Exhibit 10.2

 

 

 

MASTER LOAN SALE AGREEMENT

among

TICC CAPITAL CORP.,

as the Originator,

TICC CAPITAL CORP. 2011-1 HOLDINGS, LLC,

as the Depositor,

and

TICC CLO LLC,

as the Issuer

Dated as of August 10, 2011

 

 

 

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TABLE OF CONTENTS

 

                Page  

ARTICLE I        DEFINITIONS

     1     

Section 1.1.

    

Definitions

     1     

Section 1.2.

    

Other Terms

     3     

Section 1.3.

    

Computation of Time Periods

     4     

Section 1.4.

    

Interpretation

     4     

Section 1.5.

    

References

     5   

ARTICLE II        TRANSFER OF THE CONVEYED COLLATERAL

     5     

Section 2.1.

    

Transfer of the Conveyed Collateral

     5     

Section 2.2.

    

Conveyance of Initial Conveyed Collateral

     7     

Section 2.3.

    

Acceptance of Initial Conveyed Collateral

     8     

Section 2.4.

    

Conveyance of Subsequent Conveyed Collateral

     8     

Section 2.5.

    

Optional Substitution of Collateral Obligations

     9     

Section 2.6.

    

Direct Assignments

     10     

Section 2.7.

    

Delivery of Documents

     11   

ARTICLE III        REPRESENTATIONS AND WARRANTIES

     11     

Section 3.1.

    

Representations and Warranties of the Originator

     11     

Section 3.2.

    

Representations and Warranties Regarding the Collateral Obligations

     16     

Section 3.3.

    

Representations and Warranties of the Depositor

     16     

Section 3.4.

    

Additional Representations and Warranties of the Depositor

     18     

Section 3.5.

    

Representations and Warranties of the Issuer

     20   

ARTICLE IV        PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS

     21     

Section 4.1.

    

Custody of Collateral Obligation

     21     

Section 4.2.

    

Filing

     21     

Section 4.3.

    

Changes in Name, Corporate Structure or Location

     21     

Section 4.4.

    

Costs and Expenses

     22     

Section 4.5.

    

Sale Treatment

     22     

Section 4.6.

    

Separateness

     22   

ARTICLE V        COVENANTS

     22     

Section 5.1.

    

Covenants of the Originator

     22   

 

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TABLE OF CONTENTS

(continued)

 

                Page    

Section 5.2.

    

Covenants of the Depositor

     24   

ARTICLE VI        INDEMNIFICATION BY THE ORIGINATOR

     25     

Section 6.1.

    

Indemnification

     25     

Section 6.2.

    

Liabilities to Obligors

     25     

Section 6.3.

    

Operation of Indemnities

     26   

ARTICLE VII        OPTIONAL AND MANDATORY REPURCHASES

     26     

Section 7.1.

    

Optional Repurchases

     26     

Section 7.2.

    

Mandatory Repurchases

     26     

Section 7.3.

    

Reassignment of Substituted or Repurchased Collateral Obligations

     27     

Section 7.4.

    

Repurchase and Substitution Limit

     27   

ARTICLE VIII        MISCELLANEOUS

     27     

Section 8.1.

    

Amendment

     27     

Section 8.2.

    

Governing Law

     28     

Section 8.3.

    

Notices

     29     

Section 8.4.

    

Severability of Provisions

     29     

Section 8.5.

    

Third Party Beneficiaries

     29     

Section 8.6.

    

Counterparts

     29     

Section 8.7.

    

Headings

     29     

Section 8.8.

    

No Bankruptcy Petition; Disclaimer

     29     

Section 8.9.

    

Jurisdiction

     30     

Section 8.10.

    

Prohibited Transactions with Respect to the Issuer

     30     

Section 8.11.

    

No Partnership

     30     

Section 8.12.

    

Successors and Assigns

     30     

Section 8.13.

    

Duration of Agreement

     30     

Section 8.14.

    

Limited Recourse

     31   

 

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THIS MASTER LOAN SALE AGREEMENT, dated as of August 10, 2011 (as amended,
modified, restated, or supplemented from time to time, this “Agreement”), is
made by and among TICC CAPITAL CORP., a Maryland corporation (together with its
successors and assigns in such capacity, the “Originator”), TICC CAPITAL CORP.
2011-1 HOLDINGS, LLC, a Delaware limited liability company (together with its
successors and assigns in such capacity, the “Depositor”), and TICC CLO LLC, a
Delaware limited liability company (together with its successors and assigns in
such capacity, the “Issuer”).

PREAMBLE

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

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

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

WHEREAS, on the Closing Date, the Depositor will transfer all of its right,
title and interest in the Initial Collateral Obligations to the Issuer, and,
thereafter, the Issuer will from time to time acquire certain Additional
Collateral Obligations and Substitute Collateral Obligations, all pursuant to
the terms and conditions set forth herein and in the Indenture.

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

ARTICLE I

DEFINITIONS

Section 1.1. Definitions.

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

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“Additional Collateral Obligations”: The meaning assigned in the Preamble of
this Agreement.

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

“Conveyed Collateral”: Collectively, the Initial Conveyed Collateral and
Subsequent Conveyed Collateral.

“Depositor”: TICC Capital Corp. 2011-1 Holdings, LLC, together with its
successors and assigns.

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

“Ineligible Collateral Obligation”: The meaning specified in Section 7.2.

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

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

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

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

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

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

“Permitted Liens” means with respect to the interest of the Originator, the
Depositor and the Issuer in the Collateral Obligations included in the Assets:
(i) security interests, liens and other encumbrances in favor of the Depositor
created pursuant to this Agreement and transferred to the Issuer pursuant
hereto, (ii) security interests, liens and other encumbrances in favor of the
Issuer created pursuant to this Agreement, (iii) security interests, liens and
other encumbrances in favor of the Trustee created pursuant to the Indenture
and/or this Agreement, (iv) with respect to agented Collateral Obligations,
security interests, liens and other encumbrances in favor of the lead agent, the
collateral agent or the paying agent on behalf of all holders of indebtedness of
such Obligor under the related facility, (v) with respect to any Equity
Security, any security interests, liens and other encumbrances granted on such
Equity Security to secure indebtedness of the related Obligor and/or any
security interests, liens and other rights or encumbrances granted under any
governing documents or other agreement between or among or binding upon the
Issuer as the holder of equity in such Obligor and (vi) security interests,
liens and other

 

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encumbrances, if any, which have priority over first priority perfected security
interests in the Collateral Obligations or any portion thereof under the UCC or
any other applicable law.

“Repurchase and Substitution Limit”: The meaning specified in Section 7.4.

