Exhibit 10.9

 

EXECUTION VERSION

 

Revolving Credit and Security Agreement

 

among

 

MC Income Plus Financing SPV LLC,
as Borrower,

 

Monroe Capital Income Plus Corporation,
as Collateral Manager

 

the Lenders from time to time parties hereto,

 

KeyBank National Association,

as Administrative Agent

 

KeyBank National Association,
as Lead Arranger

 

U.S. Bank National Association,
as Collateral Agent

 

U.S. Bank National Association,
as Collateral Administrator

 

and

 

U.S. Bank National Association,
as Document Custodian

 

Dated as of March 12, 2019

 

 

 

 

Table of Contents

 

Section Heading Page         Article I Definitions; Rules of Construction;
Computations 1       Section 1.01. Definitions 1 Section 1.02. Rules of
Construction 49 Section 1.03. Computation of Time Periods 49 Section 1.04.
Collateral Value Calculation Procedures 50 Section 1.05. Calculation of
Borrowing Base 51         Article II Advances 52         Section 2.01. Revolving
Credit Facility 52 Section 2.02. Making of the Advances 52 Section 2.03.
Evidence of Indebtedness 52 Section 2.04. Payment of Principal and Interest 53
Section 2.05. Prepayment of Advances 55 Section 2.06. Changes of Commitments 55
Section 2.07. Maximum Lawful Rate 56 Section 2.08. Several Obligations 56
Section 2.09. Increased Costs 56 Section 2.10. Compensation; Breakage Payments
58 Section 2.11. Illegality; Inability to Determine Rates 58 Section 2.12.
Rescission or Return of Payment 59 Section 2.13. Past Due Interest 59 Section
2.14. Payments Generally 59 Section 2.15. Increase in Facility Amount 60 Section
2.16. Defaulting Lenders 60 Section 2.17. Tranche Period Elections 62 Section
2.18. Successor LIBOR Rate 63         Article III Conditions Precedent 64      
  Section 3.01. Conditions Precedent to Initial Advances 64 Section 3.02.
Conditions Precedent to Each Borrowing 67         Article IV Representations and
Warranties 68         Section 4.01. Representations and Warranties of the
Borrower 68 Section 4.02. Representations and Warranties of the Collateral
Manager 73         Article V Covenants 75         Section 5.01. Affirmative
Covenants of the Borrower 75 Section 5.02. Negative Covenants of the Borrower 81
Section 5.03. Affirmative Covenants of the Collateral Manager 85

 

-i-

 

 

Section 5.04. Negative Covenants of the Collateral Manager 88 Section 5.05.
Certain Undertakings Relating to Separateness 89         Article VI Events of
Default 91         Section 6.01. Events of Default 91 Section 6.02. Remedies
upon an Event of Default 94 Section 6.03. Collateral Manager Termination Events
95 Section 6.04. Remedies upon a Collateral Manager Termination Event 97        
Article VII Pledge of Collateral; Rights of the Collateral Agent 98        
Section 7.01. Grant of Security 98 Section 7.02. Release of Security Interest 99
Section 7.03. Rights and Remedies 99 Section 7.04. Remedies Cumulative 100
Section 7.05. Related Documents 100 Section 7.06. Borrower Remains Liable 100
Section 7.07. Protection of Collateral 101         Article VIII Accounts,
Accountings and Releases 102         Section 8.01. Collection of Money 102
Section 8.02. Collection Account 102 Section 8.03. Transaction Accounts 103
Section 8.04. Reserved 104 Section 8.05. Reinvestment of Funds in Covered
Accounts; Reports by Collateral Agent 104 Section 8.06. Accountings 105 Section
8.07. Release of Collateral 105 Section 8.08. [Reserved] 106 Section 8.09.
Covered Account Details 106 Section 8.10. Delivery of Report, Notices, Etc. 106
        Article IX Application of Monies 107         Section 9.01. Disbursements
of Monies from Payment Account 107         Article X Sale of Collateral Loans;
Purchase of Additional Loans 110         Section 10.01. Sales of Collateral
Loans 110 Section 10.02. Purchase of Additional Loans 111 Section 10.03.
Substitution and Transfer of Loans 112 Section 10.04. Conditions Applicable to
All Sale, Substitution and Purchase Transactions 113 Section 10.05. Additional
Equity Contributions 114

 

-ii-

 

 

Article XI Administration and Servicing of Contracts 114         Section 11.01.
Designation of the Collateral Manager 114 Section 11.02. Duties of the
Collateral Manager 115 Section 11.03. Liability of the Collateral Manager;
Indemnification of the Collateral Manager Persons 117 Section 11.04.
Authorization of the Collateral Manager 118 Section 11.05. Realization Upon
Defaulted Loans 118 Section 11.06. Collateral Management Compensation 118
Section 11.07. Payment of Certain Expenses by Collateral Manager 118 Section
11.08. The Collateral Manager Not to Resign; Assignment 119 Section 11.09.
Appointment of Successor Collateral Manager 119         Article XII The Agents
122         Section 12.01. Authorization and Action 122 Section 12.02.
Delegation of Duties 123 Section 12.03. Agent’s Reliance, Etc. 124 Section
12.04. Indemnification 126 Section 12.05. Successor Agents 126 Section 12.06.
Administrative Agent’s Capacity as a Lender 127 Section 12.07. Compensation of
Collateral Agent 127         Article XIII Reserved 127       Article XIV The
Document Custodian 127         Section 14.01. Designation of Document Custodian
127 Section 14.02. Duties of Document Custodian 128 Section 14.03. Merger or
Consolidation 132 Section 14.04. Document Custodian Compensation and
Indemnification 132 Section 14.05. Document Custodian Resignation and Removal
132 Section 14.06. Limitation on Liability 133 Section 14.07. Delivery of
Related Documents 135 Section 14.08. Release of Related Documents 136 Section
14.09. Return of Related Documents 136 Section 14.10. Access to Certain
Documentation and Information Regarding the Collateral; Audits 137 Section
14.11. Representations and Warranties of the Document Custodian 137 Section
14.12. Covenants of the Document Custodian 138 Section 14.13. Transmission of
Related Documents 139 Section 14.14. Document Custodian as Agent of Collateral
Agent 139         Article XV The Collateral Administrator 140         Section
15.01. Powers and Duties of Collateral Administrator 140 Section 15.02.
Compensation. 141

 

-iii-

 

 

Section 15.03. Limitation of Responsibility of the Collateral Administrator;
Indemnification 142 Section 15.04. Termination of Collateral Administrator 144
Section 15.05. Representations and Warranties of the Collateral Administrator
145 Section 15.06. Successors and Assigns 146 Section 15.07. Joint Venture 146  
      Article  XVI Miscellaneous 147         Section 16.01. No Waiver;
Modifications in Writing 147 Section 16.02. Notices, Etc. 147 Section 16.03.
Taxes 148 Section 16.04. Costs and Expenses; Indemnification 151 Section 16.05.
Execution in Counterparts 153 Section 16.06. Assignability 153 Section 16.07.
Governing Law 156 Section 16.08. Severability of Provisions 156 Section 16.09.
Confidentiality 157 Section 16.10. Merger 157 Section 16.11. Survival 157
Section 16.12. Submission to Jurisdiction; Waivers; Service of Process; Etc. 157
Section 16.13. Waiver of Jury Trial 158 Section 16.14. [Reserved] 159 Section
16.15. Waiver of Setoff 159 Section 16.16. PATRIOT Act Notice 159 Section 16.17.
Legal Holidays 159 Section 16.18. Non-Petition 159 Section 16.19. No Fiduciary
Duty 159 Section 16.20. Sharing of Payments by Lenders 160 Section 16.21.
Acknowledgment and Consent to Bail-In and EEA Financial Institutions 160

 

-iv-

 

 

SCHEDULES

 

Schedule 1 Initial Commitments and Percentages Schedule 2 Forms of Monthly
Report Schedule 3 Initial Collateral Loans Schedule 4 Moody’s Industry
Classifications Schedule 5 Notice Information Schedule 6 Covered Account Details
Schedule 7 Risk Factor Rating

 

EXHIBITS

 

Exhibit A Form of Notice of Borrowing (with attached form of Borrowing Base
Calculation) Exhibit B Form of Notice of Prepayment Exhibit C Form of Assignment
and Acceptance Exhibit D Form of Account Control Agreement Exhibit E-1 Form of
Release of Related Documents Exhibit E-2 Form of Certificate for Release of
Related Documents Exhibit F Form of Facility Amount Increase Request Exhibit G
Collateral Loans Certification Exhibit H Form of Closing Certificate Exhibit I
Form of U.S. Tax Compliance Certificate Exhibit J Form of Compliance Certificate
Exhibit K Form of Tranche Period Election Request Exhibit L Form of Custodial
Certificate

 

-v-

 

 

Revolving Credit and Security Agreement

 

Revolving Credit and Security Agreement dated as of March 12, 2019 among MC
Income Plus Financing SPV LLC, a Delaware limited liability company, as borrower
(together with its permitted successors and assigns, the “Borrower”); Monroe
Capital Income Plus Corporation, a Maryland corporation, as the collateral
manager (together with its permitted successors and assigns, the “Collateral
Manager”); the Lenders from time to time party hereto; KeyBank National
Association, as administrative agent for the Secured Parties (as hereinafter
defined) (in such capacity, together with its successors and assigns, the
“Administrative Agent”); U.S. Bank National Association, as collateral agent for
the Secured Parties (as hereinafter defined) (in such capacity, together with
its successors and assigns, the “Collateral Agent”); U.S. Bank National
Association, as document custodian (in such capacity, together with its
successors and assigns, the “Document Custodian”); and U.S. Bank National
Association, as collateral administrator (in such capacity, together with its
successors and assigns, the “Collateral Administrator”).

 

Recitals:

 

The Borrower desires that the Lenders make advances on a revolving basis to the
Borrower on the terms and subject to the conditions set forth in this Agreement;
and

 

Each Lender is willing to make such advances to the Borrower on the terms and
subject to the conditions set forth in this Agreement.

 

In consideration of the premises and of the mutual covenants herein contained,
the parties hereto agree as follows:

 

Article I

Definitions; Rules of Construction; Computations

 

Section 1.01.         Definitions. As used in this Agreement, the following
terms shall have the meanings indicated:

 

“ABL Collateral” means working capital (including cash, accounts receivable and
inventory) and/or fixed assets of the related Obligor.

 

“ABL Loan” means (i) a lending facility pursuant to which the loans thereunder
are secured by a perfected, first priority security interest in ABL Collateral,
(ii) is an Eligible First Lien Obligation and (iii) is designated as an ABL Loan
by the Borrower at the time of the initial acquisition thereof by the Borrower.

 

“Account Control Agreement” means an agreement in substantially the form of
Exhibit D.

 

 

 

 

“Adjusted Eurodollar Rate” means, for any Tranche Period, an interest rate per
annum equal to a fraction, expressed as a percentage, (i) the numerator of which
is equal to the LIBOR Rate for such Tranche Period and (ii) the denominator of
which is equal to 100% minus the Eurodollar Reserve Percentage for such Tranche
Period.

 

“Administration Agreement” means that certain Administration Agreement, dated as
of December 5, 2018, by and between the BDC and the Administrator, as the same
may be amended, restated, supplemented or otherwise modified from time to time.

 

“Administrative Agent” has the meaning assigned to such term in the introduction
to this Agreement.

 

“Administrative Agent Fee Letter” means that certain fee letter, dated as of the
date hereof, by and among the Administrative Agent and the Borrower.

 

“Administrative Expense Cap” means, for any rolling 12-month period, an amount
equal to $150,000.

 

“Administrative Expenses” means the fees and expenses (including indemnities)
and other amounts of the Borrower due or accrued with respect to any Payment
Date and payable, on a pro rata basis, to:

 

(a)          agents (other than the Collateral Manager) and counsel of the
Borrower for fees and expenses related to the Collateral and the Facility
Documents;

 

(b)          any rating agency for fees and expenses in connection with the
rating of (or provision of credit estimates in respect of) any Collateral Loans;
and

 

(c)          any other Person (other than the Lenders) in respect of any other
fees or expenses permitted under or incurred pursuant to the Facility Documents
and other amounts payable by the Borrower under any Facility Document.

 

provided that, for the avoidance of doubt, amounts that are expressly payable to
any Person under the Priority of Payments in respect of an amount that is stated
to be payable as an amount other than as Administrative Expenses (including,
without limitation, interest and principal, other amounts owing in respect of
the Advances and the Commitments, fees due to the Administrative Agent pursuant
to the Administrative Agent Fee Letter and the Collateral Management Fees) and
expenses paid on the Closing Date shall not constitute Administrative Expenses.

 

“Administrator” means Monroe Capital Management Advisors, LLC, a Delaware
limited liability company, together with its successors and assigns.

 

“Advance Rate” means, (i) at any time that there are nine (9) or fewer
individual Obligors with respect to all Collateral Loans, 50.0%; (ii) at any
time that there are more than nine (9) but fewer than fifteen (15) individual
Obligors with respect to all Collateral Loans, 55.0%; and (iii) at any time that
there fifteen (15) or more individual Obligors with respect to all Collateral
Loans, 60.0%.

 

 -2- 

 

 

“Advances” has the meaning assigned to such term in Section 2.01.

 

“Advisor” means Monroe Capital BDC Advisors, LLC, a Delaware limited liability
company, together with its successors and assigns.

 

“Advisory Agreement” means that certain Investment Advisory and Management
Agreement, dated as of December 5, 2018, by and between the BDC and the Advisor,
as the same may be amended, restated, supplemented or otherwise modified from
time to time.

 

“Affected Person” means (i) each Lender and each of its Affiliates and (ii) any
assignee or participant of any Lender.

 

“Affiliate” means, in respect of a referenced Person, another Person
Controlling, Controlled by or under common Control with such referenced Person;
provided that a Person shall not be deemed to be an “Affiliate” of an Obligor
solely because it is under the common ownership or control of the same financial
sponsor or affiliate thereof as such Obligor (except if any such Person or
Obligor provides collateral under, guarantees or otherwise supports the
obligations of the other such Person or Obligor).

 

“Agents” means, collectively, the Administrative Agent and the Collateral Agent.

 

“Agent’s Account” KeyBank National Association, ABA #021300077, Account to be
credited: Key Equipment Finance Inc., Account number: 329953020917, Attn: SFS
Operations, Ref: MC Income Plus Financing SPV LLC.

 

“Aggregate Collateral Balance” means, at any time, the sum of: (a) the Aggregate
Principal Balance of all Collateral Loans (other than Discount Loans and
Ineligible Loans) that are Eligible Loans, plus (b) the aggregate purchase price
of all Discount Loans (other than Ineligible Loans); provided that the portion
of the Aggregate Collateral Balance assigned to any ABL Loan shall be reduced by
an amount necessary to cause the Approved ABL Advance Rate thereon to equal the
rate opposite the type of ABL Collateral applicable to such ABL Loan, as set
forth in the definition of “Approved ABL Advance Rate.”

 

“Aggregate Principal Balance” means, when used with respect to all or a portion
of the Collateral Loans, the sum of the Principal Balances of all or of such
portion of such Collateral Loans.

 

“Agreement” means this Revolving Credit and Security Agreement.

 

“Alternative Rate” means an interest rate per annum equal to (i) if a Eurodollar
Disruption Event has occurred and is continuing or an Event of Default has
occurred and is continuing (and has not otherwise been waived by the Lenders
pursuant to the terms hereof), the Base Rate, or (ii) in all other cases, the
Adjusted Eurodollar Rate.

 

 -3- 

 

 

“Anti-Corruption Laws” means, with respect to any Person, all laws, rules, and
regulations of any jurisdiction applicable to such Person or its subsidiaries
from time to time concerning or relating to bribery or corruption.

 

“Applicable Law” means any Law of any Governmental Authority, including all
Federal and state banking or securities laws, to which the Person in question is
subject or by which it or any of its assets or properties are bound.

 

“Applicable Margin” means (a) during the Reinvestment Period, 3.000% per annum;
(b) after the Reinvestment Period and during the Amortization Period, 3.250% per
annum; and (c) with respect to Obligations which accrue interest at the Past Due
Rate pursuant to Section 2.13 or upon the occurrence and during the continuation
of an Event of Default, the Applicable Margin determined in accordance with the
foregoing clauses (a) and (b) plus 2.00% per annum.

 

“Appraisal” means with respect to any Loan, an appraisal of such Loan that is
conducted by an Approved Appraisal Firm, which may be in the form of an update
or reaffirmation by an Approved Appraisal Firm of an Appraisal of such Loan
previously performed by an Approved Appraisal Firm.

 

“Approved ABL Advance Rates” means the rates across from the applicable ABL
Collateral indicated in the following table:

 

 

ABL Collateral

 

Approved ABL Advance Rate

 

working capital

 

90%

 

fixed assets

 

60%

  

“Approved Appraisal Firm” means (a) an independent appraisal firm recognized as
being experienced in conducting valuations of secured loans or (b) an
independent financial adviser of recognized standing retained by the Borrower,
the Collateral Manager or the agent or lenders under any Loan, in each case as
consented to by the Administrative Agent.

 

“Assignment and Acceptance” means an Assignment and Acceptance in substantially
the form of Exhibit C, entered into by a Lender, an assignee, the Administrative
Agent and, if applicable, the Borrower.

 

“Bail-In Action” means the exercise of any Write-down and Conversion Powers.

 

“Bail-In Legislation” means in relation to an EEA Member Country which has
implemented, or which at any time implements, Article 55 of Directive 2014/59/EU
establishing a framework for the recovery and resolution of credit institutions
and investment firms , the relevant implementing law or regulation as described
in the EU Bail-In Legislation Schedule from time to time.

 

 -4- 

 

 

“Bankruptcy Code” means the United States Bankruptcy Code, as amended.

 

“Base Rate” means, on any date, a fluctuating interest rate per annum equal to
the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50%, and
(c) other than as a result of a Eurodollar Disruption Event, the three-month
LIBOR Rate plus 1.0%. The Base Rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to any customer of any Agent
or any Lender. Interest calculated pursuant to this definition will be
determined based on a year of 360 days and actual days elapsed.

 

“BDC” means Monroe Capital Income Plus Corporation, a Maryland corporation.

 

“Beneficial Owner” means, with respect to the Borrower, (a) each individual, if
any, who, directly or indirectly, owns 25% or more of the equity interests in
the Borrower and (b) a single individual with significant responsibility to
control, manage, or direct the Borrower.

 

“Bifurcated First Lien Term Loan” means a Collateral Loan that (a) constitutes
an Eligible First Lien Obligation and (b) that is a stand alone term loan that:

 

(i) is delivered in connection with a related Cross-Defaulted ABL Loan;

 

(ii) is secured by a valid first priority perfected security interest or Lien
in, to or on substantially all of the Obligor’s assets other than the ABL
Collateral that is secured under the related Cross-Defaulted ABL Loan, subject
to Purchase Money Liens and customary Liens for taxes or regulatory charges not
then due and payable and other permitted Liens under the Related Documents;
provided that such permitted Liens do not directly secure indebtedness for
borrowed money;

 

(iii) may be cross secured to the Cross-Defaulted ABL Loan by a valid second
priority perfected security interest or Lien in, to or on substantially all of
the Obligor’s ABL Collateral subject to customary Liens for taxes or regulatory
charges not then due and payable and other permitted Liens under the Related
Documents; provided that such permitted Liens do not directly secure
indebtedness for borrowed money;

 

(iv) is cross defaulted to the related Cross-Defaulted ABL Loan and is subject
to an intercreditor agreement or another agreement amongst the lenders to such
Obligor (including, without limitation, the lenders under the related
Cross-Defaulted ABL Loan) containing customary intercreditor provisions that are
reasonably satisfactory to the Borrower and the Collateral Manager (in
accordance with the Collateral Management Standard); and

 

(v) with respect to which as of any date of determination the related
Cross-Defaulted ABL Loan has a ratio of funded debt under such related
Cross-Defaulted ABL Loan to TTM EBITDA of less than or equal to 1.5x.

 

“Borrower” has the meaning assigned to such term in the introduction to this
Agreement.

 

 -5- 

 

 

“Borrower LLC Agreement” means the Limited Liability Company Agreement of the
Borrower, dated as of March 12, 2019.

 

“Borrowing” has the meaning assigned to such term in Section 2.01.

 

“Borrowing Base” means, at any time, (a) the Aggregate Collateral Balance minus
(b) (i) during the Reinvestment Period, any Excess Concentration Amounts, and
(ii) after the Reinvestment Period, any Excess Concentration Amounts in
existence on the last day of the Reinvestment Period; provided that with respect
to this clause (ii), any Excess Concentration Amounts attributable to a
Collateral Loan shall not exceed the Principal Balance of such Collateral Loan;
provided further, that with respect to this clause (ii), Excess Concentration
Amounts attributable to more than one Collateral Loan shall be attributed to
each Collateral Loan on a proportional basis according to the portions of such
Collateral Loans used to calculate such Excess Concentration Amounts on the last
day of the Reinvestment Period.

 

“Borrowing Base Calculation Statement” means a statement in substantially the
form attached as Schedule I to the form of Notice of Borrowing attached hereto
as Exhibit A, as such form of Borrowing Base Calculation Statement may be
modified by the Administrative Agent from time to time to the extent such form
does not, in the good faith opinion of the Administrative Agent, accurately
reflect the calculation of the Borrowing Base required hereunder.

 

“Borrowing Date” means the date of a Borrowing.

 

“Business Day” means any day other than a Saturday or Sunday, provided that
(i) days on which banks are authorized or required to close in New York,
New York, Boston, Massachusetts, Chicago, Illinois, Minneapolis, Minnesota or
Florence, South Carolina, and (ii) if the applicable Business Day relates to the
advance or continuation of, or conversion into, or payment of an Advance bearing
interest at the LIBOR Rate or the determination of the LIBOR Rate, days on which
banks are dealing in Dollar deposits in the interbank eurodollar market in
London, England are closed, shall not constitute Business Days.

 

“Cash” means Dollars immediately available on the day in question.

 

“Cause” means the indictment for or conviction of any crime of dishonesty or
moral turpitude or any act or omission that would constitute gross negligence,
bad faith or willful misconduct.

 

“Certificate of Beneficial Ownership” means, with respect to the Borrower, a
certificate certifying, among other things, the Beneficial Owner of the
Borrower, delivered on the Closing Date, as the same may be updated or amended
from time to time in accordance with this Agreement.

 

“Certificated Security” has the meaning specified in Section 8-102(a)(4) of the
UCC.

 

“Change of Control” means, at any time, the occurrence of one of the following
events: (1) the BDC fails to own 100% of the equity interests of the Borrower
free and clear of all Liens other than Permitted Liens at any time; or (2) the
Collateral Manager fails to have the power to direct the management and policies
of the Borrower.

 

 -6- 

 

 

“Clearing Agency” means an organization registered as a “clearing agency”
pursuant to Section 17A of the Exchange Act.

 

“Clearing Corporation” means each entity included within the meaning of
“clearing corporation” under Section 8-102(a)(5) of the UCC.

 

“Clearing Corporation Security” means securities which are in the custody of or
maintained on the books of a Clearing Corporation or a nominee subject to the
control of a Clearing Corporation and, if they are Certificated Securities in
registered form, properly endorsed to or registered in the name of the Clearing
Corporation or such nominee.

 

“Closing Date” means March 12, 2019.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or
any successor statute.

 

“Collateral” has the meaning assigned to such term in Section 7.01(a).

 

“Collateral Administrator” means U.S. Bank National Association, solely in its
capacity as collateral administrator hereunder, and any successor thereto.

 

“Collateral Agent” means U.S. Bank National Association, solely in its capacity
as collateral agent hereunder, and any successor thereto.

 

“Collateral Agent Account” means the deposit account established by the
Collateral Agent with its corporate trust department in the name of the Borrower
for the deposit of Advances and proceeds of the Collateral for further credit to
the Collection Account.

 

“Collateral Agent, Document Custodian, Collateral Administrator and Intermediary
Fee Letter” means the fee letter, dated as of the date hereof, among the
Borrower, U.S. Bank National Association, as Collateral Agent, Collateral
Administrator, Intermediary and Document Custodian, the Administrative Agent,
and the Collateral Manager setting forth the fees payable by the Borrower to,
among others, the Collateral Agent, the Document Custodian and the Collateral
Administrator in connection with the transactions contemplated by this Agreement
and other Facility Documents.

 

“Collateral Agent Parties” has the meaning assigned to such term in Section
16.04(b).

 

“Collateral Database” has the meaning assigned to such term in Section 15.01(b).

 

“Collateral Default Ratio” means, on any date of determination, the ratio
(expressed as a percentage) equal to (a) the sum of the Principal Balances of
all Collateral Loans that became Defaulted Loans during the previous month net
of any recoveries actually received by the Borrower in respect of such Defaulted
Loans, divided by (b) the average Aggregate Principal Balance of all Collateral
Loans during the previous month.

 

 -7- 

 

 

“Collateral Interest Amount” means, as of any Determination Date, without
duplication, the sum of (A) the aggregate amount of “Interest Proceeds”
calculated solely pursuant to clause (a) of the definition of “Interest
Proceeds” that have been received according to the payment schedule(s) under the
Related Documents during the Collection Period ending on such Determination Date
plus (B) all interest and other income that is accrued but unpaid during such
Collection Period on the Collateral Loans (excluding any such amounts with
respect to Ineligible Loans).

 

“Collateral Loan” means a Loan that is owned by the Borrower and included as
part of the Collateral.

 

“Collateral Management Fee” means the monthly fee, accruing from the Closing
Date, payable in arrears on each Payment Date for the related Interest Accrual
Period, in an amount equal to 0.35% per annum (calculated on the basis of a
360 day year and the actual number of days elapsed) of the Monthly Asset Amount.

 

“Collateral Management Standard” means, with respect to any Loan included in the
Collateral, to service and administer such Collateral Loan in accordance with
the Related Documents and all customary and usual servicing practices (a) which
are consistent with the higher of: (i) the customary and usual servicing
practices that a prudent loan investor or lender would use in servicing loans
like the Collateral Loans for its own account, and (ii) the same care, skill,
prudence and diligence with which the Collateral Manager services and
administers loans for its own account or for the account of others; (b) to the
extent not inconsistent with clause (a), with a view to maximize the value of
the Collateral Loans; and (c) without regard to: (i) any relationship that the
Collateral Manager or any Affiliate of the Collateral Manager may have with any
Obligor or any Affiliate of any Obligor, (ii) the Collateral Manager’s
obligations to incur servicing and administrative expenses with respect to a
Collateral Loan, (iii) the Collateral Manager’s right to receive compensation
for its services hereunder or with respect to any particular transaction,
(iv) the ownership by the Collateral Manager or any Affiliate thereof of any
retained interest or one or more loans of the same class as any Collateral
Loans, (v) the ownership, servicing or management for others by the Collateral
Manager of any other loans or property by the Collateral Manager, or (vi) any
relationship that the Collateral Manager or any Affiliate of the Collateral
Manager may have with any holder of other loans of the Obligor with respect to
such Collateral Loans.

 

“Collateral Manager” has the meaning assigned to such term in the introduction
of this Agreement.

 

 -8- 

 

 

“Collateral Manager Breach” has the meaning assigned to such term in Section
11.03(a).

 

“Collateral Manager Expense Cap” means, for any rolling twelve-month period, an
amount equal to $300,000.

 

“Collateral Manager Termination Event” means the occurrence of any of the
events, acts or circumstances set forth in Section 6.03.

 

“Collateral Sale Notice Date” has the meaning assigned to such term in Section
6.02.

 

“Collection Account” means the account established pursuant to Section 8.02,
which includes the Principal Collection Subaccount and the Interest Collection
Subaccount.

 

“Collection Period” means, with respect to any Payment Date, the period
commencing immediately following the prior Collection Period (or on the Closing
Date, in the case of the Collection Period relating to the first Payment Date)
and ending on the last day of the month prior to the month in which such Payment
Date occurs (or, if such last day of the month is not a Business Day, the next
succeeding Business Day) or, in the case of the final Collection Period
preceding the Final Maturity Date or the final Collection Period preceding an
optional prepayment in whole of the Advances, ending on the day preceding the
Final Maturity Date or the date of such prepayment, respectively.

 

“Collections” means all cash collections, distributions, payments and other
amounts received, and to be received by the Borrower, from any Person in respect
of any Collateral, including all principal, interest, fees, distributions and
redemption and withdrawal proceeds payable to the Borrower under or in
connection with any such Collateral and all Proceeds from any sale or
disposition of any such Collateral.

 

“Commitment” means, as to each Lender, the obligation of such Lender to make, on
and subject to the terms and conditions hereof, Advances to the Borrower
pursuant to Section 2.01 in an aggregate principal amount at any one time
outstanding for such Lender up to but not exceeding the amount set forth
opposite the name of such Lender on Schedule 1 or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Commitment, as
applicable, as such amount may be reduced from time to time pursuant to
Section 2.06 or increased or reduced from time to time pursuant to assignments
effected in accordance with Section 16.06(a).

 

“Commitment Fees” has the meaning assigned to such term in the Lender Fee
Letter.

 

“Commitment Reduction Fee” has the meaning assigned to such term in the Lender
Fee Letter.

 

“Commitment Termination Date” means the last day of the Reinvestment Period.

 

 -9- 

 

 

“Concentration Limitations” means, as of any date of determination, the
following limitations applied to the Aggregate Collateral Balance of the
Eligible Loans owned (or, in relation to a proposed purchase of a Loan, proposed
to be owned) by the Borrower, and calculated as a percentage of the
Concentration Test Amount in accordance with the procedures set forth in
Section 1.04:

 

(a)          to the extent the addition of an Eligible Loan results in less than
70.0% of the Aggregate Collateral Balance consisting of Eligible First Lien
Obligations (including ABL Loans), the portion of the Aggregate Collateral
Balance attributable to all such Eligible Loans to the extent of such failure to
maintain such percentage;

 

(b)          not more than 10.0% consists of Eligible Second Lien Obligations;

 

(c)          not more than 35.0% consists of Eligible Loans with Obligors in any
Moody’s Industry Classification;

 

(d)          not more than (i) 25.0% consists of Eligible Loans the Obligor of
which, together with any Affiliates thereof, is the Obligor of the largest
percentage of the Aggregate Collateral Balance, (ii) 20.0% consists of Eligible
Loans the Obligor of which, together with any Affiliates thereof, is the Obligor
of the 2nd largest percentage of the Aggregate Collateral Balance, and (iii) so
long as there are at least ten (10) individual Obligors with respect to the
Eligible Loans, 65.0% consists collectively of Eligible Loans the Obligors of
which, together with any Affiliates thereof, are the Obligors of the 1st, 2nd,
3rd and 4th largest percentage of the Aggregate Collateral Balance;

 

(e)          not more than 25.0% consists of Eligible Loans that have a Risk
Factor Rating of greater than 3490;

 

(f)           not more than 10.0% consists of Eligible Loans that have a Risk
Factor Rating of greater than 4770;

 

(g)          not more than 35.0% consists of Eligible Loans (excluding Recurring
Revenue Loans) that have an Obligor with a TTM EBITDA of less than $7,000,000;

 

(h)          not more than 20.0% consists of Recurring Revenue Loans;

 

(i)           not more than 30% consists of Uni-Tranche Loans;

 

(j)           not more than 30.0% consists of First Lien/Last Out Term
Obligations; and

 

(k)          not more than 10.0% consists of Bifurcated First Lien Term Loans.

 

“Concentration Test Amount” means, as of any date of determination, the greater
of (x) the Aggregate Collateral Balance as of such date (unless otherwise
specified pursuant to Section 1.04(m)) and (y) $20,000,000.

 

 -10- 

 

 

“Constituent Documents” means in respect of any Person, the certificate or
articles of formation or organization, the limited liability company agreement,
operating agreement, partnership agreement, joint venture agreement or other
applicable agreement of formation or organization (or equivalent or comparable
constituent documents) and other organizational documents and by-laws and any
certificate of incorporation, certificate of formation, certificate of limited
partnership and other agreement, similar instrument filed or made in connection
with its formation or organization, in each case, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

 

“Control” means the direct or indirect possession of the power to direct or
cause the direction of the management or policies of a Person, whether through
ownership, by contract, arrangement or understanding, or otherwise. “Controlled”
and “Controlling” have the meaning correlative thereto.

 

“Corporate Trust Office” means the applicable designated corporate trust office
of the Collateral Agent, the office of the Document Custodian or the office of
the Collateral Administrator, as applicable, specified on Schedule 5 or such
other address within the United States as the Collateral Agent, the Document
Custodian and the Collateral Administrator may designate from time to time by
notice to the Administrative Agent.

 

“Covenant Lite Loan” means a Loan that does not require the Obligor to comply
with at least one of the following financial covenants during each reporting
period applicable to such Loan, whether or not any action by, or event relating
to, the Obligor has occurred: maximum leverage, maximum senior leverage, minimum
fixed charge coverage, minimum tangible net worth, minimum net worth, minimum
debt service coverage, minimum interest coverage, maximum capital expenditures,
minimum EBITDA, or other customary financial covenants.

 

“Coverage Test” means each of (i) the Maximum Advance Rate Test and (ii) the
Interest Coverage Ratio Test.

 

“Covered Account” means each of the Collection Account (including the Interest
Collection Subaccount and Principal Collection Subaccount therein), the Payment
Account and the Custodial Account.

 

“Credit and Collection Policies” means the Monroe Capital Credit Policies and
Procedures Manual, as amended subject to the terms hereof; provided however
that, with respect to any Successor Collateral Manager, means the written
credit, collection and portfolio management policies and procedures of such
Person at the time such Person becomes the Successor Collateral Manager.

 

“Cross-Defaulted ABL Loan” means an ABL Loan (for purposes of this definition, a
“loan”) that (a) would constitute an Eligible First Lien Obligation other than
with respect to clause (v) of the definition thereof and (b) that is a stand
alone revolving loan that:

 

(i) is delivered in connection with a related Bifurcated First Lien Term Loan;

 

 -11- 

 

 

(ii) is secured by a first priority perfected Lien on the related Obligor’s ABL
Collateral, subject to customary Liens for taxes or regulatory charges not then
due and payable and other permitted Liens under the Related Documents, provided
that such permitted Liens do not directly secure indebtedness for borrowed
money;

 

(iii) may be cross-secured to the Bifurcated First Lien Term Loan by a valid
second priority perfected security interest or Lien in, to or on substantially
all of the Obligor’s assets other than the ABL Collateral subject to Purchase
Money Liens and customary Liens for taxes or regulatory charges not then due and
payable and other permitted Liens under the Related Documents, provided that
such permitted Liens do not directly secure indebtedness for borrowed money; and

 

(iv) is cross defaulted to the related Bifurcated First Lien Term Loan and is
subject to an intercreditor agreement or another agreement amongst the lenders
to such Obligor (including, without limitation, the lenders under the Bifurcated
First Lien Term Loan) containing customary intercreditor provisions that are
reasonably satisfactory to the Borrower and the Collateral Manager (in
accordance with the Collateral Management Standard).

 

“Custodial Account” means the custodial account established pursuant to
Section 8.03(b).

 

“Custodial Certificate” is defined in Section 14.02(b)(i).

 

“Data File” has the meaning assigned to such term in Section 8.06(a).

 

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect.

 

“Default” means any event which, with the passage of time, the giving of notice,
or both, would (if not cured or otherwise remedied during such time) constitute
an Event of Default.

 

“Defaulted Loan” means any Loan as to which any of the following occurs:

 

(a)          a default as to all or any portion of one or more payments of
principal and/or interest has occurred with respect to such loan (after giving
effect to any grace period applicable thereto but in no event exceeding three
(3) Business Days past the applicable due date);

 

(b)          a default other than a payment default described in clause (a)
above (after giving effect to any grace period applicable thereto) and for which
the Borrower (or the administrative agent or required lenders pursuant to the
Related Documents, as applicable) has elected to exercise any of its rights and
remedies under such Related Documents (including, without limitation,
acceleration or foreclosing on collateral, but excluding (i) the imposition of
default pricing if such default, in the good faith business judgment of the
Collateral Manager, did not arise for credit-related reasons or (ii) the
exercise of any rights to receive reports or conduct audits);

 

 -12- 

 

 

(c)          the related Obligor of such loan is subject of an Insolvency Event;

 

(d)          any or all of the principal amount due under such loan is reduced
or forgiven;

 

(e)          subject to a mandatory repurchase as a Warranty Loan under the
related documents;

 

(f)           the Collateral Manager has reasonably determined in accordance
with the Collateral Management Standard and the Credit and Collection Policies
that such Loan shall be placed on “non-accrual” status or “not collectible”; or

 

(g)          a Material Modification has occurred with respect to such loan
(unless approved by the Administrative Agent, in its reasonable discretion).

 

“Defaulting Lender” means, subject to Section 2.16(b), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within two (2) Business Days
of the date such Loans were required to be funded hereunder unless such Lender
notifies the Administrative Agent and the Borrower in writing that such failure
is the result of such Lender’s determination that one or more conditions
precedent to funding (each of which conditions precedent, together with any
applicable default, shall be specifically identified in such writing) has not
been satisfied, or (ii) pay to the Administrative Agent or any other Lender any
other amount required to be paid by it hereunder within two (2) Business Days of
the date when due, (b) has notified the Borrower or the Administrative Agent in
writing that it does not intend to comply with its funding obligations
hereunder, or has made a public statement to that effect (unless such writing or
public statement relates to such Lender’s obligation to fund an Advance
hereunder and states that such position is based on such Lender’s determination
that a condition precedent to funding (which condition precedent, together with
any applicable default, shall be specifically identified in such writing or
public statement) cannot be satisfied), (c) has failed, within three
(3) Business Days after written request by the Administrative Agent or the
Borrower, to confirm in writing to the Administrative Agent and the Borrower
that it will comply with its prospective funding obligations hereunder (provided
that such Lender shall cease to be a Defaulting Lender pursuant to this
clause (c) upon receipt of such written confirmation by the Administrative Agent
and the Borrower), or (d) has, or has a direct or indirect parent company that
has, at any time after the Closing Date (i) become the subject of a proceeding
under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian,
conservator, trustee, administrator, assignee for the benefit of creditors or
similar Person charged with reorganization or liquidation of its business or
assets, including the Federal Deposit Insurance Corporation or any other state
or federal regulatory authority acting in such a capacity or (iii) become the
subject of a Bail-in Action; provided that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any equity interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender. Any determination by the Administrative Agent that a Lender is a
Defaulting Lender under clauses (a) through (d) above shall be conclusive and
binding absent manifest error, and such Lender shall be deemed to be a
Defaulting Lender (subject to Section 2.16(b)) upon delivery of written notice
of such determination to the Borrower and each Lender.

 

 -13- 

 

 

“Delayed Drawdown Loan” means a Loan that (a) requires the Borrower to make one
or more future advances to the Obligor under the related documents, agreements
evidencing, guaranteeing, securing, governing or giving rise to such loan (for
purposes of such definition, the “related documents”), (b) specifies a maximum
amount that can be borrowed on one or more fixed borrowing dates, and (c) does
not permit the re-borrowing of any amount previously repaid by the Obligor
thereunder, provided that any such loan will be a Delayed Drawdown Loan only to
the extent of undrawn commitments and solely until all commitments by the
Borrower to make advances on such loan to the borrower under the related
documents expire or are terminated or are reduced to zero.

 

“Deliver” or “Delivered” or “Delivery” means the taking of the following steps:

 

(a)          in the case of each Certificated Security (other than a Clearing
Corporation Security), Instrument and Participation Interest in which the
Participation Interest or the Collateral Loan is represented by an Instrument:

 

(i)          causing the delivery of such Certificated Security to the
Collateral Agent and any Instrument to the Document Custodian and by registering
the same in the name of the Collateral Agent or its affiliated nominee or by
indorsing the same to the Collateral Agent or in blank;

 

(ii)         causing the Collateral Agent or the Document Custodian, as
applicable, to indicate continuously on its books and records that such
Certificated Security or Instrument is credited to the applicable Covered
Account; and

 

(iii)        causing the Collateral Agent or the Document Custodian, as
applicable, to maintain (on behalf of the Collateral Agent for the benefit of
the Secured Parties) continuous possession of such Certificated Security or
Instrument;

 

(b)          in the case of each Uncertificated Security (other than a Clearing
Corporation Security), unless covered by clause (e) below:

 

(i)          causing such Uncertificated Security to be continuously registered
on the books of the issuer thereof to the Collateral Agent; and

 

(ii)        causing the Collateral Agent to indicate continuously on its books
and records that such Uncertificated Security is credited to the applicable
Covered Account;

 

 -14- 

 

 

(c)          in the case of each Clearing Corporation Security:

 

(i)          causing the relevant Clearing Corporation to credit such Clearing
Corporation Security to the securities account of the Collateral Agent, and

 

(ii)         causing the Collateral Agent to indicate continuously on its books
and records that such Clearing Corporation Security is credited to the
applicable Covered Account;

 

(d)          in the case of each security issued or guaranteed by the United
States of America or agency or instrumentality thereof and that is maintained in
book-entry records of a Federal Reserve Bank (“FRB”) (each such security, a
“Government Security”):

 

(i)          causing the creation of a Security Entitlement to such Government
Security by the credit of such Government Security to the securities account of
the Collateral Agent at such FRB, and

 

(ii)         causing the Collateral Agent to indicate continuously on its books
and records that such Government Security is credited to the applicable Covered
Account;

 

(e)          in the case of each Security Entitlement not governed by
clauses (a) through (d) above:

 

(i)          causing a Securities Intermediary to receive a Financial Asset from
a Securities Intermediary or to acquire the underlying Financial Asset, and in
either case, accepting it for credit to the Collateral Agent’s securities
account,

 

(ii)         causing such Securities Intermediary to make entries on its books
and records continuously identifying such Security Entitlement as belonging to
the Collateral Agent on behalf of the Secured Parties and continuously
indicating on its books and records that such Security Entitlement is credited
to the securities account of such Securities Intermediary, on behalf of the
Collateral Agent on behalf of the Secured Parties, and

 

(iii)        causing the Collateral Agent to indicate continuously on its books
and records that such Security Entitlement (or all rights and property of the
Collateral Agent representing such Security Entitlement) is credited to the
applicable Covered Account;

 

(f)          in the case of Cash or Money:

 

(i)          causing the delivery of such Cash or Money to the Securities
Intermediary,

 

 -15- 

 

 

(ii)         causing the Securities Intermediary to credit such Cash or Money to
a deposit account maintained as a sub-account of the applicable Covered Account,
and

 

(iii)        causing the Securities Intermediary to indicate continuously on its
books and records that such Cash or Money is credited to the applicable Covered
Account; and

 

(g)          in the case of each account or general intangible (including any
Participation Interest in which none of the Participation Interest or the
underlying loan is represented by an Instrument), causing the filing of a
Financing Statement in the office of the Secretary of State of the State of
Delaware.

 

In addition, the Collateral Manager on behalf of the Borrower will obtain any
and all consents required by the Related Documents relating to any Instruments,
accounts or general intangibles for the transfer of ownership and/or pledge
hereunder (except to the extent that the requirement for such consent is
rendered ineffective under Section 9-406 of the UCC).

 

“Determination Date” means the last day of each Collection Period.

 

“DIP Collateral Obligation” means an obligation:

 

(a)          obtained or incurred after the entry of an order of relief in a
case pending under Chapter 11 of the Bankruptcy Code,

 

(b)          to a debtor in possession as described in Chapter 11 of the
Bankruptcy Code or a trustee (if appointment of such trustee has been ordered
pursuant to Section 1104 of the Bankruptcy Code),

 

(c)          on which the related Obligor is required to pay interest and/or
principal on a current basis, and

 

(d)          approved by a Final Order or Interim Order of the bankruptcy court
so long as such obligation is (A) fully secured by a lien on the debtor’s
otherwise unencumbered assets pursuant to Section 364(c)(2) of the Bankruptcy
Code, (B) fully secured by a lien of equal or senior priority on property of the
debtor estate that is otherwise subject to a lien pursuant to Section 364(d) of
the Bankruptcy Code or (C) is secured by a junior lien on the debtor’s
encumbered assets (so long as such loan is fully secured based on the most
recent current valuation or appraisal report, if any, of the debtor).

 

“Discount Loan” means any Loan having a purchase price of less than 90% of the
outstanding principal amount of such Loan.

 

 -16- 

 

 

“Document Custodian” means U.S. Bank National Association, a national banking
association, and any successor thereto appointed under this Agreement, in its
capacity as document custodian hereunder.

 

“Document Custodian Termination Notice” is defined in Section 14.05.

 

“Dollars” and “$” mean the lawful money of the United States of America.

 

“Due Date” means each date on which any payment is due on a Loan in accordance
with its terms.

 

“EBITDA” means earnings before interest, taxes, depreciation and amortization
(determined by the Collateral Manager for any Loan, in the manner provided in
the Related Documents). In any case that “EBITDA” or such comparable definition
is not defined in such Related Documents, an amount, for the related Obligor and
any of its parents or Subsidiaries that are obligated with respect to such Loan
pursuant to its Related Documents (determined on a consolidated basis without
duplication in accordance with GAAP) equal to earnings from continuing
operations for such period plus interest expense, income taxes, depreciation and
amortization and, to the extent determined by the Collateral Manager in
accordance with the Collateral Management Standard, any other costs and expenses
reducing earnings and other extraordinary non-recurring costs and expenses for
such period (to the extent deducted in determining earnings from continuing
operations for such period).

 

“EEA Member Country” means any member state of the European Union, Iceland,
Liechtenstein and Norway.

 

“Eligible Assignee” means a Person that (i) is not a natural Person, (ii) is not
a Defaulting Lender or any of its Subsidiaries or any Person who, upon becoming
a Lender hereunder, would constitute a Defaulting Lender or a Subsidiary of a
Defaulting Lender, (iii) is not the Borrower, the Collateral Manager, the BDC or
any Affiliate of any of the foregoing, (iv) is a Qualified Purchaser and (v)
unless such Person is a Permitted Assignee, has obtained the written consent of
the Administrative Agent prior to any assignment pursuant to Section 16.06.

 

“Eligible First Lien Obligation” means any Loan that:

 

(i)          is not (and is not expressly permitted by its terms to become)
subordinate in right of payment to any other obligation for borrowed money of
the Obligor of such loan;

 

(ii)         is secured by a valid first priority perfected security interest or
lien in, to or on substantially all of the assets of the Obligor under such loan
(except for a Bifurcated First Lien Term Loan that has a Lien on substantially
all of the Obligor’s assets other than ABL Collateral) subject to Purchase Money
Liens and customary Liens for taxes or regulatory charges not then due and
payable and other permitted Liens under the Related Documents, provided that
such permitted Liens do not directly secure indebtedness for borrowed money;

 

 -17- 

 

 

(iii)        is secured pursuant to such first priority perfected security
interest or Lien, by collateral having a value (determined as set forth below)
not less than the outstanding principal balance of such loan; and

 

(iv)        is not a loan which is secured solely or primarily by the common
stock of its Obligor or any of its Affiliates.

 

The determination as to whether clause (iii) of this definition is satisfied
shall be based on both (x) an Appraisal or other valuation (including an
internal valuation performed by the Collateral Manager and including enterprise
value) performed on or about the date of acquisition by the Borrower or of the
most recent restructuring of such loan, and (y) the Collateral Manager’s
judgment (calculated in good faith in accordance with its Credit and Collection
Policies) at the time the loan is acquired by the Borrower. The limitation set
forth in clause (iv) above shall not apply with respect to a loan made to a
parent entity that is secured solely or primarily by the stock of one or more of
the subsidiaries of such parent entity to the extent that the granting by any
such subsidiary of a lien on its own property would (1) in the case of a
subsidiary that is not part of the same consolidated group as such parent entity
for U.S. federal income tax purposes, result in a deemed dividend by such
subsidiary to such parent entity for such tax purposes, (2) violate law or
regulations applicable to such subsidiary (whether the obligation secured is
such loan or any other similar type of indebtedness owing to third parties) or
(3) cause such subsidiary to suffer adverse economic consequences under capital
adequacy or other similar rules, in each case, so long as (x) the Related
Documents limit the incurrence of indebtedness by such subsidiary and (y) the
aggregate amount of all such indebtedness is not material relative to the
aggregate value of the assets of such subsidiary.

 

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

 

“Eligible Investments” means any Dollar investment that, at the time it is
Delivered (directly or through an intermediary or bailee), is one or more of the
following obligations or securities:

 

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

 

 -18- 

 

 

(ii)          demand and time deposits in, certificates of deposit of, trust
accounts with, bankers’ acceptances payable within 183 days of issuance by, or
federal funds sold by any depository institution or trust company incorporated
under the laws of the United States of America or any state thereof and subject
to supervision and examination by federal and/or state banking authorities, so
long as the commercial paper and/or the debt obligations of such depository
institution or trust company (or, in the case of the principal depository
institution in a holding company system, the commercial paper or debt
obligations of such holding company) at the time of such investment or
contractual commitment providing for such investment have the Eligible
Investment Required Ratings;

 

(iii)         non-extendable commercial paper or other short-term obligations
with the Eligible Investment Required Ratings and that either bear interest or
are sold at a discount from the face amount thereof and have a maturity of not
more than 183 days from their date of issuance;

 

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

 

(v)          Cash;

 

provided that (1) Eligible Investments purchased with funds in the Collection
Account shall be held until maturity except as otherwise specifically provided
herein and shall include only such obligations or securities, other than those
referred to in clause (iv) above, as mature (or are putable at par to the issuer
thereof) no later than the earlier of (x) sixty (60) days after the date of
acquisition thereof or (y) the Business Day prior to the next Payment Date; and
(2) none of the foregoing obligations or securities shall constitute Eligible
Investments if (a) such obligation or security has an “f”, “r”, “p”, “pi”, “q”
or “t” subscript assigned by S&P, (b) all, or substantially all, of the
remaining amounts payable thereunder consist of interest and not principal
payments, (c) such obligation or security is subject to U.S. withholding or
foreign withholding tax unless the issuer of the security is required to make
“gross-up” payments for the full amount of such withholding tax, (d) such
obligation or security is secured by real property, (e) such obligation or
security is purchased at a price greater than 100% of the principal or face
amount thereof, (f) such obligation or security is subject of a tender offer,
voluntary redemption, exchange offer, conversion or other similar action or
(g) in the Collateral Manager’s judgment, such obligation or security is subject
to material non-credit related risks. Any such investment may be made or
acquired from or through the Collateral Agent or any of its affiliates, or any
entity for whom the Collateral Agent or any of its affiliates provides services
(so long as such investment otherwise meets the applicable requirements of the
foregoing definition of Eligible Investment at the time of acquisition) or acts
as offeror; provided that, notwithstanding the foregoing clauses (i) through
(v), unless the Borrower and the Collateral Manager have received the written
advice of counsel of national reputation experienced in such matters to the
contrary (together with an officer’s certificate of the Borrower or the
Collateral Manager to the Administrative Agent and the Collateral Agent that the
advice specified in this definition has been received by the Borrower and the
Collateral Manager), Eligible Investments may only include obligations or
securities that constitute cash equivalents for purposes of the rights and
assets in paragraph (c)(8)(i)(B) of the exclusions from the definition of
“covered fund” for purposes of the Volcker Rule. The Collateral Agent,
Collateral Administrator and Document Custodian shall have no obligation to
determine or oversee compliance with the foregoing or to determine whether an
investment is an “Eligible Investment”.

