Exhibit 10.2

 

EXECUTION VERSION

 

 

 

SECOND AMENDED AND RESTATED LOAN SALE AND CONTRIBUTION AGREEMENT

 

by and between

 

WHITEHORSE FINANCE, INC.,
as the Seller

 

and

 

WHITEHORSE FINANCE WAREHOUSE, LLC,
as the Buyer

 

Dated as of August 13, 2014

 

 

 

 

 

 

TABLE OF CONTENTS

 

      Page         ARTICLE I DEFINITIONS 1         Section 1.01   Definitions 1
Section 1.02   Other Terms 3 Section 1.03   Computation of Time Periods 3
Section 1.04   Interpretation 4 Section 1.05   References 4 Section 1.06  
Calculations 4         ARTICLE II TRANSFER OF LOAN ASSETS 5         Section 2.01
  Sale, Transfer and Assignment 5 Section 2.02   Purchase Price 7 Section 2.03  
Payment of Purchase Price 8         ARTICLE III CONDITIONS PRECEDENT 9        
Section 3.01   Conditions Precedent to Closing 9 Section 3.02   Conditions
Precedent to all Purchases 10 Section 3.03   Release of Excluded Amounts 10    
    ARTICLE IV REPRESENTATIONS AND WARRANTIES 11         Section 4.01  
Representations and Warranties Regarding the Seller 11 Section 4.02  
Representations and Warranties of the Seller Relating to the Agreement and the
Collateral 15 Section 4.03   Representations and Warranties Regarding the Buyer
16 Section 4.04   Ordinary Course of Business 17         ARTICLE V COVENANTS 17
        Section 5.01   Affirmative Covenants of the Seller 17 Section 5.02  
Negative Covenants of the Seller 19         ARTICLE VI Option to repurchase AND
SUBSTITute collateral loans 20         Section 6.01   Substitution of Collateral
Obligations 20 Section 6.02   Seller’s Optional Right to Repurchase Collateral
Obligations 21         ARTICLE VII INDEMNIFICATION BY THE SELLER 22        
Section 7.01   Indemnification 22 Section 7.02   Liabilities to Obligors 22
Section 7.03   Operation of Indemnities 22

 

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TABLE OF CONTENTS

(continued)

 

    Page       ARTICLE VIII MISCELLANEOUS 23         Section 8.01   Amendments
and Waivers 23 Section 8.02   Notices, Etc 23 Section 8.03   Binding Effect;
Benefit of Agreement 23 Section 8.04   GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF OBJECTION TO VENUE SERVICE OF PROCESS 23 Section 8.05   WAIVER OF JURY
TRIAL 24 Section 8.06   Certain Taxes 24 Section 8.07   Non-Petition 24 Section
8.08   Recourse Against Certain Parties 25 Section 8.09   Protection of Right,
Title and Interest in the Collateral; Further Action Evidencing Purchases 26
Section 8.10   Execution in Counterparts; Severability; Integration 26 Section
8.11   Headings, Exhibits and Schedules 27 Section 8.12   Assignment 27 Section
8.13   No Waiver; Cumulative Remedies 27 Exhibit A   Form of Assignment  
Schedule I   Collateral Obligations  

 

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Second AMENDED AND RESTATED LOAN SALE AND CONTRIBUTION AGREEMENT

 

THIS SECOND AMENDED AND RESTATED LOAN SALE AND CONTRIBUTION AGREEMENT, dated as
of August 13, 2014 (as amended, modified, supplemented or restated from time to
time, this “Agreement”), is between WHITEHORSE FINANCE, INC., a Delaware
corporation (together with its successors and assigns, “Parent,” and in its
capacity as seller hereunder, together with its successors and assigns, the
“Seller”) and WHITEHORSE FINANCE WAREHOUSE, LLC, a Delaware limited liability
company (together with its successors and assigns, the “Buyer”).

 

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

 

WHEREAS, the parties hereto previously entered into the Loan Sale and
Contribution Agreement dated as of August 16, 2012, as amended and restated by
the Amended and Restated Loan Sale and Contribution Agreement dated as of
September 27, 2012 (as amended, modified, supplemented or restated prior to the
date hereof, the “Original Loan Sale and Contribution Agreement”);

 

WHEREAS, pursuant to the Original Loan Sale and Contribution and this Agreement,
the Buyer has purchased and may from time to time continue to purchase certain
assets from the Seller and the Seller has sold and may from time to time
continue to sell to the Buyer certain assets originated or acquired by the
Seller in its normal course of business, together with, among other things,
certain related security and rights of payment thereunder; and

 

WHEREAS, the parties hereto now wish to amend and restate the Original Loan Sale
and Contribution Agreement in its entirety;

 

NOW, THEREFORE, for 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 1.01         Definitions.

 

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

 

“Advance Date” means the date of the initial Advance made to the Buyer with
respect to the related Collateral Obligation under the Credit Agreement.

 

“Agreement” shall have the meaning provided in the first paragraph of this
Agreement.

 

 

 

 

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

 

“Buyer” shall have the meaning provided in the first paragraph of this
Agreement.

 

“Collateral” shall have the meaning provided in Section 2.01.

 

“Conversion” means the date, if any, upon which the Parent converts by operation
of law from a Delaware limited liability company to a Delaware corporation in
anticipation of its expected BDC Election Date.

 

“Credit Agreement” means the Amended and Restated Credit and Security Agreement,
dated as of the date hereof, by and among the Buyer, as Borrower, the Lenders
from time to time party thereto, Natixis, New York Branch, as Facility Agent and
The Bank of New York Mellon Trust Company, N.A., as Collateral Agent.

 

“Excluded Amounts” means (a) any amount received by, on or with respect to any
Collateral Obligation in the Collateral, which amount is attributable to the
payment of any tax, fee or other charge imposed by any governmental Authority on
such Collateral Obligation, (b) any amount representing escrows relating to
taxes, insurance and other amounts in connection with any Collateral Obligation
which is held in an escrow account for the benefit of the related Obligor and
the secured party (other than the Seller in its capacity as lender with respect
to such Collateral Obligation) pursuant to escrow arrangements, (c) any amount
with respect to any Collateral Obligation repurchased or substituted by the
Seller under Article VI to the extent such amount is attributable to a time
after the effective date of such repurchase or substitution, (d) any Retained
Fee received by the Seller in connection with the origination of any Collateral
Obligation and (e) any Equity Security related to any Collateral Obligation that
the Seller determines will not be transferred to the Buyer by the Seller in
connection with the sale of any related Collateral Obligation hereunder.

 

“Fair Market Value” shall mean, with respect to any Collateral Obligation and
Related Property that is to be sold to the Seller pursuant to Section 6.02, (a)
(i) the average of the bid-side quotes determined by three independent
broker-dealers active in the trading of such Collateral Obligation and Related
Property; (ii) if only two such bids can be obtained, the average of the
bid-side quotes; or (iii) if only one such bid can be obtained, such bid; or (b)
if the Fair Market Value of a Collateral Obligation and Related Property cannot
be determined in accordance with clause (a) above, then the Fair Market Value
shall be the Appraised Value of such Collateral Obligation and Related Property
that has been obtained or updated within the immediately preceding three months.

 

“Indemnified Party” shall have the meaning provided in Section 7.01.

 

“Loan List” means the list of Collateral Obligations provided by the Seller to
the Buyer on each Purchase Date and incorporated as Schedule I to this Agreement
by reference, as such list may be amended, supplemented or modified from time to
time in accordance with this Agreement.

 

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“Parent” shall have the meaning provided in the first paragraph of this
Agreement.

 

“Purchase”: A purchase or other acquisition by the Buyer of Collateral from or
as directed or referred by the Seller pursuant to Section 2.01.

 

“Purchase Date”: Any day on which any Collateral is acquired by the Buyer
pursuant to the terms of this Agreement (including any Substitution Date), and
including, for the avoidance of doubt, any day on which any Collateral is
acquired directly by the Buyer from a third party in a primary market
transaction arranged and/or underwritten by the Seller or any Collateral
Obligation is acquired by the Buyer in a secondary market transaction as
provided herein.

 

“Purchase Price” shall have the meaning provided in Section 2.02.

 

“Replaced Loan” shall have the meaning provided in Section 6.01.

 

“Repurchase Price” means, on any date of determination with respect to any
Collateral Obligation and Related Property with respect to which the Seller
elects to exercise its option to repurchase pursuant to Section 6.02 of this
Agreement, an amount equal to the greater of (a) the Fair Market Value of such
Collateral Obligation and Related Property and (b) the amount required to be
paid pursuant to Section 10.01(a)(viii) of the Credit Agreement so that Buyer
shall be able to obtain a release the Lien of the Credit Agreement with respect
thereto. To the extent any Repurchase Price exceeds the Fair Market Value of the
related Collateral Obligation and Related Property, such excess shall be deemed
a capital contribution by the Seller to the Buyer.