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

(i) (x) other than in the case of a Noteless Collateral Obligation or a
Participation Interest, the original or, if accompanied by a “lost note”
affidavit and indemnity, a copy of the Underlying Note, endorsed by the prior
holder of record either in blank or to the Trustee (and evidencing an unbroken
chain of endorsements from the prior holder(s) thereof evidenced in the chain of
endorsements in blank or to the Trustee, subject to Section 2.6), with any
endorsement to the Trustee to be in the following form: “The Bank of New York
Mellon Trust Company, National Association, its successors and assigns, as
Trustee for the Secured Parties,” and (y) in the case of a Noteless Collateral
Obligation or a Participation Interest, a copy of each transfer document or
assignment agreement relating to such Noteless Collateral Obligation or
Participation Interest evidencing the assignment of such Noteless Collateral
Obligation or Participation Interest to the Originator, from the Originator to
the Depositor and from the Depositor to the Issuer (subject to Section 2.6); and

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

“Schedule of Collateral Obligations”: The meaning specified in Section 2.1(c).

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

“Subsequent Transfer Agreement”: The meaning specified in Section 2.1(c).

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

“Substitution Period”: The meaning specified in Section 2.5(b).

“Transfer Date”: The meaning specified in Section 2.1(c).

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

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

Section 1.2. Other Terms.

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

 

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Section 1.3. Computation of Time Periods.

Unless otherwise stated in this Agreement, in the computation of a period of
time from a specified date to a later specified date, the word “from” means
“from and including”, the words “to” and “until” each mean “to but excluding”,
and the word “within” means “from and excluding a specified date and to and
including a later specified date”.

Section 1.4. Interpretation.

In this Agreement, unless a contrary intention appears:

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

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

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

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

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

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

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

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

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

 

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Section 1.5. References.

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

ARTICLE II

TRANSFER OF THE CONVEYED COLLATERAL

Section 2.1. Transfer of the Conveyed Collateral.

(a) Transfer from the Originator to the Depositor. Subject to and upon the terms
and conditions set forth herein, the Originator hereby sells, conveys and
transfers to the Depositor all of the Originator’s right, title and interest in,
to and under the Initial Collateral Obligations and any related Assets with
respect thereto (the “Initial Conveyed Collateral”) for a purchase price on the
date hereof of $117,910,870.82, which purchase price shall be the value thereof
as determined by the board of directors of the Originator in accordance with the
1940 Act (but in no event at less than fair market value). The consideration for
the transfer of the Initial Conveyed Collateral from the Originator to the
Depositor shall consist of cash paid by the Depositor to the Originator on the
date hereof and, to the extent that such cash so paid on the date hereof is less
than the purchase price thereof, the difference shall be deemed a capital
contribution from the Originator to the Depositor on the date hereof.

(b) Transfer from the Depositor to the Issuer. Subject to and upon the terms and
conditions set forth herein, the Depositor hereby sells, conveys and transfers
to the Issuer all of the Depositor’s right, title and interest in, to and under
the Initial Conveyed Collateral for a purchase price on the date hereof of
$117,910,870.82. The consideration for the transfer of the Initial Conveyed
Collateral from the Depositor to the Issuer shall consist of cash paid by the
Issuer to the Depositor on the date hereof and the issuance by the Issuer to the
Depositor of all of the Subordinated Notes.

(c) Each of the Originator, the Depositor and the Issuer agrees and acknowledges
that the Issuer may, as permitted under the Indenture, acquire Additional
Collateral Obligations and related Assets with respect thereto (the “Additional
Conveyed Collateral”), and may acquire Substitute Collateral Obligations and any
related Assets as set forth in Section 2.5 and the Indenture with respect
thereto (the “Substitute Conveyed Collateral” and, together with the Additional
Conveyed Collateral, the “Subsequent Conveyed Collateral”), in each case,
pursuant to a Subsequent Transfer Agreement, substantially in the form of
Exhibit A hereto, duly executed by each of the Originator, the Depositor and the
Issuer (each such agreement, a “Subsequent Transfer Agreement”) and the parties
hereto agree that each such Subsequent Transfer Agreement will be deemed to
become part of this Agreement as of the date of its execution (each such date, a
“Transfer Date”) without further amendment hereof. Nothing contained herein
shall prevent the Issuer from acquiring Collateral Obligations and related
Assets with respect thereto from third parties that are not Affiliates of the
Originator or the Depositor, and the Issuer’s acquisition of such Collateral
Obligations and related Assets shall not be governed by the terms of this
Agreement.

 

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(d) Each of the Originator, the Depositor and the Issuer agrees that (i) the
representations, warranties, covenants and rights of indemnity of the Originator
and the Depositor set forth herein will run to and be for the benefit of the
Issuer and the Trustee, on behalf of the Secured Parties and (ii) either the
Issuer or the Trustee, on behalf of the Secured Parties, shall have the right to
enforce directly without joinder of the Depositor, the repurchase obligations
and indemnification obligations of the Originator with respect to breaches of
such representations, warranties and covenants as set forth herein. The parties
hereto acknowledge and agree that the Trustee for the benefit of the Secured
Parties shall be an express third party beneficiary of such representations,
warranties, covenants and rights of indemnity.

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

(f) If any such transfer of Conveyed Collateral by the Originator to the
Depositor (whether Initial Conveyed Collateral transferred pursuant to
Section 2.1(a) or Subsequent Conveyed Collateral transferred pursuant to
Section 2.1(c)) is deemed to be the mere granting of a security interest to
secure a financing, the Depositor may, to secure the Depositor’s own obligations
under this Agreement (to the extent that the transfer of Conveyed Collateral by
the Depositor to the Issuer hereunder is deemed to be the mere granting of a
security interest to secure a financing), repledge and reassign to the Issuer
(and the Issuer may repledge and reassign to the Trustee) (1) all or a portion
of the Conveyed Collateral pledged to the Depositor by the Originator and with
respect to which the Depositor has not released its security interest at the
time of such pledge and assignment and (2) all proceeds thereof. Such repledge
and reassignment may be made with or without a repledge and reassignment by the
Depositor of its rights under any agreement with the Originator, and without
further notice to or acknowledgement from the Originator. The Originator hereby
waives, to the extent permitted by applicable law, all claims, causes of action
and remedies, whether legal or equitable (including any right of setoff),
against the Depositor or any assignee relating to such repledge and reassignment
in connection with the transactions contemplated by this Agreement and the other
Transaction Documents. The Originator and the Depositor shall file or shall
cause to be filed a UCC-1 financing statement

 

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naming the Originator as debtor, the Depositor as secured party and the Trustee
as assignee, listing all of the Conveyed Collateral pledged hereunder as
collateral thereunder.

