Exhibit 10.1

 

EXECUTION VERSION

 

AMENDMENT NO. 3 TO THE

LOAN AND SERVICING AGREEMENT AND AMENDMENT NO. 1 TO PURCHASE

AND SALE AGREEMENT, CUSTODY AGREEMENT AND SECURITIES ACCOUNT

CONTROL AGREEMENT

 

This AMENDMENT NO. 3 TO THE LOAN AND SERVICING AGREEMENT AND AMENDMENT NO. 1 TO
PURCHASE AND SALE AGREEMENT, CUSTODY AGREEMENT AND SECURITIES ACCOUNT CONTROL
AGREEMENT (this “Amendment”), is dated as of August 17, 2015, among Fifth Street
Funding II, LLC, as the borrower (in such capacity, the “Borrower”), Fifth
Street Finance Corp., as the transferor (in such capacity, the “Transferor”) and
as the servicer (in such capacity, the “Servicer”), Sumitomo Mitsui Banking
Corporation, as the administrative agent (in such capacity, the “Administrative
Agent”), as lender (in such capacity, the “Lender”) and as the collateral agent
(in such capacity, the “Collateral Agent”) and U.S. Bank National Association,
as the custodian (the “Custodian”) and as the account bank (the “Account Bank”).
Capitalized terms used but not defined herein have the meanings provided in the
Loan and Servicing Agreement (as defined below).

 

RECITALS

 

WHEREAS, the Borrower, the Servicer, the Transferor, the Administrative Agent,
the Lender and the Collateral Agent have entered into the Loan and Servicing
Agreement, dated as of September 16, 2011 (such agreement as amended on March
16, 2012 by Amendment No. 1 and Waiver to the Loan and Servicing Agreement and
on October 30, 2013 by Amendment No. 2 to the Loan and Servicing Agreement and
as may be further amended, modified, supplemented, waived or restated from time
to time, the “Loan and Servicing Agreement”);

 

WHEREAS, the Transferor and the Borrower have entered into the Purchase and Sale
Agreement dated as of September 16, 2011 (as may be further amended, modified,
supplemented or restated from time to time, the “Purchase and Sale Agreement”);

 

WHEREAS, the Borrower, the Servicer, the Transferor, the Collateral Agent, the
Administrative Agent and the Custodian have entered into the Custody Agreement,
dated as of September 16, 2011 (as amended, modified, supplemented, waived or
restated from time to time, the “Custody Agreement”);

 

WHEREAS, the Borrower, the Servicer, the Collateral Agent and the Account Bank
have entered into the Securities Account Control Agreement, dated as of
September 16, 2011 (as amended, modified, supplemented, waived or restated from
time to time, the “Securities Account Control Agreement”);

 

WHEREAS, pursuant to and in accordance with Section 11.01 of the Loan and
Servicing Agreement, the parties hereto desire to amend the Loan and Servicing
Agreement in certain respects as provided herein;

 

WHEREAS, pursuant to and in accordance with Section 10.3 of the Purchase and
Sale Agreement, the parties hereto desire to amend the Purchase and Sale
Agreement in certain respects as provided herein;

 

   

 

 

WHEREAS, pursuant to and in accordance with Section 17.1 of the Custody
Agreement, the parties hereto desire to amend the Custody Agreement in certain
respects as provided herein; and

 

WHEREAS, pursuant to and in accordance with Section 10(b) of the Securities
Account Control Agreement, the parties hereto desire to amend the Securities
Account Control Agreement in certain respects as provided herein;

 

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:

 

SECTION 1. AMENDMENTS.

 

(a)          The Loan and Servicing Agreement is hereby amended to delete the
stricken text (indicated textually in the same manner as the following example:
stricken text) and to add the bold and double-underlined text (indicated
textually in the same manner as the following example: bold and
double-underlined text) as set forth on the pages of the Loan and Servicing
Agreement attached as Exhibit A hereto.

 

(b)          The Schedules to the Loan and Servicing Agreement are hereby
amended to delete the stricken text (indicated textually in the same manner as
the following example: stricken text) and to add the bold and double-underlined
text (indicated textually in the same manner as the following example: bold and
double-underlined text) as set forth on the pages of the Schedules to the Loan
and Servicing Agreement attached as Exhibit B hereto.

 

(c)          The Custody Agreement is hereby amended to delete the stricken text
(indicated textually in the same manner as the following example: stricken text)
and to add the bold and double-underlined text (indicated textually in the same
manner as the following example: bold and double-underlined text) as set forth
on the pages of the Custody Agreement attached as Exhibit C hereto.

 

(d)          The Securities Account Control Agreement is hereby amended to
delete the stricken text (indicated textually in the same manner as the
following example: stricken text) and to add the bold and double-underlined text
(indicated textually in the same manner as the following example: bold and
double-underlined text) as set forth on the pages of the Securities Account
Control Agreement attached as Exhibit D hereto.

 

(e)          The Purchase and Sale Agreement is hereby amended to delete the
stricken text (indicated textually in the same manner as the following example:
stricken text) and to add the bold and double-underlined text (indicated
textually in the same manner as the following example: bold and
double-underlined text) as set forth on the pages of the Purchase and Sale
Agreement attached as Exhibit E hereto.

 

 - 2 - 

 

 

SECTION 2. AGREEMENTS IN FULL FORCE AND EFFECT AS AMENDED.

 

Except as specifically amended hereby, all provisions of the Loan and Servicing
Agreement, the Purchase and Sale Agreement, the Custody Agreement and the
Securities Account Control Agreement are hereby ratified and shall remain in
full force and effect. After this Amendment becomes effective, all references to
the Loan and Servicing Agreement, the Purchase and Sale Agreement, the Custody
Agreement and the Securities Account Control Agreement, as applicable, and
corresponding references thereto or therein such as “hereof,” “herein,” or words
of similar effect referring to the Loan and Servicing Agreement, the Purchase
and Sale Agreement, the Custody Agreement and the Securities Account Control
Agreement, as applicable, shall be deemed to mean the Loan and Servicing
Agreement, the Purchase and Sale Agreement, the Custody Agreement and the
Securities Account Control Agreement, as applicable, as amended hereby. This
Amendment shall not be deemed to expressly or impliedly waive, amend or
supplement any provision of the Loan and Servicing Agreement, the Purchase and
Sale Agreement, the Custody Agreement and the Securities Account Control
Agreement, as applicable, other than as expressly set forth herein, and shall
not constitute a novation of the Loan and Servicing Agreement, the Purchase and
Sale Agreement, the Custody Agreement or the Securities Account Control
Agreement.

 

SECTION 3. Representations.

 

Each of the Borrower, the Servicer and the Transferor, severally for itself
only, represents and warrants as of the date of this Amendment as follows:

 

(i)          it is duly incorporated or organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization;

 

(ii)         the execution, delivery and performance by it of this Amendment and
the Loan and Servicing Agreement, the Purchase and Sale Agreement, the Custody
Agreement and the Securities Account Control Agreement, as applicable, as
amended hereby are within its powers, have been duly authorized, and do not
contravene (A) its charter, by-laws, or other organizational documents, or (B)
any Applicable Law;

 

(iii)        no consent, license, permit, approval or authorization of, or
registration, filing or declaration with any governmental authority, is required
in connection with the execution, delivery, performance, validity or
enforceability of this Amendment and the Loan and Servicing Agreement, the
Purchase and Sale Agreement, the Custody Agreement and the Securities Account
Control Agreement, as applicable, as amended hereby by or against it;

 

(iv)        this Amendment has been duly executed and delivered by it;

 

(v)         each of this Amendment and the Loan and Servicing Agreement, the
Purchase and Sale Agreement, the Custody Agreement and the Securities Account
Control Agreement, as applicable, as amended hereby constitutes its legal, valid
and binding obligation enforceable against it in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally or by general principles of equity;

 

 - 3 - 

 

 

(vi)        no Unmatured Event of Default, Event of Default or Servicer
Termination Event has occurred or exists; and

 

(vii)       no Unmatured Event of Default, Event of Default or Servicer
Termination Event will result under the Loan and Servicing Agreement, as amended
by this Amendment.

 

SECTION 4. Conditions to Effectiveness.

 

The effectiveness of this Amendment is conditioned upon: (i) payment of the
outstanding fees and disbursements of the Collateral Agent, the Administrative
Agent and the Lender; (ii) payment of the outstanding fees and disbursements of
Dechert LLP, as counsel to the Collateral Agent, the Administrative Agent and
the Lender; (iii) delivery to the Administrative Agent of (x) executed signature
pages by all parties hereto, (y) corporate authority documentation, certified by
the Borrower or Servicer and the secretary of state (or similar authority) of
the jurisdiction in which the Borrower and Servicer are organized, as
applicable, and (z) a favorable written opinion of legal counsel to the
Borrower, in form and substance satisfactory to the Administrative Agent and
(iv) delivery and execution of the Third Amended and Restated Lender Fee Letter
Agreement by the parties thereto.

 

SECTION 5. Miscellaneous.

 

(a)          Without in any way limiting any other obligation hereunder or under
the Transaction Documents, the Borrower agrees to provide, from time to time,
any additional documentation and to execute additional acknowledgements,
amendments, instruments or other agreements as may be reasonably requested and
required by the Administrative Agent to effectuate the foregoing.

 

(b)          This Amendment may be executed in any number of counterparts
(including by facsimile), and by the different parties hereto on the same or
separate counterparts, each of which shall be deemed to be an original
instrument but all of which together shall constitute one and the same
agreement.

 

(c)          The descriptive headings of the various sections of this Amendment
are inserted for convenience of reference only and shall not be deemed to affect
the meaning or construction of any of the provisions hereof.

 

(d)          This Amendment may not be amended or otherwise modified except as
provided in the Loan and Servicing Agreement, the Purchase and Sale Agreement,
the Custody Agreement or the Securities Account Control Agreement, as
applicable.

 

(e)          The failure or unenforceability of any provision hereof shall not
affect the other provisions of this Amendment or the Loan and Servicing
Agreement, the Purchase and Sale Agreement, the Custody Agreement or the
Securities Account Control Agreement, as applicable.

 

(f)          Whenever the context and construction so require, all words used in
the singular number herein shall be deemed to have been used in the plural
number, and vice versa, and the

 

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masculine gender shall include the feminine and neuter and the neuter shall
include the masculine and feminine.

 

(g)          This Amendment and the Loan and Servicing Agreement, the Purchase
and Sale Agreement, the Custody Agreement and the Securities Account Control
Agreement, as applicable, represent the final agreements among the applicable
parties only with respect to the matters expressly set forth therein and may not
be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements among the parties. There are no unwritten oral agreements among the
applicable parties with respect to such matters.

 

(h)          THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE CHOICE OF LAW PROVISIONS SET FORTH IN THE LOAN AND SERVICING AGREEMENT
AND SHALL BE SUBJECT TO THE WAIVER OF JURY TRIAL AND NOTICE PROVISIONS SET FORTH
IN THE LOAN AND SERVICING AGREEMENT.

 

[Remainder of Page Intentionally Left Blank]

 

 - 5 - 

 

 

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.