 

 -19- 

 

 

“Eligible Loan” means a Loan that meets each of the following criteria at the
time of acquisition thereof by the Borrower (or its binding commitment to
acquire the same):

 

(a)          is an Eligible First Lien Obligation (including a First Out
Facility, a First Lien/Last Out Term Obligation, an ABL Loan, a Recurring
Revenue Loan, Bifurcated First Lien Term Loan, a Uni-Tranche Loan) or an
Eligible Second Lien Obligation;

 

(b)          permits the purchase thereof by or assignment thereof to the
Borrower and the pledge to the Collateral Agent;

 

(c)          is denominated and payable in Dollars;

 

(d)          is an obligation of an Obligor organized or incorporated in the
United States (or any state, territory or possession thereof) or Canada;
provided that, for the avoidance of doubt, a guarantor may be organized or
incorporated outside of the United States and Canada;

 

(e)          is not a Defaulted Loan;

 

(f)           is not a Non-Cash Paying PIK Loan;

 

(g)          is not a Zero Coupon Obligation;

 

(h)          is not a Structured Finance Obligation, a finance lease or chattel
paper;

 

(i)           as of the date of acquisition thereof, is not subject to material
non-credit related risk (such as a Loan the payment of which is expressly
contingent upon the non-occurrence of a catastrophe) as determined by the
Collateral Manager in good faith;

 

(j)           no portion thereof (including any conversion option, exchange
option, warrant or other component thereof) is exchangeable or convertible into
equity at the option of the Obligor;

 

(k)          is not an Equity Security and does not provide for mandatory or
optional conversion or exchange into an Equity Security; provided that the
acquisition of an instrument that otherwise qualifies as an Eligible Loan,
together with a warrant or other similar instrument that may be converted or
exchanged for an Equity Security (other than Margin Stock), will not cause the
former instrument to lose its eligibility as an Eligible Loan;

 

(l)           as of the date of acquisition thereof, is not the subject of an
offer and has not been called for redemption;

 

 -20- 

 

 

(m)         does not constitute Margin Stock and no part of the proceeds of such
loan or any other extension of credit made thereunder will be used to purchase
or carry any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock;

 

(n)          does not subject the Borrower to withholding tax unless the Obligor
is required to make “gross-up” payments constituting 100% of such withholding
tax;

 

(o)          provides for regular scheduled payments of principal with the full
principal balance to be payable in cash at or prior to its maturity;

 

(p)          is not a Participation Interest;

 

(q)          as of the date of origination thereof, has an Obligor with (i) TTM
Revenue of at least $10,000,000 and (ii) other than with respect to any
Recurring Revenue Loan or any ABL Loan, TTM EBITDA of at least $3,000,000;

 

(r)           has an original term to maturity of not more than seven years;

 

(s)          provides for regular scheduled payments of interest no less
frequently than quarterly;

 

(t)           has not been the subject of a Material Modification after the date
of the acquisition by the Borrower (or its binding commitment to acquire the
same), unless approved by the Administrative Agent (in its reasonable
discretion);

 

(u)          is not an obligation pursuant to which any future advances or
payments to the Obligor may be required to be made by the Borrower;

 

(v)          will not cause the Borrower or the pool of assets to be required to
be registered as an investment company under the Investment Company Act;

 

(w)         is not a Covenant Lite Loan;

 

(x)           is not primarily secured by real estate;

 

(y)          if it is (i) not a Noteless Loan, the related note or (ii) a
Noteless Loan, (x) a copy of the loan register with respect to such Noteless
Loan evidencing registration of such Collateral Loan on the books and records of
the applicable Obligor or bank agent to the name of the Borrower (or its
nominee) or (y) a copy (which may be a facsimile copy) of (I) the loan or credit
agreement reflecting the Obligor’s commitment thereunder or (II) an assignment
agreement in favor of the Borrower as assignee, has been delivered to the
Document Custodian in accordance with the provisions of Article XIV;

 

(z)           as of the date of acquisition thereof, has a purchase price of
greater than 80% of par;

 

 -21- 

 

 

(aa)         other than with respect to any Recurring Revenue Loan or any ABL
Loan, as of the date of acquisition thereof, has an Obligor with (x) as of the
date of acquisition thereof, (A) if such Loan is not a Uni-Tranche Loan, (1) a
Senior Debt Ratio of less than 5.00x and (2) a Total Debt Ratio of less than
7.00x, or (B) if such Loan is a Uni-Tranche Loan, a Total Debt Ratio of less
than 6.50x and (y) as of any date of determination thereafter, (1) a Senior Debt
Ratio of less than 7.00x and (2) a Total Debt Ratio of less than 8.00x;

 

(bb)        (i) as of the date of origination and as of the date of acquisition
thereof, has a Proprietary Risk Rating of 3 or better and (ii) as of any date
after the acquisition thereof, has a Proprietary Risk Rating of 4 or better;

 

(cc)         has been assigned a Risk Factor Rating (i) upon acquisition by the
Borrower that is not more than 60 days old and (ii) thereafter, that is not more
than 13 months old;

 

(dd)        was originated, underwritten, documented and closed or acquired in
all material respects in accordance with the Collateral Manager’s Credit and
Collection Policies;

 

(ee)        has a Risk Factor Rating of less than or equal to 6500;

 

(ff)          other than with respect to any ABL Loan, as of the date of
acquisition thereof, has a loan (including all Collateral Loans and any other
debt senior to or pari passu with such Collateral Loan) to total enterprise
value ratio of less than 70% as calculated by the Collateral Manager in good
faith in accordance with and at intervals required by its Credit and Collection
Policies;

 

(gg)        the Borrower (or the Collateral Manager on behalf of the Borrower)
shall have instructed the Obligor or related administrative or paying agents
under the Related Documents to remit all Collections directly to the Collection
Account;

 

(hh)        is not a Revolving Loan or Delayed Drawdown Loan;

 

(ii)          is a Floating Rate Obligation;

 

(jj)           is, and the applicable Related Documents are, in compliance, in
all material respects, with applicable laws, rules and regulations (including
relating to usury, truth-in-lending, fair credit billing, fair credit reporting,
equal credit opportunity, fair debt collection practices and privacy, OFAC and
Patriot Act);

 

(kk)        does not represent a consumer obligation (including, without
limitation, a mortgage loan, auto loan, credit card loan or personal loan);

 

(ll)          is not a letter of credit;

 

 -22- 

 

 

(mm)      is in registered form within the meaning of Sections 881(c)(2)(B)(i)
and 163(f) of the Code and Section 5f.103-1(c) of the United States Treasury
Regulations and issued after July 18, 1984;

 

(nn)        as of the date of acquisition thereof, no payment of interest or
principal on such Loan is more than thirty (30) days past the applicable due
date within the previous twelve-month period;

 

(oo)        the Related Documents with respect to such Loan are governed by the
laws of the United States (or any state or territory thereof) or Canada (or any
province thereof);

 

(pp)       such Obligor or its related guarantor with respect to such Loan is
not engaged in any of the following: (i) assault weapons or firearms
manufacturing, (ii) consumer and commercial lending, payday lending, pawn shops,
or adult entertainment, (iii) illegal or internet gaming (excluding, for the
avoidance of doubt, hospitality and/or resorts development or management
thereof), or (iv) the sale or cultivation of marijuana or directly related
businesses;

 

(qq)        is not an obligation of an Obligor where the Borrower, Collateral
Manager or any Affiliate thereof holds voting securities of such Obligor in an
amount, collectively, that exceeds 20% of such Obligor’s voting securities; and

 

(rr)          is not a DIP Collateral Obligation.

 

The determination of the total enterprise value for purposes of clause (ff) of
this definition shall be based on (x) an Appraisal or other valuation (including
an internal valuation performed by the Collateral Manager) performed on a
consistent basis with other loans on or about the date of acquisition by the
Borrower, or (y) the Collateral Manager’s judgment at the time the loan is
acquired by the Borrower.

 

“Eligible Second Lien Obligation” means a Loan that:

 

(a)          would be a First Lien/Last Out Term Obligation if the related First
Out Facility had a ratio of funded debt under such related First Out Facility to
TTM EBITDA of less than or equal to 1.5x;

 

(b)          would be a Bifurcated First Lien Term Loan if the related
Cross-Defaulted ABL Loan had a ratio of funded debt under such related
Cross-Defaulted ABL Loan to TTM EBITDA of less than or equal to 1.5x; or

 

(c)          meets the following criteria:

 

(i)          is not (and is not expressly permitted by its terms to become)
subordinate in right of payment to any other obligation for borrowed money of
the Obligor of such loan (excluding customary terms applicable to a second lien
lender under customary intercreditor provisions, such as subordination in right
to payment to a first lien lender following an event of default under the
related first lien credit agreement with respect to the liquidation of the
Obligor or of specified collateral);

 

 -23- 

 

 

(ii)         is secured by a valid second priority perfected security interest
or lien in, to or on specified collateral securing the Obligor’s obligations
under such loan (whether or not such loan is also secured by any higher or lower
priority security interest or lien on other collateral) subject to Purchase
Money Liens and customary Liens for taxes or regulatory charges not then due and
payable and other permitted Liens under the Related Documents, provided that
such permitted Liens do not directly secure indebtedness for borrowed money;

 

(iii)        is secured, pursuant to such second priority perfected security
interest or lien, by collateral having a value (determined as set forth below)
not less than the outstanding principal balance of such loan plus the aggregate
outstanding principal balances of all other loans of equal or higher seniority
secured by a first or second lien or security interest in the same collateral;
and

 

(iv)        is not a loan which is secured solely or primarily by the common
stock of its Obligor or any of its Affiliates; and

 

(v)         is a term loan.

 

The determination as to whether clause (iii) of clause (b) of this definition is
satisfied shall be based on both (x) an Appraisal or other valuation (including
an internal valuation performed by the Collateral Manager and including
enterprise value) performed on or about the date of acquisition by the Borrower
or of the most recent restructuring of such loan, and (y) the Collateral
Manager’s judgment (calculated in good faith in accordance with its Credit and
Collection Policies) at the time the loan is acquired by the Borrower. The
limitation set forth in clause (iv) of clause (b) above shall not apply with
respect to a loan made to a parent entity that is secured solely or
substantially by the stock of one or more of the subsidiaries of such parent
entity to the extent that the granting by any such subsidiary of a lien on its
own property would (1) in the case of a subsidiary that is not part of the same
consolidated group as such parent entity for U.S. federal income tax purposes,
result in a deemed dividend by such subsidiary to such parent entity for such
tax purposes, (2) violate law or regulations applicable to such subsidiary
(whether the obligation secured is such loan or any other similar type of
indebtedness owing to third parties) or (3) cause such subsidiary to suffer
adverse economic consequences under capital adequacy or other similar rules, in
each case, so long as (x) the Related Documents limit the incurrence of
indebtedness by such subsidiary and (y) the aggregate amount of all such
indebtedness is not material relative to the aggregate value of the assets of
such subsidiary.

 

“Equity Security” means any stock or similar security, certificate of interest
or participation in any profit sharing agreement, preorganization certificate or
subscription, transferable share, voting trust certificate or certificate of
deposit for an equity security, limited partnership interest, interest in a
joint venture, or certificate of interest in a business trust; any security
future on any such security; or any security convertible, with or without
consideration into such a security, or carrying any warrant or right to
subscribe to or purchase such a security; or any such warrant or right.

 

 -24- 

 

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.

 

“ERISA Event” means (a) any “reportable event,” as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the thirty day notice requirement is waived); (b) the failure
with respect to any Plan to satisfy the “minimum funding standard” (as defined
in Section 412 of the Code or Section 302 of ERISA); (c) the filing pursuant to
Section 412(c) of the Code or Section 302 of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (d) a
determination that any Plan is, or is expected to be, in “at risk” status (as
defined in Section 430 of the Code or Section 303 of ERISA); (e) the incurrence
by the Borrower or any member of its ERISA Group of any liability under Title IV
of ERISA with respect to the termination of any Plan; (f) (i) the receipt by the
Borrower or any member of its ERISA Group from the PBGC of a notice of
determination that the PBGC intends to seek termination of any Plan or to have a
trustee appointed for any Plan, or (ii) the filing by the Borrower or any member
of its ERISA Group of a notice of intent to terminate any Plan; (g) the
incurrence by the Borrower or any member of its ERISA Group of any liability
(i) with respect to a Plan pursuant to Sections 4063 and 4064 of ERISA,
(ii) with respect to a facility closing pursuant to Section 4062(e) of ERISA, or
(iii) with respect to the withdrawal or partial withdrawal from any
Multiemployer Plan; (h) the receipt by the Borrower or any member of its ERISA
Group of any notice concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, in endangered
status or critical status, within the meaning of Section 432 of the Code or
Section 305 of ERISA or is or is expected to be insolvent or in reorganization,
within the meaning of Title IV of ERISA; or (i) the failure of the Borrower or
any member of its ERISA Group to make any required contribution to a
Multiemployer Plan.

 

“ERISA Group” means each controlled group of corporations or trades or
businesses (whether or not incorporated) under common control that is treated as
a single employer under Section 414(b), (c), (m) or (o) of the Code with the
Borrower.

 

“EU Bail-In Legislation Schedule” means the document described as such and
published by the Loan Market Association (or any successor person) from time to
time.

 

“Eurocurrency Liabilities” is defined in Regulation D of the Board of Governors
of the Federal Reserve System, as in effect from time to time.

 

 -25- 

 

 

“Eurodollar Disruption Event” means the occurrence of any of the following:
(a) any Lender shall have notified the Administrative Agent of a determination
by such Lender or any of its assignees or participants that, as a result of the
introduction of any change in applicable law since the Closing Date, it would be
contrary to law or to the directive of any central bank or other governmental
authority (whether or not having the force of law) to obtain Dollars in the
London interbank market to fund any Advance, (b) any Lender shall have notified
the Administrative Agent that by reason of circumstances affecting the interbank
eurodollar market, adequate and reasonable means do not exist for such Lender or
any of its assignees or participants to ascertain the Adjusted Eurodollar Rate,
(c) any Lender shall have notified the Administrative Agent of a determination
by such Lender or any of its assignees or participants that the rate at which
deposits of Dollars are being offered to such Lender or any of its assignees or
participants in the London interbank market does not adequately and fairly
reflect the cost to such Lender, such assignee or such participant of making,
funding or maintaining any Advance; provided that such Lender has generally made
a similar determination with respect to its other borrowers under facilities
bearing interest at an index based on the London interbank offered rate or
(d) any Lender shall have notified the Administrative Agent of the inability of
such Lender or any of its assignees or participants to obtain Dollars in the
London interbank market using reasonable commercial efforts to make, fund or
maintain any Advance.

 

“Eurodollar Reserve Percentage” means, for any Tranche Period, the percentage,
if any, applicable during such Tranche Period (or, if more than one such
percentage shall be so applicable, the daily average of such percentages for
those days in such period during which any such percentage shall be so
applicable) under regulations issued from time to time by the Board of Governors
of the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any basic, emergency,
supplemental, marginal or other reserve requirements) with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities having
a term of one month.

 

“Event of Default” means the occurrence of any of the events, acts or
circumstances set forth in Section 6.01.

 

“Excess Concentration Amount” means, at any time in respect of which any one or
more of the Concentration Limitations are exceeded, the sum of the portions
(calculated by the Collateral Manager without duplication) of each Eligible Loan
that cause such Concentration Limitations to be exceeded.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder, all as from time to time in
effect, or any successor law, rules or regulations, and any reference to any
statutory or regulatory provision shall be deemed to be a reference to any
successor statutory or regulatory provision.

 

“Excluded Amount” means (a) any amount received in the Collection Account with
respect to any Collateral Loan, which amount is attributable to the
reimbursement of payment by the Borrower of any Tax, fee or other charge imposed
by any Governmental Authority on such Collateral Loan or any related Collateral,
(b) any reimbursement of insurance premiums paid by the Borrower, (c) any
escrows relating to Taxes, insurance and other amounts in connection with
Collateral Loans which are held in an escrow account for the benefit of the
Obligor and the secured party pursuant to escrow arrangements under the Related
Documents or (d) any amount deposited into the Collection Account in error.

 

 -26- 

 

 

“Facility Amount” means (a) on or prior to the Commitment Termination Date,
$25,000,000 (as such amount may be reduced from time to time pursuant to
Section 2.06) and (b) following the Commitment Termination Date, the outstanding
principal balance of all the Advances; provided that the Facility Amount may be
increased by the Borrower from time to time in accordance with Section 2.15
hereof.

 

“Facility Amount Increase” means an increase in the Facility Amount pursuant to
Section 2.15 hereof.

 

“Facility Amount Increase Request” is defined in Section 2.15 hereof.

 

“Facility Documents” means this Agreement, the Purchase and Contribution
Agreement, the Account Control Agreement, the Collateral Agent, Document
Custodian, Collateral Administrator and Intermediary Fee Letter, the
Administrative Agent Fee Letter, the Lender Fee Letter and any other security
agreements and other instruments entered into or delivered by or on behalf of
the Borrower pursuant to Section 5.01(c) to create, perfect or otherwise
evidence the Collateral Agent’s security interest.

 

“FATCA” means Code Sections 1471 through 1474 (or any amended or successor
version that is substantively comparable and not materially more onerous to
comply with), any current or future regulations or official interpretations
thereof (including any Revenue Ruling, Revenue Procedure, Notice or similar
guidance issued by the U.S. Internal Revenue Service thereunder as a
precondition to relief or exemption from taxes under such provisions), any
agreement entered into pursuant to Section 1471(b)(1) of the Code, and any law
implementing an intergovernmental agreement or approach thereto.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it; provided that, if at any time a
Lender is borrowing overnight funds from a Federal Reserve Bank that day, the
Federal Funds Rate for such Lender for such day shall be the average rate per
annum at which such overnight borrowings are made on that day as promptly
reported by such Lender to the Borrower, the Collateral Administrator and the
Agents in writing. Each determination of the Federal Funds Rate by a Lender
pursuant to the foregoing proviso shall be conclusive and binding except in the
case of manifest error.

 

“Final Maturity Date” means the earlier of (a) the first anniversary of the
Commitment Termination Date (or such later date as may be agreed by the Borrower
and each of the Lenders and notified in writing to the Agents) or (b) the date
of the termination of the Commitments and the acceleration of the Advances
pursuant to Section 6.02.

 

“Final Order” means an order, judgment, decree or ruling the operation or effect
of which has not been stayed, reversed or amended and as to which order,
judgment, decree or ruling (or any revision, modification or amendment thereof)
the time to appeal or to seek review or rehearing has expired and as to which no
appeal or petition for review or rehearing was filed or, if filed, remains
pending.

 

 -27- 

 

 

“Financial Asset” has the meaning specified in Section 8-102(a)(9) of the UCC.

 

“Financing Documents” has the meaning set forth in Section 14.02(b).

 

“Financing Statements” has the meaning specified in Section 9-102(a)(39) of the
UCC.

 

“First Lien/Last Out Term Obligation” means a Loan that (a) constitutes an
Eligible First Lien Obligation, (b) consists of a term loan, (c) other than with
respect to a Recurring Revenue Loan, includes a First Out Facility under a
single credit agreement having a ratio of funded debt under the First Out
Facility to TTM EBITDA on any date of determination of less than or equal to
1.5x, (d) is secured on a pari passu basis with the First Out Facility by a
perfected, first priority security interest in substantially all of the assets
of the related Obligor (subject to Purchase Money Liens and customary Liens for
taxes or regulatory charges not then due and payable and other permitted Liens
under the Related Documents), and (e) in the case of an event of default under
the applicable Related Document, will be paid after one or more tranches of the
related First Out Facility issued by the same Obligor have been paid in full in
accordance with a specified waterfall of payment.

 

“First Out Facility” means a Loan that (a) constitutes an Eligible First Lien
Obligation, (b) consists of a term loan, (c) includes a First Lien/Last Out Term
Obligation under a single credit agreement, (d) is secured on a pari passu basis
with the First Lien/Last Out Term Obligation by a perfected, first priority
security interest in substantially all of the assets of the related Obligor
(subject to Purchase Money Liens and customary Liens for taxes or regulatory
charges not then due and payable and other permitted Liens under the Related
Documents), and (e) in the case of an event of default under the applicable
Related Document, will be paid in full before one or more tranches of the
related First Lien/Last Out Term Obligation issued by the same Obligor will be
paid in accordance with a specified waterfall of payment.

 

“Fitch” means Fitch, Inc., together with its successors.

 

“Floating Rate Obligation” means any Loan that bears a floating rate of
interest.

 

“Floor Obligation” means, as of any date:

 

(a)          a Floating Rate Obligation (1) for which the Related Documents
provides for a Libor rate option and that such Libor rate is calculated as the
greater of a specified “floor” rate per annum and the London interbank offered
rate for the applicable interest period and (2) that, as of such date, bears
interest based on such Libor rate option, but only if as of such date the London
interbank offered rate for the applicable interest period is less than such
floor rate; and

 

 -28- 

 

 

(b)          a Floating Rate Obligation (1) for which the Related Documents
provides for a base or prime rate option and such base or prime rate is
calculated as the greater of a specified “floor” rate per annum and the base or
prime rate for the applicable interest period and (2) that, as of such date,
bears interest based on such base or prime rate option, but only if as of such
date the base or prime rate for the applicable interest period is less than such
floor rate.

 

“Fundamental Amendment” means any amendment, modification, waiver or supplement
of or to this Agreement that would (a) increase or extend the term of the
Commitments (other than an increase in the Commitment of a particular Lender or
addition of a new Lender hereunder agreed to by the relevant Lender(s) pursuant
to the terms of this Agreement) or change the Final Maturity Date, (b) extend
the date fixed for the payment of principal of or interest on any Advance or any
fee hereunder, (c) reduce the amount of any such payment of principal or
interest, (d) reduce the rate at which interest is payable thereon or any fee is
payable hereunder, (e) release any material portion of the Collateral, except in
connection with dispositions permitted hereunder, (f) alter the terms of Section
6.01, Section 9.01, or Section 16.01(b) or any related definitions or provisions
in a manner that would alter the effect of such Sections, (g) modify the
definition of the term “Required Lenders” or modify in any other manner the
number or percentage of the Lenders required to make any determinations or waive
any rights hereunder or to modify any provision hereof, (h) modify the
definition of the terms “Borrowing Base”, “Collateral Default Ratio”, “Coverage
Test”, “Eligible Loan”, “Fundamental Amendment”, “Interest Coverage Ratio Test”,
“Maximum Advance Rate Test”, “Maximum Available Amount”, “Minimum Equity
Amount”, or any defined term used therein, in each case in a manner which would
have the effect of making more credit available to the Borrower, be adverse to
the interests of Lenders or less restrictive on the Borrower in any other
material fashion, or (i) extend the Reinvestment Period.

 

“Funding Effective Date” means the later of the Closing Date and the date on
which the conditions precedent set forth in Section 3.01 are satisfied.

 

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

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, quasi-regulatory authority, administrative tribunal, central
bank, public office, court, arbitration or mediation panel, or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of government, including the SEC, the stock
exchanges, any Federal, state, territorial, county, municipal or other
government or governmental agency, arbitrator, board, body, branch, bureau,
commission, court, department, instrumentality, master, mediator, panel,
referee, system or other political unit or subdivision or other entity of any of
the foregoing, whether domestic or foreign.

 

“Governmental Authorizations” means all franchises, permits, licenses,
approvals, consents and other authorizations of all Governmental Authorities.

 

 -29- 

 

 

“Governmental Filings” means all filings, including franchise and similar tax
filings, and the payment of all fees, assessments, interests and penalties
associated with such filings with all Governmental Authorities.

 

“Indemnified Party” has the meaning assigned to such term in Section 16.04(b).

 

“Ineligible Loan” means, at any time, a Loan or any portion thereof that fails
to satisfy any criteria of the definition of “Eligible Loan”.

 

“Insolvency Event” means with respect to a specified Person, (a) the filing of a
decree or order for relief by a court having jurisdiction in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under the Bankruptcy Code or any other applicable insolvency law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official for such Person or for any substantial
part of its property, or ordering the winding-up or liquidation of such Person’s
affairs, and such decree or order shall remain unstayed and in effect for a
period of sixty consecutive days; or (b) the commencement by such Person of a
voluntary case under the Bankruptcy Code or any other applicable insolvency law
now or hereafter in effect, or the consent by such Person to the entry of an
order for relief in an involuntary case under any such law, or the consent by
such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due, or the taking
of action by such Person in furtherance of any of the foregoing.

 

“Instrument” has the meaning specified in Section 9-102(a)(47) of the UCC.

 

“Interest” means, for each day during an Interest Accrual Period and each
Advance outstanding by a Lender on such day, the sum of the products (for each
day during such Interest Accrual Period) of:

 

[tv516008_ex10-9img01.jpg]

 

where:

 

IR            =the Interest Rate for such Advance on such day;

 

P              =the principal amount of such Advance on such day; and

 

D             =360.

 

“Interest Accrual Period” means, with respect to each Advance (or portion
thereof) (a) with respect to the first Payment Date following such Advance (or
portion thereof), the period from and including the Closing Date or the date of
such Advance, as applicable, to and including the last day of the calendar month
preceding the first Payment Date and (b) with respect to any subsequent Payment
Date for such Advance (or portion thereof), the period commencing on the first
day of the calendar month in which the preceding Payment Date occurred and
ending on the last day of the calendar month immediately preceding the month in
which the Payment Date occurs; provided, that the final Interest Accrual Period
for all outstanding Advances hereunder shall end on and include the day prior to
the payment in full of the Advances hereunder.

 

 -30- 

 

 

“Interest Collection Subaccount” has the meaning specified in Section 8.02(a).

 

“Interest Coverage Ratio” means, on any date of determination, the percentage
equal to:

 

(a)          an amount equal to the applicable Collateral Interest Amount at
such time; divided by

 

(b)          the aggregate amount payable (or expected as of the date of
determination to be payable) under Section 9.01(a)(i)(A) through (D) on the
Payment Date immediately succeeding such date of determination.

 

“Interest Coverage Ratio Test” means a test that will be satisfied on any date
of determination if the Interest Coverage Ratio is greater than or equal to
150%.

 

“Interest Proceeds” means, with respect to any Collection Period or the related
Determination Date, without duplication, the sum of:

 

(a)          all payments of interest and other income received by the Borrower
during such Collection Period on the Collateral Loans (including Ineligible
Loans), including the accrued interest received in connection with a sale
thereof during such Collection Period;

 

(b)          all principal and interest payments received by the Borrower during
such Collection Period on Eligible Investments purchased with Interest Proceeds;

 

(c)          all amendment and waiver fees, late payment fees (including
compensation for delayed settlement or trades), and all protection fees and
other fees and commissions received by the Borrower during such Collection
Period, unless the Collateral Manager notifies the Agents before such
Determination Date that the Collateral Manager in its sole discretion has
determined that such payments are to be treated as Principal Proceeds;

 

(d)          commitment fees, facility fees, anniversary fees, ticking fees and
other similar fees received by the Borrower during such Collection Period unless
the Collateral Manager notifies the Agents before such Determination Date that
the Collateral Manager in its sole discretion has determined that such payments
are to be treated as Principal Proceeds; and

 

(e)          all Cash contributions to the Borrower, which are designated as
“Interest Proceeds” by the Collateral Manager pursuant to Section 10.05.

 

 -31- 

 

 

provided that:

 

(1)         solely after the Reinvestment Period, as to any Defaulted Loan (and
only so long as it remains a Defaulted Loan), any amounts received in respect
thereof will constitute Principal Proceeds (and not Interest Proceeds) until the
aggregate of all Collections in respect thereof since it became a Defaulted Loan
equals the outstanding principal balance of such Defaulted Loan at the time as
of which it became a Defaulted Loan and all amounts received in excess thereof
will constitute Interest Proceeds;

 

(2)         solely after the Reinvestment Period, all payments received in
respect of Equity Securities will constitute Principal Proceeds; and

 

(3)         all Cash received as equity contributions from the BDC will
constitute Principal Proceeds unless specified by the Collateral Manager
pursuant to Section 10.05.

 

“Interest Rate” means a rate equal to the Alternative Rate plus the Applicable
Margin.

 

“Interim Order” means an order, judgment, decree or ruling entered after notice
and a hearing conducted in accordance with Bankruptcy Rule 4001(c) granting
interim authorization, the operation or effect of which has not been stayed,
reversed or amended.

 

“Intermediary” means U.S. Bank National Association, solely in its capacity as
securities intermediary under the Account Control Agreement, and any successor
thereto.

 

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

 

“Law” means any action, code, consent decree, constitution, decree, directive,
enactment, finding, guideline, law, injunction, interpretation, judgment, order,
ordinance, policy statement, proclamation, promulgation, regulation,
requirement, rule, rule of law, treaty, rule of public policy, settlement
agreement, statute, or writ, of any Governmental Authority, or any particular
section, part or provision thereof.

 

“Lender Fee Letter” means that certain Lender Fee Letter, dated as of the date
hereof, by and among the Lenders, the Borrower and the Collateral Manager.

 

“Lenders” means the Persons listed on Schedule 1 and any other Person that shall
have become a party hereto in accordance with the terms hereof pursuant to an
Assignment and Acceptance, other than any such Person that ceases to be a party
hereto pursuant to an Assignment and Acceptance.

 

 -32- 

 

 

“LIBOR Rate” means, for any day during the applicable Tranche Period and any
Advance, an interest rate per annum (rounded upward, if necessary, to the next
higher 1/100th of 1%), as determined by the Administrative Agent, equal to:

 

(i)           the ICE Benchmark Administration Limited (“ICE”) London interbank
offered rate for deposits for such Tranche Period in United States dollars as
displayed in the Bloomberg Financial Markets System (or such other service as
may be nominated by ICE (or any successor thereto if ICE is no longer making a
London interbank offered rate available) as the information vendor for the
purpose of displaying the London interbank offered rate for United States dollar
deposits) at approximately 11:00 a.m. (London time) on the Rate Setting Day; or

 

(ii)          if such rate is not published at such time and day for any reason,
then the LIBOR Rate shall be the rate per annum (rounded upwards, if necessary,
to the nearest 1/100th of one percent) based on the rates at which Dollar
deposits for such Tranche Period are displayed on page “LIBOR” of the Reuters
Screen as of 11:00 a.m. (London time) on the Rate Setting Day (it being
understood that if at least two such rates appear on such page, the rate will be
the arithmetic mean of such displayed rates); provided further, that in the
event fewer than two such rates are displayed, or if no such rate is available,
the LIBOR Rate shall be the rate per annum equal to the average of the rates at
which deposits in Dollars are offered by KeyBank National Association at
approximately 11:00 a.m. (London time) on the Rate Setting Day to prime banks in
the London interbank market for such Tranche Period.

 

Notwithstanding the foregoing, if the LIBOR Rate as determined herein would be
less than zero (0.00), such rate shall be deemed to be zero percent (0.00%) for
purposes of this Agreement.

 

“LIBOR Termination Date” has the meaning assigned to such term in
Section 2.18(a).

 

“Lien” means any mortgage, pledge, hypothecation, assignment, encumbrance, lien
or security interest (statutory or other), or preference, priority or other
security agreement, charge or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title retention agreement,
any financing lease having substantially the same economic effect as any of the
foregoing, and the filing authorized by the Borrower of any financing statement
under the UCC or comparable law of any jurisdiction).

 

“Listed Collateral Loan” means a Collateral Loan for which, at the time of
determination, a Listed Value is available.

 

“Listed Value” means, for any Collateral Loan, the bid price for such Collateral
Loan most recently quoted by Loan Pricing Corporation, Mark-it Partners
(formerly known as Loan X), Interactive Date Corporation (Thompson Reuters), or
quoted by another nationally recognized broker-dealer or nationally recognized
quotation service as may be approved from time to time by the Administrative
Agent and the Required Lenders if so requested by the Borrower; provided that,
if the Collateral Manager reasonably believes that the price quoted by any such
source is based on less than three bona fide bids, then the Collateral Manager,
by notice to the Agents, may determine the Listed Value in accordance with
clause (a) of the definition of “Market Value”.

 

“Loan” means a loan or other debt obligation.

 

 -33- 

 

 

“Loan Checklist” means an electronic or hard copy, as applicable, checklist
delivered by the Borrower (or the Collateral Manager on behalf of the Borrower)
to the Document Custodian, for each Collateral Loan, of the Related Documents
identified on such Loan Checklist, including, but not limited to, as applicable,
an assignment agreement, funding memo, loan or credit agreement, security
agreement and (if not a Noteless Loan) a promissory note (or such Loan Checklist
shall specify if such Collateral Loan is a Noteless Loan), and which shall
specify whether such Related Document is an original or a copy and shall include
the name of the Obligor with respect to such Collateral Loan, in each case as of
the date of acquisition thereof by the Borrower.

 

“Margin Stock” has the meaning assigned to such term in Regulation U.

 

“Market Value” means, for any Collateral Loan:

 

(a)          the lower of:

 

(x)          the fair market value of such Collateral Loan as reasonably
determined by the Collateral Manager in accordance with the Collateral
Management Standard; and

 

(y)         the purchase price in respect of such Collateral Loan expressed as
an effective percentage of par less any loss reserves maintained by the Borrower
in accordance with GAAP; or

 

(b)          solely after the Reinvestment Period, if such Collateral Loan is a
Listed Collateral Loan as at such date, the Listed Value of such Collateral Loan
as at such date.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, financial condition, operations, performance or properties of the
Borrower or the Collateral Manager, both individually or taken as a whole,
(b) the validity, enforceability or collectability of this Agreement or any
other Facility Document or the validity, enforceability or collectability of the
Collateral Loans generally or any material portion of the Collateral Loans,
(c) the rights and remedies of the Administrative Agent, the Lenders and the
Secured Parties with respect to matters arising under this Agreement or any
other Facility Document taken as a whole, (d) the ability of each of the
Borrower or the Collateral Manager to perform its obligations under any Facility
Document to which it is a party, or (e) the status, existence, perfection,
priority or enforceability of the Collateral Agent’s Lien on the Collateral.

 

“Material Modification” means, with respect to any Loan, any amendment, waiver,
consent or modification of a Related Document with respect thereto executed or
effected after the date on which such Loan is acquired by the Borrower, that:

 

(a)          reduces or waives one or more interest payments or permits any
interest due with respect to such Loan in cash to be deferred or capitalized and
added to the principal amount of such Loan (other than any deferral or
capitalization already expressly permitted by the terms of its underlying
instruments as of the date such Loan was acquired by the Borrower) or extends
one or more interest payments with respect to such Loan for more than 93 days in
the aggregate during any 12 month successive period;

 

 -34- 

 

 

(b)          except for permitted liens, contractually or structurally
subordinates such Loan by operation of a priority of payments, turnover
provisions or the transfer of assets in order to limit recourse to the related
Obligor or releases any material guarantor or co-Obligor from its obligations
with respect thereto (other than as expressly permitted by the Related Documents
as of the date such Loan was acquired by the Borrower);

 

(c)          substitutes or releases the underlying assets securing such Loan
(other than as expressly permitted by the Related Documents as of the date such
Loan was acquired by the Borrower), and such substitution or release materially
and adversely affects the value of such Loan (as determined by the
Administrative Agent in a commercially reasonable manner);

 

(d)          waives, extends or postpones any date fixed for any scheduled
payment or mandatory prepayment of principal on such Loan; or

 

(e)          reduces or forgives any principal amount of such Loan.

 

“Maximum Advance Rate Test” means a test that will be satisfied at any time if
(a) the aggregate outstanding principal balance of the Advances at such time is
less than or equal to (b) the Maximum Available Amount at such time.

 

“Maximum Available Amount” means, at any time, the least of:

 

(a)          the Facility Amount at such time;

 

(b)          the sum of:

 

(i)          the product of (x) the Borrowing Base and (y) the applicable
Advance Rate, plus

 

(ii)         the aggregate amount of cash then on deposit in the Principal
Collection Subaccount; and

 

(c)          the sum of:

 

(i)          the Aggregate Collateral Balance, minus

 

(ii)         the Minimum Equity Amount, plus

 

(iii)        the aggregate amount of cash then on deposit in the Principal
Collection Subaccount.

 

 -35- 

 

 

“Measurement Date” means, (i) the Closing Date, (ii) each Borrowing Date and
(iii) each Monthly Report Determination Date.

 

“Minimum Equity Amount” means, at any time, the greater of (i) $8,000,000 and
(ii) the Aggregate Collateral Balance of all Collateral Loans owned (or, in
relation to a proposed purchase of a Collateral Loan, proposed to be owned) by
the Borrower which consist of obligations of any Obligor which, together with
the Affiliates thereof, is an Obligor with the 1st, 2nd, 3rd or 4th largest
percentage of the Aggregate Collateral Balance.

 

“Money” has the meaning specified in Section 1-201(24) of the UCC.

 

“Monthly Asset Amount” means, for any Payment Date, the Aggregate Collateral
Balance as of the last day of the most recent Collection Period.

 

“Monthly Report” has the meaning specified in Section 8.06(a).

 

“Monthly Report Determination Date” has the meaning specified in
Section 8.06(a).

 

“Monthly Reporting Date” means the date that is two Business Days prior to the
20th of each calendar month.

 

“Moody’s” means Moody’s Investors Service, Inc., together with its successors.

 

“Moody’s Industry Classification” means the industry classifications set forth
in Schedule 4, as such industry classifications shall be updated at the option
of the Collateral Manager if Moody’s publishes revised industry classifications.
The determination of which Moody’s Industry Classification to which an Obligor
belongs shall be made in good faith by the Collateral Manager.

 

“Moody’s RiskCalc” means Moody’s RiskCalc® Plus Version 3.1 in the Credit Cycle
Adjustment (“CCA”) mode with static mapping to equivalent bond letter ratings;
provided, however, that if at any time of determination a different Risk Factor
Rating is obtained utilizing the Financial Statement Only (“FSO”) mode, upon the
Borrower’s request and the approval of the Agent in its sole discretion, the FSO
mode may be substituted for the CCA mode with respect to such Risk Factor
Rating.

 

“Multiemployer Plan” means an employee pension benefit plan within the meaning
of Section 4001(a)(3) of ERISA that is sponsored by the Borrower or a member of
its ERISA Group or to which the Borrower or a member of its ERISA Group is
obligated to make contributions or has any liability.

 

“Non-Cash Paying PIK Loan” means, at any time, a PIK Loan that is deferring all
of the cash interest that is due at such time or that, at such time, has any
capitalized interest (unless, in addition to capitalized interest, such PIK Loan
requires interest in cash at a rate of at least LIBOR plus 4.5% per annum, or
any balance of due and unpaid cash interest, outstanding).

 

“Non-Consenting Lender” means any Lender that does not approve any consent,
waiver or amendment that (a) requires the approval of all affected Lenders in
accordance with the terms of Section 16.01 and (b) has been approved by the
Required Lenders.

 

 -36- 

 

 

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting
Lender at such time.

 

“Noteless Loan” means a Loan with respect to which the Related Documents either
(i) do not require the Obligor to execute and deliver a promissory note to
evidence the indebtedness created under such Loan or (ii) require execution and
delivery of such a promissory note only upon the request of any holder of the
indebtedness created under such Loan, and as to which the Borrower has not
requested a promissory note from the related Obligor.

 

“Notice of Borrowing” has the meaning assigned to such term in Section 2.02.

 

“Notice of Prepayment” has the meaning assigned to such term in Section 2.05.

 

“Obligations” means all indebtedness, whether absolute, fixed or contingent, at
any time or from time to time owing by the Borrower to any Secured Party or any
Affected Person under or in connection with this Agreement, the Collateral
Agent, Document Custodian, Collateral Administrator and Intermediary Fee Letter
or any other Facility Document, including all amounts payable by the Borrower in
respect of the Advances, with interest thereon, and all amounts payable
hereunder.

 

“Obligor” means, in respect of any Loan, the Person primarily obligated to pay
Collections in respect of such Loan.

 

“OFAC” has the meaning assigned to such term in Section 4.01(f).

 

“Other Taxes” has the meaning given in Section 16.03(b).

 

“Ownership Certificates” means, in respect of any Collateral, all stock,
ownership certificates, participation certificates and other “instruments” and
“certificated securities” (as such terms are defined in the UCC), if any,
governing or evidencing or representing ownership of such Collateral.

 

“Participant” means any Person to whom a participation is sold as permitted by
Section 16.06(c).

 

“Participation Interest” means a participation interest in a Loan.

 

“Party” has the meaning assigned to such term in Section 16.22.

 

“Past Due Rate” means a rate per annum equal to the Base Rate plus the
Applicable Margin.

 

 -37- 

 

 

“PATRIOT Act” has the meaning assigned to such term in Section 16.16.

 

“Payment Account” means the payment account of the Collateral Agent established
pursuant to Section 8.03(a).

 

“Payment Date” means the 20th day of each January, April, July and October;
provided that, if any such day is not a Business Day, then such Payment Date
shall be the next succeeding Business Day.

 

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor agency
or entity performing substantially the same functions.

 

“Percentage” of any Lender means, (a) with respect to any Lender party hereto on
the date hereof, the percentage set forth opposite such Lender’s name on
Schedule 1, as such amount is reduced by any Assignment and Acceptance entered
into by such Lender with an assignee or increased by any Assignment and
Acceptance entered into by such lender with an assignor, or (b) with respect to
a Lender that has become a party hereto pursuant to an Assignment and
Acceptance, the percentage set forth therein as such Lender’s Percentage, as
such amount is reduced by an Assignment and Acceptance entered into between such
Lender and an assignee or increased by any Assignment and Acceptance entered
into by such lender with an assignor.

 

“Permitted Agent” means:

 

(a)          in connection with the Facility Documents, the Collateral Manager,
the Document Custodian, the Collateral Administrator, the Intermediary, the
Agents and any such party’s sub-agents; and

 

(b)          in connection with the Loans, (i) administrative agents, collateral
agents, arrangers, trustees and similar agents (and any sub-agents) appointed
under the Related Documents, (ii) financial and restructuring advisors,
appraisers and evaluators, (iii) foreign agents retained for foreign perfection
purposes or other local law requirements, (iv) back-office operations providers
and (v) legal counsel, in each case, consistent with the Collateral Manager’s
past practice and in the ordinary course of business.

 

“Permitted Assignee” means (i) an Affiliate of any Lender that has a short-term
unsecured debt rating or certificate of deposit rating of “A-2” or better by S&P
or “P-2” or better by Moody’s, and (ii) any Person who is a Lender immediately
prior to any assignment, and which, in the case of clause (i) and at the time of
the related assignment, does not require the Borrower to pay any additional or
increased costs or is otherwise approved by the Borrower.

 

“Permitted Liens” means: (a) Liens created in favor of the Collateral Agent
hereunder or under the other Facility Documents for the benefit of the Secured
Parties; and (b) Liens imposed by any Governmental Authority for taxes,
assessments or charges not yet delinquent or which are being contested in good
faith and by appropriate proceedings if adequate reserves with respect thereto
are maintained on the books of the Borrower in accordance with GAAP.

 

 -38- 

 

 

“Permitted Securitization” means any private or public term or conduit
securitization transaction undertaken by the Borrower or its Affiliates that is
secured, directly or indirectly, by any Loan currently or formerly included in
the Collateral or any portion thereof or any interest therein released from the
Lien of this Agreement, including, without limitation, any collateralized loan
obligation or collateralized debt obligation offering or other asset
securitization.

 

“Person” means an individual or a corporation (including a business trust),
partnership, trust, incorporated or unincorporated association, joint stock
company, limited liability company, government (or an agency or political
subdivision thereof) or other entity of any kind.

 

“PIK Loan” means a Loan that permits the Obligor thereon to defer or capitalize
any portion of the accrued interest thereon.

 

“Plan” means an employee pension benefit plan (other than a Multiemployer Plan)
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code that is sponsored by the Borrower or a
member of its ERISA Group or to which the Borrower or a member of its ERISA
Group is obligated to make contributions or has any liability.

 

“Plan Asset Rule” has the meaning specified in Section 4.01(n).

 

“Portfolio Collateral” has the meaning assigned to such term in Section
15.01(b).

 

“Potential Collateral Manager Termination Event” means any event which, with the
passage of time, the giving of notice, or both, would (if not cured or otherwise
remedied during such time) constitute a Collateral Manager Termination Event.

 

“Prime Rate” means the rate announced by KeyBank National Association from time
to time as its prime rate in the United States, such rate to change as and when
such designated rate changes. The Prime Rate is not intended to be the lowest
rate of interest charged by KeyBank National Association in connection with
extensions of credit to debtors. KeyBank National Association may make
commercial loans or other loans at rates of interest at, above, or below the
Prime Rate.

 

“Principal Balance” means, with respect to any Loan, as of any date of
determination, the outstanding principal amount of such Loan (excluding any
capitalized interest).

 

“Principal Collection Subaccount” has the meaning specified in Section 8.02(a).

 

“Principal Proceeds” means, with respect to any Collection Period or the related
Determination Date, all amounts received by the Borrower during such Collection
Period that do not constitute Interest Proceeds, including unapplied proceeds of
the Advances and any Cash equity contributions (unless specified by the
Collateral Manager to constitute Interest Proceeds in accordance with Section
10.05).

 

 -39- 

 

 

“Priority of Payments” has the meaning specified in Section 9.01(a).

 

“Private Authorizations” means all franchises, permits, licenses, approvals,
consents and other authorizations of all Persons (other than Governmental
Authorities).

 

“Proceeds” has, with reference to any asset or property, the meaning assigned to
it under the UCC and, in any event, shall include, but not be limited to, any
and all amounts from time to time paid or payable under or in connection with
such asset or property.

 

“Professional Independent Manager” means an individual who is employed by a
nationally-recognized company that provides professional independent directors
or independent managers for Special Purpose Entities and other corporate
services in the ordinary course of its business.

 

“Prohibited Transaction” means a transaction described in Section 406(a) of
ERISA, that is not exempted by a statutory or administrative or individual
exemption pursuant to Section 408 of ERISA.

 

“Proprietary Risk Rating” means, for any Loan, the rating assigned thereto by
the Collateral Manager under the five-level numeric rating system used by the
Collateral Manager to rate the credit profile on Loans, as described in the
Collateral Manager’s Credit and Collection Policies, applied consistently and in
good faith.

 

“Purchase and Contribution Agreement” means that certain Purchase and
Contribution Agreement dated as of the Closing Date between the BDC, as seller,
and the Borrower, as buyer.

 

“Purchase Money Lien” means a Lien that secures indebtedness (including under a
capital lease) for borrowed money so long as (i) substantially all of the
proceeds of the indebtedness for borrowed money (including under a capital
lease) that is the subject of such Lien was used to acquire, construct or
improve the asset(s) that are the subject of such Lien, and (ii) such Lien does
not attach to assets other than those acquired, constructed or improved with
such proceeds.

 

“Qualified Institution” means a depository institution or trust company
organized under the laws of the United States of America or any one of the
States thereof or the District of Columbia (or any domestic branch of a foreign
bank), (i)(a) that has either (1) a long-term unsecured debt rating of “A” or
better by S&P and “A2” or better by Moody’s or (2) a short-term unsecured debt
rating or certificate of deposit rating of “A-1” or better by S&P or “P-1” or
better by Moody’s, (b) the parent corporation of which has either (1) a
long-term unsecured debt rating of “A” or better by S&P and “A2” or better by
Moody’s or (2) a short-term unsecured debt rating or certificate of deposit
rating of “A-1” or better by S&P and “P-1” or better by Moody’s or (c) is
otherwise acceptable to the Administrative Agent and (ii) the deposits of which
are insured by the Federal Deposit Insurance Corporation.

 

“QIB” has the meaning specified in Section 16.06(e).

 

 -40- 

 

 

“Qualified Purchaser” has the meaning specified in Section 16.06(e).

 

“Rate Setting Day” means, with respect to each Advance (or portion thereof) the
Business Day prior to the start of each Tranche Period.

 

“Recurring Revenue” means, with respect to any Obligor, the amount, as
determined by the Collateral Manager in accordance with its Credit and
Collection Policy, of revenues of such Obligor in respect of perpetual licenses,
subscription agreements, maintenance streams or other similar and perpetual cash
flow streams.

 

“Recurring Revenue Loan” means a Loan that meets each of the following criteria:

 

(a)          constitutes an Eligible First Lien Obligation;

 

(b)          the Obligor is in a high growth industry or industry that
customarily has businesses with recurring revenue models;

 

(c)          the Obligor has generated a minimum of $15,000,000 in TTM Recurring
Revenue during the most recent reporting period;

 

(d)          if such Obligor’s TTM EBITDA is positive, the ratio of the
outstanding principal amount of such loan to the related Obligor’s TTM Recurring
Revenue is less than or equal to 2.50:1.00;

 

(e)          if such Obligor’s TTM EBITDA is negative, the ratio of the
outstanding principal amount of such loan to the related Obligor’s TTM Recurring
Revenue is less than or equal to 2.00:1.00;

 

(f)          the Obligor has a ratio of Senior Total Funded Debt to enterprise
value of 50% or less; and

 

(g)          has Related Documents that obligate the Obligor with respect to
such Loan to meet a minimum of two (2) financial covenants, including a covenant
for minimum liquidity and maximum ratio of outstanding principal amount of such
loan to TTM Recurring Revenue.

 

The determination of the enterprise value for purposes of clause (f) of this
definition shall be based on both (x) an Appraisal or other valuation (including
an internal valuation performed by the Collateral Manager) performed on a
consistent basis with other loans (i) on or about the date of acquisition by the
Borrower, (ii) on or about the date of the most recent restructuring of such
loan, (iii) at any interval required by the Credit and Collection Policy or (iv)
on or about the date of any Material Modification of such loan, and (y) the
Collateral Manager’s judgment at the time the loan is acquired by the Borrower.

 

“Register” has the meaning specified in Section 16.06(d).

 

 -41- 

 

 

“Registered Investment Adviser” means a Person duly registered as an investment
adviser (including by being identified as a “relying adviser” in Section 1.B.,
Schedule D of its related “filing adviser’s” Form ADV) in accordance with and
pursuant to Section 203 of the Investment Advisers Act of 1940, as amended.

 

“Regulation T”, “Regulation U” and “Regulation X” mean Regulation T, U and X,
respectively, of the Board of Governors of the Federal Reserve System, as in
effect from time to time.

 

“Regulatory Change” has the meaning specified in Section 2.09(a).

 

“Reinvestment Period” means the period from and including the Closing Date to
and including the earliest of (a) March 12, 2020 (or such later date as may be
agreed by the Borrower and each of the Lenders and notified in writing to the
Agents), (b) the date of the termination of the Commitments pursuant to
Section 6.02 or (c) the date of the termination of the Commitments in whole
pursuant to Section 2.06.

 

“Related Documents” means, with respect to each Collateral Loan, all agreements
or documents evidencing, guaranteeing, securing, governing or giving rise to
such Loan including with respect to Related Documents to be delivered to the
Document Custodian as identified on the related Loan Checklist for a Collateral
Loan the following to the extent reasonably available to the Borrower (or the
Collateral Manager on its behalf): (i)(A) if the Collateral Loan includes a
note, (x) an original, executed copy of the related promissory note, or (y) in
the case of a lost promissory note, a copy of the executed underlying promissory
note accompanied by an original executed affidavit and indemnity indorsed by the
Borrower or the prior holder of record either in blank or to the Collateral
Agent, in each case with respect to clause (x) or clause (y) with an unbroken
chain of indorsements from each prior holder of such promissory note to the
Borrower or to the Collateral Agent, or in blank, or (B) in the case of a
noteless Collateral Loan, a paper or electronic copy of each executed document
or instrument evidencing the creation or assignment of such Collateral Loan to
the Borrower, (ii) paper or electronic copies of the related loan agreement,
guaranty, security agreement, intercreditor agreement or any other material
agreement (as determined by the Collateral Manager in its reasonable discretion)
and (iii) any other document included on the related Loan Checklist that is
reasonably requested by the Administrative Agent and reasonably available to the
Collateral Manager.

 

“Related Party” has the meaning assigned to such term in Section 16.04(b).

 

“Requested Amount” has the meaning assigned to such term in Section 2.02.

 

“Required Lenders” means, as of any date of determination, one or more Lenders
having aggregate Percentages more than 50%; provided, however that at any time
there are two (2) or more Lenders, “Required Lenders” must include at least two
(2) Lenders (who are not Affiliates of each other). To the extent provided in
the last paragraph of Section 16.01(c), the Percentage of any Defaulting Lender
shall be disregarded in determining Required Lenders at any time.

 

 -42- 

 

 

“Resolution Authority” means any body which has authority to exercise any
Write-down and Conversion Powers.

