Exhibit 10.5

Execution Version

AMENDMENT NO. 3 TO SENIOR SECURED CREDIT AGREEMENT

AMENDMENT NO. 3 dated as of November 21, 2018 (this “Amendment No. 3”) among
SOLAR CAPITAL LTD., a Maryland corporation (the “Borrower”), the undersigned
Lenders constituting the Required Lenders (as defined in the Credit Agreement)
(the “Consenting Lenders”) and CITIBANK, N.A., as administrative agent for the
lenders party to the Credit Agreement referenced below (in such capacity,
together with its successors in such capacity, the “Administrative Agent”).

WHEREAS, the Borrower, the lenders party thereto and the Administrative Agent
are parties to a Senior Secured Credit Agreement dated as of June 29, 2012 (as
amended, modified and supplemented and in effect immediately prior to the
effectiveness of this Amendment No. 3, the “Credit Agreement”);

Whereas, the Borrower has requested, and each of the Consenting Lenders and the
Administrative Agent have agreed, to amend the Credit Agreement in order to
effect the changes described below;

WHEREAS, pursuant to Section 9.02(b) of the Credit Agreement, the amendments
requested by the Borrower must be contained in a written agreement signed by the
Borrower and the Required Lenders;

NOW THEREFORE, in consideration of the promises and the mutual agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the Borrower, the
Consenting Lenders and the Administrative Agent hereby agrees as follows:

Section 1. Definitions.

(a) Except as otherwise defined in this Amendment No. 3, terms defined in the
Credit Agreement (including the preamble and recitals above) are used herein as
defined therein.

(b) References in the Credit Agreement and the other Loan Documents (including
references to the Credit Agreement as amended hereby) to “this Agreement” (and
indirect references such as “hereunder”, “hereby”, “herein”, “hereof”
“thereunder”, “thereby”, “therein”, or “thereof”) shall be deemed to be
references to the Credit Agreement, as amended hereby.

Section 2. Amendments to Credit Agreement.

(a) The definition of “Applicable Margin” set forth in Section 1.01 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:

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“Applicable Margin” means, (a) with respect to any Non-Extending Lender:
(i) 1.25% per annum in the case of ABR Loans and (ii) 2.25% per annum in the
case of Eurocurrency Loans, and (b) with respect to any Extending Lender: (i) if
the Gross Borrowing Base (as of the most recently delivered Borrowing Base
Certificate) is equal to or greater than 1.85 times the Covered Debt Amount (as
of the most recently delivered Borrowing Base Certificate), (A) with respect to
any ABR Loan, 1.00% per annum, and (B) with respect to any Eurocurrency Loan,
2.00% per annum and (ii) if the Gross Borrowing Base (as of the most recently
delivered Borrowing Base Certificate) is less than 1.85 times the Covered Debt
Amount (as of the most recently delivered Borrowing Base Certificate), (A) with
respect to any ABR Loan, 1.25% per annum, and (B) with respect to any
Eurocurrency Loan, 2.25% per annum. Any change in the Applicable Margin due to a
change in the ratio of the Gross Borrowing Base to the Covered Debt Amount as
set forth in any Borrowing Base Certificate shall be effective from and
including the day immediately succeeding the date of delivery of such Borrowing
Base Certificate; provided that (x) if any Borrowing Base Certificate has not
been delivered in accordance with Section 5.01(d), then from and including the
day immediately succeeding the date on which such Borrowing Base Certificate was
required to be delivered, the Applicable Margin shall be the Applicable Margin
set forth in clause (b)(ii) above, to and including the date on which the
required Borrowing Base Certificate is delivered and (y) at any time that an
Event of Default has occurred and is continuing to but excluding the date on
which such Event of Default shall cease to be continuing, the Applicable Margin
shall be the Applicable Margin set forth in clause (b)(ii) above.

(b) Section 1.01 of the Credit Agreement is hereby amended by inserting the
following new definitions in the correct alphabetical order therein:

“Collateral Pool” means, at any time, each Portfolio Investment that has been
Delivered (as defined in the Guarantee and Security Agreement) to the Collateral
Agent and is subject to the Lien of the Guaranty and Security Agreement, and
then only for so long as such Portfolio Investment continues to be Delivered as
contemplated therein and in which the Collateral Agent has a first-priority
perfected Lien as security for the Secured Obligations (subject to any Lien
permitted by Section 6.02 hereof), provided that in the case of any Portfolio
Investment in which the Collateral Agent has a first-priority perfected security
interest pursuant to a valid Uniform Commercial Code filing (and for which no
other method of perfection with a higher priority is possible), such Portfolio
Investment may be included in the Borrowing Base so long as all remaining
actions to complete “Delivery” are satisfied in full within 7 days of such
inclusion.

 

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“Combined Debt Amount” means, as of any date, (i) the aggregate amount of the
Dollar Commitments and the Multicurrency Commitments as of such date (or, if
greater, the Revolving Credit Exposures of all Lenders as of such date) plus
(ii) the aggregate outstanding amount of Term Loans as of such date plus
(iii) the aggregate amount of outstanding Designated Indebtedness.

“EBITDA” means the consolidated net income of the applicable Person (excluding
extraordinary, unusual or non-recurring gains and extraordinary losses (to the
extent excluded in the definition of “EBITDA” (or similar defined term used for
the purposes contemplated herein) in the relevant agreement relating to the
applicable Portfolio Investment)) for the relevant period plus, without
duplication, the following to the extent deducted in calculating such
consolidated net income in the relevant agreement relating to the applicable
Portfolio Investment for such period: (i) consolidated interest charges for such
period, (ii) the provision for federal, state, local and foreign income taxes
payable for such period, (iii) depreciation and amortization expense for such
period, and (iv) such other adjustments included in the definition of “EBITDA”
(or similar defined term used for the purposes contemplated herein) in the
relevant agreement relating to the applicable Portfolio Investment, provided
that such adjustments are usual and customary and substantially comparable to
market terms for substantially similar debt of other similarly situated
borrowers at the time such relevant agreements are entered into as reasonably
determined in good faith by the Borrower.

“Gross Borrowing Base” has the meaning assigned to such term in
Section 5.13(a)(vi).

“Relevant Asset Coverage Ratio” means, as of any date, the Asset Coverage Ratio
as of the most recent Quarterly Date.