 

“Seller” shall have the meaning provided in the first paragraph of this
Agreement.

 

“Substitute Loans” shall have the meaning provided in Section 6.01.

 

“Substitution Date” means any date on which the Seller transfers a Substitute
Loan to the Buyer.

 

“Warehouse Facility” means any collateralized loan financing facility or
collateralized loan obligation transaction that the Seller or any Affiliate
thereof may be party to in any capacity.

 

Section 1.02         Other Terms.

 

All accounting terms used but not specifically defined herein shall be construed
in accordance with generally accepted accounting principles in the United
States. The symbol “$” shall mean the lawful currency of the United States of
America. All terms used in Article 9 of the UCC in the State of New York, and
not specifically defined herein, are used herein as defined in such Article 9.

 

Section 1.03         Computation of Time Periods.

 

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

 

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Section 1.04         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 Facility Documents;

 

(iii)        references to “including” means “including, without limitation”;

 

(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 Facility 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 Facility Documents, and reference to any promissory note
includes any promissory note that is an extension or renewal thereof or a
substitute or replacement therefore; and

 

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

 

Section 1.05         References.

 

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

 

Section 1.06         Calculations.

 

Except as otherwise provided herein, all interest rate and basis point
calculations hereunder will be made on the basis of a 360 day year and the
actual days elapsed in the relevant period and will be carried out to at least
three decimal places.

 

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ARTICLE II

TRANSFER OF LOAN ASSETS

 

Section 2.01         Sale, Transfer and Assignment.

 

(a)          On the terms and subject to the conditions set forth in this
Agreement (including the conditions to purchase set forth in Article III), on
each Purchase Date, (x) with respect to items of Collateral conveyed by the
Seller hereunder, the Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Buyer, and the Buyer hereby Purchases and takes from
the Seller all right, title and interest (whether now owned or hereafter
acquired or arising and wherever located) of the Seller (including all
obligations of the Seller as lender to fund any Revolving Collateral Loan or
Delayed Drawdown Collateral Loan conveyed by the Seller to Buyer hereunder which
obligations Buyer hereby assumes), and (y) in all other cases, with respect to
items of Collateral Purchased by the Buyer hereunder, the Buyer hereby Purchases
all right, title and interest (whether now owned or hereafter acquired or
arising and wherever located) (including all obligations as lender to fund any
Revolving Collateral Loan or Delayed Drawdown Collateral Loan Purchased by Buyer
hereunder which obligations Buyer hereby assumes), in the property identified in
clauses (i) - (iv) below and all accounts, cash and currency, chattel paper,
tangible chattel paper, electronic chattel paper, copyrights, copyright
licenses, equipment, fixtures, general intangibles, instruments, commercial tort
claims, deposit accounts, inventory, investment property, letter-of-credit
rights, accessions, proceeds and other property consisting of, arising out of,
or related to any of the following (in each case excluding the Excluded Amounts)
(collectively, the “Collateral”):

 

(i)          the Collateral Obligations listed on each Loan List delivered by
the Seller to the Buyer from time to time pursuant to this Agreement and all
monies due, to become due or paid in respect of such Collateral Obligations on
and after the related Purchase Date, including but not limited to all
Collections and other recoveries thereon, in each case as they arise after the
related Purchase Date;

 

(ii)         all Liens and Related Property with respect to the Collateral
Obligations referred to in clause (i) above;

 

(iii)        all Related Documents with respect to the Collateral Obligations
referred to in clause (i) above; and

 

(iv)        all income and proceeds of the foregoing.

 

For the avoidance of doubt, and without limiting the foregoing, the term
“Collateral” shall, for all purposes of this Agreement, be deemed to include any
Collateral Obligation acquired directly by the Buyer from a third party in a
primary market transaction arranged and/or underwritten by the Seller or any
Collateral Obligation acquired by the Buyer in a secondary market transaction as
provided herein.

 

(b)          From and after each Purchase Date, the Collateral listed on the
relevant Loan List shall be deemed to be Collateral hereunder.

 

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(c)          On any Purchase Date and on the Advance Date with respect to the
Collateral to be acquired or financed by the Buyer on that date, as applicable,
the Seller shall be deemed to, and hereby does, reaffirm and certify to the
Buyer, the Collateral Agent, on behalf of the Secured Parties, and the Facility
Agent, as of such Purchase Date or such Advance Date, as applicable, that each
of the representations and warranties in Section 4.02 is true and correct as of
such Purchase Date or such Advance Date, as applicable.

 

(d)          Except as specifically provided in this Agreement, the sale and
purchase of Collateral under this Agreement shall be without recourse to the
Seller; it being understood that the Seller shall be liable to the Buyer for all
representations, warranties, covenants and indemnities made by the Seller
pursuant to the terms of this Agreement, all of which obligations are limited so
as not to constitute recourse to the Seller for the credit risk of the Obligors.

 

(e)          In connection with each Purchase of Collateral as contemplated by
this Agreement, the Buyer hereby directs the Seller to, and the Seller agrees
that it will Deliver, or cause to be Delivered, to the Custodian, each
Collateral Obligation being transferred to the Buyer on such Purchase Date in
accordance the applicable provisions of the Credit Agreement. The Seller shall
take such action requested by the Buyer or the Facility Agent, from time to time
hereafter, that may be necessary or appropriate to ensure that the Buyer has an
enforceable ownership interest and its assigns under the Credit Agreement have
an enforceable and perfected security interest in the Collateral Purchased by
the Buyer as contemplated by this Agreement.

 

(f)          In connection with the Purchase by the Buyer of the Collateral as
contemplated by this Agreement, the Seller further agrees that it will, at its
own expense, indicate clearly and unambiguously in its computer files and its
financial statements, on or prior to each Purchase Date, that such Collateral
has been Purchased by the Buyer in accordance with this Agreement.

 

(g)          The Seller further agrees to deliver to the Buyer on or before each
Purchase Date a computer file containing a true, complete and correct Loan List
(which shall contain the related Principal Balance, outstanding principal
balance, loan number and Obligor name for each Collateral Obligation) as of the
related Purchase Date. Such file or list shall be marked as Schedule I to this
Agreement, shall be delivered to the Buyer as confidential and proprietary, and
is hereby incorporated into and made a part of this Agreement as such Schedule I
may be supplemented and amended from time to time.

 

(h)          It is the intention of the parties hereto that the conveyance of
all right, title and interest in and to the Collateral to the Buyer as provided
in Section 2.01 shall constitute an absolute sale, conveyance and transfer
conveying good title, free and clear of any Lien (other than Permitted Liens)
and that the Collateral shall not be part of the Seller’s bankruptcy estate in
the event of an Insolvency Event with respect to the Seller. Furthermore, it is
not intended that such conveyance be deemed a pledge of the Collateral
Obligations and the other Collateral to the Buyer to secure a debt or other
obligation of the Seller. If, however, notwithstanding the intention of the
parties, the conveyance provided for in this Section 2.01 is determined to be a
transfer for security, then this Agreement shall also be deemed to be, and
hereby is, a “security agreement” within the meaning of Article 9 of the UCC and
the Seller hereby grants to the Buyer a duly perfected, first priority “security
interest” within the meaning of Article 9 of the UCC in all right, title and
interest in and to the Collateral, now existing and hereafter created, to secure
the prompt and complete payment of a loan deemed to have been made in an amount
equal to the aggregate Purchase Price of the Collateral together with all of the
other obligations of the Seller hereunder. The Buyer shall have, in addition to
the rights and remedies which it may have under this Agreement, all other rights
and remedies provided to a secured creditor under the UCC and other Applicable
Law, which rights and remedies shall be cumulative.

 

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(i)          The Seller and the Buyer agree and acknowledge that, in accordance
with the terms of the Retention of Net Economic Interest Letter, on and after
the Restatement Effective Date, the Buyer will acquire all Collateral
Obligations (other than any acquired pursuant to an offer, exchange or exercise
of rights or remedies pursuant to a Collateral Obligation owned by the Buyer)
pursuant to this Agreement including as follows:

 

(i)          The Buyer may acquire a Collateral Obligation from a third party in
a primary market transaction arranged and/or underwritten by the Seller. Each
Collateral Obligation that is acquired in a primary market transaction arranged
and/or underwritten by the Seller may be transferred to or acquired by the Buyer
without waiting a two Business Day period, subject to the Seller retaining
credit and market value risk described in Section 2.02.

 

(ii)         Each Collateral Obligation that is acquired in the secondary market
(including any acquisition by the Buyer in which such Collateral Obligation is
settled directly with the Buyer) shall be held (including via a commitment to
purchase) on the Seller’s books and records for its own account for at least two
Business Days before transfer to or acquisition by the Buyer.

 

Section 2.02         Purchase Price.