 

“Responsible Officer” means (a) in the case of a corporation, partnership or
limited liability company that, pursuant to its Constituent Documents, has
officers, any chief executive officer, chief financial officer, chief
administrative officer, president, senior vice president, vice president,
assistant vice president, treasurer, director or manager, and, in any case where
two Responsible Officers are acting on behalf of such entity, the second such
Responsible Officer may be a secretary or assistant secretary, (b) in the case
of a limited partnership, the Responsible Officer of the general partner, acting
on behalf of such general partner in its capacity as general partner, (c) in the
case of a limited liability company that does not have officers, any Responsible
Officer of the sole member, managing member or manager, acting on behalf of the
sole member, managing member or manager in its capacity as sole member, managing
member or manager, (d) in the case of a trust, the Responsible Officer of the
trustee, acting on behalf of such trustee in its capacity as trustee, (e) in the
case of the Administrative Agent, a vice president, assistant vice president,
secretary, assistant secretary or officer of the Administrative Agent, and (f)
in the case of the Document Custodian, the Collateral Administrator or the
Collateral Agent, a vice president, assistant vice president, secretary,
assistant secretary or officer within the applicable Corporate Trust Office of
the Document Custodian, Collateral Administrator or the Collateral Agent, as
applicable, duly authorized to act on such person’s behalf and in each case
responsible for the administration of this Agreement.

 

“Restricted Payments” means the declaration of any distribution or dividends or
the payment of any other amount (including in respect of redemptions permitted
by the Constituent Documents of the Borrower) to any shareholder, partner,
member or other equity investor in the Borrower on account of any share,
membership interest, partnership interest or other equity interest in respect of
the Borrower, or the payment on account of, or the setting apart of assets for a
sinking or other analogous fund for, or the purchase or other acquisition of any
class of stock of or other equity interest in the Borrower or of any warrants,
options or other rights to acquire the same (or to make any “phantom stock” or
other similar payments in the nature of distributions or dividends in respect of
equity to any Person), whether now or hereafter outstanding, either directly or
indirectly, whether in cash, property (including marketable securities), or any
payment or setting apart of assets for the redemption, withdrawal, retirement,
acquisition, cancellation or termination of any share, membership interest,
partnership interest or other equity interest in respect of the Borrower.

 

“Review Criteria” is defined in Section 14.02(b)(i).

 

“Review Period” is defined in Section 14.02(b)(i).

 

“Revolving Loan” means any Loan (other than a Delayed Drawdown Loan) (including,
without limitation, revolving loans, including funded and unfunded portions of
revolving credit lines and letter of credit facilities, unfunded commitments
under specific facilities and other similar loans and investments) that by its
terms may require one or more future advances to be made to the Obligor by the
Borrower provided that any such loan will be a Revolving Loan only until all
commitments to make revolving advances to the Obligor expire or are terminated
or irrevocably reduced to zero.

 

 -43- 

 

 

“Risk Factor Rating” means, with respect to any Loan, determined on the date of
acquisition and on each Risk Factor Rating Trigger Date with respect to such
Loan, the number set forth on Schedule 7 which corresponds to the “bond default
rating” and estimated default frequency for the Obligor of such Loan obtained by
inputting current data related to such Obligor into Moody’s RiskCalc to produce
a “bond default rating” based on the one-year and five-year expected default
frequency; provided, however, that the Collateral Manager may substitute (i) a
credit estimate issued by Moody’s which assigns a specific Risk Factor Rating or
(ii) a private or public rating issued by any of S&P, Fitch or Moody’s as the
“bond default rating” in lieu of the “bond default rating” determined by Moody’s
RiskCalc. For purposes of determining the Risk Factor Rating in accordance with
Schedule 7 solely with respect to a Loan with a “bond default rating” determined
by Moody’s RiskCalc, (i) a Loan with a Moody’s RiskCalc “bond default rating” of
Baa3 or better will be deemed to have a “bond default rating” of Ba3, (ii) a
Loan with a Moody’s RiskCalc “bond default rating” of Ba1 will be deemed to have
a “bond default rating” of B1, (iii) a Loan with a Moody’s RiskCalc “bond
default rating” of Ba2, Ba3 or B1 will be deemed to have a “bond default rating”
of B2, and (iv) a Loan with a Moody’s RiskCalc “bond default rating” of B2 will
be deemed to have a “bond default rating” of B3. Notwithstanding anything herein
to the contrary, (x) the Risk Factor Rating of a Recurring Revenue Loan of an
Obligor with TTM EBITDA of less than $0 will be deemed to be 4770, (y) the Risk
Factor Rating of a Recurring Revenue Loan of an Obligor with TTM EBITDA of
greater than or equal to $0 but less than $5,000,000 will be deemed to be 3490
and (z) the Risk Factor Rating of a Recurring Revenue Loan of an Obligor with
TTM EBITDA of greater than or equal to $5,000,000, will otherwise be determined
in accordance with the provisions of this definition and Schedule 7; provided,
however that the “bond default rating” with respect to such Recurring Revenue
Loan shall be deemed to be no better than B1.

 

“Risk Factor Rating Trigger Date” means (a) with respect to any Loan that is not
a Recurring Revenue Loan, (i) each one-year anniversary of the date of
acquisition of such Loan, (ii) any time that the related Obligor’s ratio of
Senior Total Funded Debt to TTM EBITDA increases by greater than 0.75x (based on
the most recent financial statements and covenant compliance package delivered
by the related Obligor) since the later of (x) the date of acquisition of such
Loan or (y) the date that the Risk Factor Rating was last determined in
accordance with clause (a)(ii) of this definition and (iii) any time that the
related Obligor’s TTM EBITDA declines below $5,000,000 and (b) with respect to
any Loan that is a Recurring Revenue Loan, (i) each one-year anniversary of the
date of acquisition of such Loan, (ii) any time that the related Obligor’s TTM
Recurring Revenue decreases by 20% or more since the later of (x) the date of
acquisition of such Loan or (y) the date that the related Obligor’s TTM
Recurring Revenue was last determined in accordance with clause (b)(ii) of this
definition, or (iii) any time that the related Obligor’s ratio of Senior Total
Funded Debt to enterprise value increases by 25% or more since the later of (x)
the date of acquisition of such Loan or (y) the date that the related Obligor’s
ratio of Senior Total Funded Debt to enterprise value was last determined in
accordance with clause (b)(iii) of this definition. For purposes of clause
(b)(iii) of this definition, enterprise value shall be determined in accordance
with the definition of “Recurring Revenue Loan”.

 

 -44- 

 

 

“S&P” means S&P Global Ratings, a Standard & Poor’s Financial Services LLC
business.

 

“Sanctioned Country” means, at any time, a country or territory that is, or
whose government is, the subject or target of any Sanctions.

 

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by OFAC, the U.S.
Department of State, the United Nations Security Council, the European Union or
any EU member state, (b) any Person located, organized or resident in a
Sanctioned Country or (c) any Person controlled by any such Person.

 

“Sanctions” means economic or financial sanctions or trade embargoes
administered or enforced from time to time by (a) the U.S. government, including
those administered by OFAC or the U.S. Department of State or (b) the United
Nations Security Council, the European Union or Her Majesty’s Treasury of the
United Kingdom.

 

“Scheduled Distribution” means, with respect to any Loan, for each Due Date, the
scheduled payment of principal and/or interest and/or fees due on such Due Date
with respect to such Loan.

 

“SEC” means the Securities and Exchange Commission or any other governmental
authority of the United States of America at the time administrating the
Securities Act, the Investment Company Act or the Exchange Act.

 

“Secured Parties” means the Administrative Agent, the Collateral Agent, the
Collateral Administrator, the Document Custodian, the Collateral Manager, the
Intermediary, the Lenders and their respective permitted successors and assigns.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, all as from time to time in effect.

 

“Securities Intermediary” has the meaning assigned to it in Section 8-102(a)(14)
of the UCC.

 

“Security Entitlement” has the meaning specified in Section 8-102(a)(17) of the
UCC.

 

“Senior Debt Ratio” means, with respect to any Loan, the ratio of Senior Total
Funded Debt to TTM EBITDA of the related Obligor, calculated in accordance with
the corresponding amount or ratio in the underlying Related Documents for such
Loan utilizing the most recently delivered financial results for the related
Obligor.

 

 -45- 

 

 

“Senior Total Funded Debt” means, with respect to any Loan at any time the same
is to be determined, the sum (but without duplication) of (a) all indebtedness
for borrowed money of the related Obligor and its Subsidiaries ranking senior or
pari passu to such Loan at such time, and (b) all indebtedness for borrowed
money of any other Person which is directly or indirectly guaranteed by the
Obligor or any of its Subsidiaries or which the Obligor or any of its
Subsidiaries has agreed (contingently or otherwise) to purchase or otherwise
acquire or in respect of which the Obligor or any of its Subsidiaries has
otherwise assured a creditor against loss; provided that, in the case of this
clause (b), any such obligation under such guarantee, agreement or assurance
ranks senior or pari passu with respect to such Loan.

 

“Solvent” means, with respect to any Person, that as of the date of
determination, both (i) (a) the sum of such Person’s debt (including contingent
liabilities) does not exceed the present fair saleable value of such Person’s
assets; (b) such Person’s capital is not unreasonably small in relation to its
business as contemplated on the Closing Date and will not be unreasonably small
with respect to any transaction contemplated to be undertaken after the Closing
Date; and (c) such Person has not incurred debts beyond its ability to pay such
debts as they become due; and (ii) such Person is “solvent” within the meaning
given that term under the Bankruptcy Code, Section 271 of the Debtor and
Creditor Law of the State of New York and applicable laws relating to fraudulent
transfers under the Bankruptcy Code and New York State law. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability (irrespective of whether such contingent liabilities
meet the criteria for accrual under Statement of Financial Accounting Standards
No. 5).

 

“Special Purpose Entity” means a limited liability company or other business
entity that is created with the purpose of being “bankruptcy remote” and whose
organizational documents contain restrictions on its activities and impose
requirements intended to preserve such entity’s separateness that are
substantially similar to the special purpose provisions of the Borrower LLC
Agreement.

 

“Specified Eligible Investment” means an Eligible Investment meeting the
requirements of Section 8.05(a) and that is available to the Collateral Agent,
to be specified by the Collateral Manager to the Collateral Agent (with a copy
to the Administrative Agent) on or prior to the initial Borrowing Date; provided
that, so long as no Default or Event of Default shall have occurred and then be
continuing, at any time with not less than five Business Days’ notice to the
Collateral Agent (with a copy to the Administrative Agent) the Collateral
Manager may (and, if the-then Specified Eligible Investment is no longer
available to the Collateral Agent, shall) designate another Eligible Investment
that meets the requirements of Section 8.05(a) and that is available to the
Collateral Agent to be the Specified Eligible Investment for purposes hereof.

 

“Specified LIBOR” means at any time the LIBOR Rate then in effect as determined
by the Collateral Manager (and subject to confirmation and agreement by the
Administrative Agent in its commercially reasonable discretion).

 

“Structured Finance Obligation” means any debt obligation owing by a finance
vehicle that is secured directly and primarily by, primarily referenced to,
and/or primarily representing ownership of, a pool of receivables or a pool of
other assets, including collateralized debt obligations, residential
mortgage-backed securities, commercial mortgage-backed securities, other
asset-backed securities, “future flow” receivable transactions and other similar
obligations; provided that ABL Loans, loans to financial service companies,
factoring businesses, health care providers and other genuine operating
businesses do not constitute Structured Finance Obligations.

 

 -46- 

 

 

“Subject Laws” has the meaning assigned to such term in Section 4.01(f).

 

“Successor Collateral Management Fee” means the monthly fee, accruing from the
date a Successor Collateral Manager becomes the Collateral Manager, payable in
arrears on each Payment Date for the related Interest Accrual Period, in an
amount equal to 0.35% per annum (calculated on the basis of a 360 day year and
the actual number of days elapsed) of the Monthly Asset Amount.

 

“Successor Collateral Manager” has the meaning assigned to such term in
Section 11.09(a).

 

“Taxes” has the meaning assigned to such term in Section 16.03(a).

 

“Third Party Expense Cap” means, for any rolling twelve-month period, an amount
equal to $300,000.

 

“Total Debt Ratio” means, with respect to any Loan, the ratio of Total Funded
Debt to TTM EBITDA of the related Obligor, calculated in accordance with the
corresponding amount or ratio in the underlying Related Documents for such Loan
utilizing the most recently delivered financial results for the related Obligor.

 

“Total Funded Debt” means, with respect to any Loan at any time the same is to
be determined, the sum (but without duplication) of (a) all indebtedness for
borrowed money of the related Obligor and its Subsidiaries at such time, and
(b) all indebtedness for borrowed money of any other Person which is directly or
indirectly guaranteed by the Obligor or any of its Subsidiaries or which the
Obligor or any of its Subsidiaries has agreed (contingently or otherwise) to
purchase or otherwise acquire or in respect of which the Obligor or any of its
Subsidiaries has otherwise assured a creditor against loss, calculated in
accordance with the corresponding amount or ratio in the underlying Related
Documents for such Loan utilizing the most recently delivered financial results
for the related Obligor.

 

“Tranche Period” means, with respect to each Borrowing, either (i) the one-month
period commencing on the first day of a calendar month and ending on the last
day of such calendar month or (ii) the three-month period commencing on the
first day of a calendar quarter and ending on the last day of the calendar month
occurring three months thereafter, in each case as the Borrower may elect
pursuant to Section 2.17; provided, that no Tranche Period shall extend beyond
the Final Maturity Date. For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made and thereafter shall be the
effective date of the most recent conversion or continuation of such Borrowing.

 

“Tranche Period Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.17 in the form attached hereto
as Exhibit K.

 

 -47- 

 

 

“TTM EBITDA” means, at any time the same is to be determined with respect to any
Obligor, the trailing twelve-month EBITDA of such Obligor calculated in
accordance with the corresponding amount or ratio in the underlying Related
Documents for such Loan utilizing the most recently delivered financial results
for the related Obligor.

 

“TTM Recurring Revenue” means, at any time the same is to be determined with
respect to any Obligor, the trailing twelve-month Recurring Revenue of such
Obligor calculated in accordance with the corresponding amount or ratio in the
underlying Related Documents for such loan utilizing the most recently delivered
financial results of the related Obligor.

 

“TTM Revenue” means, at any time the same is to be determined with respect to
any Obligor, the trailing twelve-month revenue of such Obligor calculated in
accordance with the corresponding amount or ratio in the underlying Related
Documents for such Loan utilizing the most recently delivered financial results
for the related Obligor.

 

“UCC” means the Uniform Commercial Code, as from time to time in effect in the
State of New York; provided that if, by reason of any mandatory provisions of
law, the perfection, the effect of perfection or non-perfection or priority of
the security interests granted to the Collateral Agent pursuant to this
Agreement are governed by the Uniform Commercial Code as in effect in a
jurisdiction of the United States of America other than the State of New York,
then “UCC” means the Uniform Commercial Code as in effect from time to time in
such other jurisdiction for purposes of such perfection, effect of perfection or
non-perfection or priority.

 

“Uncertificated Security” has the meaning specified in Section 8-102(a)(18) of
the UCC.

 

“Underlying Note” means one or more promissory notes executed by an Obligor
evidencing a Loan.

 

“Uni-Tranche Loan” means any Loan that (i) constitutes an Eligible First Lien
Obligation, and (ii) has an Obligor with a ratio of Senior Total Funded Debt to
TTM EBITDA of greater than 5.00x.

 

“U.S. Bank” means U.S. Bank National Association, a national banking
association.

 

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

 

“Voting Shares” of any Person means capital stock or other equity interests of
any class or classes (however designated) having ordinary power for the election
of directors or other similar governing body of such Person, other than stock or
other equity interests having such power only by reason of the happening of a
contingency.

 

“Warranty Loan” has the meaning specified in the Purchase and Contribution
Agreement.

 

 -48- 

 

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

“Write-down and Conversion Powers” means in relation to any Bail-In Legislation
described in the EU Bail-In Legislation Schedule from time to time, the powers
described as such in relation to that Bail-In Legislation in the EU Bail-In
Legislation Schedule.

 

“Zero Coupon Obligation” means a Loan that does not provide for periodic
payments of interest in Cash or that pays interest only at its stated maturity.

 

Section 1.02.         Rules of Construction. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires
(i) singular words shall connote the plural as well as the singular, and vice
versa (except as indicated), as may be appropriate, (ii) the words “herein,”
“hereof” and “hereunder” and other words of similar import used in this
Agreement refer to this Agreement as a whole and not to any particular article,
schedule, section, paragraph, clause, exhibit or other subdivision, (iii) the
headings, subheadings and table of contents set forth in this Agreement are
solely for convenience of reference and shall not constitute a part of this
Agreement nor shall they affect the meaning, construction or effect of any
provision hereof, (iv) references in this Agreement to “include” or “including”
shall mean include or including, as applicable, without limiting the generality
of any description preceding such term, and for purposes hereof the rule of
ejusdem generis shall not be applicable to limit a general statement, followed
by or referable to an enumeration of specific matters, to matters similar to
those specifically mentioned, (v) each of the parties to this Agreement and its
counsel have reviewed and revised, or requested revisions to, this Agreement,
and the rule of construction that any ambiguities are to be resolved against the
drafting party shall be inapplicable in the construction and interpretation of
this Agreement, (vi) any definition of or reference to any Facility Document,
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (vii) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns (subject to any restrictions set forth herein or in any other applicable
agreement), (viii) any reference to any law or regulation herein shall refer to
such law or regulation as amended, modified or supplemented from time to time
and (ix) unless otherwise provided herein, each reference to any time means New
York, New York time.

 

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” and the words
“to” and “until” both mean “to but excluding”. Periods of days referred to in
this Agreement shall be counted in calendar days unless Business Days are
expressly prescribed.

 

 -49- 

 

 

Section 1.04.         Collateral Value Calculation Procedures. In connection
with all calculations required to be made pursuant to this Agreement with
respect to Scheduled Distributions on any Loan, or any payments on any other
assets included in the Collateral, with respect to the sale of and reinvestment
in Loans, and with respect to the income that can be earned on Scheduled
Distributions on such Loans and on any other amounts that may be received for
deposit in the Collection Account, the provisions set forth in this Section 1.04
shall be applied. The provisions of this Section 1.04 shall be applicable to any
determination or calculation that is covered by this Section 1.04, whether or
not reference is specifically made to Section 1.04, unless some other method of
calculation or determination is expressly specified in the particular provision.

 

(a)          All calculations with respect to Scheduled Distributions on the
Collateral Loans shall be made on the basis of information as to the terms of
each such Collateral Loan and upon reports of payments, if any, received on such
Collateral Loans that are furnished by or on behalf of the Obligor of such
Collateral Loans and, to the extent they are not manifestly in error, such
information or reports may be conclusively relied upon in making such
calculations.

 

(b)          For purposes of calculating the Coverage Tests, except as otherwise
specified in the Coverage Tests, such calculations will not include
(i) scheduled interest and principal payments on Defaulted Loans and Ineligible
Loans unless or until such payments are actually made and (ii) ticking fees in
respect of Collateral Loans, and other similar fees, unless or until such fees
are actually paid.

 

(c)          For each Collection Period and as of any date of determination, the
Scheduled Distribution on any Collateral Loans (other than Defaulted Loans and
Ineligible Loans, which, except as otherwise provided herein, shall be assumed
to have Scheduled Distributions of zero) shall be the total amount of payments
and collections to be received during such Collection Period in respect of such
Collateral Loans.

 

(d)          Each Scheduled Distribution receivable with respect to a Collateral
Loan shall be assumed to be received on the applicable Due Date.

 

(e)          References in the Priority of Payments to calculations made on a
“pro forma basis” shall mean such calculations after giving effect to all
payments, in accordance with the Priority of Payments, that precede (in priority
of payment) or include the clause in which such calculation is made.

 

(f)           For purposes of calculating all Concentration Limitations, in both
the numerator and the denominator of any component of the Concentration
Limitations, Defaulted Loans and Ineligible Loans (including any unfunded
commitments with respect to such Collateral Loans) will be treated as having a
value equal to zero.

 

(g)          Determinations of the Eligible Loans, or portions thereof, that
constitute Excess Concentration Amounts will be determined in the way that
produces the highest Borrowing Base at the time of determination, it being
understood that a Collateral Loan (or portion thereof) that falls into more than
one such category of Collateral Loans will be deemed, solely for purposes of
such determinations, to fall only into the category that produces the highest
such Borrowing Base at such time (without duplication).

 

 -50- 

 

 

(h)          [Reserved].

 

(i)           Any Collateral Loan Obligation purchased for 98% of par or more
will be deemed to be purchased at par; provided that any arranger, closing or
similar fees earned at the primary closing of a Collateral Loan Obligation will
not be considered discounts to par.

 

(j)           References in this Agreement to the Borrower’s “purchase” or
“acquisition” of a Loan include references to the Borrower’s acquisition of such
Collateral Loan by way of a sale and/or contribution from the BDC and the
Borrower’s making or origination of such Loan. Portions of the same Loan
acquired by the Borrower on different dates (whether through purchase, receipt
by contribution or the making or origination thereof) will, for purposes of
determining the purchase price of such Loan, be treated as separate purchases on
separate dates (and not a weighted average purchase price for any particular
Loan).

 

(k)          For the purposes of calculating compliance with each of the
Concentration Limitations all calculations will be rounded to the nearest 0.01%.

 

(l)           Notwithstanding any other provision of this Agreement to the
contrary, all monetary calculations under this Agreement shall be in Dollars.
For purposes of this Agreement, calculations with respect to all amounts
received or required to be paid in a currency other than Dollars shall be valued
at zero.

 

(m)         Other than for purposes of determining whether the conditions for
each Advance have been satisfied, for purposes of calculating compliance with
any test under this Agreement (including, without limitation, the Maximum
Advance Rate Test, Interest Coverage Ratio Test and any Concentration
Limitation), the trade date (and not the settlement date) with respect to any
acquisition or disposition of a Loan shall be used to determine whether and when
such acquisition or disposition has occurred so long as such acquisition or
disposition settles within 30 days of the trade date. If such acquisition or
disposition does not settle within 30 days of the trade date, all such tests
shall be recalculated based on the date such acquisition or disposition of a
Loan actually settles. For the avoidance of doubt, for purposes of calculating
compliance with any test under this Agreement to determine whether the
conditions for each Advance have been satisfied, the settlement date (and not
the trade date) with respect to any acquisition or disposition of a Loan shall
be used to determine whether and when such acquisition or disposition has
occurred.

 

Section 1.05.         Calculation of Borrowing Base. In connection with amounts
to be calculated for purposes of determining the Borrowing Base and generally
preparing the Borrowing Base Calculation Statement, all amounts shall be
expressed in Dollars.

 

 -51- 

 

 

Article II

Advances

 

Section 2.01.         Revolving Credit Facility. On the terms and subject to the
conditions hereinafter set forth, including Article III, each Lender severally
agrees to make loans in Dollars to the Borrower (each, an “Advance”) from time
to time on any Business Day during the period from the Funding Effective Date
until the Commitment Termination Date, on a pro rata basis in each case in an
aggregate principal amount at any one time outstanding up to but not exceeding
such Lender’s Commitment and, as to all Lenders, in an aggregate principal
amount up to but not exceeding the Maximum Available Amount (which shall be
determined using the Advance Rate applicable to the Maximum Advance Rate Test)
as then in effect. Each such borrowing of an Advance on any single day is
referred to herein as a “Borrowing”. Within such limits and subject to the other
terms and conditions of this Agreement, the Borrower may borrow (and re-borrow)
Advances under this Section 2.01 and prepay Advances under Section 2.05.

 

Section 2.02.         Making of the Advances. (a) If the Borrower desires to
make a Borrowing under this Agreement, the Borrower, or the Collateral Manager
on its behalf, shall give the Administrative Agent and the Collateral Agent a
written notice (each, a “Notice of Borrowing”) for such Borrowing (which notice
shall be irrevocable and effective upon receipt) not later than 12:00 noon on
the Business Day prior to the day of the requested Borrowing; provided, however
that notwithstanding anything contained herein to the contrary, no more than two
Advances may be made in a calendar week. A Notice of Borrowing received after
3:00 p.m. shall be deemed received on the following Business Day.

 

Promptly following receipt of a Notice of Borrowing in accordance with this
Section, the Administrative Agent shall advise each applicable Lender of the
details thereof and of the amounts of such Lender’s Advance to be made as part
of the requested Borrowing. Each Notice of Borrowing shall be substantially in
the form of Exhibit A, dated the date the request for the related Borrowing is
being made, signed by a Responsible Officer of the Borrower or the Collateral
Manager, as applicable, shall attach a Borrowing Base Calculation Statement as
of the Borrowing Date after giving effect to the requested Borrowing and shall
otherwise be appropriately completed. The proposed Borrowing Date specified in
each Notice of Borrowing shall be a Business Day falling on or prior to the
Commitment Termination Date, and the amount of the Borrowing requested in such
Notice of Borrowing (the “Requested Amount”) shall be equal to at least $250,000
or an integral multiple of $100,000 in excess thereof.

 

(b)          Each Lender shall, not later than 1:00 p.m. on each Borrowing Date,
make its Percentage of the applicable Requested Amount on each Borrowing Date by
wire transfer of immediately available funds to the Collateral Agent Account.

 

Section 2.03.         Evidence of Indebtedness. (a) Maintenance of Records by
Lender. Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to it and
resulting from the Advances made by such Lender to the Borrower, from time to
time, including the amounts of principal and interest thereon and paid to it,
from time to time hereunder, provided that the failure of any Lender to maintain
such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Advances in accordance with the terms of this
Agreement.

 

 -52- 

 

 

(b)          Maintenance of Records by Administrative Agent. The Administrative
Agent shall maintain records in which it shall record (i) the amount of each
Advance made hereunder, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder,
and (iii) the amount of any sum received by the Administrative Agent hereunder
for the account of the Lenders and each Lender’s share thereof.

 

(c)          Effect of Entries. The entries made in the records maintained
pursuant to paragraph (a) or (b) of this Section shall be prima facie evidence,
absent obvious error, of the existence and amounts of the obligations recorded
therein; provided that the failure of any Lender or the Administrative Agent to
maintain such records or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Advances in accordance with the terms of
this Agreement.

 

Section 2.04.         Payment of Principal and Interest. The Borrower shall pay
principal and Interest on the Advances as follows:

 

(a)          100% of the outstanding principal amount of each Advance, together
with all accrued and unpaid Interest thereon, shall be payable on the Final
Maturity Date.

 

(b)          Interest shall accrue on the unpaid principal amount of each
Advance at the applicable Interest Rate from the date of such Advance until such
principal amount is paid in full. The Administrative Agent shall determine the
unpaid Interest and Commitment Fees payable thereto prior to each Payment Date
(using the applicable Interest Rate for each day during the related Interest
Accrual Period) to be paid by the Borrower with respect to each Advance on each
Payment Date for the related Interest Accrual Period and shall advise the
Collateral Manager and the Collateral Administrator thereof on the sixth
Business Day prior to such Payment Date. The Administrative Agent shall send a
consolidated invoice of all such Interest and Commitment Fees to the Borrower on
the Business Day following the Administrative Agent’s receipt of all such
information from the Lenders.

 

(c)          Accrued Interest on each Advance shall be payable in arrears (x) on
each Payment Date, and (y) in connection with any prepayment in full of the
Advances pursuant to Section 2.05(a); provided that (i) with respect to any
prepayment in full of the Advances outstanding, accrued Interest on such amount
to but excluding the date of prepayment may be payable on such date or as
otherwise agreed to between the Lenders and the Borrower and (ii) with respect
to any partial prepayment of the Advances outstanding, accrued Interest on such
amount to but excluding the date of prepayment shall be payable following such
prepayment on the applicable Payment Date for the Collection Period in which
such prepayment occurred.

 

 -53- 

 

 

(d)          Subject in all cases to Section 2.04(f), the obligation of the
Borrower to pay the Obligations, including the obligation of the Borrower to pay
the Lenders the outstanding principal amount of the Advances and accrued
interest thereon, shall be absolute, unconditional and irrevocable, and shall be
paid strictly in accordance with the terms hereof (including Section 2.14),
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower or any other Person may have or have had
against any Secured Party or any other Person.

 

(e)          As a condition to the payment of principal of and Interest on any
Advance without the imposition of withholding tax, the Borrower or either Agent
may require certification acceptable to it to enable the Borrower and the Agents
to determine their duties and liabilities with respect to any taxes or other
charges that they may be required to deduct or withhold from payments in respect
of such Advance under any present or future law or regulation of the United
States and any other applicable jurisdiction, or any present or future law or
regulation of any political subdivision thereof or taxing authority therein or
to comply with any reporting or other requirements under any such law or
regulation.

 

(f)          Notwithstanding any other provision of this Agreement, the
obligations of the Borrower under this Agreement are limited recourse
obligations of the Borrower 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, subject to Section 2.12, all
obligations of and any claims against the Borrower hereunder or in connection
herewith after such realization shall be extinguished and shall not thereafter
revive. No recourse shall be had against any officer, director, employee,
shareholder, Affiliate, member, manager, agent, partner, principal or
incorporator of the Borrower or their respective successors or assigns for any
amounts payable under this Agreement. It is understood that the foregoing
provisions of this clause (f) shall not (i) prevent recourse to the Collateral
for the sums due or to become due under any security, instrument or agreement
which is part of the Collateral or (ii) constitute a waiver, release or
discharge of any indebtedness or obligation evidenced by this Agreement until
such Collateral has been realized. It is further understood that the foregoing
provisions of this clause (f) shall not limit the right of any Person to name
the Borrower as a party defendant in any proceeding or in the exercise of any
other remedy under this Agreement, so long as no judgment in the nature of a
deficiency judgment or seeking personal liability shall be asked for or (if
obtained) enforced against the Borrower.

 

 -54- 

 

 

Section 2.05.         Prepayment of Advances. (a) Optional Prepayments. The
Borrower may, from time to time on any Business Day but no more than once during
any calendar week, voluntarily prepay Advances in whole or in part, without
penalty or premium; provided that the Borrower shall have delivered to the
Collateral Agent and the Administrative Agent written notice of such prepayment
(such notice, a “Notice of Prepayment”) in the form of Exhibit B not later than
3:00 p.m. at least one (1) Business Day prior to the day of such prepayment
(provided that same day notice may be given to cure any non-compliance with the
Maximum Advance Rate Test). Each such Notice of Prepayment shall be irrevocable
and effective upon receipt and shall be dated the date such notice is being
given, signed by a Responsible Officer of the Borrower and otherwise
appropriately completed. Further, each such Notice of Prepayment shall specify
the Borrowing(s) and the related Tranche Period(s) for which such prepayment
shall be applied to; provided that, if no Borrowing or Borrowings are so
specified in such Notice of Prepayment, then the Borrower shall be deemed to
have selected to apply such prepayment first, to the Borrowing or Borrowings
with Tranche Periods of one month duration, if any, until repaid in full, then,
to the Borrowing or Borrowings with Tranche Periods of three months duration, if
any. If no Tranche Period is specified in a Notice of Borrowing, then the
Borrower shall be deemed to have selected a Tranche Period of three months
duration. Each prepayment of any Advance by the Borrower pursuant to this
Section 2.05(a) (other than a prepayment made in order to cure any
non-compliance with the Maximum Advance Rate Test) shall in each case be in a
principal amount of at least $500,000 or, if less, the entire outstanding
principal amount of the Advances of the Borrower. If a Notice of Prepayment is
given by the Borrower, the Borrower shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein. The Borrower shall make the payment amount specified in such notice by
wire transfer of immediately available funds by 2:00 p.m. to the Agent’s
Account. The Administrative Agent promptly will make such payment amount
specified in such notice available to each Lender in the amount of each Lender’s
Percentage of the payment amount by wire transfer to such Lender’s account. Any
funds for purposes of a voluntary prepayment received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next Business Day.

 

(b)          Mandatory Prepayments. The Borrower shall prepay the Advances on
each Payment Date in the manner and to the extent provided in the Priority of
Payments. The Borrower shall provide, in each Monthly Report, notice of the
aggregate amounts of Advances that are to be prepaid on the related Payment Date
in accordance with the Priority of Payments.

 

(c)          Additional Prepayment Provisions. Each prepayment pursuant to this
Section 2.05 shall be subject to Sections 2.04(c) and 2.10 and applied to the
Advances in accordance with the Lenders’ respective Percentages.

 

(d)          Interest on Prepaid Advances. If requested by the Administrative
Agent, the Borrower shall pay all accrued and unpaid Interest on Advances
prepaid on the date of such prepayment.

 

Section 2.06.         Changes of Commitments. (a) Automatic Reduction and
Termination. The Commitments of all Lenders shall be automatically reduced to
zero at 5:00 p.m. on the Commitment Termination Date.

 

(b)          Optional Reductions. Prior to the Commitment Termination Date, the
Borrower shall have the right to terminate or reduce the unused amount of the
Facility Amount at any time or from time to time without any fee or penalty
(other than any applicable Commitment Reduction Fee) upon not less than two
Business Days’ prior notice to the Collateral Agent, the Lenders and the
Administrative Agent of each such termination or reduction, which notice shall
specify the effective date of such termination or reduction and the amount of
any such reduction; provided that (i) the amount of any such reduction of the
Facility Amount shall be equal to at least $5,000,000 or an integral multiple of
$100,000 in excess thereof or, if less, the remaining unused portion thereof,
and (ii) no such reduction will reduce the Facility Amount below the aggregate
principal amount of Advances outstanding at such time. Such notice of
termination or reduction shall be irrevocable and effective only upon receipt
and shall be applied pro rata to reduce the respective Commitments of each
Lender.

 

 -55- 

 

 

(c)          Effect of Termination or Reduction. The Commitments of the Lenders
once terminated or reduced may not be reinstated. Each reduction of the Facility
Amount pursuant to this Section 2.06 shall be applied ratably among the Lenders
in accordance with their respective Commitments.

 

(d)          Payment of Commitment Reduction Fee. If applicable, the Borrower
shall pay to the Lenders, for their own use and benefit, the Commitment
Reduction Fee in connection with any optional reduction of the Facility Amount,
subject to and in accordance with the Lender Fee Letter.

 

Section 2.07.         Maximum Lawful Rate. It is the intention of the parties
hereto that the interest on the Advances shall not exceed the maximum rate
permissible under Applicable Law. Accordingly, anything herein to the contrary
notwithstanding, in the event any interest is charged to, collected from or
received from or on behalf of the Borrower by the Lenders pursuant hereto or
thereto in excess of such maximum lawful rate, then the excess of such payment
over that maximum shall be applied first to the payment of amounts then due and
owing by the Borrower to the Secured Parties under this Agreement (other than in
respect of principal of and interest on the Advances) and then to the reduction
of the outstanding principal amount of the Advances of the Borrower.

 

Section 2.08.         Several Obligations. The failure of any Lender to make any
Advance to be made by it on the date specified therefor shall not relieve any
other Lender of its obligation to make its Advance on such date, neither Agent
shall be responsible for the failure of any Lender to make any Advance, and no
Lender shall be responsible for the failure of any other Lender to make an
Advance to be made by such other Lender.

 

Section 2.09.         Increased Costs. (a)          Except with respect to
taxes, which shall be governed exclusively by Section 16.03, if, due to either
(i) the introduction of or any change in or in the interpretation, application
or implementation of any Applicable Law or GAAP or other applicable accounting
policy after the date hereof, or (ii) the compliance with any guideline or
change in the interpretation, application or implementation of any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law) after the date hereof (a “Regulatory Change”), there
shall be any increase in the cost to any Affected Person of agreeing to make or
making, funding or maintaining Advances to the Borrower, then the Borrower shall
from time to time in accordance with the Priority of Payments, on the Payment
Date occurring at least 5 Business Days following such Affected Person’s demand,
pay in accordance with the Priority of Payments such Affected Person such
additional amounts as may be sufficient to compensate such Affected Person for
such increased cost. A certificate setting forth in reasonable detail the amount
of such increased cost, submitted to the Borrower by an Affected Person (with a
copy to the Agents), shall be conclusive and binding for all purposes, absent
manifest error. Notwithstanding anything herein to the contrary, each of (i) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all rules and
regulations promulgated thereunder or issued in connection therewith, and (ii)
all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III shall be deemed to have been
introduced after the Closing Date, thereby constituting a Regulatory Change
hereunder with respect to the Affected Person as of the Closing Date, regardless
of the date enacted, adopted or issued.

 

 -56- 

 

 

(b)          If an Affected Person determines that compliance with any
Applicable Law, request from any central bank or other Governmental Authority
charged with the interpretation or administration thereof (whether or not having
the force of law) or any Regulatory Change, in each case, introduced or made
after the date hereof (i) affects the amount of capital or liquidity required to
be maintained by such Affected Person and that the amount of such capital or
liquidity is increased by or based upon the existence of such Affected Person’s
Commitment under this Agreement or upon such Affected Person’s making, funding
or maintaining Advances or (ii) reduces the rate of return of an Affected Person
to a level below that which such Affected Person could have achieved but for
such compliance (taking into consideration such Affected Person’s policies with
respect to capital adequacy and liquidity), then the Borrower shall from time to
time (and, to the extent the funds available for payment thereof by the Borrower
are insufficient to pay such amounts in full on the applicable Payment Date, the
Collateral Manager, on behalf of the Borrower, shall be obligated to pay such
amounts in accordance with the Priority of Payments), on the Payment Date
occurring at least 5 Business Days following such Affected Person’s demand, pay
in accordance with the Priority of Payments such additional amounts which are
sufficient to compensate such Affected Person for such increase in capital or
liquidity or reduced return. If any Affected Person becomes entitled to claim
any additional amounts pursuant to this Section 2.09(b), it shall notify, within
a commercially reasonable time, the Borrower (with a copy to the Agents) of the
event by reason of which it has become so entitled. A certificate setting forth
in reasonable detail such amounts submitted to the Borrower by an Affected
Person shall be conclusive and binding for all purposes, absent manifest error.

 

(c)          Upon the occurrence of any event giving rise to the Borrower’s
obligation to pay additional amounts to a Lender pursuant to clauses (a) or (b)
of this Section 2.09, such Lender shall (at the request of the Borrower), use
reasonable efforts (subject to the customary practices of such Lender) to
minimize any increased amounts payable by the Borrower which at first shall
include, but not be limited to, designating a different lending office for the
funding or the booking of its Advances hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment would reduce or
obviate the obligations of the Borrower to make future payments of such
additional amounts; provided that such designation is made on such terms that
such Lender and its lending office suffer no unreimbursed cost or material legal
or regulatory disadvantage (as reasonably determined by such Lender), with the
object of avoiding future consequence of the event giving rise to the operation
of any such provision. The Borrower hereby agrees to pay all reasonable costs
and expenses incurred by any Lender in connection with any such designation or
assignment.

 

 -57- 

 

 

Section 2.10.         Compensation; Breakage Payments. The Borrower agrees to
compensate each Affected Person from time to time, on the Payment Dates,
following such Affected Person’s written request (which request shall set forth
the basis for requesting such amounts), in accordance with the Priority of
Payments for all reasonable losses, expenses and liabilities (including any
interest paid by such Affected Person to lenders of funds borrowed to make or
carry an Advance and any loss sustained by such Affected Person in connection
with the re-employment of such funds but excluding loss of anticipated profits),
which such Affected Person may sustain: (i) if for any reason (including any
failure of a condition precedent set forth in Article III but excluding a
default by the applicable Lender) a Borrowing of any Advance by the Borrower
does not occur on the Borrowing Date specified therefor in the applicable Notice
of Borrowing delivered by the Borrower, (ii) if any payment, prepayment or
conversion of any of the Borrower’s Advances occurs on a date that is not the
last day of the relevant Tranche Period, (iii) if any payment or prepayment of
any Advance is not made on any date specified in a Notice of Prepayment given by
the Borrower or (iv) as a consequence of any other default by the Borrower to
repay its Advances when required by the terms of this Agreement. A certificate
as to any amounts payable pursuant to this Section 2.10 submitted to the
Borrower by any Lender (with a copy to the Agents, and accompanied by a
reasonably detailed calculation of such amounts and a description of the basis
for requesting such amounts) shall be conclusive in the absence of manifest
error.

 

Section 2.11.         Illegality; Inability to Determine Rates.
(a) Notwithstanding any other provision in this Agreement, in the event of a
Eurodollar Disruption Event, then the affected Lender shall promptly notify the
Agents and the Borrower thereof, and such Lender’s obligation to make or
maintain Advances hereunder based on the Adjusted Eurodollar Rate shall be
suspended until such time as such Lender may again make and maintain Advances
based on the Adjusted Eurodollar Rate.

 

(b)          Upon the occurrence of any event giving rise to a Lender’s
suspension of its obligation to make or maintain Advances based on the Adjusted
Eurodollar Rate pursuant to Section 2.11(a), such Lender shall use reasonable
efforts (subject to the customary practices of such Lender) to designate a
different lending office if such designation would enable such Lender to again
make and maintain Advances based on the Adjusted Eurodollar Rate; provided that
such designation is made on such terms that such Lender and its lending office
suffer no unreimbursed cost or material legal or regulatory disadvantage (as
reasonably determined by such Lender), with the object of avoiding future
consequence of the event giving rise to the operation of any such provision.

 

(c)          If, prior to the first day of any Interest Accrual Period or prior
to the date of any Advance, as applicable, either (i) the Administrative Agent
determines that for any reason adequate and reasonable means do not exist for
determining the LIBOR Rate for the applicable Advances, or (ii) the Required
Lenders determine and notify the Administrative Agent that the Adjusted
Eurodollar Rate with respect to such Advances does not adequately and fairly
reflect the cost to such Lenders of funding such Advances (provided that each
such Lender has generally made a similar determination with respect to its other
borrowers under facilities bearing interest at an index based on the London
interbank offered rate), the Administrative Agent will promptly so notify the
Borrower, the Collateral Agent, the Collateral Administrator and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Advances based on
the Adjusted Eurodollar Rate shall be suspended until the Administrative Agent
(upon the instruction of the Required Lenders) revokes such notice.

 

 -58- 

 

 

Section 2.12.         Rescission or Return of Payment. The Borrower agrees that,
if at any time (including after the occurrence of the Final Maturity Date) all
or any part of any payment theretofore made by it to any Secured Party or any
designee of a Secured Party is or must be rescinded or returned for any reason
whatsoever (including the insolvency, bankruptcy or reorganization of the
Borrower or any of its Affiliates), the obligation of the Borrower to make such
payment to such Secured Party shall, for the purposes of this Agreement, to the
extent that such payment is or must be rescinded or returned, be deemed to have
continued in existence and this Agreement shall continue to be effective or be
reinstated, as the case may be, as to such obligations, all as though such
payment had not been made.

 

Section 2.13.         Past Due Interest. The Borrower shall pay interest on all
Obligations other than amounts due under Section 16.04(a) and other
Administrative Expenses that are not paid when due for the period from the due
date thereof until the date the same is paid in full at the Past Due Rate.
Interest payable at the Past Due Rate shall be payable on each Payment Date in
accordance with the Priority of Payments.

 

Section 2.14.         Payments Generally. (a) All amounts owing and payable to
any Secured Party, any Affected Person or any Indemnified Party, in respect of
the Advances and other Obligations, including the principal thereof, interest,
fees, indemnities, expenses or other amounts payable under this Agreement, shall
be paid by the Borrower to the Administrative Agent for account of the
applicable recipient in Dollars, in immediately available funds, in accordance
with the Priority of Payments, and all without counterclaim, setoff, deduction,
defense, abatement, suspension or deferment. The Administrative Agent and each
Lender shall provide wire instructions to the Borrower, the Administrative Agent
and the Collateral Agent. Payments must be received by the Administrative Agent
for account of the Lenders on or prior to 3:00 p.m. on a Business Day; provided
that, payments received by the Administrative Agent after 3:00 p.m. on a
Business Day will be deemed to have been paid on the next following Business
Day.

 

(b)          Except as otherwise expressly provided herein, all computations of
interest, fees and other Obligations shall be made on the basis of a year of
360 days for the actual number of days elapsed in computing interest on any
Advance, the date of the making of the Advance shall be included and the date of
payment shall be excluded; provided that, if an Advance is repaid on the same
day on which it is made, one day’s Interest shall be paid on such Advance. All
computations made by a Lender, the Collateral Agent or the Administrative Agent
under this Agreement shall be conclusive absent manifest error.

 

 -59- 

 

 

Section 2.15.         Increase in Facility Amount. The Borrower may, on any
Business Day prior to the Commitment Termination Date, increase the Facility
Amount by delivering a request substantially in the form attached hereto as
Exhibit F (each, a “Facility Amount Increase Request”) to the Administrative
Agent (with a copy to the Collateral Agent) or in such other form acceptable to
the Administrative Agent at least five (5) Business Days prior to the desired
effective date of such increase (the “Facility Amount Increase”) identifying an
additional Lender that is a Permitted Assignee (or additional Commitments for
existing Lender(s) which have consented to such increase), and the amount of its
Commitment (or additional amount of its Commitment(s)); provided, however, that
(i) the Facility Amount shall not exceed $50,000,000 without the consent of all
Lenders, (ii) any increase of the aggregate amount of the Facility Amount shall
be in an amount not less than $10,000,000, (iii) no Default or Event of Default
shall have occurred and be continuing at the time of the request or the
effective date of the Facility Amount Increase, (iv) all representations and
warranties contained in Article IV hereof (as the same may be amended from time
to time) shall be true and correct in all material respects (except for
representations and warranties already qualified by materiality or Material
Adverse Effect, which shall be true and correct) at the time of such request and
on the effective date of such Facility Amount Increase, and (v) unless such
increase is increasing the Commitment of, and with the consent of, an existing
Lender, the Administrative Agent shall have provided its written consent to such
increase (which consent shall not be unreasonably withheld or delayed). The
effective date of the Facility Amount Increase shall be agreed upon by the
Borrower and the Administrative Agent. Upon the effectiveness thereof, the new
Lender(s) (or, if applicable, existing Lender(s)) shall make Advances in an
amount sufficient such that after giving effect to its advance each Lender shall
have outstanding its Percentage of Advances. It shall be a condition to such
effectiveness that (i) if any Advances are bearing interest at the Adjusted
Eurodollar Rate on the date of such effectiveness, such Advances shall be deemed
to be prepaid on such date and the Borrower shall pay any amounts owing to the
Lenders pursuant to Section 2.10 hereof, provided, however, that if a Facility
Amount Increase is made among the existing Lenders and the amount of the
increase in each such Lender’s Commitment is on a pro rata basis in accordance
with the existing Commitments of such Lenders on the date of such Facility
Amount Increase, such Advances bearing interest at the Adjusted Eurodollar Rate
shall not be deemed to be prepaid on such date and (ii) the Borrower shall not
have terminated any portion of the Commitments pursuant to Section 2.06 hereof.
The Borrower agrees to promptly pay any reasonable expenses of the
Administrative Agent and the affected Lender(s) relating to any Facility Amount
Increase. Notwithstanding anything herein to the contrary, no Lender shall have
any obligation to increase its Commitment and no Lender’s Commitment shall be
increased without its consent thereto, and each Lender may at its option,
unconditionally and without cause, decline to increase its Commitment. For the
avoidance of doubt, each Advance made under a Facility Amount Increase shall be
subject to the same terms (including pricing) as an Advance under the existing
Facility Amount.

 

Section 2.16.         Defaulting Lenders. (a) Defaulting Lender Adjustments.
Notwithstanding anything to the contrary contained in this Agreement, if any
Lender becomes a Defaulting Lender, then, until such time as such Lender is no
longer a Defaulting Lender, to the extent permitted by Applicable Law:

 

(i)           Waivers and Amendments. Such Defaulting Lender’s right to approve
or disapprove any amendment, waiver or consent with respect to this Agreement
shall be restricted as set forth in the definition of Required Lenders.

 

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(ii)          Defaulting Lender Waterfall. Any payment of principal, interest,
fees or other amounts received by the Administrative Agent for the account of
such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article VI or otherwise) shall be applied at such time or times as may be
determined by the Administrative Agent as follows: first, to the payment of any
amounts owing by such Defaulting Lender to the Administrative Agent hereunder;
second, as the Borrower may request (so long as no Default or Event of Default
exists), to the funding of any Advance in respect of which such Defaulting
Lender has failed to fund its portion thereof as required by this Agreement, as
determined by the Administrative Agent; third, if so determined by the
Administrative Agent and the Borrower, to be held in a deposit account and
released pro rata in order to satisfy such Defaulting Lender’s potential future
funding obligations with respect to Advances under this Agreement; fourth, to
the payment of any amounts owing to the Lenders as a result of any judgment of a
court of competent jurisdiction obtained by any Lender against such Defaulting
Lender as a result of such Defaulting Lender’s breach of its obligations under
this Agreement; fifth, so long as no Default or Event of Default exists, to the
payment of any amounts owing to the Borrower as a result of any judgment of a
court of competent jurisdiction obtained by the Borrower against such Defaulting
Lender as a result of such Defaulting Lender’s breach of its obligations under
this Agreement; and sixth, to such Defaulting Lender or as otherwise directed by
a court of competent jurisdiction; provided that if (x) such payment is a
payment of the principal amount of any Advances in respect of which such
Defaulting Lender has not fully funded its appropriate share, and (y) such
Advances were made at a time when the conditions set forth in Section 3.02 were
satisfied or waived, such payment shall be applied solely to pay the Advances of
all Non-Defaulting Lenders on a pro rata basis prior to being applied to the
payment of any Advances of such Defaulting Lender until such time as all
Advances are held by the Lenders pro rata in accordance with their Percentages
of the Commitments. Any payments, prepayments or other amounts paid or payable
to a Defaulting Lender that are applied (or held) to pay amounts owed by a
Defaulting Lender or to post Cash Collateral pursuant to this
Section 2.16(a)(ii) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

 

(iii)         Certain Fees. No Defaulting Lender shall be entitled to receive
any Commitment Fee for any period during which that Lender is a Defaulting
Lender (and the Borrower shall not be required to pay any such fee that
otherwise would have been required to have been paid to that Defaulting Lender).

 

(b)          Defaulting Lender Cure. If the Borrower and the Administrative
Agent agree in writing that a Lender is no longer a Defaulting Lender, the
Administrative Agent will so notify the parties hereto, whereupon as of the
effective date specified in such notice and subject to any conditions set forth
therein, that Lender will, to the extent applicable, purchase at par that
portion of outstanding Advances of the other Lenders or take such other actions
as the Administrative Agent may determine to be necessary to cause the Advances
to be held pro rata by the Lenders in accordance with their respective
Percentages of the Commitments, whereupon such Lender will cease to be a
Defaulting Lender; provided that no adjustments will be made retroactively with
respect to fees accrued or payments made by or on behalf of the Borrower while
that Lender was a Defaulting Lender; and provided, further, that except to the
extent otherwise expressly agreed by the affected parties, no change hereunder
from Defaulting Lender to Lender will constitute a waiver or release of any
claim of any party hereunder arising from that Lender’s having been a Defaulting
Lender.

 

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Section 2.17.         Tranche Period Elections. (a) Each Borrowing initially
shall accrue Interest at the Interest Rate for the applicable Tranche Period
specified in the applicable Notice of Borrowing. If no Tranche Period is
specified in a Notice of Borrowing, then the Borrower shall be deemed to have
selected a Tranche Period of three months duration. Thereafter, the Borrower may
elect to convert such Borrowing to a different Tranche Period as provided in
this Section 2.17.

 

(b)          To make an election pursuant to this Section 2.17, the Borrower
shall notify the Administrative Agent (with a copy to the Collateral Agent) of
such election by delivery of a Tranche Period Election Request by the time that
a Notice of Borrowing would be required under Section 2.02 if the Borrower were
requesting a Borrowing to be made on the effective date of such election. Each
Tranche Period Election Request shall be irrevocable. Notwithstanding any
contrary provision herein, this Section shall not be construed to permit the
Borrower to elect a Tranche Period that does not comply with the proviso to
clause (ii) of the definition thereof.

 

(c)          Each Tranche Period Election Request shall specify the following
information:

 

(i)          the Borrowing to which such Tranche Period Election Request
applies;

 

(ii)         the effective date of the election made pursuant to such Tranche
Period Election Request, which shall be the first day after the end of the then
applicable Tranche Period; and

 

(iii)        the Tranche Period to be applicable thereto after giving effect to
such election, which Tranche Period shall be a period contemplated by the
definition of the term “Tranche Period”.

 

(d)          Promptly following receipt of a Tranche Period Election Request,
the Administrative Agent shall advise each Lender of the details thereof and of
such Lender’s portion of each resulting Borrowing.