(c) Section 2.10(c) of the Credit Agreement is hereby amended by inserting the
following proviso at the end thereof:

“; provided, solely to the extent such Borrowing Base Deficiency is due to a
failure to satisfy the requirements of Section 5.13(a)(vi) as a consequence of a
change in either (x) the ratio of the Gross Borrowing Base to the Senior Debt
Amount or (y) the Relevant Asset Coverage Ratio from one quarterly period to the
next, such 30-Business Day period shall be extended to a 45-Business Day period
solely with respect to compliance with Section 5.13(a)(vi).”

(d) Section 5.13 of the Credit Agreement is hereby amended and restated as set
forth on Annex A hereto.

 

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(e) Section 6.07(b) of the Credit Agreement is hereby amended by replacing the
reference to “2.00” therein with “1.50”.

(f) Clause (e) of Article VII is hereby amended by inserting the following
proviso at the end thereof:

“; provided further, such 30-Business Day period shall be extended to a
45-Business Day period solely to the extent as provided in Section 2.10(c) in
order to cure any failure to satisfy Section 5.13(a)(vi)”

(g) The reference to the “Borrowing Base” in Sections 6.03(d)(ii)(y), 6.05(d)
and 9.02(c)(ii)(2)(B)(II) of the Credit Agreement are hereby amended to be
references to “Gross Borrowing Base”.

(h) Exhibit C to the Credit Agreement is hereby amended and restated in its
entirety as set forth on Annex B hereto.

Section 3. Representations and Warranties.

The Borrower represents and warrants to the Consenting Lenders and the
Administrative Agent, as of the date of this Amendment No. 3 and on and as of
the Amendment Effective Date (as defined below) and immediately after giving
effect to this Amendment No. 3, as follows:

(a) Authorization; Enforceability. This Amendment No. 3 has been duly
authorized, executed and delivered by the Borrower and each of this Amendment
No. 3 and the Credit Agreement, as amended by this Amendment No. 3, constitutes
a legal, valid and binding obligation of the Borrower, enforceable against the
Borrower in accordance with its terms, except as such enforceability may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar
laws of general applicability affecting the enforcement of creditors’ rights and
(ii) the application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

(b) No Conflict. Neither the execution, delivery and performance of this
Amendment No. 3 nor the transactions contemplated herein will (i) violate any
applicable law or regulation or the limited liability company operating
agreement, charter, by-laws or other organizational documents of the Borrower or
any of its Subsidiaries or any order of any Governmental Authority or
(ii) violate or result in a default in any material respect under any Loan
Document or any indenture, agreement or other instrument binding upon the
Borrower or any of its Subsidiaries or assets, or give rise to a right
thereunder to require any payment to be made by any such Person.

(c) Continued Security Interest. On the date of this Amendment No. 3 and after
giving effect to this Amendment No. 3 and the transactions contemplated herein,
the security interest created by and provided for in the Security Documents,
shall constitute a valid first and prior perfected Lien on the Collateral
(except that any

 

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such security interest in a Special Equity Interest may be subject to a Lien in
favor of a creditor of the issuer of such Special Equity Interest as
contemplated by the definition of such term in Section 1.02 of the Guarantee and
Security Agreement). The Borrower hereby acknowledges and agrees that this
Amendment No. 3 shall in no way constitute a release of the Borrower from its
obligations under the Guarantee and Security Agreement.

(d) Solvency. Immediately after the consummation of the transactions
contemplated by this Amendment No. 3, the present fair value of the assets of
the Borrower will exceed the sum of the probable liabilities and identified
contingent liabilities of the Borrower. The Borrower is solvent both before and
after giving effect to the execution, delivery and performance of this Amendment
No. 3 and the Credit Agreement (as amended by this Amendment No. 3) and the
other Loan Documents and the consummation of the transactions contemplated by
this Amendment No. 3, and is not, and after giving effect to the execution,
delivery and performance of this Amendment No. 3 and the Credit Agreement (as
amended by this Amendment No. 3) and the other Loan Documents and the
consummation of the transactions contemplated by this Amendment No. 3, will not
be (A) left with unreasonably small capital with which to carry on its business
as it is proposed to be conducted and (B) unable to pay its debts (contingent or
otherwise) as they mature.

(e) Representations in Loan Documents. The representations and warranties of the
Borrower set forth in Article III of the Credit Agreement (as amended hereby)
and in the other Loan Documents are true and correct in all material respects
(except to the extent any such representation or warranty is itself qualified by
materiality or reference to a Material Adverse Effect, in which case it is true
and correct in all respects, subject to such qualification) on and as of the
date of this Amendment No. 3 and on the Amendment Effective Date (as defined
below).

(f) No Default. No Default has occurred and is continuing.

Section 4. Conditions Precedent.

This Amendment No. 3 shall become effective as of the date (the “Amendment
Effective Date”) when, and only when, each of the following conditions precedent
shall have been satisfied:

(a) The Administrative Agent shall have received one or more counterparts of
this Amendment No. 3 executed by the Borrower and each of the Consenting
Lenders;

(b) The Borrower shall have paid such reasonable and documented fees and
expenses of Chadbourne & Parke LLP, special New York counsel to the
Administrative Agent, in connection with the ongoing administration of the
Credit Agreement, the negotiation, preparation, execution and delivery of this
Amendment No. 3 and the other Loan Documents (to the extent that statements for
such fees and expenses have been delivered to the Borrower).

 

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Section 5. Miscellaneous.

(a) Except as herein provided, the Credit Agreement shall remain unchanged. The
Credit Agreement, as specifically amended by this Amendment No. 3, and each of
the other Loan Documents are and shall continue to be in full force and effect
and are hereby in all respects ratified and confirmed.

(b) This Amendment No. 3 may be executed in any number of counterparts, all of
which taken together shall constitute one and the same amendatory instrument and
any of the parties hereto may execute this Amendment No. 3 by signing any such
counterpart. Delivery of an executed counterpart of a signature page of this
Amendment No. 3 by telecopy or other electronic means shall be effective as
delivery of a manually executed counterpart of this Amendment No. 3.

(c) This Amendment No. 3 shall be construed in accordance with and governed by
the law of the State of New York. The provisions of Sections 9.09(b), 9.09(c) ,
9.09(d) and Section 9.10 of the Credit Agreement are hereby incorporated herein,
mutatis mutandis, as if a part hereof.

(d) This Amendment No. 3 is a Loan Document.

(e) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of any Lender or the Administrative Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.

[Remainder of page intentionally left blank; signatures follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be
duly executed and delivered as of the day and year first above written.

 

SOLAR CAPITAL LTD. By:      

Name:

Title:

[Signature Page to Amendment No. 3]

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CITIBANK, N.A., as Administrative Agent and as a

Lender

By:      

Name:

Title:

[Signature Page to Amendment No. 3]

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[LENDER SIGNATURE PAGES TO BE INSERTED]

[Signature Page to Amendment No. 3]

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Annex A

SECTION 5.13. Calculation of Borrowing Base.

