means such agreement, document or instrument as amended, modified,
supplemented, replaced, restated, waived or extended and in effect from time to
time in accordance with the terms thereof and, if applicable, the terms of the
other Transaction Documents, and reference to any promissory note includes any
promissory note that is an extension or renewal thereof or a substitute or
replacement therefor;

 

(viii) reference to any requirement of law means such requirement of law as
amended, modified, codified, replaced or reenacted, in whole or in part, and in
effect from time to time, including rules and regulations promulgated thereunder
and reference to any Section or other provision of any requirement of law means
that provision of such requirement of law from time to time in effect and
constituting the substantive amendment, modification, codification, replacement
or reenactment of such Section or other provision; and

 

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(ix) references to “including” means “including, without limitation”.

 

Section 1.5. References.

 

All Section references (including references to the Preamble), unless otherwise
indicated, shall be to Sections (and the Preamble) in this Agreement.

 

ARTICLE II
Transfer of the conveyed COLLATERAL

 

Section 2.1. Transfer of the Conveyed Collateral.

 

(a) Transfer from the Transferor to the Issuer. Subject to and upon the terms
and conditions set forth herein, the Transferor hereby sells, conveys and
transfers to the Issuer all of the Transferor’s right, title and interest in, to
and under the Collateral Obligations and any related Assets with respect thereto
(the “Conveyed Collateral”) for a purchase price on the date hereof of
$50,053,568.44, which purchase price is the fair market value thereof. The
consideration for the transfer of the Conveyed Collateral from the Transferor to
the Issuer shall consist of cash paid by the Issuer to the Transferor on the
date hereof and the issuance by the Issuer to the Transferor of all of the
Subordinated Notes. In connection with such transfer of the Conveyed Collateral
from the Transferor to the Issuer, the Transferor shall transfer to the Trustee
(for the benefit of the Issuer) for deposit into the Collection Account all
proceeds received with respect to such Conveyed Collateral, on and after the
Closing Date.

 

(b) Each of the Transferor and the Issuer acknowledges and agrees that (i) the
representations, warranties, covenants and rights of indemnity of the Transferor
set forth herein will run to and be for the benefit of the Issuer and the
Trustee, on behalf of the Secured Parties and (ii) the Trustee for the benefit
of the Secured Parties shall be an express third party beneficiary of such
representations, warranties, covenants and rights of indemnity.

 

(c) Each of the Transferor and the Issuer intends and agrees that (i) the
transfer of the Conveyed Collateral by the Transferor to the Issuer pursuant to
this Agreement is intended to be an absolute sale, conveyance and transfer of
ownership of the Conveyed Collateral rather than the mere granting of a security
interest to secure a financing and (ii) such Conveyed Collateral shall not be
part of the Transferor’s estate in the event of a filing of a bankruptcy
petition or other action by or against the Transferor under any Insolvency Law.
In the event, however, that notwithstanding such intent and agreement, such
transfer is deemed to secure indebtedness, the Transferor hereby Grants to the
Issuer a security interest in all of its right, title and interest in, to and
under such Conveyed Collateral (whether now existing or hereafter created), and
the Issuer hereby further Grants such security interest to the Trustee for the
benefit of the Secured Parties. For such purposes, this Agreement shall
constitute a security agreement under the UCC, securing the repayment of the
purchase price paid hereunder and the obligations or interests represented by
the Notes, in the order and priorities, and subject to the other terms and
conditions of this Agreement and the Indenture, together with such other
obligations or interest as may arise hereunder and thereunder in favor of the
parties hereto and thereto.

 

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(d) If the transfer of the Conveyed Collateral by the Transferor to the Issuer
is deemed to be the mere granting of a security interest to secure a financing,
the Issuer may, to secure the Issuer’s obligations under the Indenture, repledge
and reassign to the Trustee for the benefit of the Secured Parties (1) all or a
portion of the Conveyed Collateral pledged to the Issuer by the Transferor and
with respect to which the Issuer has not released its security interest at the
time of such pledge and assignment and (2) all proceeds thereof. Such repledge
and reassignment may be made with or without a repledge and reassignment by the
Issuer of its rights under any agreement with the Transferor, and without
further notice to or acknowledgment from the Transferor. The Transferor hereby
waives, to the extent permitted by applicable law, all claims, causes of action
and remedies, whether legal or equitable (including any right of setoff),
against the Issuer or any assignee relating to such repledge or reassignment in
connection with the transactions contemplated by this Agreement and the other
Transaction Documents. The Issuer and the Transferor shall file or shall cause
to be filed a UCC-1 financing statement naming the Transferor as debtor, the
Issuer as secured party and the Trustee as assignee, listing all of the Conveyed
Collateral pledged hereunder as collateral thereunder.