(g) If any such transfer of Conveyed Collateral by the Depositor to the Issuer
(whether Initial Conveyed Collateral transferred pursuant to Section 2.1(b) or
Subsequent Conveyed Collateral transferred pursuant to Section 2.1(c)) is deemed
to be the mere granting of a security interest to secure a financing, the Issuer
may, to secure the Issuer’s obligations under the Indenture, repledge and
reassign to the Trustee for the benefit of the Secured Parties (1) all or a
portion of the Conveyed Collateral pledged to the Issuer by the Depositor and
with respect to which the Issuer has not released its security interest at the
time of such pledge and assignment and (2) all proceeds thereof. Such repledge
and reassignment may be made with or without a repledge and reassignment by the
Issuer of its rights under any agreement with the Depositor, and without further
notice to or acknowledgment from the Depositor. The Depositor hereby waives, to
the extent permitted by applicable law, all claims, causes of action and
remedies, whether legal or equitable (including any right of setoff), against
the Issuer or any assignee relating to such repledge or reassignment in
connection with the transactions contemplated by this Agreement and the other
Transaction Documents. The Issuer and the Depositor shall file or shall cause to
be filed a UCC-1 financing statement naming the Depositor as debtor, the Issuer
as secured party and the Trustee as assignee, listing all of the Conveyed
Collateral pledged hereunder as collateral thereunder.

(h) To the extent that (i) the consideration received by the Originator from the
Depositor in exchange for any Conveyed Collateral and (ii) the consideration
received by the Depositor from the Issuer for any Conveyed Collateral is less
than the fair market value of such Conveyed Collateral, the difference between
such fair market value and the consideration so received shall be deemed to be a
capital contribution by the Originator to the Depositor (in the case of clause
(i) above), and by the Depositor to the Issuer (in the case of clause
(ii) above) made on the Closing Date in the case of the Initial Conveyed
Collateral and as of the related Transfer Date in the case of any Subsequent
Conveyed Collateral. For all purposes of this Agreement, any contributed
Conveyed Assets shall be treated the same as the Conveyed Assets sold for cash
or other property including, without limitation, for purposes of Section 7.2.

Section 2.2. Conveyance of Initial Conveyed Collateral.

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

(i) officially certified recent evidence of due formation or incorporation, as
applicable, good standing of the Depositor and the Issuer, in each case under
the laws of the State of Delaware and good standing of the Originator under the
laws of the State of Maryland;

(ii) a copy of a written consent of the board of directors of TICC Capital
Corp., in its capacity as Originator and in its capacities as the designated
manager of the Depositor and of the Issuer, approving the execution, delivery
and performance of

 

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this Agreement and the transactions contemplated hereunder, certified, in each
case as applicable, by an Officer of TICC Capital Corp., in such capacities;

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

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

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

(b) Concurrently with the transfer of the Initial Conveyed Collateral by the
Originator to the Depositor and by the Depositor to the Issuer, the (i) the
Originator shall transfer to the Collection Account all Principal Proceeds and
Interest Proceeds received with respect to such Initial Conveyed Collateral, on
and after the Closing Date, (ii) each of the representations and warranties made
by the Originator pursuant to Article III applicable to the Initial Conveyed
Collateral shall be true and correct as of the Closing Date, and (iii) the
Originator shall, at its own expense, not later than the Closing Date, indicate
in its records that ownership of the Initial Conveyed Collateral has been
conveyed by it to the Depositor and by the Depositor to the Issuer pursuant to
this Agreement.

Section 2.3. Acceptance of Initial Conveyed Collateral

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

Section 2.4. Conveyance of Subsequent Conveyed Collateral.

(a) As and when permitted by the Indenture and subject to this Section 2.4 and
the satisfaction of the conditions imposed under the Indenture with respect to
the acquisition of Subsequent Conveyed Collateral, the Originator may at its
option (but shall not be obligated to) sell, convey and transfer to the
Depositor (by delivery of an executed Subsequent Transfer Agreement) all the
right, title and interest of the Originator in and to the Subsequent Conveyed
Collateral identified on Schedule 1 thereto, in each and every case without
recourse other than as expressly provided herein and therein and the Depositor
shall be required to purchase from the Originator and sell, convey and transfer
to the Issuer (by delivery of an executed Subsequent

 

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Transfer Agreement) all the right, title and interest of the Depositor in and to
the Subsequent Conveyed Collateral identified on Schedule 1 thereto, in each and
every case without recourse other than as expressly provided herein and therein.

(b) Concurrently with the transfer of any Subsequent Conveyed Collateral by the
Originator to the Depositor and by the Depositor to the Issuer, (i) the
Originator shall transfer to the Collection Account all Principal Proceeds and
Interest Proceeds received with respect to such Subsequent Conveyed Collateral,
on and after the related Cut-Off Date, (ii) each of the representations and
warranties made by the Originator pursuant to Article III applicable to the
Subsequent Conveyed Collateral shall be true and correct as of the related
Transfer Date and (iii) the Originator shall, at its own expense, on or prior to
the applicable date of transfer to the Depositor, indicate in its records that
ownership of the Subsequent Conveyed Collateral identified in the Subsequent
Transfer Agreement has been sold by the Originator to the Depositor and by the
Depositor to the Issuer pursuant to this Agreement.

Section 2.5. Optional Substitution of Collateral Obligations.

(a) Subject to Section 12.3 of the Indenture, this Section 2.5 and the
Repurchase and Substitution Limit, with respect to any Collateral Obligation as
to which a Substitution Event has occurred, the Originator may (but shall not be
obligated to except as required under the Indenture) either (x) convey to the
Depositor and cause the Depositor to contemporaneously convey to the Issuer one
or more Collateral Obligations in exchange for such Collateral Obligation or
(y) deposit into the Principal Collection Subaccount the Transfer Deposit Amount
with respect to such Collateral Obligation and then, prior to the expiration of
the Substitution Period, convey to the Depositor and cause the Depositor to
convey to the Issuer one or more Collateral Obligations in exchange for the
funds so deposited or a portion thereof.

(b) Any substitution pursuant to this Section 2.5 shall be initiated by delivery
of a Notice of Substitution, as set forth in the Indenture, by the Originator to
the Trustee, the Depositor, the Issuer and the Collateral Manager that the
Originator intends to substitute a Collateral Obligation pursuant to this
Section 2.5 and shall be completed prior to the earliest of: (x) the expiration
of 90 days after delivery of such notice; (y) delivery of written notice to the
Trustee from the Originator stating that the Originator does not intend to
convey any additional Substitute Collateral Obligations to the Issuer in
exchange for any remaining amounts deposited in the Principal Collection
Subaccount under clause (a)(y) above; or (z) in the case of a Collateral
Obligation which has become subject to a Specified Amendment, the effective date
set forth in such Specified Amendment (such period described in clause (x),
(y) or (z), as applicable, being the “Substitution Period”).