 

The purchase price for each item of Collateral sold to the Buyer under and for
purposes of this Agreement shall be a dollar amount equal to the fair market
value thereof as determined by the Seller’s investment adviser (the “Purchase
Price”). In the case of the acquisition of a Collateral Obligation in the
primary market pursuant to clause (i) of Section 2.01(i), the Seller shall
retain credit and market risk for two Business Days after the acquisition of the
Collateral Obligation by the Buyer by agreeing that if (a) the Purchase Price at
the close of business on such date is greater than the Purchase Price paid by
the Buyer at acquisition, the Buyer shall pay to the Seller such positive
difference from cash on hand in the Collection Account and (b) if the Purchase
Price at the close of business on such date is less the Purchase Price paid by
the Buyer at acquisition, the difference shall be payable in cash by the Seller
to the Buyer. Each Collateral Obligation acquired in the secondary market and
sold by Seller to the Buyer pursuant to clause (ii) of Section 2.01(i) shall be
sold at the Purchase Price thereof determined at the earlier of (but in no event
earlier than two Business Days after the Seller has committed to purchase such
Collateral Obligation) (1) the entering into of a trade confirmation or forward
purchase agreement between the Seller and the Buyer with respect to such
Collateral Obligation or other evidence of the agreement to transfer such
Collateral Obligation from the Seller to the Buyer on the books and records
thereof and (2) settlement by Buyer of its purchase of such Collateral
Obligation.

 

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Section 2.03         Payment of Purchase Price.

 

(a)          The Purchase Price for any Collateral acquired by the Buyer on any
Purchase Date pursuant to this Agreement shall be paid in a combination of (i)
immediately available funds and (ii) if the Buyer does not have sufficient funds
to pay the full amount of the Purchase Price (after taking into account any
Advance the Buyer expects to receive pursuant to the Credit Agreement), by means
of a capital contribution by the Seller to the Buyer.

 

(b)          [Reserved.]

 

(c)          Notwithstanding any provision herein to the contrary, the Seller
may on any Purchase Date elect to designate all or a portion of the Collateral
proposed to be transferred to the Buyer on such date as a capital contribution
to the Buyer. In such event, the cash portion of the Purchase Price payable with
respect to such transfer shall be reduced by that portion of the Purchase Price
of the Collateral that was so contributed; provided that Collateral contributed
to the Buyer as capital shall constitute Collateral for all purposes of this
Agreement. To the extent the fair market value of any Collateral purchased or
acquired by replacement and substitution by Buyer pursuant to this Agreement
exceeds the amount of cash paid or other consideration exchanged therefore, such
excess shall be deemed to be a capital contribution from the Seller to the
Buyer.

 

(d)          The Seller, in connection with each Purchase hereunder relating to
any Collateral, shall be deemed to have certified, and hereby does certify, with
respect to the Collateral to be Purchased by the Buyer on such day, that its
representations and warranties contained in Article IV are true and correct on
and as of such day, with the same effect as though made on and as of such day.

 

(e)          Upon the payment of the Purchase Price for any Purchase, title to
the Collateral included in such Purchase shall vest in Buyer, whether or not the
conditions precedent to such Purchase and the other covenants and agreements
contained herein were in fact satisfied; provided that Buyer shall not be deemed
to have waived any claim it may have under this Agreement for the failure by the
Seller in fact to satisfy any such condition precedent, covenant or agreement.

 

(f)          The Seller and the Buyer acknowledge and agree that, solely for
administrative convenience, any assignment agreement required to be executed and
delivered in connection with the transfer of a Collateral Obligation in
accordance with the terms of any Related Documents may reflect that the relevant
seller is assigning such Collateral Obligation directly to the Buyer. Nothing in
any assignment agreement shall be deemed to impair the transfer of the related
Collateral Obligation by the Seller to the Buyer in accordance with the terms of
this Agreement. Any such Collateral Obligation so assigned for administrative
convenience shall be deemed sold and transferred by the related seller to the
Seller and, pursuant to this Agreement, shall be sold and transferred by the
Seller to the Buyer. For the avoidance of doubt, all of the provisions of this
Agreement, including without limitation the conditions precedent to all
purchases, the representations and warranties of the Seller, the covenants of
the Seller and the indemnity of the Seller, contained in Section 3.02, Article
IV, Article V and Article VII hereof, respectively, shall apply to the Seller
with equal force with respect to any such sales and assignments for
administrative convenience by any related seller to the Buyer as if such sale
and assignment was directly from the Seller to the Buyer.

 

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(g)          Collateral Obligations may be purchased or acquired from time to
time by the Buyer from the Seller or any of its Affiliates hereunder only if (i)
the terms and conditions thereof are no less favorable to the Buyer than the
terms it would obtain in a comparable, timely purchase or acquisition with a
non-Affiliate and (ii) the transactions are effected in accordance with all
Applicable Laws.

 

ARTICLE III

CONDITIONS PRECEDENT

 

Section 3.01         Conditions Precedent to Closing.

 

The closing hereunder of this Agreement is subject to the conditions precedent
that (i) each of the conditions precedent to the execution, delivery and
effectiveness of each other Facility Document being delivered on the Restatement
Effective Date (other than a condition precedent in any such other Facility
Document relating to the effectiveness of this Agreement) shall have been
fulfilled, and (ii) on or prior to the Restatement Effective Date, the Seller
shall have delivered to the Buyer each of the items specified below in form and
substance satisfactory to the Buyer and the Facility Agent.

 

(a)          Counterparts of this Agreement executed on behalf of the Seller.

 

(b)          Officer’s Certificates as to solvency duly executed by Responsible
Officers of the Seller.

 

(c)          All documents and information necessary to complete the Exhibit and
Schedule to this Agreement, including the current Loan List (Schedule I hereto).

 

(d)          Certificates of the Secretary or Assistant Secretary or other
Responsible Officer of the Seller, each dated as of the date of this Agreement,
certifying (i) the names and true signatures of the incumbent officers of the
Seller authorized to sign this Agreement and the other documents to be delivered
by it hereunder (on which certificate the Buyer, the Collateral Agent, the
Custodian, the Facility Agent and the Lenders may conclusively rely), (ii) that
the copy of the articles of incorporation of the Seller attached thereto is a
complete and correct copy and that such articles of incorporation have not been
further amended, modified or supplemented and is in full force and effect, (iii)
that the copy of the articles of incorporation of the Seller attached thereto is
a complete and correct copy and that such articles of incorporation have not
been further amended, modified or supplemented and are in full force and effect,
and (iv) the resolutions of the Seller’s board of directors approving and
authorizing the execution, delivery and performance by the Seller of the
transactions contemplated by this Agreement and of the documents entered into by
the Seller related thereto.

 

(e)          All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Buyer and the Facility Agent.

 

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(f)          A good standing certificate for the Seller issued by the Secretary
of State of Delaware dated as of a date no more than ten (10) days prior to the
Closing Date.

 

(g)          Opinions of Dechert LLP, counsel to the Seller, in form and
substance satisfactory to the Buyer and the Facility Agent.

 

(h)          Filed UCC-1 (as amended by a filed UCC-3) financing statements
naming the Seller, as debtor, and the Buyer, as secured party, and a filed UCC-3
financing statement naming the Collateral Agent, on behalf of the Secured
Parties, as assignee, for the benefit of the Secured Parties, describing the
Collateral and meeting the requirements of the laws of each jurisdiction in
which it is necessary or reasonably desirable, or in which the Seller is
required by Applicable Law, and in such manner as is necessary or reasonably
desirable, to perfect the conveyance of the Collateral to the Buyer.

 

Section 3.02         Conditions Precedent to all Purchases.

 

The obligations of the Buyer to Purchase the Collateral from the Seller on any
Purchase Date shall be subject to the satisfaction of the following conditions
precedent that:

 

(a)          all representations and warranties of the Seller contained in
Sections 4.01 and 4.02 shall be true and correct on and as of such date as
though made on and as of such date and shall be deemed to have been made on and
as of such day;

 

(b)          the Seller shall have delivered to the Buyer a duly completed Loan
List that is true, accurate and complete in all respects as of the related
Purchase Date;

 

(c)          on and as of such Purchase Date, the Seller shall have performed
all of the covenants and agreements required to be performed by it on or prior
to such date pursuant to the provisions of this Agreement;

 

(d)          no event has occurred and is continuing, or would result from such
Purchase, that constitutes a Default or Event of Default (unless such purchase
would cure such Default or Event of Default) and Buyer makes such Purchase in
accordance with the applicable provisions hereof and of the Credit Agreement;

 

(e)          except in connection with the transfer of a Substitute Loan in
accordance with the provisions of this Agreement and of the Credit Agreement,
the final day of the Reinvestment Period shall not have occurred; and

 

(f)          no Applicable Law shall prohibit or enjoin, and no order, judgment
or decree of any federal, state or local court or governmental body, agency or
instrumentality shall prohibit or enjoin, the making of any such Purchase by the
Buyer in accordance with the provisions hereof.