 

(e) To the extent that the consideration received by the Transferor from the
Issuer in exchange for any Conveyed Collateral is less than the fair market
value of such Conveyed Collateral, the difference between such fair market value
and the consideration so received shall be deemed to be a capital contribution
by the Transferor to the Issuer. For all purposes of this Agreement, any
contributed Conveyed Collateral shall be treated the same as the Conveyed
Collateral sold for cash or other property.

 

Section 2.2. Conveyance of Conveyed Collateral.

 

(a) On or before the Closing Date, the Transferor shall deliver or cause to be
delivered to the Trustee each of the documents, certificates and other items as
follows:

 

(i) officially certified recent evidence of due formation and good standing of
the Issuer under the laws of the State of Delaware and good standing of the
Transferor under the laws of the State of Maryland;

 

(ii) a copy of a written consent of the board of directors of TICC Capital
Corp., in its capacity as Transferor and in its capacities as the designated
manager of the Issuer, approving the execution, delivery and performance of this
Agreement and the transactions contemplated hereunder, certified, in each case
as applicable, by an Officer of TICC Capital Corp., in such capacities;

 

(iii) a UCC financing statement naming the Transferor as debtor, naming the
Issuer as secured party (and the Trustee as assignee for the benefit of the
Secured Parties) and identifying the Conveyed Collateral as collateral for
filing with the office of the Secretary of State for the State of Maryland; and
delivery of UCC financing statements naming the Issuer as debtor, naming the
Trustee, for the benefit of the Secured Parties, as secured party and
identifying the Conveyed Collateral, as collateral for filing with the office of
the Secretary of State for the State of Delaware;

 

(iv) a fully executed copy of each Transaction Document; and

 

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(v) all Opinions of Counsel required to be delivered pursuant to Section 3.1(c)
of the Indenture.

 

(b) Concurrently with the transfer of the Conveyed Collateral by the Transferor
to the Issuer, (i) each of the representations and warranties made by the
Transferor pursuant to Article III applicable to the Conveyed Collateral shall
be true and correct as of the Closing Date, and (ii) the Transferor shall, at
its own expense and not later than the Closing Date, indicate in its records
that ownership of the Conveyed Collateral has been conveyed by it to the Issuer
pursuant to this Agreement.

 

Section 2.3. Acceptance of Conveyed Collateral

 

On the Closing Date, upon satisfaction of the conditions set forth in Section
2.2, the Issuer hereby instructs the Transferor, and the Transferor hereby
agrees to deliver, on behalf of the Issuer, the Conveyed Collateral to the
Trustee, and such delivery to and acceptance by the Trustee shall be deemed to
be delivery to and acceptance by the Issuer.

 

Section 2.4. Delivery of Documents.

 

With respect to each Collateral Obligation transferred hereunder as part of the
Conveyed Collateral, on or prior to the Closing Date, the Transferor, on behalf
of the Issuer, will deliver or cause to be delivered to the Custodian, to the
extent not previously delivered, each of the Required Loan Documents with
respect to such Collateral Obligations.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES

 

The Transferor makes the following representations and warranties, on which the
Issuer will rely in acquiring the Conveyed Collateral on the Closing Date, and
on which each of the parties hereto acknowledges and agrees that the Trustee,
for the benefit of the Secured Parties, shall be entitled to rely as an express
third party beneficiary as a condition of the Issuer entering into the
Transaction Documents to which it is a party and of the Noteholders purchasing
the Notes. Each of the parties hereto acknowledges and agrees that such
representations and warranties are being made by the Transferor for the benefit
of the Issuer and the Trustee, for the benefit of the Secured Parties.

 

The representations and warranties set forth in this Article III are given as of
the Closing Date, but shall survive the sale, transfer and assignment of the
Conveyed Collateral to the Issuer hereunder.

 

The representations and warranties set forth in Section 3.1(j) may not be waived
by any Person and shall survive the termination of this Agreement.

 

Section 3.1. Representations and Warranties of the Transferor.

 

By its execution of this Agreement, the Transferor represents and warrants that:

 

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(a) Organization and Good Standing. The Transferor is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Maryland, and has full power and authority to own its assets and to transact
the business in which it is currently engaged, and is duly qualified as a
foreign corporation and is in good standing under the laws of each jurisdiction
where its ownership or lease of property, the conduct of its business or the
performance of this Agreement or any other Transaction Document applicable to it
would require such qualification, except for those jurisdictions in which the
failure to be so qualified, authorized or licensed would not have a material
adverse effect on the business operations, assets or financial condition of the
Transferor or on the validity or enforceability of this Agreement or the
provisions of any other Transaction Document applicable to the Transferor, or
the performance by the Transferor of its duties hereunder or thereunder.