 

  FIFTH STREET FUNDING II, LLC, as the Borrower         By: /s/ Alexander C.
Frank     Name:  Alexander C. Frank     Title:    Chief Financial Officer and
Treasurer

 

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

 

Fifth Street Funding II, LLC
Amendment No. 3 to Loan & Servicing Agreement and Amendment No. 1 to Purchase
Agreement, Custody Agreement and Securities Account Control Agreement

 

   

 

 

  FIFTH STREET FINANCE CORP., as the Servicer and as the Transferor         By:
/s/ Steven M. Noreika     Name:  Steven M. Noreika     Title:    Chief Financial
Officer

 

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

 

Fifth Street Funding II, LLC
Amendment No. 3 to Loan & Servicing Agreement and Amendment No. 1 to Purchase
Agreement, Custody Agreement and Securities Account Control Agreement

 

   

 

 

  SUMITOMO MITSUI BANKING CORPORATION,   as the Administrative Agent         By:
/s/ Hitoshi Ryoji     Name:  Hitoshi Ryoji     Title:    Managing Director

 

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

 

Fifth Street Funding II, LLC
Amendment No. 3 to Loan & Servicing Agreement and Amendment No. 1 to Purchase
Agreement, Custody Agreement and Securities Account Control Agreement

 

   

 

 

  SUMITOMO MITSUI BANKING CORPORATION, as the Lender         By: /s/ Hitoshi
Ryoji     Name: Hitoshi Ryoji     Title:   Managing Director

 

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

 

Fifth Street Funding II, LLC
Amendment No. 3 to Loan & Servicing Agreement and Amendment No. 1 to Purchase
Agreement, Custody Agreement and Securities Account Control Agreement

 

   

 

 

  SUMITOMO MITSUI BANKING CORPORATION, as the Collateral Agent         By: /s/
Hitoshi Ryoji     Name:  Hitoshi Ryoji     Title:    Managing Director

  

Fifth Street Funding II, LLC
Amendment No. 3 to Loan & Servicing Agreement and Amendment No. 1 to Purchase
Agreement, Custody Agreement and Securities Account Control Agreement

 

   

 

 

  U.S. BANK NATIONAL ASSOCIATION,   as the Custodian         By: /s/ Jon
Sammarco     Name: Jon Sammarco     Title: Vice President       U.S. BANK
NATIONAL ASSOCIATION,   as the Account Bank         By: /s/ Jon Sammarco    
Name: Jon Sammarco     Title: Vice President

  

Fifth Street Funding II, LLC
Amendment No. 3 to Loan & Servicing Agreement and Amendment No. 1 to Purchase
Agreement, Custody Agreement and Securities Account Control Agreement

 

   

 

 

Exhibit A

 

CONFORMED LOAN AND SERVICING AGREEMENT

 

   

 

 

EXECUTION VERSION

Conformed through Amendment No. 23

 

Up to U.S. $125,000,000

 

LOAN AND SERVICING AGREEMENT

 

Dated as of September 16, 2011

 

Among

 

FIFTH STREET FUNDING II, LLC,

as the Borrower

 

 

FIFTH STREET FINANCE CORP.,

as the Servicer and as the Transferor

 

SUMITOMO MITSUI BANKING CORPORATION,

as the Administrative Agent and as the Collateral Agent

 

and

 

EACH OF THE LENDERS FROM TIME TO TIME PARTY HERETO,

as the Lenders

 

   

 

 

TABLE OF CONTENTS

 

      Page         ARTICLE I. DEFINITIONS 1 Section 1.01 Certain Defined Terms 1
Section 1.02 Other Terms 33 Section 1.03 Computation of Time Periods 33 Section
1.04 Interpretation 3334 ARTICLE II. THE FACILITY 34 Section 2.01 Variable
Funding Note and Advances 34 Section 2.02 Procedure for Advances 35 Section 2.03
Determination of Yield 3738 Section 2.04 Remittance Procedures 38 Section 2.05
Instructions to the Collateral Agent 41 Section 2.06 Borrowing Base Deficiency
Payments 41 Section 2.07 Substitution and Sale of Loan Assets; Affiliate
Transactions 42 Section 2.08 Payments and Computations, Etc. 46 Section 2.09
Fees 47 Section 2.10 Increased Costs; Capital Adequacy 47 Section 2.11 Taxes 49
Section 2.12 Collateral Assignment of Agreements 51 Section 2.13 Grant of a
Security Interest 5152 Section 2.14 Evidence of Debt 52 Section 2.15 Survival of
Representations and Warranties 5253 Section 2.16 Release of Loan Assets 5253
Section 2.17 Treatment of Amounts Received by the Borrower 53 Section 2.18
Prepayment; Termination 53 Section 2.19 [Reserved] 54 Section 2.20 Collections
and Allocations 54 Section 2.21 Additional Lenders 55 ARTICLE III. CONDITIONS
PRECEDENT 55 Section 3.01 Conditions Precedent to Effectiveness 55 Section 3.02
Conditions Precedent to All Advances 5657

 

 i  

 

 

TABLE OF CONTENTS

(continued)

 

      Page         Section 3.03 Advances Do Not Constitute a Waiver 59 Section
3.04 Conditions to Pledges of Loan Assets 59 ARTICLE IV. REPRESENTATIONS AND
WARRANTIES 6061 Section 4.01 Representations and Warranties of the Borrower 6061
Section 4.02 Representations and Warranties of the Borrower Relating to the
Agreement and the Collateral Portfolio 6869 Section 4.03 Representations and
Warranties of the Servicer 69 Section 4.04 Representations and Warranties of
each Lender 73 ARTICLE V. GENERAL COVENANTS 73 Section 5.01 Affirmative
Covenants of the Borrower 73 Section 5.02 Negative Covenants of the Borrower 80
Section 5.03 Affirmative Covenants of the Servicer 8283 Section 5.04 Negative
Covenants of the Servicer 87 ARTICLE VI. ADMINISTRATION AND SERVICING OF
CONTRACTS 89 Section 6.01 Appointment and Designation of the Servicer 89 Section
6.02 Duties of the Servicer 91 Section 6.03 Authorization of the Servicer 93
Section 6.04 Collection of Payments; Accounts 94 Section 6.05 Realization Upon
Loan Assets 9596 Section 6.06 Servicing Compensation 96 Section 6.07 Payment of
Certain Expenses by Servicer 96 Section 6.08 Reports to the Administrative
Agent; Account Statements; Servicing Information 96 Section 6.09 Annual
Statement as to Compliance 98 Section 6.10 Annual Independent Public
Accountant’s Servicing Reports 98 Section 6.11 The Servicer Not to Resign 99
Section 6.12 Required Sale Date 99 ARTICLE VII. EVENTS OF DEFAULT 99 Section
7.01 Events of Default 99 Section 7.02 Additional Remedies of the Administrative
Agent 102 ARTICLE VIII. INDEMNIFICATION 104105

 

 ii  

 

 

TABLE OF CONTENTS

(continued)

 

      Page         Section 8.01 Indemnities by the Borrower 104105 Section 8.02
Indemnities by Servicer 107108 Section 8.03 Legal Proceedings 109 Section 8.04
After-Tax Basis 110 ARTICLE IX. THE ADMINISTRATIVE AGENT 110 Section 9.01 The
Administrative Agent 110 ARTICLE X. COLLATERAL AGENT 113114 Section 10.01
Designation of Collateral Agent 113114 Section 10.02 Duties of Collateral Agent
114 Section 10.03 Merger or Consolidation 116 Section 10.04 Collateral Agent
Compensation 116117 Section 10.05 Collateral Agent Removal 116117 Section 10.06
Limitation on Liability 117 Section 10.07 Collateral Agent Resignation 118
ARTICLE XI. MISCELLANEOUS 118119 Section 11.01 Amendments and Waivers 118119
Section 11.02 Notices, Etc. 119 or at such other address as shall be designated
by such party in a written notice to the other parties hereto 119120 Section
11.03 No Waiver; Remedies 120 Section 11.04 Binding Effect; Assignability;
Multiple Lenders 120 Section 11.05 Term of This Agreement 120121 Section 11.06
GOVERNING LAW; JURY WAIVER 121 Section 11.07 Costs, Expenses and Taxes 121
Section 11.08 No Proceedings 122 Section 11.09 Recourse Against Certain Parties
122123 Section 11.10 Execution in Counterparts; Severability; Integration 123124
Section 11.11 Consent to Jurisdiction; Service of Process 123124 Section 11.12
Characterization of Conveyances Pursuant to the Purchase and Sale Agreement 124
Section 11.13 Confidentiality 125126

 

 iii  

 

 

TABLE OF CONTENTS

(continued)

 

    Page       Section 11.14 Non-Confidentiality of Tax Treatment 126127 Section
11.15 Waiver of Set Off 127 Section 11.16 Headings and Exhibits 127 Section
11.17 Ratable Payments 127 Section 11.18 Failure of Borrower or Servicer to
Perform Certain Obligations 127128 Section 11.19 Power of Attorney 127128
Section 11.20 Delivery of Termination Statements, Releases, etc. 128

 

 iv  

 

 

This LOAN AND SERVICING AGREEMENT is made as of September 16, 2011, among:

 

(1)         FIFTH STREET FUNDING II, LLC, a Delaware limited liability company
(together with its successors and assigns in such capacity, the “Borrower”);

 

(2)         FIFTH STREET FINANCE CORP., a Delaware corporation, as the Servicer
(as defined herein) and as the Transferor (as defined herein);

 

(3)         SUMITOMO MITSUI BANKING CORPORATION, a Japanese banking corporation,
as Administrative Agent (together with its successors and assigns in such
capacity, the “Administrative Agent”) and as the Collateral Agent (together with
its successors and assigns in such capacity, the “Collateral Agent”); and

 

(4)         EACH OF THE LENDERS FROM TIME TO TIME PARTY HERETO, as a Lender.

 

PRELIMINARY STATEMENT

 

The Lenders have agreed, on the terms and conditions set forth herein, to
provide a secured revolving credit facility which shall provide for Advances
under the Variable Funding Note(s) from time to time in an aggregate principal
amount not to exceed the Borrowing Base. The proceeds of the Advances will be
used (a) to finance the Borrower’s purchase, on a “true sale” basis, of Eligible
Loan Assets from the Transferor, approved by the Administrative Agent, pursuant
to the Purchase and Sale Agreement between the Borrower and the Transferor, (b)
to fund the Unfunded Exposure Account and (c) to distribute such proceeds to the
Borrower’s parent. Accordingly, the parties agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

SECTION 1.01         Certain Defined Terms.

 

(a)          Certain capitalized terms used throughout this Agreement are
defined above or in this Section 1.01.

 

(b)          As used in this Agreement and the exhibits and schedules thereto
(each of which is hereby incorporated herein and made a part hereof), the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

 

“1940 Act” means the Investment Company Act of 1940, as amended, and the rules
and regulations promulgated thereunder.

 

“Account Bank” means U.S. Bank, in its capacity as the “Account Bank” pursuant
to the Control Agreement.

   

 

 

Affiliate relationship which may exist solely as a result of direct or indirect
ownership or control by a common Financial Sponsor.

 

“Agented Note” means any Loan Asset (i) originated as a part of a syndicated
loan transaction that has been closed (without regard to any contemporaneous or
subsequent syndication of such Loan Asset) prior to such Loan Asset becoming
part of the Collateral Portfolio and (ii) with respect to which, upon an
assignment of the note under the Purchase and Sale Agreement to the Borrower,
the Borrower, as assignee of the note, will have all of the rights but none of
the obligations of the Transferor with respect to such note and the Underlying
Collateral.

 

“Agreement” means this Loan and Servicing Agreement, as the same may be amended,
restated, supplemented and/or otherwise modified from time to time hereafter.

 

“Applicable Law” means for any Person all existing and future laws, rules,
regulations (including temporary and final income tax regulations), statutes,
treaties, codes, ordinances, permits, certificates, orders, licenses of and
interpretations by any Governmental Authority applicable to such Person
(including, without limitation, predatory lending laws, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing
Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the
Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the Federal
Reserve Board’s Regulations “B” and “Z”, the Servicemembers Civil Relief Act of
2003 and state adaptations of the National Consumer Act and of the Uniform
Consumer Credit Code and all other consumer credit laws and equal credit
opportunity and disclosure laws) and applicable judgments, decrees, injunctions,
writs, awards or orders of any court, arbitrator or other administrative,
judicial, or quasi-judicial tribunal or agency of competent jurisdiction.

 

“Applicable Percentage” means, for each Eligible Loan Asset, 65%.

 

“Applicable Spread” means, (i) with respect to any rate based on LIBOR, if the
Advances Outstanding on the applicable day (after giving effect to borrowings,
prepayments and Commitment reductions effected on such day) were (x) greater
than an amount equal to thirty-five percent (35.00%) of the aggregate
Commitments on such day, 2.00% per annum and (y) less than or equal to an amount
equal to thirty-five percent (35.00%) of the aggregate Commitments on such day,
2.25% per annum and, (ii) with respect to any rate based on the Base Rate, 1.25%
per annum; provided that, at any time after the occurrence of an Event of
Default, the Applicable Spread shall be 4.00% per annum.

 

“Approval Notice” means, with respect to any Eligible Loan Asset, the written
notice, in substantially the form attached hereto as Exhibit A, evidencing the
approval by the Administrative Agent, in its sole discretion, of the conveyance
of such Eligible Loan Asset by the Transferor to the Borrower pursuant to the
terms of the Purchase and Sale Agreement and the Loan Assignment by which the
Transferor effects such conveyance.