 

Section 3.03         Release of Excluded Amounts.

 

The parties acknowledge and agree that the Buyer has no interest in the Excluded
Amounts. Promptly upon the receipt by or release to the Buyer of any Excluded
Amounts, the Buyer hereby irrevocably agrees to deliver and release to the
Seller such Excluded Amounts, which release shall be automatic and shall require
no further act by the Buyer; provided that the Buyer shall execute and deliver
such instruments of release and assignment or other documents, or otherwise
confirm the foregoing release of such Excluded Amounts, as may be reasonably
requested by the Seller in writing.

 

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

Section 4.01         Representations and Warranties Regarding the Seller.

 

As of the Original Closing Date, as of the Restatement Effective Date, as of
each Purchase Date and as of each Advance Date, as applicable, the Seller
represents and warrants to the Buyer for the benefit of the Buyer and each of
its successors and assigns that:

 

(a)          Due Organization. The Seller is as of the Original Closing Date and
as of each Purchase Date prior to its Conversion, a limited liability company
duly formed, and, after its Conversion, is a corporation duly incorporated, and
in each such case validly existing under the laws of the State of Delaware, with
full power and authority to own and operate its assets and properties, conduct
the business in which it is now engaged and to execute and deliver and perform
its obligations under this Agreement and the other Facility Documents to which
it is a party.

 

(b)          Due Qualification and Good Standing. The Seller is in good standing
in the State of Delaware. The Seller is duly qualified to do business and, to
the extent applicable, is in good standing in each other jurisdiction in which
the nature of its business, assets and properties, including the performance of
its obligations under this Agreement, the other Facility Documents to which it
is a party and its Constituent Documents to which it is a party, requires such
qualification, except where the failure to be so qualified or in good standing
would not have a material adverse effect on the business operations, assets or
financial condition of the Seller or could reasonably be expected to have a
material adverse effect on the validity or enforceability of this Agreement or
the provisions of any other Facility Document applicable to the Seller, or the
performance by the Seller of its duties hereunder or thereunder.

 

(c)          Due Authorization; Execution and Deliver; Legal, Value and Binding;
Enforceability; Valid Sale. The execution and delivery by the Seller of, and the
performance of its obligations under this Agreement and the other Facility
Documents to which it is a party and the other instruments, certificates and
agreements contemplated hereby and thereby are within its powers and have been
duly authorized by all requisite action by it and have been duly executed and
delivered by it and constitute its legal, valid and binding obligations
enforceable against it in accordance with their respective terms, subject, as to
enforcement, (A) to the effect of bankruptcy, insolvency or similar laws
affecting generally the enforcement of creditors’ rights as such laws would
apply in the event of any bankruptcy, receivership, insolvency or similar event
applicable to the Seller and (B) to general equitable principles (whether
enforceability of such principles is considered in a proceeding at law or in
equity). This Agreement shall effect a valid sale, transfer and assignment of or
grant of a security interest in the Collateral Obligations from the Seller to
the Buyer, enforceable against the Seller and creditors of and purchasers from
the Seller.

 

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(d)          Non-Contravention. None of the execution and delivery by the Seller
of this Agreement or the other Facility Documents to which it is a party, the
consummation of the transactions herein or therein contemplated, or performance
and compliance by it with the terms, conditions and provisions hereof or
thereof, will (i) conflict with, or result in a breach or violation of, or
constitute a default under its Constituent Documents, (ii) conflict with or
contravene (A) any Applicable Law, (B) any indenture, agreement or other
contractual restriction binding on or affecting it or any of its assets,
including any Related Document, or (C) any order, writ, judgment, award,
injunction or decree binding on or affecting it or any of its assets or
properties or (iii) result in a breach or violation of, or constitute a default
under, or permit the acceleration of any obligation or liability in, or but for
any requirement of the giving of notice or the passage of time (or both) would
constitute such a conflict with, breach or violation of, or default under, or
permit any such acceleration in, any contractual obligation or any agreement or
document to which it is a party or by which it or any of its assets are bound
(or to which any such obligation, agreement or document relates), in each case
which would have a material adverse effect on the business, operations, assets
or financial condition of the Seller or that could reasonably be expected to
adversely affect in a material manner its ability to perform its obligations
hereunder and under any other Facility Document applicable to it;

 

(e)          Governmental Authorizations; Private Authorizations; Governmental
Filings. Other than any filings, if any, the Seller may be required to file
after the Original Closing Date under the Investment Company Act, the Investment
Advisers Act of 1940, as amended and the the Securities Act or the Exchange Act,
each of which shall be made in compliance with Applicable Law as set forth in
Section 4.01(f), the Seller has obtained, maintained and kept in full force and
effect all Governmental Authorizations and Private Authorizations which are
necessary for it to properly carry out its business, and has made all
Governmental Filings necessary for the execution and delivery by it of the
Facility Documents to which it is a party and the performance by the Seller of
its obligations under this Agreement and the other Facility Documents, and no
Governmental Authorization, Private Authorization or Governmental Filing which
has not been obtained or made is required to be obtained or made by it in
connection with the execution and delivery by it of any Facility Document to
which it is a party or the performance of its obligations under this Agreement
and the other Facility Documents to which it is a party;

 

(f)          Compliance with Applicable Law. The Seller has duly observed and
complied with all Applicable Laws, including the Investment Company Act,
relating to the conduct of its business and its assets except where the failure
to do so could not reasonably be expected to result in a material adverse effect
upon the performance by the Seller of its duties under, or on the validity or
enforceability of this Agreement and the provisions of any other Facility
Document applicable to the Seller.

 

(g)          Solvency. The Seller, at the time of and after giving effect to
each conveyance of Collateral Obligations hereunder and the transactions
contemplated hereunder and under the Credit Agreement and the other Facility
Documents, is Solvent on and as of the date thereof.

 

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(h)          Taxes. The Seller has filed or caused to be filed all tax returns
which, to its knowledge, 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 the books of the
Seller); no tax Lien has been filed and, to the Seller’s knowledge, no claim is
being asserted, with respect to any such tax, fee or other charge.

 

(i)          Place of Business; No Changes. The Seller’s location (within the
meaning of Article 9 of the UCC) is the State of Delaware. Except in connection
with its Conversion from a limited liability company to a corporation, the
Seller has not changed its name, whether by amendment of its certificate of
formation, by reorganization or otherwise, and has not changed its location
within the four months preceding the Restatement Effective Date.

 

(j)          Investment Company Status. Prior to its BDC Election Date, the
Seller is not required to be registered as an “investment company” within the
meaning of the Investment Company Act. On and after its BDC Election Date, the
Seller conducts and will conduct its business and other activities (i) in
compliance in all material respects with the applicable provisions of the
Investment Company Act and any applicable rules, regulations or orders issued by
the SEC thereunder and (ii) in such a way that the transactions contemplated by
the Facility Documents do not violate in any material respect the provisions of
the Investment Company Act applicable to business development companies or any
rules, regulations or orders issued by the SEC thereunder.

 

(k)          Sale Treatment. Other than for accounting and tax purposes, the
Seller has treated the transfer of Collateral Obligations to the Buyer for all
purposes as a sale and/or capital contribution and purchase on all of its
relevant books and records.

 

(l)          Security Interest.

 

(i)          This Agreement creates a valid and continuing security interest (as
defined in the applicable UCC) in favor of the Buyer in all right, title and
interest of the Seller in the Collateral Obligations, which security interest is
prior to all other Liens (except for Permitted Liens), and is enforceable as
such against creditors of and purchasers from the Seller;

 

(ii)         the Loans, along with the Related Documents, constitute “general
intangibles,” “instruments,” “accounts,” “investment property,” or “chattel
paper,” within the meaning of the applicable UCC;

 

(iii)        the Seller owns and has, and upon the sale and transfer thereof by
the Seller to the Buyer, the Buyer will have good and marketable title to such
Collateral Obligations free and clear of any Lien (other than Permitted Liens),
claim or encumbrance of any Person;

 

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(iv)        the Seller has received all consents and approvals required by the
terms of the Collateral Obligations to the sale of the Collateral Obligations
hereunder to the Buyer (except (A) to the extent that the requirement for such
consent is rendered ineffective under Section 9-406 of the UCC and (B) for any
customary procedural requirements and agents’ and/or Obligors’ consents expected
to be obtained in due course in connection with the transfer of the Collateral
Obligations to the Buyer (except, in the case of clause (B), for any such
agents’ consents where the Seller or any of its Affiliates is the agent which
the Seller has or will obtain));

 

(v)         the Seller 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 the Collateral
Obligations granted to the Buyer under this Agreement to the extent perfection
can be achieved by filing a financing statement;

 

(vi)        other than the security interest granted to the Buyer pursuant to
this Agreement, the Seller has not pledged, assigned, sold, granted a security
interest in or otherwise conveyed any of the Collateral Obligations, except in
connection with its Warehouse Facilities, if any, which security interests, if
any, with respect to such Collateral Obligations will be released on or prior to
the applicable Purchase Date. The Seller has not authorized the filing of and is
not aware of any financing statements naming the Seller as debtor that include a
description of collateral covering the Collateral Obligations other than any
financing statement (A) relating to the security interest granted to the Buyer
under this Agreement, or (B) that has been terminated or for which a release or
partial release has been or will be timely filed. The Seller is not aware of the
filing of any judgment or tax Lien filings against the Seller;

 

(vii)       except with respect to any Collateral Obligation for which there is
no promissory note, all original executed copies of each promissory note that
constitutes or evidences the Collateral Obligations have been Delivered by the
Seller at the direction of the Buyer as required under the Credit Agreement; and

 

(viii)      none of the promissory notes, if any, that constitute or evidence
any Collateral Obligations has any marks or notations indicating that they have
been pledged, assigned or otherwise conveyed to any Person other than the Buyer.