(c) Each Notice of Substitution shall specify the Collateral Obligation to be
substituted, the reasons for such substitution and the Transfer Deposit Amount
with respect to the Collateral Obligation. On the last day of any Substitution
Period, any amounts previously deposited in accordance with clause (a)(y) above
which relate to such Substitution Period that have not been applied to purchase
one or more Substitute Collateral Obligations or to fund the Revolver Funding
Account if necessary with respect thereto shall be deemed to constitute
Principal Proceeds; provided that prior to the expiration of the related
Substitution Period any such amounts shall not be deemed to be Principal
Proceeds and shall remain in the Principal

 

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Collection Subaccount until applied to acquire Substitute Collateral Obligations
or to fund the Revolver Funding Account if necessary with respect thereto. The
price paid (or deemed paid, in the case of a contemporaneous conveyance of a
Substitute Loan pursuant to Section 2.3(a)(x)) by the Issuer to the Depositor
and by the Depositor to the Originator, as applicable, for any Substitute
Collateral Obligation shall be an amount equal to the value thereof, as
determined by the board of directors of the Originator in accordance with the
1940 Act (but in no event less than the fair market value thereof). To the
extent any cash or other property received by the Issuer in connection with a
Substitute Collateral Obligation exceeds the fair market value thereof, such
excess shall be deemed a capital contribution from the Originator to the
Depositor and from the Depositor to the Issuer.

(d) The substitution of any Substitute Collateral Obligation will be subject to
the satisfaction of the Substitute Collateral Obligations Qualification
Conditions as of the related Transfer Date for each such Collateral Obligation
(after giving effect to such substitution).

(e) With respect to any Substitute Collateral Obligations to be conveyed to the
Depositor by the Originator as described in this Section 2.5, (i) the Originator
hereby sells, transfers, assigns, sets over and otherwise conveys to the
Depositor, without recourse other than as expressly provided herein (and the
Depositor shall purchase through cash payment and/or by exchange of one or more
related Collateral Obligations released by the Issuer to the Depositor and by
the Depositor to the Issuer on the related Cut-Off Date), all the right, title
and interest of the Originator in and to the Substitute Collateral Obligation
and (ii) the Depositor hereby sells, transfers, assigns, sets over and otherwise
conveys to the Issuer without recourse other than as expressly provided herein
(and the Issuer shall purchase through cash payment and/or by exchange of one or
more related Collateral Obligations released by the Issuer to the Depositor on
the related Cut-Off Date), all the right, title and interest of the Depositor in
and to the Substitute Collateral Obligation. To the extent any cash or other
property received by the Issuer in connection with a Substitute Collateral
Obligation exceeds the fair market value thereof, such excess shall be deemed a
capital contribution from the Originator to the Depositor and from the Depositor
to the Issuer.

(f) The Originator and Depositor shall execute and deliver to the Issuer and the
Trustee a Subsequent Transfer Agreement with respect to each Substitute
Collateral Obligation and shall cooperate with the Collateral Manager and the
Issuer so that they may satisfy their respective obligations with respect to any
substitution of Collateral Obligations pursuant to the Indenture.

(g) The Originator shall bear all transaction costs incurred in connection with
a substitution of Collateral Obligations effected pursuant to this Agreement and
the Indenture.

Section 2.6. Direct Assignments.

The Originator, the Depositor and the Issuer acknowledge and agree that, solely
for administrative convenience, any transfer document or assignment agreement
(or, in the case of any Underlying Note, any chain of endorsement) required to
be executed and delivered in connection with the transfer of a Collateral
Obligation in accordance with the terms of related Underlying Documents may
reflect that (i) the Originator (or any third party from whom the

 

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Originator, the Depositor or the Issuer may purchase a Collateral Obligation) is
assigning such Collateral Obligation directly to the Issuer or (ii) the Issuer
is acquiring such Collateral Obligation at the closing of such Collateral
Obligation. Nothing in any such transfer document or assignment agreement (or,
in the case of any Underlying Note, nothing in such chain of endorsement) shall
be deemed to impair the transfers of the Collateral Obligations by the
Originator to the Depositor and the Depositor to the Issuer in accordance with
the terms of this Agreement.

Section 2.7. Delivery of Documents.

With respect to each Collateral Obligation transferred hereunder as part of the
Conveyed Collateral, within five Business Days after the related Transfer Date
(or on or prior to the Closing Date, with respect to the Initial Collateral
Obligations), the Originator, on behalf of the Depositor and the Issuer, will
deliver or cause to be delivered to the Custodian, to the extent not previously
delivered, each of the Required Loan Documents with respect to such Collateral
Obligations.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

The Originator and the Depositor, as applicable, each makes, and upon execution
of each Subsequent Transfer Agreement is deemed to make, the following
representations and warranties, on which the Depositor or the Issuer, as
applicable, will rely in acquiring the Initial Conveyed Collateral on the
Closing Date, and any Subsequent Conveyed Collateral on any applicable Transfer
Date pursuant to the applicable Subsequent Transfer Agreement, and on which, in
each case, each of the parties hereto acknowledges and agrees that the Trustee,
for the benefit of the Secured Parties, shall be entitled to rely as an express
third party beneficiary as a condition of the Issuer entering into the
Transaction Documents to which it is a party and of the Noteholders purchasing
the Notes. Each of the parties hereto acknowledges and agrees that such
representations and warranties are being made by the Originator and the
Depositor for the benefit of the Issuer and the Trustee, for the benefit of the
Secured Parties.

The representations and warranties set forth in this Article III are given as of
the Closing Date (or Transfer Date, as applicable), but shall survive the sale,
transfer and assignment of the Conveyed Collateral to the Depositor and to the
Issuer hereunder or under a Subsequent Transfer Agreement, as applicable.

The representations and warranties set forth in Sections 3.1(j) and 3.4(a) may
not be waived by any Person and shall survive the termination of this Agreement.

Section 3.1. Representations and Warranties of the Originator.

By its execution of this Agreement and each Subsequent Transfer Agreement, the
Originator represents and warrants that:

(a) Organization and Good Standing. The Originator is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Maryland, and has full power and authority to own its assets and to transact
the business in which it is currently

 

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engaged, and is duly qualified as a foreign corporation and is in good standing
under the laws of each jurisdiction where its ownership or lease of property,
the conduct of its business or the performance of this Agreement or any other
Transaction Document applicable to it would require such qualification, except
for those jurisdictions in which the failure to be so qualified, authorized or
licensed would not have a material adverse effect on the business operations,
assets or financial condition of the Originator or on the validity or
enforceability of this Agreement or the provisions of any other Transaction
Document applicable to the Originator, or the performance by the Originator of
its duties hereunder or thereunder.