 

“Assigned Documents” has the meaning assigned to that term in Section 2.12.

 

 - 2 - 

 

 

therein and (ii) provides that the payment obligation of the Obligor on such
Loan Asset is either senior to, or pari passu with, all other Indebtedness of
such Obligor.

 

“Floating Rate Note” means a note issued pursuant to an indenture or equivalent
document by a corporation, partnership, limited liability company, trust or
other Person, bearing interest at a floating rate. For the avoidance of doubt, a
Floating Rate Note will not include any note evidencing any borrowings under or
in respect of a Loan Asset.

 

“Foreign Lender” means a Lender that is not created or organized under the laws
of the United States or a political subdivision thereof.

 

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

 

“Governmental Authority” means, with respect to any Person, any nation or
government, any state or other political subdivision thereof, any central bank
(or similar monetary or regulatory authority) thereof, any body or entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and any court or arbitrator having
jurisdiction over such Person.

 

“Hazardous Materials” means all materials subject to any Environmental Law,
including, without limitation, materials listed in 49 C.F.R. § 172.010,
materials defined as hazardous pursuant to § 101(14) of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
flammable, explosive or radioactive materials, hazardous or toxic wastes or
substances, lead-based materials, petroleum or petroleum distillates or asbestos
or material containing asbestos, polychlorinated biphenyls, radon gas, urea
formaldehyde and any substances classified as being “in inventory”, “usable work
in process” or similar classification that would, if classified as unusable, be
included in the foregoing definition.

 

“Indebtedness” means, with respect to any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current liabilities incurred in the
ordinary course of business and payable in accordance with customary trade
practices) or that is evidenced by a note, bond, debenture or similar instrument
or other evidence of indebtedness customary for indebtedness of that type, (b)
all obligations of such Person under leases that have been or should be, in
accordance with GAAP, recorded as capital leases, (c) all obligations of such
Person in respect of acceptances issued or created for the account of such
Person, (d) all liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable for
the payment thereof, (e) all indebtedness, obligations or liabilities of that
Person in respect of derivatives, and (f) all obligations under direct or
indirect guaranties in respect of obligations (contingent or otherwise) to
purchase or otherwise acquire, or to otherwise assure a creditor against loss in
respect of, indebtedness or obligations of others of the kind referred to in
clauses (a) through (e).

 

“Indemnified Amounts” has the meaning assigned to that term in Section 8.01.

 

“Indemnified Party” has the meaning assigned to that term in Section 8.01.

 

 - 3 - 

 

 

scheduled payments of interest and payments of interest relating to principal
prepayments, all guaranty payments attributable to interest and proceeds of any
liquidations, sales or dispositions attributable to interest on such Loan Asset
and (ii) amendment fees, late fees, waiver fees, prepayment fees or other
amounts received in respect of Loan Assets.

 

“Interest Period” means with respect to any LIBOR Advance (i) the period
beginning on, and including, the Advance Date or Conversion Date, as applicable,
with respect to such LIBOR Advance and ending on, but excluding, the first
succeeding Payment Date (provided that if the Advance Date or Conversion Date,
as applicable, for any LIBOR Advance occurs on or after the Payment Date Cut-Off
in any calendar month but prior to the Payment Date in such calendar month, the
initial Interest Period for such LIBOR Advance shall end on, but exclude, the
second succeeding Payment Date) and (ii) thereafter, for so long as such LIBOR
Advance or any portion thereof remains outstanding, each period beginning on,
and including, the Payment Date on which the immediately preceding Interest
Period with respect to such LIBOR Advance ended and ending on, but excluding,
the next succeeding Payment Date.

 

“Investment Advisor Departure Event” means Fifth Street Management LLC shall
cease to be the investment advisor of the Servicer without having been
immediately replaced with an investment advisor reasonably satisfactory to the
Administrative Agent and the Required Lenders in their reasonable discretion.
For the avoidance of doubt, in the event the Servicer elects to be self-managed
in accordance with applicable law, no Investment Advisor Departure Event shall
be deemed to have occurred so long as no Key Person Departure Event has
occurred.

 

“Investment Polices” means Fifth Street’s written investment policies in effect
on the date hereof (a copy of which has been previously delivered to the
Administrative Agent), as same may be amended from time to time in Fifth
Street’s reasonable business judgment.

 

“Joinder Supplement” means an agreement among the Borrower, a Lender and the
Administrative Agent in the form of Exhibit E to this Agreement (appropriately
completed) delivered in connection with a Person becoming a Lender hereunder
after the Closing Date.

 

“Key Person Departure Event” means any two of (i) Leonard Tannenbaum, (ii)
Bernard Berman and (iii) Ivelin Dimitrov fail  to provide active and material
participation in Fifth Street Management LLC’s daily activities (whether by
resignation, termination, disability, death or lack of day-to-day management).

 

“Lender” means (i) SMBC, (ii) each financial institution which may from time to
time become a Lender hereunder by executing and delivering a Joinder Supplement
to the Administrative Agent and the Borrower as contemplated by Section 2.21
and/or (iii) any other Person to whom a Lender assigns any part of its rights
and obligations under this Agreement and the other Transaction Documents in
accordance with the terms of Section 11.04.

 

“Lender Fee Letter” means each fee letter agreement that shall be entered into
by and among the Borrower, the Servicer and the applicable Lender in connection
with the transactions contemplated by this Agreement, as amended, modified,
waived, supplemented, restated or replaced from time to time.

 

 - 4 - 

 

 

other obligations that accrue after the commencement of an insolvency proceeding
(in each case whether or not allowed as a claim in such insolvency proceeding).

 

“Obligor” means, collectively, each Person obligated to make payments under a
Loan Agreement, including any guarantor thereof.

 

“Officer’s Certificate” means a certificate signed by the president, the
secretary, an assistant secretary, the chief financial officer or any vice
president, as an authorized officer, of any Person.

 

“Opinion of Counsel” means a written opinion of counsel, which opinion and
counsel are acceptable to the Administrative Agent in its sole discretion;
provided that Rutan & Tucker LLP and Sutherland Asbill & Brennan LLP shall be
considered acceptable counsel for purposes of this definition.

 

“Outstanding Balance” means the principal balance of a Loan Asset, expressed
exclusive of PIK Interest and accrued interest. For the avoidance of doubt, the
Outstanding Balance with respect to a Revolving Loan Asset or a Delayed Draw
Loan Asset shall be equal to the funded amount of such Revolving Loan Asset or
Delayed Draw Loan Asset.

 

“Payment Date” means the 15th day of each calendar month or, if such day is not
a Business Day, the next succeeding Business Day, commencing on the Initial
Payment Date; provided that the final Payment Date shall occur on the Collection
Date.

 

“Payment Date Cut-Off” means, with respect to each Payment Date, the fifth
Business Day prior to such Payment Date.

 

“Payment Duties” has the meaning assigned to that term in Section 10.02(b)(ii).

 

“Pension Plan” has the meaning assigned to that term in Section 4.01(x).

 

“Permitted Investment Required Ratings” means (a) if such obligation or security
(i) has both a long-term and a short-term credit rating from Moody’s, such
ratings are “Aa3” or better (not on credit watch for possible downgrade) and
“P-1” (not on credit watch for possible downgrade), respectively, (ii) has only
a long-term credit rating from Moody’s, such rating is “Aaa” (not on credit
watch for possible downgrade) and (iii) has only a short-term credit rating from
Moody’s, such rating is “P-1” (not on credit watch for possible downgrade) and
(b) “A 1” or better (or, in the absence of a short-term credit rating, “A+” or
better) from S&P.“Permitted Investments” means, at any time, either Cashcash or
any Dollar investment that, at the time it is delivered (directly or through an
intermediary or bailee), (x) matures not later than the earlier of (A) the date
that is 60 days after the date of delivery thereof and (B) the Business Day
immediately preceding the Payment Date immediately following the date of
delivery thereof, and (y)investments that is one or more of the following
obligations or securities:

 

(i)          direct Registeredinterest bearing obligations of, and
Registeredinterest bearing obligations theguaranteed as to timely payment of
principal and interest on which is fully and expressly guaranteed by, the United
States or any agency or instrumentality of the

 

 - 5 - 

 

 

United States, the obligations of which are expressly backed by the full faith
and credit of the United States;

 

(ii)         demand andor time deposits in, certificates of deposit of, trust
accounts with,demand notes of, or bankers’ acceptances issued by, or federal
funds sold by any depository institution or trust company incorporatedorganized
under the laws of the United States or any State thereof (including the Account
Bank) or any state thereofany federal or state branch or agency of a foreign
depository institution or trust company) and subject to supervision and
examination by federal and/or state banking authorities (including, if
applicable, the Collateral Agent, the Collateral Custodian or with the
Administrative Agent, in each case payable within 60 days after issuance, so
long as the commercial paper and/or the or any agent thereof acting in its
commercial capacity); provided that the short term unsecured 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 Permitted
Investment Required Ratingsare rated at least “A-1” by Standard & Poor’s and
“P-1” by Moody’s;

 

(iii)        unleveraged repurchase obligations (if treated as debt by the
Borrower and the counterparty) with respect to (a) any security described in
clause (i) above or (b) any other Registered security issued or guaranteed by an
agency or instrumentality of the United States, in either case entered into with
a depository institution or trust company (acting as principal) described in
clause (ii) above or entered into with an entity (acting as principal) with, or
whose parent company has (in addition to issuing a guarantee agreement
guaranteeing payment of such entity’s obligations under such repurchase
obligation, which guarantee agreement complies with S&P’s then-current criteria
with respect to guarantees), the Permitted Investment Required
Ratings;commercial paper that (a) is payable in Dollars and (b) is rated at
least “A-1” by Standard & Poor’s and “P-1” by Moody’s; and

 

(iv)        commercial paper or other short-term obligations (other than
asset-backed commercial paper) with the Permitted 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 60 days from their date of
issuance;units of money market funds rated in the highest credit rating category
by each of S&P and Moody’s.

 

(v)         a Reinvestment Agreement issued by any bank (if treated as a deposit
by such bank), or a Reinvestment Agreement issued by any insurance company or
other corporation or entity, in each case with the Permitted Investment Required
Ratings; provided that such Reinvestment Agreement may be unwound at the option
of the Borrower without penalty; and

 

(vi)        money market funds that have, at all times, credit ratings of “Aaa”
and “MR1+” by Moody’s and “AAAm” or “AAAm-G” by S&P, respectively;

 

provided that (1) Permitted 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 (vi) above, as mature (or are putable at par to the issuer
thereof) no later than the Business Day prior to the next Payment

 

 - 6 - 

 

 

Date unless such Permitted Investments are issued by the Collateral Agent in its
capacity as a banking institution, in which event such Permitted Investments may
mature on such Payment Date; and (2) none of the foregoing obligations or
securities shall constitute Permitted Investments if (a) such obligation or
security has an “f”, “r”, “p”, “pi”, “q” or “t” subscript assigned by S&P, (b)
all, or substantially all, of the remaining amounts payable thereunder consist
of interest and not principal payments, (c) payments with respect to such
obligations or securitiesor proceeds of disposition are subject to withholding
taxes by any jurisdiction unless the payor is required to make “gross-up”
payments that cover the full amount of any such withholding tax on an after-tax
basis, (d) such obligation or security is secured by real property, (e) such
obligation or security is purchased at a price greater than 100% of the
principal or face amount thereof, (f) such obligation or security is subject of
a tender offer, voluntary redemption, exchange offer, conversion or other
similar action, (g) in the Servicer’s judgment, such obligation or security is
subject to material non-credit related risks, (h) such obligation is a
structured finance obligation or (i) such obligation or security is represented
by a certificate of interest in a grantor trust. Permitted Investments may
include, without limitation, those investments issued by or made with the
Account Bank or for which the Account Bank or the Collateral Agent or an
Affiliate of the Account Bank or the Collateral Agent provides services and
receives compensation. No Permitted Investment shall have an “f”, “r”, “p”,
“pi”, “q”, “sf” or “t” subscript affixed to its S&P rating. Any such investment
may be made or acquired from or through the Collateral Agent or the
Administrative Agent or any of their respective affiliates, or any entity for
whom the Collateral Agent, the Administrative Agent, the Collateral Custodian,
the Account Bank or any of their respective affiliates provides services and
receives compensation (so long as such investment otherwise meets the applicable
requirements of the foregoing definition of Permitted Investment at the time of
acquisition); provided that, notwithstanding the foregoing clauses (i) through
(iv), unless the Borrower and the Servicer have received the written advice of
counsel of national reputation experienced in such matters to the contrary
(together with an Officer’s Certificate of the Borrower or the Servicer to the
Administrative Agent and the Collateral Agent that the advice specified in this
definition has been received by the Borrower and the Servicer), on and after the
Required Sale Date, Permitted Investments may only include obligations or
securities that constitute cash equivalents for purposes of the rights and
assets in paragraph (c)(8)(i)(B) of the exclusions from the definition of
“covered fund” for purposes of the Volcker Rule.