 

(m)          Value Given. The cash payments, if any, received by the Seller, and
the increase in the Seller’s equity interest in the Buyer as a result of any
capital contribution by the Seller to the Buyer in respect of the purchase price
of the Collateral Obligations sold hereunder constitute reasonably equivalent
value in consideration for the transfer to the Buyer of such Collateral
Obligations under this Agreement, such transfer was not made for or on account
of an antecedent debt owed by the Seller to the Buyer, and such transfer was not
and is not voidable or subject to avoidance under any applicable bankruptcy
laws.

 

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

 

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(o)          Origination and Collection Practices. The origination and
collection practices used by the Seller and any of its Affiliates with respect
to each Collateral Obligation prior to the Purchase Date with respect thereto
have been consistent with the Servicing Standard.

 

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

 

(q)          Nonconsolidation. The Seller conducts its affairs and has conducted
it affairs since the Original Closing Date such that (i) the Buyer would not be
substantively consolidated in the estate of the Seller and their respective
separate existences would not be disregarded in the event of the Seller’s
bankruptcy and (ii) in its capacity as designated manager of the Buyer, such
that Buyer is in compliance with the provisions of its Constituent Documents
(provided, however, Seller does not hereby agree to maintain the solvency of the
Buyer or agree to pay any of the Buyer’s obligations or liabilities).

 

(r)          Accuracy of Information. All written factual information heretofore
furnished by the Seller for purposes of or in connection with this Agreement or
the other Facility Documents to which the Seller is a party, or any transaction
contemplated hereby or thereby is, and all such written factual information
hereafter furnished by the Seller to any party to the Facility Documents will
be, accurate in all material respects, on or as of the date such information is
stated or certified; provided that the Seller shall not be responsible for, nor
have any liability with respect to, any factual information furnished to it by
any third party not affiliated with it, except to the extent that a Responsible
Officer of the Seller has actual knowledge that such factual information is
inaccurate in any material respect.

 

Section 4.02         Representations and Warranties of the Seller Relating to
the Agreement and the Collateral.

 

The Seller hereby represents and warrants to the Buyer as of the Original
Closing Date, as of the Restatement Effective Date, as of each Purchase Date and
each Advance Date with respect to the Collateral to be acquired or financed by
the Buyer on that date, as applicable:

 

(a)          Valid Transfer and Security Interest. This Agreement constitutes a
valid transfer to the Buyer of all right, title and interest of the Seller in,
to and under all of the Collateral, free and clear of any Lien of any Person
claiming through or under the Seller or its Affiliates, except for Permitted
Liens. If the conveyances contemplated by this Agreement are determined to be a
transfer for security, then this Agreement constitutes a grant of a security
interest in all of the Collateral to the Buyer, which security interest is a
valid and first priority perfected security interest in all Collateral, subject
only to Permitted Liens. Neither the Seller nor any Person claiming through or
under Seller shall have any claim to or interest in the Collection Account and
if this Agreement constitutes the grant of a security interest in such property,
except for the interest of the Seller in such property as a debtor for purposes
of the UCC.

 

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(b)          Eligibility of Collateral. As of the Original Closing Date, the
Restatement Effective Date, each Purchase Date and each Advance Date, as
applicable, (i) the Loan List is an accurate and complete listing of all
Collateral as of the related Purchase Date or the related Advance Date, as
applicable, and the information contained therein with respect to the identity
of such Collateral and the amounts owing thereunder is true and correct as of
the related Purchase Date or the related Advance Date, as applicable, (ii) as of
its Purchase Date and as of its Advance Date, each such Collateral Obligation
satisfies or satisfied, as applicable, the definition of Collateral Obligation,
and (iii) the representations and warranties set forth in Section 4.02(a) are
true and correct with respect to each item of Collateral.

 

(c)          No Fraud. Each Loan was originated without any fraud or material
misrepresentation by the Seller or, to the best of the Seller’s knowledge, on
the part of the Obligor.

 

Section 4.03         Representations and Warranties Regarding the Buyer.

 

By its execution of this Agreement, the Buyer represents and warrants to the
Seller that:

 

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

 

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

 

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

 

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

 

(e)          Governmental Authorizations; Private Authorizations; Governmental
Filings. The Buyer has obtained, maintained and kept in full force and effect
all Governmental Authorizations and Private Authorizations which are necessary
for it to properly carry out its business, and made all Governmental Filings
necessary for the execution and delivery by it of the Facility Documents to
which it is a party and the performance by the Buyer of its obligations under
this Agreement and the other Facility Documents, and no Governmental
Authorization, Private Authorization or Governmental Filing which has not been
obtained or made is required to be obtained or made by it in connection with the
execution and delivery by it of any Facility Document to which it is a party or
the performance of its obligations under this Agreement and the other Facility
Documents to which it is a party;

 

(f)          [Intentionally Omitted.]

 

(g)          Place of Business; No Changes. The Buyer’s location (within the
meaning of Article 9 of the UCC) is the State of Delaware. The Buyer has not
changed its name, whether by amendment of its certificate of formation, by
reorganization or otherwise, and has not changed its location, within the four
months preceding the Closing Date.

 

(h)          Sale Treatment. Other than for accounting and tax purposes, the
Buyer has treated the transfer of Collateral Obligations from the Seller for all
purposes as a sale and purchase on all of its relevant books and records and
other applicable documents.

 

Section 4.04         Ordinary Course of Business

 

Each of the Seller and the Buyer represents and warrants to the other as to
itself that in the event the conveyances of the Collateral provided for in
Section 2.01(a) of this Agreement are determined by a court of competent
jurisdiction to be a transfer for security purposes, each remittance of
payments, if any, by the Seller hereunder to the Buyer under this Agreement will
have been (i) in payment of an obligation incurred by the Seller in the ordinary
course of business or financial affairs of the Seller and the Buyer, as the case
may be, and (ii) made in the ordinary course of business or financial affairs of
the Seller and the Buyer.

 

ARTICLE V

COVENANTS

 

Section 5.01         Affirmative Covenants of the Seller.

 

From the Original Closing Date until the Payment in Full Date:

 

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(a)          Preservation of Corporate Existence. The Seller, prior to its
Conversion, preserved and maintained is limited liability company (and, after
its Conversion has or will preserve and maintain its corporate) existence,
rights, franchises and privileges in the jurisdiction of its formation, and
qualify and remain qualified in good standing as a foreign limited liability
company or foreign corporation, as applicable, in each jurisdiction where the
failure to preserve and maintain such existence, rights, franchises, privileges
and qualification has had, or could reasonably be expected to have, a material
adverse effect on the business operations, assets or financial condition of the
Seller or on the validity or enforceability of this Agreement or the provisions
of any other Facility Document applicable to the Seller, or the performance by
the Seller of its duties hereunder or thereunder.

 

(b)          Performance and Compliance with Collateral. The Seller will, at its
expense, timely and fully perform and comply in all material respects with all
provisions, covenants and other promises required to be observed by it under all
agreements related to such Collateral.

 

(c)          Protection of Interest in Collateral. With respect to the
Collateral Purchased by the Buyer, the Seller will (i) sell such Collateral
pursuant to and in accordance with the terms of this Agreement, (ii) (at the
Seller’s expense) take all action necessary to perfect, protect and more fully
evidence the Buyer’s or its assignee’s ownership of or security interest in such
Collateral free and clear of any Lien other than the Lien created hereunder and
Permitted Liens, including, without limitation, (a) filing and maintaining (at
the Seller’s expense), effective financing statements naming the Seller, as
debtor, the Buyer, as secured party, and the
Collateral Agent, for the benefit of the Secured Parties, as assignee, in all
necessary or appropriate filing offices, and filing continuation statements,
amendments or assignments with respect thereto in such filing offices, and (b)
executing or causing to be executed such other instruments or notices as may be
necessary or appropriate, and (iii) take all additional action that the Buyer,
the Collateral Agent or the Facility Agent may reasonably request to perfect,
protect and more fully evidence the respective interests of the parties to this
Agreement in the Collateral and of the Collateral Agent, for the benefit of the
Secured Parties, under the Credit Agreement.