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

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

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

 

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

(f) Solvency. The Originator, at the time of and after giving effect to each
conveyance of Conveyed Collateral hereunder, is solvent and is not aware of any
pending insolvency.

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

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

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

(j) Security Interest.

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

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

 

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

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

(v) the Originator has caused the filing of all appropriate financing statements
in the proper filing office in the appropriate jurisdictions under applicable
law in order to perfect the security interest in such Conveyed Collateral
granted to the Depositor under this Agreement to the extent perfection can be
achieved by filing a financing statement;

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

(vii) on or prior to the Closing Date (with respect to the Initial Collateral
Obligations) and within five Business Days after the related Transfer Date (with
respect to the Additional Collateral Obligations), copies (which may be in
electronic form) (or originals, if required by the definition of “Required Loan
Documents”) of the Required Loan Documents have been delivered to the Custodian;
and

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

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

 

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

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

(n) Origination and Collection Practices. The origination and collection
practices used with respect to each Collateral Obligation have been in all
material respects legal, proper, and customary in the Collateral Obligation
origination and servicing business.

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

(p) Nonconsolidation. The Originator conducts, and will at all times conduct,
its affairs such that neither the Depositor nor the Issuer would be
substantively consolidated in the estate of the Originator and their respective
separate existences would not be disregarded in the event of a bankruptcy of the
Originator.

(q) Accuracy of Information. All written factual information heretofore
furnished by the Originator for purposes of or in connection with this Agreement
or the other Transaction Documents to which the Originator is a party, or any
transaction contemplated hereby or thereby is, and all such written factual
information hereafter furnished by the Originator to any such party will be,
true and accurate in every material respect, on the date such information is
stated or certified; provided that the Originator shall not be responsible for
any factual information furnished to it by any third party not affiliated with
it except to the extent that a Responsible Officer of the Originator has actual
knowledge that such factual information is inaccurate in any material respect.

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

 

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Section 3.2. Representations and Warranties Regarding the Collateral
Obligations.

The Originator hereby represents to the Issuer and to the Trustee for the
benefit of the Secured Parties that (i) each Collateral Obligation conveyed
hereunder, as of its related Cut-Off Date, satisfies the definition of
“Collateral Obligation” under the Indenture and (ii) the information set forth
on Schedule 1 hereto or on Schedule 1 to any Subsequent Transfer Agreement, as
applicable, and in the Schedule of Collateral Obligations under the Indenture is
true and correct in all material respects.

Section 3.3. Representations and Warranties of the Depositor.

By its execution of this Agreement and each Subsequent Transfer Agreement, the
Depositor represents and warrants that:

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

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

(c) No Consent Required. No consent of any other Person and no license, permit,
order, approval or authorization of, exemption by, notice or report to, or
registration,

 

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filing or declaration with, any governmental authority or court or any other
Person is required to be obtained by the Depositor in connection with this
Agreement or any other Transaction Document to which it is a party or the
execution, delivery, performance, validity or enforceability of this Agreement
or any other Transaction Document to which it is a party or the obligations
imposed on the Depositor hereunder or under the terms of the Indenture or any
other Transaction Document to which it is a party other than those that have
been obtained or made.

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

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

(f) Solvency. The Depositor, at the time of and after giving effect to each
conveyance of Conveyed Collateral hereunder, is solvent and is not aware of any
pending insolvency.

(g) Taxes. The Depositor has filed or caused to be filed all tax returns which
are required to be filed and has paid all taxes shown to be due and payable on
such returns or on any assessments made against it or any of its property and
all other taxes, fees or other charges imposed on it or any of its property by
any governmental authority (other than any amount of tax due, the validity of
which is currently being contested in good faith by appropriate proceedings and
with respect to which reserves in accordance with generally accepted accounting
principles have been provided on its books); no tax lien has been filed and no
claim is being asserted, with respect to any such tax, fee or other charge.

(h) Place of Business; No Changes. The Depositor has not changed its name or the
State under whose laws it is formed, whether by amendment of its certificate of
formation, by reorganization or otherwise.

(i) Sale Treatment. Other than for tax and accounting purposes, the Depositor
has treated each of (1) the acquisition of the Conveyed Collateral from the
Originator

 

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and (2) the transfer of the Conveyed Collateral to the Issuer for all purposes
as a sale and purchase on all of its relevant books and records.

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

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

(l) Lack of Intent to Hinder, Delay or Defraud. The Depositor did not and will
not sell any interest in any Conveyed Collateral with any intent to hinder,
delay or defraud any of its creditors.

(m) Nonconsolidation. The Depositor conducts, and will at all times conduct, its
affairs such that neither the Issuer nor the Originator would be substantively
consolidated in the estate of the Depositor and their respective separate
existences would not be disregarded in the event of the Depositor’s bankruptcy.

(n) Accuracy of Information. All written factual information heretofore
furnished by the Depositor for purposes of or in connection with this Agreement
or the other Transaction Documents to which the Depositor is a party, or any
transaction contemplated hereby or thereby is, and all such written factual
information hereafter furnished by the Depositor to any such party will be, true
and accurate in every material respect, on the date such information is stated
or certified; provided that the Depositor shall not be responsible for any
factual information furnished to it by any third party not affiliated with it,
or the Originator, except to the extent that a Responsible Officer of the
Depositor has actual knowledge that such factual information is inaccurate in
any material respect.

(o) Investment Company Act. The Depositor is not required to register as an
“investment company” under the 1940 Act.

Section 3.4. Additional Representations and Warranties of the Depositor.

By its execution of this Agreement and each Subsequent Transfer Agreement, the
Depositor additionally represents and warrants that:

(a) Security Interest.

(i) In the event that the transfer by the Depositor to the Issuer of any
Conveyed Collateral is determined not to be an absolute transfer, this Agreement
is effective to create in favor of the Issuer a valid and continuing security
interest (as defined in the UCC) in all of the right, title and interest of the
Depositor in, to and under such Conveyed Collateral, which security interest is
perfected and is prior to all other

 

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liens (other than Permitted Liens), and is enforceable as such against, all
creditors of and purchasers from the Depositor;

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

(iii) Upon the transfer by the Depositor to the Issuer of any Conveyed
Collateral pursuant to this Agreement or any Subsequent Transfer Agreement, the
Issuer will own such Conveyed Collateral free and clear of any and all liens,
claims or encumbrances created by, or attaching to property of, the Depositor
(other than Permitted Liens);

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

(v) The Depositor has caused the filing of all appropriate financing statements
in the proper filing office in the appropriate jurisdictions under applicable
law in order to perfect the security interest in such Conveyed Collateral
granted to the Issuer under this Agreement to the extent perfection can be
achieved by filing a financing statement;

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

(vii) On or prior to the Closing Date (with respect to the Initial Collateral
Obligations) and within five Business Days after the related Transfer Date (with
respect to the Additional Collateral Obligations), copies (or originals, if
required by the definition of “Required Loan Documents”) of the Required Loan
Documents have been delivered to the Custodian; and

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

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

 

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Depositor, and such transfer was not and is not voidable or subject to avoidance
under any Insolvency Law.