 

“Permitted Liens” means any of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding shall have been commenced
(a) Liens for state, municipal or other local Taxes if such Taxes shall not at
the time be due and payable or if a Person shall currently be contesting the
validity thereof in good faith by appropriate proceedings and with respect to
which reserves in accordance with GAAP have been provided on the books of such
Person, (b) Liens imposed by law, such as materialmen’s, warehousemen’s,
mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens,
arising by operation of law in the ordinary course of business for sums that are
not overdue or are being contested in good faith and (c) Liens granted pursuant
to or by the Transaction Documents.

 

“Person” means an individual, partnership, corporation (including a statutory or
business trust), limited liability company, joint stock company, trust,
unincorporated association,

 

 - 7 - 

 

 

accordance with the Servicing Standard, the proceeds from the sale of the
Underlying Collateral, the proceeds of any related Insurance Policy, any other
recoveries with respect to such Loan Asset, as applicable, the Underlying
Collateral, and amounts representing late fees and penalties, net of any amounts
received that are required under such Loan Asset, as applicable, to be refunded
to the related Obligor.

 

“Register” has the meaning assigned to that term in Section 2.14.

 

“Registered” means, for the purposes of the definition of “Permitted
Investments”, in registered form for U.S. federal income tax purposes and issued
after July 18, 1984; provided that a certificate of interest in a grantor trust
shall not be treated as Registered unless each of the obligations or securities
held by the trust was issued after that date.

 

“Reinvestment Agreement” means a guaranteed reinvestment agreement from a bank,
insurance company or other corporation or entity having a Permitted Investment
Required Rating; provided that such agreement provides that it is terminable by
the purchaser, without penalty, if the rating assigned to such agreement by
either S&P or Moody’s is at any time lower than such agreement’s Permitted
Investment Required Rating.

 

“Reinvestment Period” shall mean the date commencing on the Closing Date and
ending on the day preceding the earlier of (i) September 16, 2016,2017, (ii) the
occurrence of an Event of Default (past any applicable notice or cure period
provided in the definition thereof) and (iii) the date of any voluntary
termination by the Borrower pursuant to Section 2.18(b); provided that if any of
the foregoing is not a Business Day, the Reinvestment Period shall end on the
next Business Day.

 

“Release Date” has the meaning set forth in Section 2.07(c).

 

“Remittance Period” means, (i) as to the Initial Payment Date, the period
beginning on the Closing Date and ending on, and including, the Payment Date
Cut-Off immediately preceding such Payment Date and (ii) as to any subsequent
Payment Date, the period beginning on the first day after the most recently
ended Remittance Period and ending on, and including, the Payment Date Cut-Off
immediately preceding such Payment Date, or, with respect to the final
Remittance Period, the Collection Date.

 

“Replacement Servicer” has the meaning assigned to that term in Section 6.01(c).

 

“Reporting Date” means the date that is three Business Days prior to the Payment
Date of each calendar month, commencing with the Payment Date in October, 2011.

 

“Required Lenders” means (i) SMBC (as a Lender hereunder) and its successors and
assigns, in the event any such party is a Lender hereunder and (ii) the Lenders
representing an aggregate of at least 51% of the aggregate Commitments of the
Lenders then in effect.

 

“Required Loan Documents” means, for each Loan Asset, originals (except as
otherwise indicated) of the following documents or instruments, all as specified
on the related Loan Asset Checklist:

 

 - 8 - 

 

 

(a)(i)          other than in the case of a Noteless Loan Asset, the original
or, if accompanied by an original “lost note” affidavit and indemnity, a copy
of, the underlying promissory note, endorsed by the Borrower or the prior holder
of record in blank (and evidencing an unbroken chain of endorsements from each
prior holder thereof evidenced in the chain of endorsements in blank), and (ii)
in the case of a Noteless Loan Asset (x) a copy of each transfer document or
instrument relating to such Noteless Loan Asset evidencing the assignment of
such Noteless Loan Asset to the Transferor and from the Transferor to the
Borrower and from the Borrower in blank, and (y) a copy of the Loan Asset
Register with respect to such Noteless Loan Asset, as described in Section
5.03(k)(ii);

 

(b)          originals or copies of each of the following, to the extent
applicable to the related Loan Asset; any related Loan Agreement, credit
agreement, note purchase agreement, security agreement (if separate from any
mortgage), sale and servicing agreement, acquisition agreement, subordination
agreement, intercreditor agreement or similar instruments, guarantee, Insurance
Policy, assumption or substitution agreement or similar material operative
document, in each case together with any amendment or modification thereto, as
set forth on the Loan Asset Checklist; and

 

(c)          with respect to any Loan Asset originated by the Transferor or an
Affiliate and with respect to which the Transferor or an Affiliate acts as
administrative agent (or in a comparable capacity), either (i) copies of the
UCC-1 Financing Statements, if any, and any related continuation statements,
each showing the Obligor as debtor and the Collateral Agent as total assignee or
showing the Obligor, as debtor and the Transferor or the applicable Affiliate as
secured party and each with evidence of filing thereon, or (ii) copies of any
such financing statements certified by the Servicer to be true and complete
copies thereof in instances where the original financing statements have been
sent to the appropriate public filing office for filing, in each case as set
forth in the Loan Asset Checklist.

 

“Required Reports” means, collectively, the asset report and the Servicing
Report required pursuant to Section 6.08(b), the Servicer’s Certificate required
pursuant to Section 6.08(c), the financial statements of the Servicer required
pursuant to Section 6.08(d), the tax returns of the Borrower, the Transferor and
the Servicer required pursuant to Section 6.08(e), the financial statements and
valuation reports of each Obligor required pursuant to Section 6.08(f), the
annual statements as to compliance required pursuant to Section 6.09, and the
annual independent public accountant’s report required pursuant to Section 6.10.

 

“Required Sale Assets” means all assets owned by the Borrower that would
disqualify the Borrower from using the “loan securitization exemption” under the
Volcker Rule (as determined by the Administrative Agent in its reasonable
discretion). For the avoidance of doubt, any asset that is an Eligible Loan
Asset hereunder will not be included in the definition of “Required Sale
Assets.”

 

“Required Sale Date” means the date immediately prior to July 21, 2016 (or the
date immediately prior to such later date (to the extent applicable to the
transactions contemplated hereby) as shall be determined by written order of the
Board of Governors of the Federal Reserve System with respect to the required
conformance with the Volcker Rule by banking entities generally); provided that
if the Administrative Agent receives an

 

 - 9 - 

 

 

opinion of Dechert LLP or other nationally recognized counsel satisfactory to it
in its sole discretion that (A) the ownership of the Required Sale Assets will
not cause the Borrower to be a “covered fund” under the Volcker Rule, (B) the
Advances are not considered to constitute “ownership interests” under the
Volcker Rule or (C) ownership of the Advances will be otherwise exempt from the
Volcker Rule, then the Required Sale Date shall not occur; provided further that
upon receipt of further official guidance from or on behalf of the Board of
Governors of the Federal Reserve System with respect to compliance with the
Volcker Rule, the Administrative Agent, the Lenders and the Borrower shall
negotiate in good faith in respect of amendments or modifications to the
Transaction Documents appropriate to assure compliance with or exemption from
the Volcker Rule.

 

“Responsible Officer” means, with respect to any Person, any duly authorized
officer of such Person with direct responsibility for the administration of this
Agreement and also, with respect to a particular matter, any other duly
authorized officer of such Person to whom such matter is referred because of
such officer’s knowledge of and familiarity with the particular subject.

 

“Restricted Junior Payment” means (i) any dividend or other distribution, direct
or indirect, on account of any class of membership interests of the Borrower now
or hereafter outstanding, except a dividend paid solely in interests of that
class of membership interests or in any junior class of membership interests of
the Borrower; (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any class of
membership interests of the Borrower now or hereafter outstanding, (iii) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
membership interests of the Borrower now or hereafter outstanding, and (iv) any
payment of management fees by the Borrower. For the avoidance of doubt, (x)
payments and reimbursements due to the Servicer in accordance with this
Agreement or any other Transaction Document do not constitute Restricted Junior
Payments and (y) distributions by the Borrower to holders of its membership
interests of Loan Assets or of cash or other proceeds relating thereto which
have been substituted by the Borrower in accordance with this Agreement shall
not constitute Restricted Junior Payments.

 

“Retained Interest” means, with respect to any Agented Note that is transferred
to the Borrower, (i) all of the obligations, if any, of the agent(s) under the
documentation evidencing such Agented Note and (ii) the applicable portion of
the interests, rights and obligations under the documentation evidencing such
Agented Note that relate to such portion(s) of the indebtedness that is owned by
another lender.

 

“Revolving Loan Asset” means a Loan Asset that is a line of credit or contains
an unfunded commitment arising from an extension of credit to an Obligor,
pursuant to the terms of which amounts borrowed may be repaid and subsequently
reborrowed.

 

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business (or its successors in interest).

 

 - 10 - 

 

 

(e)          Fifth Street shall assign its rights or obligations as “Servicer”
hereunder to any Person without the consent of each Lender and the
Administrative Agent (as required in Section 11.04(a) of this Agreement);

 

(f)          any change in the management of the Servicer (whether by
resignation, termination, disability, death or lack of day-to-day management)
relating to either (x) Leonard Tannenbaum or (y) both Bernard Berman and Ivelin
Dimitrov, in each case failing to provide active and material participation in
the Servicer’s or Transferor’s daily activities including, but not limited to,
general management, underwriting, and the credit approval process and credit
monitoring activities, and such persons are not replaced with other individuals
reasonably acceptable to the Administrative Agent within 30 days of such event;a
Key Person Departure Event shall occur;

 

(g)          any failure by the Servicer to deliver (i) any required Servicing
Report on or before the date occurring two Business Days after the date such
report is required to be made or given, as the case may be or (ii) any other
Required Reports hereunder on or before the date occurring five Business Days
after the date such report is required to be made or given, as the case may be,
in each case under the terms of this Agreement;

 

(h)          any representation, warranty or certification made by the Servicer
in any Transaction Document or in any document or report delivered pursuant to
any Transaction Document shall prove to have been incorrect when made, which
inaccuracy has a material adverse effect on the Lenders, and continues to be
unremedied for a period of 30 days after the earlier to occur of (i) the date on
which written notice of such incorrectness requiring the same to be remedied
shall have been given to the Servicer by the Administrative Agent, any Lender or
the Collateral Agent (at the direction of the Administrative Agent) and (ii) the
date on which a Responsible Officer of the Servicer acquires knowledge thereof;

 

(i)          any financial or other information reasonably requested by the
Administrative Agent, a Lender or the Collateral Agent is not provided as
requested within a reasonable amount of time following such request;

 

(j)          the rendering against the Servicer of one or more final judgments,
decrees or orders for the payment of money in excess of United States
$10,000,000, individually or in the aggregate, and the continuance of such
judgment, decree or order unsatisfied and in effect for any period of more than
60 consecutive days without a stay of execution;

 

(k)          any change in the control of the Servicer that takes the form of
either a merger or consolidation that does not comply with the provisions of
Section 5.04(a) of this Agreement;

 

(l)          the occurrence of an Event of Default (past any applicable notice
or cure period provided in the definition thereof); or

 

(m)          the Servicer resigns in contravention of Section 6.11 of this
Agreement.