(a) For purposes of this Agreement, the “Borrowing Base” shall be determined, as
at any date of determination, as the sum of the Advance Rates of the Value of
each Portfolio Investment (excluding any cash held by the Administrative Agent
pursuant to Section 2.05(k)), provided that:

(i) if, as of such date, the Relevant Asset Coverage Ratio is (A) greater than
or equal to 2.00:1:00, the Advance Rate applicable to that portion of the
aggregate Value of the Portfolio Investments (other than Cash and Cash
Equivalents) of all issuers in a consolidated group of corporations or other
entities in accordance with GAAP exceeding 6% of the aggregate Value of all
Portfolio Investments in the Collateral Pool, shall be 50% of the otherwise
applicable Advance Rate; (B) less than 2.00:1:00 and greater than or equal to
1.75:1.00, the Advance Rate applicable to that portion of the aggregate Value of
the Portfolio Investments (other than Cash and Cash Equivalents) of all issuers
in a consolidated group of corporations or other entities in accordance with
GAAP exceeding 5% of the aggregate Value of all Portfolio Investments in the
Collateral Pool, shall be 50% of the otherwise applicable Advance Rate or
(C) less than 1.75:1:00, the Advance Rate applicable to that portion of the
aggregate Value of the Portfolio Investments (other than Cash and Cash
Equivalents) of all issuers in a consolidated group of corporations or other
entities in accordance with GAAP exceeding 4% of the aggregate Value of all
Portfolio Investments in the Collateral Pool, shall be 50% of the otherwise
applicable Advance Rate;

(ii) if, as of such date, the Relevant Asset Coverage Ratio is (A) greater than
or equal to 2.00:1:00, the Advance Rate applicable to that portion of the
aggregate Value of the Portfolio Investments (other than Cash and Cash
Equivalents) of all issuers in a consolidated group of corporations or other
entities in accordance with GAAP exceeding 12% of the aggregate Value of all
Portfolio Investments in the Collateral Pool shall be 0%; (B) less than
2.00:1:00 and greater than or equal to 1.75:1.00, the Advance Rate applicable to
that portion of the aggregate Value of the Portfolio Investments (other than
Cash and Cash Equivalents) of all issuers in a consolidated group of
corporations or other entities in accordance with GAAP exceeding 10% of the
aggregate Value of all Portfolio Investments in the Collateral Pool shall be 0%
or (C) less than 1.75:1:00, the Advance Rate applicable to that portion of the
aggregate Value of the Portfolio Investments (other than Cash and Cash
Equivalents) of all issuers in a consolidated group of corporations or other
entities in accordance with GAAP exceeding 8% of the aggregate Value of all
Portfolio Investments in the Collateral Pool shall be 0%;

(iii) if, as of such date, the Relevant Asset Coverage Ratio is (A) greater than
or equal to 2.00:1:00, the Advance Rate applicable to that portion of the
aggregate Value of the Portfolio Investments (other than Cash and Cash
Equivalents) in any single Industry Classification Group that exceeds 25% of the
aggregate Value of all Portfolio Investments in the Collateral Pool shall be 0%,
(B) less than 2.00:1:00 and greater than or

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equal to 1.75:1.00, the Advance Rate applicable to that portion of the aggregate
Value of the Portfolio Investments (other than Cash and Cash Equivalents) in any
single Industry Classification Group that exceeds 20% of the aggregate Value of
all Portfolio Investments in the Collateral Pool shall be 0%, provided that,
with respect to Portfolio Investments in the Collateral Pool in a single
Industry Classification Group from time to time designated by the Borrower to
the Administrative Agent, such 20% figure shall be increased to 25%, or (C) less
than 1.75:1:00, the Advance Rate applicable to that portion of the aggregate
Value of the Portfolio Investments (other than Cash and Cash Equivalents) in any
single Industry Classification Group that exceeds 20% of the aggregate Value of
all Portfolio Investments in the Collateral Pool shall be 0%;

(iv) if, as of such date, the Relevant Asset Coverage Ratio is (A) greater than
or equal to 2.00:1:00, the Advance Rate applicable to that portion of the
aggregate Value of the Borrower’s investments in Non-Core Investments shall be
0% to the extent necessary so that no more than 20% of the Borrowing Base is
attributable to such investments, (B) less than 2.00:1:00 and greater than or
equal to 1.75:1.00, the Advance Rate applicable to that portion of the aggregate
Value of the Borrower’s investments in Non-Core Investments shall be 0% to the
extent necessary so that no more than 10% of the Borrowing Base is attributable
to such investments or (C) less than 1.75:1:00, the Advance Rate applicable to
that portion of the aggregate Value of the Borrower’s investments in Non-Core
Investments shall be 0% to the extent necessary so that no more than 5% of the
Borrowing Base is attributable to such investments;

(v) if, as of such date, the Relevant Asset Coverage Ratio is (A) less than
2.00:1:00 and greater than or equal to 1.75:1.00, the Advance Rate applicable to
that portion of the aggregate Value of the Borrower’s investments in Junior
Investments and Non-Core Investments shall be 0% to the extent necessary so that
no more than 30% of the Borrowing Base is attributable to such investments or
(B) less than 1.75:1:00, the Advance Rate applicable to that portion of the
aggregate Value of the Borrower’s investments in Junior Investments and Non-Core
Investments shall be 0% to the extent necessary so that no more than 20% of the
Borrowing Base is attributable to such investments;

(vi) if, as of such date, (A)(1) the Borrowing Base (without giving effect to
any adjustment required pursuant to this paragraph (a)(vi), the “Gross Borrowing
Base”) is less than 1.5 times the Senior Debt Amount and (2) the Relevant Asset
Coverage Ratio is less than 2.00:1:00 and greater than or equal to 1.75:1.00,
then the Borrowing Base shall be reduced to the extent necessary such that the
contribution of Senior Investments to the Borrowing Base may not be less than
60% of the Covered Debt Amount, (B)(1) the Gross Borrowing Base is less than 1.5
times the Senior Debt Amount and (2) the Relevant Asset Coverage Ratio is less
than 1.75:1.00, then the Borrowing Base shall be reduced to the extent necessary
such that the contribution of Senior Investments to the Borrowing Base may not
be less than 75% of the Covered Debt Amount, (C)(1) the Gross Borrowing Base is
greater than or equal to 1.5 times the Senior Debt Amount and (2) the Relevant
Asset Coverage Ratio is less than 2.00:1.00 and greater than or equal to
1.75:1.00, then the Borrowing Base shall be reduced to the extent necessary such
that the