 

(e)          If the Borrower fails to deliver a timely Tranche Period Election
Request with respect to a Borrowing prior to the end of the Tranche Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Tranche Period, such Borrowing shall continue to accrue Interest
with respect to the last selected or deemed selected Tranche Period.
Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing and the Administrative Agent, at the request of the
Required Lenders, so notifies the Borrower (with a copy to the Collateral
Agent), then, so long as an Event of Default is continuing, each Borrowing shall
be converted to a Borrowing that accrues Interest with respect to a Tranche
Period of three months duration at the end of the Tranche Period applicable
thereto.

 

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Section 2.18.         Successor LIBOR Rate. (a) If the Administrative Agent
determines (which determination shall be final and conclusive, absent manifest
error) that either (a)(i) the circumstances set forth in Section 2.11 have
arisen and are unlikely to be temporary, or (ii) the circumstances set forth in
Section 2.11 have not arisen but the applicable supervisor or administrator (if
any) of the interbank Eurodollar market or a Governmental Authority having
jurisdiction over the Administrative Agent has made a public statement
identifying the specific date after which the LIBOR Rate shall no longer be used
for determining interest rates for loans (either such date, a “LIBOR Termination
Date”), or (b) a rate other than the LIBOR Rate has become a widely recognized
benchmark rate for newly originated loans in Dollars in the U.S. market, then
the Administrative Agent may (in consultation with the Collateral Manager and
the Borrower) choose a replacement index for the LIBOR Rate and make adjustments
to applicable margins and related amendments to this Agreement as referred to
below such that, to the extent practicable, the all-in interest rate based on
the replacement index will be substantially equivalent to the all-in LIBOR
Rate-based interest rate in effect prior to its replacement.

 

(b)          The Administrative Agent, the Collateral Manager and the Borrower
shall enter into an amendment to this Agreement to reflect the replacement
index, the adjusted margins and such other related amendments as may be
appropriate, in the discretion of the Administrative Agent for the
implementation and administration of the replacement index-based rate, and shall
provide notice and a copy of such proposed amendment to the Collateral Agent,
the Collateral Administrator, the Document Custodian and the Lenders not less
than ten (10) Business Days prior to the execution of such amendment.
Notwithstanding anything to the contrary in this Agreement or the other Facility
Documents (including, without limitation, Section 16.01), such amendment shall
become effective without any further action or consent of any other party to
this Agreement at 5:00 p.m. on the tenth (10th) Business Day after the date a
draft of the amendment is provided to the Lenders, the Collateral Agent, the
Document Custodian and the Collateral Administrator, unless the Administrative
Agent receives, on or before such tenth (10th) Business Day, a written notice
from the Required Lenders stating that such Lenders object to such amendment.

 

(c)          Selection of the replacement index, adjustments to the applicable
margins, and amendments to this Agreement (i) will be determined with due
consideration to the then-current market practices for determining and
implementing a rate of interest for newly originated loans in the United States
and loans converted from a LIBOR Rate-based rate to a replacement index-based
rate, and (ii) may also reflect adjustments to account for (x) the effects of
the transition from the LIBOR Rate to the replacement index and (y) yield- or
risk-based differences between the LIBOR Rate and the replacement index.

 

(d)          Until an amendment reflecting a new replacement index in accordance
with this Section 2.18 is effective, each advance, conversion and renewal of an
Advance at the LIBOR Rate will continue to bear interest with reference to the
LIBOR Rate, as applicable; provided, however, that if the Administrative Agent
determines (which determination shall be final and conclusive, absent manifest
error) that a LIBOR Termination Date has occurred, then following the LIBOR
Termination Date, all Advances as to which the LIBOR Rate would otherwise apply
shall automatically be converted to the Base Rate (without the incurrence of any
breakage costs or expenses under Section 2.10) until such time as an amendment
reflecting a replacement index and related matters as described above is
implemented.

 

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(e)          Notwithstanding anything to the contrary contained herein, if at
any time the replacement index is less than zero, at such times, such index
shall be deemed to be zero for purposes of this Agreement.

 

(f)          For the avoidance of doubt, none of the Collateral Agent, the
Document Custodian and the Collateral Administrator shall have any
responsibility for the selection of replacement index (including any replacement
index adopted pursuant to an amendment to this Agreement), any adjustments to
applicable margins or related amendments or any liability for any failure or
delay in performing their duties hereunder solely as a result of the
unavailability of “LIBOR”, the LIBOR Rate, or any other index rate herein.

 

Article III

Conditions Precedent

 

Section 3.01.         Conditions Precedent to Initial Advances. The obligation
of each Lender to make its initial Advance hereunder shall be subject to the
conditions precedent that the Administrative Agent shall have received on or
before the date of such initial Advance the following, each in form and
substance reasonably satisfactory to the Administrative Agent:

 

(a)          each of the Facility Documents duly executed and delivered by the
parties thereto, which shall each be in full force and effect;

 

(b)          true and complete copies of the Constituent Documents of the
Borrower and the Collateral Manager as in effect on the Funding Effective Date;

 

(c)          true and complete copies certified by a Responsible Officer of the
Borrower of all Governmental Authorizations, Private Authorizations and
Governmental Filings, if any, required in connection with the transactions
contemplated by this Agreement;

 

(d)          a certificate of a Responsible Officer of the Borrower certifying
(i) as to its Constituent Documents, (ii) as to its resolutions or other action
of its board of directors or members approving this Agreement and the other
Facility Documents to which it is a party and the transactions contemplated
thereby, (iii) that its representations and warranties set forth in the Facility
Documents to which it is a party are true and correct in all material respects
as of the Closing Date (except to the extent such representations and warranties
expressly relate to any earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such earlier
date), (iv) no Default or Event of Default has occurred and is continuing, and
(v) as to the incumbency and specimen signature of each of its Responsible
Officers authorized to execute the Facility Documents to which it is a party;

 

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(e)          a certificate of a Responsible Officer of the Collateral Manager
certifying (i) as to its Constituent Documents, (ii) as to its resolutions or
other action of its board of directors or members approving this Agreement and
the other Facility Documents to which it is a party and the transactions
contemplated thereby, (iii) that its representations and warranties set forth in
the Facility Documents to which it is a party are true and correct in all
material respects as of the Closing Date (except to the extent such
representations and warranties expressly relate to any earlier date, in which
case such representations and warranties shall be true and correct in all
material respects as of such earlier date), (iv) to the knowledge of the
Collateral Manager, no Default or Event of Default has occurred and is
continuing, and (v) as to the incumbency and specimen signature of each of its
Responsible Officers authorized to execute the Facility Documents to which it is
a party;

 

(f)           a certificate of a Responsible Officer of the BDC certifying (i)
as to its Constituent Documents, (ii) as to its resolutions or other action of
its board of directors, partners or members approving this Agreement and the
other Facility Documents to which it is a party and the transactions
contemplated thereby, (iii) that its representations and warranties set forth in
the Facility Documents to which it is a party are true and correct in all
material respects as of the Closing Date (except to the extent such
representations and warranties expressly relate to any earlier date, in which
case such representations and warranties shall be true and correct in all
material respects as of such earlier date), (iv) to the knowledge of the BDC, no
Default or Event of Default has occurred and is continuing with respect to the
Purchase and Contribution Agreement, and (v) as to the incumbency and specimen
signature of each of its Responsible Officers authorized to execute the Facility
Documents to which it is a party;

 

(g)          UCC financing statements, under the UCC in all jurisdictions that
the Administrative Agent deems necessary or desirable in order to perfect the
interests in the Collateral contemplated by this Agreement;

 

(h)          copies of proper financing statements, if any, necessary to release
all security interests and other rights of any Person in the Collateral
previously granted by the Borrower or any transferor;

 

(i)           legal opinions (addressed to each of the Secured Parties) of
Winston & Strawn LLP, counsel to the Borrower and the Collateral Manager and
Nixon Peabody LLP, counsel to the Collateral Agent, the Collateral
Administrator, and the Document Custodian covering such matters as the
Administrative Agent and its counsel shall reasonably request including security
interest, corporate, and true sale and non-consolidation matters;

 

(j)           evidence reasonably satisfactory to it that all of the Covered
Accounts shall have been established; and the Account Control Agreement shall
have been executed and delivered by the Borrower, the Collateral Administrator,
the Collateral Agent and the Intermediary, and shall be in full force and
effect;

 

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(k)          evidence that (x) all fees due and owing to the Administrative
Agent, each Lender and U.S. Bank National Association, in its respective
capacities hereunder, on or prior to the Closing Date have been received or will
be contemporaneous with closing; and (y) the reasonable and documented accrued
fees and expenses of Chapman and Cutler LLP, counsel to the Administrative
Agent, and Nixon Peabody LLP, counsel to U.S. Bank National Association, in its
respective capacities hereunder, in connection with the transactions
contemplated hereby (to the extent invoiced prior to the Closing Date and
required to be paid by the Borrower hereunder), shall have been paid by the
Borrower or will be contemporaneous with closing;

 

(l)           unaudited consolidated financial statements of the Collateral
Manager for the fiscal year ended December 31, 2018;

 

(m)          Delivery of such Collateral (including any promissory note,
executed assignment agreements and word or pdf copies of the principal credit
agreement for each initial Collateral Loan, to the extent received by the
Borrower) in accordance with the provisions of Article XIV shall have been
effected;

 

(n)          a certificate of a Responsible Officer of the Borrower, dated as of
the Closing Date, to the effect that, in the case of each item of Collateral
pledged to the Collateral Agent, on the Closing Date and immediately prior to
the delivery thereof on the Closing Date:

 

(i)          the Borrower is the owner of such Collateral free and clear of any
liens, claims or encumbrances of any nature whatsoever except for (A) those
which are being released on the Closing Date and (B) Permitted Liens;

 

(ii)         the Borrower has acquired its ownership in such Collateral in good
faith without notice of any adverse claim, except as described in clause (i)
above;

 

(iii)        the Borrower has not assigned, pledged or otherwise encumbered any
interest in such Collateral (or, if any such interest has been assigned, pledged
or otherwise encumbered, it has been released) other than interests granted
pursuant to this Agreement;

 

(iv)        the Borrower has full right to grant a security interest in and
assign and pledge such Collateral to the Collateral Agent; and

 

(v)         upon grant by the Borrower, the Collateral Agent has a first
priority perfected security interest in the Collateral, except as permitted by
this Agreement;

 

(o)          all documentation and other information requested by any such
Lender required by bank regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including the Patriot
Act; and the Administrative Agent shall have received a fully executed Internal
Revenue Service Form W-9 (or its equivalent) for the Borrower, the Collateral
Manager and the BDC;

 

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(p)          a closing certificate from the Borrower substantially in the form
set forth on Exhibit H hereto;

 

(q)          such other opinions, instruments, certificates and documents from
the Borrower, the Collateral Manager and the BDC as the Agents, the Document
Custodian, the Collateral Administrator or any Lender shall have reasonably
requested;

 

(r)           the BDC shall have raised equity of at least $10,000,000; and

 

(s)          an executed Certificate of Beneficial Ownership and all
documentation and other information requested by any such Lender required by
bank regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including the Patriot Act.

 

Section 3.02.         Conditions Precedent to Each Borrowing. The obligation of
each Lender to make each Advance to be made by it (including the initial
Advance) on each Borrowing Date shall be subject to the fulfillment of the
following conditions; provided that the conditions described in clauses (c) and
(d) (other than a Default or Event of Default described in Sections 6.01(c) or
(f) or in Sections 6.03(c), (e) or (f)) below need not be satisfied if the
proceeds of the Borrowing are used settle trades committed to by the Borrower
prior to the end of the Reinvestment Period:

 

(a)          the Administrative Agent shall have received a Notice of Borrowing
with respect to such Advance (including the Borrowing Base Calculation Statement
attached thereto, all duly completed) delivered in accordance with Section 2.02;

 

(b)          immediately after the making of such Advance on the applicable
Borrowing Date, each Coverage Test shall be satisfied, as demonstrated on the
Borrowing Base Calculation Statement and attached to such Notice of Borrowing;

 

(c)          each of the representations and warranties of the Borrower and the
Collateral Manager contained in this Agreement shall be true and correct in all
material respects (except for representations and warranties already qualified
by materiality or Material Adverse Effect, which shall be true and correct) as
of such Borrowing Date (except to the extent such representations and warranties
expressly relate to any earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such earlier
date as if made on such date);

 

(d)          no Default or Event of Default shall have occurred and be
continuing at the time of the making of such Advance or shall result upon the
making of such Advance; and

 

(e)          such Advance shall not cause the aggregate principal amount of
Advances outstanding hereunder to increase by more than $50,000,000 during the
32-day period ending on the related Borrowing Date of such Advance unless
otherwise approved by the Administrative Agent in its sole discretion.

 

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Article IV

Representations and Warranties

 

Section 4.01.         Representations and Warranties of the Borrower. The
Borrower represents and warrants to each of the Secured Parties on and as of
each Measurement Date (and, in respect of clause (i) below, each date such
information is provided by or on behalf of it), as follows:

 

(a)          Due Organization. The Borrower 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 Borrower is in good
standing in the State of Delaware. The Borrower 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, 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 Borrower of, and the
performance of its obligations under the Facility Documents to which it is a
party and the other instruments, certificates and agreements contemplated
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 (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors’ rights generally, (ii) general principles of equity,
regardless of whether considered in a proceeding in equity or at law or (iii)
implied covenants of good faith and fair dealing.

 

(d)          Non-Contravention. None of the execution and delivery by the
Borrower of this Agreement or the other Facility Documents to which it is a
party, the Borrowings or the pledge of the Collateral hereunder, the
consummation of the transactions herein or therein contemplated, or compliance
by it with the terms, conditions and provisions hereof or thereof, will
(i) conflict with, or result in a material 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), except in the case of
clauses (ii) and (iii) above, where such conflicts, contravention, breaches,
violations or defaults could not reasonably be expected to have a Material
Adverse Effect.

 

 -68- 

 

 

(e)          Governmental Authorizations; Private Authorizations; Governmental
Filings. The Borrower 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, except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect, and made all
material Governmental Filings necessary for the execution and delivery by it of
the Facility Documents to which it is a party, the Borrowings by the Borrower
under this Agreement, the pledge of the Collateral by the Borrower under this
Agreement and the performance by the Borrower of its obligations under this
Agreement, the other Facility Documents, and no material 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, the Borrowings by the Borrower under this Agreement, the pledge of the
Collateral by the Borrower under this Agreement or the performance of its
obligations under this Agreement and the other Facility Documents to which it is
a party.

 

(f)          Compliance with Agreements, Laws, Etc. The Borrower has duly
observed and complied in all material respects with all Applicable Laws relating
to the conduct of its business and its assets. The Borrower has preserved and
kept in full force and effect its rights, privileges, qualifications and
franchises, except where the failure to do so could not reasonably be expected
to result in a Material Adverse Effect. Without limiting the foregoing, (x) to
the extent applicable, the Borrower is in compliance in all material respects
with the regulations and rules promulgated by the U.S. Department of Treasury
and/or administered by the U.S. Office of Foreign Asset Controls (“OFAC”),
including U.S. Executive Order No. 13224, and other related statutes, laws and
regulations (collectively, the “Subject Laws”), (y) the Borrower has adopted
internal controls and procedures designed to ensure its continued compliance in
all material respects with the applicable provisions of the Subject Laws and to
the extent applicable, will adopt procedures consistent in all material respects
with the PATRIOT Act and implementing regulations, and (z) to the knowledge of
the Borrower (based on the implementation of its internal procedures and
controls), no investor in the Borrower is a Person whose name appears on the
“List of Specially Designated Nationals” and “Blocked Persons” maintained by the
OFAC.

 

(g)          Location. The Borrower’s chief place of business and its chief
executive office are located in the State of Illinois. The Borrower’s registered
office and the jurisdiction of organization of the Borrower is the jurisdiction
referred to in Section 4.01(a).

 

 -69- 

 

 

(h)          Investment Company Act. Assuming compliance by each of the Lenders
and any participant with Section 16.06(e), neither the Borrower nor the pool of
Collateral is required to register as an “investment company” under the
Investment Company Act. The transactions contemplated by this Agreement and the
other Facility Documents do not result in the Administrative Agent, the
Collateral Agent or the Lenders holding an “ownership interest” in a “covered
fund” for purposes of the Volcker Rule.

 

(i)           Information and Reports. Each Notice of Borrowing, each Monthly
Report and all other written information, reports, certificates and statements
(other than projections and forward-looking statements) furnished by or on
behalf of the Borrower to any Secured Party for purposes of or in connection
with this Agreement, the other Facility Documents or the transactions
contemplated hereby or thereby are (when taken as a whole) true and correct in
all material respects and does not omit to state a material fact necessary to
make the statements contained therein not misleading as of the date such
information is stated or certified. All projections and forward-looking
statements furnished by or on behalf of the Borrower were prepared in good faith
based upon assumptions believed to be reasonable at the time they were provided.

 

(j)           ERISA. Neither the Borrower nor any member of the ERISA Group has,
or during the past five years had, any liability or obligation with respect to
any Plan or Multiemployer Plan.

 

(k)          Taxes. The Borrower has filed all income tax returns and all other
material tax returns which are required to be filed by it, if any, and has paid
all taxes shown to be due and payable on such returns, if any, or pursuant to
any assessment received by any such Person, other than any such taxes,
assessments or charges that are being contested in good faith by appropriate
proceedings and for which appropriate reserves in accordance with GAAP have been
established.

 

(l)          Tax Status. For U.S. federal income tax purposes the Borrower is
(i) disregarded as an entity separate from its owner and (ii) has not made an
election under U.S. Treasury Regulation Section 301.7701-3 and is not otherwise
treated as an association taxable as a corporation.

 

(m)         Collections. The Borrower (or the Collateral Manager on behalf of
the Borrower) has instructed all Obligors or related administrative and paying
agents under the Related Documents to remit all Collections directly to the
Collection Account.

 

(n)          Plan Assets. The assets of the Borrower are not treated as “plan
assets” for purposes of 29 C.F.R. Section 2510.03-101 and Section 3(42) of ERISA
(the “Plan Asset Rule”) and the Collateral is not deemed to be “plan assets” for
purposes of the Plan Asset Rule. The Borrower has not taken, or omitted to take,
any action which would result in any of the Collateral being treated as “plan
assets” for purposes of the Plan Asset Rule or, assuming that the assets of the
Lenders, the Administrative Agent and the Collateral Agent are not deemed to be
“plan assets” for the purposes of the Plan Asset Rule, the occurrence of any
Prohibited Transaction in connection with the transactions contemplated
hereunder.

 

 -70- 

 

 

(o)          Solvency. After giving effect to each Advance hereunder, and the
disbursement of the proceeds of such Advance, the Borrower is and will be
Solvent.

 

(p)          Representations Relating to the Collateral. The Borrower hereby
represents and warrants that:

 

(i)          it owns and has legal and beneficial title to all Collateral Loans
and other Collateral free and clear of any Lien, claim or encumbrance of any
Person, other than Permitted Liens;

 

(ii)         other than Permitted Liens, the Borrower has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed any of the
Collateral. The Borrower has not authorized the filing of and is not aware of
any financing statements or any equivalent filing in any applicable jurisdiction
against the Borrower that include a description of collateral covering the
Collateral other than any financing statement or any equivalent filing in any
applicable jurisdiction relating to the security interest granted to the
Collateral Agent hereunder or that has been terminated; and the Borrower is not
aware of any judgment, PBGC liens or tax lien filings against the Borrower or
any of its assets;

 

(iii)        the Collateral constitutes Money, Cash, accounts (as defined in
Section 9-102(a)(2) of the UCC), Instruments, general intangibles (as defined in
Section 9-102(a)(42) of the UCC), Uncertificated Securities, Certificated
Securities or Security Entitlements to Financial Assets resulting from the
crediting of Financial Assets to a “securities account” (as defined in
Section 8-501(a) of the UCC);

 

(iv)        all Covered Accounts constitute “securities accounts” under
Section 8-501(a) of the UCC;

 

(v)         this Agreement creates a valid, continuing and, upon Delivery of
Collateral, filing of the financing statement referred to in clause (vii) and
execution of the Account Control Agreement, perfected security interest (as
defined in Section 1-201(37) of the UCC) in the Collateral in favor of the
Collateral Agent, for the benefit and security of the Secured Parties, which
security interest is prior to all other liens, claims and encumbrances (other
than Permitted Liens), and is enforceable as such against creditors of and
purchasers from the Borrower;

 

(vi)        the Borrower has received all consents and approvals required by the
terms of the Related Documents in respect of such Collateral to the pledge
hereunder to the Collateral Agent of its interest and rights in such Collateral;

 

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(vii)       with respect to the Collateral that constitutes accounts or general
intangibles (as defined in Section 9-102(a)(42) of the UCC), the Borrower has
caused or will have caused, on or prior to the Closing Date, 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 granted to the Collateral Agent, for the benefit and security of
the Secured Parties, hereunder (which the Borrower hereby agrees may be an “all
asset” filing). Such filing of a financing statement is sufficient to perfect
such security interest under applicable law (to the extent a security interest
may be perfected under the UCC solely by filing of a financing statement); and

 

(viii)      with respect to Collateral that constitutes Security Entitlements,
all such Collateral has been and will have been credited to the applicable
Covered Account.

 

(q)          Eligibility. Each Collateral Loan included in a Monthly Report or a
Borrowing Base Calculation Statement required to be delivered by it under this
Agreement as an Eligible Loan was, in fact, an Eligible Loan and not an
Ineligible Loan at such time, unless identified as an Ineligible Loan on such
Monthly Report or Borrowing Base Calculation Statement, as applicable.

 

(r)          Anti-Corruption Laws and Sanctions. The Borrower and its directors,
officers, managers and, to its knowledge, its agents, are in compliance with
Anti-Corruption Laws and applicable Sanctions. None of (a) the Borrower or its
directors, officers or managers, or (b) to its knowledge, any of its agents that
will act in any capacity in connection with or benefit from the credit
facilities established hereby, is a Sanctioned Person. No Borrowing, use of
proceeds thereof or other transactions hereunder will violate Anti-Corruption
Laws or applicable Sanctions.

 

(s)          Value Given. The Borrower has given fair consideration and
reasonably equivalent value to the BDC in exchange for the purchase of the
Collateral Loans (or any number of them) from the BDC pursuant to the Purchase
and Contribution Agreement. No such transfer has been made for or on account of
an antecedent debt owed by the Borrower to the BDC and no such transfer is or
may be voidable or subject to avoidance under any section of the Bankruptcy
Code.

 

(t)          Certificate of Beneficial Ownership. The Certificate of Beneficial
Ownership executed and delivered to the Administrative Agent, the Collateral
Agent and Lenders on or prior to the Closing Date, as updated from time to time
in accordance with this Agreement, is accurate, complete and correct as of the
Closing Date and as of the date any such update is delivered.

 

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Section 4.02.         Representations and Warranties of the Collateral Manager.
The Collateral Manager (and the Borrower, where so indicated) represents and
warrants to each of the Secured Parties on and as of each Measurement Date (and
in respect of clause (i) below, each date such information is provided by or on
behalf of it), as follows:

 

(a)          Due Organization. The Collateral Manager is a corporation 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 Collateral Manager is in
good standing in the State of Maryland. The Collateral Manager 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 Collateral Manager
of, and the performance of its obligations under the Facility Documents to which
it is a party and the other instruments, certificates and agreements
contemplated 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 (i) applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors’ rights generally (ii) general principles of
equity, regardless of whether considered in a proceeding in equity or at law or
(iii) implied covenants of good faith and fair dealing.

 

(d)          Non-Contravention. None of the execution and delivery by the
Collateral Manager of this Agreement or the other Facility Documents to which it
is a party, the consummation of the transactions herein or therein contemplated,
or 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 of, 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), except in the case of
clauses (ii) and (iii) above, where such conflicts, contravention, breaches,
violations or defaults could not reasonably be expected to have a Material
Adverse Effect.

 

 -73- 

 

 

(e)          Governmental Authorizations; Private Authorizations; Governmental
Filings. The Collateral Manager 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, except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect, and
made all material 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 Collateral Manager of its obligations under this Agreement, the other
Facility Documents, and no material 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 Agreements, Laws, Etc. The Collateral Manager has
duly observed and complied in all material respects with all Applicable Laws,
including the Securities Act and the Investment Company Act, relating to the
conduct of its business and its assets. The Collateral Manager has preserved and
kept in full force and effect its rights, privileges, qualifications and
franchises, except where the failure to do so could not reasonably be expected
to result in a Material Adverse Effect. Without limiting the foregoing, (x) to
the extent applicable, the Collateral Manager is in compliance in all material
respects with Subject Laws, (y) the Collateral Manager has adopted internal
controls and procedures designed to ensure its continued compliance in all
material respects with the applicable provisions of the Subject Laws and to the
extent applicable, will adopt procedures consistent in all material respects
with the PATRIOT Act and implementing regulations, once such regulations have
been finalized, and (z) to the knowledge of the Collateral Manager (based on the
implementation of its internal procedures and controls), no investor in the
Collateral Manager is a Person whose name appears on the “List of Specially
Designated Nationals” and “Blocked Persons” maintained by the OFAC.

 

(g)          Location of Records. The Collateral Manager’s chief place of
business, its chief executive office and the office in which the Collateral
Manager maintains its books and records are located in the State of Illinois.
The Collateral Manager’s registered office and the jurisdiction of organization
of the Collateral Manager is the jurisdiction referred to in Section 4.02(a).

 

(h)          Investment Advisers Act. The Collateral Manager is a Registered
Investment Adviser.

 

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(i)           Information and Reports. Each Notice of Borrowing, each Monthly
Report and all other written information, reports, certificates and statements
(other than projections and forward-looking statements) furnished by the
Collateral Manager to any Secured Party for purposes of or in connection with
this Agreement, the other Facility Documents or the transactions contemplated
hereby or thereby are (when taken as a whole) true and correct in all material
respects and does not omit to state a material fact necessary to make the
statements contained therein not misleading as of the date such information is
stated or certified. All projections and forward-looking statements furnished by
the Collateral Manager were prepared in good faith based upon assumptions
believed to be reasonable at the time they were provided.

 

(j)           ERISA. Neither the Collateral Manager nor any member of the ERISA
Group has, or during the past five years had, any liability or obligation with
respect to any Plan or Multiemployer Plan.

 

(k)          Taxes. The Collateral Manager has filed all income tax returns and
all other material tax returns which are required to be filed by it, if any, and
has paid all taxes shown to be due and payable on such returns, if any, or
pursuant to any assessment received by any such Person, other than any such
taxes, assessments or charges that are being contested in good faith by
appropriate proceedings and for which appropriate reserves in accordance with
GAAP have been established.

 

(l)           Eligibility. Each Collateral Loan included in a Monthly Report or
a Borrowing Base Calculation Statement required to be delivered by it under this
Agreement as an Eligible Loan was, in fact, an Eligible Loan and not an
Ineligible Loan at such time, unless identified as an Ineligible Loan on such
Monthly Report or Borrowing Base Calculation Statement, as applicable.

 

(m)          Anti-Corruption Laws and Sanctions. The Collateral Manager and its
subsidiaries and their respective directors, officers, managers and, to its
knowledge, its agents, are in compliance with Anti-Corruption Laws and
applicable Sanctions. None of (a) the Collateral Manager, its subsidiaries or
their respective directors, officers or managers, or (b) to their respective
knowledge, any of their agents that will act in any capacity in connection with
or benefit from the credit facilities established hereby, is a Sanctioned
Person.

 

Article V

Covenants

 

Section 5.01.         Affirmative Covenants of the Borrower. The Borrower
covenants and agrees that, until the date that all Obligations have been paid in
full, other than contingent indemnification obligations as to which no claim
giving rise thereto has been asserted, and all Commitments hereunder have been
terminated:

 

(a)          Compliance with Agreements, Laws, Etc. It shall (i) duly observe,
comply in all material respects with all Applicable Laws relative to the conduct
of its business or to its assets, (ii) preserve and keep in full force and
effect its legal existence, (iii) preserve and keep in full force and effect its
rights, privileges, qualifications and franchises, except where the failure to
do so could not reasonably be expected to result in a Material Adverse Effect,
(iv) comply in all material respects with the terms and conditions of each
Facility Document, its Constituent Documents and each Related Document to which
it is a party and (v) obtain, maintain and keep in full force and effect all
Governmental Authorizations, Private Authorizations and Governmental Filings
which are necessary to carry out its business and the transactions contemplated
to be performed by it under the Facility Documents, its Constituent Documents
and the Related Documents to which it is a party.

 

 -75- 

 

 

(b)          Enforcement. (i)  It shall not take any action, and will use
commercially reasonable efforts not to permit any action to be taken by others,
that would release any Person from any of such Person’s material covenants or
obligations under any instrument included in the Collateral, except in the case
of (A) repayment of Collateral Loans, (B) subject to the terms of this
Agreement, (i) amendments to Related Documents that govern Defaulted Loans or
Ineligible Loans, (ii) amendments to Collateral Loans in accordance with the
Credit and Collection Policies and the Collateral Management Standard, and
(iii) actions taken in connection with the work-out or restructuring of any
Collateral Loan in accordance with the provisions hereof, and (C) other actions
by the Collateral Manager to the extent not prohibited by this Agreement or as
otherwise required hereby.

 

(ii)          Except as provided for in this Agreement, it will not, without the
prior written consent of the Administrative Agent and the Required Lenders,
contract with other Persons for the performance of actions and obligations to be
performed by the Borrower or the Collateral Manager hereunder. Notwithstanding
any such arrangement, the Borrower shall remain primarily liable with respect
thereto. The Borrower will punctually perform, and use its commercially
reasonable efforts to cause the Collateral Manager and such other Person to
perform, all of their obligations and agreements contained in this Agreement or
any other Facility Document.

 

(c)          Further Assurances. It shall promptly upon the reasonable request
of the Administrative Agent, the Collateral Agent (acting at the direction of
the Administrative Agent) or the Required Lenders (through the Administrative
Agent), at the Borrower’s expense, execute and deliver such further instruments
and take such further action in order to maintain and protect the Collateral
Agent’s first-priority perfected security interest in the Collateral pledged by
the Borrower for the benefit of the Secured Parties free and clear of any Liens
(other than Permitted Liens). At the reasonable request of the Administrative
Agent, the Collateral Agent (acting at the direction of the Administrative
Agent) or the Required Lenders (through the Administrative Agent), the Borrower
shall promptly take, at the Borrower’s expense, such further action in order to
establish and protect the rights, interests and remedies created or intended to
be created under this Agreement in favor of the Secured Parties in the
Collateral, including all actions which are necessary to (x) enable the Secured
Parties to enforce their rights and remedies under this Agreement and the other
Facility Documents, and (y) effectuate the intent and purpose of, and to carry
out the terms of, the Facility Documents. Subject to Section 7.02, and without
limiting its obligation to maintain and protect the Collateral Agent’s first
priority security interest in the Collateral, the Borrower authorizes the
Collateral Agent to file or record financing statements (including financing
statements describing the Collateral as “all assets” or the equivalent) and
other filing or recording documents or instruments with respect to the
Collateral in such form and in such offices as are necessary to perfect the
security interests of the Collateral Agent under this Agreement under each
method of perfection required herein with respect to the Collateral, provided,
that the Collateral Agent does not hereby assume any obligation of the Borrower
to maintain and protect its security interest under this Section 5.01 or Section
7.07.

 

 -76- 

 

 

In addition, the Borrower will take such reasonable action from time to time as
shall be necessary to ensure that all assets (including all Covered Accounts,
but excluding all Excluded Amounts) of the Borrower constitute “Collateral”
hereunder. Subject to the foregoing, the Borrower will, and, upon the reasonable
request of Administrative Agent, the Collateral Agent (acting at the direction
of the Administrative Agent) shall, at the Borrower’s expense, take such other
action (including executing and delivering or authorizing for filing any
required UCC financing statements) as shall be necessary to create and perfect a
valid and enforceable first-priority security interest on all Collateral
acquired by the Borrower as collateral security for the Obligations and will in
connection therewith deliver such proof of corporate action, incumbency of
officers, opinions of counsel and other documents as is consistent with those
delivered by the Borrower pursuant to Section 3.01 on the Funding Effective Date
or as the Administrative Agent, the Collateral Agent (acting at the direction of
the Administrative Agent) or the Required Lenders (through the Administrative
Agent) shall have reasonably requested.

 

(d)          Financial Statements; Other Information. It shall provide to the
Administrative Agent or cause to be provided to the Administrative Agent (with
enough additional copies for each Lender) with a copy to the Collateral Agent:

 

(i)          within ninety days after the end of each fiscal year of the BDC,
the BDC’s audited consolidated balance sheet and related line item profit and
loss statements (including (x) a consolidating schedule showing such statements
for the Borrower and (y) the most recent quarterly valuation statement for the
BDC) as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on by
independent public accountants of recognized national standing (without a “going
concern” or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the BDC, and each of its consolidated
subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;

 

 -77- 

 

 

(ii)         within sixty days after the end of each of the first three fiscal
quarters of each fiscal year of the BDC, each of its unaudited consolidated
balance sheet and related line item profit and loss statements (in the case of
the BDC, including (x) a consolidating schedule showing such statements for the
Borrower and (y) the most recent quarterly valuation statement for the BDC) as
of the end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, in each case, to the extent produced, setting forth in each case in
comparative form the figures for the corresponding period or periods of (or, in
the case of the balance sheet, as of the end of) the previous fiscal year, all
certified by a Responsible Officer as presenting fairly in all material respects
the financial condition and results of operations of the BDC and each of its
consolidated subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;

 

(iii)        [reserved];

 

(iv)        within two Business Days after a Responsible Officer of the
Collateral Manager or a Responsible Officer of the Borrower obtains actual
knowledge of the occurrence and continuance of any (w) Default or (x) Event of
Default, a certificate of a Responsible Officer of the Borrower setting forth
the details thereof and the action which the Borrower is taking or proposes to
take with respect thereto;

 

(v)         from time to time such additional information regarding the
Borrower’s financial position or business and the Collateral (including
reasonably detailed calculations of each Coverage Test) as the Administrative
Agent or the Required Lenders (through the Administrative Agent) may reasonably
request if reasonably available to the Borrower;

 

(vi)        promptly after the occurrence of any ERISA Event, notice of such
ERISA Event and copies of any communications with all Governmental Authorities
or any Multiemployer Plan with respect to such ERISA Event;

 

(vii)       promptly after the occurrence of any change in the Borrower’s
taxpayer identification number, notice of such change on an IRS Form W-9;

 

(viii)      at least two (2) Business Days prior to doing so, the Borrower shall
provide notice of any change in its chief place of business, its chief executive
office or the office in which the Borrower maintains its books and records;

 

(ix)         within 15 days after each Determination Date, a Compliance
Certificate in the form attached hereto as Exhibit J calculating each Coverage
Test;

 

(x)          within 90 days after the last day of each fiscal year, a
certificate in form and substance reasonably satisfactory to the Administrative
Agent calculating the total net revenue of the Collateral Manager; and

 

 -78- 

 

 

(xi)         as soon as commercially practicable: (i) promptly upon request
therefor by the Administrative Agent or any Lender, confirmation of the accuracy
of the information set forth in the most recent Certificate of Beneficial
Ownership provided to the Administrative Agent and Lenders; (ii) a new
Certificate of Beneficial Ownership, in form and substance acceptable to the
Administrative Agent and each Lender, when the individual(s) to be identified as
a Beneficial Owner have changed; and (iii) such other information and
documentation as may reasonably be requested by the Administrative Agent or any
Lender from time to time for purposes of compliance by the Administrative Agent
or such Lender with Applicable Laws (including without limitation the Patriot
Act and other “know your customer” and anti-money laundering rules and
regulations), and any policy or procedure implemented by the Administrative
Agent or such Lender to comply therewith.

 

(e)          Access to Records and Documents. It shall permit the Administrative
Agent and each Lender (or any Person designated by the Administrative Agent or
such Lender) to, upon reasonable advance notice (which, so long as no Event of
Default shall have occurred and be continuing, shall not be less than two
Business Days) and during normal business hours, visit and inspect and make
copies thereof at reasonable intervals (i) of its books, records and accounts
relating to its business, financial condition, operations, assets and its
performance under the Facility Documents and the Related Documents and to
discuss the foregoing with its and such Person’s officers, partners, employees
and accountants, and (ii) all of its Related Documents, in each case all as
often as the Administrative Agent or the Lenders may reasonably request;
provided that so long as no Event of Default has occurred and is continuing,
each Person entitled to so visit and inspect the Borrower’s records under this
clause (e) may only exercise its rights under this clause (e) twice during any
fiscal year of the Borrower (it being understood that the Borrower shall be
responsible for all costs and expenses for only one such visit per fiscal year
absent the occurrence and continuance of an Event of Default). The
Administrative Agent and each Lender agrees to use commercially reasonable
efforts to coordinate with each other Lender in exercising their respective
rights under this paragraph (e) and under Section 5.03(d) below with a view to
minimizing duplication of effort and expense by the Borrower.

 

(f)          Use of Proceeds. It shall use the proceeds of each Advance made
hereunder solely to fund or pay the purchase price of Loans (other than
Ineligible Loans) or Eligible Investments acquired by the Borrower in accordance
with the terms and conditions set forth herein or for general corporate purposes
(including for the avoidance of doubt to make Restricted Payments to its members
in respect of their membership interests in the Borrower).

 

Without limiting the foregoing, it shall use the proceeds of each Advance in a
manner that does not, directly or indirectly, violate any provision of its
Constituent Documents or any Applicable Law, including Regulation T, Regulation
U and Regulation X.

 

 -79- 

 

 

(g)          Audit Rights. It will permit the Administrative Agent and any
Lender (or any representatives thereof (including any consultants, accountants,
lawyers and appraisers)) to conduct evaluations and appraisals of the Borrower’s
computation of the Borrowing Base and the assets included in the Borrowing Base
at least once and no more than twice during any fiscal year of the Borrower. The
Borrower shall pay the reasonable and documented fees and expenses of any
representatives retained by the Administrative Agent or any Lender to conduct
any such evaluation or appraisal; provided that (i) the Borrower shall not be
required to pay such fees and expenses for more than one such evaluation or
appraisal during any calendar year unless an Event of Default has occurred and
is continuing and (ii) such evaluation or appraisal shall not be duplicative of
any audit under Section 5.03(e). Each Lender agrees to use commercially
reasonable efforts to coordinate with the other Lenders in exercising their
respective rights under this paragraph (g) and under Section 5.03(e) with a view
to minimizing duplication of effort and expense by the Borrower.

 

(h)          Opinions as to Collateral. On or before each five (5) year
anniversary of the Closing Date until the Final Maturity Date, the Borrower
shall furnish to the Agents an opinion of counsel, addressed to the Borrower,
the Lenders and the Agents, relating to the continued perfection of the security
interest granted by the Borrower to the Collateral Agent hereunder.

 

(i)           No Other Business. The Borrower shall not engage in any business
or activity other than borrowing Advances pursuant to this Agreement,
originating, funding, acquiring, owning, holding, administering, selling,
enforcing, lending, exchanging, redeeming, pledging, contracting for the
management of and otherwise dealing with Loans, Eligible Investments and the
other Collateral in connection therewith and entering into and performing its
obligations under the Facility Documents, any applicable Related Documents and
any other agreements contemplated by this Agreement, and shall not engage in any
activity or take any other action that would cause the Borrower to be subject to
U.S. Federal or material state or local income tax on a net income basis.

 

(j)           Tax Matters. The Borrower shall (and each Lender hereby agrees to)
treat the Advances as debt for U.S. federal income tax purposes and will take no
contrary position, except to the extent required by law. Assuming that such
treatment is correct, the Borrower shall at all times maintain its status as an
entity disregarded as an entity separate from its owner for U.S. federal income
tax purposes. The Borrower shall at all times ensure that its owner is and will
remain a United States person as defined by Section 7701(a)(30) of the Code.
Notwithstanding any contrary agreement or understanding, the Collateral Manager,
the Borrower, the Agents and the Lenders (and each of their respective
employees, representatives or other agents) may disclose to any and all Persons,
without limitation of any kind, the tax treatment and tax structure of the
transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to them relating to
such tax treatment and tax structure. The foregoing provision shall apply from
the beginning of discussions between the parties. For this purpose, the tax
treatment of a transaction is the purported or claimed U.S. tax treatment of the
transaction under applicable U.S. federal, state or local law, and the tax
structure of a transaction is any fact that may be relevant to understanding the
purported or claimed U.S. tax treatment of the transaction under applicable U.S.
federal, state or local law.

 

 -80- 

 

 

(k)          Collections. The Borrower (or the Collateral Manager on behalf of
the Borrower) shall direct all Obligors or related administrative and paying
agents under the Related Documents to remit all Collections directly to the
Collection Account.

 

(l)           Priority of Payments. The Borrower shall direct the Collateral
Agent to apply all Interest Proceeds and Principal Proceeds solely in accordance
with the provisions of this Agreement.

 

(m)         Information and Reports. Each Notice of Borrowing, each Monthly
Report and all other written information, reports, certificates and statements
furnished by or on behalf of the Borrower to any Secured Party for purposes of
or in connection with this Agreement, the other Facility Documents or the
transactions contemplated hereby or thereby shall be true, complete and correct
in all material respects as of the date such information is stated or certified;
provided that solely with respect to information furnished by the Borrower which
was provided to the Borrower from an Obligor with respect to a Collateral Loan,
such information shall only need to be true, complete and correct in all
material respects to the actual knowledge of the Borrower.

 

(n)          Compliance with Legal Opinions. The Borrower shall take all other
actions necessary to maintain the accuracy of the factual assumptions set forth
in the legal opinions of Winston & Strawn LLP, as counsel to the Borrower,
issued in connection with the Purchase and Contribution Agreement and relating
to the issues of substantive consolidation and true sale of certain Loans.

 

Section 5.02.         Negative Covenants of the Borrower. The Borrower covenants
and agrees that until the date that all Obligations have been paid in full,
other than contingent indemnification obligations as to which no claim giving
rise thereto has been asserted, and all Commitments hereunder have been
terminated:

 

(a)          Restrictive Agreements. It shall not enter into or suffer to exist
or become effective any agreement that prohibits, limits or imposes any
condition upon its ability to create, incur, assume or suffer to exist any Lien
(other than Permitted Liens) upon any of its property or revenues constituting
Collateral, whether now owned or hereafter acquired, to secure its obligations
under the Facility Documents other than this Agreement and the other Facility
Documents.

 

(b)          Liquidation; Merger; Sale of Collateral. It shall not consummate
any plan of division, plan of liquidation, dissolution, partial liquidation,
merger or consolidation (or suffer any liquidation, dissolution or partial
liquidation) nor sell, transfer, exchange or otherwise dispose of any of its
assets, or enter into an agreement or commitment to do so or enter into or
engage in any business with respect to any part of its assets, except as
expressly permitted by Section 10.01 of this Agreement (including in connection
with the repayment in full of the Obligations) or with the prior written consent
of the Required Lenders.

 

 -81- 

 

 

(c)          Amendments to Constituent Documents, etc. Without the consent of
the Administrative Agent, (i) it shall not amend, modify or take any action
inconsistent with its Constituent Documents and (ii) it will not amend, modify
or waive any term or provision in any Facility Document (other than in
accordance with its terms, including any provision thereof requiring the consent
of the Administrative Agent or all or a specified percentage of the Lenders).

 

(d)          ERISA. Neither it nor any member of the ERISA Group shall establish
any Plan or Multiemployer Plan.

 

(e)          Liens. It shall not create, assume or suffer to exist any Lien on
any of its assets now owned or hereafter acquired by it at any time, except for
Permitted Liens.

 

(f)           Margin Requirements. It shall not (i) extend credit to others for
the purpose of buying or carrying any Margin Stock in such a manner as to
violate Regulation T or Regulation U or (ii) use all or any part of the proceeds
of any Advance, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that violates the provisions of the
Regulations of the Board of Governors, including, to the extent applicable,
Regulation U and Regulation X.

 

(g)          Restricted Payments. It shall not make, directly or indirectly, any
Restricted Payment (whether in the form of cash or other assets) or incur any
obligation (contingent or otherwise) to do so; provided that the Borrower may
make Restricted Payments to its members in respect of their membership interests
in the Borrower (i) on any day, with amounts paid to the Borrower pursuant to
Section 9.01 on any applicable Payment Date (ii) at any time with Principal
Proceeds, subject to satisfaction of the requirements set forth in Section
8.02(b) and (iii) at any time during the Revolving Period, with the proceeds of
any Advance so long as (x) the conditions precedent to such Advance set forth in
Section 4.02 are satisfied, (y) no Default or Event of Default shall have
occurred and be continuing or result from such Restricted Payment and (z) none
of the proceeds from such Advance are needed to settle the acquisition of any
Eligible Loan.

 

(h)          Changes to Filing Information. It shall not change its name, its
chief place of business, its chief executive office, the office in which the
Borrower maintains its principal books and records or its jurisdiction of
organization, unless it gives ten days’ prior written notice to the Agents and
takes all actions necessary to protect and perfect the Collateral Agent’s
perfected security interest in the Collateral and promptly files appropriate
amendments to all previously filed financing statements that are necessary to
continue to perfect the security interests of the Collateral Agent under this
Agreement under each method of perfection required herein with respect to the
Collateral (and shall provide copy of such amendments to the Collateral Agent
and the Administrative Agent).

 

 -82- 

 

 

(i)           Transactions with Affiliates. Except as permitted or required
under the Facility Documents, it shall not sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates (including, without limitation, sales of Defaulted Loans and other
Loans) unless such transaction is upon terms no less favorable to the Borrower
than it would obtain in a comparable arm’s length transaction with a Person that
is not an Affiliate (it being agreed that any purchase or sale at par shall be
deemed to comply with this provision).

 

(j)           Investment Company Restriction. It shall not become required to
register as an “investment company” under the Investment Company Act.

 

(k)          Subject Laws. It shall not utilize directly or indirectly the
proceeds of any Advance for the benefit of any Person controlling, controlled
by, or under common control with any other Person, whose name appears on the
List of Specially Designated Nationals and Blocked Persons maintained by OFAC or
otherwise in violation of any Subject Laws.

 

(l)           No Claims Against Advances. Subject to Applicable Law, it shall
not claim any credit on, make any deduction from, or dispute the enforceability
of payment of the principal or interest payable (or any other amount) in respect
of the Advances or assert any claim against any present or future Lender, by
reason of the payment of any taxes levied or assessed upon any part of the
Collateral.

 

(m)         Indebtedness; Guarantees; Securities; Other Assets. It shall not
incur or assume or guarantee any indebtedness, obligations (including contingent
obligations) or other liabilities, or issue any additional securities, whether
debt or equity, in each case other than (i) pursuant to or as expressly
permitted by of this Agreement or (ii) pursuant to customary indemnification and
expense reimbursement and similar provisions under the Related Documents or
otherwise in the ordinary course of business as is customary for Special Purpose
Entities. The Borrower shall not acquire any Loans or other property other than
as expressly permitted hereunder; it being understood and agreed that the
Borrower shall be permitted to acquire Loans from its Affiliates and from
unaffiliated third parties.

 

(n)         Validity of this Agreement. It shall not (i) take any action to
permit or fail to take any action that would cause the validity or effectiveness
of this Agreement or any grant of Collateral hereunder to be impaired, or permit
the lien of this Agreement to be amended, hypothecated, subordinated, terminated
or discharged, or permit any Person to be released from any covenants or
obligations with respect to this Agreement (except in accordance with its terms)
and (ii) take any action that would permit the Lien of this Agreement not to
constitute a valid first priority security interest in the Collateral (subject
to Permitted Liens).

 

(o)          [Reserved].

 

 -83- 

 

 

(p)          Subsidiaries. It shall not have or permit the formation of any
subsidiaries (other than equity interests in Obligors in connection with the
exercise of any remedies with respect to a Collateral Loan or any exchange
offer, work-out or restructuring of a Collateral Loan).

 

(q)          Name. It shall not conduct business under any name other than its
own.

 

(r)           Employees. It shall not have any employees (other than officers
and directors to the extent they are employees).

 

(s)          Non-Petition. The Borrower shall not be party to any agreements
under which it has any material obligations or liability (direct or contingent)
without using commercially reasonable efforts to include customary
“non-petition” and “limited recourse” provisions therein (and shall not amend or
eliminate such provisions in any agreement to which it is party), except for
loan agreements, related loan documents, bond indentures and related bond
documents, any agreements related to the purchase and sale of any Loans which
contain customary (as determined by the Collateral Manager) purchase or sale
terms or which are documented using customary (as determined by the Collateral
Manager) loan trading documentation, and customary service contracts and
engagement letters entered into with Permitted Agents in connection with the
Loans.

 

(t)           Certificated Securities. The Borrower shall not acquire or hold
any Certificated Securities in bearer form (other than securities not required
to be in registered form under Section 163(f)(2)(A) of the Code) in a manner
that does not satisfy the requirements of United States Treasury Regulations
section 1.165-12(c) (as determined by the Collateral Manager).

 

(u)          Independent Manager. The Borrower shall at all times (other than in
connection with the resignation, death, incapacity or disability of a current
independent manager) maintain at least one independent manager who (A) for the
five year period prior to his or her appointment as independent manager has not
been, and during the continuation of his or her service as independent manager,
is not: (i) an employee, manager, member, stockholder, partner or officer of the
Borrower or any of its Affiliates (other than his or her service as an
independent manager of the Borrower or any of its Affiliates that are structured
to be “bankruptcy remote”), (ii) a significant customer or supplier of the
Borrower or any of its Affiliates, (iii) a Person controlling or under common
control with any partner, shareholder, member, manager, Affiliate or supplier of
the Borrower or any Affiliate of the Borrower, or (iv) any member of the
immediate family of a Person described in clauses (i), (ii) or (iii); provided
that an independent manager may serve in similar capacities for other special
purpose entities established from time to time by Affiliates of the Borrower and
(B) is a Professional Independent Manager. The criteria set forth above in this
Section 5.02(u) are referred to herein as the “Independent Manager Criteria”.
The Borrower shall notify the Administrative Agent of any decision to appoint a
new manager of the Borrower as the “independent manager” for purposes of this
Agreement, such notice shall be delivered not less than ten days prior to the
proposed effective date of such appointment (unless such appointment is due to
the resignation, death, incapacity, disability or unwillingness to serve of the
prior independent manager, in which case the Borrower shall deliver notice
promptly upon identifying the successor independent manager) and shall certify
that the designated Person satisfies the Independent Manager Criteria. Except
for the appointment of a successor independent manager employed by any of AMACAR
Group LLC, Citadel SPV, Global Securitization Services, LLC, Lord Securities
Corporation, Puglisi & Associates or CT Corporation following the death,
disability or incapacity of the previous independent manager, the Borrower shall
not appoint a new manager as the independent manager without first confirming
that such proposed new independent manager is acceptable to the Administrative
Agent as evidenced in a writing executed by the Administrative Agent. In no
event shall any Independent Manager be removed or expelled except as permitted
under the Borrower’s Constituent Documents.

 

 -84- 

 

 

(v)         Changes to Related Documents. If any amendment, consent, waiver or
other modification with respect to a Related Document (other than a Defaulted
Loan or an Ineligible Loan) would constitute a Material Modification, then the
Borrower shall not cause or vote in favor of any such Material Modification, if
such Material Modification would result in the occurrence of a Default or Event
of Default, without the written consent of the Administrative Agent and the
Required Lenders (such consent not to be unreasonably withheld or delayed).

 

(w)         Anti-Corruption and Sanctions. The Borrower will not request any
Borrowing, and shall not use the proceeds of any Borrowing (i) in furtherance of
an offer, payment, promise to pay, or authorization of the payment or giving of
money, or anything else of value, to any Person in violation of any
Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating
any activities, business or transaction of or with any Sanctioned Person or in
any Sanctioned Country or (iii) in any manner that would result in the violation
of any Sanctions applicable to the Borrower.