 

“Servicer Termination Notice” has the meaning assigned to that term in Section
6.01(b).

 

 - 11 - 

 

 

liabilities beyond such Person’s ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in a business or a transaction, and
does not propose to engage in a business or a transaction, for which such
Person’s property assets would constitute unreasonably small capital.

 

“State” means one of the fifty states of the United States or the District of
Columbia.

 

“Stated Maturity Date” means September 16, 20202021 (or, if such day is not a
Business Day, the next succeeding Business Day).

 

“Structured Finance Obligation” means any obligation secured directly by,
referenced to, or representing ownership of, a pool of receivables or other
financial assets of any obligor, including collateralized debt obligations and
mortgage-backed securities, including (but not limited to) collateral debt
obligations, collateral loan obligation, asset backed securities and commercial
mortgage backed securities or any resecuritization thereof.

 

“Subsidiary” means with respect to a person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such person.

 

“Substitute Eligible Loan Asset” means each Eligible Loan Asset Pledged by the
Borrower to the Collateral Agent, on behalf of the Secured Parties, pursuant to
Section 2.07(a) or Section 2.07(c)(ii).

 

“Taxes” means any present or future taxes, levies, imposts, duties, charges,
assessments or fees of any nature (including interest, penalties, and additions
thereto) that are imposed by any Governmental Authority.

 

“Term Loan Asset” means a Loan Asset that is a term loan that has been fully
funded and does not contain any unfunded commitment on the part of the
Transferor arising from an extension of credit by the Transferor to an Obligor.

 

“Third Amendment Effective Date” means August 17, 2015.

 

“Transaction Documents” means this Agreement, the Variable Funding Note(s), any
Joinder Supplement, the Purchase and Sale Agreement, the Control Agreement, the
Custody Agreement, the U.S. Bank Fee Letter, each Lender Fee Letter and each
document, instrument or agreement related to any of the foregoing.

 

“Transferor” means Fifth Street, in its capacity as the transferor hereunder and
as the seller under the Purchase and Sale Agreement, together with its
successors and assigns in such capacity.

 

 - 12 - 

 

 

“Value Adjustment Event” means, with respect to any Loan Asset, the occurrence
of any one or more of the following events after the related Cut-Off Date (any
of which, for the avoidance of doubt, may occur more than once):

 

(i)          an Obligor payment default under any Loan Asset (after giving
effect to any grace and/or cure period set forth in the Loan Agreement, but not
to exceed five days);

 

(ii)         a Bankruptcy Event with respect to the related Obligor; or

 

(iii)        the occurrence of a Material Modification with respect to such Loan
Asset.

 

“Variable Funding Note” has the meaning assigned to such term in Section
2.01(a).

 

“Volcker Rule” means Section 13 of the U.S. Bank Holding Company Act of 1956, as
amended, and the applicable rules and regulations thereunder.

 

“Warranty Event” means, as to any Loan Asset, the discovery that as of the
related Cut-Off Date for such Loan Asset there existed a breach of any
representation or warranty relating to such Loan Asset (including that the Loan
Asset failed to satisfy the criteria of the definition of “Eligible Loan
Asset”); provided that any Loan Asset approved by the Administrative Agent in
accordance with Section 2 of Schedule II on the applicable Cut-Off Date shall
not be a Warranty Loan Asset due to the failure of such Loan Asset to satisfy
the requirements of Section 2 of Schedule II on any date thereafter.

 

“Warranty Loan Asset” means a Loan Asset with respect to which a Warranty Event
has occurred.

 

“Yield” means the sum of the following, payable on each Payment Date:

 

(a) the aggregate LIBOR Yield for all LIBOR Advances Outstanding that have an
Interest Period that ends on such Payment Date and for any part of the
outstanding principal amount of a LIBOR Advance that was prepaid on a day other
than a day on which an Interest Period for such LIBOR Advance ended, to the
extent that LIBOR Yield with respect to such prepaid principal remains accrued
and unpaid:

 

plus,

 

(b) with respect to any previously ended Remittance Period during which any Base
Rate Advances were outstanding, the sum for each day in such Remittance Period
of amounts determined in accordance with the following formula (but only to the
extent that such amounts were not previously paid to the Lenders):

 

YR x L

D

 

 - 13 - 

 

 

(c)          If as a result of any event or circumstance similar to those
described in clause (a) or (b) of this Section 2.10, any Affected Party is
required to compensate a bank or other financial institution providing liquidity
support, credit enhancement or other similar support to such Affected Party in
connection with this Agreement or the funding or maintenance of Advances
hereunder, then within ten days after demand by such Affected Party, the
Borrower shall pay to such Affected Party such additional amount or amounts as
may be necessary to reimburse such Affected Party for any amounts payable or
paid by it.

 

(d)          In determining any amount provided for in this Section 2.10, the
Affected Party may use any reasonable averaging and attribution methods. The
Administrative Agent, on behalf of any Affected Party making a claim under this
Section 2.10, shall submit to the Borrower a certificate setting forth in
reasonable detail the basis for and the computations of such additional or
increased costs, which certificate shall be conclusive absent manifest error.

 

(e)          Failure or delay on the part of any Affected Party to demand
compensation pursuant to this Section 2.10 shall not constitute a waiver of such
Affected Party’s right to demand or receive such compensation.

 

(f)          If at any time the Borrower shall be liable for the payment of any
additional amounts in accordance with this Section 2.10, then the Borrower shall
have the option to terminate this Agreement (in accordance with the provisions
of Section 2.18(b) but without the payment of any Make-Whole Premium); provided
that such option to terminate shall in no event relieve the Borrower of paying
any amounts owing pursuant to this Section 2.10 in accordance with the terms
hereof.

 

(g)          Notwithstanding anything herein to the contrary, (i) the Dodd-Frank
Wall Street Reform and Consumer Protection Act and all rules and regulations
promulgated thereunder or issued in connection therewith shalland (ii) 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 shall, in each case, be deemed to have been
introduced after the Closing Date, thereby constituting a change for which a
claim for increased costs or additional amounts may be made hereunder with
respect to the Affected Parties, regardless of the date enacted, adopted or
issued.

 

SECTION 2.11         Taxes.

 

(a)          All payments made by the Borrower or made by the Servicer on behalf
of the Borrower under this Agreement will be made free and clear of and without
deduction or withholding for or on account of any Non-Excluded Taxes. If any
Non-Excluded Taxes are required to be withheld from any amounts payable to any
Indemnified Party, then the amount payable to such Person will be increased (the
amount of such increase, the “Additional Amount”) such that every net payment
made under this Agreement after withholding for or on account of any
Non-Excluded Taxes (including, without limitation, any Non-Excluded Taxes on
such increase) is not less than the amount that would have been paid had no such
deduction or withholding been made. The foregoing obligation to pay Additional
Amounts with respect to payments required to be made by the Borrower or made by
the Servicer on behalf of the

 

 - 14 - 

 

 

SECTION 2.21         Additional Lenders.

 

The Borrower may, with the written consent of the Administrative Agent, add
additional Persons as Lenders. Each additional Lender shall become a party
hereto by executing and delivering to the Administrative Agent and the Borrower
a Joinder Supplement and aan Assignment and Acceptance.

 

ARTICLE III.

 

CONDITIONS PRECEDENT

 

SECTION 3.01         Conditions Precedent to Effectiveness.

 

(a)          This Agreement shall be effective upon satisfaction of the
conditions precedent that:

 

(i)          all reasonable up-front expenses and fees (including legal fees,
any fees required under any Lender Fee Letter and the U.S. Bank Fee Letter) that
are invoiced at or prior to the Closing Date shall have been paid in full and
all other acts and conditions (including, without limitation, the obtaining of
any necessary consents and regulatory approvals and the making of any required
filings, recordings or registrations) required to be done and performed and to
have happened prior to the execution, delivery and performance of this Agreement
and all related Transaction Documents and to constitute the same legal, valid
and binding obligations, enforceable in accordance with their respective terms,
shall have been done and performed and shall have happened in due and strict
compliance with all Applicable Law;

 

(ii)         in the reasonable judgment of the Administrative Agent, there has
not been any change after the date hereof in Applicable Law which adversely
affects any Lender’s or the Administrative Agent’s ability to enter into the
transactions contemplated by the Transaction Documents or any Material Adverse
Effect or material disruption in the financial, banking or commercial loan or
capital markets generally;

 

(iii)        any and all information submitted to each Lender and the
Administrative Agent by the Borrower, the Transferor or the Servicer or any of
their Affiliates is true, accurate, complete in all material respects and not
misleading in any material respect;

 

(iv)        the Administrative Agent shall have received, all documentation and
other information requested by the Administrative Agent in its sole discretion
and/or required by regulatory authorities with respect to the Borrower, the
Transferor and the Servicer under applicable “know your customer” and anti-money
laundering rules and regulations, including, without limitation, the USA PATRIOT
Act, all in form and substance reasonably satisfactory to the Administrative
Agent;

 

(v)         the Administrative Agent shall have received on or before the date
of such effectiveness the items listed in Schedule I hereto, each in form and
substance satisfactory to the Administrative Agent;

 

 - 15 - 

 

 

which the Administrative Agent and Lenders have access or upon receipt of such
information through e-mail or another delivery method acceptable to the
Administrative Agent.

 

SECTION 6.09         Annual Statement as to Compliance. The Servicer will
provide to the Administrative Agent, each Lender and the Collateral Agent within
90 days following the end of each fiscal year of the Servicer, commencing with
the fiscal year ending on September 30, 2011, a fiscal report signed by a
Responsible Officer of the Servicer certifying that (a) a review of the
activities of the Servicer, and the Servicer’s performance pursuant to this
Agreement, for the fiscal period ending on the last day of such fiscal year has
been made under such Person’s supervision and (b) the Servicer has performed or
has caused to be performed in all material respects all of its obligations under
this Agreement throughout such year and no Servicer Termination Event has
occurred.

 

SECTION 6.10         Annual Independent Public Accountant’s Servicing Reports.
The Servicer will cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer) to furnish to
the Administrative Agent, each Lender and the Collateral Agent within 90 days
following the end of each fiscal year of the Servicer, commencing with the
fiscal year ending on September 30, 2012, a report covering such fiscal year to
the effect that such accountants have applied certain agreed-upon procedures (a
copy of which procedures are attached hereto as Schedule III, it being
understood that the Servicer and the Administrative Agent will provide an
updated Schedule III reflecting any further amendments to such Schedule III
prior to the issuance of the first such agreed-upon procedures report, a copy of
which shall replace the then existing Schedule III) to certain documents and
records relating to the Collateral Portfolio under any Transaction Document,
compared the information contained in the Servicing Reports and the Servicer’s
Certificates delivered during the period covered by such report with such
documents and records and that no matters came to the attention of such
accountants that caused them to believe that such servicing was not conducted in
compliance with this Article VI, except for such exceptions as such accountants
shall believe to be immaterial and such other exceptions as shall be set forth
in such statement.

 

SECTION 6.11         The Servicer Not to Resign. The Servicer shall not resign
from the obligations and duties hereby imposed on it except upon the Servicer’s
determination that (i) the performance of its duties hereunder is or becomes
impermissible under Applicable Law and (ii) there is no reasonable action that
the Servicer could take to make the performance of its duties hereunder
permissible under Applicable Law. Any such determination permitting the
resignation of the Servicer shall be evidenced as to clause (i) above by an
Opinion of Counsel to such effect delivered to the Administrative Agent and each
Lender. No such resignation shall become effective until a Replacement Servicer
shall have assumed the responsibilities and obligations of the Servicer in
accordance with Section 6.02.

 

SECTION 6.12         Required Sale Date. Notwithstanding anything else in this
Agreement or the other Transaction Documents to the contrary, the Borrower shall
divest itself of all Required Sale Assets on or prior to the Required Sale Date;
provided, however, that the Administrative Agent may, in its sole discretion,
give notice at any time to the Borrower to divest itself of any Required Sale
Assets. For the avoidance of doubt, the Borrower’s divestment of the Required
Sale Assets shall not be included in determining the Borrower’s compliance with
Section 2.07 of this Agreement.