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contribution of Senior Investments to the Borrowing Base may not be less than
40% of the Covered Debt Amount or (D)(1) the Gross Borrowing Base is greater
than or equal to 1.5 times the Senior Debt Amount and (2) the Relevant Asset
Coverage Ratio is less than 1.75:1.00, then the Borrowing Base shall be reduced
to the extent necessary such that the contribution of Senior Investments to the
Borrowing Base may not be less than 60% of the Covered Debt Amount;

(vii) if, as of such date, the Relevant Asset Coverage Ratio is (i) greater than
or equal to 2.00:1:00, the Advance Rate applicable to that portion of the
aggregate Value of the Portfolio Investments (other than Cash and Cash
Equivalents) attributable to Venture Loans exceeding 30% of the aggregate Value
of all Portfolio Investments in the Collateral Pool, shall be 0%; (ii) less than
2.00:1:00 and greater than or equal to 1.75:1.00, the Advance Rate applicable to
that portion of the aggregate Value of the Portfolio Investments (other than
Cash and Cash Equivalents) attributable to Venture Loans exceeding 25% of the
aggregate Value of all Portfolio Investments in the Collateral Pool, shall be 0%
or (iii) less than 1.75:1:00, the Advance Rate applicable to that portion of the
aggregate Value of the Portfolio Investments (other than Cash and Cash
Equivalents) attributable to Venture Loans exceeding 20% of the aggregate Value
of all Portfolio Investments in the Collateral Pool, shall be 0%;

(viii) the Advance Rate applicable to that portion of the aggregate Value of the
Portfolio Investments (other than Common Equity) in which the Borrower has a
controlling influence as determined under the Investment Company Act that
exceeds 5% of Shareholders’ Equity of the Borrower (which for purposes of this
calculation shall exclude the aggregate amount of investments in, and advances
to, Financing Subsidiaries) shall be the Advance Rate applicable to Performing
Common Equity (to the extent such Portfolio Investments are Performing) or 0%;
and

(ix) the Advance Rate applicable to that portion of the Value of the Portfolio
Investments attributable to any investment in a Financing Subsidiary shall be
0%.

(b) No Portfolio Investment may be included in the Borrowing Base until such
time as such Portfolio Investment has been Delivered (as defined in the
Guarantee and Security Agreement) to the Collateral Agent, and then only for so
long as such Portfolio Investment continues to be Delivered as contemplated
therein; provided that in the case of any Portfolio Investment in which the
Collateral Agent has a first-priority perfected security interest pursuant to a
valid Uniform Commercial Code filing (and for which no other method of
perfection with a higher priority is possible), such Portfolio Investment may be
included in the Borrowing Base so long as all remaining actions to complete
“Delivery” are satisfied within 7 days of such inclusion. Voting stock of any
Controlled Foreign Corporation in excess of 66% of the issued and outstanding
voting stock of such Controlled Foreign Corporation shall not be included as a
Portfolio Investment for purposes of calculating the Borrowing Base.

For the avoidance of doubt, to avoid double-counting of excess concentrations,
any Advance Rate reductions set forth under this Section 5.13 shall be without
duplication of any other such Advance Rate reductions. For purposes of the
categorization of each Portfolio

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Investment in accordance with this Section 5.13, the amount of any “first lien
debt” or EBITDA with respect to any Portfolio Investment shall be determined
using the most recent quarterly valuation determined in accordance with the
valuation procedures set forth in Section 5.12(b)(ii)(B).

(c) As used herein, the following terms have the following meanings:

“Advance Rate” means, as to any Portfolio Investment as of any date and subject
to adjustment as provided in Section 5.13(a)(i) through (x) (other than clause
(vi) and as provided below based on the Relevant Asset Coverage Ratio as of such
date, the following percentages with respect to such Portfolio Investment:

 

Portfolio Investment1

   Relevant Asset
Coverage Ratio >
2.00:1:00     2.00:1:00 >
Relevant Asset
Coverage Ratio >
1.75:1.00     1.75:1:00 >
Relevant Asset
Coverage Ratio >
1.50:1.00      Quoted     Unquoted     Quoted     Unquoted     Quoted    
Unquoted  

Cash, Cash Equivalents and Short-Term U.S. Government Securities

     100 %      n.a.       100 %      n.a.       100 %      n.a.  

Long-Term U.S. Government Securities

     95 %      n.a.       95 %      n.a.       95 %      n.a.  

Performing First Lien Bank Loans

     85 %      75 %      85 %      75 %      85 %      75 % 

Performing First Lien Venture Loans

     85 %      75 %      80 %      70 %      75 %      65 % 

Performing First Lien Unitranche Bank Loans

     85 %      75 %      80 %      70 %      75 %      65 % 

Performing First Lien Last Out Bank Loans

     80 %      70 %      75 %      65 %      70 %      60 % 

Performing Second Lien Bank Loans

     75 %      65 %      70 %      60 %      65 %      55 % 

Performing Cash Pay High Yield Securities

     70 %      60 %      65 %      55 %      60 %      50 % 

 

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The above categories are intended to be indicative of the traditional investment
types in a fully capitalized issuer. All determinations of whether a particular
portfolio investment belongs to one category or another shall be made by the
Borrower on a consistent basis with the foregoing.

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Portfolio Investment1

   Relevant Asset
Coverage Ratio >
2.00:1:00     2.00:1:00 >
Relevant Asset
Coverage Ratio >
1.75:1.00     1.75:1:00 >
Relevant Asset
Coverage Ratio >
1.50:1.00      Quoted     Unquoted     Quoted     Unquoted     Quoted    
Unquoted  

Performing Cash Pay Mezzanine Investments

     65 %      55 %      60 %      50 %      55 %      45 % 

Performing Non-Cash Pay High Yield Securities

     60 %      50 %      55 %      45 %      50 %      40 % 

Performing Non-Cash Pay Mezzanine Investments

     55 %      45 %      50 %      40 %      45 %      35 % 

Performing Preferred Equity

     55 %      45 %      50 %      40 %      45 %      35 % 

Performing Common Equity

     30 %      20 %      25 %      20 %      20 %      20 % 

Non-Performing First Lien Bank Loans

     45 %      45 %      40 %      40 %      35 %      35 % 

Non-Performing First Lien Unitranche Bank Loans

     45 %      45 %      40 %      40 %      35 %      35 % 

Non-Performing Venture Loans

     40 %      35 %      35 %      30 %      30 %      25 % 

Non-Performing First Lien Last Out Bank Loans

     40 %      35 %      35 %      30 %      30 %      25 % 

Non-Performing Second Lien Bank Loans

     40 %      30 %      35 %      25 %      30 %      20 % 

Non-Performing High Yield Securities

     30 %      30 %      25 %      25 %      20 %      20 % 

Non-Performing Mezzanine Investments

     30 %      25 %      25 %      20 %      20 %      20 % 

Non-Performing Preferred Equity

     0 %      0 %      0 %      0 %      0 %      0 % 

Non-Performing Common Equity

     0 %      0 %      0 %      0 %      0 %      0 % 

“Bank Loans” means debt obligations (including, without limitation, term loans,
revolving loans, debtor-in-possession financings, the funded and unfunded
portion of revolving credit lines and letter of credit facilities and other
similar loans and investments including interim loans and senior subordinated
loans) which are generally under a loan or credit facility.