 

(b) Authorization; Valid Sale; Binding Obligations. The Transferor has the power
and authority to make, execute, deliver and perform this Agreement and the other
Transaction Documents to which it is a party and all of the transactions
contemplated under this Agreement and the other Transaction Documents to which
it is a party. This Agreement shall effect a valid sale (or contribution, as the
case may be), transfer and assignment of, or Grant of a security interest in,
the Conveyed Collateral being so transferred, conveyed and assigned from the
Transferor to the Issuer, enforceable against the Transferor and creditors of
and purchasers from the Transferor. This Agreement and the other Transaction
Documents to which the Transferor is a party constitute the legal, valid and
binding obligations of the Transferor enforceable in accordance with their
terms, except as enforcement of such terms may be limited by bankruptcy,
reorganization, insolvency, moratorium and other laws affecting the enforcement
of creditors’ rights generally and general principles of equity, whether
considered in a suit at law or in equity.

 

(c) No Consent Required. No consent of any other Person and no license, permit,
order, approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority or court or
any other Person is required to be obtained by the Transferor in connection with
this Agreement or any other Transaction Document to which it is a party or the
execution, delivery, performance, validity or enforceability of this Agreement
or any other Transaction Document to which it is a party or the obligations
imposed on the Transferor hereunder or under the terms of the Indenture or any
other Transaction Document to which it is a party other than those that have
been obtained or made.

 

(d) No Violations. The execution, delivery and performance of this Agreement and
the other Transaction Documents to which it is a party, and the consummation of
the transactions contemplated hereby and thereby, will not violate the
Transferor’s articles of incorporation or bylaws or any material requirement of
law applicable to it, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Transferor is a party or by
which the Transferor or any of the Transferor’s properties may be bound, or
result in the creation or imposition of any security interest, lien, charge,
pledge or encumbrance of any kind upon any of its properties pursuant to the
terms of any such mortgage, indenture, contract or other agreement, other than
as contemplated by the Transaction Documents.

 

(e) Litigation. No litigation or administrative proceeding of or before any
court, tribunal or governmental body is currently pending, or to the knowledge
of the Transferor threatened, against the Transferor or any of its properties or
with respect to this Agreement, the other Transaction Documents to which it is a
party or the Notes (1) that could be expected to have a material adverse effect
on (i) the business, properties, assets or condition (financial or otherwise) of
the Transferor or (ii) the transactions contemplated by this Agreement or the
other Transaction Documents to which the Transferor is a party or (2) seeking to
adversely affect the federal income tax or other federal, state or local tax
attributes of the Notes.

 

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(f) Solvency. The Transferor, at the time of and after giving effect to the
conveyance of the Conveyed Collateral hereunder, is solvent and, to the best of
the Transferor’s knowledge, is not facing any pending insolvency.

 

(g) Taxes. The Transferor has filed or caused to be filed all tax returns which
are required to be filed and has paid all taxes shown to be due and payable on
such returns or on any assessments made against it or any of its property and
all other taxes, fees or other charges imposed on it or any of its property by
any governmental authority (other than any amount of tax due, the validity of
which is currently being contested in good faith by appropriate proceedings and
with respect to which reserves in accordance with generally accepted accounting
principles have been provided on its books), except for failures to file or pay
that could not be expected to have a material adverse effect on the business
operations, assets or financial condition of the Transferor or on the validity
or enforceability of this Agreement or the provisions of any other Transaction
Document applicable to the Transferor, or the performance by the Transferor of
its duties hereunder or thereunder.

 

(h) Place of Business; No Changes. Except for the change in the Transferor’s
name from Technology Investment Capital Corp. to TICC Capital Corp. on December
3, 2007, the Transferor has not changed its name or the State under whose laws
it is formed, whether by amendment of its articles of incorporation, by
reorganization or otherwise.

 

(i) Sale Treatment. Other than for tax and accounting purposes, the Transferor
has treated the transfer of the Conveyed Collateral to the Issuer for all
purposes as a sale and purchase on all of its relevant books and records.

 

(j) Security Interest.

 

(i) in the event that the transfer by the Transferor to the Issuer of any
Conveyed Collateral is determined not to be an absolute transfer, this Agreement
is effective to create in favor of the Issuer a valid and continuing security
interest (as defined in the UCC) in all of the right, title and interest of the
Transferor in, to and under such Conveyed Collateral, which security interest is
perfected and is prior to all other liens (other than Permitted Liens), and is
enforceable as such against, all creditors of and purchasers from the
Transferor;

 

(ii) each Collateral Obligation transferred hereunder constitutes or is
evidenced by a Financial Asset, an Instrument, a Certificated Security or a
general intangible (as defined in the UCC);

 

(iii) the Transferor owns the Conveyed Collateral being conveyed hereunder, free
and clear of any lien, claim or encumbrance of any Person (other than Permitted
Liens), and, upon the transfer by the Transferor to the Issuer of any Conveyed
Collateral, the Issuer will own such Conveyed Collateral free and clear of any
and all liens, claims or encumbrances created by, or attaching to property of,
the Transferor (other than Permitted Liens);

 