 

Section 5.03.         Affirmative Covenants of the Collateral Manager. The
Collateral Manager covenants and agrees that until the date that all Obligations
have been paid in full, other than contingent indemnification obligations as to
which no claim giving rise thereto has been asserted, and all Commitments
hereunder have been terminated:

 

(a)          Compliance with Agreements, Laws, Etc. It shall (i) duly observe,
comply in all material respects with all Applicable Laws relative to the conduct
of its business or to its assets, (ii) preserve and keep in full force and
effect its legal existence, (iii) preserve and keep in full force and effect its
rights, privileges, qualifications and franchises, except where the failure to
do so could not reasonably be expected to result in a Material Adverse Effect,
(iv) comply in all material respects with the terms and conditions of each
Facility Document, Constituent Document and each Related Document to which it is
a party, and (v) obtain, maintain and keep in full force and effect all
Governmental Authorizations, Private Authorizations and Governmental Filings
which are necessary to carry out its business and the transactions contemplated
to be performed by it under the Facility Documents, the Constituent Documents
and the Related Documents to which it is a party.

 

 -85- 

 

 

(b)          Enforcement. (i) It shall not take any action, and will use
commercially reasonable efforts not to permit any action to be taken by others,
that would release any Person from any of such Person’s covenants or obligations
under any instrument included in the Collateral, except in the case of
(A) repayment of Collateral Loans, (B) subject to the terms of this Agreement,
(1) amendments to Related Documents that govern Defaulted Loans or Ineligible
Loans, (2) amendments to Collateral Loans in accordance with the Credit and
Collection Policies and the Collateral Management Standard, and (3) actions
taken in connection with the work-out or restructuring of any Collateral Loan in
accordance with the provisions hereof, and (C) other actions by the Collateral
Manager to the extent not prohibited by this Agreement or as otherwise required
hereby.

 

(ii)         It will not, without the prior written consent of the
Administrative Agent and the Required Lenders, contract with other Persons for
the performance of actions and obligations to be performed by the Collateral
Manager hereunder. Notwithstanding any such arrangement, the Collateral Manager
shall remain primarily liable with respect thereto. In the event of such
contract, the performance of such actions and obligations by such Persons shall
be deemed to be performance of such actions and obligations by the Collateral
Manager, and the Collateral Manager will punctually perform all of its
obligations and agreements contained in this Agreement or any such other
agreement.

 

(c)          Further Assurances. It shall promptly at the Borrower’s expense,
execute and deliver such further instruments and take such further action in
order to maintain and protect the Collateral Agent’s first-priority perfected
security interest in the Collateral pledged by the Borrower for the benefit of
the Secured Parties free and clear of any Liens (subject to Permitted Liens).
The Collateral Manager shall promptly take, at the Borrower’s expense, such
further action necessary to establish and protect the rights, interests and
remedies created or intended to be created under this Agreement in favor of the
Secured Parties in the Collateral, including all actions which are necessary to
(x) enable the Secured Parties to enforce their rights and remedies under this
Agreement and the other Facility Documents, and (y) effectuate the intent and
purpose of, and to carry out the terms of, the Facility Documents.

 

In addition, the Collateral Manager will take such reasonable action from time
to time as shall be necessary to ensure that all assets (including all Covered
Accounts, but excluding all Excluded Amounts) of the Borrower constitute
“Collateral” hereunder. Subject to the foregoing, the Collateral Manager will at
the Borrower’s expense, take such other action (including executing and
delivering or authorizing for filing any required UCC financing statements) as
shall be necessary to create and perfect a valid and enforceable first-priority
security interest on all Collateral acquired by the Borrower as collateral
security for the Obligations.

 

 -86- 

 

 

(d)          Access to Records and Documents. It shall permit the Administrative
Agent and each Lender (or any Person designated by the Administrative Agent or
such Lender) to, upon reasonable advance notice (which, so long as no Event of
Default shall have occurred and be continuing, shall not be less than five
Business Days) and during normal business hours, visit and inspect and make
copies thereof at reasonable intervals (i) its books, records and accounts
relating to its business, financial condition, operations, assets and its
performance under the Facility Documents and the Related Documents and to
discuss the foregoing with its and such Person’s officers, partners, employees
and accountants, and (ii) all of its Related Documents, in each case all as
often as the Administrative Agent or the Lenders may reasonably request;
provided that so long as no Event of Default has occurred, each Person entitled
to so visit and inspect the Collateral Manager’s records under this paragraph
(d) may only exercise its rights under this paragraph (d) twice during any
fiscal year of the Collateral Manager (it being understood that the Borrower
shall be responsible for all costs and expenses for only one such visit per
fiscal year absent the occurrence and continuance of an Event of Default). The
Administrative Agent and each Lender agrees to use commercially reasonable
efforts to coordinate with each other Lender in exercising their respective
rights under this paragraph (d) and under Section 5.01(e) with a view to
minimizing duplication of effort and expense by the Borrower and the Collateral
Manager.

 

(e)          Audit Rights. It will permit the Administrative Agent and any
Lender (or any representatives thereof (including any consultants, accountants,
lawyers and appraisers)) to conduct evaluations and appraisals of the Collateral
Manager’s computation of the Borrowing Base and the assets included in the
Borrowing Base at least once and no more than twice during any fiscal year of
the Collateral Manager. The Borrower shall pay the reasonable and documented
fees and expenses of any representatives retained by the Administrative Agent or
any Lender to conduct any such evaluation or appraisal; provided that (i) the
Borrower shall not be required to pay such fees and expenses for more than one
such evaluation or appraisal during any calendar year unless an Event of Default
has occurred and is continuing and (ii) such evaluation or appraisal shall not
be duplicative of any audit under Section 5.01(g). Each Lender agrees to use
commercially reasonable terms to coordinate with the other Lenders in exercising
their respective rights under this paragraph (e) and under paragraph (d) above
with a view to minimizing duplication of effort and expense by the Borrower.

 

(f)           Independent Manager. The Collateral Manager shall notify the
Administrative Agent of any decision to appoint a new manager of the Borrower as
the “independent manager” for purposes of this Agreement, such notice shall be
delivered not less than ten days prior to the proposed effective date of such
appointment (unless such appointment is due to the resignation, death,
incapacity, disability or unwillingness to serve of the prior independent
manager, in which case the Collateral Manager shall deliver notice promptly upon
receipt of knowledge of such resignation) and shall certify that the designated
Person satisfies the Independent Manager Criteria.

 

(g)          Information and Reports. Each Notice of Borrowing, each Monthly
Report and all other written information, reports, certificates and statements
furnished by or on behalf of the Collateral Manager to any other Secured Party
for purposes of or in connection with this Agreement, the other Facility
Documents or the transactions contemplated hereby or thereby shall be true,
complete and correct in all material respects as of the date such information is
stated or certified; provided that solely with respect to information furnished
by the Collateral Manager which was provided to the Collateral Manager from an
Obligor with respect to a Collateral Loan, such information shall only need to
be true, complete and correct in all material respects to the actual knowledge
of the Collateral Manager.

 

 -87- 

 

 

(h)          Amendments to Administration Agreement and Advisory Agreement. The
Collateral Manager shall notify the Administrative Agent of any proposed
amendment or modification of the Administration Agreement or the Advisory
Agreement. Such notice shall be delivered not less than ten days prior to the
proposed effective date of such amendment or modification.

 

Section 5.04.         Negative Covenants of the Collateral Manager. The initial
Collateral Manager covenants and agrees that until the date that all Obligations
have been paid in full, other than contingent indemnification obligations as to
which no claim giving rise thereto has been asserted, and all Commitments
hereunder have been terminated:

 

(a)          Restrictive Agreements. It shall not enter into or suffer to exist
or become effective any agreement that prohibits, limits or imposes material any
condition upon its ability to perform its obligations under the Facility
Documents.

 

(b)          Validity of this Agreement. It shall not (i) take any action to
permit or fail to take any action that would cause the validity or effectiveness
of this Agreement or any grant of Collateral hereunder to be impaired, or permit
the lien of this Agreement to be amended, hypothecated, subordinated, terminated
or discharged, or permit any Person to be released from any covenants or
obligations with respect to this Agreement (except in accordance with its terms)
and (ii) except as permitted by this Agreement, take any action that would
permit the lien of this Agreement not to constitute a valid first priority
security interest in the Collateral (subject to Permitted Liens).

 

(c)          Liquidation; Merger; Disposition of Assets. It shall not consummate
any plan of liquidation, dissolution, partial liquidation, merger or
consolidation (or suffer any liquidation, dissolution or partial liquidation)
nor sell, transfer, exchange or otherwise dispose of all or substantially all of
its assets or enter into any agreement or commitment to do so, except (i) with
the prior written consent of the Required Lenders and (ii) that the Collateral
Manager shall be allowed to merge with any entity so long as the Collateral
Manager remains the surviving corporation of such merger, with a net worth not
less than the net worth of the Collateral Manager immediately prior to such
merger, and such merger does not result in an Event of Default under Section
6.2(g)(ii). The Collateral Manager shall give 30 days prior written notice of
any merger to the Administrative Agent and the Collateral Agent.

 

(d)          Changes to Related Documents. If any amendment, consent, waiver or
other modification with respect to a Related Document (other than a Defaulted
Loan or an Ineligible Loan) would constitute a Material Modification, then the
Collateral Manager shall not cause or vote in favor of any such Material
Modification to occur, if such Material Modification would result in the
occurrence of a Default or Event of Default, without the written consent of the
Administrative Agent and the Required Lenders (such consent not to be
unreasonably withheld or delayed).

 

 -88- 

 

 

(e)          Certain Amendments to Administration Agreement and Advisory
Agreement. The Collateral Manager shall not agree to any amendment or
modification of the Administration Agreement or the Advisory Agreement if any
such amendment or modification has or could reasonably be expected to have a
material adverse effect on the pool of Collateral, the Collateral Manager’s
ability to manage the pool of Collateral or the Lenders.

 

Section 5.05.         Certain Undertakings Relating to Separateness. (a) Without
limiting any, and subject to all, other covenants of the Borrower contained in
this Agreement, the Borrower shall conduct its business and operations separate
and apart from that of any other Person (including the Collateral Manager and
any of its Affiliates, the BDC and their respective Affiliates) and in
furtherance of the foregoing:

 

(1)          The Borrower shall maintain its accounts, financial statements,
books, accounting and other records, and other Borrower documents separate from
those of any other Person, provided that the Borrower may be consolidated with
the BDC solely for tax and accounting purposes.

 

(2)          The Borrower shall not commingle or pool any of its funds or assets
with those of any Affiliate or any other Person (other than as expressly
contemplated herein with respect to the Excluded Amounts), and it shall hold all
of its assets in its own name, except as otherwise permitted or required under
the Facility Documents.

 

(3)          The Borrower shall conduct its own business in its own name and,
for all purposes, shall not operate, or purport to operate, collectively as a
single or consolidated business entity with respect to any Person.

 

(4)          The Borrower shall pay its own debts, liabilities and expenses
(including overhead expenses, if any) only out of its own assets as the same
shall become due.

 

(5)          The Borrower has observed, and shall observe all (A) limited
liability company formalities and (B) other organizational formalities, in each
case to the extent necessary or advisable to preserve its separate existence,
and shall preserve its existence, and it shall not, nor shall it permit any
Affiliate or any other Person to, amend, modify or otherwise change its limited
liability company agreement in a manner that would adversely affect the
existence of the Borrower as a bankruptcy-remote special purpose entity.

 

(6)          The Borrower shall not (A) guarantee, become obligated for, or hold
itself or its credit out to be responsible for or available to satisfy, the
debts or obligations of any other Person or (B) control the decisions or actions
respecting the daily business or affairs of any other Person except as permitted
by or pursuant to the Facility Documents.

 

 -89- 

 

 

(7)          The Borrower shall, at all times, hold itself out to the public as
a legal entity separate and distinct from any other Person provided that the
assets of the Borrower may be consolidated into the BDC for accounting purposes
and included in consolidated financial statements of the BDC.

 

(8)          The Borrower shall not identify itself as a division of any other
Person.

 

(9)          The Borrower shall maintain its assets in such a manner that it
will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any Affiliate or any other Person.

 

(10)        The Borrower shall not use its separate existence to perpetrate a
fraud in violation of Applicable Law.

 

(11)        The Borrower shall not, in connection with the Facility Documents,
act with an intent to hinder, delay or defraud any of its creditors in violation
of Applicable Law.

 

(12)        The Borrower shall maintain an arm’s length relationship with its
Affiliates and the Collateral Manager.

 

(13)        Except as permitted by or pursuant to the Facility Documents, the
Borrower shall not grant a security interest or otherwise pledge its assets for
the benefit of any other Person.

 

(14)        Except as provided in the Facility Documents, the Borrower shall not
acquire any securities or debt instruments of the Collateral Manager, its
Affiliates or any other Person.

 

(15)        The Borrower shall not make loans or advances to any Person, except
for the Collateral Loans and as permitted by or pursuant to the Facility
Documents.

 

(16)        The Borrower shall make no transfer of its assets except as
permitted by or pursuant to the Facility Documents.

 

(17)        The Borrower shall file its own tax returns separate from those of
any other Person or entity, except to the extent that the Borrower is not
required to file tax returns under applicable law or is not permitted to file
its own tax returns separate from those of any other Person.

 

(18)        The Borrower shall not acquire obligations or securities of its
members.

 

(19)        The Borrower shall use separate stationery, invoices and checks.

 

(20)        The Borrower shall correct any known misunderstanding regarding its
separate identity.

 

 -90- 

 

 

(21)        The Borrower shall maintain adequate capital in light of its
contemplated business operations.

 

(22)        The Borrower shall at all times be organized as a special purpose
entity with organizational documents substantially similar in all material
respects to those in effect on the Closing Date.

 

(23)        The Borrower shall at all times conduct its business so that any
assumptions made with respect to the Borrower in any “substantive
non-consolidation” opinion letter delivered in connection with the Facility
Documents will continue to be true and correct in all material respects.

 

Article VI

Events of Default

 

Section 6.01.         Events of Default. “Event of Default”, wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

 

(a)          a default by the Borrower in the payment, when due and payable, of
any interest on or Commitment Fee in respect of the Advances and such default is
not cured within two (2) Business Days; or

 

(b)          the failure to reduce the outstanding Advances to $0 on the Final
Maturity Date; or

 

(c)          (i) the Borrower becomes an investment company required to be
registered under the Investment Company Act or (ii) the BDC ceases to be an
“investment company” that has elected to be regulated as a “business development
company” within the meaning of the Investment Company Act or to be qualified as
a “regulated investment company” for purposes of the Code; or

 

(d)          except as otherwise provided in this Section 6.01, (i) a failure by
the Borrower to deliver (or cause to be delivered) any Monthly Report, Borrowing
Base Calculation Statement, quarterly financial report pursuant to Section
5.01(d)(ii) or notice of a Default or Event of Default pursuant to Section
5.01(d)(iv) when due and such default is not cured within three Business Days;
or (ii) a default in the performance, or breach in a covenant by the Borrower
with respect to the management and distribution of funds received with respect
to the Collateral Loans and such default is not cured within two Business Days;
(iii) a failure by the Borrower to deliver (or cause to be delivered) any
material information requested by the Administrative Agent or the Required
Lenders pursuant to Section 5.01(d)(v) within ten (10) Business Days of such
request; or (iv) a default in any material respect in the performance, or breach
in any material respect, of any other covenant or other agreement of the
Borrower, the Collateral Manager or the BDC under this Agreement or the other
Facility Documents (other than failure to comply with any Concentration
Limitation), or the failure of any representation or warranty of the Borrower or
the BDC made in this Agreement, in any other Facility Document or in any
certificate or other writing delivered pursuant hereto or thereto or in
connection herewith or therewith to be correct in each case in all material
respects when the same shall have been made, and the continuation of such
default, breach or failure for a period of thirty (30) days after the earlier of
(x) written notice to the Borrower or the Collateral Manager (which may be by
email) by the Administrative Agent, the Collateral Agent (acting at the
direction of the Administrative Agent) or the Collateral Manager (as the case
may be), and (y) actual knowledge of the Borrower, the BDC or the Collateral
Manager; or

 

 -91- 

 

 

(e)          the rendering of one or more final judgments, decrees or orders by
a court or arbitrator of competent jurisdiction for the payment of money in
excess individually or in the aggregate of $5,000,000 against the BDC, or
$500,000 against the Borrower (exclusive of any amounts fully covered by
insurance), and the aforementioned parties shall not have either (x) discharged
or provided for the discharge of any such judgment, decree or order in
accordance with its terms or (y) perfected a timely appeal of such judgment,
decree or order and caused the execution of same to be stayed during the
pendency of the appeal, in each case, within sixty days from the date of entry
thereof; or

 

(f)           an Insolvency Event relating to the Borrower or the BDC occurs; or

 

(g)          any Collateral Manager Termination Event shall have occurred and be
continuing; or

 

(h)          (i) any Facility Document to which the Borrower or the BDC is a
party shall (except in accordance with its terms) terminate, cease to be
effective or cease to be the legally valid, binding and enforceable obligation
of the Borrower or the BDC, as the case may be or (ii) the Borrower, the BDC or
any of their Affiliates shall, directly or indirectly, contest in any manner the
effectiveness, validity, binding nature or enforceability of any Facility
Document or any Lien purported to be created thereunder; or

 

(i)           (i) the Internal Revenue Service shall file notice of a Lien
pursuant to Section 6323 of the Code with regard to any assets of the Borrower
and such Lien shall not have been released within five (5) Business Days or
(ii) the PBGC shall file notice of a Lien pursuant to Section 4068 of ERISA with
regard to any of the assets of the Borrower and such Lien shall not have been
released within five (5) Business Days, unless in each case a reserve has been
established therefor in accordance with GAAP and such action is being diligently
contested in good faith by appropriate proceedings (except to the extent that
the amount secured by such Lien exceeds $750,000); or

 

(j)           a Change of Control occurs with respect to the Borrower; or

 

 -92- 

 

 

(k)          the BDC shall fail to maintain unencumbered liquidity (calculated
as the sum of (i) cash or cash equivalents, (ii) committed, undrawn and
available amounts under any of the BDC’s facilities, (iii) loans that would
constitute Collateral Loans hereunder if they were sold or contributed to the
Borrower and (iv) the amount (if any) by which the Borrowing Base on such date
exceeds the aggregate outstanding principal amount of Advances hereunder) in an
amount at least equal to the sum of the product of (A) the Principal Balance of
the single largest Collateral Loan multiplied by (B) the applicable Advance
Rate; or

 

(l)           the Borrower ceases to have a valid ownership interest in all of
the Collateral (subject to Permitted Liens) or the Collateral Agent shall fail
to have a first priority perfected security interest in any part of the
Collateral (other than in respect of a de minimis amount of Collateral and
subject to Permitted Liens); or

 

(m)         the Borrower shall assign or attempt to assign any of its rights,
obligations, or duties under the Facility Documents without the prior written
consent of each Lender; or

 

(n)          the Interest Coverage Ratio Test shall not be satisfied as of any
Determination Date; or

 

(o)          the Maximum Advance Rate Test shall not be satisfied and such
failure shall continue for three (3) Business Days; or

 

(p)          the Borrower shall fail to maintain at least one independent
manager as required pursuant to Section 5.02(u), provided that, upon the
resignation, death, disability, incapacity or unwillingness to serve of the
current independent manager, the Borrower shall have 10 Business Days to replace
such independent manager with a successor independent manager that satisfies the
Independent Manager Criteria;

 

(q)          as of the Monthly Reporting Date that immediately follows the date
that, pursuant to Section 5.01(d)(ii), the Borrower delivers the financial
statements of the BDC for the fiscal quarter ended March 31, 2019 and
thereafter, the BDC’s equity determined in accordance with GAAP and as shown in
the BDC’s most recently delivered quarterly consolidated financials and audited
annual consolidated financial statements shall be less than 50% of the amount of
contributed capital less accumulated distributed redemptions; or

 

(r)           as of the Monthly Reporting Date that immediately follows the date
that, pursuant to Section 5.01(d)(ii), the Borrower delivers the financial
statements of the BDC for the fiscal quarter ended March 31, 2019 and
thereafter, the BDC’s debt as a percentage of equity as determined in accordance
with GAAP and as shown in the BDC’s most recently delivered quarterly
consolidated financial statements and annual audited consolidated financial
statements exceeds 200%.

 

 -93- 

 

 

Section 6.02.         Remedies upon an Event of Default. (a) Upon a Responsible
Officer of the Borrower or Collateral Manager obtaining knowledge of the
occurrence of an Event of Default, each of the Borrower and the Collateral
Manager shall notify each other and the Agents, in accordance with Section
5.01(d)(iv). Upon the occurrence of an Event of Default known to a Responsible
Officer of the Collateral Agent, the Collateral Agent shall promptly notify the
Administrative Agent (which will notify the Lenders promptly) of such Event of
Default in writing.

 

(b)          Upon the occurrence and during the continuance of any Event of
Default, in addition to all rights and remedies specified in this Agreement and
the other Facility Documents, including Article VII, and the rights and remedies
of a secured party under Applicable Law, including the UCC (which rights shall
be cumulative), the Administrative Agent shall, at the request of, or may with
the consent of, the Required Lenders, by notice to the Borrower (with a copy to
the Collateral Agent), do any one or more of the following: (1) declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
forthwith terminate, and (2) declare the principal of and the accrued interest
on the Advances and all other amounts whatsoever payable by the Borrower
hereunder to be forthwith due and payable, whereupon such amounts shall be
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby waived by the Borrower;
provided that, upon the occurrence of any Event of Default described in
clause (f) of Section 6.01, the Commitments shall automatically terminate and
the Advances and all such other amounts shall automatically become due and
payable, without any further action by any party. The Borrower and the
Collateral Manager hereby agree that they will, at the Borrower’s expense and at
the direction of the Administrative Agent, (i) assemble all or any part of the
Collateral as directed by the Administrative Agent and make the same available
to the Administrative Agent at a place to be designated by the Administrative
Agent that is reasonably convenient to such parties and (ii) without notice
except as specified below, sell the Collateral or any part thereof at a public
or private sale in accordance with applicable law. The Administrative Agent
shall provide notice to the Borrower, Collateral Manager or the BDC of its
election to sell the Collateral hereunder on the date that is 13 Business Days
prior to the proposed date of such sale (the date such notice is delivered, the
“Collateral Sale Notice Date”), and the Borrower agrees that such notice shall
constitute reasonable notification. All cash proceeds received by the
Administrative Agent or Collateral Agent in respect of any sale of, collection
from, or other realization upon, all or any part of the Collateral (after
payment of any amounts incurred in connection with such sale) shall be deposited
into the Collection Account and to be applied pursuant to Section 9.01(a)(iii).

 

If the Administrative Agent elects to sell the Collateral in whole or in part,
at a public or private sale, the Borrower, the BDC, the Collateral Manager (so
long as it is an Affiliate of the BDC) or any of their respective Affiliates or
assignees shall have the right of first refusal to repurchase the Collateral, in
whole but not in part, prior to such sale at a purchase price that is equal to
the amount of the Obligations as of the date of such proposed sale. Such right
of first refusal shall terminate not later than 4:00 p.m. on the twelfth
Business Day following the Collateral Sale Notice Date.

 

 -94- 

 

  

If none of the Borrower, the BDC, the Collateral Manager or any of their
respective Affiliates or assignees elects to exercise its right of first
refusal, the Administrative Agent may sell such Collateral or portion thereof.
For the avoidance of doubt, the Borrower, the BDC, the Collateral Manager or
their respective Affiliates or assignees may participate in any public or
private sale of the Collateral directed by the Administrative Agent.

 

(c)          In addition, upon the occurrence and during the continuation of an
Event of Default, following written notice by the Administrative Agent (provided
in its sole discretion or at the direction of the Required Lenders) of the
exercise of control rights with respect to the Collateral, which notice shall be
delivered to the Borrower, the BDC and the Collateral Manager (with a copy to
the Collateral Agent): (w) the Collateral Manager’s power to consent to
modifications to and direct the acquisition, sales and other dispositions of
Collateral Loans will be immediately suspended, (x) the Collateral Manager will
be required to obtain the consent of the Administrative Agent before causing the
Borrower to agree to any modification of any Collateral Loan or before causing
the Borrower to acquire, sell or otherwise dispose of any Collateral Loan, and
(y) the Collateral Manager (so long as it is an Affiliate of the Borrower) will
cause the Borrower to sell or otherwise dispose of any Collateral Loan as
directed by the Administrative Agent in its sole discretion (so long as, in the
case of this clause (y), the Collateral Manager and the BDC are afforded a
commercially reasonable opportunity to bid for and acquire such Collateral Loan
in such sale or disposition).

 

Section 6.03.         Collateral Manager Termination Events. “Collateral Manager
Termination Event”, wherever used herein, means any one of the following events
(whatever the reason for such Collateral Manager Termination Event and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

 

(a)          any Event of Default shall have occurred and be continuing; or

 

(b)          the Collateral Manager is required to be registered under the
Investment Company Act and is not registered; or

 

(c)          except as otherwise provided in this Section 6.03, (i) a failure by
the Collateral Manager to deliver (or cause to be delivered) any Monthly Report
or Borrowing Base Calculation Statement when due and such default is not cured
within three Business Days; or (ii) a default in the performance or breach in a
covenant by the Collateral Manager with respect to the management and
distribution of funds received with respect to the Collateral Loans, and such
failure or default is not cured within two Business Days; or (iii) a default in
any material respect in the performance, or breach in any material respect, of
any other covenant or other agreement of the Collateral Manager under this
Agreement or the other Facility Documents, or the failure of any representation
or warranty of the Collateral Manager made in this Agreement, in any other
Facility Document or in any certificate or other writing delivered pursuant
hereto or thereto or in connection herewith or therewith to be correct in each
case in all material respects when the same shall have been made, and the
continuation of such default, breach or failure for a period of thirty days
after the earlier of (x) written notice to the Collateral Manager (which may be
by email) by the Administrative Agent or the Collateral Agent (acting at the
direction of the Administrative Agent), and (y) actual knowledge of the
Collateral Manager; or

 

 -95- 

 

 

(d)          the rendering of one or more final judgments, decrees or orders
against the Collateral Manager (exclusive of any amounts fully covered by
insurance) by a court or arbitrator of competent jurisdiction for the payment of
money in excess individually or in the aggregate of (i) at any time the
Collateral Manager and the Administrator, collectively, have at least
$5,000,000,000 in assets under its management, $5,000,000 or more, or (ii) at
any time the Collateral Manager and the Administrator, collectively, have less
than $5,000,000,000 in assets under its management, $2,000,000 or more, and the
Collateral Manager shall not have either (x) discharged or provided for the
discharge of any such judgment, decree or order in accordance with its terms or
(y) perfected a timely appeal of such judgment, decree or order and caused the
execution of same to be stayed during the pendency of the appeal, in each case,
within sixty days from the date of entry thereof; or

 

(e)          an Insolvency Event relating to the Collateral Manager, the Advisor
or the Administrator occurs; or

 

(f)          (1) any Facility Document to which the Collateral Manager is a
party shall (except in accordance with its terms) terminate, cease to be
effective or cease to be the legally valid, binding and enforceable obligation
of the Collateral Manager, (2) the Collateral Manager or any of its Affiliates
shall, directly or indirectly, contest in any manner the effectiveness,
validity, binding nature or enforceability of any Facility Document or any Lien
purported to be created thereunder, or (3) any Lien securing any obligation
under any Facility Document shall, in whole or in part (other than in respect of
a de minimis amount of Collateral), cease to be a first priority perfected
security interest of the Collateral Agent except for Permitted Liens; or

 

(g)          the Collateral Manager shall fail to comply with the first sentence
of Section 5.04(c); or

 

(h)          any two of Theodore Koenig, Aaron Peck or Michael Egan shall fail
to provide active and material participation in the Adviser’s or the
Administrator’s daily activities, including, but not limited to, general
management, underwriting and credit approval process, and credit monitoring
activities and such Persons are not replaced with other individuals satisfactory
to the Administrative Agent in its sole discretion within 60 days; or

 

(i)          any change to the Credit and Collection Policies that has a
material adverse effect at any time on the interests and rights and remedies of
the Administrative Agent, the Collateral Agent or the Lenders without the prior
written consent of the Administrative Agent; or

 

(j)          the Administrator shall fail to maintain at least $4,000,000,000 of
assets (including cash) under management; or

 

 -96- 

 

 

(k)          as of any Monthly Report Determination Date, (i) from the Closing
Date until the date that is six months after the Closing Date, the rolling
trailing 3-month average Collateral Default Ratio shall exceed 10% or (ii)
thereafter, the rolling trailing 6-month average Collateral Default Ratio shall
exceed 7%; or

 

(l)          (i) one or more acts (including any failure(s) to act) by the
Collateral Manager, the Advisor or the Administrator occurs that constitutes
fraud (as determined in a final, non-appealable adjudication by a court of
competent jurisdiction) in the performance of its asset management business or
(ii) the Collateral Manager, the Advisor or the Administrator or any of their
respective senior officers is convicted of (with no further right of appeal) a
felony criminal offense materially related to its asset management business and,
in each case, such Person is not replaced or does not cease to have
responsibility for asset management activities, within 60 days of the applicable
adjudication or conviction; or

 

(m)          the Advisory Agreement or the Administration Agreement is
terminated without the prior written consent of the Administrative Agent.

 

Section 6.04.         Remedies upon a Collateral Manager Termination Event. Upon
a Responsible Officer of the Borrower or Collateral Manager obtaining knowledge
of the occurrence of Collateral Manager Termination Event, each of the Borrower
and the Collateral Manager shall notify each other and the Agents, specifying
the specific Collateral Manager Termination Event(s) that occurred as well as
all other Collateral Manager Termination Events that are then known to be
continuing. Upon the occurrence of a Collateral Manager Termination Event
actually known to a Responsible Officer of the Collateral Agent, subject to the
immediately preceding sentence, the Collateral Agent shall promptly notify the
Administrative Agent (which will notify the Lenders promptly) of such Collateral
Manager Termination Event in writing.

 

Upon the occurrence and during the continuance of a Collateral Manager
Termination Event, the Administrative Agent, by written notice to the Collateral
Manager (with a copy to the Document Custodian, the Collateral Administrator and
the Collateral Agent) (a “Collateral Manager Termination Notice”), may terminate
all of the rights and obligations of the Collateral Manager as Collateral
Manager under this Agreement in accordance with Section 11.09 and appoint a
successor Collateral Manager pursuant to Section 11.09 hereto.

 

 -97- 

 

 

Article VII

Pledge of Collateral; Rights of the Collateral Agent

 

Section 7.01.         Grant of Security. (a) The Borrower hereby grants,
pledges, transfers and collaterally assigns to the Collateral Agent, for the
benefit of the Secured Parties, as collateral security for all Obligations, a
continuing security interest in, and a Lien upon, all of the Borrower’s right,
title and interest in, to and under, the following property, in each case
whether tangible or intangible, wheresoever located, and whether now owned by
the Borrower or hereafter acquired and whether now existing or hereafter coming
into existence (all of the property described in this Section 7.01(a) being
collectively referred to herein as the “Collateral”):

 

(i)          all Collateral Loans and Related Documents (listed, as of the
Closing Date, in Schedule 3), both now and hereafter owned, including all
collections and other proceeds thereon or with respect thereto;

 

(ii)         each Covered Account and all Money and all investment property
(including all securities, all security entitlements with respect to such
Covered Account and all financial assets carried in such Covered Account) from
time to time on deposit in or credited to each Covered Account;

 

(iii)        all interest, dividends, stock dividends, stock splits,
distributions and other money or property of any kind distributed in respect of
the Collateral Loans of the Borrower, which the Borrower is entitled to receive,
including all Collections in respect of its Collateral Loans;

 

(iv)        each Facility Document (other than this Agreement) and all rights,
remedies, powers, privileges and claims under or in respect thereto (whether
arising pursuant to the terms thereof or otherwise available to the Borrower at
law or equity), including the right to enforce each such Facility Document and
to give or withhold any and all consents, requests, notices, directions,
approvals, extensions or waivers under or with respect thereto, to the same
extent as the Borrower could but for the assignment and security interest
granted to the Collateral Agent under this Agreement;

 

(v)         all Cash or Money in possession of the Borrower or delivered to the
Collateral Agent (or any bailee of the foregoing);

 

(vi)        all accounts, chattel paper, deposit accounts, financial assets,
general intangibles, instruments, investment property, letter-of-credit rights
and other supporting obligations relating to the foregoing (in each case as
defined in the UCC);

 

(vii)       all other property of the Borrower and all property of the Borrower
which is delivered to the Collateral Agent (or the Document Custodian on its
behalf) by or on behalf of the Borrower (whether or not constituting Collateral
Loans or Eligible Investments);

 

(viii)      all security interests, liens, collateral, property, guaranties,
supporting obligations, insurance and other agreements or arrangements of
whatever character from time to time supporting or securing payment of the
assets, investments and properties described above; and

 

(ix)         all Proceeds of any and all of the foregoing.

 

provided, however, that the term “Collateral” shall exclude all Excluded
Amounts.

 

 -98- 

 

 

(b)          All terms used in this Section 7.01 that are defined in the UCC but
are not defined in Section 1.01 shall have the respective meanings assigned to
such terms in the UCC.

 

Section 7.02.         Release of Security Interest. If and only if all
Obligations have been paid in full (other than contingent indemnification
obligations as to which no claim giving rise thereto has been asserted) and all
Commitments have been terminated, the Collateral Agent, for itself and on behalf
of the Secured Parties, shall, at the expense of the Borrower, promptly execute,
deliver and file or authorize for filing such instruments as the Borrower shall
reasonably request in order to reassign, release or terminate the Collateral
Agent’s security interest in the Collateral. The Secured Parties acknowledge and
agree that upon the sale or disposition of any Collateral by the Borrower in
compliance with the terms and conditions of this Agreement, the security
interest of the Secured Parties in such Collateral shall immediately terminate
and the Collateral Agent, for itself and on behalf of the other Secured Parties,
shall, at the expense of the Borrower, execute, deliver and file or authorize
for filing such instrument as the Borrower shall reasonably request to reflect
or evidence such termination. Any and all actions under this Article VII in
respect of the Collateral shall be without any recourse to, or representation or
warranty by any Secured Party and shall be at the sole cost and expense of the
Borrower and the Collateral Manager.

 

Section 7.03.         Rights and Remedies. The Collateral Agent (for itself and
on behalf of the other Secured Parties) shall have all of the rights and
remedies of a secured party under the UCC and other Applicable Law. Upon the
occurrence and during the continuance of an Event of Default, the Collateral
Agent or its designees shall, at, and in accordance with the written direction
of the Administrative Agent or the Required Lenders acting through the
Administrative Agent, (i) instruct the Borrower to deliver any or all of the
Collateral, the Related Documents and any other documents relating to the
Collateral to the Collateral Agent or its designees and otherwise give all
instructions for the Borrower regarding the Collateral; (ii) sell or otherwise
dispose of the Collateral in a commercially reasonable manner, all without
judicial process or proceedings; (iii) take control of the Proceeds of any such
Collateral; (iv) subject to the provisions of the applicable Related Documents,
exercise any consensual or voting rights in respect of the Collateral;
(v) release, make extensions, discharges, exchanges or substitutions for, or
surrender all or any part of the Collateral; (vi) enforce the Borrower’s rights
and remedies with respect to the Collateral; (vii) institute and prosecute legal
and equitable proceedings to enforce collection of, or realize upon, any of the
Collateral; (viii) require that the Borrower immediately take all actions
necessary to cause the liquidation of the Collateral in order to pay all amounts
due and payable in respect of the Obligations, in accordance with the terms of
the Related Documents; (ix) to redeem or withdraw or cause the Borrower to
redeem or withdraw any asset of the Borrower to pay amounts due and payable in
respect of the Obligations; (x) make copies of or, if necessary, remove from the
Borrower’s, the Collateral Manager’s and their respective agents’ place of
business all books, records and documents relating to the Collateral; and
(xi) endorse the name of the Borrower upon any items of payment relating to the
Collateral or upon any proof of claim in bankruptcy against an account debtor.

 

 -99- 

 

 

The Borrower hereby agrees that, upon the occurrence and during the continuance
of an Event of Default, at the request of the Administrative Agent, the
Collateral Agent (acting at the direction of the Administrative Agent) or the
Required Lenders (acting through the Administrative Agent), it shall execute all
documents and agreements which are necessary or appropriate to have the
Collateral be assigned to the Collateral Agent or its designee. For purposes of
taking the actions described in clauses (i) through (xi) of this Section 7.03
the Borrower hereby irrevocably appoints the Collateral Agent as its
attorney-in-fact (which appointment being coupled with an interest and is
irrevocable while any of the Obligations remain unpaid, with power of
substitution), in the name of the Collateral Agent or in the name of the
Borrower or otherwise, for the use and benefit of the Collateral Agent (for the
benefit of the Secured Parties), but at the cost and expense of the Borrower
and, except as permitted by applicable law, without notice to the Borrower.

 

Section 7.04.         Remedies Cumulative. Each right, power, and remedy of the
Agents and the other Secured Parties, or any of them, as provided for in this
Agreement or in the other Facility Documents or now or hereafter existing at law
or in equity or by statute or otherwise shall be cumulative and concurrent and
shall be in addition to every other right, power, or remedy provided for in this
Agreement or in the other Facility Documents or now or hereafter existing at law
or in equity or by statute or otherwise, and the exercise or beginning of the
exercise by the Agents or any other Secured Party of any one or more of such
rights, powers, or remedies shall not preclude the simultaneous or later
exercise by such Persons of any or all such other rights, powers, or remedies.

 

Section 7.05.         Related Documents. (a) Each of the Borrower and the
Collateral Manager hereby agrees that, to the extent not expressly prohibited by
the terms of the Related Documents, after the occurrence and during the
continuance of an Event of Default, it shall (i) upon the written request of the
Administrative Agent or the Collateral Agent (acting at the direction of the
Administrative Agent), promptly forward to such Agent all material information
and notices which it receives under or in connection with the Related Documents
relating to the Collateral, and (ii) upon the written request of the
Administrative Agent or the Collateral Agent (acting at the direction of the
Administrative Agent), act and refrain from acting in respect of any request,
act, decision or vote under or in connection with the Related Documents relating
to the Collateral only in accordance with the direction of the Administrative
Agent.

 

(b)          Each of the Borrower and the Collateral Manager hereby agrees that,
to the extent the same shall be in the Borrower’s or the Collateral Manager’s
possession, it will hold all Related Documents relating to the Collateral in
trust for the Collateral Agent on behalf of the Secured Parties, and upon
request of the Administrative Agent or the Collateral Agent (acting at the
direction of the Administrative Agent) following the occurrence and during the
continuance of an Event of Default or as otherwise provided herein, promptly
deliver the same to the Collateral Agent or its designee (including the Document
Custodian). In addition, in accordance with Article XIV, promptly following its
acquisition of any Loan the Borrower or the Collateral Manager (on behalf of the
Borrower) shall deliver to the Document Custodian copies of the principal
underlying documentation with respect to such Loan (e.g., loan or credit
agreement, primary security agreement and guarantees, etc.).

 

Section 7.06.         Borrower Remains Liable. (a) Notwithstanding anything
herein to the contrary, (i) the Borrower shall remain liable under the contracts
and agreements included in and relating to the Collateral (including the Related
Documents) to the extent set forth therein, and shall perform all of its duties
and obligations under such contracts and agreements to the same extent as if
this Agreement had not been executed, and (ii) the exercise by any Secured Party
of any of its rights hereunder shall not release the Borrower from any of its
duties or obligations under any such contracts or agreements included in the
Collateral.

 

 -100- 

 

 

(b)          No obligation or liability of the Borrower is intended to be
assumed by the Administrative Agent or any other Secured Party under or as a
result of this Agreement or the other Facility Documents, and the transactions
contemplated hereby and thereby, including under any Related Document or any
other agreement or document that relates to Collateral and, to the maximum
extent permitted under provisions of law, the Administrative Agent and the other
Secured Parties expressly disclaim any such assumption.

 

Section 7.07.         Protection of Collateral. The Borrower shall from time to
time execute and deliver all such supplements and amendments hereto and file or
authorize the filing of all such UCC-1 financing statements, continuation
statements, instruments of further assurance and other instruments, and shall
take such other action as may be necessary to secure the rights and remedies of
the Secured Parties hereunder and to:

 

(i)          grant security more effectively on all or any portion of the
Collateral;

 

(ii)         maintain, preserve and perfect any grant of security made or to be
made by this Agreement including, without limitation, the first priority nature
of the lien or carry out more effectively the purposes hereof;

 

(iii)        perfect, publish notice of or protect the validity of any grant
made or to be made by this Agreement (including, without limitation, any and all
actions necessary as a result of changes in law or regulations);

 

(iv)        enforce any of the Collateral or other instruments or property
included in the Collateral;

 

(v)         preserve and defend title to the Collateral and the rights therein
of the Collateral Agent and the Secured Parties in the Collateral against the
claims of all third parties; and

 

(vi)        pay or cause to be paid any and all taxes levied or assessed upon
all or any part of the Collateral.

 

The Borrower hereby designates the Collateral Agent as its agent and attorney in
fact to prepare and file any UCC-1 financing statement, continuation statement
and all other instruments, and take all other actions, required pursuant to this
Section 7.07. Such designation shall not impose upon the Collateral Agent, or
release or diminish, the Borrower’s obligations under this Section 7.07 or
Section 5.01(c). The Borrower further authorizes the Administrative Agent or its
counsel to file, without the Borrower’s signature, UCC- 1 financing statements
that name the Borrower as debtor and the Collateral Agent as secured party and
that describe “all assets in which the debtor now or hereafter has rights” as
the Collateral in which the Collateral Agent has a grant of security hereunder
and any amendments or continuation statements that may be necessary or
desirable.

 

 -101- 

 

 

Article VIII

Accounts, Accountings and Releases

 

Section 8.01.         Collection of Money. Except as otherwise expressly
provided herein, the Collateral Agent may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all Money and other property payable to
or receivable by the Collateral Agent pursuant to this Agreement, including all
payments due on the Collateral, in accordance with the terms and conditions of
such Collateral. The Collateral Agent shall segregate and hold all such Money
and property received by it in trust for the Secured Parties and shall apply it
as provided in this Agreement. Each Covered Account shall be established and
maintained under the Account Control Agreement with a Qualified Institution. Any
Covered Account may contain any number of subaccounts for the convenience of the
Collateral Agent or as required by the Collateral Manager for convenience in
administering the Covered Account or the Collateral.

 

Section 8.02.         Collection Account. (a) In accordance with this Agreement
and the Account Control Agreement, the Borrower shall, on or prior to the
Closing Date, establish at the Intermediary or a sub-agent of the Intermediary a
single, segregated account in the name “MC Income Plus Financing SPV LLC
Collection Account, subject to the lien of the Collateral Agent”, which shall be
designated as the “Collection Account”, which shall be maintained with the
Intermediary in accordance with the Account Control Agreement and which shall be
subject to the lien of the Collateral Agent. In addition, the Intermediary shall
establish two segregated subaccounts within the Collection Account, one of which
will be designated the “Interest Collection Subaccount” and one of which will be
designated the “Principal Collection Subaccount”. The Collateral Agent shall
from time to time deposit into the Interest Collection Subaccount, in addition
to the deposits required pursuant to Section 8.05(a), immediately upon receipt
thereof all Interest Proceeds received by the Collateral Agent. The Collateral
Agent shall deposit immediately upon receipt thereof all other amounts remitted
to the Collection Account into the Principal Collection Subaccount including, in
addition to the deposits required pursuant to Section 8.05(a), all Principal
Proceeds (unless simultaneously reinvested in additional Loans in accordance
with Article X or in Eligible Investments) received by the Collateral Agent. All
Monies deposited from time to time in the Collection Account pursuant to this
Agreement shall be held by the Collateral Agent as part of the Collateral and
shall be applied to the purposes herein provided. Subject to Section 8.02(c),
amounts in the Collection Account shall be reinvested pursuant to
Section 8.05(a).

 

(b)          At any time during the Revolving Period, the Collateral Manager on
behalf of the Borrower may by delivery of a certificate of a Responsible Officer
of the Collateral Manager direct the Collateral Agent to, and upon receipt of
such certificate the Collateral Agent shall, withdraw funds on deposit in the
Principal Collection Subaccount representing Principal Proceeds and (i) reinvest
such funds in additional Loans or exercise a warrant held in the Collateral, in
each case in accordance with the requirements of Article X and such certificate
or (ii) make Restricted Payments to its members in respect of their membership
interests in the Borrower, so long as (x) no Default or Event of Default shall
have occurred and be continuing, (y) none of such Principal Proceeds are needed
to settle the acquisition of any Eligible Loan and (z) each Coverage Test is
satisfied as of such date (as demonstrated on a duly completed and executed
Borrowing Base Calculation Statement delivered to the Administrative Agent).

 

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(c)          The Collateral Agent shall transfer to the Payment Account, from
the Collection Account for application pursuant to Section 9.01(a), on each
Payment Date, the amount set forth to be so transferred in the Monthly Report
for such Payment Date

 

(d)          Notwithstanding anything to the contrary set forth herein, the
Collateral Manager may direct the Collateral Agent to withdraw from the
Collection Account and pay to the Person entitled thereto any amounts credited
thereto constituting Excluded Amounts if the Collateral Manager has, prior to
such withdrawal and consent, delivered to the Administrative Agent and the
Collateral Agent a report setting forth the calculation of such Excluded Amounts
in form and substance reasonably satisfactory to the Administrative Agent, which
report shall include a brief description of the facts and circumstances
supporting such request and designate a date for the payment of such
reimbursement, which date shall not be earlier than two (2) Business Days
following delivery of such notice.

 

Section 8.03.         Transaction Accounts. (a) Payment Account. In accordance
with this Agreement and the Account Control Agreement, the Borrower shall, on or
prior to the Closing Date, establish at the Intermediary a single, segregated
account in the name “MC Income Plus Financing SPV LLC Payment Account, subject
to the lien of the Collateral Agent”, which shall be designated as the “Payment
Account”, which shall be maintained by the Borrower with the Intermediary in
accordance with the Account Control Agreement and which shall be subject to the
lien of the Collateral Agent. Except as provided in Section 9.01, the only
permitted withdrawal from or application of funds on deposit in, or otherwise to
the credit of, the Payment Account shall be to pay amounts due and payable under
the Priority of Payments on the Payment Dates in accordance with their terms and
the provisions of this Agreement. The Borrower shall not have any legal,
equitable or beneficial interest in the Payment Account other than in accordance
with this Agreement and the Priority of Payments.

 

(b)          Custodial Account. In accordance with this Agreement and the
Account Control Agreement, the Borrower shall, on or prior to the Closing Date,
establish at the Intermediary a single, segregated account in the name “MC
Income Plus Financing SPV LLC Custodial Account, subject to the lien of the
Collateral Agent”, which shall be designated as the “Custodial Account”, which
shall be maintained by the Borrower with the Intermediary in accordance with the
Account Control Agreement and which shall be subject to the Lien of the
Collateral Agent. All Collateral Loans (other than Noteless Loans or Collateral
Loans which are an account or general intangible (including participation
interest) shall be credited to the Custodial Account. The only permitted
withdrawals from the Custodial Account shall be in accordance with the
provisions of this Agreement. The Collateral Agent agrees to give the Borrower
prompt notice if (to the Collateral Agent’s actual knowledge) the Custodial
Account or any assets or securities on deposit therein, or otherwise to the
credit of the Custodial Account, shall become subject to any writ, order,
judgment, warrant of attachment, execution or similar process.

 

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Section 8.04.         Reserved.

 

Section 8.05.         Reinvestment of Funds in Covered Accounts; Reports by
Collateral Agent. (a) By delivery of a certificate of a Responsible Officer of
the Borrower (or the Collateral Manager on behalf of the Borrower) (which may be
in the form of standing instructions), the Borrower (or the Collateral Manager
on behalf of the Borrower) shall at all times direct the Collateral Agent to,
and, upon receipt of such certificate, the Collateral Agent shall, invest all
funds on deposit in the Collection Account (including the Principal Collection
Subaccount and the Interest Collection Subaccount) as so directed in Eligible
Investments having stated maturities no later than the Business Day preceding
the next Payment Date (or such shorter maturities expressly provided herein).
If, prior to the occurrence and continuance of an Event of Default, the Borrower
shall not have given any such investment directions, the Collateral Agent shall
seek instructions from the Collateral Manager within three Business Days after
transfer of any funds to such accounts and shall immediately invest in Specified
Eligible Investments that mature overnight. If the Collateral Agent does not
thereafter receive written instructions from the Collateral Manager within five
Business Days after transfer of such funds to such accounts, it shall invest and
reinvest the funds held in such accounts, as fully as practicable, but only in
Specified Eligible Investments selected by the Administrative Agent maturing no
later than the Business Day immediately preceding the next Payment Date (or such
shorter maturities expressly provided herein). During the continuance of an
Event of Default, the Collateral Agent (as directed by the Administrative Agent)
shall invest and reinvest such Monies as fully as practicable in Specified
Eligible Investments selected by the Administrative Agent maturing not later
than the earlier of (i) thirty days after the date of such investment (unless
putable at par to the issuer thereof) or (ii) the Business Day immediately
preceding the next Payment Date (or such shorter maturities expressly provided
herein). Except to the extent expressly provided otherwise herein, all interest,
gain, loss and other income from such investments shall be deposited, credited
or charged (as applicable) in and to the Interest Collection Subaccount. The
Collateral Agent shall in no way be liable for any insufficiency in a Covered
Account resulting from any loss relating to any such investment.

 

(b)          The Collateral Agent agrees to give the Borrower prompt notice if
any Covered Account or any funds on deposit in any Covered Account, or otherwise
to the credit of a Covered Account, shall become subject to any writ, order,
judgment, warrant of attachment, execution or similar process.

 

(c)          The Collateral Agent shall supply, in a timely fashion, to the
Borrower and the Collateral Manager any information regularly maintained by the
Collateral Agent that the Borrower or the Collateral Manager may from time to
time reasonably request with respect to the Collateral, the Covered Accounts and
the other Collateral and provide any other requested information reasonably
available to the Collateral Agent and required to be provided by Section 8.06 or
to permit the Collateral Manager to perform its obligations hereunder or the
Borrower’s obligations hereunder that have been delegated to the Collateral
Manager. The Collateral Agent shall promptly forward to the Collateral Manager
copies of notices and other writings received by it from the Obligor of any
Collateral Loan or from any Clearing Agency with respect to any Collateral Loan
which notices or writings advise the holders of such Collateral Loan of any
rights that the holders might have with respect thereto (including, without
limitation, requests to vote with respect to amendments or waivers and notices
of prepayments and redemptions) as well as all periodic financial reports
received from such issuer and Clearing Agencies with respect to such Obligor.

 

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Section 8.06.         Accountings. The Collateral Manager shall compile and
provide (or cause to be compiled and provided) to the Collateral Administrator
and the Administrative Agent a loan data file (the “Data File”) for the previous
monthly period ending on the Monthly Report Determination Date (containing such
information agreed upon by the Collateral Manager, the Collateral Administrator
and the Administrative Agent). The Collateral Administrator shall assist the
Collateral Manager to compile (or cause to be compiled) a monthly report on a
settlement basis (each, a “Monthly Report”) (containing such information agreed
upon by the Collateral Agent, the Collateral Manager, the Collateral
Administrator and the Administrative Agent). The Collateral Administrator shall
use commercially reasonable efforts to assist the Collateral Manager to compile
such Monthly Report at least five (5) days prior to the Monthly Reporting Date.
The Collateral Administrator shall use commercially reasonable efforts to assist
the Collateral Manager to review and confirm the calculations made by the
Collateral Manager in any such Monthly Report by the Monthly Reporting Date, and
the Collateral Administrator shall cooperate with the Collateral Manager in
connection with such review. Upon completion of the Monthly Report by the
Collateral Manager and the Collateral Administrator and in any event by no later
than the Monthly Reporting Date, the Collateral Administrator shall compile and
provide to the Agents, the Collateral Manager and the Lenders the Monthly
Report. As used herein, the “Monthly Report Determination Date” with respect to
any calendar month will be the last day of the previous calendar month. The
Monthly Report delivered for any calendar month shall contain the information
with respect to the Collateral Loans and Eligible Investments included in the
Collateral set forth on Schedule 2 hereto and shall be determined as of the
Monthly Report Determination Date applicable to such Monthly Report.
Additionally, each Monthly Report that is delivered on the first Monthly
Reporting Date to occur after the delivery of the quarterly valuation statements
for the BDC pursuant to Section 5.01(d)(iii) shall include a statement reporting
the assets (including cash) under management by the Collateral Manager. The
Collateral Manager shall provide such statement to the Collateral Administrator
to be included in the Monthly Report at least five (5) days prior to such
Monthly Reporting Date.