--------------------------------------------------------------------------------

“Capital Stock” of any Person means any and all shares of corporate stock
(however designated) of, and any and all other equity interests and
participations representing ownership interests (including membership interests
and limited liability company interests) in, such Person; provided, however,
that trust certificates, preference shares, unrated subordinated notes,
combination notes and other residual or equity interests of a Person whose
primary business is investing in and/or purchasing loans or other financial
assets shall not be considered “Capital Stock” to the extent that such Person
finances the purchase of or investment in such loans or financial assets through
the issuance of debt securities.

“Cash” has the meaning assigned to such term in Section 1.01 of this Agreement.

“Cash Equivalents” has the meaning assigned to such term in Section 1.01 of this
Agreement.

“Cash Pay Bank Loans” means First Lien Bank Loans, First Lien Unitranche Bank
Loans, First Lien Last Out Bank Loans and Second Lien Bank Loans as to which, at
the time of determination, all of the interest on which is payable not less
frequently than quarterly and for which not less than 2/3rds of the interest
(including accretions and “pay-in-kind” interest) for the current monthly or
quarterly period (as applicable) is payable in cash.

“Cash Pay Venture Loan” means First Lien Venture Loans as to which, at the time
of determination, all of the interest on which is payable not less frequently
than quarterly and for which not less than 2/3rds of the interest (including
accretions and “pay-in-kind” interest) for the current monthly or quarterly
period (as applicable) is payable in cash.

“First Lien Bank Loan” means a Bank Loan that is entitled to the benefit of a
first lien and first priority perfected security interest (subject to any
Permitted Prior Working Capital Lien and other customary encumbrances) on a
substantial portion of the assets of the respective borrower and guarantors
obligated in respect thereof, provided that any First Lien Bank Loan that is
also a First Lien Unitranche Bank Loan shall be treated for purposes of
determining the applicable Advance Rate as a First Lien Unitranche Bank Loan;
provided, further, that any First Lien Bank Loan that is also a First Lien Last
Out Bank Loan shall be treated for purposes of determining the applicable
Advance Rate as a First Lien Last Out Bank Loan.

“First Lien Last Out Bank Loan” means a Bank Loan that is a First Lien Bank
Loan, a portion of which is, in effect, subject to debt subordination and
superpriority rights of other lenders following an event of default (such
portion, a “last out” portion) provided, that the aggregate principal amount of
the “last out” portion of such Bank Loan is at least 50% of the aggregate
principal amount of any “first out” portion of such Bank Loan, provided, further
that the underlying obligor with respect to such Bank Loan shall have a ratio of
first lien debt (including the “first out” portion of such Bank Loan, but
excluding the “last out” portion of such Bank Loan) to EBITDA

--------------------------------------------------------------------------------

that does not exceed 3.25:1.00 and a ratio of aggregate first lien debt
(including both the “first out” portion and the “last out” portion of such Bank
Loan) to EBITDA that does not exceed 5.25:1.00. An Obligor’s investment in the
“last out” portion of a First Lien Last Out Bank Loan shall be treated as a
First Lien Last Out Bank Loan for purposes of determining the applicable Advance
Rate for such Portfolio Investment under this Agreement. For the avoidance of
doubt, an Obligor’s investment in the portion of such Bank Loan that is not the
last out portion (the “first out” portion) shall be treated as a First Lien Bank
Loan for purposes of determining the applicable Advance Rate for such Portfolio
Investment under this Agreement and an Obligor’s investment in any “last out”
portion of a First Lien Bank Loan that does not meet the foregoing criteria
shall be treated as a Second Lien Bank Loan.

“First Lien Unitranche Bank Loan” means a First Lien Bank Loan with a ratio of
first lien debt to EBITDA that exceeds 5.25:1.00, and where the underlying
borrower does not also have a Second Lien Bank Loan outstanding.

“First Lien Venture Loan” means a Venture Loan that is entitled to the benefit
of a first lien and first priority perfected security interest (subject to any
Permitted Prior Working Capital Lien and other customary encumbrances) on a
substantial portion of the assets of the respective borrower and guarantors
obligated in respect thereof.

“High Yield Securities” means debt Securities, in each case (a) issued by public
or private issuers, (b) issued pursuant to an effective registration statement
or pursuant to Rule 144A under the Securities Act (or any successor provision
thereunder) and (c) that are not Cash Equivalents, Mezzanine Investments or Bank
Loans.

“Junior Investments” means, collectively, Performing Cash Pay High Yield
Securities and Performing Cash Pay Mezzanine Investments.

“Long-Term U.S. Government Securities” means U.S. Government Securities maturing
more than three months from the applicable date of determination.

“Mezzanine Investments” means debt Securities (including convertible debt
Securities (other than the “in-the-money” equity component thereof)) (a) issued
by public or private issuers, (b) issued without registration under the
Securities Act, (c) not issued pursuant to Rule 144A under the Securities Act
(or any successor provision thereunder), (d) that are not Cash Equivalents and
(e) contractually subordinated in right of payment to other debt of the same
issuer.

“Non-Core Investments” means, collectively, Portfolio Investments in common
equity, warrants, Non-Performing Bank Loans, Non-Performing High Yield
Securities, Non-Performing Mezzanine Investments, Performing Non-Cash Pay High
Yield Securities, Performing Preferred Equity, Performing Non-Cash Pay Mezzanine
Investments and Performing Common Equity.

“Non-Performing Bank Loans” means, collectively, Non-Performing First Lien Bank
Loans, Non-Performing First Lien Last Out Bank Loans, Non-Performing First Lien
Unitranche Loans, Non-Performing Second Lien Bank Loans and Non-Performing
Venture Loans.