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(iv) the Transferor has received all consents and approvals required by the
terms of any Conveyed Collateral to the conveyance of such Conveyed Collateral
hereunder to the Issuer;

 

(v) the Transferor has caused 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 such Conveyed Collateral
granted to the Issuer under this Agreement to the extent perfection can be
achieved by filing a financing statement;

 

(vi) other than the conveyance to the Issuer and the security interest granted
to the Issuer pursuant to this Agreement, the Transferor has not pledged,
assigned, sold, granted a security interest in or otherwise conveyed any of such
Conveyed Collateral. The Transferor has not authorized the filing of, and is not
aware of, any financing statements against the Transferor that include a
description of collateral covering such Conveyed Collateral other than (A) any
financing statement relating to the security interest Granted to the Issuer
under this Agreement and (B) any financing statement that has been terminated.
The Transferor is not aware of the filing of any judgment, employee benefit or
tax lien filings against it;

 

(vii) on or prior to the Closing Date, copies (which may be in electronic form)
(or originals, if required by the definition of “Required Loan Documents”) of
the Required Loan Documents have been delivered to the Custodian; and

 

(viii) none of the Underlying Notes that constitute or evidence the Conveyed
Collateral has any marks or notations indicating that it has been pledged,
assigned or otherwise conveyed to any Person other than the Issuer or in blank
or to the Trustee.

 

(k) Value Given. The cash payments and corresponding increase in the
Transferor’s equity interest in the Issuer received by the Transferor in respect
of the purchase price of all Conveyed Collateral conveyed hereunder constitutes
reasonably equivalent value in consideration for the transfer to the Issuer of
such Conveyed Collateral under this Agreement, such transfer was not made for or
on account of an antecedent debt owed by the Issuer to the Transferor, and such
transfer was not and is not voidable or subject to avoidance under any
Insolvency Law.

 

(l) No Defaults. The Transferor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency, which default might have consequences that
would materially and adversely affect the condition (financial or otherwise) or
operations of it or its respective properties or might have consequences that
would materially and adversely affect its performance hereunder.

 

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(m) Bulk Transfer Laws. The transfer, assignment and conveyance of the Conveyed
Collateral by the Transferor pursuant to this Agreement are not subject to the
bulk transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.

 

(n) Lack of Intent to Hinder, Delay or Defraud. Neither the Transferor nor any
of its Affiliates sold or will sell any interest in any Conveyed Collateral with
any intent to hinder, delay or defraud any of their respective creditors.

 

(o) Nonconsolidation. The Transferor conducts, and will at all times conduct,
its affairs such that the Issuer would not be substantively consolidated in the
estate of the Transferor and the separate existence of the Issuer would not be
disregarded in the event of a bankruptcy of the Transferor.

 

(p) Investment Company Act. The Transferor: (i) has filed an election to be
treated as a business development company under the 1940 Act and has not
withdrawn such election and qualifies as a regulated investment company under
the Code; (ii) conducts its business and other activities (a) in compliance in
all material respects with the applicable provisions of the 1940 Act and any
applicable rules, regulations or orders issued by the Securities and Exchange
Commission thereunder and (b) in such a way that the consummation of the
transactions contemplated by this Agreement and the other Transaction Documents
does not violate in any material respect the provisions of the 1940 Act or any
rules, regulations or orders issued by the Securities and Exchange Commission
thereunder.

 

Section 3.2. Representations and Warranties Regarding the Collateral
Obligations.

 

The Transferor hereby represents to the Issuer and to the Trustee for the
benefit of the Secured Parties that each Collateral Obligation conveyed
hereunder, as of the Closing Date, satisfies the definition of “Collateral
Obligation” under the Indenture.

 

Section 3.3. Representations and Warranties of the Issuer.

 

By its execution of this Agreement, the Issuer represents and warrants to the
Transferor that:

 

(a) Organization and Good Standing. The Issuer is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware and in each jurisdiction where the conduct of its business
requires such license, qualification or good standing, except where the failure
to be so licensed or qualified or in good standing would not have a material
adverse effect the ownership or use of its assets, the validity or
enforceability of the Transaction Documents to which it is a party, or the
ability of the Issuer to perform its obligations hereunder or thereunder.

 

10

 

(b) Power and Authority. The Issuer has the power and authority to execute and
deliver the Transaction Documents and all other documents and agreements
contemplated hereby and thereby to which it is a party, as well as to carry out
the terms hereof and thereof.

 

(c) Valid Execution; Binding Obligations. The Issuer has taken all necessary
action, including but not limited to all requisite limited liability company
action, to authorize the execution, delivery and performance of the Transaction
Documents and all other documents and agreements contemplated hereby and thereby
to which it is a party. When executed and delivered by the Issuer each of the
Transaction Documents will constitute the legal, valid and binding obligation of
the Issuer enforceable in accordance with its terms, subject, as to enforcement,
to applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of creditors’
rights in general, except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity).