 

In addition, the Collateral Manager shall provide together with each Data File a
copy of each amendment, modification or waiver under any Related Document for
each Collateral Loan that constitutes a Material Modification, together with
each other amendment, modification or waiver under any Related Document for each
Collateral Loan that, in the Collateral Manager’s reasonable judgment, are
material in relation to the related Obligor, in each case that became effective
during the one month period ending on the Monthly Report Determination Date for
the immediately prior Monthly Report (or, in respect of the first Monthly
Report, from the Closing Date) together with a listing of each Collateral Loan
with respect to which one of the foregoing amendments, modifications or waivers
is being provided.

 

Section 8.07.         Release of Collateral. (a) If no Event of Default has
occurred and is continuing, the Borrower may, by delivery of a certificate of a
Responsible Officer of the Collateral Manager delivered to the Collateral Agent
at least one Business Day prior to the settlement date for any sale of any item
of Collateral certifying that the sale of such security is being made in
accordance with Section 10.01 and such sale complies with all applicable
requirements of Section 10.01, direct the Collateral Agent (or the Document
Custodian on its behalf) to release or cause to be released such item from the
lien of this Agreement and, upon receipt of such certificate, the Collateral
Agent (or Document Custodian, as applicable) shall deliver any such item, if in
physical form, duly endorsed to the broker or purchaser designated in such
certificate or, if such item is a Clearing Corporation Security, cause an
appropriate transfer thereof to be made, in each case against receipt of the
sales price therefor as specified by the Collateral Manager in such certificate;
provided that the Collateral Agent (or Document Custodian, as applicable) may
deliver any such item in physical form for examination in accordance with street
delivery custom.

 

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(b)          Subject to the terms of this Agreement, the Collateral Agent or
Document Custodian, as applicable, shall, upon the receipt of a certificate of
the Borrower, by delivery of a certificate of a Responsible Officer of the
Collateral Manager, deliver any Collateral as instructed in such certificate,
and execute such documents or instruments as are presented by the Borrower or
the Collateral Manager and are reasonably necessary to release or cause to be
released such security from the lien of this Agreement, which is set for any
mandatory call or redemption or payment in full to the appropriate paying agent
on or before the date set for such call, redemption or payment, in each case
against receipt of the call or redemption price or payment in full thereof.

 

(c)          As provided in Section 8.02(a), the Collateral Agent shall deposit
any proceeds received by it from the disposition of Collateral in the applicable
subaccount of the Collection Account, unless simultaneously applied to the
purchase of additional Loans or Eligible Investments as permitted under and in
accordance with the requirements of this Article VIII and Article X.

 

(d)          The Collateral Agent shall, upon receipt of a certificate of a
Responsible Officer of the Borrower (or the Collateral Manager on its behalf),
at such time as there are no Commitments outstanding and all Obligations of the
Borrower hereunder and under the other Facility Documents have been satisfied,
release any remaining Collateral from the lien of this Agreement.

 

(e)          Any security, Collateral Loan or amounts that are released pursuant
to Section 8.07(a) or (b) shall automatically be released from the Lien of this
Agreement.

 

Section 8.08.         [Reserved].

 

Section 8.09.         Covered Account Details. The account number of each
Covered Account is set forth on Schedule 6.

 

Section 8.10.         Delivery of Report, Notices, Etc. Documents and notices
required to be delivered by the Borrower or the Collateral Manager pursuant this
Agreement may be delivered electronically and if so delivered, shall be deemed
to have been delivered on the date on which the Borrower or the Collateral
Manager posts such documents or notices, or provides a link thereto on the
Collateral Manager’s website or otherwise delivers such documents or notices via
email in accordance with Section 16.02.

 

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Article IX

Application of Monies

 

Section 9.01.         Disbursements of Monies from Payment Account.
(a) Notwithstanding any other provision in this Agreement, but subject to the
other subsections of this Section 9.01, on each Payment Date, the Collateral
Agent shall disburse amounts transferred from the Collection Account to the
Payment Account pursuant to Section 8.02 in accordance with the following
priorities (the “Priority of Payments”) as set forth in the related Monthly
Report:

 

(i)          On each Payment Date prior to the occurrence and continuance of an
Event of Default, Interest Proceeds on deposit in the Interest Collection
Subaccount, to the extent received on or before the related Determination Date
(or, if such Determination Date is not a Business Day, the next succeeding
Business Day) will be transferred into the Payment Account, to be applied in the
following order of priority:

 

(A)         (1) first, to pay all out-of-pocket costs and expenses (including
the fees and expenses of attorneys, experts and agents) of the Collateral Agent
incurred in connection with any sale of Collateral or other exercises of its
remedial rights pursuant to Section 7.03; and (2) second, to pay to the
Collateral Agent, the Collateral Administrator, Intermediary and the Document
Custodian, any amounts payable pursuant to Collateral Agent, Document Custodian,
Collateral Administrator and Intermediary Fee Letter, this Agreement and the
other Facility Documents, provided that the amount applied under this
clause (A)(2) for such Payment Date shall not exceed the Third Party Expense Cap
for such Payment Date; provided, further that the Third Party Expense Cap shall
not apply with respect to fees and expenses (including the fees and expenses of
attorneys, experts and agents) incurred in connection with the transfer of
servicing to Successor Collateral Manager;

 

(B)         to the Collateral Manager, to pay accrued and unpaid Collateral
Management Fees and all other expenses (including indemnities) incurred by the
Collateral Manager in connection with the services provided under this Agreement
and as further described in Sections 11.03, 11.07 and 11.09, provided that, to
the extent directed by the Collateral Manager, all or any portion of such
Collateral Management Fees may be waived or payable to an Affiliate of the
Collateral Manager; provided, further, that the amount applied under this
clause (B) for such Payment Date in respect of expenses and indemnities shall
not exceed the Collateral Manager Expense Cap for such Payment Date;

 

(C)         to pay regular scheduled payments, any fees and expenses incurred
under any hedge agreement (excluding any hedge termination payments);

 

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(D)         to each Lender to pay accrued and unpaid Interest, Commitment Fees
due to each such Lender and amounts payable to each such Lender under Sections
2.09 and 2.10;

 

(E)          if the Maximum Advance Rate Test is not satisfied as of the related
Determination Date, to pay the principal of the Advances of each Lender (pro
rata, based on each Lender’s Percentage) until the Maximum Advance Rate Test is
satisfied (on a pro forma basis as at such Determination Date);

 

(F)          to payment of Administrative Expenses; provided that the amount
applied under this clause (F) for such Payment Date shall not exceed the
Administrative Expense Cap for such Payment Date;

 

(G)         to the payment or application of amounts referred to in clauses (A),
(B), (C) and (F) above, to the extent not paid in full pursuant to applications
under such clauses;

 

(H)         [reserved];

 

(I)          during the Reinvestment Period, to the payment of any hedge
breakage or termination costs owed by the Borrower;

 

(J)          after the Reinvestment Period, to any hedge breakage or termination
costs owed by the Borrower; and

 

(K)         the remainder to the Borrower or to the BDC at the direction of the
Collateral Manager.

 

(ii)         On each Payment Date prior to the occurrence and continuance of an
Event of Default, Principal Proceeds on deposit in the Principal Collection
Subaccount that are received on or before the related Determination Date and
that are not designated for reinvestment by the Collateral Manager will be
transferred to the Payment Account and applied, except for any such Principal
Proceeds that will be used to settle binding commitments (entered into prior to
the related Determination Date) for the purchase of Loans, in the following
order of priority:

 

(A)         to the payment of unpaid amounts under clauses (A) through (F) in
clause (i) above (in the same order of priority specified therein and subject to
any limitations set forth therein), to the extent not paid in full thereunder;

 

(B)         during the Reinvestment Period and so long as the Maximum Advance
Rate Test is not satisfied, all remaining amounts shall be applied to prepay the
Advances in an amount necessary to cause the Maximum Advance Rate Test to be
satisfied;

 

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(C)         during the Reinvestment Period and so long as the Maximum Advance
Rate Test is satisfied, at the discretion of the Collateral Manager, all
remaining amounts shall remain in the Principal Collection Subaccount as
Principal Proceeds or be applied in any combination of the following two
options: (1) to the Principal Collection Subaccount for the purpose of acquiring
additional Loans and/or (2) to prepay the Advances;

 

(D)         after the Reinvestment Period, to each Lender to pay the Advances of
such Lender (pro rata, based on each Lender’s Percentage) until the Advances are
paid in full;

 

(E)         after the Reinvestment Period, to the payment of amounts referred to
in clauses (G) and (H) of clause (i) above (in the same order of priority
specified therein), to the extent not paid in full thereunder;

 

(F)         after the Reinvestment Period, without duplication, to the payment
of any other Administrative Expenses; and

 

(G)         after the Reinvestment Period, the remainder to the Borrower or to
the BDC at the direction of the Collateral Manager.

 

(iii)        On each Business Day following the occurrence and continuance of an
Event of Default, Interest Proceeds on deposit in the Interest Collection
Subaccount and Principal Proceeds on deposit in the Principal Collection
Subaccount will be transferred to the Payment Account and applied in the
following order of priority:

 

(A)         to the payment of unpaid amounts under clause (A) in clause (i)
above (in the order specified therein and subject to any limitations set forth
therein; provided, that if the Advances have been accelerated following the
occurrence and during the continuance of an Event of Default, and the sale of
the Collateral has commenced in connection therewith, such limitations specified
therein shall not be given any effect);

 

(B)         to the payment of unpaid amounts under clause (B) in clause (i)
above (subject to the Collateral Manager Expense Cap if the Collateral Manager
is the initial Collateral Manager or an Affiliate of the Borrower or the BDC);

 

(C)         to each Lender to pay accrued and unpaid Interest, Commitment Fees
due to each such Lender and amounts payable to each such Lender under Sections
2.09 and 2.10;

 

(D)         to the payment of Administrative Expenses (subject to the cap set
forth in clause (F) in clause (i) above);

 

(E)         to each Lender to pay the Advances of such Lender (pro rata, based
on each Lender’s Percentage) until the Advances are paid in full;

 

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(F)         to the payment or application of amounts referred to in clauses (A)
through (D) above (in the same order of priority specified therein), to the
extent not paid in full pursuant to applications under such clauses;

 

(G)         [reserved];

 

(H)         to the payment of any other Administrative Expenses to the extent
not paid in full;

 

(I)          the remainder to the Borrower or to the BDC at the direction of the
Collateral Manager.

 

(b)          If on any Payment Date the amount available in the Payment Account
is insufficient to make the full amount of the disbursements required by the
Monthly Report, the Collateral Agent shall make the disbursements called for in
the order and according to the priority set forth under Section 9.01(a) to the
extent funds are available therefor.

 

Article X

Sale of Collateral Loans; Purchase of Additional Loans

 

Section 10.01.         Sales of Collateral Loans. (a) Discretionary Sales of
Collateral Loans. Subject to the satisfaction of the conditions specified in
Section 10.04, the Collateral Manager on behalf of the Borrower may sell any
Collateral Loan, Defaulted Loan, or Ineligible Loan if such sale meets the
requirements set forth below (provided that prior to such discretionary sale,
the Collateral Manager shall demonstrate that the requirements set forth below
are met by submitting to the Lenders completed forms of “Borrowing Base
Certificate,” “Compliance Certificate,” “Compliance Calculation Sheet” and
“Excess Concentration Limitations” as set forth in the forms of Monthly Report
(Schedule 2 to this Agreement) as of the date of such discretionary sale after
giving effect thereto):

 

(i)no Default or Event of Default is continuing or would result upon giving
effect thereto (unless, in the case of such a Default, such Default will be
cured upon giving effect to such sale and the application of the proceeds
thereof);

 

(ii)upon giving effect thereto and the application of the proceeds thereof, each
Coverage Test is satisfied (or if any such Coverage Test is not satisfied, such
test is maintained or improved after giving effect to such sale);

 

(iii)except as provided in Section 10.01(c), if such sale is to an Affiliate of
the Borrower, such sale is made for a purchase price at least equal to the
Market Value thereof;

 

(iv)such sale is made for Cash; and

 

 -110- 

 

 

(v)in the reasonable judgment of the Collateral Manager, there is no adverse
selection of such Collateral Loans to be sold.

 

Notwithstanding anything above that would otherwise prohibit the sale of a
Collateral Loan after the occurrence or during the continuance of a Default or
an Event of Default, if the Borrower entered into an agreement to sell any such
Collateral Loan prior to the occurrence and continuance of such Default or an
Event of Default, but such sale did not settle prior to the occurrence of such
Default or an Event of Default, then the Borrower shall be permitted to
consummate such sale notwithstanding the occurrence and continuance of such
Default or an Event of Default, provided that such sale was not entered into in
contemplation of the occurrence of such Default or Event of Default and such
settlement occurs within the customary settlement period for similar trades.

 

(b)          Sales of Equity Securities. The Borrower may sell any Equity
Security at any time without restriction, and shall use its commercially
reasonable efforts to effect the sale of any Equity Security, regardless of
price within forty-five days of receipt if such Equity Security constitutes
Margin Stock, unless such sale is prohibited by Applicable Law or applicable
contract restriction, in which case such Equity Security should be sold as soon
as such sale is permitted by Applicable Law or applicable contract.

 

(c)          Certain Restrictions. In the case of a sale of a Defaulted Loan or
an Ineligible Loan to an Affiliate of the Borrower at a price less than the
original percentage of par paid by the Borrower, the purchase price shall not be
less than the Market Value of such Defaulted Loan or Ineligible Loan (determined
in accordance with clause (a)(x) of the definition of “Market Value”).

 

(d)          Terms of Sales. All sales of Collateral Loans and other property of
the Borrower under the provisions above in this Section 10.01 must be
exclusively for Cash.

 

Section 10.02.         Purchase of Additional Loans. (a) Purchase of Loans. On
any date during the Reinvestment Period, if no Event of Default has occurred and
is continuing, the Collateral Manager on behalf of the Borrower may, if each of
the conditions specified in this Section 10.02 and Section 10.04 are met, invest
Principal Proceeds, accrued interest received with respect to any Collateral
Loan to the extent used to pay for accrued interest on additional Loans and
other amounts on deposit in the Principal Collection Subaccount in additional
Loans, provided, that no Loan may be purchased unless each of the following
conditions are satisfied as of the date the Collateral Manager commits on behalf
of the Borrower to make such purchase, in each case after giving effect to such
purchase and all other sales or purchases previously or simultaneously committed
to:

 

(i)          such obligation is an Eligible Loan; and

 

(ii)         each Coverage Test is satisfied (or if any such Coverage Test is
not satisfied, such test is maintained or improved after giving effect to such
purchase).

 

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(b)          Purchase of Loans Involving Affiliates. Additional Loans may be
purchased from time to time by the Borrower from the Collateral Manager or any
of its Affiliates only if (x) the material terms and conditions thereof are no
less favorable to the Borrower than the terms it would obtain if negotiated on
an arms-length basis, (y) the transactions are effected in accordance with all
Applicable Laws and (z) such purchase is for an amount equal to or less than the
lesser of (A) the original purchase price paid by the Collateral Manager or such
Affiliate (after adjustment for any borrowings or repayments and amortization of
upfront fees and exclusive of interest) and (B) the Collateral Manager’s current
mark with respect to such Loan.

 

Section 10.03.         Substitution and Transfer of Loans. (a) Substitutions.
The Borrower may (including in connection with any retransfer of a Collateral
Loan to Fund under the Purchase and Contribution Agreement) replace any
Collateral Loan with another Loan (a “Substitute Loan”), subject to the
satisfaction of the conditions set forth below and in Section 10.04(c).

 

(b)          Conditions to Substitution. No substitution of a Collateral Loan
with a Substitute Loan shall occur unless each of the following conditions is
satisfied as of the date of such substitution (as certified to the Agents by the
Borrower (or the Collateral Manager on behalf of the Borrower)):

 

(i)          each Substitute Loan satisfies the eligibility criteria set forth
in the definition of an Eligible Loan on the date of substitution;

 

(ii)         after giving effect to any such substitution, each Coverage Test
(or if any such Coverage Test is not satisfied, such test is maintained or
improved after giving effect to such substitution);

 

(iii)        100% of the proceeds from the sale of the Collateral Loan(s) to be
replaced in connection with such Substitute Loan are either applied by the
Borrower to acquire the Substitute Loan(s) or deposited in the Principal
Collection Subaccount;

 

(iv)        no Default or Event of Default has occurred and is continuing
(before or after giving effect to such substitution);

 

(v)         there is no adverse selection, impacting the interest of the Secured
Parties, by the Borrower or Collateral Manager with regard to such Collateral
Loans to be substituted or the Substitute Loans;

 

(vi)        the Borrower and, if the Collateral Manager is the initial
Collateral Manager or an Affiliate of the Borrower or the BDC, the Collateral
Manager (on behalf of the Borrower) shall agree to pay the legal fees and
expenses of the Administrative Agent and the Collateral Agent in connection with
any such substitution (including, but not limited to, expenses incurred in
connection with the release of the Lien of the Collateral Agent on behalf of the
Secured Parties in connection with such sale, substitution or repurchase);

 

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(vii)       the Borrower shall notify the Administrative Agent of any amount to
be deposited into the Collection Account in connection with any such
substitution and shall deliver to the Document Custodian the Related Documents
for any Substitute Loans;

 

(viii)      upon confirmation of the delivery of a Substitute Loan for each
applicable Collateral Loan being substituted for, each applicable Collateral
Loan being substituted for shall be removed from the Collateral and the
applicable Substitute Loan(s) shall be included in the Collateral;

 

(ix)         the Borrower shall deliver to the Administrative Agent (with a copy
to the Collateral Agent) on the date of such substitution a certificate of a
Responsible Officer of the Borrower certifying that each of the foregoing is
true and correct as of such date; and

 

(x)          the Concentration Limitations are satisfied (or if there is any
Excess Concentration Amount, such Excess Concentration Amount is maintained or
decreased after giving effect to such sale).

 

Section 10.04.         Conditions Applicable to All Sale, Substitution and
Purchase Transactions. (a) Any transaction effected under this Article X or in
connection with the acquisition of additional Loans shall be conducted on an
arm’s length basis and, if effected with a Person that is an Affiliate of the
Collateral Manager (or with an account or portfolio for which the Collateral
Manager or any of its Affiliates serves as investment adviser), shall be on
material terms no less favorable to the Borrower and the Secured Parties than
would be the case if such Person were not such an Affiliate or as otherwise
expressly permitted under the Facility Documents.

 

(b)          Upon each acquisition by the Borrower of a Loan, (i) all of the
Borrower’s right, title and interest to such Loan shall be subject to the Lien
granted to the Collateral Agent pursuant to this Agreement and (ii) such Loan
shall be Delivered to the Collateral Agent (or the Document Custodian on its
behalf, as applicable); provided, that, notwithstanding the foregoing, the
Related Documents with respect to such Loan may be delivered within ten (10)
Business Days of the contribution or acquisition of such Loan.

 

(c)          The Aggregate Principal Balance of the Collateral Loan(s) which are
the subject of any sale to an Affiliate of the Borrower under this Article X or
substitution pursuant to Section 10.03, together with the sum of the Aggregate
Principal Balance of all Collateral Loans sold to Affiliates or substituted in
the twelve month period preceding the proposed date of sale or substitution (or
such lesser number of months as shall have elapsed since the Closing Date) shall
not exceed 20% of the highest Aggregate Collateral Balance during such period;
provided that, the sum of the Aggregate Principal Balance of all Defaulted Loans
sold to Affiliates or substituted in the twelve month period preceding the
proposed date of sale or substitution (or such lesser number of months as shall
have elapsed since the Closing Date) shall not exceed 10% of the of the highest
Aggregate Collateral Balance during such period. For the avoidance of doubt, the
foregoing limitations shall not apply (i) to Warranty Loans or (ii) where
Collateral Loans are sold by the Borrower in connection with a Permitted
Securitization.

 

 -113- 

 

 

(d)          Upon the sale or substitution of a Collateral Loan pursuant to this
Article X, the Collateral Agent, for the benefit of the Secured Parties, shall
automatically and without further action be deemed to release and transfer to
the Borrower, without recourse, representation or warranty, all the right, title
and interest of the Collateral Agent, for the benefit of the Secured Parties in,
to and under such Collateral Loan being sold or being substituted for, as
applicable. The Collateral Agent, for the benefit of the Secured Parties, shall,
at the sole expense of the Borrower, execute such documents and instruments of
transfer as may be prepared by the Collateral Manager, on behalf of the
Borrower, and take other such actions as shall reasonably be requested by the
Collateral Manager on behalf of the Borrower to effect the release and transfer
of such Collateral Loan being sold or substituted for pursuant to this
Article X.

 

(e)          For the avoidance of doubt, the restrictions set forth in Sections
10.01 and 10.04 shall not apply to the sale of Warranty Loans.

 

Section 10.05.         Additional Equity Contributions. The BDC may, but shall
have no obligation to, at any time or from time to time contribute additional
equity to the Borrower for any purpose, including for the purpose of curing any
Default, satisfying any Coverage Test, enabling the acquisition or sale of any
Loan or satisfying any conditions under Section 3.02. Each equity contribution
shall either be made (i) in Cash, (ii) by assignment and contribution of an
Eligible Investment and/or (iii) by assignment and contribution of a Loan. All
Cash contributed to the Borrower shall be treated as Principal Proceeds except
to the extent that the Collateral Manager, in its discretion, specifies that
such Cash shall constitute Interest Proceeds.

 

Article XI

Administration and Servicing of Contracts

 

Section 11.01.         Designation of the Collateral Manager. (a) Initial
Collateral Manager. The servicing, administering and collection of the
Collateral shall be conducted in accordance with this Section 11.01 by the
Person designated as the Collateral Manager hereunder. Monroe Capital Income
Plus Corporation is hereby appointed as, and hereby accepts such appointment and
agrees to perform the duties and responsibilities, of Collateral Manager
pursuant to the terms hereof. The Collateral Manager and the Borrower hereby
acknowledge that each of the Secured Parties are third party beneficiaries of
the obligations taken by the Collateral Manager hereunder.

 

(b)          Subcontracts. The Collateral Manager may, with the prior written
consent of the Administrative Agent, subcontract with any other Person for back
office, servicing and administrative functions or collecting the Collateral;
provided that (i) the Collateral Manager shall select any such Person with
reasonable care and shall be solely responsible for the fees and expenses
payable to such Person, (ii) the Collateral Manager shall not be relieved of,
and shall remain liable for, the performance of the duties and obligations of
the Collateral Manager pursuant to the terms hereof without regard to any
subcontracting arrangement and (iii) any such subcontract shall be subject to
the provisions hereof.

 

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Section 11.02.         Duties of the Collateral Manager. (a) Duties. The
Collateral Manager shall take or cause to be taken all such actions as may be
necessary or advisable to service, administer and collect on the Collateral from
time to time, all in accordance with Applicable Law and the Collateral
Management Standard. Without limiting the foregoing, the duties of the
Collateral Manager shall include the following:

 

(i)          supervising the Collateral, including communicating with Obligors,
executing amendments, providing consents and waivers, exercising voting rights,
enforcing and collecting on the Collateral and otherwise managing the Collateral
on behalf of the Borrower;

 

(ii)         preparing and submitting claims to Obligors on each Collateral
Loan;

 

(iii)        maintaining all necessary servicing records with respect to the
Collateral;

 

(iv)        maintaining and implementing administrative and operating procedures
(including, without limitation, an ability to recreate servicing records
evidencing the Collateral in the event of the destruction of the originals
thereof) and keeping and maintaining all documents, books, records and other
information reasonably necessary or advisable for the collection of the
Collateral;

 

(v)         promptly delivering to the Administrative Agent, each Lender, the
Collateral Administrator or the Collateral Agent, from time to time, such
information and servicing records (including information relating to its
performance under this Agreement) as the Administrative Agent, each Lender, the
Collateral Administrator or the Collateral Agent may from time to time
reasonably request;

 

(vi)        identifying each Collateral Loan clearly and unambiguously in its
servicing records to reflect that such Collateral Loan is owned by the Borrower
and that the Borrower is pledging a security interest therein to the Collateral
Agent (for the benefit of the Secured Parties) pursuant to this Agreement;

 

(vii)       notifying the Administrative Agent and each Lender of any material
action, suit, proceeding, dispute, offset, deduction, defense or counterclaim
(1) that is or is threatened to be asserted by an Obligor with respect to any
Collateral Loan (or portion thereof) of which it has actual knowledge or has
received notice; or (2) that could reasonably be expected to have a Material
Adverse Effect;

 

(viii)      maintaining the perfected security interest of the Collateral Agent,
for the benefit of the Secured Parties, in the Collateral;

 

(ix)         with respect to each Collateral Loan included as part of the
Collateral, making copies of the Related Documents available for inspection by
the Administrative Agent, upon reasonable notice, at the offices of the
Collateral Manager during normal business hours in accordance with Section
5.03(d);

 

(x)          directing the Collateral Agent to make payments pursuant to the
terms of the Monthly Report in accordance with the Priority of Payments;

 

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(xi)         directing the acquisition, sale or substitution of Collateral in
accordance with Article X;

 

(xii)        providing assistance to the Borrower with respect to the purchase
of Loans and sale of Collateral Loans;

 

(xiii)       instructing the Obligors or related the administrative and paying
agents under the Related Documents, as applicable, on the Collateral Loans to
make payments directly into the Collection Account;

 

(xiv)      preparing the Monthly Reports and cooperating with the Collateral
Administrator in its duties hereunder in the manner and at the times required
hereunder;

 

(xv)       complying with such other duties and responsibilities as required of
the Collateral Manager by this Agreement; and

 

(xvi)      with respect to each Loan proposed to be acquired by the Borrower,
providing a Loan Checklist and Related Documents to the Document Custodian (with
an electronic copy provided to the Administrative Agent prior to any Advance,
the proceeds of which are to be used to fund all or a portion of such
acquisition).

 

It is acknowledged and agreed that the Borrower possesses only such rights with
respect to the enforcement of rights and remedies with respect to the Collateral
Loans and the underlying assets securing such Collateral Loans under the Related
Documents as have been transferred to the Borrower with respect to the related
Collateral Loan, and therefore, for all purposes under this Agreement, the
Collateral Manager shall perform its administrative and management duties
hereunder only to the extent that, as a lender under the Related Documents, it
has the right to do so.

 

(b)          Exercise of Remedies Not Release. Notwithstanding anything to the
contrary contained herein, the exercise by the Administrative Agent, the
Collateral Agent, each Lender and the Secured Parties of their rights hereunder
or any other Facility Document shall not release the Collateral Manager or the
Borrower from any of their duties or responsibilities with respect to the
Collateral. The Secured Parties, the Administrative Agent, each Lender and the
Collateral Agent shall not have any obligation or liability with respect to any
Collateral, nor shall any of them be obligated to perform any of the obligations
of the Collateral Manager hereunder.

 

(c)          Application of Obligor Payments. Any payment by an Obligor in
respect of any indebtedness owed by it to the Borrower shall, except as
otherwise specified by such Obligor or otherwise required by contract or law and
unless otherwise instructed by the Administrative Agent, be applied as a
collection of a payment by such Obligor (starting with the oldest such
outstanding payment due) to the extent of any amounts then due and payable
thereunder before being applied to any other receivable or other obligation of
such Obligor.

 

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Section 11.03. Liability of the Collateral Manager; Indemnification of the
Collateral Manager Persons.

 

(a)       The Collateral Manager and any of its Affiliates, employees,
shareholders, members, partners, assigns, representatives or agents (each such
individual or entity, which, for the avoidance of doubt, shall be deemed to
include the Administrator and the Advisor, a “Collateral Manager Person”) shall
not be liable to the Borrower, any Lender, the Administrative Agent, the Lead
Arranger, the Collateral Agent, the Collateral Administrator, the Document
Custodian or any other Person for any liability, loss (including amounts paid in
settlement), damages, judgments, costs, expenses (including reasonable
attorneys’ fees and expenses, accountant’s fees and expenses and the fees and
expenses of other experts), demands, charges or claim (collectively, the
“Damages”) incurred by reason of any act or omission or alleged act or omission
performed or omitted by such Collateral Manager Person, or for any decrease in
the value of the Collateral or any other losses suffered by any party; provided,
however, that a Collateral Manager Person shall be liable for any Damages that
arise (i) by reason of any act or omission constituting bad faith, willful
misconduct, or gross negligence by any Collateral Manager Person in the
performance of or reckless disregard of the Collateral Manager’s duties
hereunder or (ii) by any breach of the representations and warranties of the
Collateral Manager expressly set forth in this Agreement (each such breach, a
“Collateral Manager Breach”).

 

(b)          The Collateral Manager may rely in good faith upon, and will incur
no Damages for relying upon, (i) any authoritative source customarily used by
firms performing services similar to those services provided by the Collateral
Manager under this Agreement, and (ii) the advice of nationally recognized
counsel, accountants or other advisors as the Collateral Manager determines
reasonably appropriate in connection with the services provided by the
Collateral Manager under this Agreement.

 

(c)          In no event shall the Collateral Manager be liable for special,
indirect or consequential losses or damages of any kind whatsoever (including
but not limited to diminution in value or lost profits) even if the Collateral
Manager has been advised of the likelihood of such damages and regardless of the
form of such action.

 

(d)          Each Collateral Manager Person shall be held harmless and be
indemnified by the Borrower for any Damages suffered by virtue of any acts or
omissions or alleged acts or omissions arising out of the activities of such
Collateral Manager Person in the performance of the obligations of the
Collateral Manager under this Agreement or as a result of this Agreement, or the
Borrower’s ownership interest in any portion of the Collateral Loans, except to
the extent any such Damage arises as a result of a Collateral Manager Breach.
All amounts payable pursuant to this Section 11.03 shall be payable in
accordance with the Priority of Payments.

 

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Section 11.04.         Authorization of the Collateral Manager. The Borrower
hereby authorizes the Collateral Manager to take any and all reasonable steps in
its name and on its behalf necessary or desirable in the determination of the
Collateral Manager and not inconsistent with the pledge of the Collateral by the
Borrower to the Collateral Agent, on behalf of the Secured Parties, hereunder,
to collect all amounts due under any and all Collateral, including, without
limitation, endorsing its name on checks and other instruments representing
Collections, executing and delivering any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Collateral and, after the
delinquency of any Collateral and to the extent permitted under and in
compliance with Applicable Law, to commence proceedings with respect to
enforcing payment thereof, to the same extent as the Collateral Manager could
have done if it owned such Collateral. The Borrower shall furnish the Collateral
Manager (and any successors thereto) with any powers of attorney and other
documents necessary or appropriate to enable the Collateral Manager to carry out
its collateral management duties hereunder, and shall cooperate with the
Collateral Manager to the fullest extent in order to ensure the collectability
of the Collateral. In no event shall the Collateral Manager be entitled to make
the Secured Parties, the Collateral Agent, the Collateral Administrator, the
Administrative Agent or any Lender a party to any litigation without such
party’s express prior written consent, or to make the Borrower a party to any
litigation (other than any foreclosure or similar collection procedure) without
the Administrative Agent’s consent. Following the occurrence and continuance of
an Event of Default (unless otherwise waived by the Lenders in accordance with
Section 16.01), the Administrative Agent (acting in its sole discretion or at
the direction of the Required Lenders) may provide notice to the Collateral
Manager (with a copy to the Collateral Administrator, the Document Custodian and
the Collateral Agent) that the Secured Parties are exercising their control
rights with respect to the Collateral in accordance with Section 6.02.

 

Section 11.05.         Realization Upon Defaulted Loans. The Collateral Manager
will use reasonable efforts consistent with the Collateral Management Standard,
this Agreement and the Related Documents to exercise (on behalf of the Borrower
and the Secured Parties) available remedies (which may include liquidating,
foreclosing upon or repossessing, as applicable, or otherwise comparably
converting the ownership of any related property) with respect to any Defaulted
Loan. The Collateral Manager will comply with the Collateral Management
Standard, the Related Documents and Applicable Law in realizing upon such
related property, and employ practices and procedures, including reasonable
efforts, consistent with the Collateral Management Standard and the Related
Documents, to enforce all obligations of Obligors. Without limiting the
generality of the foregoing, the Collateral Manager may cause the sale of any
such related property to the Collateral Manager or its Affiliates for a purchase
price equal to the then fair market value thereof, any such sale to be evidenced
by a certificate of a Responsible Officer of the Collateral Manager delivered to
the Administrative Agent setting forth the Collateral Loan, the related
property, the sale price of the related property and certifying that such sale
price is the fair market value of such related property. The Collateral Manager
will remit to the Collection Account the recoveries received in connection with
the sale or disposition of related property relating to any Defaulted Loan
hereunder.

 

Section 11.06.         Collateral Management Compensation. As compensation for
its servicing and collateral management activities hereunder and reimbursement
for its expenses, the Collateral Manager shall be entitled to receive the
Collateral Management Fee to the extent of funds available therefor pursuant to
the Priority of Payments, as applicable.

 

Section 11.07.         Payment of Certain Expenses by Collateral Manager. The
Collateral Manager (if the Collateral Manager is an Affiliate of the Borrower)
will be required to pay all expenses incurred by it in connection with its
activities under this Agreement, including fees and disbursements of its
independent accountants, Taxes imposed on the Collateral Manager, expenses
incurred by the Collateral Manager in connection with the production of reports
pursuant to this Agreement, and all other fees and expenses not expressly stated
under this Agreement for the account of the Borrower. The Collateral Manager
shall be required to pay such expenses for its own account and shall not be
entitled to any payment therefor other than the Collateral Management Fee.

 

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Section 11.08.         The Collateral Manager Not to Resign; Assignment. The
Collateral Manager shall not resign from the obligations and duties hereby
imposed on it except upon the Collateral Manager’s determination that the
performance of its duties hereunder is or becomes impermissible under Applicable
Law. Any such determination permitting the resignation of the Collateral Manager
shall be evidenced by an opinion of counsel to such effect delivered to the
Administrative Agent and each Lender. No such resignation shall become effective
until a Successor Collateral Manager shall have assumed the responsibilities and
obligations of the Collateral Manager in accordance with Section 11.09.

 

Section 11.09.         Appointment of Successor Collateral Manager. (a)  Upon
resignation of the Collateral Manager pursuant to Section 11.08, the Borrower
may (with the consent of the Administrative Agent and the Required Lenders) at
any time appoint a successor collateral manager (the “Successor Collateral
Manager”), which, for the avoidance of doubt may be the Administrative Agent or
any Lender, and such Successor Collateral Manager shall accept its appointment
by a written assumption in a form acceptable to the Administrative Agent. Upon
the occurrence and continuance of a Collateral Manager Termination Event, the
Administrative Agent may (with the consent of the Required Lenders and, in the
case of a Collateral Manager Termination Event arising solely under Section
6.03(a), with the consent of the BDC) at any time appoint a successor collateral
manager, which, for the avoidance of doubt may be the Administrative Agent or
any Lender, and such Successor Collateral Manager shall accept its appointment
by a written assumption in a form acceptable to the Administrative Agent. No
assignment of this Agreement by the Collateral Manager (including, without
limitation, a change in control or management of the Collateral Manager which
would be deemed an “assignment” under the Investment Advisers Act of 1940, as
amended) shall be made unless such assignment is consented to in writing by the
Borrower and the Administrative Agent (such consent not to be unreasonably
withheld or delayed); provided, however, that nothing herein shall be construed
to restrict the ability of the Administrative Agent to replace the Collateral
Manager upon the occurrence of a Collateral Manager Termination Event pursuant
to Section 11.09 or any obligations of the Collateral Manager in connection with
such provisions.

 

 -119- 

 

  

(b)          Upon its appointment (the “Assumption Date”), the Successor
Collateral Manager shall be the successor in all respects to the Collateral
Manager with respect to collateral management functions under this Agreement
subject to and in accordance with the terms of this Agreement (including without
limitation Article XIII hereof) and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the
Collateral Manager by the terms and provisions hereof, and all references in
this Agreement to the Collateral Manager shall be deemed to refer to the
Successor Collateral Manager; provided that the Successor Collateral Manager
shall not (i) be deemed to have assumed or to become liable for, or otherwise
have any liability for, any duties, responsibilities, actions performed,
breaches, defaults, claims, obligations or liabilities of the terminated
Collateral Manager or any other predecessor Collateral Manager arising before
the Assumption Date, (ii) have any obligation to pay any taxes required to be
paid by the terminated Collateral Manager or any other predecessor Collateral
Manager (provided that the Successor Collateral Manager shall pay any income
taxes for which it is liable), (iii) have any liability for any failure to
perform its duties as Collateral Manager, or any loss or damages arising from
such failure, that results from the actions (or inaction) of the terminated
Collateral Manager or any other predecessor Collateral Manager on or before the
Assumption Date, (iv) have any obligation to perform advancing or repurchase
obligations, if any, of the Borrower, the terminated Collateral Manager or any
other predecessor Collateral Manager unless it elects to do so in its sole
discretion, (v) have any obligation to pay any of the fees and expenses of any
other party to the transaction contemplated by this Agreement or any Facility
Document, (vi) have any liability with respect to any of the representations and
warranties of any predecessor Collateral Manager under this Agreement,
(vii) have any obligation to expend or risk its own funds or otherwise incur any
financial liability in the performance of its duties hereunder or in the
exercise of any of its rights and powers, if, in its reasonable judgment, it
shall believe that repayment of such funds or adequate indemnity against such
risk or liability is not assured to it and (viii) have any obligation to file or
record any financing statements or other documents in order to perfect or
continue any security interests contemplated by this Agreement unless it has
been directed by the Administrative Agent to make such filing or recordation.
The indemnification obligations of the Successor Collateral Manager, upon
becoming a Successor Collateral Manager, are expressly limited to those arising
on account of its failure to act in good faith and with reasonable care under
the circumstances.

 

(c)          The Collateral Manager agrees to cooperate and use its commercially
reasonable efforts in effecting the transition of the responsibilities and
rights of servicing of the Collateral, including, without limitation, the
transfer to the Successor Collateral Manager for the administration by it of all
cash amounts that shall at the time be held by the Collateral Manager for
deposit, or have been deposited by the Collateral Manager, or thereafter
received with respect to the Collateral and the delivery to the Successor
Collateral Manager in an orderly and timely fashion of all files and records
with respect to the Collateral and a computer data file in readable form
containing all information necessary to enable the Successor Collateral Manager
to service the Collateral. In addition, the Collateral Manager agrees to
cooperate and use its commercially reasonable efforts in providing, at the
expense of the Collateral Manager, the Successor Collateral Manager with
reasonable access (including at the premises of the Collateral Manager) to the
employees of the Collateral Manager, and any and all of the books, records (in
electronic or other form) or other information reasonably requested by it to
enable the Successor Collateral Manager to assume the servicing functions
hereunder and under this Agreement and to maintain a list of key servicing
personnel and contact information.

 

(d)          Notwithstanding the Successor Collateral Manager’s assumption of,
and its agreement to perform and observe, all duties, responsibilities and
obligations of the Collateral Manager under this Agreement arising on and after
the Assumption Date, the Successor Collateral Manager shall not be deemed to
have assumed or to become liable for, or otherwise have any liability for, any
duties, responsibilities, obligations or liabilities of the initial Collateral
Manager or any other predecessor Collateral Manager arising under the terms of
this Agreement, arising by operation of law or otherwise with respect to the
period ending on the Assumption Date, including, without limitation, any
liability for, any duties, responsibilities, obligations or liabilities of the
initial Collateral Manager or any other predecessor Collateral Manager arising
on or before the Assumption Date under this Agreement, regardless of when the
liability, duty, responsibility or obligation of the initial Collateral Manager
or any other predecessor Collateral Manager therefor arose, whether provided by
the terms of this Agreement arising by operation of law or otherwise, and in no
case will the Successor Collateral Manager have any liability for any failure to
perform its duties as Collateral Manager, or any loss or damages arising from
such failure, that results from the actions (or inaction) of the initial
Collateral Manager or any other predecessor Collateral Manager on or before the
Assumption Date.

 

 -120- 

 

 

(e)          The Successor Collateral Manager undertakes to perform only such
duties and obligations as are specifically set forth in this Agreement, it being
expressly understood by all parties hereto that there are no implied duties or
obligations of the Successor Collateral Manager hereunder.

 

(f)           Notwithstanding anything contained in this Agreement or any
Facility Document to the contrary, the Successor Collateral Manager is
authorized to accept and rely on all of the accounting, records (including
computer records) and work of the prior Collateral Manager relating to the
Collateral Loans (collectively, the “Predecessor Collateral Manager Work
Product”) without any audit or other examination thereof, except to the extent
that it knows such records or work product to be incorrect, and such Successor
Collateral Manager shall have no duty, responsibility, obligation or liability
for the acts and omissions of the prior Collateral Manager or any other
predecessor Collateral Manager. If any error, inaccuracy, omission or incorrect
or non-standard practice or procedure (collectively, “Errors”) exist in any
Predecessor Collateral Manager Work Product and such Errors make it materially
more difficult to service or should cause or materially contribute to the
Successor Collateral Manager making or continuing any Errors (collectively,
“Continued Errors”), such Successor Collateral Manager shall have no duty,
responsibility, obligation or liability for such Continued Errors; provided that
such Successor Collateral Manager agrees to use commercially reasonable efforts
to prevent further Continued Errors. In the event that the Successor Collateral
Manager becomes aware of Errors or Continued Errors, it shall, with the prior
consent of the Administrative Agent, use its commercially reasonable efforts to
reconstruct and reconcile such data as is commercially reasonable to correct
such Errors and Continued Errors and to prevent future Continued Errors. The
Successor Collateral Manager shall be entitled to recover its costs thereby
expended in accordance with the Priority of Payments.

 

(g)          The Collateral Manager will, upon the request of the Successor
Collateral Manager, provide the Successor Collateral Manager with a power of
attorney providing that the Successor Collateral Manager is authorized and
empowered to execute and deliver, on behalf of the Collateral Manager, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do so or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination or to perform the duties of
the Collateral Manager under this Agreement.

 

(h)          The Successor Collateral Manager shall not be liable for an action
or omission to act hereunder, except for its own willful misconduct, gross
negligence or bad faith. Under no circumstances will the Successor Collateral
Manager be liable for indirect, special, consequential or incidental damages,
such as loss of use, revenue or profit. In no event shall the Successor
Collateral Manager be liable to the Borrower for any bad debts or other defaults
by Obligors.

 

 -121- 

 

 

(i)           Except as set forth herein, the Successor Collateral Manager shall
have no duty to review any information regarding the Collateral Manager,
including any financial statements or the information set forth herein.

 

(j)           If the Successor Collateral Manager is prevented from fulfilling
its obligations hereunder as a result of government actions, regulations, fires,
strikes, accidents, acts of God or other causes beyond the control of such
party, the Successor Collateral Manager shall use commercially reasonable
efforts to resume performance as soon as reasonably possible, and the Successor
Collateral Manager’s obligations shall be suspended for a reasonable time during
which such conditions exist.

 

Article XII

The Agents

 

Section 12.01.         Authorization and Action. Each Lender hereby irrevocably
appoints and authorizes the Administrative Agent and the Collateral Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement and, to the extent applicable, the other Facility Documents as are
delegated to such Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto, subject to the terms hereof. No
Agent shall have any duties or responsibilities, except those expressly set
forth herein or in the other Facility Documents, or any fiduciary relationship
with any Secured Party, and no implied covenants, functions, responsibilities,
duties or obligations or liabilities on the part of such Agent shall be read
into this Agreement or any other Facility Document to which such Agent is a
party (if any) as duties on its part to be performed or observed. No Agent shall
have or be construed to have any other duties or responsibilities in respect of
this Agreement and the transactions contemplated hereby. As to any matters not
expressly provided for by this Agreement or the other Facility Documents, no
Agent shall be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the written instructions of the Required
Lenders or, with respect to the Collateral Agent, the Administrative Agent;
provided that such Agent shall not be required to take any action which exposes
such Agent, in its judgment, to personal liability, cost or expense or which is
contrary to this Agreement, the other Facility Documents or Applicable Law, or
would be, in its judgment, contrary to its duties hereunder, under any other
Facility Document or under Applicable Law. Each Lender agrees that in any
instance in which the Facility Documents provide that an Agent’s consent may not
be unreasonably withheld, provide for the exercise of such Agent’s reasonable
discretion, or provide to a similar effect, it shall not in its instructions
(or, by refusing to provide instruction) to such Agent withhold its consent or
exercise its discretion in an unreasonable manner.

 

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If the Collateral Agent has been requested or directed by the Administrative
Agent or the Required Lenders to take any action pursuant to any provision of
this Agreement or any other Facility Document, the Collateral Agent shall not be
under any obligation to exercise any of the rights or powers vested in it by
this Agreement or such Facility Document in the manner so requested unless it
shall have been provided indemnity reasonably satisfactory to it against the
costs, expenses and liabilities which may be incurred by it in compliance with
or in performing such request or direction. No provision of this Agreement or
any Facility Document shall otherwise be construed to require the Collateral
Agent to expend or risk its own funds or to take any action that could in its
judgment cause it to incur any cost, expenses or liability, unless it is
provided indemnity acceptable to it against any such expenditure, risk, costs,
expense or liability. For the avoidance of doubt, the Collateral Agent shall not
have any duty or obligation to take any affirmative action to exercise or
enforce any power, right or remedy available to it under this Agreement or any
Facility Document or Related Document unless and until directed by the Required
Lenders (or the Administrative Agent on their behalf).

 

Neither the Collateral Agent nor any officer, agent or representative thereof
shall be personally liable for any action taken by any such person in accordance
with any notice given by the Required Lenders (or the Administrative Agent on
their behalf) pursuant to the terms of this Agreement or any other Facility
Document even if, at the time such action is taken by any such person, the
Required Lenders or persons purporting to be the Required Lenders are not
entitled to give such notice, except where the Responsible Officer of the
Collateral Agent has actual knowledge (without any duty of inquiry or
investigation on its part) that such Required Lenders or persons purporting to
be the Required Lenders are not entitled to give such notice. If any dispute or
disagreement shall arise as to the allocation of any sum of money received by
the Collateral Agent hereunder or under any Facility Document, the Collateral
Agent shall have the right to deliver such sum to a court of competent
jurisdiction and therein commence an action for interpleader.

 

If in performing its duties under this Agreement, the Collateral Agent is
required to decide between alternative courses of action, it may request written
instructions from the Administrative Agent or the Required Lenders as to the
course of action desired by it. If the Collateral Agent does not receive such
instructions within two Business Days after it has requested them, the
Collateral Agent may, but shall be under no duty to, take or refrain from taking
any such courses of action. The Collateral Agent shall act in accordance with
instructions received after such two-Business Day period except to the extent it
has already, in good faith, taken or committed itself to take, action
inconsistent with such instructions.

 

Section 12.02.         Delegation of Duties. Each Agent may execute any of its
duties under this Agreement and each other Facility Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. No Agent shall be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.

 

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Section 12.03.         Agent’s Reliance, Etc. (a) Neither Agent nor any of its
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement or any of the other Facility Documents, except for its or their
own gross negligence or willful misconduct. Without limiting the generality of
the foregoing, each Agent: (i) may consult with legal counsel (including,
without limitation, counsel for the Borrower or the Collateral Manager or any of
their Affiliates) and independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accountants or
experts; (ii) makes no warranty or representation to any Secured Party or any
other Person and shall not be responsible to any Secured Party or any Person for
any statements, warranties or representations (whether written or oral) made in
or in connection with this Agreement or the other Facility Documents;
(iii) shall not have any duty to monitor, ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement, the other Facility Documents or any Related Documents on the part of
the Borrower or the Collateral Manager or any other Person or to inspect the
property (including the books and records) of the Borrower or the Collateral
Manager; (iv) shall not be responsible to any Secured Party or any other Person
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of any Collateral, this Agreement, the other Facility
Documents, any Related Document or any other instrument or document furnished
pursuant hereto or thereto or for the validity, perfection, priority or
enforceability of the Liens on the Collateral; and (v) shall incur no liability
under or in respect of this Agreement or any other Facility Document by relying
on, acting upon (or by refraining from action in reliance on) any notice,
consent, certificate (including for the avoidance of doubt, the Borrowing Base
Certificate), instruction or waiver, report, statement, opinion, direction or
other instrument or writing (which may be delivered by telecopier, email, cable
or telex, if acceptable to it) reasonably believed by it to be genuine and
signed or sent by the proper party or parties. No Agent shall have any liability
to the Borrower or any Lender or any other Person for the Borrower’s, the
Collateral Manager’s or any Lender’s, as the case may be, performance of, or
failure to perform, any of their respective obligations and duties under this
Agreement or any other Facility Document.

 

(b)          No Agent shall be liable for the actions or omissions of any other
Agent (including without limitation concerning the application of funds), or
under any duty to monitor or investigate compliance on the part of any other
Agent with the terms or requirements of this Agreement, any Facility Documents
or any Related Documents, or their duties thereunder. Each Agent shall be
entitled to assume the due authority of any signatory and genuineness of any
signature appearing on any instrument or document it may receive (including,
without limitation, each Notice of Borrowing received hereunder). No Agent shall
be liable for any action taken in good faith and reasonably believed by it to be
within the powers conferred upon it, or taken by it pursuant to any direction or
instruction by which it is governed, or omitted to be taken by it by reason of
the lack of direction or instruction required hereby for such action (including
without limitation for refusing to exercise discretion or for withholding its
consent in the absence of its receipt of, or resulting from a failure, delay or
refusal on the part of the Required Lenders to provide, written instruction to
exercise such discretion or grant such consent from the Required Lenders, as
applicable). No Agent shall be liable for any error of judgment made in good
faith unless it shall be proven by a court of competent jurisdiction that such
Agent was grossly negligent in ascertaining the relevant facts. Nothing herein
or in any Facility Documents or Related Documents shall obligate any Agent to
advance, expend or risk its own funds, or to take any action which in its
reasonable judgment may cause it to incur any expense or financial or other
liability for which it is not adequately indemnified. No Agent shall be liable
for any indirect, special or consequential damages (included but not limited to
lost profits) whatsoever, even if it has been informed of the likelihood thereof
and regardless of the form of action. No Agent shall be charged with knowledge
or notice of any matter unless actually known to a Responsible Officer of such
Agent, or unless and to the extent written notice of such matter is received by
such Agent at its address in accordance with Section 16.02. Any permissive grant
of power to an Agent hereunder shall not be construed to be a duty to act.
Neither Agent shall be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, entitlement order, approval or other paper or
document. Neither Agent shall be liable for any error of judgment, or for any
act done or step taken or omitted by it, in good faith, or for any mistakes of
fact or law, or for anything that it may do or refrain from doing in connection
herewith except in the case of its willful misconduct, bad faith, reckless
disregard or grossly negligent performance or omission of its duties.

 

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(c)          No Agent shall be responsible or liable for delays or failures in
performance resulting from acts beyond its control. Such acts shall include but
not be limited to acts of God, strikes, lockouts, riots, acts of war, epidemics,
governmental regulations imposed after the fact, fire, communication line
failures, computer viruses, power failures, earthquakes or other disasters.

 

(d)          The delivery of reports, and other documents and information to the
Collateral Agent hereunder or under any other Facility Document or Related
Document is for informational purposes only and the Collateral Agent’s receipt
of such documents and information shall not constitute constructive notice of
any information contained therein or determinable from information contained
therein. The Collateral Agent is hereby authorized and directed to execute and
deliver the other Facility Documents to which it is a party. Whether or not
expressly stated in such Facility Documents, in performing (or refraining from
acting) thereunder, the Collateral Agent shall have all of the rights, benefits,
protections and indemnities that are afforded to it in this Agreement.