Section 3.5. Representations and Warranties of the Issuer.

By its execution of this Agreement and each Subsequent Transfer Agreement, the
Issuer represents and warrants to the Depositor and the Originator that:

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

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

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

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

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

 

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result in the imposition or creation of any lien, charge or encumbrance upon any
of the properties or assets of the Issuer pursuant to the provisions of any such
contract, agreement, mortgage, indenture or undertaking, other than as
specifically set forth in the Indenture.

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

ARTICLE IV

PERFECTION OF TRANSFER

AND PROTECTION OF SECURITY INTERESTS

Section 4.1. Custody of Collateral Obligation.

On or prior to the Closing Date (with respect to the Initial Collateral
Obligations) and within five Business Days after the related Transfer Date (with
respect to the Additional Collateral Obligations), copies (or originals, if
required by the definition of Required Loan Documents) of the Required Loan
Documents shall be delivered to the Custodian.

Section 4.2. Filing.

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

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

(a) During the term of this Agreement, neither the Originator nor the Depositor
shall change its name, structure or state of formation without first giving at
least 30 days’ prior written notice to the Trustee and the Collateral Manager.

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

 

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Section 4.4. Costs and Expenses.

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

Section 4.5. Sale Treatment.

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

Section 4.6. Separateness.

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

ARTICLE V

COVENANTS

Section 5.1. Covenants of the Originator.

The Originator makes the following covenants, on which the Depositor will rely
in conveying the Initial Conveyed Collateral on the Closing Date (and any
Subsequent Conveyed Collateral on any applicable Transfer Date) to the Issuer,
and on which the Originator acknowledges and agrees that the Issuer and the
Trustee, for the benefit of the Secured Parties, shall be entitled to rely as an
express third party beneficiary as a condition of the Issuer and the Trustee
entering into the Transaction Documents to which each of them is a party and as
a condition to the Noteholders purchasing the Notes. The Depositor acknowledges
that such covenants are being made by the Originator for the benefit of the
Issuer and for the benefit of the Trustee, for the benefit of the Secured
Parties.

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

 

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

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

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

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

(f) Merger or Consolidation of the Originator.

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

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

(g) Regulatory Filings. The Originator shall make, or shall cause to be made,
any filings, reports, notices, applications and registrations with, and seek any
consents or authorizations from, the Securities and Exchange Commission and any
state securities authority on behalf of the Originator, the Depositor and the
Issuer as may be necessary or that the Originator deems advisable to comply with
any federal or state securities or reporting

 

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requirements laws relating to the transactions contemplated by the Transaction
Documents or as may be otherwise required by applicable law.

Section 5.2. Covenants of the Depositor.

The Depositor makes the following covenants, on which the Originator and the
Issuer will rely in connection with the conveyance of Initial Conveyed
Collateral on the Closing Date (and any Subsequent Conveyed Collateral on any
applicable Transfer Date) to the Depositor and the Issuer, and on which the
Depositor acknowledges and agrees the Issuer and the Trustee for the benefit of
the Secured Parties shall be entitled to rely as an express third party
beneficiary as a condition of the Issuer and the Trustee entering into the
Transaction Documents to which each of them is a party and as a condition to the
Noteholders purchasing the Notes. Each of the Originator and the Issuer
acknowledges that such covenants are being made by the Depositor for the benefit
of the Originator, the Issuer and the Trustee for the benefit of the Secured
Parties.

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

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

(c) Security Interests. Except as expressly provided herein, the Depositor will
not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any lien on any Conveyed Collateral. The
Depositor will promptly notify the Originator, the Issuer and the Trustee of the
existence of any lien on any Conveyed Collateral; and the Depositor shall defend
the respective right, title and interest of the Issuer in, to and under the
Conveyed Collateral against all claims of third parties; provided that nothing
in this Section 5.2(c) shall prevent or be deemed to prohibit the Grant of the
Conveyed Collateral to the Trustee under the Indenture. The Depositor shall
promptly take all actions required (including, but not limited to, all filings
and other acts necessary or advisable under the UCC of each relevant
jurisdiction) in order to continue (subject to any Permitted Lien) the first
priority perfected security interest of the Issuer in all Conveyed Collateral
which has not been released pursuant to the Indenture.

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

 

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

(f) Merger or Consolidation; Sales. The Depositor shall not enter into any
transaction of merger or consolidation, or liquidate or dissolve itself (or
suffer any liquidation or dissolution) or acquire or be acquired by any Person,
or convey, sell, lease or otherwise dispose of all or substantially all of its
property or business other than to the Issuer in accordance with the Transaction
Documents.

ARTICLE VI

INDEMNIFICATION BY THE ORIGINATOR

Section 6.1. Indemnification.

The Originator agrees to indemnify, defend and hold the Depositor, the Issuer,
the Trustee and any of their respective managers, members, officers, directors,
employees and agents (any one of which is an “Indemnified Party”) harmless from
and against any and all claims, losses, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments and any other reasonable
costs, fees and expenses (provided that any indemnification for damages is
limited to actual damages, not consequential, special or punitive damages) that
such Person may sustain as a result of the failure of the Originator to perform
its duties in compliance in all material respects with the terms of this
Agreement, except to the extent arising from the gross negligence, willful
misconduct or fraud by the Person claiming indemnification; provided that, for
the avoidance of doubt, the obligations of the Originator set forth in
Section 7.2 shall constitute the sole recourse to the Originator for any breach
of the representations or warranties set forth in Section 3.2. An Indemnified
Party shall promptly notify the Originator if a claim is made by a third party
with respect to this Agreement, and the Originator shall assume (with the
consent of the Indemnified Party) the defense and any settlement of any such
claim and pay all expenses in connection therewith, including reasonable counsel
fees, and promptly pay, discharge and satisfy any judgment or decree which may
be entered against the Indemnified Party in respect of such claim. If the
consent of the Indemnified Party required in the immediately preceding sentence
is unreasonably withheld with respect to any claim, the Originator shall be
relieved of its indemnification obligations hereunder with respect to such
claim. The parties agree that the provisions of this Section 6.1 shall not be
interpreted to provide recourse to the Originator against loss by reason of the
bankruptcy, insolvency or lack of creditworthiness of an Obligor with respect to
a Collateral Obligation. The Originator shall have no liability for making
indemnification hereunder to the extent any such indemnification constitutes
recourse for uncollectible or uncollected amounts payable under any Collateral
Obligation.