 

(d) Authorizations. All authorizations, licenses, permits, certificates,
franchises, consents, approvals and undertakings which are required to be
obtained by the Issuer under any applicable law which are material to (i) the
conduct of its business, (ii) the ownership, use, operation or maintenance of
its properties or (iii) the performance by the Issuer of its obligations under
or in connection with the Transaction Documents to which it is a party, have
been received and all such authorizations, licenses, permits, certificates,
franchises, consents, approvals and undertakings are in full force and effect.

 

(e) No Violations. The execution, issuance and delivery of, and performance by
the Issuer of its obligations under, the Transaction Documents to which it is a
party and any and all instruments or documents required to be executed or
delivered pursuant to or in connection herewith or therewith were and are within
the powers of the Issuer and will not violate any provision of any law,
regulation, decree or governmental authorization applicable to the Issuer or its
limited liability company agreement, and will not violate or cause a default
under any provision of any contract, agreement, mortgage, indenture or other
undertaking to which the Issuer is a party or which is binding upon the Issuer
or any of its property or assets, and will not result in the imposition or
creation of any lien, charge or encumbrance upon any of the properties or assets
of the Issuer pursuant to the provisions of any such contract, agreement,
mortgage, indenture or undertaking, other than as specifically set forth in the
Indenture.

 

(f) Litigation. There are no legal, governmental or regulatory proceedings
pending to which the Issuer is a party or to which any of its property is
subject, which if determined adversely to the Issuer could individually or in
the aggregate have a material adverse effect on the performance by the Issuer of
the Transaction Documents to which it is a party or the consummation of the
transactions contemplated hereunder or thereunder, and to the best of its
knowledge, no such proceedings are threatened or contemplated.

 

11

 

ARTICLE IV
Perfection of Transfer
and Protection of Security Interests

 

Section 4.1. Custody of Collateral Obligation.

 

On or prior to the Closing Date, copies (or originals, if required by the
definition of Required Loan Documents) of the Required Loan Documents shall be
delivered to the Custodian.

 

Section 4.2. Filing.

 

On or prior to the Closing Date, the Transferor shall cause the UCC financing
statement(s) referred to in Section 2.2(a)(iii) hereof to be filed.
Notwithstanding the obligation of the Transferor set forth in the preceding
sentence, each of the Transferor and the Issuer hereby authorizes the Collateral
Manager to prepare and file, at the expense of the Collateral Manager, such UCC
financing statements (including but not limited to renewal, continuation or in
lieu statements) and amendments or supplements thereto or other instruments as
the Collateral Manager may from time to time deem necessary or appropriate in
order to perfect and maintain the security interests granted hereunder in
accordance with the UCC.

 

Section 4.3. Changes in Name, Corporate Structure or Location.

 

(a) During the term of this Agreement, the Transferor shall not change its name,
structure or state of incorporation without first giving at least 30 days’ prior
written notice to the Trustee.

 

(b) If any change in the Transferor’s name, structure, state of formation,
location or other action would make any financing or continuation statement or
notice of ownership interest or lien relating to any Conveyed Collateral
seriously misleading within the meaning of applicable provisions of the UCC or
any title statute, the Transferor, no later than five Business Days after the
effective date of such change, shall file such amendments as may be required to
preserve and protect the Issuer’s and the Trustee’s respective interests in the
Conveyed Collateral.

 

Section 4.4. Costs and Expenses.

 

The Issuer (or the Collateral Manager pursuant to the Collateral Management
Agreement on its behalf) will be obligated to pay all reasonable costs and
disbursements in connection with the perfection and the maintenance of
perfection, as against all third parties, of the Issuer’s and Trustee’s
respective right, title and interest in and to the Conveyed Collateral
(including, without limitation, the security interests provided for in the
Indenture).

 

Section 4.5. Sale Treatment.

 

Other than for tax and accounting purposes, the Transferor shall treat the
transfer of the Conveyed Collateral made hereunder for all purposes as a sale
and purchase on all of its relevant books and records.

 

12

 

Section 4.6. Separateness.

 

The Transferor agrees to take, or refrain from taking or engaging in, with
respect to the Issuer each of the actions or activities specified in the
“substantive consolidation” opinion of Sutherland Asbill & Brennan LLP
(including any certificates delivered in connection therewith) delivered on the
Closing Date, upon which the conclusions and opinions therein are based.

 

ARTICLE V
Covenants

 

Section 5.1. Covenants of the Transferor.

 

The Transferor makes the following covenants to the Issuer, and on which the
Transferor acknowledges and agrees that the Issuer and the Trustee, for the
benefit of the Secured Parties, shall be entitled to rely as an express third
party beneficiary as a condition of the Issuer and the Trustee entering into the
Transaction Documents to which each of them is a party and as a condition to the
Noteholders purchasing the Notes.