 

 - 16 - 

 

 

(o)          any representation, warranty or certification made by the Borrower
or the Transferor in any Transaction Document or in any document delivered
pursuant to any Transaction Document shall prove to have been incorrect when
made in any material respect, and continues to be unremedied for a period of 30
days after the earlier to occur of (i) the date on which written notice of such
incorrectness requiring the same to be remedied shall have been given to the
Borrower or the Transferor by the Administrative Agent or the Collateral Agent
(which shall be given at the direction of the Administrative Agent) and (ii) the
date on which a Responsible Officer of the Borrower or the Transferor acquires
knowledge thereof; or

 

(p)          the Borrower ceases to have a valid, perfected ownership interest
in all of the Collateral Portfolio; or

 

(q)          the Borrower makes any assignment of its respective rights or
obligations under this Agreement or any other Transaction Document without first
obtaining the specific written consent of each of the Lenders and the
Administrative Agent, which consent may be withheld by any Lender or the
Administrative Agent in the exercise of its sole and absolute discretion; or

 

(r)          the Borrower, the Servicer or the Transferor fails to observe or
perform any covenant, agreement or obligation with respect to the management and
distribution of funds received with respect to the Collateral Portfolio, and
such failure is not cured within three Business Days; or

 

(s)          (i) failure of the Borrower to maintain at least one Independent
Director, (ii) the removal of any Independent Director of the Borrower without
“cause” (as such term is defined in the organizational document of the Borrower)
or without giving prior written notice to the Administrative Agent and the
Lenders, each as required in the organizational documents of the Borrower or
(iii) an Independent Director of the Borrower which is not provided by CSC or a
nationally recognized service reasonably acceptable to the Administrative Agent
shall be appointed without the consent of the Administrative Agent; or

 

(t)          an Investment Advisor Departure Event shall occur;

 

then the Administrative Agent or all of the Lenders, may, by notice to the
Borrower, declare the Facility Maturity Date to have occurred; provided that, in
the case of any event described in Section 7.01(h) above, the Facility Maturity
Date shall be deemed to have occurred automatically upon the occurrence of such
event. Upon any such declaration or automatic occurrence, (i) the Borrower shall
cease purchasing Loan Assets from the Transferor under the Purchase and Sale
Agreement, (ii) the Administrative Agent or all of the Lenders may declare the
Advances to be immediately due and payable in full (without presentment, demand,
protest or notice of any kind all of which are hereby waived by the Borrower)
and any other Obligations to be immediately due and payable, and (iii) all
proceeds and distributions in respect of the Portfolio Assets shall be
distributed by the Collateral Agent (at the direction of the Administrative
Agent) as described in Section 2.04(c) (provided that the Borrower shall in any
event remain liable to pay such Advances Outstanding and all such amounts and
Obligations immediately in accordance with Section 2.04(e) hereof). In addition,
upon any such declaration or upon any such automatic occurrence, the Collateral
Agent, on behalf of the Secured Parties and at the direction of the

 

 - 17 - 

 

 

(a)          This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Servicer, the Administrative Agent, each Lender, the
Collateral Agent and their respective successors and permitted assigns. Each
Lender and their respective successors and assigns may assign, syndicate, or
grant a security interest or sell a participation interest in, (i) this
Agreement and such Lender’s rights and obligations hereunder and interest herein
in whole or in part (including by way of the sale of participation interests
therein) and/or (ii) any Advance (or portion thereof) or any Variable Funding
Note (or any portion thereof) to any Person other than the Borrower or an
Affiliate thereof; provided that, (x) so long as no Event of Default has
occurred, unless the Borrower shall otherwise consent, a Lender may only assign,
syndicate, grant a security interest or sell a participation in, its rights and
obligations hereunder to an Affiliate and (y) after an Event of Default has
occurred, a Lender may assign its rights and obligations hereunder to any Person
who is not a Fifth Street Competitor. Any such assignee shall execute and
deliver to the Servicer, the Borrower and the Administrative Agent a
fully-executed assignment and acceptance substantially in the form of Exhibit M
hereto (a “Assignment and Acceptance”) and a fully-executed Joinder Supplement.
The parties to any such assignment, grant or sale of a participation interest
shall execute and the Lender record in its books and records, such agreement or
document as may be satisfactory to such parties. To the fullest extent effective
under Applicable Law (including Section 9-408 of the UCC), none of the Borrower,
the Transferor or the Servicer may assign, or permit any Lien (other than
Permitted Liens) to exist upon, any of its rights or obligations hereunder or
under any Transaction Document or any interest herein or in any Transaction
Document, without the prior written consent of (with respect to assignments,
solely as to the Borrower) each Lender and the Administrative Agent.

 

(b)          Notwithstanding any other provision of this Section 11.04, any
Lender may at any time pledge or grant a security interest in all or any portion
of its rights (including, without limitation, rights to payment of principal and
interest) under this Agreement to secure obligations of such Lender to a Federal
Reserve Bank, without notice to or consent of the Borrower or the Administrative
Agent; provided that no such pledge or grant of a security interest shall
release such Lender from any of its obligations hereunder, or substitute any
such pledgee or grantee for such Lender as a party hereto.

 

(c)          Each Affected Party and each Indemnified Party shall be an express
third party beneficiary of this Agreement.

 

SECTION 11.05         Term of This Agreement. This Agreement, including, without
limitation, the Borrower’s representations and covenants set forth in Articles
IV and V and the Servicer’s representations, covenants and duties set forth in
Articles IV, V and VI, shall remain in full force and effect until the
Collection Date; provided that the rights and remedies with respect to any
breach of any representation and warranty made or deemed made by the Borrower or
the Servicer pursuant to Articles III and IV and the indemnification and payment
provisions of Article VIII, IX and Article XI and the provisions of Section
2.10, Section 2.11, Section 11.07, Section 11.08 and Section 11.09 shall be
continuing and shall survive any termination of this Agreement.

 

SECTION 11.06         GOVERNING LAW; JURY WAIVER. THIS AGREEMENT SHALL, IN
ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL

 

 - 18 - 

 

 

Exhibit B

 

CONFORMED SCHEDULES TO LOAN AND SERVICING AGREEMENT

 

 

 

 

Execution version

Conformed through Omnibus Amendment No. 3

 

SCHEDULE I

 

CONDITIONS PRECEDENT DOCUMENTS

 

As required by Section 3.01 of the Loan and Servicing Agreement, each of the
following items must be delivered to the Administrative Agent and the Lenders
prior to the effectiveness of the Loan and Servicing Agreement:

 

(a)          A copy of the Loan and Servicing Agreement duly executed by each of
the parties hereto;

 

(b)          A certificate of the secretary or assistant secretary of each of
the Borrower and Fifth Street, dated the date of the Loan and Servicing
Agreement, certifying (i) the names and true signatures of the incumbent
officers of such Person authorized to sign on behalf of such Person the
Transaction Documents to which it is a party (on which certificate the
Administrative Agent and the Lenders may conclusively rely until such time as
the Administrative Agent and the Lenders shall receive from the Borrower or
Fifth Street, as applicable, a revised certificate meeting the requirements of
this paragraph (b)(i)), (ii) that the copy of the certificate of formation or
articles of incorporation of such Person, as applicable, is a complete and
correct copy and that such certificate of formation or articles of incorporation
have not been amended, modified or supplemented and are in full force and
effect, (iii) that the copy of the limited liability company agreement or
by-laws, as applicable, of such Person are a complete and correct copy, and that
such limited liability company agreement or by-laws have not been amended,
modified or supplemented and are in full force and effect, and (iv) the
resolutions of the board of directors of such Person approving and authorizing
the execution, delivery and performance by such Person of the Transaction
Documents to which it is a party;

 

(c)          A good standing certificate, dated as of a recent date for each of
the Borrower and Fifth Street, issued by the Secretary of State of such Person’s
State of formation or organization, as applicable;

 

(d)          Duly executed Powers of Attorney from each of the Borrower and
Fifth Street to the Administrative Agent and to the Collateral Agent;

 

(e)          Duly executed Variable Funding Note(s);

 

(f)          Financing statements (the “Facility Financing Statements”)
describing the Collateral Portfolio, and (i) naming the Borrower as debtor and
the Collateral Agent, on behalf of the Secured Parties, as secured party, (ii)
naming the Transferor as debtor, the Borrower as assignor and the Collateral
Agent, on behalf of the Secured Parties, as secured party/total assignee and
(iii) other, similar instruments or documents, as may be necessary or, in the
opinion of the Administrative Agent, desirable under the UCC of all appropriate
jurisdictions or any comparable law to perfect the Collateral Agent’s, on behalf
of the Secured Parties, interests in all Collateral Portfolio;

 

(g)          Financing statements, if any, necessary to release all security
interests and other rights of any Person in the Collateral Portfolio previously
granted by the Transferor;

 

 Sch. I- 1  

 

 

SCHEDULE II

 

ELIGIBILITY CRITERIA

 

The representations and warranties set forth in this Schedule II are made by the
Borrower and the Servicer under the Loan and Servicing Agreement and the
Transferor under the Purchase and Sale Agreement, with respect to all Loan
Assets which are designated as being Eligible Loan Assets on any Borrowing Base
Certificate or are otherwise represented to the Administrative Agent or the
Lenders as being Eligible Loan Assets, or are included as Eligible Loan Assets
in any calculation set forth in the Loan and Servicing Agreement to which this
Schedule II is attached. For the avoidance of doubt, if such Loan Asset does not
satisfy the representations and warranties set forth in this Schedule II then
the Administrative Agent must expressly consent to the inclusion of such Loan
Asset; it being understood that the Administrative Agent will not be deemed to
have consented to the acquisition of a Loan Asset by the Borrower that does not
satisfy the representations and warranties set forth in this Schedule II by
merely approving the acquisition of such Loan Asset by the Borrower unless there
is an express acknowledgement by the Borrower and the Servicer under the Loan
and Servicing Agreement and the Seller under the Purchase and Sale Agreement of
non-satisfaction of the representations and warranties set forth in this
Schedule II.

 

1.          As of the related Cut-Off Date, each such Loan Asset is a First Lien
Loan Asset evidenced by a note or a credit document and an assignment document
in the form specified in the applicable credit agreement or, if no such
specification, on the LSTA assignment form. Each such Loan Asset and the
Portfolio Assets related thereto is subject to a valid, subsisting and
enforceable first priority perfected security interest (subject only to
Permitted Liens) in favor of the Collateral Agent, on behalf of the Secured
Parties, and the Borrower has good and marketable title to such Loan Asset and
the Portfolio Assets related thereto, free and clear of all Liens other than any
Permitted Liens.

 

2.          As of the related Cut-Off Date, the acquisition of each such Loan
Asset by the Borrower, and the Pledge of each such Loan Asset, has been approved
by the Administrative Agent, in its sole discretion, by delivery of an Approval
Notice.

 

3.          As of the related Cut-Off Date, each such Loan Asset is not (a) a
participation interest in all or a portion of a loan (for the avoidance of
doubt, a syndication or co-lending interest which is not documented as a
participation interest shall not be deemed a participation interest), (b) a
letter of credit, (c) a bond, (d) a Structured Finance Obligation or (e) a
Floating Rate Note.

 

4.          As of the related Cut-Off Date, the Obligor with respect to each
such Loan Asset is organized under the laws of the United States or any state
thereof and domiciled in the United States, as reasonably determined by the
Administrative Agent.