Section 6.2. Liabilities to Obligors.

Except with respect to the funding commitment or letter of credit participations
assumed by the Issuer with respect to any Delayed Drawdown Collateral Obligation
or Revolving Collateral Obligation, the Originator hereby acknowledges and
agrees that no obligation or liability of the Originator to any Obligor under
any of the Collateral Obligations is intended to be

 

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assumed by the Depositor, the Issuer, the Trustee or the Noteholders under or as
a result of this Agreement, any Subsequent Transfer Agreement and the
transactions contemplated hereby and under the other Transaction Documents, and
the Trustee for the benefit of the Secured Parties is expressly named as a third
party beneficiary of this Agreement for purposes of this Section 6.2.

Section 6.3. Operation of Indemnities.

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

ARTICLE VII

OPTIONAL AND MANDATORY REPURCHASES

Section 7.1. Optional Repurchases.

In addition to the right to substitute for any Collateral Obligations that
become subject to a Substitution Event, the Originator shall have the right, but
not the obligation, to repurchase from the Issuer any such Collateral Obligation
subject to the Repurchase and Substitution Limit and the conditions set forth in
the Indenture. In the event of such a repurchase, the Originator shall deposit
in the Collection Account an amount equal to the Transfer Deposit Amount for
such Collateral Obligation (or applicable portion thereof) as of the date of
such repurchase. The Originator, the Depositor and the Issuer shall execute and
deliver such instruments, consents or other documents and perform all acts
reasonably requested by the Originator and the Collateral Manager in order to
effect the transfer and release of any of the Issuer’s interests in the
Collateral Obligations (together with the Assets related thereto) that are being
repurchased and the release thereof from the lien of the Indenture.

Section 7.2. Mandatory Repurchases.

Upon discovery by a Responsible Officer of the Collateral Manager of a breach of
the representation set forth in Section 3.2 which materially and adversely
affects the value of the Collateral Obligations or the interest of the
Noteholders or which materially and adversely affects the interests of the
Noteholders in the related Collateral Obligation in the case of a representation
and warranty relating to a particular Collateral Obligation (each such
Collateral Obligation, an “Ineligible Collateral Obligation”), the Collateral
Manager shall give prompt written notice of such breach or failure to the
parties hereunder and the Trustee. Within 30 days of the earlier of its
discovery or its receipt of notice of any such breach, the Originator shall
(a) promptly cure such breach in all material respects, (b) purchase the
Collateral Obligation by depositing in the Collection Account, within such
30-day period, an amount equal to the Transfer Deposit Amount of such Collateral
Obligation or (c) remove such Collateral Obligation from the Issuer and
substitute therefor one or more Substitute Collateral Obligations satisfying the
criteria listed under Section 2.5 of this Agreement and Section 12.3 of the
Indenture by not later than 30 days after notice or discovery of such breach.
Such repurchase and substitution obligations constitute the sole remedy
available for a breach of Section 3.2.

 

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Section 7.3. Reassignment of Substituted or Repurchased Collateral Obligations.

Upon (i) receipt by the Trustee for deposit in the Collection Account of the
Transfer Deposit Amount, in the case of any repurchased Collateral Obligation or
(ii) or upon the Cut-Off Date related to a Substitute Collateral Obligation
described in Section 2.5, the Issuer hereby assigns to the Depositor and the
Depositor hereby assigns to the Originator all of the Issuer’s (or Depositor’s,
as applicable) right, title and interest in the Collateral Obligation being
repurchased or substituted (together with the Assets related thereto) without
recourse, representation or warranty. Such reassigned Collateral Obligation
(together with the Assets related thereto) shall no longer thereafter be deemed
a part of the Assets.

Section 7.4. Repurchase and Substitution Limit.

At all times, (i) the Aggregate Principal Balance of all Collateral Obligations
that are Substitute Collateral Obligations (excluding substitutions occurring as
a result of a Substitution Event pursuant to clause (v) of the definition
thereof) plus (ii) the Aggregate Principal Balance related to all Collateral
Obligations that have been repurchased by the Originator hereunder pursuant to
its right of optional repurchase or substitution (other than a substitution
occurring as a result of a Substitution Event pursuant to clause (v) of the
definition thereof) and not subsequently applied to purchase a Substitute
Collateral Obligation may not exceed an amount equal to 20% of the Net Purchased
Loan Balance; provided that clause (ii) above shall not include (A) the
principal balance related to any Collateral Obligation that is repurchased by
the Originator in connection with a proposed Specified Amendment to such
Collateral Obligation so long as (x) the Originator certifies in writing to the
Collateral Manager and the Trustee that such purchase is, in the commercially
reasonable business judgment of the Originator, necessary or advisable in
connection with the restructuring of such Collateral Obligation and such
restructuring is expected to result in a Specified Amendment to such Collateral
Obligation, and (y) the Collateral Manager certifies in writing to the Trustee
that the Collateral Manager either would not be permitted to or would not elect
to enter into such Specified Amendment pursuant to the Collateral Manager
Standard or any provision of the Indenture or the Collateral Management
Agreement or (B) the purchase price of any Collateral Obligations or, for the
avoidance of doubt, any Equity Securities sold by the Issuer to the Originator
as described in Section 12.1 of the Indenture. The foregoing provisions in this
paragraph constitute the “Repurchase and Substitution Limit”.

ARTICLE VIII

MISCELLANEOUS

Section 8.1. Amendment.

(a) This Agreement may be amended or waived from time to time by the parties
hereto by written agreement without consent of the Noteholders, to (i) cure any
ambiguity or to correct or supplement any provisions herein, (ii) comply with
any changes in the Code, (iii) to enable the Issuer or Depositor to rely upon
any exemption from registration under the Securities Act or the 1940 Act,
(iv) to enable the Issuer, Depositor or Originator to comply with any applicable
securities law or U.S. securities laws (including the regulations implementing
such laws), (v) conform this Agreement to the Offering Circular and (vi) to
evidence the

 

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succession of another Person to the Issuer, Depositor or Originator, as
applicable and the assumption by any such successor Person of the covenants of
the Issuer, Depositor or Originator, as applicable herein. Any other amendment
or waiver to this Agreement shall be subject to the consent of a Majority of the
Controlling Class; provided that no such amendment or waiver shall reduce in any
manner the amount of, or delay the timing of, any amounts received on Collateral
Obligations which are required to be distributed on any Note without the consent
of the related Noteholder, or change the rights or obligations of any other
party hereto without the consent of such party.