 

(a) Corporate Existence. During the term of this Agreement, the Transferor will
keep in full force and effect its existence, rights and franchises as a
corporation under the laws of the jurisdiction of its organization and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the other Transaction Documents and each other
instrument or agreement necessary or appropriate to the proper administration of
this Agreement and the transactions contemplated hereby. In addition, all
transactions and dealings between the Transferor and the Issuer will be
conducted on an arm’s length basis.

 

(b) Collateral Obligations Not to Be Evidenced by Promissory Notes. In the event
that any Collateral Obligation not originally evidenced by a promissory note is
evidenced by an Instrument, the Transferor shall deliver such Instrument to the
Custodian.

 

(c) Security Interests. Except as expressly provided herein, the Transferor will
not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any lien on any Conveyed Collateral. The
Transferor will promptly notify the Issuer and the Trustee of the existence of
any lien on any Conveyed Collateral; and the Transferor shall defend the
respective right, title and interest of the Issuer in, to and under the Conveyed
Collateral against all claims of third parties; provided that nothing in this
Section 5.1(c) shall prevent or be deemed to prohibit the Transferor from
suffering to exist Permitted Liens upon any of the Conveyed Collateral. The
Transferor shall promptly take all actions required (including, but not limited
to, all filings and other acts necessary or advisable under the UCC of each
relevant jurisdiction) in order to continue (subject to Permitted Liens) the
first priority perfected security interest of the Issuer in all Conveyed
Collateral which has not been released pursuant to the Indenture.

 

(d) Compliance with Law. The Transferor hereby agrees to comply in all respects
with all requirements of law applicable to it except where the failure to do so
would not have a material adverse effect on the Issuer.

 

13

 

(e) Location. The Transferor shall not move its jurisdiction of formation
outside of the State of Maryland without 30 days’ prior written notice to the
Issuer and the Trustee.

 

(f) Merger or Consolidation of the Transferor.

 

(i) Any Person into which the Transferor may be merged or consolidated, or any
Person resulting from such merger or consolidation to which the Transferor is a
party, or any Person succeeding by acquisition or transfer to substantially all
of the assets and the business of the Transferor shall be the successor to the
Transferor hereunder and the other Transaction Documents to which the Transferor
is a party, without execution or filing of any paper or any further act on the
part of any of the parties hereto, notwithstanding anything herein to the
contrary.

 

(ii) Upon the merger or consolidation of the Transferor or transfer of
substantially all of its assets and its business as described in this Section
5.1(f), the Transferor shall provide the Trustee, the Issuer and the Rating
Agencies notice of such merger, consolidation or transfer of substantially all
of the assets and business within 30 days after completion of the same.

 

(g) Regulatory Filings. The Transferor shall make, or shall cause to be made,
any filings, reports, notices, applications and registrations with, and seek any
consents or authorizations from, the Securities and Exchange Commission and any
state securities authority on behalf of the Transferor and the Issuer as may be
necessary or that the Transferor deems advisable to comply with any federal or
state securities or reporting requirements, laws relating to the transactions
contemplated by the Transaction Documents, or as may be otherwise required by
applicable law.

 

(h) Notice. The Transferor shall, promptly following the Closing Date, notify
the agent bank and the Obligor (if required under the respective assignment
agreement) with respect to the Conveyed Collateral of the Transferor’s sale of
the Conveyed Collateral to the Issuer.

 

ARTICLE VI
Indemnification by THE TRANSFEROR

 

Section 6.1. Indemnification.

 

The Transferor agrees to indemnify, defend and hold the Issuer, the Trustee and
any of their respective managers, members, officers, directors, employees and
agents (any one of which is an “Indemnified Party”) harmless from and against
any and all claims, losses, penalties, fines, forfeitures, reasonable legal fees
and related costs, judgments and any other reasonable costs, fees and expenses
(provided that any indemnification for damages is limited to actual damages, not
consequential, special or punitive damages) that such Person may sustain as a
result of the Transferor’s gross negligence, willful misconduct or fraud. An
Indemnified Party shall promptly notify the Transferor if a claim is made by a
third party with respect to this Agreement, and the Transferor shall assume
(with the consent of the Indemnified Party) the defense and any settlement of
any such claim and pay all expenses in connection therewith, including
reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against the Indemnified Party in respect of such
claim. If the consent of the Indemnified Party required in the immediately
preceding sentence is unreasonably withheld with respect to any claim, the
Transferor shall be relieved of its indemnification obligations hereunder with
respect to such claim. The parties agree that the provisions of this Section 6.1
shall not be interpreted to provide recourse to the Transferor against loss by
reason of the bankruptcy, insolvency or lack of creditworthiness of an Obligor
with respect to a Collateral Obligation. The Transferor shall have no liability
for making indemnification hereunder to the extent any such indemnification
constitutes recourse for uncollectible or uncollected amounts payable under any
Collateral Obligation.