 

(d)          Delivery of Collections. The Seller will cause all payments
relating to all Collateral to be remitted directly to the Collection Account. In
the event any payments relating to any Collateral are remitted directly to the
Seller or any Affiliate of the Seller, the Seller will remit (or will cause all
such payments to be remitted) directly to the Collection Account within two (2)
Business Days following receipt thereof, and, at all times prior to such
remittance, the Seller will itself hold or, if applicable, will cause such
payments to be held in trust for the exclusive benefit of the Buyer (and its
assignees).

 

(e)          Separate Identity. The Seller acknowledges that the Facility Agent,
the Lenders and the other Secured Parties are entering into the transactions
contemplated by the Credit Agreement in reliance upon the Buyer’s identity as a
legal entity that is separate from the Seller and each other Affiliate of the
Seller. Therefore, from and after the Original Closing Date, the Seller has and
will take all reasonable steps to maintain the Buyer’s identity as a legal
entity that is separate from the Seller and each other Affiliate of the Seller
and to make it manifest to third parties that the Buyer is an entity with assets
and liabilities distinct from those of the Seller and each other Affiliate
thereof and not just a division of the Seller or any such other Affiliate
(except as otherwise required under GAAP or applicable tax law). Without
limiting the generality of the foregoing and in addition to the other covenants
set forth herein, the Seller agrees that:

 

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(i)          the Seller will take all other actions necessary on its part to
ensure that the Buyer is at all times in compliance with Section 5.03 of the
Credit Agreement (provided, however, that the Seller does not hereby guaranty
the solvency of the Buyer or agree to pay any of the Buyer’s obligations or
liabilities);

 

(ii)         the Seller shall maintain corporate records and books of account
separate from those of the Buyer;

 

(iii)        the annual financial statements of the Seller shall disclose the
effects of the Seller’s transactions in accordance with GAAP and the annual
financial statements of the Seller shall not reflect in any way that the assets
of the Buyer, including, without limitation, the Collateral, could be available
to pay creditors of the Seller or any other Affiliate of the Seller;

 

(iv)        the resolutions, agreements and other instruments underlying the
transactions described in this Agreement shall be continuously maintained by the
Seller as official records;

 

(v)         the Seller shall maintain an arm’s–length relationship with the
Buyer and will not hold itself out as being liable for the debts of the Buyer;

 

(vi)        except as otherwise permitted under the Credit Agreement, the Seller
shall keep its assets and its liabilities wholly separate from those of the
Buyer;

 

(vii)       the Seller will avoid the appearance, and promptly correct any known
misperception of any of the Seller’s creditors, that the assets of the Buyer are
available to pay the obligations and debts of the Seller; and

 

(viii)      to the extent that the Seller services the Collateral and performs
other services on the Buyer’s behalf, the Seller will clearly identify itself as
an agent for the Buyer in the performance of such duties; provided, however,
that the Seller will not be required to so identify itself when communicating
with the Obligors not in its capacity as agent for the Buyer but rather in its
capacity as agent for a group of lenders.

 

(f)          Cooperation with Requests for Information or Documents. The Seller
will cooperate fully with all reasonable requests of the Buyer regarding the
provision of any information or documents in the possession of or reasonably
obtainable by the Seller without undue burden or expense which are necessary or
desirable, including the provision of such information or documents in
electronic or machine–readable format, to allow each of the Buyer and its
assignees (including, without limitation, the Collateral Agent) to carry out
their responsibilities under the Facility Documents.

 

Section 5.02         Negative Covenants of the Seller.

 

From the Original Closing Date until the Payment in Full Date:

 

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(a)          Change of Name or Location of Loan Files. The Seller shall not
change its name (other than in connection with its Conversion), move the
location of its principal place of business and chief executive office, or
change the jurisdiction of its formation or incorporation, as applicable, unless
the Seller gives written notice thereof to the Buyer and the Facility Agent and
takes all actions required under the UCC of each relevant jurisdiction in order
to continue the first priority perfected security interest of the Buyer and the
Collateral Agent, for the benefit of the Secured Parties, in the Collateral.

 

(b)          Accounting of Purchases. Other than for tax and consolidated
accounting purposes, the Seller will not account for or treat (whether in
financial statements or otherwise) the transactions contemplated hereby in any
manner other than as a sale of the Collateral by the Seller to the Buyer;
provided that for federal income tax reporting purposes, the Buyer is treated as
a “disregarded entity” and, therefore, the transfer of Collateral by the Seller
to the Buyer hereunder will not be recognized.

 

ARTICLE VI

Option to repurchase AND SUBSTITute collateral loans

 

Section 6.01         Substitution of Collateral Obligations.

 

So long as the Seller is permitted to do so pursuant to Section 10.01(a)(vi) of
the Credit Agreement, the Seller may, subject to the conditions set forth in
said section and in this Section 6.01, replace any Credit Risk Loan, Defaulted
Loan or Excess Concentration Loan and Related Property with one or more other
Collateral Obligations, provided that no such replacement shall occur unless
each of the following conditions is satisfied as of the date of such replacement
and substitution:

 

(a)          the Seller has notified the Buyer and the Facility Agent in writing
identifying the Collateral Obligation to be replaced (a “Replaced Loan”) and the
Collateral Obligation(s) to be substituted therefore (each, a “Substitute
Loan”);

 

(b)          all representations and warranties of the Seller contained in
Sections 4.01 and 4.02 shall be true and correct as of the date of substitution
of any such Substitute Loan;

 

(c)          the Repurchase and Substitution Limits applicable to any such
substitution are satisfied;

 

(d)          the Acquisition and Disposition Standards are adhered to;

 

(e)          the Seller shall deliver to the Buyer on the date of such
substitution a revised Schedule I that shall include such Substitute Loan(s) and
shall have deleted such Replaced Loan(s); and

 

(f)          the Seller shall deliver to the Buyer and the Facility Agent on the
date of such substitution a certificate of a Responsible Officer stating that
the foregoing conditions have been or will be met upon such replacement and
substitution and an assignment substantially in the form of Exhibit A hereto
with respect to such Substitute Loan(s).

 

-20-

 

 

Contemporaneously with the receipt of the Substitute Loan, the Buyer shall sell,
transfer, assign, set over and otherwise convey to the Seller, without recourse,
all the right, title and interest of the Buyer in and to any Replaced Loan and
Related Property pursuant to this Section 6.01, and the Buyer shall cause the
Collateral Agent to release the Lien of the Credit Agreement thereon.

 

Section 6.02         Seller’s Optional Right to Repurchase Collateral
Obligations.

 

(a)          In addition to its right of substitution hereunder, so long as the
Seller is permitted to do so pursuant to Section 10.01(a)(vi) of the Credit
Agreement, the Seller may, subject to the conditions set forth in Section
10.01(a)(vi) and Section 10.01(a)(viii) of the Credit Agreement and this
Section 6.02, repurchase any Credit Risk Loan, Defaulted Loan or Excess
Concentration Loan and Related Property at the Repurchase Price, provided that
no such repurchase shall occur unless each of the following conditions is
satisfied as of the date thereof:

 

(i)          the Repurchase and Substitution Limits applicable to any such
repurchase are satisfied;

 

(ii)         the Acquisition and Disposition Standards are adhered to;

 

(iii)        the Seller shall deposit in the Collection Account the Repurchase
Price with respect to such Collateral Obligation and Related Property as of the
date of such repurchase.

 

(b)          Promptly upon request of the Seller to do so, the Buyer (or the
Collateral Manager on its behalf) shall determine each component of the
Repurchase Price and shall notify the Seller of each thereof and of the
Repurchase Price with respect thereto should the Seller elect to exercise its
repurchase option. No later than ten (10) Business Days after receipt of such
information, the Seller may, at its option, by written notice to the Buyer, the
Collateral Manager, the Collateral Agent and the Facility Agent, elect to
exercise its right to repurchase such Collateral Obligation and Related Property
and, on such date or within five (5) Business Days thereafter, repurchase such
Collateral Obligation and Related Property. Failure by the Seller to exercise
such option to repurchase any Collateral Obligation and Related Property at any
time shall not affect the ability of the Seller to exercise such right at a
later date with respect to such Collateral Obligation and Related Property
provided the Repurchase Price is redetermined at such later time.