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

(c) Promptly after the execution of any such amendment or waiver, the Trustee
shall furnish written notification of the substance of such amendment or waiver
to the Rating Agencies and to each Noteholder. It shall not be necessary for the
consent of any Noteholders pursuant to Section 8.1(a) to approve the particular
form of any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such
consents and of evidencing the authorization by Noteholders of the execution
thereof shall be subject to such reasonable requirements as the Trustee may
prescribe.

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

(e) The Trustee, by its signature below, acknowledges and agrees to be bound by
the provisions of this Section 8.1.

Section 8.2. Governing Law.

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

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

 

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enter into this Agreement by, among other things, the mutual waivers and
certifications in this Section 8.2(b).

Section 8.3. Notices.

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

Section 8.4. Severability of Provisions.

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

Section 8.5. Third Party Beneficiaries.

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

Section 8.6. Counterparts.

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

Section 8.7. Headings.

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

Section 8.8. No Bankruptcy Petition; Disclaimer.

(a) Each of the Originator and the Depositor covenants and agrees that, prior to
the date that is one year and one day after the satisfaction and discharge of
the Indenture or, if longer, the applicable preference period then in effect, it
will not institute against the Depositor (in the case of the Originator), or the
Issuer (in the case of the Originator or the Depositor), or

 

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join any other Person in instituting against the Depositor or the Issuer, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceedings under the laws of the United States or any state of
the United States. This Section 8.8 will survive the termination of this
Agreement.

(b) The provisions of this Section 8.8 shall be for the third party benefit of
those entitled to rely thereon, including the Trustee for the benefit of the
Secured Parties, and shall survive the termination of this Agreement.

Section 8.9. Jurisdiction.

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

Section 8.10. Prohibited Transactions with Respect to the Issuer.

The Originator shall not:

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

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

Section 8.11. No Partnership.

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

Section 8.12. Successors and Assigns.

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

Section 8.13. Duration of Agreement.

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

 

30

 

 

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Section 8.14. Limited Recourse.

The obligations of the Issuer, the Depositor and the Originator under this
Agreement and the other Transaction Documents are solely the limited liability
company or corporate obligations, as applicable, of the Issuer, the Depositor
and Originator, respectively. No recourse shall be had for the payment of any
amount owing by the Issuer, the Depositor or Originator under this Agreement,
any Transaction Document or for the payment by the Issuer, the Depositor or
Originator of any fee in respect hereof or any other obligation or claim of or
against the Issuer, the Depositor or Originator arising out of or based upon
this Agreement or any Transaction Document, against any employee, officer,
director, shareholder, partner, member or manager of the Issuer, the Depositor
or Originator or of any Affiliate of such Person (other than the Originator, the
Depositor or the Issuer, as applicable). The provisions of this Section 8.14
shall survive the termination of this Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

31

 

 

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

 

TICC CAPITAL CORP. By:  

 

  Name:   Title:

TICC CAPITAL CORP. 2011-1 HOLDINGS, LLC

By:   TICC Capital Corp., its designated manager By:  

 

  Name:   Title: TICC CLO LLC By:   TICC Capital Corp., its designated manager
By:  

 

  Name:   Title:

 

32

 

 

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SCHEDULE 1

Schedule of Initial Conveyed Collateral

 

S-1-1

 

 

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SCHEDULE 2

NOTICE INFORMATION

Originator:

TICC Capital Corp.

8 Sound Shore Drive, Suite 255

Greenwich, CT 06830

Telephone No.: (203) 983-5275

Facsimile No.: (203) 983-5290

Attention: Saul Rosenthal

Depositor:

TICC Capital Corp. 2011-1 Holdings, LLC

8 Sound Shore Drive, Suite 255

Greenwich, CT 06830

Telephone No.: (203) 983-5275

Facsimile No.: (203) 983-5290

Attention: Saul Rosenthal

Issuer:

TICC CLO LLC

8 Sound Shore Drive, Suite 255

Greenwich, CT 06830

Telephone No.: (203) 983-5275

Facsimile No.: (203) 983-5290

Attention: Saul Rosenthal

Collateral Manager:

TICC Capital Corp.

8 Sound Shore Drive, Suite 255

Greenwich, CT 06830

Telephone No.: (203) 983-5275

Facsimile No.: (203) 983-5290

Attention: Saul Rosenthal

Trustee:

The Bank of New York Mellon Trust Company, National Association

601 Travis Street, 16th Floor

Houston, TX 77002

Telephone No.: 713-483-6000

Facsimile No.: 713-483-6001

Attention: Global Corp Trust – TICC CLO LLC

 

A-2

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EXHIBIT A

FORM OF SUBSEQUENT TRANSFER AGREEMENT

                 , 20    

This Subsequent Transfer Agreement, dated as of                  , 20     (this
“Agreement”), is made by and among TICC CAPITAL CORP. (the “Originator”), TICC
CAPITAL CORP. 2011-1 HOLDINGS, LLC (the “Depositor”) and TICC CLO LLC (the
“Issuer”). Capitalized terms used but not defined herein have the respective
meanings attributed to such terms in that certain Master Loan Sale Agreement,
dated as of August 10, 2011 (such agreement as amended, restated, supplemented
or modified from time to time, the “Master Loan Sale Agreement”), among the
Originator, the Depositor and the Issuer.

Subject to and upon the terms and conditions set forth in the Master Loan Sale
Agreement, in exchange for good and valuable consideration, the adequacy of
which is duly acknowledged by the Originator and the Depositor, the Originator
hereby absolutely transfers to the Depositor as of the date hereof (the
“Transfer Date”) all of the Originator’s right, title and interest in, to and
under the Subsequent Conveyed Collateral identified in Schedule I hereto.

Subject to and upon the terms and conditions set forth in the Master Loan Sale
Agreement, the Depositor hereby absolutely transfers, in exchange for good and
valuable consideration, the adequacy of which is duly acknowledged by the
Depositor and the Issuer, to the Issuer as of the Transfer Date all of the
Depositor’s right, title and interest in, to and under the Subsequent Conveyed
Collateral identified in Schedule I hereto.

By its execution of this Agreement each of the parties hereto makes the
representations and warranties set forth in Article III of the Master Loan Sale
Agreement, as applicable, as of the Transfer Date and the provisions of
Section 8.14 of the Master Loan Sale Agreement are hereby incorporated herein by
reference.

[Remainder of page intentionally left blank.]

 

A-3

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

TICC CAPITAL CORP. By:  

 

  Name:   Title:

TICC CAPITAL CORP. 2011-1 HOLDINGS, LLC

By:   TICC Capital Corp., its designated manager By:  

 

  Name:   Title: TICC CLO LLC By:   TICC Capital Corp., its designated manager
By:  

 

  Name:   Title:

 

A-4

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Schedule I

to Subsequent Transfer Agreement

Subsequent Conveyed Collateral

 

A-5