 

14

 

Section 6.2. Liabilities to Obligors.

 

Except with respect to the funding commitment or letter of credit participations
assumed by the Issuer with respect to any Delayed Drawdown Collateral Obligation
or Revolving Collateral Obligation, the Transferor hereby acknowledges and
agrees that no obligation or liability of the Transferor to any Obligor under
any of the Collateral Obligations is intended to be assumed by the Issuer, the
Trustee or the Noteholders under or as a result of this Agreement and the
transactions contemplated hereby and under the other Transaction Documents, and
the Trustee for the benefit of the Secured Parties is expressly named as a third
party beneficiary of this Agreement for purposes of this Section 6.2.

 

Section 6.3. Operation of Indemnities.

 

If the Transferor has made any indemnity payments to any Indemnified Party
pursuant to this Article VI and such Indemnified Party thereafter collects any
such amounts from others, such Indemnified Party will repay such amounts
collected to the Transferor.

 

ARTICLE VII
Miscellaneous

 

Section 7.1. Amendment.

 

(a) This Agreement may be amended or waived from time to time by the parties
hereto by written agreement without consent of the Noteholders, to (i) cure any
ambiguity or to correct or supplement any provisions herein, (ii) comply with
any changes in the Code, (iii) to enable the Issuer to rely upon any exemption
from registration under the Securities Act or the 1940 Act, (iv) to enable the
Issuer or Transferor to comply with any applicable securities law or U.S.
securities laws (including the regulations implementing such laws), (v) conform
this Agreement to the Offering Circular and (vi) to evidence the succession of
another Person to the Issuer or Transferor, as applicable, and the assumption by
any such successor Person of the covenants of the Issuer or Transferor, as
applicable herein. Any other amendment or waiver to this Agreement shall be
subject to the consent of a Majority of the Controlling Class; provided that no
such amendment or waiver shall reduce in any manner the amount of, or delay the
timing of, any amounts received on Collateral Obligations which are required to
be distributed on any Note without the consent of the related Noteholder, or
change the rights or obligations of any other party hereto without the consent
of such party.

 

15

 

(b) Prior to the execution of any such amendment or waiver, the Transferor shall
furnish to the Trustee and the Trustee shall furnish to each Rating Agency and
each Noteholder written notification of the substance of such proposed amendment
or waiver, together with a copy thereof.

 

(c) Promptly after the execution of any such amendment or waiver, the Trustee
shall furnish written notification of the substance of such amendment or waiver
to the Rating Agencies and to each Noteholder. It shall not be necessary for the
consent of any Noteholders pursuant to Section 7.1(a) to approve the particular
form of any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such
consents and of evidencing the authorization by Noteholders of the execution
thereof shall be subject to such reasonable requirements as the Trustee may
prescribe.

 

(d) Prior to the execution of any amendment to this Agreement, the Issuer and
the Trustee shall be entitled to receive and rely upon an Opinion of Counsel
(which Opinion of Counsel may rely upon an Officer’s certificate of the Issuer
or of the Collateral Manager with respect to the effect of any such amendment or
waiver on the economic interests of the Noteholders) stating that the execution
of such amendment is authorized or permitted by this Agreement. The Trustee may,
but shall not be obligated to, consent to any such amendment that affects such
Trustee’s own rights, duties or immunities under this Agreement or otherwise.

 

(e) The Trustee, by its signature below, acknowledges and agrees to be bound by
the provisions of this Section 7.1.

 

Section 7.2. Governing Law.

 

(a) This Agreement shall be construed in accordance with, and this Agreement and
all matters arising out of or relating in any way whatsoever (whether in
contract, tort or otherwise) to this Agreement shall be governed by, the law of
the State of New York

 

(b) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT. Each party hereto (i) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (ii) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications in this Section 7.2(b).

 

Section 7.3. Notices.

 

All notices, demands, certificates, requests, directions and communications
hereunder shall be in writing and shall be effective (a) upon receipt when sent
through the U.S. mails, registered or certified mail, return receipt requested,
postage prepaid, with such receipt to be effective the date of delivery
indicated on the return receipt, (b) one Business Day after delivery to an
overnight courier, (c) on the date personally delivered to a Responsible Officer
of the party to which sent, or (d) on the date transmitted by legible facsimile
transmission or electronic mail transmission with a confirmation of receipt, in
all cases addressed to the recipient at such recipient’s address for notices set
forth in Schedule 2.

 

16

 

 

 

Section 7.4. Severability of Provisions.

 

If one or more of the covenants, agreements, provisions or terms of this
Agreement shall be for any reason whatsoever prohibited or held invalid or
unenforceable, then such covenants, agreements, provisions or terms shall be
deemed severable from the remaining covenants, agreements, provisions or terms
of this Agreement and shall in no way affect the validity or enforceability of
the other provisions of this Agreement and any such prohibition, invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such covenant, agreement, provision or term in any other
jurisdiction.