 

(c)          Contemporaneously with the receipt of the Repurchase Price, the
Buyer shall sell, transfer, assign, set over and otherwise convey to the Seller,
without recourse, all the right, title and interest of the Buyer in and to any
Collateral Obligation and Related Property repurchased by the Seller pursuant to
Section 6.02(a), and the Buyer shall cause the Collateral Agent to release the
Lien of the Credit Agreement thereon.

 

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ARTICLE VII

INDEMNIFICATION BY THE SELLER

 

Section 7.01         Indemnification.

 

The Seller agrees to indemnify, defend and hold harmless the Buyer, its
officers, directors, employees, personnel and agents (any one of which is an
“Indemnified Party”) from and against any and all claims, losses, penalties,
fines, forfeitures, judgments, reasonable legal fees and related costs and any
other reasonable costs, fees and expenses that such Person may sustain as a
result of the Seller’s fraud or the failure of the Seller to perform its duties
in compliance in all material respects with the terms of this Agreement, except
to the extent arising from gross negligence, willful misconduct or fraud by the
Person claiming indemnification, provided that the Seller shall not be liable
for any consequential (including loss of profit), indirect, special or punitive
damages hereunder. Any Person seeking indemnification hereunder shall promptly
notify the Seller if such Person receives a complaint, claim, compulsory process
or other notice of any loss, claim, damage or liability giving rise to a claim
of indemnification hereunder but failure to provide such notice shall not
relieve the Seller of its indemnification obligations hereunder unless and to
the extent the Seller is deprived of material substantive or procedural rights
or defenses as a result thereof. The Seller shall assume (with the consent of
the Indemnified Party, such consent not to be unreasonably withheld) 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. The parties agree that the provisions of this
Section 7.01 shall not be interpreted to provide recourse to the Seller against
loss by reason of the bankruptcy, insolvency or lack of creditworthiness of an
Obligor with respect to a Collateral Obligation. The Seller shall have no
liability for making indemnification hereunder to the extent any such
indemnification constitutes recourse for uncollectible or uncollected Collateral
Obligations.

 

Section 7.02         Liabilities to Obligors.

 

Except with respect to the funding commitment assumed by the Buyer with respect
to any Delayed Drawdown Collateral Loan or Revolving Collateral Loan, no
obligation or liability to any Obligor under any of the Collateral Obligations
is intended to be assumed by the Buyer, the Facility Agent or any of the other
the Secured Parties under or as a result of this Agreement and the transactions
contemplated hereby.

 

Section 7.03         Operation of Indemnities.

 

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

 

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ARTICLE VIII

MISCELLANEOUS

 

Section 8.01         Amendments and Waivers.

 

Except as provided in this Section 8.01, no amendment, waiver or other
modification of any provision of this Agreement shall be effective unless signed
by the Buyer and Seller, consented to in writing by the Facility Agent and
Rating Confirmation having been satisfied, other than an amendment to this
Agreement to incorporate by reference and/or amend a Loan List on the related
Purchase Date.

 

Section 8.02         Notices, Etc.

 

All notices and other communications provided for hereunder shall, unless
otherwise stated herein, be in writing and mailed, e-mailed, transmitted or
delivered, as to each party hereto, at its address set forth under its name on
the signature pages hereof or at such other address as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall be effective, upon receipt, or in the case of (a) notice by
mail, five (5) days after being deposited in the United States mail, first class
postage prepaid, (b) notice by e-mail or by facsimile mail, when electronic
confirmation or verbal communication of receipt is obtained.

 

Section 8.03         Binding Effect; Benefit of Agreement.

 

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

 

Section 8.04         GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION
TO VENUE SERVICE OF PROCESS.

 

THIS AGREEMENT AND ALL MATTERS ARISING OUT OF OR RELATING IN ANY WAY WHATSOEVER
(WHETHER IN CONTRACT, TORT OR OTHERWISE) TO THE FOREGOING SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING NEW
YORK GENERAL OBLIGATIONS LAW SECTIONS 5-1401 AND 5-1402 BUT OTHERWISE WITHOUT
REGARD TO THE PRINCIPLES THEREOF GOVERNING CONFLICTS OF LAW. EACH OF THE PARTIES
HERETO HEREBY AGREES TO THE NON–EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT
LOCATED WITHIN THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO HEREBY WAIVES
ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO
THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT.

 

-23-

 

 

Each of the Buyer and the Seller agrees that service of process may be effected
by mailing a copy thereof by registered or certified mail, postage prepaid, to
the Buyer or the Seller, as applicable, at its address specified in the
signature pages to this Agreement or at such other address(es) as the Facility
Agent and the Collateral Agent shall have been notified in accordance with the
Credit Agreement. Nothing in this Section 8.04 shall affect the right of the
Facility Agent and the Collateral Agent to serve legal process in any other
manner permitted by law.

 

Section 8.05         WAIVER OF JURY TRIAL.

 

TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF
THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL
WITHOUT A JURY.

 

Section 8.06         Certain Taxes. The Seller shall pay on demand any and all
stamp, sales, excise and other taxes and fees payable or determined to be
payable to any governmental Authority in connection with the execution,
delivery, filing and recording of this Agreement and the other documents to be
delivered hereunder.

 

Section 8.07         Non-Petition.

 

(a)          The Seller hereby agrees not to institute against, or join,
cooperate with or encourage any other Person in instituting against the Buyer
any bankruptcy, reorganization, receivership, arrangement, insolvency,
moratorium or liquidation proceedings or other proceedings under federal or
state bankruptcy or similar laws until at least one year and one day, or if
longer, the applicable preference period then in effect plus one day, after the
Payment in Full Date, provided that nothing in the Section 8.07 shall preclude,
or be deemed to stop, the Seller (i) from taking any action prior to the
expiration of the aforementioned one year and one day period, or if longer the
applicable preference period then in effect plus one day, in (a) any case or
proceeding voluntarily filed or commenced by the Buyer or (b) any involuntary
insolvency proceeding filed or commenced against the Buyer by a Person other
than the Seller, or (ii) from commencing against the Buyer or any properties of
the Buyer any legal action which is not a bankruptcy, reorganization,
receivership, arrangement, insolvency, moratorium or liquidation proceeding or
other proceeding under federal or state bankruptcy or similar laws.

 

-24-

 

 

Section 8.08         Recourse Against Certain Parties.

 

(a)          No recourse under or with respect to any obligation, covenant or
agreement (including, without limitation, the payment of any fees or any other
obligations) of the Seller as contained in this Agreement, any other Facility
Document or any other agreement, instrument or document entered into by it
pursuant to or in connection with this Agreement or any other Facility Document
shall be had against any stockholder, incorporator, partner, member, manager,
authorized representative, officer, employee, personnel or director of the
Seller by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise it being expressly agreed and
understood that the agreements of the Seller contained in this Agreement, any
other Facility Document and all of the other agreements, instruments and
documents entered into by it pursuant to or in connection with this Agreement or
any other Facility Document are, in each case, solely the corporate obligations
of the Seller, and that no personal liability whatsoever shall attach to or be
incurred by any stockholder, incorporator, partner, member, manager, authorized
representative, officer, employee, personnel or director of the Seller, or any
of them, under or by reason of any of the obligations, covenants or agreements
of the Seller contained in this Agreement, any other Facility Document or in any
other such instruments, documents or agreements, or which are implied therefrom,
and that any and all personal liability of each stockholder, incorporator,
partner, member, manager, authorized representative, officer, employee,
personnel or director of the Seller, or any of them, for breaches by the Seller
of any such obligations, covenants or agreements, which liability may arise
either at common law or at equity, by statute or constitution, or otherwise, is
hereby expressly waived as a condition of and in consideration for the execution
of this Agreement. The provisions of this Section 8.08(a) shall survive the
termination of this Agreement.

 

(b)          Notwithstanding any other provision of this Agreement, the
obligations of the Buyer under this Agreement and any other Facility Document
are limited recourse obligations of the Buyer payable solely from the Collateral
and, following realization of the Collateral, and application of the proceeds
thereof in accordance with the Priority of Payments and all obligations of and
any claims by the Seller against the Buyer hereunder after any such realization
and application shall be extinguished and shall not thereafter revive. No
recourse under or with respect to any obligation, covenant or agreement
(including, without limitation, the payment of any fees or any other
obligations) of the Buyer as contained in this Agreement, any other Facility
Document or any other agreement, instrument or document entered into by it
pursuant to or in connection with this Agreement or any other Facility Document
shall be had against any stockholder, incorporator, partner, member, manager,
authorized representative, officer, employee, personnel or director of the Buyer
by the enforcement of any assessment or by any legal or equitable proceeding, by
virtue of any statute or otherwise it being expressly agreed and understood that
the agreements of the Buyer contained in this Agreement, any other Facility
Document and all of the other agreements, instruments and documents entered into
by it pursuant to or in connection with this Agreement and any other Facility
Document are, in each case, solely the limited liability company obligations of
the Buyer, and that no personal liability whatsoever shall attach to or be
incurred by any stockholder, incorporator, partner, member, manager, authorized
representative, officer, employee, personnel or director of the Buyer or any of
them, under or by reason of any of the obligations, covenants or agreements of
the Buyer contained in this Agreement, any other Facility Document or in any
other such instruments, documents or agreements, or which are implied therefrom,
and that any and all personal liability of each stockholder, incorporator,
partner, member, manager, authorized representative, officer, employee,
personnel or director of the Buyer, or any of them, for breaches by the Buyer of
any such obligations, covenants or agreements, which liability may arise either
at common law or at equity, by statute or constitution, or otherwise, is hereby
expressly waived as a condition of and in consideration for the execution of
this Agreement. The provisions of this Section 8.08(b) shall survive the
termination of this Agreement.