 

(e)          Each Lender acknowledges that except as expressly set forth in this
Agreement, the Collateral Agent has not made any representation or warranty to
it, and that no act by the Collateral Agent hereafter taken, including any
consent and acceptance of any assignment or review of the affairs of the
Borrower, shall be deemed to constitute any representation or warranty by the
Collateral Agent to any Secured Party as to any matter. Each Lender represents
to the Collateral Agent that it has, independently and without reliance upon the
Collateral Agent and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower, and made its own decision to enter into this
Agreement and the other Facility Documents to which it is a party. Each Lender
also represents that it will, independently and without reliance upon the
Collateral Agent or any other Secured Party and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
Facility Documents, and to make such investigations as it deems necessary to
inform itself as to the business, prospects, operations, property, financial and
other condition and creditworthiness of the Borrower and the Collateral Manager.
The Collateral Agent shall not have any duty or responsibility to provide any
Secured Party with any credit or other information concerning the business,
prospects, operations, property, financial or other condition or
creditworthiness of the Borrower or Collateral Manager which may come into the
possession of the Collateral Agent.

 

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Section 12.04.         Indemnification. Each of the Lenders agrees to indemnify
and hold the Agents harmless (to the extent not reimbursed by or on behalf of
the Borrower pursuant to Section 16.04 or otherwise) from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, demands, charges, costs, expenses (including, without limitation, fees
and expenses of agents, experts or attorneys) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Agents in any way relating to or arising out of this Agreement or any other
Facility Document or any Related Document or any action taken or omitted by the
Agents under this Agreement or any other Facility Document or any Related
Document; provided that no Lender shall be liable to any Agent for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, demands, charges, costs, expenses or disbursements resulting
from such Agent’s gross negligence or willful misconduct; and provided, further,
that no Lender shall be liable to the Collateral Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
demands, charges, costs, expenses or disbursements (for purposes hereof,
“Liabilities”) unless such Liabilities are imposed on, incurred by, or asserted
against the Collateral Agent as a result of any action taken, or not taken, by
the Collateral Agent at the direction of the Administrative Agent or such Lender
or Lenders, as the case may be, in accordance with the terms and conditions set
forth in this Agreement (it being understood and agreed that the Collateral
Agent shall be under no obligation to exercise or to honor any of the rights or
powers vested in it by this Agreement at the request or direction of any of the
Lenders (or other Persons authorized or permitted under the terms hereof to make
such request or give such direction) pursuant to this Agreement or any of the
other Facility Documents, unless such Lenders shall have provided to the
Collateral Agent security or indemnity reasonably satisfactory to it against the
costs, expenses (including reasonable and documented fees and expenses of
agents, experts and attorneys) and Liabilities which might reasonably be
incurred by it in compliance with such request or direction, whether such
indemnity is provided under this Section 12.04 or otherwise). The rights of the
Agents and obligations of the Lenders under or pursuant to this Section 12.04
shall survive the termination of this Agreement, and the earlier removal or
resignation of any Agent hereunder.

 

Section 12.05.         Successor Agents. Subject to the terms of this
Section 12.05, each Agent may, upon thirty days’ notice to the Lenders and the
Borrower, resign as Administrative Agent or Collateral Agent, as applicable. If
an Agent shall resign then the Required Lenders shall appoint a successor agent.
If for any reason a successor agent is not so appointed and does not accept such
appointment within thirty days of notice of resignation such Agent may appoint a
successor agent. The appointment of any successor Agent shall be subject to the
prior written consent of the Borrower (which consent shall not be unreasonably
withheld or delayed); provided that the consent of the Borrower to any such
appointment shall not be required if (i) an Event of Default shall have occurred
and is continuing or, (ii) if such successor Agent is a Lender or an Affiliate
of such Agent or any Lender. Any resignation of an Agent shall be effective upon
the appointment of a successor agent pursuant to this Section 12.05. After the
effectiveness of any retiring Agent’s resignation hereunder as Agent, the
retiring Agent shall be discharged from its duties and obligations hereunder and
under the other Facility Documents and the provisions of this Article XII shall
continue in effect for its benefit with respect to any actions taken or omitted
to be taken by it while it was Agent under this Agreement and under the other
Facility Documents. Any Person (i) into which the Collateral Agent may be merged
or consolidated, (ii) that may result from any merger or consolidation to which
the Collateral Agent shall be a party, or (iii) that may succeed to the
corporate trust properties and assets of the Collateral Agent substantially as a
whole, shall be the successor to the Collateral Agent under this Agreement
without further act of any of the parties to this Agreement.

 

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Section 12.06.         Administrative Agent’s Capacity as a Lender. The Person
serving as the Administrative Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the same
as though it were not the Administrative Agent, and such Person and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or any Subsidiary or other Affiliate thereof
as if it were not the Administrative Agent hereunder.

 

Section 12.07. Compensation of Collateral Agent. As compensation for its
Collateral Agent activities hereunder, the Collateral Agent shall be entitled to
fees pursuant to the Collateral Agent, Document Custodian, Collateral
Administrator and Intermediary Fee Letter and any other reasonable and
documented out-of-pocket fees, expenses (including reasonable and documented
out-of-pocket fees, costs and expenses of agents, experts and attorneys) and
indemnity amounts payable by the Borrower or the Collateral Manager to the
Collateral Agent under the Facility Documents.

 

Article XIII

Reserved

 

Article XIV

The Document Custodian

 

Section 14.01.         Designation of Document Custodian.

 

(a)          Initial Document Custodian. The role of Document Custodian with
respect to the Related Documents delivered to it shall be conducted by the
Person designated as Document Custodian hereunder from time to time in
accordance with this Section 14.01. Until the Administrative Agent shall give to
U.S. Bank a Document Custodian Termination Notice, U.S. Bank is hereby appointed
as, and hereby accepts such appointment and agrees to perform the duties and
obligations of, Document Custodian pursuant to the terms hereof.

 

(b)          Successor Document Custodian. Upon the Document Custodian’s receipt
of a Document Custodian Termination Notice from the Administrative Agent of the
designation of a successor Document Custodian pursuant to the provisions of
Section 14.05, the Document Custodian agrees that it will terminate its
activities as Document Custodian hereunder. Upon the resignation of the Document
Custodian, the Administrative Agent shall appoint a successor Document Custodian
and if it does not do so within thirty days of the Document Custodian’s
resignation, the Document Custodian may petition a court of competent
jurisdiction for the appointment of a successor.

 

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Section 14.02.         Duties of Document Custodian.

 

(a)          Appointment. Each of the Borrower and the Administrative Agent
hereby designate and appoint the Document Custodian to act as its agent and
hereby authorizes the Document Custodian to take such actions on its behalf and
to exercise such powers and perform such duties as are expressly granted to the
Document Custodian by this Agreement. The Document Custodian hereby accepts such
agency appointment to act as Document Custodian pursuant to the terms of this
Agreement, until its resignation or removal as Document Custodian pursuant to
the terms hereof.

 

(b)          Duties. On or before the Funding Effective Date, and until its
removal pursuant to Section 14.5, the Document Custodian shall perform, on
behalf of the Administrative Agent and the other Secured Parties, the following
duties and obligations:

 

(i)          The Document Custodian shall take and retain custody of the Related
Documents delivered to it by the Borrower or the Collateral Manager (on behalf
of the Borrower) pursuant to Section 7.05 in accordance with the terms and
conditions of this Agreement, all for the benefit of the Secured Parties and
subject to the Lien thereon in favor of the Administrative Agent, as agent for
the Secured Parties. Within five Business Days of its receipt of the Related
Documents and Loan Checklist (the “Review Period”), the Document Custodian shall
review the Related Documents delivered to it to confirm that (A) if the Loan
Checklist or electronic files delivered per the following sentence indicate that
any document must contain an original signature, each such document appears to
bear the original signature, or if the Loan Checklist or electronic file
indicates that such document may contain a copy of a signature, that such copies
appear to bear a reproduction of such signature and (B) based on a review of the
applicable note, the related initial principal loan balance when entered into or
obtained by the Borrower, loan identification number and Obligor name with
respect to such Collateral Loan is referenced on the related Loan Checklist or
electronic file and does not appear to be a duplicate Collateral Loan (such
items (A) through (B) collectively, the “Review Criteria”). In order to
facilitate the foregoing review by the Document Custodian, in connection with
each delivery of Related Documents for a Collateral Loan hereunder to the
Document Custodian, the Collateral Manager shall provide to the Document
Custodian an electronic file (in EXCEL or a comparable format acceptable to the
Document Custodian) or the related Loan Checklist that contains a list of all
Related Documents for such Loan and whether they require original signatures,
the loan identification number and the name of the Obligor and the initial
principal loan balance when entered into or obtained by the Borrower with
respect to each related Collateral Loan. Notwithstanding anything herein to the
contrary, the Document Custodian’s obligation to review the Related Documents
shall be limited to reviewing such Related Documents based on the information
provided on the Loan Checklist or electronic file as the case may be. In
receiving any Related Documents hereunder, and in maintaining any listing or
providing any report or communication with respect to the Related Documents held
hereunder, the Document Custodian shall be required only to review such Related
Documents in accordance with the Review Criteria. Within one Business Day after
the end of the Review Period, the Document Custodian shall notify the Borrower,
the Collateral Manager, the Administrative Agent and the Collateral Agent in
writing of any Related Documents listed on the Loan Checklist not included in
the Related Documents so delivered to the Document Custodian and any other
exceptions to the Review Criteria substantially in the form of Exhibit L
attached hereto (the “Custodial Certificate”). After the Document Custodian’s
delivery of the Custodial Certificate, the Collateral Manager shall have ten
Business Days to correct any non-compliance with any Review Criteria. In
addition, if requested in writing in the form of Exhibit E-1 by the Collateral
Manager and approved by the Administrative Agent within ten Business Days of the
Document Custodian’s delivery of such Custodial Certificate, the Document
Custodian shall return the Related Documents for any Collateral Loan which fails
to satisfy a Review Criteria to the Borrower. Other than the foregoing, the
Document Custodian shall not have any responsibility for reviewing any Related
Documents.

 

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(ii)         In taking and retaining custody of the Related Documents, the
Document Custodian shall be deemed to be acting as the custodian of the Secured
Parties, and has no instructions to hold any Related Documents for the benefit
of any Person other than the Secured Parties; provided that the Document
Custodian makes no representations as to the existence, perfection or priority
of any Lien on the Related Documents or the instruments therein; and provided
further that the Document Custodian’s duties as custodian shall be limited to
those expressly contemplated herein. In so taking and retaining custody of the
Related Documents, the Document Custodian shall be deemed to be acting for the
purpose of perfecting the Collateral Agent’s security interest therein under the
UCC.

 

(iii)        The Document Custodian shall maintain continuous custody of all
items in its possession in secure facilities in accordance with customary
standards for such custody and shall reflect in its records the interest of the
Secured Parties therein. Each Related Document which comes into the possession
of the Document Custodian (other than documents delivered electronically) shall
be maintained in fire-resistant vaults or cabinets at the office of the Document
Custodian specified in Schedule 5 or at such other offices as shall be specified
to the Administrative Agent, the Borrower and the Collateral Manager in a
written notice at least thirty (30) days prior to such change. Each Related
Document shall be marked with an appropriate identifying label and maintained in
such manner so as to permit retrieval and access by the Document Custodian and
the Administrative Agent. The Document Custodian shall keep the Related
Documents clearly segregated from any other documents or instruments in its
files.

 

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(iv)        On each Payment Date, the Document Custodian shall provide a written
report to the Administrative Agent and the Collateral Manager (in a form
acceptable to the Administrative Agent) identifying each Collateral Loan for
which it holds Related Documents, the non-complying Collateral Loans and the
applicable Review Criteria that any non-complying Collateral Loan fails to
satisfy.

 

(v)         In performing its duties, the Document Custodian shall use a similar
degree of care and attention as it employs with respect to similar collateral
that it holds as Document Custodian for others.

 

(vi)        In no event shall the Document Custodian be liable for special,
indirect or consequential losses or damages of any kind whatsoever (including
but not limited to lost profits) even if the Document Custodian has been advised
of the likelihood of such damages and regardless of the form of such action.

 

(vii)       Notwithstanding anything herein to the contrary, delivery of the
Collateral Loans acquired by the Borrower which constitute Noteless Loans or
Participations or which are otherwise not evidenced by a “security” or
“instrument” as defined in Section 8-102 and Section 9-102(a)(47) of the UCC,
respectively, shall be made by delivery to the Document Custodian (as part of
the Related Documents) of (i) in the case of a Noteless Loan, a copy of the loan
register with respect to such Noteless Loan evidencing registration of such
Collateral Loan on the books and records of the applicable Obligor or bank agent
to the name of the Borrower (or its nominee) or a copy (which may be a facsimile
copy) of an assignment agreement in favor of the Borrower as assignee, and (ii)
in the case of a Participation, a copy of the related participation agreement.
Any duty on the part of the Document Custodian with respect to the custody of
such Collateral Loans shall be limited to the exercise of reasonable care by the
Document Custodian in the physical custody of any such Related Documents
delivered to it, including any related instrument, security, credit agreement,
assignment agreement and/or other agreements or documents, if any (collectively,
“Financing Documents”), that may be delivered to it as part of the Related
Documents.

 

(viii)      The Document Custodian may assume the genuineness of any such
Financing Document it may receive and the genuineness and due authority of any
signatures appearing thereon, and shall be entitled to assume that each such
Financing Document it may receive is what it purports to be. If an original
“security” or “instrument” as defined in Section 8-102 and Section 9-102(a)(47)
of the UCC, respectively, is or shall be or become available with respect to any
Collateral Loan to be held by the Document Custodian under this Agreement, it
shall be the sole responsibility of the Borrower to make or cause delivery
thereof to the Document Custodian, and the Document Custodian shall not be under
any obligation at any time to determine whether any such original security or
instrument has been or is required to be issued or made available in respect of
any Collateral Loan or to compel or cause delivery thereof to the Document
Custodian.

 

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(ix)         With respect to the documents comprising each Related Document, the
Document Custodian shall (i) act exclusively as Document Custodian for the
Secured Parties, (ii) hold all documents constituting such Related Document
received by it for the exclusive use and benefit of the Secured Parties and
(iii) make disposition thereof only in accordance with the terms of this
Agreement or with written instructions furnished by the Administrative Agent;
provided, that in the event of a conflict between the terms of this Agreement
and the written instructions of the Administrative Agent, the Administrative
Agent’s written instructions shall control.

 

(x)          The Document Custodian shall accept only written instructions of a
Responsible Officer of the Borrower, Collateral Agent, Collateral Manager or
Administrative Agent concerning the use, handling and disposition of the Related
Documents.

 

(xi)         In the event that (i) the Borrower, the Administrative Agent, the
Administrative Agent, any Agent, the Collateral Manager, the Document Custodian
or the Collateral Agent shall be served by a third party with any type of levy,
attachment, writ or court order with respect to any Related Document or a
document included within a Related Document or (ii) a third party shall
institute any court proceeding by which any Related Document or a document
included within a Related Document shall be required to be delivered otherwise
than in accordance with the provisions of this Agreement, the party receiving
such service shall promptly deliver or cause to be delivered to the other
parties to this Agreement (to the extent not prohibited by Applicable Law)
copies of all court papers, orders, documents and other materials concerning
such proceedings. The Document Custodian shall, to the extent permitted by
Applicable Law, continue to hold and maintain all the Related Documents that are
the subject of such proceedings pending a final, nonappealable order of a court
of competent jurisdiction permitting or directing disposition thereof. Upon
final determination of such court, the Document Custodian shall dispose of such
Related Document or a document included within such Related Document as directed
by the Administrative Agent, which shall give a direction consistent with such
determination. The reasonable and documented out-of-pocket expenses of the
Document Custodian incurred as a result of such proceedings shall be borne by
the Borrower and paid in accordance with Section 16.04.

 

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(xii)        The Document Custodian shall not be liable for any action taken,
suffered or omitted by it in accordance with the request or direction of any
Secured Party, to the extent that this Agreement provides such Secured Party the
right to so direct the Document Custodian, or the Administrative Agent. The
Document Custodian shall not be deemed to have notice or knowledge of any matter
hereunder, including a Collateral Manager Termination Event, unless a
Responsible Officer of the Document Custodian has knowledge of such matter or
written notice thereof is received by the Document Custodian.

 

Section 14.03.         Merger or Consolidation. Any Person (i) into which the
Document Custodian may be merged or consolidated, (ii) that may result from any
merger or consolidation to which the Document Custodian shall be a party, or
(iii) that may succeed to the properties and assets of the Document Custodian
substantially as a whole, which Person in any of the foregoing cases executes an
agreement of assumption to perform every obligation of the Document Custodian
hereunder, shall be the successor to the Document Custodian under this Agreement
without further act of any of the parties to this Agreement.

 

Section 14.04.         Document Custodian Compensation and Indemnification. As
compensation for its Document Custodian activities hereunder, the Document
Custodian shall be entitled to fees pursuant to Collateral Agent, Document
Custodian, Collateral Administrator and Intermediary Fee Letter. The Document
Custodian’s entitlement to receive the fees under the Collateral Agent, Document
Custodian, Collateral Administrator and Intermediary Fee Letter shall cease on
the earlier to occur of: (i) its removal as Document Custodian and appointment
and acceptance by the successor custodian pursuant to Section 14.05 and the
Document Custodian has ceased to hold any Related Documents or (ii) the
termination of this Agreement. Upon termination of this Agreement or earlier
resignation or removal of the Document Custodian, the Borrower shall pay to the
Document Custodian such compensation, and shall likewise reimburse the Document
Custodian for its costs, expenses and disbursements, as may be due as of the
date of such termination, resignation or removal, as the case may be. For the
avoidance of doubt, the Document Custodian shall be entitled to all of the
benefits of the indemnification provisions to the extent and in the manner set
forth in Section 16.04. All indemnifications in favor of the Document Custodian
under this Agreement shall survive the termination of this Agreement, or any
resignation or removal of the Document Custodian. The Borrower agrees to pay or
reimburse to the Document Custodian upon its request from time to time all
costs, disbursements, advances, and expenses (including reasonable fees and
expenses of agents, experts and legal counsel) incurred, in connection with the
preparation, execution, performance or enforcement of this Agreement, or in
connection with the transactions contemplated hereby or performance by the
Document Custodian of its duties and services under this Agreement (including
costs and expenses of any action deemed necessary by the Document Custodian to
collect any amounts owing to it under this Agreement).

 

Section 14.05.         Document Custodian Resignation and Removal.

 

(a)          The Document Custodian may be removed, with or without cause, by
the Administrative Agent by notice given in writing to the Document Custodian
and the Collateral Agent (the “Document Custodian Termination Notice”); provided
that notwithstanding its receipt of a Document Custodian Termination Notice, the
Document Custodian shall continue to act in such capacity (and shall continue to
be entitled to receive fees) until a successor Document Custodian has been
appointed, has agreed to act as Document Custodian hereunder, and has received
all Related Documents held by the previous Document Custodian. Any such
appointment shall be accomplished by written instrument and one original
counterpart of such instrument of appointment shall be delivered to the Document
Custodian and the successor custodian, with a copy delivered to the
Administrative Agent, the Borrower, the Collateral Agent and the Collateral
Manager.

 

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(b)          The Document Custodian shall not resign from the obligations and
duties hereby imposed on it except upon (a)  written notice to the Borrower, the
Collateral Manager and the Administrative Agent, or (b) the Document Custodian’s
determination that (i) the performance of its duties hereunder is or becomes
impermissible under Applicable Law and (ii) there is no reasonable action that
the Document Custodian could take to make the performance of its duties
hereunder permissible under Applicable Law. Any such determination permitting
the resignation of the Document Custodian shall be evidenced as to clause (i)
above by an opinion of counsel to such effect delivered to the Administrative
Agent. No such resignation shall become effective until a successor custodian
shall have assumed the responsibilities and obligations of the Document
Custodian hereunder. Promptly after receipt of notice of the Document
Custodian’s resignation, the Administrative Agent shall promptly appoint a
successor custodian by written instrument, in duplicate, copies of which
instrument shall be delivered to the Borrower, the Collateral Manager, each
Agent, the resigning Document Custodian and to the successor custodian.

 

(c)          In the event of any such resignation or removal, the Document
Custodian shall, no later than five (5) Business Days after receipt of notice of
the successor custodian, transfer to the successor custodian, as directed in
writing by the Administrative Agent, all the Related Documents being
administered under this Agreement. The cost of the shipment of Related Documents
arising out of the resignation of the Document Custodian pursuant to
Section 14.05(b) shall be at the expense of the Document Custodian. Any
reasonable and documented out-of-pocket cost of shipment arising out of the
removal or discharge of the Document Custodian pursuant to Section 14.05(a)
shall be at the expense of the Borrower and paid in accordance with Section
16.04.

 

Section 14.06.         Limitation on Liability.

 

(a)          The Document Custodian may conclusively rely on and shall be fully
protected in acting upon any certificate, instrument, opinion, notice, letter,
telegram or other document delivered to it and that in good faith it reasonably
believes to be genuine and that has been signed by the proper party or parties.
The Document Custodian may rely conclusively on and shall be fully protected in
acting upon (a) the written instructions of any designated officer of the
Administrative Agent or (b) the verbal instructions of the Administrative Agent.

 

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(b)          The Document Custodian may consult counsel satisfactory to it and
the advice or opinion of such counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel. The Document Custodian may exercise any of its rights or powers
hereunder or perform any of its duties hereunder either directly or by or
through agents or attorneys, and the Document Custodian shall not be responsible
for any misconduct or negligence on the part of any agent or attorney appointed
hereunder with due care by it. Each of the protections, reliances, indemnities
and immunities offered to the Collateral Agent in Article XII shall be afforded
to the Document Custodian.

 

(c)          The Document Custodian shall not be liable for any error of
judgment, or for any act done or step taken or omitted by it, in good faith, or
for any mistakes of fact or law, or for anything that it may do or refrain from
doing in connection herewith except, notwithstanding anything to the contrary
contained herein, in the case of its willful misconduct, bad faith or grossly
negligent performance or omission of its duties and in the case of its grossly
negligent performance of its duties in taking and retaining custody of the
Related Documents.

 

(d)          The Document Custodian makes no warranty or representation and
shall have no responsibility (except as expressly set forth in this Agreement)
as to the content, enforceability, completeness, validity, sufficiency, value,
genuineness, ownership or transferability of the Collateral, and will not be
required to and will not make any representations as to the validity or value
(except as expressly set forth in this Agreement) of any of the Collateral. The
Document Custodian shall not be obligated to take any action hereunder that
might in its judgment involve any expense or liability unless it has been
furnished with an indemnity reasonably satisfactory to it.

 

(e)          The Document Custodian shall have no duties or responsibilities
except such duties and responsibilities as are specifically set forth in this
Agreement and no covenants or obligations shall be implied in this Agreement
against the Document Custodian.

 

(f)          The Document Custodian shall not be required to expend or risk its
own funds in the performance of its duties hereunder.

 

(g)          It is expressly agreed and acknowledged that the Document Custodian
is not guaranteeing performance of or assuming any liability for the obligations
of the other parties hereto or any parties to the Collateral.

 

(h)          Without prejudice to the generality of the foregoing, the Document
Custodian shall be without liability to the Borrower, Collateral Manager, the
Administrative Agent or any other Person for any failure or delay in the
performance or its obligations hereunder because of, or for any damage or loss
resulting from or caused by, events or circumstances beyond the Document
Custodian’s reasonable control, including nationalization, expropriation,
currency restrictions, the interruption, disruption or suspension of the normal
procedures and practices of any securities market, power, mechanical,
communications or other technological failures or interruptions, computer
viruses or the like, fires, floods, earthquakes or other natural disasters,
civil and military disturbance, acts of war or terrorism, riots, revolution,
acts of God, work stoppages, strikes, national disasters of any kind, or other
similar events or acts; errors by the Borrower, the Collateral Manager,
collateral Administrator or the Administrative Agent (including any Authorized
Person of any thereof) in its instructions to the Document Custodian; or changes
in applicable law, regulation or orders.

 

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(i)          In the event that (i) the Borrower, Collateral Agent, the
Collateral Administrator, the Collateral Manager, the Administrative Agent,
Lenders or Document Custodian shall be served by a third party with any type of
levy, attachment, writ or court order with respect to any Loan or Related
Documents or (ii) a third party shall institute any court proceeding by which
any Related Document shall be required to be delivered otherwise than in
accordance with the provisions of this Agreement, the party receiving such
service shall promptly deliver or cause to be delivered to the other parties to
this Agreement copies of all court papers, orders, documents and other materials
concerning such proceedings. The Document Custodian shall, to the extent
permitted by law, continue to hold and maintain all the Related Documents that
are the subject of such proceedings pending a final, nonappealable order of a
court of competent jurisdiction permitting or directing disposition thereof.
Upon final determination of such court, the Document Custodian shall dispose of
such Related Documents as directed by the Collateral Agent or Administrative
Agent, which shall give a direction consistent with such determination. Expenses
of the Document Custodian incurred as a result of such proceedings shall be
borne by the Borrower.

 

Section 14.07.         Delivery of Related Documents. (a) The Borrower shall
deliver, or cause to be delivered, to the Document Custodian all of the Related
Loan Documents for each Collateral Loan owned by the Borrower at any time during
the term of this Agreement at the address identified herein. The Document
Custodian shall not be responsible for any Collateral Loan or Related Document
until actually received by it.

 

(b)          The Borrower or the Collateral Manager (on behalf of the Borrower)
shall deliver, promptly after the acquisition of any Collateral Loan (but no
more than five (5) Business Days after such acquisition) the Related Documents
for each Collateral Loan. In connection with each delivery of Related Documents
to the Document Custodian, the Collateral Manager shall represent, warrant and
agree that the Related Documents delivered to the Document Custodian shall
include all of the documents listed in the related Loan Checklist and all of
such documents are complete in all material respects pursuant to a certification
in the form of Exhibit G executed by a Responsible Officer of the Collateral
Manager.

 

(c)          Notwithstanding any language to the contrary herein, the Document
Custodian shall make no representations as to, and shall not be responsible to
verify, (i) the validity, legality, ownership, title, perfection, priority,
enforceability, due authorization, recordability, sufficiency for any purpose,
or genuineness of any of the documents contained in the Related Documents or
(ii) the collectability, insurability, effectiveness or suitability of any such
Collateral Loan.

 

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Section 14.08.         Release of Related Documents.

 

(a)          Release for Servicing. From time to time and as appropriate for the
enforcement or servicing of any of the Collateral, the Document Custodian is
hereby authorized (unless and until such authorization is revoked by the
Administrative Agent) to, and shall, upon written receipt from the Collateral
Manager of a request for release of documents and receipt in the form annexed
hereto as Exhibit E-1 a (“Request for Release of Related Documents”), release to
the Collateral Manager within two Business Days of receipt of such request, the
Related Documents or the documents set forth in such Request for Release of
Related Documents. All documents so released to the Collateral Manager shall be
held by the Collateral Manager in trust for the benefit of the Administrative
Agent in accordance with the terms of this Agreement. The Collateral Manager
shall return to the Document Custodian the Related Documents or other such
documents (i) promptly upon the request of the Administrative Agent, or
(ii) when the Collateral Manager’s need therefor in connection with such
enforcement or servicing no longer exists. Upon receipt of a certificate of the
Collateral Manager substantially in the form of Exhibit E-2 (a “Certificate for
Release of Related Documents”), with a copy to the Administrative Agent (who
shall forward a copy to the Collateral Agent), stating that such Collateral Loan
was either (x) liquidated and that all amounts received or to be received in
connection with such liquidation that are required to be deposited have been so
deposited, (y) sold pursuant to a sale in accordance with Section 10.01, or (z)
repurchased or substituted in accordance with Section 10.03, the Document
Custodian shall within three (3) Business Days of its receipt of such
Certificate for Release of Related Documents, release the requested Related
Documents to the Collateral Manager, and the Collateral Manager will not be
required to return the Related Documents to the Document Custodian.

 

(b)          Release for Payment. Upon receipt by the Document Custodian of the
Collateral Manager’s Request for Release of Related Documents (which
certification shall include a statement to the effect that all amounts received
in connection with such payment or repurchase have been credited to the
Collection Account as provided in this Agreement), the Document Custodian shall
promptly release the Related Documents to the Collateral Manager.

 

Section 14.09.         Return of Related Documents. The Borrower may, with the
prior written consent of the Administrative Agent (such consent not to be
unreasonably withheld), require that the Document Custodian return each Related
Document (as applicable), respectively (a) delivered to the Document Custodian
in error, (b) as to which the Lien on the underlying assets securing such
related Collateral Loan has been so released pursuant to Section 7.02, (c) that
has been the subject of a discretionary sale or any sale of a loan pursuant to
Section 10.01 or substitution pursuant to Section 10.03 or (d) that is required
to be redelivered to the Borrower in connection with the termination of this
Agreement, in each case by submitting to the Document Custodian and the
Administrative Agent a written Request for Release of Related Documents (signed
by both the Borrower and the Administrative Agent) specifying the Collateral to
be so returned and reciting that the conditions to such release have been met
(and specifying the Section or Sections of this Agreement being relied upon for
such release). The Document Custodian shall upon its receipt of each such
Request for Release of Related Documents executed by the Borrower and the
Administrative Agent promptly, but in any event within two Business Days, return
the Related Documents so requested to the Borrower.

 

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Section 14.10.         Access to Certain Documentation and Information Regarding
the Collateral; Audits.

 

(a)          The Collateral Manager and the Document Custodian shall provide to
the Administrative Agent access to the Related Documents and all other
documentation regarding the Collateral including in such cases where the
Administrative Agent is required in connection with the enforcement of the
rights or interests of the Secured Parties, or by applicable statutes or
regulations, to review such documentation, such access being afforded without
charge (but, with respect to the Document Custodian, at the expense of the
Borrower) but only (i) upon two Business Days’ prior written request,
(ii) during normal business hours and (iii) subject to the Collateral Manager’s
and Document Custodian’s normal security and confidentiality procedures;
provided that the Administrative Agent may, and shall upon request of any
Lender, permit each Lender to be included on any such review, and shall use
reasonably commercial efforts to schedule any review on a day when Lenders
desiring to participate in such review may be included. From time to time at the
discretion of the Administrative Agent, the Administrative Agent may review the
Collateral Manager’s collection and administration of the Collateral in order to
assess compliance by the Collateral Manager with ARTICLE XI and may conduct an
audit of the Collateral, and Related Documents in conjunction with such a
review. Such review shall be reasonable in scope and shall be completed in a
reasonable period of time, in each case subject to the provisions of Section
5.03(e). The Collateral Manager hereby agrees to cause each of the Administrator
and the Advisor, as applicable, to provide access to the Related Documents and
all other documentation regarding the Collateral and allow the Administrative
Agent the right to review their collection and administration of the Collateral,
as required under this Section 14.10(a).

 

(b)          Without limiting the foregoing provisions of Section 14.10(a), from
time to time on request of the Administrative Agent, the Document Custodian
shall permit certified public accountants or other independent auditors
acceptable to the Administrative Agent to conduct a review of the Related
Documents and all other documentation regarding the Collateral. Up to one such
review per fiscal year shall be at the expense of the Borrower and additional
reviews in a fiscal year shall be at the expense of the requesting Lender(s);
provided that, after the occurrence and during the continuance of an Event of
Default, any such reviews, regardless of frequency, shall be at the expense of
the Borrower.

 

Section 14.11.         Representations and Warranties of the Document Custodian.
The Document Custodian in its individual capacity and as Document Custodian
represents and warrants as follows:

 

(a)          Organization; Power and Authority. It is a duly organized and
validly existing national banking association in good standing under the laws of
the United States. It has full corporate power, authority and legal right to
execute, deliver and perform its obligations as Document Custodian under this
Agreement.

 

(b)          Due Authorization. The execution and delivery of this Agreement and
the consummation of the transactions provided for herein have been duly
authorized by all necessary association action on its part, either in its
individual capacity or as Document Custodian, as the case may be.

 

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(c)          No Conflict. The execution and delivery of this Agreement, the
performance of the transactions contemplated hereby and the fulfillment of the
terms hereof will not conflict with, result in any breach of its articles of
incorporation or bylaws or any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under any
indenture, contract, agreement, mortgage, deed of trust, or other instrument to
which the Document Custodian is a party or by which it or any of its property is
bound.

 

(d)          No Violation. The execution and delivery of this Agreement, the
performance of the transactions contemplated hereby and the fulfillment of the
terms hereof will not conflict with or violate, in any material respect, any
Applicable Law as to the Document Custodian.

 

(e)          All Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or Governmental Authority applicable to
the Document Custodian, required in connection with the execution and delivery
of this Agreement, the performance by the Document Custodian of the transactions
contemplated hereby and the fulfillment by the Document Custodian of the terms
hereof have been obtained.

 

(f)          Validity. The Agreement constitutes the legal, valid and binding
obligation of the Document Custodian, enforceable against the Document Custodian
in accordance with its terms, except as such enforceability may be limited by
applicable Bankruptcy Code and general principles of equity (whether considered
in a suit at law or in equity).

 

Section 14.12.         Covenants of the Document Custodian.

 

(a)          Affirmative Covenants of the Document Custodian.

 

(i)          Compliance with Law. The Document Custodian will comply in all
material respects with all Applicable Law.

 

(ii)         Preservation of Existence. The Document Custodian will preserve and
maintain its existence, rights, franchises and privileges in the jurisdiction of
its formation and qualify and remain qualified in good standing in each
jurisdiction where 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.

 

(iii)        Location of Related Documents. Subject to Section 14.08, the
Related Documents shall remain at all times in the possession of the Document
Custodian at the Corporate Trust Office of the Document Custodian unless notice
of a different address is given in accordance with the terms hereof or unless
the Administrative Agent agrees to allow certain Related Documents to be
released to the Collateral Manager on a temporary basis in accordance with the
terms hereof, except as such Related Documents may be released pursuant to this
Agreement.

 

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(b)          Negative Covenants of the Document Custodian.

 

(i)          Related Documents. The Document Custodian will not dispose of any
documents constituting the Related Documents in any manner that is inconsistent
with the performance of its obligations as the Document Custodian pursuant to
this Agreement.

 

(ii)         No Changes to Document Custodian Fee. The Document Custodian will
not make any changes to the custodian fee set forth in the Collateral Agent,
Document Custodian, Collateral Administrator and Intermediary Fee Letter without
the prior written approval of the Administrative Agent and the Borrower.

 

Section 14.13. Transmission of Related Documents. Written instructions as to the
method of shipment and shipper(s) the Document Custodian is directed to utilize
in connection with the transmission of Related Documents in the performance of
the Document Custodian’s duties hereunder shall be delivered by the Borrower or
the Collateral Manager to the Document Custodian prior to any shipment of any
Related Documents hereunder. In the event the Document Custodian does not
receive such written instruction from the Borrower or the Collateral Manager,
the Document Custodian shall be authorized and indemnified as provided herein to
utilize a nationally recognized courier service. The Collateral Manager shall
arrange for the provision of such services at the sole cost and expense of the
Borrower (or, at the Document Custodian’s option, reimburse the Document
Custodian for all reasonable and documented out-of-pocket costs and expenses
incurred by the Document Custodian consistent with such instructions in
accordance with Section 16.04) and shall maintain such insurance against loss or
damage to the Related Documents as the Collateral Manager deems appropriate.

 

Section 14.14 Document Custodian as Agent of Collateral Agent. The Document
Custodian agrees that, with respect to any Related Document at any time or times
in its possession or held in its name, the Document Custodian shall be the agent
and custodian of the Collateral Agent, for the benefit of the Secured Parties,
for purposes of perfecting (to the extent not otherwise perfected) the
Collateral Agent’s security interest in the Collateral and for the purpose of
ensuring that such security interest is entitled to first priority status under
the UCC. For so long as the Document Custodian is the same entity as the
Collateral Agent, the Document Custodian shall be entitled to the same rights
and protections afforded to the Collateral Agent hereunder.

 

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Article XV

The Collateral Administrator

 

Section 15.01.         Powers and Duties of Collateral Administrator. (a) U.S.
Bank shall act as Collateral Administrator pursuant to the terms of this
Agreement, until U.S. Bank’s resignation or removal as Collateral Administrator
pursuant to Section 15.04 hereof. In such capacity, the Collateral Administrator
shall assist the Borrower and the Collateral Manager by maintaining a database
of certain characteristics with respect to the Collateral on an ongoing basis,
and in providing to the Borrower and the Collateral Manager certain reports,
calculations and other data (as may be mutually agreed upon by the parties
hereto), which reports, calculations and other data the Borrower or the
Collateral Manager on its behalf, and/or the Collateral Administrator is
required to prepare and deliver (or which are necessary to be performed in order
that certain reports and calculations can be performed as required) under
Section 8.06. U.S. Bank’s duties and authority to act as Collateral
Administrator hereunder are limited to the duties and authority specifically set
forth in this Agreement. By entering into, or performing its duties under, this
Agreement, the Collateral Administrator shall not be deemed to assume any
obligations or liabilities of the Borrower or the Collateral Manager under this
Agreement, and nothing herein contained shall be deemed to release, terminate,
discharge, limit, reduce, diminish, modify, amend or otherwise alter in any
respect the duties, obligations or liabilities of the Borrower or the Collateral
Manager under or pursuant to this Agreement.

 

(b)          The Collateral Administrator shall perform the following general
functions from time to time:

 

(i)          Promptly, and in any event within 30 days after the Closing Date,
create a collateral database with respect to the Collateral (the “Collateral
Database”);

 

(ii)         Update the Collateral Database promptly for changes and to reflect
the sale or other disposition of the Collateral Loans included in the Collateral
(the “Portfolio Collateral”) and the addition to the Collateral of additional
Loans from time to time, in each case based upon, and to the extent of,
information furnished to the Collateral Administrator by or on behalf of the
Borrower or Collateral Manager as may be reasonably required by the Collateral
Administrator, or by the agents for the underlying obligors from time to time,
or based on information maintained by U.S. Bank in its capacity as Collateral
Agent under this Agreement;

 

(iii)        Provide or make available the information contained in the
Collateral Database to the Collateral Manager on behalf of the Borrower, as the
Collateral Manager shall reasonably request;

 

(iv)        Track the receipt and daily allocation to the Collection Account
with respect to Interest Proceeds and Principal Proceeds and the outstanding
balance therein, and any withdrawals therefrom and, on each Business Day,
provide to the Collateral Manager daily reports reflecting such actions to the
Collection Accounts as of the close of business on the preceding Business Day;

 

(v)         [Reserved];

 

(vi)        [Reserved]; and

 

(vii)       So long as the same Person serves as both Collateral Administrator
and as Collateral Agent under this Agreement, provide such other information
with respect to the Collateral as may be routinely maintained by the Collateral
Administrator in performing its ordinary Collateral Agent function pursuant to
this Agreement (so long as it shall also serve as Collateral Agent under this
Agreement), or as may be required by this Agreement, as the Borrower or
Collateral Manager may reasonably request from time to time.

 

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(c)          The Collateral Manager shall cooperate with the Collateral
Administrator in connection with the matters described herein, including the
confirmation by the Collateral Administrator of the calculations contained in
the Monthly Reports. Without limiting the generality of the foregoing, the
Collateral Manager shall advise in a timely manner the Collateral Administrator
of the results of any determinations required or permitted to be made by it or
the Borrower under this Agreement and supply the Collateral Administrator with
such other information (in a mutually agreeable format) as is maintained by or
on behalf of the Collateral Manager that the Collateral Administrator may from
time to time reasonably request with respect to the Collateral and reasonably
needed to perform its obligations hereunder or required to permit the Collateral
Administrator to perform its obligations hereunder (including the Collateral
Manager’s determinations of Market Value, Aggregate Collateral Balance,
Concentration Limitations and the Borrowing Base, as applicable) and any other
information that may be reasonably required under this Agreement with respect to
a Collateral Loan (including as to its designation as a Defaulted Loan,
Ineligible Loan or Equity Security).

 

(d)          If, in performing its duties under this Agreement, the Collateral
Administrator is required to decide between alternative courses of action, the
Collateral Administrator may request written instructions from the Borrower or
the Collateral Manager as to the course of action desired by it. If the
Collateral Administrator does not receive such instructions within two Business
Days after it has requested them, the Collateral Administrator may, but shall be
under no duty to, take or refrain from taking any such courses of action. The
Collateral Administrator shall act in accordance with instructions received
after such two-Business Day period except to the extent it has already taken, or
committed itself to take, action inconsistent with such instructions. The
Collateral Administrator shall be entitled to rely on the advice of legal
counsel and independent accountants in performing its duties hereunder and shall
be deemed to have acted in good faith if it acts in accordance with such advice.

 

(e)          Nothing herein shall prevent the Collateral Administrator or any of
its Affiliates from engaging in other businesses or from rendering services of
any kind to any Person.

 

Section 15.02.         Compensation. The Borrower agrees to pay, and the
Collateral Administrator shall be entitled to receive, compensation for, and
reimbursement for expenses in connection with, the Collateral Administrator’s
performance of the duties called for herein as provided in the Collateral Agent,
Document Custodian, Collateral Administrator and Intermediary Fee Letter.

 

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Section 15.03.         Limitation of Responsibility of the Collateral
Administrator; Indemnification. (a) The Collateral Administrator will have no
responsibility under this Agreement other than to render the services expressly
called for hereunder in good faith and without willful misfeasance, gross
negligence or reckless disregard of its duties hereunder. The Collateral
Administrator shall incur no liability to anyone in acting upon any signature,
instrument, statement, notice, resolution, request, direction, consent, order,
certificate, report, opinion, bond or other document or paper reasonably
believed by it to be genuine and reasonably believed by it to be signed by the
proper party or parties. The Collateral Administrator may exercise any of its
rights or powers hereunder or perform any of its duties hereunder either
directly or by or through agents or attorneys, and the Collateral Administrator
shall not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed hereunder with due care by it. Neither the
Collateral Administrator nor any of its affiliates, directors, officers,
shareholders, agents or employees will be liable to the Collateral Manager, the
Borrower or any other Person, except by reason of acts or omissions by the
Collateral Administrator constituting bad faith, willful misfeasance, fraud,
gross negligence or reckless disregard of the Collateral Administrator’s duties
hereunder. The Collateral Administrator shall in no event have any liability for
the actions or omissions of the Borrower, the Collateral Manager or any other
Person, and shall have no liability for any inaccuracy or error in any duty
performed by it that results from or is caused by inaccurate, untimely or
incomplete information or data received by it from the Borrower, the Collateral
Manager or another Person except to the extent that such inaccuracies or errors
are caused by the Collateral Administrator’s own bad faith, willful misfeasance,
fraud, gross negligence or reckless disregard of its duties hereunder. The
Collateral Administrator shall not be liable for failing to perform or delay in
performing its specified duties hereunder which results from or is caused by a
failure or delay on the part of the Borrower, the Collateral Manager or another
Person in furnishing necessary, timely and accurate information to the
Collateral Administrator. The duties and obligations of the Collateral
Administrator and its employees or agents shall be determined solely by the
express provisions of this Agreement and they shall not be under any obligation
or duty except for the performance of such duties and obligations as are
specifically set forth herein, and no implied covenants shall be read into this
Agreement against them. The Collateral Administrator may consult with counsel
and shall be protected in and shall have no liability as a result of any action
reasonably taken in good faith in accordance with the advice of such counsel.

 

(b)          The Collateral Administrator may rely conclusively on any notice,
certificate or other document (including, without limitation, telecopier or
other electronically transmitted instructions, documents or information)
furnished to it hereunder and reasonably believed by it in good faith to be
genuine. The Collateral Administrator shall not be liable for any action taken
by it in good faith and reasonably believed by it to be within the discretion or
powers conferred upon it, or taken by it pursuant to any direction or
instruction by which it is governed hereunder, or omitted to be taken by it by
reason of the lack of direction or instruction required hereby for such action.
The Collateral Administrator shall not be bound to make any investigation into
the facts or matters stated in any certificate, report or other document;
provided, however, that, if the form thereof is prescribed by this Agreement,
the Collateral Administrator shall examine the same to determine whether it
conforms on its face to the requirements hereof. The Collateral Administrator
shall not be deemed to have knowledge or notice of any matter unless actually
known to a Responsible Officer working in its Global Corporate
Trust/Collateralized Debt Obligations Unit (or any successor group of the
Collateral Administrator). Under no circumstances shall the Collateral
Administrator be liable for indirect, punitive, special or consequential damages
under or pursuant to this Agreement, its duties or obligations hereunder or
arising out of or relating to the subject matter hereof. In no event shall the
Collateral Administrator be liable for any failure or delay in the performance
of its obligations hereunder because of circumstances beyond its control,
including, but not limited to, acts of god, flood, war (whether declared or
undeclared), terrorism, fire, riot, embargo, government action (including any
laws, ordinances, regulations) or the like that delay, restrict or prohibit the
providing of services by the Collateral Administrator as completed by this
Agreement. It is expressly acknowledged by the Borrower and the Collateral
Manager that application and performance by the Collateral Administrator of its
various duties hereunder (including recalculations to be performed in respect of
the matters contemplated hereby) shall be based upon, and in reliance upon, data
and information provided to it by the Collateral Manager (and/or the Borrower)
with respect to the Collateral, and the Collateral Administrator shall have no
responsibility for the accuracy or completeness of any such information or data
provided to it by such persons. Nothing herein shall impose or imply any duty or
obligation on the part of the Collateral Administrator to verify, investigate or
audit any such information or data, or to determine or monitor on an independent
basis whether any obligor under the Collateral is in default or in compliance
with the underlying documents governing or securing such securities, from time
to time, the role of the Collateral Administrator hereunder being solely to
perform certain mathematical computations and data comparisons and to provide
certain reports and other deliveries, as provided herein.

 

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(c)          The Borrower shall, and hereby agrees to, reimburse, indemnify and
hold harmless the Collateral Administrator and its affiliates, directors,
officers, shareholders, agents and employees for and from any and all losses,
damages, liabilities, demands, charges, costs, expenses (including the
reasonable fees and expenses of counsel and other experts) and claims of any
nature in respect of, or arising from any acts or omissions performed or omitted
by the Collateral Administrator, its affiliates, directors, officers,
shareholders, agents or employees pursuant to or in connection with the terms of
this Agreement, or in the performance or observance of its duties or obligations
under this Agreement; provided the same are in good faith and without willful
misfeasance, fraud and/or gross negligence on the part of the Collateral
Administrator or without reckless disregard of its duties hereunder. The
obligations of the Borrower under this Section 15.03(c) shall survive the
termination of this Agreement and any earlier resignation or removal of the
Collateral Administrator.

 

(d)          Nothing herein shall obligate the Collateral Administrator to
determine independently the correct characterization or categorization of any
item of Collateral, or to evaluate or verify the Collateral Manager’s
characterization of any item of Collateral including whether any item of
Collateral is a Defaulted Loan, Ineligible Loan or Equity Security, any such
determination being based exclusively upon notification the Collateral
Administrator receives from the Collateral Manager and nothing herein shall
obligate the Collateral Administrator to review or examine any underlying
instrument or contract evidencing, governing or guaranteeing or securing any
Collateral Loan in order to verify, confirm, audit or otherwise determine any
characteristic thereof.

 

(e)          Without limiting the generality of any terms of this Section 15.03,
the Collateral Administrator shall have no liability for any failure, inability
or unwillingness on the part of the Collateral Manager or Borrower (or
Collateral Agent, if not the same Person as the Collateral Administrator) to
provide accurate and complete information on a timely basis to the Collateral
Administrator, or otherwise on the part of any such party to comply with the
terms of this Agreement or this Agreement and shall have no liability for any
inaccuracy or error in the performance or observance on the Collateral
Administrator’s part of any of its duties hereunder that is caused by or results
from any such inaccurate, incomplete or untimely information received by it, or
other failure on the part of any such other party to comply with the terms
hereof. Each of the protections, reliances, indemnities and immunities offered
to the Collateral Agent in Article XII shall be afforded to the Collateral
Administrator.

 

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Section 15.04.         Termination of Collateral Administrator. (a)  At the
option of the Borrower (with the prior written consent or at the direction of
the Administrative Agent prior to the termination of the Commitments and the
payment in full of the Obligations), the Collateral Administrator may be
terminated upon ten days’ written notice of termination from the Borrower to the
Collateral Administrator and the Administrative Agent if any of the following
events shall occur:

 

(i)          The Collateral Administrator shall, in violation of its duty of
care hereunder, default in the performance of any of its material duties under
this Agreement and shall not cure such default within thirty days (or, if such
default cannot be cured in such time, the Collateral Administrator shall not
have given within thirty days such assurance of cure as shall be reasonably
satisfactory to the Borrower and the Administrative Agent and cured such default
within the time so assured); or

 

(ii)         an Insolvency Event relating to the Collateral Administrator
occurs.

 

If an event specified in clause (ii) shall occur, the Collateral Administrator
shall give written notice thereof to the Collateral Manager, the Administrative
Agent and the Borrower within one Business Day after the occurrence of such
event.

 

(b)          Except when the Collateral Administrator shall be removed pursuant
to subsection (a) of this Section 15.04 or shall resign pursuant to subsection
(c) of this Section 15.04, no removal or resignation of the Collateral
Administrator shall be effective until the date as of which a successor
collateral administrator reasonably acceptable to the Administrative Agent, the
Borrower and the Collateral Manager shall have agreed in writing to assume all
of the Collateral Administrator’s duties and obligations pursuant to this
Agreement and shall have executed and delivered an agreement in form and content
reasonably satisfactory to the Administrative Agent, the Borrower, the
Collateral Manager and the Collateral Agent. Upon any resignation or removal of
the Collateral Administrator hereunder, the Borrower shall promptly, and in any
case within thirty (30) days after the related notice of resignation or removal,
appoint a qualified successor to act as collateral administrator hereunder and
cause such successor collateral administrator to execute and deliver an
agreement accepting such appointment as described in the preceding sentence. If
the Borrower fails to appoint such a qualified successor which duly accepts its
appointment by properly executing and delivering such an agreement within such
time, the retiring Collateral Administrator shall be entitled to petition a
court of competent jurisdiction for the appointment of a successor to serve as
collateral administrator hereunder and shall be indemnified pursuant to Section
15.03(c) for the reasonable costs and expenses thereof.

 

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(c)          Notwithstanding the foregoing, the Collateral Administrator may
resign its duties hereunder without any requirement that a successor collateral
administrator be obligated hereunder and without any liability for further
performance of any duties hereunder (i) immediately upon the termination
(whether by resignation or removal) of U.S. Bank as Collateral Agent under this
Agreement, or (ii) upon thirty days’ notice to the Collateral Manager and the
Administrative Agent upon any reasonable determination by U.S. Bank that the
taking of any action, or performance of any duty, on its part as Collateral
Administrator pursuant to the terms of this Agreement would be in conflict with
or in violation of its duties or obligations as Collateral Agent under this
Agreement or (c) upon at least sixty days’ prior written notice of termination
to the Collateral Manager, the Administrative Agent and the Borrower upon the
occurrence of any of the following events and the failure to cure such event
within such sixty day notice period: (i) failure of the Borrower to pay any of
the amounts specified in Section 15.02 hereof within sixty days after such
amount is due pursuant to Section 15.02 hereof (to the extent not already paid
to Collateral Administrator pursuant to Section 9.01) or (ii) failure of the
Borrower to provide any indemnity payment to Collateral Administrator pursuant
to the terms of this Agreement, as the case may be, within sixty days of the
receipt by the Borrower of the written request for such payment or reimbursement
(to the extent not already paid Collateral Administrator pursuant to Section
9.01).

 

(e)          Any corporation into which the Collateral Administrator may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Collateral
Administrator shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Collateral
Administrator, shall be the successor of the Collateral Administrator hereunder
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.

 

Section 15.05.         Representations and Warranties of the Collateral
Administrator. The Collateral Administrator hereby represents and warrants to
the Collateral Manager and the Borrower as follows:

 

(i)          The Collateral Administrator is a national banking association duly
organized, validly existing and in good standing under the laws of the United
States of America and has full corporate power and authority to execute, deliver
and perform this Agreement and all obligations required hereunder and has taken
all necessary corporate action to authorize this Agreement on the terms and
conditions hereof, the execution, delivery and performance of this Agreement and
all obligations required hereunder. No consent of any other person including,
without limitation, stockholders or other equity holder and creditors of the
Collateral Administrator, and no license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority, except those that have been obtained, is required by
the Collateral Administrator in connection with this Agreement or the execution,
delivery, performance, validity or enforceability of this Agreement and the
obligations imposed upon it hereunder. When executed and delivered by the
Collateral Administrator and the other parties hereto, this Agreement will
constitute the legal, valid and binding obligations of the Collateral
Administrator enforceable against the Collateral Administrator in accordance
with its 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 Collateral Administrator and
(b) to general equitable principles (whether enforceability of such principles
is considered in a proceeding at law or in equity).