 

Section 7.5. Third Party Beneficiaries.

 

The parties hereto hereby manifest their intent that except as otherwise
expressly provided herein, no third party (other than the Trustee, on behalf of
the Secured Parties) shall be deemed a third party beneficiary of this
Agreement, and specifically that the Obligors are not third party beneficiaries
of this Agreement.

 

Section 7.6. Counterparts.

 

This Agreement may be executed by facsimile signature and in several
counterparts, each of which shall be an original and all of which shall together
constitute but one and the same instrument.

 

Section 7.7. Headings.

 

The headings of the various Sections herein are for convenience of reference
only and shall not define or limit any of the terms or provisions hereof.

 

Section 7.8. No Bankruptcy Petition; Disclaimer.

 

(a) The Transferor covenants and agrees that, prior to the date that is one year
and one day after the satisfaction and discharge of the Indenture or, if longer,
the applicable preference period then in effect, it will not institute against
the Issuer, or join any other Person in instituting against the Issuer, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceedings under the laws of the United States or any state of
the United States. This Section 7.8 will survive the termination of this
Agreement.

 

(b) The provisions of this Section 7.8 shall be for the third party benefit of
those entitled to rely thereon, including the Trustee for the benefit of the
Secured Parties, and shall survive the termination of this Agreement.

 

Section 7.9.
Jurisdiction.

 

Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction
of any New York State or Federal court sitting in the Borough of Manhattan in
The City of New York in any action or proceeding arising out of or relating this
Agreement, and hereby irrevocably agrees that all claims in respect of such
action or proceeding may be heard and determined in such New York State or
Federal court. Each party hereto hereby irrevocably waives, to the fullest
extent that it may legally do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. Each party hereto irrevocably consents
to the service of any and all process in any action or proceeding by the mailing
or delivery of copies of such process to it the address set forth in Schedule 2.
Each party hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.

 

Section 7.10. Prohibited Transactions with Respect to the Issuer.

 

The Transferor shall not:

 

(a) Provide credit to any Noteholder for the purpose of enabling such Noteholder
to purchase Notes; or

 

(b) Purchase any Notes in an agency or trustee capacity.

 

Section 7.11. No Partnership.

 

Nothing herein contained shall be deemed or construed to create a co-partnership
or joint venture between the parties hereto.

 

Section 7.12. Successors and Assigns.

 

This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.

 

Section 7.13. Duration of Agreement.

 

This Agreement shall continue in existence and effect until the satisfaction and
discharge of the Indenture.

 

Section 7.14. Limited Recourse.

 

The obligations of the Issuer and the Transferor under this Agreement and the
other Transaction Documents are solely the limited liability company or
corporate obligations, as applicable, of the Issuer and Transferor,
respectively. No recourse shall be had for the payment of any amount owing by
the Issuer or Transferor under this Agreement, any Transaction Document or for
the payment by the Issuer or Transferor of any fee in respect hereof or any
other obligation or claim of or against the Issuer or Transferor arising out of
or based upon this Agreement or any Transaction Document, against any employee,
officer, director, shareholder, partner, member or manager of the Issuer or
Transferor or of any Affiliate of such Person (other than the Transferor or the
Issuer, as applicable). The provisions of this Section 7.14 shall survive the
termination of this Agreement.

 

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18

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement .to be duly
executed by their respective officers as of the day and year first above
written.

 

TICC CAPITAL CORP.

 

By:
Name:
Title:

 

 

TICC CLO 2012-1 LLC

 

By: TICC Capital Corp., its designated manager

 

By:
Name:
Title:

 

19

 

SCHEDULE 1

 

 

 

Schedule of Conveyed Collateral

 

 

S-1-1

 

SCHEDULE 2

NOTICE INFORMATION

Transferor:

 

TICC Capital Corp.
8 Sound Shore Drive, Suite 255

Greenwich, CT 06830

Telephone No.: (203) 983-5275
Facsimile No.: (203) 983-5290

Attention: Saul Rosenthal

 

Issuer:

 

TICC CLO 2012-1 LLC
8 Sound Shore Drive, Suite 255

Greenwich, CT 06830

Telephone No.: (203) 983-5275
Facsimile No.: (203) 983-5290

Attention: Saul Rosenthal

 

Collateral Manager:

 

TICC Capital Corp.
8 Sound Shore Drive, Suite 255

Greenwich, CT 06830

Telephone No.: (203) 983-5275
Facsimile No.: (203) 983-5290

Attention: Saul Rosenthal

 

Trustee:

 

The Bank of New York Mellon Trust Company, National Association

601 Travis Street, 16th Floor
Houston, TX 77002

Telephone No.: 713-483-6000
Facsimile No.: 713-483-6001

Attention: Global Corp Trust – TICC CLO 2012-1 LLC

S-2-1