 

-25-

 

 

Section 8.09         Protection of Right, Title and Interest in the Collateral;
Further Action Evidencing Purchases.

 

(a)          The Seller shall cause all financing statements and continuation
statements and any other necessary documents perfecting the Buyer’s security
interest in the Collateral to be promptly recorded, registered and filed, and at
all times to be kept recorded, registered and filed, all in such manner and in
such places as may be required by law fully to preserve and protect the
perfection and priority of the security interest of the Buyer in all property
comprising the Collateral. The Seller shall deliver to the Buyer the
file–stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such
recording, registration or filing. The Seller shall cooperate fully with the
Buyer in connection with the obligations set forth above and will execute any
and all documents reasonably required to fulfill the intent of this Section
8.09(a).

 

(b)          The Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that the Buyer, the Facility Agent or the Collateral Agent, on behalf
of the Secured Parties, may reasonably request in order to perfect, protect or
more fully evidence the Purchases hereunder and the security and/or interest
granted in the Collateral.

 

(c)          If the Seller fails to perform any of its obligations hereunder,
the Buyer or the Facility Agent may (but shall not be required to) perform, or
cause performance of, such obligation; and the Buyer’s or the Facility Agent’s
costs and expenses incurred in connection therewith shall be payable by the
Seller. The Seller irrevocably authorizes the Buyer or the Facility Agent at any
time (so long as it has failed to perform its obligations hereunder) at the
Buyer’s or the Facility Agent’s sole discretion and appoints each of the Buyer
and the Facility Agent as its attorney–in–fact to act on behalf of the Seller
(i) to execute on behalf of the Seller and to file financing statements on
behalf of the Seller, as debtor, necessary or desirable in the Buyer’s and the
Facility Agent’s sole discretion to perfect and to maintain the perfection and
priority of the security interest of the Buyer (and its assignees) in the
Collateral and (ii) to file a carbon, photographic or other reproduction of this
Agreement or any financing statement with respect to the Collateral as a
financing statement in such offices as the Buyer or the Facility Agent in its
sole discretion deems necessary or desirable to perfect and to maintain the
perfection and priority of the security interests of the Buyer (and its
assignees) in the Collateral. This appointment is coupled with an interest and
is irrevocable.

 

Section 8.10         Execution in Counterparts; Severability; Integration.

 

This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts (including by facsimile), each of which
when so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement. In case any provision in
or obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby. This
Agreement and any agreements or letters (including fee letters) executed in
connection herewith contains the final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire agreement among the parties hereto with respect to
the subject matter hereof, superseding all prior oral or written understandings.

 

-26-

 

 

Section 8.11         Headings, Exhibits and Schedules.

 

The headings herein are for purposes of references only and shall not otherwise
affect the meaning or interpretation of any provision hereof. The exhibits and
schedules attached hereto and referred to herein shall constitute a part of this
Agreement and are incorporated into this Agreement for all purposes.

 

Section 8.12         Assignment.

 

Notwithstanding anything to the contrary contained herein, this Agreement may
not be assigned by the Buyer or the Seller except as permitted by this Section
8.12 or by the Credit Agreement. Simultaneously with the execution and delivery
of this Agreement, the Buyer shall assign all of its right, title and interest
herein to the Collateral Agent for the benefit of the Secured Parties, to which
assignment the Seller hereby expressly consents. Upon assignment, the Seller
agrees to perform its obligations hereunder for the benefit of the Collateral
Agent for the benefit of the Secured Parties and the Collateral Agent, in such
capacity, shall be a third party beneficiary hereof. The Collateral Agent on
behalf of the Secured Parties under and in accordance with the Credit Agreement
may enforce the provisions of this Agreement, exercise the rights of the Buyer
and enforce the obligations of the Seller hereunder without joinder of the
Buyer.

 

Section 8.13         No Waiver; Cumulative Remedies.

 

No failure to exercise and no delay in exercising, on the part of the Buyer or
the Seller, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law. Any
waiver of this Agreement shall be effective only in the specific instance and
for the specific purpose for which given.

 

[Remainder of Page Intentionally Left Blank.]

 

-27-

 

 

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.

 

  WHITEHORSE FINANCE, INC.,   as the Seller           By:       Name:    
  Title:           Address for Notices:         WhiteHorse Finance, Inc.   1450
Brickell Avenue   Miami, FL  33131   Attention:  Mr. Richard Siegel  
Tel:  (305) 379-2322   Fax:  (305) 381-4180   Email:  rsiegel@higcapital.com    
    with a copy to:         WhiteHorse Finance, Inc.   600 Fifth Avenue, 19th
Floor   New York, NY 10020   Gerhard Lombard   Tel: (212) 314-1053   Fax:  (212)
314-1016   Email: glombard@whitehorsefinance.com   WHITEHORSE FINANCE WAREHOUSE,
LLC,   as the Buyer         By: WHITEHORSE FINANCE, INC., its designated manager
          By:       Name:       Title:           Address for Notices:        
WhiteHorse Finance Warehouse, LLC   1450 Brickell Avenue   Miami, FL  33131  
Attention:  Mr. Richard Siegel   Tel:  (305) 379-2322   Fax:  (305) 381-4180  
Email:  rsiegel@higcapital.com

 

 

 

 

  with a copy to:         WhiteHorse Finance Warehouse, LLC   600 Fifth Avenue,
19th Floor   New York, NY 10020   Gerhard Lombard   Tel: (212) 314-1053  
Fax:  (212) 314-1016   Email: glombard@whitehorsefinance.com

 

-2-

 

 

Exhibit A

Form of Assignment

 

[ Date ]

 

In accordance with the Second Amended and Restated Loan Sale and Contribution
Agreement (together with all amendments and modifications from time to time
thereto, the “Agreement”), dated as of August 13, 2014, made by and between the
undersigned, WHITEHORSE FINANCE, INC., as the Seller (together with its
successors and permitted assigns, the “Seller”), and WHITEHORSE FINANCE
WAREHOUSE, LLC, as the Buyer (together with its successors and permitted
assigns, the “Buyer”), as assignee thereunder, the undersigned does hereby sell,
transfer, convey and assign, set over and otherwise convey to the Buyer, all of
the Seller’s right, title and interest in and to the following (including,
without limitation, all obligations of the lender to fund any Revolving
Collateral Loan or Delayed Drawdown Collateral Loan conveyed by the undersigned
to Buyer hereunder which obligations Buyer hereby assumes):

 

(i)          the Collateral Obligations listed on Schedule I attached hereto
(which Schedule I is hereby incorporated by reference in and shall become part
of the Loan List referred to as Schedule I in the Agreement), all payments paid
in respect thereof and all monies due, to become due or paid in respect thereof
accruing on and after the Purchase Date and all Collections and other recoveries
thereon, in each case as they arise after the Purchase Date;

 

(ii)         all Liens and Related Property with respect to the Collateral
Obligations referred to in clause (i) above;

 

(iii)        all Related Documents with respect to the Collateral Obligations
referred to in clause (i) above;

 

(iv)        all income, payments, proceeds and other benefits of any and all of
the foregoing, including but not limited to, all accounts, cash and currency,
chattel paper, electronic chattel paper, tangible chattel paper, copyrights,
copyright licenses, equipment, fixtures, general intangibles, instruments,
commercial tort claims, deposit accounts, inventory, investment property, letter
of credit rights, software, supporting obligations, accessions, proceeds and
other property consisting of, arising out of, or related to the foregoing, but
excluding any Excluded Amount with respect thereto.

 

Capitalized terms used herein have the meaning given such terms in the
Agreement.

 

This Assignment is made pursuant to and in reliance upon the representations and
warranties on the part of the undersigned contained in Article IV of the
Agreement and no others.

 

 

 

 

IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed on the date written above.

 

  WHITEHORSE FINANCE, INC.         By:     Name:     Title:  

 

A-2

 

 

Schedule I

 

Loan List

 

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