 

5.          The funding obligations for each such Loan Asset and the Loan
Agreement under which such Loan Asset was created have been fully satisfied and
all sums available thereunder have been fully advanced, or if such Loan Asset is
a Revolving Loan Asset or Delayed Draw Loan Asset, then (a) the sum of (i) the
aggregate commitments under the

 

 

 Sch. II- 1  

 

 

Exhibit C

 

CONFORMED CUSTODY AGREEMENT

 

 

 

 

EXECUTION COPYExecution Version

Conformed Copy

 

 

 

CUSTODY AGREEMENT

 

 

 

dated as of September 16, 2011
by and among

 

FIFTH STREET FUNDING II, LLC
(“Company”),

 

FIFTH STREET FINANCE CORP.
(“Servicer” and “Transferor”),

 

SUMITOMO MITSUI BANKING CORPORATION

(“Collateral Agent” and “Administrative Agent”)

 

and

 

U.S. BANK NATIONAL ASSOCIATION
(“Custodian”)

 

 

 

 

  TABLE OF CONTENTS       Page 1. DEFINITIONS 1 2. APPOINTMENT OF CUSTODIAN 45
3. DUTIES OF CUSTODIAN 56 4. REPORTING 1213 5. DEPOSIT IN U.S. SECURITIES
SYSTEMS 13 6. CERTAIN GENERAL TERMS 1314 7. COMPENSATION OF CUSTODIAN 1516 8.
RESPONSIBILITY OF CUSTODIAN 16 9. SECURITY CODES 1819 10. TAX LAW 1819 11.
EFFECTIVE PERIOD, TERMINATION AND AMENDMENT 19 12. REPRESENTATIONS AND
WARRANTIES; Covenants 20 13. PARTIES IN INTEREST; NO THIRD PARTY BENEFIT 2122
14. NOTICES 2122 15. CHOICE OF LAW AND JURISDICTION 2324 16. ENTIRE AGREEMENT;
COUNTERPARTS 2324 17. AMENDMENT; WAIVER 2324 18. SUCCESSOR AND ASSIGNS 24 19.
SEVERABILITY 2425 20. INSTRUMENT UNDER SEAL; HEADINGS 2425 21. REQUEST FOR
INSTRUCTIONS 2425 22. OTHER BUSINESS 2526 23. REPRODUCTION OF DOCUMENTS 2526 24.
CONFIDENTIALITY 2526 25. MISCELLANEOUS 2627 SCHEDULES     SCHEDULE A – Initial
Authorized Persons  

 

 i  

 

 

THIS CUSTODY AGREEMENT (this “Agreement”) is dated as of September 16, 2011 and
is by and among FIFTH STREET FUNDING II, LLC, a Delaware limited liability
company (or any successor or permitted assign hereunder, the “Company”), FIFTH
STREET FINANCE CORP., a Delaware corporation, as the servicer and as the
transferor (or any successor or permitted assign hereunder, the “Servicer” or
the “Transferor”), SUMITOMO MITSUI BANKING CORPORATION, a Japanese banking
corporation (or any successor or permitted assign acting as the collateral agent
or as the administrative agent hereunder, the “Collateral Agent” or the
“Administrative Agent”, respectively, and “SMBC”), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association (or any successor or permitted
assign acting as custodian hereunder, the “Custodian”).

 

RECITALS

 

WHEREAS, the Company, the Administrative Agent, the Collateral Agent and each of
the Lenders from time to time a party to the Loan and Servicing Agreement desire
to retain U.S. Bank National Association to act as custodian;

 

WHEREAS, the Company, the Administrative Agent, the Collateral Agent and each of
the Lenders from time to time a party to the Loan and Servicing Agreement desire
that the Company’s Securities (as defined below), Required Loan Documents (as
defined below) be held and administered by the Custodian pursuant to this
Agreement; and

 

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

 

1.          DEFINITIONS

 

1.1           Defined Terms. All capitalized terms used but not otherwise
defined in this Agreement shall have the same defined meanings as set forth in
the Loan and Servicing Agreement. In addition to terms expressly defined
elsewhere herein, the following words shall have the following meanings as used
in this Agreement:

 

“Administrative Agent” has the meaning set forth in the first paragraph of this
Agreement.

 

“Agreement” means this Custody Agreement (as the same may be amended from time
to time in accordance with the terms hereof).

 

“Authorized Person” has the meaning set forth in Section 6.4.

 

“Business Day” means a day on which the Custodian is open for business in the
market or country in which a transaction is to take place.

 

“Collateral Agent” has the meaning set forth in the first paragraph of this
Agreement.

 

“Company” has the meaning set forth in the first paragraph of this Agreement.

 

 1 

 

 

“Confidential Information” means any databases, computer programs, screen
formats, screen designs, report formats, interactive design techniques, and
other similar or related information that may be furnished to the Company by the
Custodian from time to time pursuant to this Agreement.

 

“Custodian” has the meaning set forth in the first paragraph of this Agreement.

 

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

 

“Eligible Investment” means any investment that at the time of its acquisition
is one or more of the following:

 

(a)          United States government and agency obligations;

 

(b)          commercial paper having a rating assigned to such commercial paper
by Standard & Poor’s Rating Services or Moody’s Investor Service, Inc. (or, if
neither such organization shall rate such commercial paper at such time, by any
nationally recognized rating organization in the United States of America) equal
to one of the two highest ratings assigned by such organization, it being
understood that as of the date hereof such ratings by Standard & Poor’s Rating
Services are “A1+” and “A1” and such ratings by Moody’s Investor Service, Inc.
are “P1” and “P2”;

 

(c)          interest bearing deposits in United States dollars in United States
or Canadian banks with an unrestricted surplus of at least U.S. $250,000,000,
maturing within one year; and

 

(d)          money market funds (including funds of the bank serving as
Custodian or its affiliates) or United States government securities funds
designed to maintain a fixed share price and high liquidity.

 

“Eligible Securities Depository” has the meaning set forth in Section (b)(1) of
Rule 17f-7 under the 1940 Act.

 

“Excepted Persons” has the meaning set forth in Section 24.1.

 

“Federal Reserve Bank Book-Entry System” means a depository and securities
transfer system operated by the Federal Reserve Bank of the United States on
which are eligible to be held all United States Government direct obligation
bills, notes and bonds.

 

“Loan Asset” means any commercial loan, or portion thereof, individually or
collectively, originated or acquired by the Transferor in the ordinary course of
its business, which loan includes, without limitation, (i) the Required Loan
Documents and Loan Asset File, and (ii) all right, title and interest of the
Transferor in and to the loan and any Underlying Collateral, but excluding, in
each case, the Retained Interest and Excluded Amounts and which loan was
acquired by the Borrower from the Transferor under the Purchase and Sale
Agreement and owned by the Borrower on the initial Advance Date (as set forth on

 

 2 

 

 

3.2           Securities Custody Account. The Custodian shall open and maintain
in its trust department a segregated trust account in the name of the Company,
subject to the Lien of the Collateral Agent, for the benefit of the Secured
Parties, subject to order of the Custodian, in which the Custodian shall enter
and carry, subject to Section 3.3(b), all Securities (other than Loan Assets)
and other assets (other than cash and EligiblePermitted Investments) of the
Company Pledged to the Collateral Agent, for the benefit of the Secured Parties,
which are delivered to it in accordance with this Agreement. For avoidance of
doubt, the Custodian shall not be required to credit or deposit Loan Assets in
the Securities Account but shall instead maintain a register (in book-entry form
or in such other form as it shall deem necessary or desirable) of such Loan
Assets, containing such information as the Servicer, the Collateral Agent, the
Administrative Agent and the Custodian may reasonably agree; provided that, with
respect to such Loan Assets, (i) all Required Loan Documents shall be held in
safekeeping by the Document Custodian, as bailee of the Collateral Agent
individually segregated from the securities and investments of any other person
and marked so as to clearly identify them as the property of the Company,
subject to the Lien of the Collateral Agent, for the benefit of the Secured
Parties, in a manner consistent with this Agreement.

 

3.3           Delivery of Securities to Custodian.

 

(a)          The Company, the Servicer or the Transferor shall deliver, or cause
to be delivered, to the Custodian the Company’s Securities, Pledged by the
Company to the Collateral Agent under the Loan and Servicing Agreement. The
Company and the Servicer agree and acknowledge that cash Proceeds of Securities
shall be delivered to the Account Bank pursuant to provisions of Control
Agreement. With respect to Loan Assets, the Required Loan Documents and other
underlying loan documents shall be delivered to the Custodian in its role as,
and at the address identified for, the Document Custodian. With respect to
assets other than Loan Assets, such assets shall be delivered to the Custodian
in its role as, and (where relevant) at the address identified for, the
Securities Custodian. The Custodian shall not be responsible for such Securities
or other assets until actually delivered to, and received by it. In taking and
retaining custody of the Required Loan Documents, the Document Custodian shall
be deemed to be acting as the agent of the Collateral Agent for the benefit of
the Secured Parties.

 

(b)          (i) In connection with the Company’s Pledge of a Loan Asset or
other Security to the Collateral Agent, the Company, the Servicer or the
Transferor shall deliver or cause to be delivered to the Custodian (in its roles
as, and at the address identified for, the Custodian and Document Custodian) a
properly completed Trade Confirmation containing such information in respect of
such Loan Asset as the Custodian may reasonably require in order to enable the
Custodian to perform its duties hereunder in respect of such Loan Asset and on
which the Custodian may conclusively rely without further inquiry or
investigation, in such form and format as the Custodian reasonably may require,
and shall deliver to the Document Custodian (in its role as, and at the address
identified for, the

 

 3 

 

 

Exhibit D

 

CONFORMED SECURITIES ACCOUNT CONTROL AGREEMENT

 

   

 

 

EXECUTION COPYExecution version

Conformed Copy

 

 

 

SECURITIES ACCOUNT CONTROL AGREEMENT

 

dated as of September 16, 2011

 

by and among

 

FIFTH STREET FUNDING II, LLC

 

as the Borrower

 

FIFTH STREET FUNDING CORP.

 

as the Servicer

 

SUMITOMO MITSUI BANKING CORPORATION

 

as the Collateral Agent

 

U.S. BANK NATIONAL ASSOCIATION

 

as the Account Bank

 

 

 

 

 

 

  TABLE OF CONTENTS         Section 1. Defined Terms; Interpretation 1      
Section 2. Appointment of the Account Bank 23       Section 3. The Controlled
Accounts 3       Section 4. The Account Bank 6       Section 5. Disbursements
from the Controlled Accounts 89       Section 6. Indemnity; Limitation on
Damages; Expenses; Fees 89       Section 7. Representations 910       Section 8.
Transfer 1011       Section 9. Termination 1012       Section 10. Miscellaneous
1112       Section 11. Notices 1213       Section 12. Governing Law and
Jurisdiction 1314

 

 - i - 

 

 

SECURITIES ACCOUNT CONTROL AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, this “Agreement”), dated as of September
16, 2011, by and among FIFTH STREET FUNDING II, LLC, as the borrower (the
“Borrower”); FIFTH STREET FINANCE CORP., as the servicer (the “Servicer”);
SUMITOMO MITSUI BANKING CORPORATION, as the collateral agent (in such capacity,
together with its successors in such capacity, the “Collateral Agent”) under the
Loan and Servicing Agreement referred to below; and U.S. BANK NATIONAL
ASSOCIATION, as the account bank (in such capacity, the “Account Bank”).

 

In consideration of the mutual agreements hereinafter contained and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

Section 1.          Defined Terms; Interpretation

 

(a)       Definitions. Capitalized terms used but not defined in this Agreement
shall have the meanings provided in the Loan and Servicing Agreement. In
addition, all terms used herein which are defined in Article 8 or Article 9 of
the UCC and which are not otherwise defined herein are used herein as so
defined. As used herein, the following defined terms have the meanings provided
below.

 

“Account Bank” has the meaning specified in the first paragraph hereof.

 

“Agreement” has the meaning specified in the first paragraph hereof.

 

“Associated Persons” has the meaning specified in Section 6(b).

 

“Borrower” has the meaning specified in the first paragraph hereof.

 

“Business Day” means a day of the year other than (i) Saturday or a Sunday or
(ii) any other day on which commercial banks in New York, New York or the city
or cities in which the offices of the Collateral Agent and Account Bank are
located and are authorized or required by Applicable Law, regulation or
executive order to close.

 

“Collateral Agent” has the meaning specified in the first paragraph hereof.

 

“Controlled Accounts” has the meaning specified in Section 3(a)(i).

 

“Disbursement Request” shall means a disbursement request from the Borrower to
the Administrative Agent and the Collateral Agent in the form attached as
Exhibit C attached hereto in connection with a disbursement request from the
Unfunded Exposure Account in accordance with Section 2.04(d) of the Loan and
Servicing Agreement.

 

“Dollar”, “USD” or “U.S.$” means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for all
debts, public and private.

 

“Eligible Account” shall mean a separate and identifiable account from all other
funds held by the holding institution that is either (i) an account or accounts
maintained with a federal

 

 

 

 

or state-chartered depository institution or trust company which complies with
the definition of Eligible Institution or (ii) a segregated trust account or
accounts maintained with a federal or state chartered depository institution or
trust company acting through its corporate trust division which, in the case of
a state chartered depository institution or trust company, is subject to
regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal and state authorities. An Eligible Account will not be
evidenced by a certificate of deposit, passbook or other instrument.