--------------------------------------------------------------------------------

“Non-Performing Common Equity” means Capital Stock (other than Preferred Stock)
and warrants of an issuer having any debt outstanding that is non-Performing.

“Non-Performing First Lien Bank Loans” means First Lien Bank Loans other than
Performing First Lien Bank Loans.

“Non-Performing Venture Loans” means Venture Loans other than Performing First
Lien Venture Loans.

“Non-Performing First Lien Last Out Bank Loans” means First Lien Last Out Bank
Loans other than Performing First Lien Bank Loans.

“Non-Performing First Lien Unitranche Bank Loans” means First Lien Unitranche
Bank Loans other than Performing First Lien Bank Unitranche Loans.

“Non-Performing High Yield Securities” means High Yield Securities other than
Performing High Yield Securities.

“Non-Performing Mezzanine Investments” means Mezzanine Investments other than
Performing Mezzanine Investments.

“Non-Performing Preferred Equity” means Preferred Stock other than Performing
Preferred Equity.

“Non-Performing Second Lien Bank Loans” means Second Lien Bank Loans other than
Performing Second Lien Bank Loans.

“Performing” means (a) with respect to any Portfolio Investment that is debt,
the issuer of such Portfolio Investment is not in default of any payment
obligations in respect thereof, after the expiration of any applicable grace
period and (b) with respect to any Portfolio Investment that is Preferred Stock,
the issuer of such Portfolio Investment has not failed to meet any scheduled
redemption obligations or to pay its latest declared cash dividend, after the
expiration of any applicable grace period.

“Performing Cash Pay High Yield Securities” means High Yield Securities (a) as
to which, at the time of determination, not less than 2/3rds of the interest
(including accretions and “pay-in-kind” interest) for the current monthly,
quarterly, semi-annual or annual period (as applicable) is payable in cash and
(b) which are Performing.

“Performing Cash Pay Mezzanine Investments” means Mezzanine Investments (a) as
to which, at the time of determination, not less than 2/3rds of the interest
(including accretions and “pay-in-kind” interest) for the current monthly,
quarterly, semi-annual or annual period (as applicable) is payable in cash and
(b) which are Performing.

--------------------------------------------------------------------------------

“Performing Common Equity” means Capital Stock (other than Preferred Stock) and
warrants of an issuer all of whose outstanding debt is Performing.

“Performing First Lien Bank Loans” means First Lien Bank Loans which are Cash
Pay Bank Loans and are Performing.

“Performing First Lien Last Out Bank Loans” means First Lien Last Out Bank Loans
which are Cash Pay Bank Loans and are Performing.

“Performing First Lien Unitranche Bank Loans” means First Lien Unitranche Bank
Loans which are Cash Pay Bank Loans and are Performing.

“Performing First Lien Venture Loans” means First Lien Venture Loans which are
Cash Pay Venture Loans and are Performing.

“Performing Non-Cash Pay High Yield Securities” means Performing High Yield
Securities other than Performing Cash Pay High Yield Securities.

“Performing Non-Cash Pay Mezzanine Investments” means Performing Mezzanine
Investments other than Performing Cash Pay Mezzanine Investments.

“Performing Preferred Equity” means Preferred Stock of an issuer that has not
failed to meet any scheduled redemption obligations or to pay its latest
declared cash dividend, after the expiration of any applicable grace period.

“Performing Second Lien Bank Loans” means Second Lien Bank Loans which are Cash
Pay Bank Loans and are Performing.

“Permitted Prior Working Capital Lien” means, with respect to any borrower under
a Bank Loan, a security interest to secure a revolving facility for such
borrower and any of its subsidiaries; provided that (i) such Bank Loan has a
second priority lien on the collateral that is subject to the first priority
lien of such revolving facility (or a pari passu lien on such collateral where
the revolving facility has a super-priority right of payment), (ii) such
revolving facility is not secured by any other assets (other than a pari passu
lien or a second priority lien, subject to the first priority lien of the Bank
Loan) and does not benefit from any standstill rights or other agreements (other
than customary rights) with respect to any other assets and (iii) the maximum
outstanding amount of such revolving facility is not greater than the lower of
(a) 1.0x EBITDA of the borrower under such Bank Loan, and (b) 20% of the
outstanding amount of the associated First Lien Bank Loan.

“Preferred Stock” as applied to the Capital Stock of any Person, means Capital
Stock of such Person of any class or classes (however designated) that ranks
prior, as to the payment of dividends or as to the distribution of assets upon
any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to any shares (or other interests) of other Capital Stock of such
Person, and shall include, without limitation, cumulative preferred,
non-cumulative preferred, participating preferred and convertible preferred
Capital Stock.

--------------------------------------------------------------------------------

“Second Lien Bank Loan” means a Bank Loan that is entitled to the benefit of a
second lien and second priority perfected security interest (subject to
customary encumbrances) on a substantial portion of the assets of the respective
borrower and guarantors obligated in respect thereof.

“Securities” means common and preferred stock, units and participations, member
interests in limited liability companies, partnership interests in partnerships,
notes, bonds, debentures, trust receipts and other obligations, instruments or
evidences of indebtedness, including debt instruments of public and private
issuers and tax-exempt securities (including warrants, rights, put and call
options and other options relating thereto, representing rights, or any
combination thereof) and other property or interests commonly regarded as
securities or any form of interest or participation therein, but not including
Bank Loans.

“Senior Debt Amount” means, on any date, the greater of (i) the Covered Debt
Amount and (ii) the Combined Debt Amount.

“Senior Investments” means Cash, Cash Equivalents, Short-Term U.S. Government
Securities, Long-Term U.S. Government Securities, Performing First Lien Bank
Loans, Performing First Lien Last Out Bank Loans, Performing First Lien
Unitranche Loans and Performing First Lien Venture Loans.

“Short-Term U.S. Government Securities” means U.S. Government Securities
maturing within three months of the applicable date of determination.

“U.S. Government Securities” has the meaning assigned to such term in
Section 1.01 of this Agreement.

“Value” means, with respect to any Portfolio Investment, the most recent value
as determined pursuant to Section 5.12(b)(ii).

“Venture Loan” means a Portfolio Investment that is a “venture” loan and whose
principal underlying collateral consists of an all asset lien (including
accounts, inventory and equipment, where applicable) (subject to any “permitted
liens” as defined in the applicable loan agreement for such Portfolio Investment
or such comparable definition or provision if “permitted liens” is not defined
therein) but with at least a negative pledge on the intellectual property, of an
underlying obligor that is in the startup, R&D or early-stage commercial phase
and whose principal business is in the bio-pharmaceutical, medical device,
healthcare IT or Healthcare Services industries.