 

“Eligible Institution” shall mean a depository institution or trust company
insured by the Federal Deposit Insurance Corporation, the short term unsecured
debt obligations or commercial paper of which are rated at least A-1 by Standard
& Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business
(“S&P”), P-1 by Moody’s Investors Service, Inc. (“Moody’s”), and F-1+ by Fitch,
Inc. (“Fitch”) in the case of accounts in which funds are held for 30 days or
less or, in the case of letters of credit or accounts in which funds are held
for more than 30 days, the long term unsecured debt obligations of which are
rated at least “AA” by Fitch and S&P and “Aa2” by Moody’s.

 

“Law” includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
“lawful” and “unlawful” will be construed accordingly.

 

“Loan and Servicing Agreement” means the Loan and Servicing Agreement, dated as
of September 16, 2011 by and among the Borrower, the Servicer and Sumitomo
Mitsui Banking Corporation, as the Administrative Agent, as Lender and as the
Collateral Agent, a copy of which is attached hereto as Exhibit A.

 

“Loan Assets” has the meaning specified in Section 13.

 

“Loan Assignment Agreement” has the meaning specified in Section 13.

 

“Moody’s” means Moody’s Investors Service, Inc. (or its successors in interest).

 

“Payment Date” means the 15th day of each calendar month or, if such day is not
a Business Day, the next succeeding Business Day, commencing on the 15th day of
October, 2011; provided that the final Payment Date shall occur on the
Collection Date.

 

“Permitted Investment Required Ratings” means (a) if such obligation or security
(i) has both a long-term and a short-term credit rating from Moody’s, such
ratings are “Aa3” or better (not on credit watch for possible downgrade) and
“P-1” (not on credit watch for possible downgrade), respectively, (ii) has only
a long-term credit rating from Moody’s, such rating is “Aaa” (not on credit
watch for possible downgrade) and (iii) has only a short-term credit rating from
Moody’s, such rating is “P-1” (not on credit watch for possible downgrade) and
(b) “A 1” or better (or, in the absence of a short-term credit rating, “A+” or
better) from S&P.

 

“Permitted Investments” means either cash or any Dollar investment that, at the
time it is delivered (directly or through an intermediary or bailee), (x)
matures not later than the earlier of (A) the date that is 60 days after the
date of delivery thereof and (B) the Business Day

 

 - 2 - 

 

 

immediately preceding the Payment Date immediately following the date of
delivery thereof, and (y) is one or more of the following obligations or
securities:

 

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

 

(ii)         demand and time deposits in, certificates of deposit of, trust
accounts with, bankers’ acceptances issued by, or federal funds sold by any
depository institution or trust company incorporated under the laws of the
United States (including the Account Bank) or any state thereof and subject to
supervision and examination by federal and/or state banking authorities or with
the Administrative Agent, in each case payable within 60 days after issuance, 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 Permitted
Investment Required Ratings;

 

(iii)        unleveraged repurchase obligations (if treated as debt by the
Borrower and the counterparty) with respect to (a) any security described in
clause (i) above or (b) any other Registered security issued or guaranteed by an
agency or instrumentality of the United States, in either case entered into with
a depository institution or trust company (acting as principal) described in
clause (ii) above or entered into with an entity (acting as principal) with, or
whose parent company has (in addition to issuing a guarantee agreement
guaranteeing payment of such entity’s obligations under such repurchase
obligation, which guarantee agreement complies with S&P’s then-current criteria
with respect to guarantees), the Permitted Investment Required Ratings;

 

(iv)        commercial paper or other short-term obligations (other than
asset-backed commercial paper) with the Permitted 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 60 days from their date of
issuance;

 

(v)         a Reinvestment Agreement issued by any bank (if treated as a deposit
by such bank), or a Reinvestment Agreement issued by any insurance company or
other corporation or entity, in each case with the Permitted Investment Required
Ratings; provided that such Reinvestment Agreement may be unwound at the option
of the Borrower without penalty; and

 

(vi)        money market funds that have, at all times, credit ratings of “Aaa”
and “MR1+” by Moody’s and “AAAm” or “AAAm-G” by S&P, respectively;

 

provided that (1) Permitted 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 (vi) above, as mature (or are putable at par to the issuer
thereof) no later than the Business Day prior to the next Payment Date unless
such Permitted Investments are issued by the Collateral Agent or the Account
Bank

 

 

 - 3 - 

 

 

in its capacity as a banking institution, in which event such Permitted
Investments may mature on such Payment Date; and (2) none of the foregoing
obligations or securities shall constitute Permitted Investments if (a) such
obligation or security has an “f”, “r”, “p”, “pi”, “q” or “t” subscript assigned
by S&P, (b) all, or substantially all, of the remaining amounts payable
thereunder consist of interest and not principal payments, (c) payments with
respect to such obligations or securities or proceeds of disposition are subject
to withholding taxes by any jurisdiction unless the payor is required to make
“gross-up” payments that cover the full amount of any such withholding tax on an
after-tax basis, (d) such obligation or security is secured by real property,
(e) such obligation or security is purchased at a price greater than 100% of the
principal or face amount thereof, (f) such obligation or security is subject of
a tender offer, voluntary redemption, exchange offer, conversion or other
similar action, (g) in the Servicer’s judgment, such obligation or security is
subject to material non-credit related risks, (h) such obligation is a
structured finance obligation or (i) such obligation or security is represented
by a certificate of interest in a grantor trust. Permitted Investments may
include, without limitation, those investments issued by or made with the
Account Bank or for which the Account Bank or the Collateral Agent or an
Affiliate of the Account Bank or the Collateral Agent provides services and
receives compensation.

 

“Proceedings” has the meaning specified in Section 12(b).

 

“Registered” means, for the purposes of the definition of “Permitted
Investments”, in registered form for U.S. federal income tax purposes and issued
after July 18, 1984; provided that a certificate of interest in a grantor trust
shall not be treated as Registered unless each of the obligations or securities
held by the trust was issued after that date.

 

“Reinvestment Agreement” means a guaranteed reinvestment agreement from a bank,
insurance company or other corporation or entity having a Permitted Investment
Required Rating; provided that such agreement provides that it is terminable by
the purchaser, without penalty, if the rating assigned to such agreement by
either S&P or Moody’s is at any time lower than such agreement’s Permitted
Investment Required Rating.

 

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business (or its successors in interest).

 

(b) Rules of Construction. Unless the context otherwise clearly requires: (i)
the definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined; (ii) whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms; (iii) the
words “include”, “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”; (iv) the word “will” shall be construed to have
the same meaning and effect as the word “shall”; (v) any definition of or
reference to any 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);
(vi) any reference herein to any Person shall be construed to include such
Person’s successors and assigns; (vii) the words “herein”, “hereof’ and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not

 

 - 4 - 

 

 

Exhibit E

 

CONFORMED PURCHASE AND SALE AGREEMENT

 

 

 

 

EXECUTION COPYExecution version

(Conformed Copy)

 

PURCHASE AND SALE AGREEMENT

 

by and between

 

FIFTH STREET FUNDING II, LLC,

 

as the Purchaser

 

and

 

FIFTH STREET FINANCE CORP.,

 

as the Seller

 

Dated as of September 16, 2011

 

 

 

 

PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT, dated as of September 16, 2011, by and between
FIFTH STREET FINANCE CORP., a Delaware corporation, as the seller (the “Seller”)
and FIFTH STREET FUNDING II, LLC, a Delaware limited liability company, as the
purchaser (the “Purchaser”).

 

WITNESSETH:

 

WHEREAS, the Purchaser has agreed to Purchase (as hereinafter defined) from the
Seller from time to time, and the Seller has agreed to Sell (as hereinafter
defined) to the Purchaser from time to time, certain Loan Assets and Portfolio
Assets related thereto on the terms set forth herein;

 

WHEREAS, it is contemplated that the Loan Assets and Portfolio Assets Purchased
hereunder may be Pledged by the Purchaser pursuant to the Loan and Servicing
Agreement (as defined herein) and the related Transaction Documents, to the
Collateral Agent, for the benefit of the Secured Parties; and

 

WHEREAS, the Seller agrees that all representations, warranties, covenants and
agreements made by the Seller herein with respect to the Sale Portfolio shall
also be for the benefit of any Secured Party.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter contained, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the Purchaser and the Seller, intending
to be legally bound, hereby agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

Section 1.1.          General. The specific terms defined in this Article
include the plural as well as the singular. Words herein importing a gender
include the other gender. References herein to “writing” include printing,
typing, lithography and other means of reproducing words in visible form.
References to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement or the Loan and
Servicing Agreement (as hereinafter defined). References herein to Persons
include their successors and assigns permitted hereunder or under the Loan and
Servicing Agreement. The terms “include” or “including” mean “include without
limitation” or “including without limitation”. The words “herein”, “hereof” and
“hereunder” and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision, and Article,
Section, Schedule and Exhibit references, unless otherwise specified, refer to
Articles and Sections of and Schedules and Exhibits to this Agreement.
References to any Applicable Law means such Applicable 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 Applicable Law means that provision of
such Applicable Law from time to time

 

 

 

 

(b)          Security Interests. Except as otherwise permitted herein and in the
Loan and Servicing Agreement, the Seller will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Sale Portfolio Sold by the Seller to the Purchaser hereunder,
whether now existing or hereafter transferred hereunder, or any interest,
therein, and the Seller will not sell, pledge, assign or suffer to exist any
Lien (except for Permitted Liens) on its interest in the Sale Portfolio Sold by
the Seller to the Purchaser hereunder. The Seller will promptly notify the
Purchaser, the Collateral Agent, each Lender and the Administrative Agent of the
existence of any Lien on any Sale Portfolio and the Seller shall defend the
right, title and interest of the Purchaser and the Collateral Agent, on behalf
of the Secured Parties, in, to and under the Sale Portfolio against all claims
of third parties; provided that nothing in this Section 5.3(b) shall prevent or
be deemed to prohibit the Seller from suffering to exist Permitted Liens upon
any of the Sale Portfolio.

 

(c)          Mergers, Acquisitions, Sales, Etc. The Seller will not consolidate
with or merge into any other Person or convey or transfer its properties and
assets substantially as an entirety to any Person, or sell or assign with or
without recourse any Sale Portfolio or any interest therein (other than in the
ordinary course of business or as permitted pursuant to this Agreement or the
Transaction Documents).

 

(d)          Transfer of Purchaser Membership Interests. The Seller shall not
transfer, pledge, participate or otherwise encumber its membership interests in
the Purchaser without the prior written consent of the Administrative Agent and
the delivery of an acceptable (in the Administrative Agent’s reasonable
discretion) non-consolidation opinion.

 

(e)          Restricted Payments. The Seller shall not cause or permit the
Purchaser to make any Purchaser Restricted Junior Payment, except that, so long
as no Event of Default or Unmatured Event of Default has occurred or would
result therefrom, the Purchaser may declare and make distributions to its member
on its membership interests.

 

(f)          Accounting of Purchases. Other than for tax and consolidated
accounting purposes, the Seller will not account for or treat (whether in
financial statements or otherwise) the transactions contemplated hereby in any
manner other than as a sale of the Loan Assets to the Purchaser.

 

(g)          ERISA Matters. The Seller will not (a) engage, and will exercise
its best efforts not to permit any ERISA Affiliate to engage, in any prohibited
transaction (within the meaning of ERISA Section 406(a) or (b) or Code Section
4975) for which an exemption is not available or has not previously been
obtained from the United States Department of Labor, (b) fail to meet the
minimum funding standard set forth in Section 302(a) of ERISA and Section 412(a)
of the Code with respect to any Pension Plan other than a Multiemployer Plan,
(c) fail to make any payments to a Multiemployer Plan that the Seller or any
ERISA Affiliate may be required to make under the agreement relating to such
Multiemployer Plan or any law pertaining thereto, (d) terminate any Pension Plan
so as to result, directly or indirectly, in any liability to the Seller, or (e)
permit to exist any occurrence of any reportable event described in Title IV of
ERISA with respect to any Pension Plan other than an event for which the
reporting requirements have been waived by regulations.

 

 2