--------------------------------------------------------------------------------

Annex B

[Form of Borrowing Base Certificate]

Monthly accounting period ended                 , 20    _

Reference is made to the Senior Secured Credit Agreement, dated as of June 29,
2012 (as modified and supplemented and in effect from time to time, the “Credit
Agreement”), by and among Solar Capital Ltd. (the “Company”), the Lenders party
thereto, Citibank, N.A., as Administrative Agent and the other parties party
thereto. Terms defined in the Credit Agreement are used herein as defined
therein. The contents of this certificate are confidential and subject to
Section 9.13 of the Credit Agreement.

Pursuant to Section 5.01(d) of the Credit Agreement, the undersigned, the
                of the Company, and as such a Financial Officer of the Company,
hereby certifies on behalf of the Company that attached hereto as Annex 1 is
(a) a complete and correct list as at the end of the monthly accounting period
ended                 , 20     of all Portfolio Investments included in the
Collateral, indicating, in the case of each such Portfolio Investment, (i) the
classification thereof for purposes of Section 5.13 of the Credit Agreement,
(ii) the Value thereof as determined in accordance with Section 5.12 of the
Credit Agreement, (iii) whether or not such Portfolio Investment has been
Delivered (as defined in the Guarantee and Security Agreement), (iv) the Advance
Rates (as adjusted pursuant to Section 5.13 of the Credit Agreement) applicable
to each Portfolio Investment and (b) a true and correct calculation of the
Borrowing Base as at the end of such monthly accounting determined in accordance
with the requirements of the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly
executed as of the                 day of                 , 20    .

 

 

Title: [Financial Officer]

Borrowing Base Certificate

--------------------------------------------------------------------------------

Borrowing Base Calculations

 

Calculation of Available Borrowing Base or Deficiency:

  

(1)    Total Borrowing Base:

   $                

(2)    Calculation of Covered Debt Amount:

   $    

(a)   Revolving Credit Exposure

   $    

(b)   Principal amount of Term Loans outstanding

   $    

(c)   The aggregate amount of Other Covered Indebtedness

   $    

(d)     from the date that is nine months prior to the maturity date of any
Unsecured Longer-Term Indebtedness that matures less than six months after the
Maturity Date, the outstanding amount of any such Unsecured Longer-Term
Indebtedness

   $    

(e)   LC Exposures fully cash collateralized

   $    

(f)   Sum of (2)(a) plus (2)(b) plus (2)(c) plus (2)(d) minus (2)(e)

   $    

(3)    Available Borrowing Base (Borrowing Base Deficiency): (1) minus (2)(f)

   $    

Gross Borrowing Base: (1) without giving effect to any adjustment required
pursuant to Section 5.13(a)(vi)

   $    

Borrowing Base Certificate

--------------------------------------------------------------------------------

Annex I

Portfolio Investments

 

Portfolio
Investment

  Classification     Value     Delivered
[Yes/No]     Advance Rate                                                       
                                   

Borrowing Base Certificate

--------------------------------------------------------------------------------

Exhibit A to Annex 1

Section 5.13(a)(i)

If, as of such date, the Relevant Asset Coverage Ratio is greater than or equal
to 2.00:1:00, adjustments to the Advance Rate applicable to that portion of the
aggregate Value of the Portfolio Investments (other than Cash and Cash
Equivalents) of all issuers in a consolidated group of corporations or other
entities in accordance with GAAP exceeding 6% of the aggregate Value of all
Portfolio Investments in the Collateral Pool:

50% of the otherwise applicable Advance Rate

If, as of such date, the Relevant Asset Coverage Ratio is less than 2.00:1:00
and greater than or equal to 1.75:1.00, adjustments to the Advance Rate
applicable to that portion of the aggregate Value of the Portfolio Investments
(other than Cash and Cash Equivalents) of all issuers in a consolidated group of
corporations or other entities in accordance with GAAP exceeding 5% of the
aggregate Value of all Portfolio Investments in the Collateral Pool:

50% of the otherwise applicable Advance Rate

If, as of such date, the Relevant Asset Coverage Ratio is less than 1.75:1:00,
adjustments to the Advance Rate applicable to that portion of the aggregate
Value of the Portfolio Investments (other than Cash and Cash Equivalents) of all
issuers in a consolidated group of corporations or other entities in accordance
with GAAP exceeding 4% of the aggregate Value of all Portfolio Investments in
the Collateral Pool:

50% of the otherwise applicable Advance Rate

Section 5.13(a)(ii)

If, as of such date, the Relevant Asset Coverage Ratio is greater than or equal
to 2.00:1:00, adjustments to the Advance Rate applicable to that portion of the
aggregate Value of the Portfolio Investments (other than Cash and Cash
Equivalents) of all issuers in a consolidated group of corporations or other
entities in accordance with GAAP exceeding 12% of the aggregate Value of all
Portfolio Investments in the Collateral Pool:

0% of the otherwise applicable Advance Rate

If, as of such date, the Relevant Asset Coverage Ratio is less than 2.00:1:00
and greater than or equal to 1.75:1.00, adjustments to the Advance Rate
applicable to that portion of the aggregate Value of the Portfolio Investments
(other than Cash and Cash Equivalents) of all issuers in a consolidated group of
corporations or other entities in accordance with GAAP exceeding 10% of the
aggregate Value of all Portfolio Investments in the Collateral Pool:

0% of the otherwise applicable Advance Rate

If, as of such date, the Relevant Asset Coverage Ratio is less than 1.75:1:00,
adjustments to the Advance Rate applicable to that portion of the aggregate
Value of the Portfolio Investments

Borrowing Base Certificate

--------------------------------------------------------------------------------

(other than Cash and Cash Equivalents) of all issuers in a consolidated group of
corporations or other entities in accordance with GAAP exceeding 8% of the
aggregate Value of all Portfolio Investments in the Collateral Pool:

0% of the otherwise applicable Advance Rate

Section 5.13(a)(iii)

If, as of such date, the Relevant Asset Coverage Ratio is greater than or equal
to 2.00:1:00, adjustments to the Advance Rate applicable to that portion of the
aggregate Value of the Portfolio Investments (other than Cash and Cash
Equivalents) in any single Industry Classification Group that exceeds 25% of the
aggregate Value of all Portfolio Investments in the Collateral Pool:

0% of the otherwise applicable Advance Rate

If, as of such date, the Relevant Asset Coverage Ratio is less than 2.00:1:00
and greater than or equal to 1.75:1.00, adjustments to the Advance Rate
applicable to that portion of the aggregate Value of the Portfolio Investments
(other than Cash and Cash Equivalents) in any single Industry Classification
Group that exceeds 20% (or, with respect to Portfolio Investments in the
Collateral Pool in a single Industry Classification Group from time to time
designated by the Borrower to the Administrative Agent, such 20% figure shall be
increased to 25%) of the aggregate Value of all Portfolio Investments in the
Collateral Pool:

0% of the otherwise applicable Advance Rate

If, as of such date, the Relevant Asset Coverage Ratio is less than 1.75:1:00,
adjustments to the Advance Rate applicable to that portion of the aggregate
Value of the Portfolio Investments (other than Cash and Cash Equivalents) in any
single Industry Classification Group that exceeds 20% of the aggregate Value of
all Portfolio Investments in the Collateral Pool:

0% of the otherwise applicable Advance Rate

Section 5.13(a)(iv)

If, as of such date, the Relevant Asset Coverage Ratio is greater than or equal
to 2.00:1:00, adjustments to the Advance Rate applicable to that portion of the
aggregate Value of the Borrower’s investments in Non-Core Investments:

0% of the otherwise applicable Advance Rate to the extent necessary so that no
more than 20% of the Borrowing Base is attributable to such investments

If, as of such date, the Relevant Asset Coverage Ratio is less than 2.00:1:00
and greater than or equal to 1.75:1.00, adjustments to the Advance Rate
applicable to that portion of the aggregate Value of the Borrower’s investments
in Non-Core Investments:

0% of the otherwise applicable Advance Rate to the extent necessary so that no
more than 10% of the Borrowing Base is attributable to such investments

Borrowing Base Certificate

--------------------------------------------------------------------------------

If, as of such date, the Relevant Asset Coverage Ratio is less than 1.75:1:00,
adjustments to the Advance Rate applicable to that portion of the aggregate
Value of the Borrower’s investments in Non-Core Investments:

0% of the otherwise applicable Advance Rate to the extent necessary so that no
more than 5% of the Borrowing Base is attributable to such investments

Section 5.13(a)(v)

If, as of such date, the Relevant Asset Coverage Ratio is less than 2.00:1:00
and greater than or equal to 1.75:1.00, adjustments to the Advance Rate
applicable to that portion of the aggregate Value of the Borrower’s investments
in Junior Investments and Non-Core Investments:

0% of the otherwise applicable Advance Rate to the extent necessary so that no
more than 30% of the Borrowing Base is attributable to such investments

If, as of such date, the Relevant Asset Coverage Ratio is less than 1.75:1:00,
adjustments to the Advance Rate applicable to that portion of the aggregate
Value of the Borrower’s investments in Junior Investments and Non-Core
Investments

0% of the otherwise applicable Advance Rate to the extent necessary so that no
more than 20% of the Borrowing Base is attributable to such investments

Section 5.13(a)(vi)

If, as of such date, (1) the Gross Borrowing Base, is less than 1.5 times the
Senior Debt Amount and (2) the Relevant Asset Coverage Ratio is less than
2.00:1:00 and greater than or equal to 1.75:1.00:

Reduction of the Borrowing Base to the extent necessary such that the
contribution of Senior Investments to the Borrowing Base may not be less than
60% of the Covered Debt Amount

If, as of such date, (1) the Gross Borrowing Base is less than 1.5 times the
Senior Debt Amount and (2) the Relevant Asset Coverage Ratio is less than
1.75:1.00:

Reduction of the Borrowing Base to the extent necessary such that the
contribution of Senior Investments to the Borrowing Base may not be less than
75% of the Covered Debt Amount,

If, as of such date, (1) the Gross Borrowing Base is greater than or equal to
1.5 times the Senior Debt Amount and (2) the Relevant Asset Coverage Ratio is
less than 2.00:1.00 and greater than or equal to 1.75:1.00:

Reduction of the Borrowing Base to the extent necessary such that the
contribution of Senior Investments to the Borrowing Base may not be less than
40% of the Covered Debt Amount

Borrowing Base Certificate

--------------------------------------------------------------------------------

If, as of such date, (1) the Gross Borrowing Base is greater than or equal to
1.5 times the Senior Debt Amount and (2) the Relevant Asset Coverage Ratio is
less than 1.75:1.00:

Reduction of the Borrowing Base to the extent necessary such that the
contribution of Senior Investments to the Borrowing Base may not be less than
60% of the Covered Debt Amount;

Section 5.13(a)(vii)

If, as of such date, the Relevant Asset Coverage Ratio is greater than or equal
to 2.00:1:00, adjustments to the Advance Rate applicable to that portion of the
aggregate Value of the Portfolio Investments (other than Cash and Cash
Equivalents) attributable to Venture Loans exceeding 30% of the aggregate Value
of all Portfolio Investments in the Collateral Pool:

0% of the otherwise applicable Advance Rate

If, as of such date, the Relevant Asset Coverage Ratio is less than 2.00:1:00
and greater than or equal to 1.75:1.00, adjustments to the Advance Rate
applicable to that portion of the aggregate Value of the Portfolio Investments
(other than Cash and Cash Equivalents) attributable to Venture Loans exceeding
25% of the aggregate Value of all Portfolio Investments in the Collateral Pool:

0% of the otherwise applicable Advance Rate

If, as of such date, the Relevant Asset Coverage Ratio is less than 1.75:1:00,
adjustments to the Advance Rate applicable to that portion of the aggregate
Value of the Portfolio Investments (other than Cash and Cash Equivalents)
attributable to Venture Loans exceeding 20% of the aggregate Value of all
Portfolio Investments in the Collateral Pool:

0% of the otherwise applicable Advance Rate

Section 5.13(a)(viii)

Adjustments to Advance Rate applicable to that portion of the aggregate Value of
the Portfolio Investments (other than Common Equity) in which the Borrower has a
controlling influence as determined under the Investment Company Act that
exceeds 5% of Shareholders’ Equity of the Borrower (which for purposes of this
calculation shall exclude the aggregate amount of investments in, and advances
to, Financing Subsidiaries):

Advance Rate applicable to Performing Common Equity (to the extent such
Portfolio Investments are Performing) or 0% of the Advance Rate otherwise
applicable.

Section 5.13(a)(ix)

Adjustments to Advance Rate applicable to that portion of the Value of the
Portfolio Investments attributable to any investment in a Financing Subsidiary:

0% of the Advance Rate otherwise applicable

Borrowing Base Certificate