 

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(ii)         The execution, delivery and performance of this Agreement and the
documents and instruments required hereunder will not violate any provision of
any existing law or regulation binding on the Collateral Administrator, or any
order, judgment, award or decree of any court, arbitrator or governmental
authority binding on the Collateral Administrator, or the articles of
association or by-laws, as amended, of the Collateral Administrator or of any
mortgage, indenture, lease, contract or other agreement, instrument or
undertaking to which the Collateral Administrator is a party or by which the
Collateral Administrator or any of its assets may be bound, the violation of
which would have a material adverse effect on the business, operations, assets
or financial condition of the Collateral Administrator and will not result in,
or require, the creation or imposition of any lien on any of its property,
assets or revenues pursuant to the provisions of any such mortgage, indenture,
lease, contract or other agreement, instrument or undertaking the creation or
imposition of which would have a material adverse effect on the business
operations, assets or financial condition of the Collateral Administrator.

 

Section 15.06.         Successors and Assigns. This Agreement shall inure to the
benefit of, and be binding upon, the successors and assigns of the Collateral
Administrator; provided, however, that the Collateral Administrator may not
assign its rights and obligations hereunder without the prior written consent of
the Collateral Manager, the Administrative Agent, the Required Lenders and the
Borrower, except that U.S. Bank as Collateral Administrator may delegate to,
employ as agent, or otherwise cause any duty or obligation hereunder to be
performed by, any direct or indirect wholly owned subsidiary of U.S. Bank
National Association or its successors without the prior written consent of the
Collateral Manager, the Administrative Agent, the Required Lenders and the
Borrower (provided that in such event U.S. Bank as Collateral Administrator
shall remain responsible for the performance of its duties as Collateral
Administrator hereunder). Notwithstanding the foregoing, the Collateral
Administrator consents to the pledge of its rights under this Agreement by the
Borrower to the Collateral Agent, as provided in the granting language set forth
in Section 7.01 of this Agreement.

 

Section 15.07.         Joint Venture. Nothing contained in this Agreement
(i) shall constitute the Borrower, the Collateral Administrator, the Lenders,
the Agents and the Collateral Manager as members of any partnership, joint
venture, association, syndicate, unincorporated business or other separate
entity, (ii) shall be construed to impose any liability as such on any of them
or (iii) shall be deemed to confer on any of them any express, implied or
apparent authority to incur any obligation or liability on behalf of the others.

 

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Article XVI

Miscellaneous

 

Section 16.01.         No Waiver; Modifications in Writing. (a) No failure or
delay on the part of any Secured Party exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. Any waiver
of any provision of this Agreement, and any consent to any departure by any
party to this Agreement from the terms of any provision of this Agreement, shall
be effective only in the specific instance and for the specific purpose for
which given. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances.

 

(b)          No amendment, modification, supplement or waiver of this Agreement
shall be effective unless signed by the Borrower, the Collateral Manager, the
Administrative Agent and the Required Lenders, provided that:

 

(i)          any Fundamental Amendment shall also require the written consent of
all Lenders; and

 

(ii)         no such amendment, modification, supplement or waiver shall amend,
modify or otherwise affect the rights or duties of any Agent, the Document
Custodian or the Collateral Administrator hereunder without the prior written
consent of such Agent, Document Custodian or Collateral Administrator, as the
case may be.

 

(c)          Notwithstanding anything to the contrary herein, no Defaulting
Lender shall have any right to approve or disapprove any amendment, waiver or
consent hereunder (and any amendment, waiver or consent which by its terms
requires the consent of all Lenders or each affected Lender may be effected with
the consent of the applicable Lenders other than Defaulting Lenders), except
that (x) the Commitment of any Defaulting Lender may not be increased or
extended without the consent of such Lender and (y) any waiver, amendment or
modification requiring the consent of all Lenders or each affected Lender that
by its terms affects any Defaulting Lender more adversely than other affected
Lenders shall require the consent of such Defaulting Lender.

 

Section 16.02.         Notices, Etc. Except where telephonic instructions are
authorized herein to be given, all notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto shall be in writing and shall be personally delivered or sent by
registered, certified or express mail, postage prepaid, or by facsimile
transmission, or by prepaid courier service, or by electronic mail (if the
recipient has provided an email address in Schedule 5), and shall be deemed to
be given for purposes of this Agreement on the day that such writing is received
by the intended recipient thereof in accordance with the provisions of this
Section 16.02. Unless otherwise specified in a notice sent or delivered in
accordance with the foregoing provisions of this Section 16.02, notices,
demands, instructions and other communications in writing shall be given to or
made upon the respective parties hereto at their respective addresses (or to
their respective facsimile numbers or email addresses) indicated in Schedule 5,
and, in the case of telephonic instructions or notices, by calling the telephone
number or numbers indicated for such party in Schedule 5.

 

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Section 16.03.         Taxes. (a) Any and all payments by or on account of an
obligation of the Borrower under this Agreement shall be made, in accordance
with this Agreement, free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities (including penalties, interest and expenses) with respect
thereto, excluding: (A) any taxes imposed on or measured by net income (however
denominated) taxes, capital taxes, or similar taxes in lieu thereof, branch
profits taxes and franchise taxes, in each case imposed (i) in the case of any
Secured Party, by the jurisdiction (or any political subdivision thereof) under
the laws of which such Secured Party is organized or in which its principal
office is located, or in the case of any Lender, in which its applicable lending
office is located, or (ii) in the case of any Secured Party or any Lender, by
any jurisdiction by reason of such Secured Party or such Lender having any other
present or former connection with such jurisdiction (other than a connection
arising solely from entering into, receiving any payment under or enforcing its
rights under this Agreement or any other Facility Document); (B) any U.S.
federal withholding taxes imposed under FATCA; and (C) any interest, penalties
and additions to tax attributable to any of the foregoing (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as “Taxes”). If the Borrower shall be required by law
(or by the interpretation or administration thereof) to deduct any Taxes from or
in respect of any sum payable by it hereunder or under any other Facility
Document to any Secured Party, (i) the sum payable by the Borrower shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
16.03) such Secured Party receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions, and (iii) the Borrower shall timely pay the full amount deducted to
the relevant Governmental Authority in accordance with Applicable Law. The
obligation of the Borrower to make any additional payments in respect of any
deduction or withholding of Taxes as set forth in this Section 16.03 shall be
subject to the Secured Party’s compliance with the conditions in Section
16.03(g), (h), or (j).

 

(b)          In addition, the Borrower agrees (and, to the extent the funds
available for by the Borrower therefor on any Payment Date are insufficient to
pay such amounts in full, the Collateral Manager, on behalf of the Borrower,
will shall pay such amounts), to timely pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made by the Borrower hereunder or under any
other Facility Document or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or under any other Facility Document,
except any such taxes that are imposed with respect to an assignment other than
an assignment to comply with Section 16.03(h) (hereinafter referred to as “Other
Taxes”).

 

(c)          The Borrower agrees to indemnify each of the Secured Parties for
the full amount of Taxes or Other Taxes (including any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable under this Section
16.03) paid by any Secured Party in respect of the Borrower, whether or not such
Taxes or Other Taxes were correctly or legally imposed or asserted. Payments by
Borrower or the Collateral Manager pursuant to this indemnification shall be
made promptly following the date the Secured Party makes written demand
therefor, which demand shall be accompanied by a certificate describing in
reasonable detail the basis thereof. Such certificate shall be presumed to be
correct absent manifest error.

 

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(d)          The Borrower shall not be required to indemnify any Secured Party,
or pay any additional amounts to any Secured Party, in respect of United States
federal withholding tax or United States federal backup withholding tax to the
extent that (i) the obligation to withhold amounts with respect to United States
federal withholding or backup withholding tax imposed pursuant to a law in
effect on the date such Lender became a party to this Agreement (or acquired its
interest herein) or, with respect to payments to a new lending office designated
by a Lender (a “New Lending Office”), the date such Lender designated such New
Lending Office with respect to an Advance; provided that this clause (i) shall
not apply to the extent the indemnity payment or additional amounts any Secured
Party would be entitled to receive (without regard to this clause (i)) do not
exceed the indemnity payment or additional amounts that the transferor Lender
immediately before the Secured Party became a party hereto or the Lender making
the designation of such New Lending Office immediately before changing its
lending office, if any, would have been entitled to receive in the absence of
such transfer or designation, or (ii) the obligation to pay such additional
amounts would not have arisen but for a failure by such Secured Party to comply
with paragraphs (g), (j), or (h) below.

 

(e)          Promptly after the date of any payment of Taxes or Other Taxes, the
Borrower will furnish to each Agent the original or a certified copy of a
receipt issued by the relevant Governmental Authority evidencing payment thereof
(or other evidence of payment as may be reasonably satisfactory to such Agent).

 

(f)          If any payment is made by the Borrower (or the Collateral Manager
on its behalf) to or for the account of any Secured Party after deduction for or
on account of any Taxes or Other Taxes, and an indemnity payment or additional
amounts are paid by the Borrower pursuant to this Section 16.03, then, if such
Secured Party in its sole discretion determines that it is entitled to a refund
of such Taxes or Other Taxes, such Secured Party shall, to the extent that it
can do so without prejudice to the retention of the amount of such refund, apply
for such refund and reimburse to the Borrower (or the Collateral Manager, as
applicable) such amount of any refund received (net of reasonable out-of-pocket
expenses incurred, including taxes) as such Secured Party shall determine in its
sole discretion to be attributable to the relevant Taxes or Other Taxes;
provided that in the event that such Secured Party is required to repay such
refund to the relevant taxing authority, the Borrower agrees to return the
refund to such Secured Party. Notwithstanding anything to the contrary in this
Section 16.03(f), in no event will the indemnified party be required to pay any
amount to an indemnifying party pursuant to this Section 16.03(f) the payment of
which would place the indemnified party in a less favorable net after-tax
position than the indemnified party would have been in if the Tax giving rise to
such refund had not been deducted, withheld or otherwise imposed and the
indemnification payments or additional amounts with respect to such Tax had
never been paid.

 

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(g)          Each Secured Party and each Participant that is a U.S. person as
that term is defined in Section 7701(a)(30) of the Code (a “U.S. Person”) hereby
agrees that it shall, no later than the Funding Effective Date or, in the case
of a Secured Party or a Participant which becomes a party hereto pursuant to
Section 16.06, the date upon which such Secured Party becomes a party hereto or
participant herein, deliver to the Borrower and each Agent, if applicable, two
accurate, complete and signed copies of U.S. Internal Revenue Service Form W-9
or successor form, certifying that such Secured Party or Participant is on the
date of delivery thereof entitled to an exemption from United States backup
withholding tax. Each Secured Party or Participant that is not a U.S. Person (a
“Non-U.S. Lender”) shall, no later than the date on which such Secured Party
becomes a party hereto or a participant herein pursuant to Section 16.06,
deliver to the Borrower and each Agent two properly completed and duly executed
copies of either U.S. Internal Revenue Service Form W-8BEN, W-8BEN-E, W-8ECI or
W-8IMY or any subsequent versions thereof or successors thereto, in each case
claiming complete exemption from, or reduced rate of, U.S. federal withholding
tax with respect to payments of interest hereunder. In addition, in the case of
a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code, such Non-U.S. Lender provides the
appropriate certification pursuant to Exhibit I that such Non-U.S. Lender is not
a bank for purposes of Section 881(c) of the Internal Revenue Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the
Internal Revenue Code) of the Borrower and is not a controlled foreign
corporation related to the Borrower (within the meaning of Section 864(d)(4) of
the Code), and such Non-U.S. Lender agrees that it shall notify the Borrower and
each Agent in the event such certification is no longer accurate. Such forms
shall be delivered by each Non-U.S. Lender on or before the date it becomes a
party to this Agreement or participant herein and on or before the date, if any,
such Non-U.S. Lender designates a New Lending Office. In addition, each Non-U.S.
Lender shall deliver such forms as promptly as practicable after receipt of a
written request therefor from the Borrower or an Agent. Any Non-U.S. Lender
shall also, to the extent it is legally entitled to do so, deliver to the
Borrower and each Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Non-U.S. Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or its Agent), executed originals of any
other form prescribed by applicable law as a basis for claiming exemption from
or a reduction in U.S. federal withholding Tax, duly completed, together with
such supplementary documentation as may be prescribed by applicable law to
permit the Borrower or each Agent to determine the withholding or deduction
required to be made. Each Secured Party agrees that if any form or certification
it previously delivered expires or becomes obsolete or inaccurate in any
respect, it shall update such form or certification or promptly notify the
Borrower in writing of its legal inability to do so.

 

(h)          If any Secured Party requires the Borrower to pay any additional
amount to such Secured Party or any taxing Governmental Authority for the
account of such Secured Party or to indemnify such Secured Party pursuant to
this Section 16.03, then such Secured Party shall use reasonable efforts to
designate a different lending office for funding or booking its Advances
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if such Lender determines, in its sole
discretion, that such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to this Section 16.03 in the future and (ii) would not
subject such Secured Party to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Secured Party. The Borrower hereby agrees
to pay all reasonable costs and expenses incurred by any Lender in connection
with any such designation or assignment.

 

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(i)           Nothing in this Section 16.03 shall be construed to require any
Secured Party to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Borrower or any other
Person.

 

(j)           Compliance with FATCA. Each Secured Party shall deliver to the
Borrower and each Agent, as applicable, at the time or times prescribed by law
and at such time or times reasonably requested by the Borrower or an Agent such
documentation prescribed by Applicable Law or FATCA (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Borrower or an Agent as may be necessary for the
Borrower and each Agent, as applicable, to comply with their obligations under
FATCA and to determine that such Secured Party has complied with such Secured
Party’s obligations under FATCA or to determine the amount to deduct and
withhold from any payment. Solely for purposes of this Section 16.03(j), “FATCA”
shall include any amendments made to FATCA after the date of this Agreement.
Each Secured Party agrees that if any form or certification it previously
delivered expires or becomes obsolete or inaccurate in any respect, it shall
update such form or certification or promptly notify the Borrower in writing of
its legal inability to do so.

 

Section 16.04.         Costs and Expenses; Indemnification. (a) The Borrower
agrees to promptly pay all reasonable and documented out-of-pocket costs and
expenses of the Agents, the Document Custodian, the Collateral Administrator and
the other Lenders in connection with the preparation, review, negotiation,
reproduction, execution and delivery of this Agreement and the other Facility
Documents, including the reasonable fees and disbursements of outside counsel
for each of the Administrative Agent, the Collateral Agent, the Collateral
Administrator, the Document Custodian and the other Lenders, UCC filing fees and
all other related fees and expenses in connection therewith; and in connection
with any modification or amendment of this Agreement or any other Facility
Document; provided that the legal fees, charges and expenses of outside counsel
to the Administrative Agent incurred prior to the Closing Date with respect to
the foregoing shall not, in the aggregate, exceed $200,000. Further, the
Borrower shall pay on demand (A) all reasonable and documented out-of-pocket
costs and expenses (including all reasonable fees, expenses and disbursements of
outside legal counsel, auditors, accountants, consultants or appraisers or other
professional advisors and agents engaged by the Agents and the Lenders) incurred
by the Agents, the Document Custodian, the Collateral Administrator and the
Lenders in the preparation, execution, delivery, filing, recordation,
administration, performance or enforcement of this Agreement or any other
Facility Document or any consent, amendment, waiver or other modification
relating thereto, (B) all reasonable and documented out-of-pocket costs and
expenses of creating, perfecting, releasing or enforcing the Collateral Agent's
security interests in the Collateral, including filing and recording fees,
expenses and taxes, stamp or documentary taxes, search fees, and title insurance
premiums, and (C) after the occurrence of any Event of Default, all reasonable
and documented out-of-pocket costs and expenses incurred by the Agents, the
Document Custodian, the Collateral Administrator and the Lenders in connection
with the preservation, collection, foreclosure or enforcement of the Collateral
subject to the Facility Documents or any interest, right, power or remedy of the
Agents and the Lenders or in connection with the collection or enforcement of
any of the Obligations or the proof, protection, administration or resolution of
any claim based upon the Obligations in any insolvency proceeding, including all
reasonable fees and disbursements of outside attorneys, accountants, auditors,
consultants, appraisers and other professionals engaged by the Agents and the
Lenders; provided that in each case, there shall be a single primary counsel to
(i) the Collateral Agent, the Document Custodian and the Collateral
Administrator and (ii) the Administrative Agent and the Lenders and a single
local counsel to (i) the Collateral Agent, the Document Custodian and the
Collateral Administrator and (ii) the Administrative Agent and the Lenders in
each relevant jurisdiction (unless there is an actual or perceived conflict of
interest or the availability of different claims or defenses among the Agents
and the Lenders, in which case each such similarly conflicted group of Persons
may retain its own counsel). The undertaking in this Section shall survive
repayment of the Obligations, any foreclosure under, or modification, release or
discharge of, any or all of the Related Documents, termination of this Agreement
and the resignation or replacement of the Collateral Agent. Without prejudice to
its rights hereunder, the expenses and the compensation for the services of the
Collateral Agent are intended to constitute expenses of administration under any
applicable bankruptcy law.

 

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(b)          The Borrower agrees to indemnify and hold harmless each Secured
Party and each of their Affiliates and the respective officers, directors,
employees, agents, managers of, and any Person controlling any of, the foregoing
(each, an “Indemnified Party”) from and against any and all claims, damages,
losses, liabilities, obligations, expenses, penalties, actions, suits, judgments
and disbursements of any kind or nature whatsoever, (including the reasonable
and documented fees and disbursements of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of the execution, delivery, enforcement,
performance, administration of or otherwise arising out of or incurred in
connection with this Agreement, any other Facility Document, any Related
Document or any transaction contemplated hereby or thereby (and regardless of
whether or not any such transactions are consummated) (collectively, the
“Liabilities”), including any such Liability that is incurred or arises out of
or in connection with, or by reason of any one or more of the following:
(i) preparation for a defense of any investigation, litigation or proceeding
arising out of, related to or in connection with this Agreement, any other
Facility Document, any Related Document or any of the transactions contemplated
hereby or thereby; (ii) any breach of any covenant by the Borrower or the
Collateral Manager contained in any Facility Document; (iii) any representation
or warranty made or deemed made by the Borrower or the Collateral Manager
contained in any Facility Document or in any certificate, statement or report
delivered in connection therewith is false or misleading; (iv) any failure by
the Borrower or the Collateral Manager to comply with any Applicable Law or
contractual obligation binding upon it; (v) any failure to vest, or delay in
vesting, in the Collateral Agent (for the benefit of the Secured Parties) a
perfected security interest in all of the Collateral free and clear of all
Liens; (vi) any action or omission, not expressly authorized by the Facility
Documents, by the Borrower or any Affiliate of the Borrower which has the effect
of reducing or impairing the Collateral or the rights of the Agents or the
Secured Parties with respect thereto; (vii) the failure to file, or any delay in
filing, financing statements, continuation statements or other similar
instruments or documents under the UCC of any applicable jurisdiction or other
Applicable Law with respect to any Collateral, whether at the time of any
Advance or at any subsequent time; (viii) any dispute, claim, offset or defense
(other than the discharge in bankruptcy of an Obligor) of an Obligor to the
payment with respect to any Collateral (including, without limitation, a defense
based on any Collateral Loan (or the Related Documents evidencing such
Collateral Loan) not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from any related property; (ix) the commingling of Collections on the
Collateral at any time with other funds; (x) any failure by the Borrower to give
reasonably equivalent value to the applicable seller, in consideration for the
transfer by such seller to the Borrower of any item of Collateral or any attempt
by any Person to void or otherwise avoid any such transfer under any statutory
provision or common law or equitable action, including, without limitation, any
provision of the Bankruptcy Code; (xi) the failure of the Borrower, the
Collateral Manager or any of their respective agents or representatives to remit
to the Collection Account, within one Business Day of receipt, Collections on
the Collateral Loans remitted to the Borrower, the Collateral Manager or any
such agent or representative as provided in this Agreement; and (xii) any
Default or Event of Default; provided, that (x) the Borrower shall not be liable
(A) for any Liability or losses arising due to the deterioration in the credit
quality or market value of the Collateral Loans or other Collateral hereunder to
the extent that such credit quality or market value was not misrepresented in
any material respect by the Borrower or any of its Affiliates or (B) to the
extent any such Liability is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted solely from such Indemnified
Party’s fraud, bad faith, gross negligence or willful misconduct; (C) to the
extent any such Liability arises out of a claim or counterclaim brought by the
Borrower or any of its Affiliates against an Indemnified Party for a material
breach of such Indemnified Party’s obligations under this Agreement or any other
Facility Document (which, in the case of any material breach with respect to the
Collateral Agent, Collateral Administrator or Collateral Custodian (the
“Collateral Agent Parties”) arises as a result of its gross negligence, willful
misconduct, fraud or bad faith), if the Borrower or such other Affiliate has
obtained a final and non-appealable judgment in its favor on such claim or
counterclaim as determined by a court of competent jurisdiction or (D) to the
extent any such Liability arises from disputes solely between or among the
Indemnified Parties not relating to or in connection with acts or omissions by
the Borrower or any of its Affiliates and, with respect to the Collateral Agent
Parties, such disputes do not relate to this Agreement or other Facility
Documents (it being understood that in the event of such dispute relating to or
in connection with acts or omissions by the Borrower or any of its Subsidiaries
or any of their respective Affiliates involving a claim or proceeding brought
against the Administrative Agent or any of its Affiliates, directors, officers,
employees, partners, representatives, advisors and agents and each of their
respective heirs, successors and assigns (each, a “Related Party” and, in each
case, acting in its capacity as such) by the other Indemnified Parties, the
Administrative Agent or such Related Party, as applicable, shall be entitled
(subject to the other limitations and exceptions set forth in this proviso) to
the benefit of such indemnification) and (y) no Indemnified Party seeking
indemnification hereunder shall, without the prior written consent of the
Borrower (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened proceeding in respect of which such
Indemnified Party is a party and indemnity has been sought hereunder by such
Indemnified Party; provided, however that in no event will such Indemnified
Party have any liability for any special, exemplary, indirect, punitive or
consequential damages in connection with or as a result of such Indemnified
Party’s activities related to this Agreement or any Facility Document or any
agreement or instrument contemplated hereby or thereby or referred to herein or
therein; provided, further, this Section 16.04(b) shall not apply with respect
to taxes, levies, imposts, deductions, charges and withholdings, and all
liabilities (including penalties, interest and expenses) with respect thereto,
or additional sums described in Sections 2.09, 2.10 or 16.03, other than any
taxes, levies, imposts, deductions, charges and withholdings that represent
Liabilities arising from a claim under any Section of this Agreement other than
Sections 2.09, 2.10 or 16.03.

 

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Section 16.05.         Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement. Delivery of an executed signature
page of this Agreement by facsimile or other electronic transmission shall be
effective as delivery of a manually executed counterpart hereof.

 

Section 16.06.         Assignability. (a) Each Lender may, with the consent of
the Administrative Agent and the Borrower (in each case not to be unreasonably
withheld or delayed), assign to an assignee all or a portion of its rights and
obligations under this Agreement (including all or a portion of its outstanding
Advances or interests therein owned by it, together with ratable portions of its
Commitment); provided that the Borrower shall be deemed to have consented to any
such assignment unless it shall object thereto by written notice to the
Administrative Agent within ten (10) Business Days after having received notice
thereof; provided further that:

 

(i)          the Borrower’s consent to any such assignment shall not be required
if the assignee is a Permitted Assignee with respect to such assignor;

 

(ii)         the Borrower’s consent to any such assignment pursuant to this
Section 16.06(a) shall not be required if an Event of Default shall have
occurred and is continuing (and not been waived by the Lenders in accordance
with Section 16.01);

 

(iii)        no assignment shall be made to a natural person; and

 

(iv)        no assignment shall be made to the Borrower or any of its Affiliates
or Subsidiaries.

 

The parties to each such assignment shall execute and deliver to the
Administrative Agent (with a copy to the Collateral Agent and the Borrower) an
Assignment and Acceptance and the applicable tax forms required by Section
16.03(g) and (j). Notwithstanding any other provision of this Section 16.06, any
Lender may at any time pledge or grant a security interest in all or any portion
of its rights (including rights to payment of principal and interest) under this
Agreement to secure obligations of such Lender, including any pledge or security
interest granted to a Federal Reserve Bank, without notice to or consent of the
Borrower or the Administrative Agent; provided that no such pledge or grant of a
security interest shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or grantee for such Lender as a party
hereto.

 

(b)          The Borrower may not assign its rights or obligations hereunder or
any interest herein without the prior written consent of the Agents and the
Lenders.

 

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(c)          (i) Any Lender may, without the consent of the Borrower, sell
participations to one or more banks or other entities (a “Participant”) in all
or a portion of such Lender’s rights and obligations under this Agreement;
provided that (A) such Lender’s obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (C) such Borrower, the Agents
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement, (D) each Participant shall have agreed to be bound by this Section
16.06(c) and Sections 15.09(b) and 15.15 and (E) each Participant shall have a
short term rating of at least “A-2/P2” by S&P and Moody’s, respectively. Any
agreement pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement may provide that such Lender will not,
without the consent of the Participant, agree to any Fundamental Amendment. Each
Lender that sells a participation agrees, at the Borrower’s request and expense,
to use reasonable efforts to cooperate with the Borrower to effectuate the
provisions of Section 16.06(f) with respect to any Participant. Sections 2.09,
2.10, and 16.03 shall apply to each Participant as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (a) of this Section;
provided that no Participant shall be entitled to any amount under Section 2.09,
2.10, or 16.03 which is greater than the amount the related Lender would have
been entitled to under any such Sections or provisions if the applicable
participation had not occurred.

 

(ii)         In the event that any Lender sells participations in any portion of
its rights and obligations hereunder, such Lender as nonfiduciary agent for the
Borrower shall maintain a register on which it enters the name of all
participants in the Advances held by it and the principal amount (and stated
interest thereon) of the portion of the Advance which is the subject of the
participation (the “Participant Register”); provided that no Lender shall have
any obligation to disclose all or any portion of the Participant Register to any
Person (including the identity of any participant or any information relating to
a participant’s interest in any Commitments, Loans or its other obligations
under this Agreement) except to the extent that such disclosure is necessary to
establish that such Commitment, Loan or other obligation is in registered form
under Section 5f.103-1(c) of the United States Treasury Regulations. An Advance
may be participated in whole or in part only by registration of such
participation on the Participant Register. Any participation of such Advance may
be effected only by the registration of such participation on the Participant
Register. The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary. For the avoidance
of doubt, the Administrative Agent (in its capacity as Administrative Agent)
shall have no responsibility for maintaining a Participant Register.

 

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(d)          The Administrative Agent, on behalf of and acting solely for this
purpose as the nonfiduciary agent of the Borrower, shall maintain at its address
specified in Section 16.02 or such other address as the Administrative Agent
shall designate in writing to the Lenders, a copy of this Agreement and each
signature page hereto and each Assignment and Acceptance delivered to and
accepted by it and a register (the “Register”) for the recordation of the names
and addresses of the Lenders and the aggregate outstanding principal amount of
the outstanding Advances maintained by each Lender under this Agreement (and any
stated interest thereon). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the Agents
and the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice. An Advance may be assigned
or sold in whole or in part only by registration of such assignment or sale on
the Register and in accordance with this Section 16.06.

 

(e)          Notwithstanding anything to the contrary set forth herein or in any
other Facility Document, each Lender hereunder, and each Participant, must at
all times be a “qualified purchaser” as defined in the Investment Company Act (a
“Qualified Purchaser”) and a “qualified institutional buyer” as defined in Rule
144A under the Securities Act (a “QIB”). Each Lender represents to the Borrower,
(i) on the date that it becomes a party to this Agreement (whether by being a
signatory hereto or by entering into an Assignment and Acceptance) and (ii) on
each date on which it makes an Advance hereunder, that it is a Qualified
Purchaser and a QIB. Each Lender further agrees that it shall not assign, or
grant any participations in, any of its Advances or its Commitment to any Person
unless such Person is a Qualified Purchaser and a QIB.

 

(f)          Replacement of Lenders. If a Lender (i) is a Defaulting Lender,
(ii) is a Non-Consenting Lender, or (iii) requests payment of amounts payable
pursuant to Section 2.09 or 16.03 and, in each case, such Lender has declined or
is unable to designate a different lending office in accordance with
Section 2.09(c) or Section 16.03(h), respectively, then, in addition to any
other rights and remedies that any Person may have, the Borrower may, at its
sole expense and effort, by notice to the applicable Lender within 180 days
after such event (with a copy of such notice concurrently delivered to the
Administrative Agent), require such Lender to assign, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 16.06), all of its interests, rights (other than its
existing rights to payments pursuant to Section 2.09 or Section 16.03) and
obligations under the Facility Documents to one or more Eligible Assignees
specified by the Borrower within 20 days after the Borrower’s notice, provided,
however, that (A) such assignment does not conflict with Applicable Law, (B) in
the case of any such assignment resulting from a claim for compensation under
Section 2.09 or 16.03, such assignment will result in a reduction in such
compensation or payments thereafter, and (C) in the case of any assignment
resulting from a Lender becoming a Non-Consenting Lender, the applicable
assignee shall have consented to the applicable amendment, waiver or consent. A
Lender shall not be required to make any such assignment or delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.
The Administrative Agent is irrevocably appointed as attorney-in-fact to execute
any such assignment if any member of the affected Lender fails to execute same.
The affected Lender shall be entitled to receive, in cash, concurrently with
such assignment, all amounts owed to it under the Facility Documents, including
all principal, interest and fees through the date of assignment (including any
amounts under Section 2.10 as if the Advances owing to it were prepaid rather
than assigned).

 

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(g)          Certain Additional Payments. In connection with any assignment of
rights and obligations of any Defaulting Lender hereunder, no such assignment
shall be effective unless and until, in addition to the other conditions thereto
set forth herein, the parties to the assignment shall make such additional
payments to the Administrative Agent in an aggregate amount sufficient, upon
distribution thereof as appropriate (which may be outright payment, purchases by
the assignee of participations or subparticipations, or other compensating
actions, including funding, with the consent of the Borrower and the
Administrative Agent, the applicable pro rata share of Advances previously
requested but not funded by the Defaulting Lender, to each of which the
applicable assignee and assignor hereby irrevocably consent), to (x) pay and
satisfy in full all payment liabilities then owed by such Defaulting Lender to
the Administrative Agent and each other Lender hereunder (and interest accrued
thereon), and (y) acquire (and fund as appropriate) its full pro rata share of
all Advances in accordance with its Percentage. Notwithstanding the foregoing,
in the event that any assignment of rights and obligations of any Defaulting
Lender hereunder shall become effective under Applicable Law without compliance
with the provisions of this paragraph, then the assignee of such interest shall
be deemed to be a Defaulting Lender for all purposes of this Agreement until
such compliance occurs. No assignment by a Defaulting Lender will constitute a
waiver or release of any claim of any party hereunder arising from that Lender’s
having been a Defaulting Lender.

 

Section 16.07.         Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND ANY CLAIM, CONTROVERSY,
DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED
UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER FACILITY
DOCUMENT (EXCEPT, AS TO ANY OTHER FACILITY DOCUMENT, AS EXPRESSLY SET FORTH
THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, except the
conflict of law PRINCIPLES thereof which would have the effect of applying the
law of any other jurisdiction.

 

Section 16.08.         Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

 

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Section 16.09.         Confidentiality. (a) Each Secured Party agrees to keep
confidential all non-public information provided to it by the Borrower or the
Collateral Manager with respect to the Borrower, its Affiliates, the Collateral
or any other information furnished to any Secured Party pursuant to this
Agreement or any other Facility Document (collectively, the “Borrower
Information”); provided that nothing herein shall prevent any Secured Party from
disclosing any Borrower Information (a) in connection with this Agreement and
the other Facility Documents and not for any other purpose, (x) to any Secured
Party or any Affiliate of a Secured Party, or (y) any of their respective
Affiliates, employees, directors, agents, attorneys, accountants and other
professional advisors (collectively, the “Secured Party Representatives”), it
being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Borrower Information, (b) subject to
an agreement to comply with the provisions of this Section (or other provisions
at least as restrictive as this Section), (i) to use the Borrower Information
only in connection with this Agreement and the other Facility Documents and not
for any other purpose, to any actual or bone fide prospective permitted
assignees and Participants in any of the Secured Parties’ interests under or in
connection with this Agreement and (ii) as reasonably required by any direct or
indirect contractual counterparties or professional advisors thereto, to any
swap or derivative transaction relating to the Borrower and its obligations, (c)
to any Governmental Authority purporting to have jurisdiction over any Secured
Party or any of its Affiliates or any Secured Party Representative, (d) in
response to any order of any court or other Governmental Authority or as may
otherwise be required to be disclosed pursuant to any Applicable Law, (e) that
is a matter of general public knowledge or that has heretofore been made
available to the public by any Person other than any Secured Party or any
Secured Party Representative, (f) in connection with the exercise of any remedy
hereunder or under any other Facility Document, (g) with the written consent of
the Borrower, (h) that was in its possession or known by such Secured Party or
any of its Affiliates without restriction prior to receipt from the Borrower or
the Collateral Manager, (i) that was rightfully disclosed to such Secured Party
by a third party not known by such Secured Party to be under any obligation of
confidentiality to the Borrower or (j) that was independently developed by such
Secured Party or any of its Affiliates without any use of Borrower Information.
In addition, each Secured Party may disclose the existence of this Agreement and
the Facility Amount available hereunder to market data collectors, similar
service providers to the lending industry and service providers to the Secured
Parties in connection with the administration and management of this Agreement
and the other Facility Documents.

 

Section 16.10.         Merger. This Agreement and the other Facility Documents
executed by the Administrative Agent or the Lenders taken as a whole incorporate
the entire agreement between the parties thereto concerning the subject matter
thereof and such Facility Documents supersede any prior agreements among the
parties relating to the subject matter thereof.

 

Section 16.11.         Survival. All representations and warranties made
hereunder, in the other Facility Documents and in any certificate delivered
pursuant hereto or thereto or in connection herewith or therewith shall survive
the execution and delivery of this Agreement and the making of the Advances
hereunder. The agreements in Sections 2.04(f), 2.09, 2.10, 2.12, 16.03, 16.04,
16.09, 16.16, and 16.18 and this Section 16.11 shall survive the termination of
this Agreement in whole or in part and the payment in full of the principal of
and interest on the Advances.

 

Section 16.12.         Submission to Jurisdiction; Waivers; Service of Process;
Etc. Each party hereto hereby irrevocably and unconditionally:

 

(a)          submits for itself and its property in any legal action or
proceeding relating to this Agreement or the other Facility Documents to which
it is a party, or for recognition and enforcement of any judgment in respect
thereof, to the exclusive general jurisdiction of the courts of New York County
in the State of New York, the courts of the United States of America for the
Southern District of New York, and the appellate courts of any of them;

 

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(b)          consents that any such action or proceeding may be brought in any
court described in Section 16.12(a) and waives to the fullest extent permitted
by Applicable Law any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

 

(c)          agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such party at its
address set forth in Section 16.02 or at such other address as may be permitted
thereunder;

 

(d)          agrees that nothing herein shall affect the right to effect service
of process, summons, notices and documents in any other manner permitted by
applicable law; and

 

(e)          waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding against any
Secured Party arising out of or relating to this Agreement or any other Facility
Document any special, exemplary, indirect, punitive or consequential damages (as
opposed to direct or actual damages) (whether or not the claim therefor is based
on contract, tort or duty imposed by any applicable legal requirement).

 

Additionally, if the Borrower fails at any time to maintain a business office in
Chicago, Illinois or in the State of New York, it shall immediately (but no
later than five Business Days following such occurrence) (i) notify the
Administrative Agent and (ii) appoint a process agent in accordance with the
procedure set forth below. The Borrower shall irrevocably designate, appoint and
empower an agent (the “Process Agent”), with an office in New York, New York, as
its designee, appointee and agent to receive, accept and acknowledge for and on
its behalf, and its properties, assets and revenues, service for any and all
legal process, summons, notices and documents which may be served in any action,
suit or proceeding brought in the courts listed above in connection with or
arising out of this Agreement or any other Facility Document. If for any reason
the Process Agent shall cease to act as such and the Borrower does not at such
time have a business office within the State of New York, the Borrower agrees to
promptly designate new designees, appointees and agents in New York, New York on
the terms and for the purposes reasonably satisfactory to the Administrative
Agent, which new designees, appointees and agents shall thereafter be deemed to
be the Process Agent for all purposes of this Agreement and the other Facility
Documents. The Borrower further hereby irrevocably consents and agrees to the
service of any and all legal process, summons, notices and documents out of any
of the aforesaid courts in any such action, suit or proceeding by serving a copy
thereof upon the Process Agent (whether or not the appointment of the Process
Agent shall for any reason prove to be ineffective or the Process Agent shall
accept or acknowledge such service) or by mailing copies thereof by regular or
overnight mail, postage prepaid, to the Process Agent at its address specified
above.

 

Section 16.13.         Waiver of Jury Trial. Each of the parties hereto hereby
irrevocably and unconditionally waives trial by jury in any legal action or
proceeding relating to this Agreement or any other Facility Document or for any
counterclaim therein or relating thereto.

 

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Section 16.14.         [Reserved].

 

Section 16.15.         Waiver of Setoff. Each of the Borrowers and the
Collateral Manager hereby waives any right of setoff it may have or to which it
may be entitled under this Agreement from time to time against any Lender or its
assets.

 

Section 16.16.         PATRIOT Act Notice. Each Lender and each of the
Administrative Agent, the Collateral Agent, the Collateral Administrator and the
Document Custodian hereby notifies the Borrower that pursuant to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into
law on October 26, 2001)) (the “PATRIOT Act”), it is required to obtain, verify
and record information that identifies the Borrower, which information includes
the name and address of the Borrower and other information that will allow the
Lenders to identify the Borrower in accordance with the PATRIOT Act. The
Borrower shall provide to the extent commercially reasonable, such information
and take such actions as are reasonably requested by any Lender in order to
assist such Lender in maintaining compliance with the PATRIOT Act.

 

Section 16.17.         Legal Holidays. In the event that the date of any Payment
Date, date of prepayment or Final Maturity Date shall not be a Business Day,
then notwithstanding any other provision of this Agreement or any Facility
Document, payment need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the nominal
date of any such Payment Date, date of prepayment or Final Maturity Date, as the
case may be, and interest shall accrue on such payment for the period from and
after any such nominal date to but excluding such next succeeding Business Day.

 

Section 16.18.         Non-Petition. The Collateral Manager, the Collateral
Agent, the Collateral Administrator, each Lender and the Document Custodian each
hereby agrees not to institute against, or join, cooperate with or encourage any
other Person in instituting against, the Borrower 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 of the Advances
and the termination of all Commitments. The provisions of this Section 16.18
shall survive the termination of this Agreement.

 

Section 16.19.         No Fiduciary Duty. The Administrative Agent, each Lender
and their Affiliates (collectively, solely for purposes of this paragraph, the
“Lenders”), may have economic interests that conflict with those of the Credit
Parties, their stockholders and/or their affiliates. The Borrower and the
Collateral Manager (collectively, solely for purposes of this paragraph, the
“Credit Parties”) each agree that nothing in the Facility Documents or otherwise
will be deemed to create an advisory, fiduciary or agency relationship or
fiduciary or other implied duty between any Lender, on the one hand, and such
Credit Party, its stockholders or its affiliates, on the other. The Credit
Parties acknowledge and agree that (i) the transactions contemplated by the
Facility Documents (including the exercise of rights and remedies hereunder and
thereunder) are arm’s-length commercial transactions between the Lenders, on the
one hand, and the Credit Parties, on the other, and (ii) in connection therewith
and with the process leading thereto, (x) no Lender has assumed an advisory or
fiduciary responsibility in favor of any Credit Party, its stockholders or its
affiliates with respect to the transactions contemplated hereby (or the exercise
of rights or remedies with respect thereto) or the process leading thereto
(irrespective of whether any Lender has advised, is currently advising or will
advise any Credit Party, its stockholders or its Affiliates on other matters) or
any other obligation to any Credit Party except the obligations expressly set
forth in the Facility Documents and (y) each Lender is acting solely as
principal and not as the agent or fiduciary of any Credit Party, its management,
stockholders, creditors or any other Person. Each Credit Party acknowledges and
agrees that it has consulted its own legal and financial advisors to the extent
it deemed appropriate and that it is responsible for making its own independent
judgment with respect to such transactions and the process leading thereto. Each
Credit Party agrees that it will not claim that any Lender has rendered advisory
services of any nature or respect, or owes a fiduciary or similar duty to such
Credit Party, in connection with such transaction or the process leading
thereto.

 

 -159- 

 

 

Section 16.20.         Sharing of Payments by Lenders. If any Lender shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Advances or other
obligations hereunder resulting in such Lender receiving payment of a proportion
of the aggregate amount of its Advances and accrued interest thereon or other
such obligations greater than its pro rata share thereof as provided herein,
then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Advances and such other obligations of the other Lenders,
or make such other adjustments as shall be equitable, so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective
Advances and other amounts owing them; provided that:

 

(a)          if any such participations are purchased and all or any portion of
the payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest; and

 

(b)          the provisions of this Section shall not be construed to apply to
(x) any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement (including the application of funds arising from
the existence of a Defaulting Lender), or (y) any payment obtained by a Lender
as consideration for the assignment of or sale of a participation in any of its
Advances to any assignee or participant.

 

The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.

 

Section 16.21.         Acknowledgment and Consent to Bail-In and EEA Financial
Institutions.. Notwithstanding any other term in any Facility Document or any
other agreement, arrangement or understanding among the parties hereto (each, a
“Party”), each Party acknowledges and accepts that any liability of any Party to
any other Party under or in connection with the Facility Documents may be
subject to Bail-In Action by the relevant Resolution Authority and acknowledges
and accepts to be bound by the effect of:

 

 -160- 

 

 

(a)          any Bail-In Action in relation to any such liability, including
(without limitation):

 

(i)          a reduction, in full or in part, in the principal amount, or
outstanding amount due (including any accrued but unpaid interest) in respect of
any such liability;

 

(ii)         a conversion of all, or part of, any such liability into shares or
other instruments of ownership that may be issued to, or conferred on, it; and

 

(iii)        a cancellation of any such liability; and

 

(b)          a variation of any term of any Facility Document to the extent
necessary to give effect to any Bail-In Action in relation to any such
liability.

 

[Signature Pages to Follow]

 

 -161- 

 

 

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

 

  MC Income Plus Financing SPV LLC, as Borrower       By:  Monroe Capital Income
Plus Corporation, as Designated Manager         By:       Name:            
Title:           Monroe Capital Income Plus Corporation, as Collateral Manager  
      By:       Name:       Title:  

 

 S-1 

 

 

KeyBank National Association, as Administrative Agent         By:       Name:
           Title:  

 

 S-2 

 

 

  KeyBank National Association, as Lender         By:       Name:             
Title:  

 

 S-3 

 

 

  U.S. Bank National Association, as Collateral Agent         By:       Name:
            Title:             U.S. Bank National Association, as Document
Custodian         By:       Name:       Title:             U.S. Bank National
Association, as Collateral Administrator         By:       Name:       Title:  

 

 S-4 

 

 

Schedule 1

 

Commitments and Percentages

Lender  Commitment   Percentage  KeyBank National Association  $25,000,000  
 100%    $25,000,000    100%

 

 

 

 

Schedule 2

 

Forms of Monthly Report

 

Attached.

 

 

 

 

Schedule 3

 

Initial Collateral Loans

 

To be attached.

 

 

 

 

Schedule 4

 

Moody’s Industry Classifications

 

CORP - Aerospace & Defense 1 CORP - Automotive 2 CORP - Banking, Finance,
Insurance & Real Estate 3 CORP - Beverage, Food & Tobacco 4 CORP - Capital
Equipment 5 CORP - Chemicals, Plastics, & Rubber 6 CORP - Construction &
Building 7 CORP - Consumer goods: Durable 8 CORP - Consumer goods: Non-durable 9
CORP - Containers, Packaging & Glass 10 CORP - Energy: Electricity 11 CORP -
Energy: Oil & Gas 12 CORP - Environmental Industries 13 CORP - Forest Products &
Paper 14 CORP - Healthcare & Pharmaceuticals 15 CORP - High Tech Industries 16
CORP - Hotel, Gaming & Leisure 17 CORP - Media: Advertising, Printing &
Publishing 18 CORP - Media: Broadcasting & Subscription 19 CORP - Media:
Diversified & Production 20 CORP - Metals & Mining 21 CORP - Retail 22 CORP -
Services: Business 23 CORP - Services: Consumer 24 CORP - Sovereign & Public
Finance 25 CORP - Telecommunications 26 CORP - Transportation: Cargo 27 CORP -
Transportation: Consumer 28 CORP - Utilities: Electric 29 CORP - Utilities: Oil
& Gas 30 CORP - Utilities: Water 31 CORP - Wholesale 32

 

 

 

 

Schedule 5

 

Notice Information

 

If to the Administrative Agent:

KeyBank National Association

1000 McCaslin Boulevard

Superior, Colorado 80027

Attn: Richard Andersen

Telephone No: (720) 304-1247

Facsimile No.: (216) 370-9166

E-mail: LAS.OPERATIONS.KEF@key.com

    If to KeyBank National Association:

KeyBank National Association

1000 McCaslin Boulevard

Superior, Colorado 80027

Attn: Richard Andersen

Telephone No: (720) 304-1247

Facsimile No.: (216) 370-9166

E-mail: richard_s_andersen@key.com

    If to the Collateral Agent, the Collateral Administrator or the
Intermediary:

U.S. Bank National Association

Global Corporate Trust – CDO Unit

One Federal Street, Third Floor

Boston, Massachusetts

Attn: Lynne Caulfield

Ref: MC Income Plus Financing SPV LLC

Telephone No: (617) 603-6641

Facsimile No.: (855) 791-2099

E-mail: lynora.caulfield@usbank.com

    If to the Document Custodian, including for delivery of Related Documents:

U.S. Bank National Association

AVP/Private Certifications Manager

Document Custody Services

U.S. Bank Global Corporate Trust

1719 Otis Way

Florence, SC 29501

Ref: MC Income Plus Financing SPV LLC

Attn: Steve Garrett

E-mail: steven.garrett@usbank.com

Telephone No: (843) 673-0162

Facsimile No.: (843) 676-8901

 

 

 

 

If to the Borrower:

MC Income Plus Financing SPV LLC

311 South Wacker Drive, Suite 6400

Chicago, Illinois 60606

Attn: Michael Furr

Telephone No: (312) 523-2383

Facsimile No.: (312) 258-8350

E-mail: mfurr@monroecap.com

    If to the Collateral Manager:

Monroe Capital Income Plus Corporation

311 South Wacker Drive, Suite 6400

Chicago, Illinois 60606

Attn: Michael Furr

Telephone No: (312) 523-2383

Facsimile No.: (312) 258-8350

E-mail: mfurr@monroecap.com

 

 

 

 

 

Schedule 6

 

Covered Account Details

 

Collection Account 191779-300     Interest Collection Subaccount 191779-201    
Principal Collection Subaccount 191779-202     Payment Account 191779-200    
Custodial Account 191779-700

 

 

 

Schedule 7

 

Risk Factor Rating

 

Bond Default
Rating (1)  Risk
Factor Rating  One Year Expected Default
Frequency  Five Year Expected Default
Frequency Aaa  1       Aa1  10       Aa2  20       Aa3  40       A1  70      
A2  120       A3  180       Baa1  260       Baa2  360       Baa3  610       Ba1 
940       Ba2  1350       Ba3  1766       B1  2220       B2  2720       B3 
3490*       Caa-C  4770**  Less than or equal to 11.62%  Less than or equal to
27.05% Caa-C  6500***  Greater than 11.62% but less than or equal to 26.00% 
Greater than 27.05% but less than or equal to 48.75% Ineligible(2)  N/A  Greater
than 26%  Greater than 48.75%

 

 

(1) The Bond Default Rating used from RiskCalc should be the lower of the 1-year
or 5-year rating outputs.

 

* This Risk Factor Rating shall be assigned to any Obligor of a Recurring
Revenue Loan if the ratio of such loan to such Obligor’s TTM Recurring Revenue
is 2.0x or less; provided if the ratio of such loan to such Obligor’s TTM
Recurring Revenue is greater than 2.0x, such loan shall be assigned a Risk
Factor Rating corresponding to a Bond Default Rating of Caa-C pursuant to this
Schedule.

 

** This Risk Factor Rating shall be assigned to any Obligor (other than with
respect to the Obligor of a Recurring Revenue Loan) with a TTM EBITDA of less
than $5,000,000; provided, however, that such Obligor would not be assigned a
Risk Factor Rating of 6500 pursuant to footnote *** below.

 

*** This Risk Factor Rating shall be assigned to any Obligor (other than with
respect to the Obligor of a Recurring Revenue Loan) with TTM EBITDA of less than
$5,000,000 and (i) other than with respect to Uni-Tranche Loans, Senior Total
Funded Debt to TTM EBITDA of greater than 3.75x, (ii) other than with respect to
Uni-Tranche Loans, Total Funded Debt to TTM EBITDA of greater than 5.25x or
(iii) with respect to Uni-Tranche Loans, Total Funded Debt to TTM EBITDA of
greater than 4.00x.

 

(2) Collateral Loans with a Bond Default Rating of Caa-C shall be divided into
two sub-categories based on their Expected Default Frequencies as outlined
above. Collateral Loans with a Risk Factor greater than 6500 are not eligible

 

 

 

 

Exhibit A

 

[Form of Notice of Borrowing]

 

[Date]

KeyBank National Association

as Administrative Agent

1000 McCaslin Boulevard

Superior, Colorado 80027

Attn: Richard Andersen

Telephone No: (720) 304-1247

Facsimile No.: (216) 370-9166

E-mail: LAS.OPERATIONS.KEF@key.com

Ref: MC Income Plus Financing SPV LLC

 

U.S. Bank National Association
as Collateral Agent
U.S. Bank National Association

Global Corporate Trust – CDO Unit

One Federal Street, Third Floor

Boston, Massachusetts

Attn: Lynne Caulfield

Ref: MC Income Plus Financing SPV LLC

 

Notice of Borrowing

 

This Notice of Borrowing is made pursuant to Section 2.02 of that certain
Revolving Credit and Security Agreement dated as of March 12, 2019 (as the same
may from time to time be amended, supplemented, waived or modified, the “Credit
Agreement”) among MC Income Plus Financing SPV LLC, a Delaware limited liability
company, as borrower (together with its permitted successors and assigns, the
“Borrower”); Monroe Capital Income Plus Corporation, a Maryland corporation, as
the collateral manager (together with its permitted successors and assigns, the
“Collateral Manager”); the Lenders from time to time party thereto; KeyBank
National Association, as administrative agent for the Secured Parties (as
hereinafter defined) (in such capacity, together with its successors and
assigns, the “Administrative Agent”); U.S. Bank National Association, as
collateral agent for the Secured Parties (in such capacity, together with its
successors and assigns, the “Collateral Agent”); U.S. Bank National Association,
as document custodian; and U.S. Bank National Association, as collateral
administrator. Capitalized terms used but not otherwise defined herein shall
have the respective meanings assigned to such terms in the Credit Agreement.

 

1.          The Borrower hereby requests that on _____________, 20__ (the
“Borrowing Date”) it receive Borrowings under the Credit Agreement in an
aggregate principal amount of ____________ Dollars ($_________) (the “Requested
Amount”).

 

 

 

 

2.          The Tranche Period applicable to this Borrowing is ________.1

 

3.          The Borrower hereby gives notice of its request for Advances in an
aggregate principal amount equal to the Requested Amount to the Collateral Agent
(who shall forward such request to the Lenders) pursuant to Section 2.02 of the
Credit Agreement and requests that the Lenders remit, or cause to be remitted,
the proceeds thereof to the Collateral Agent Account in the respective pro rata
amounts in accordance with the following wiring instructions:

 

U.S. Bank N.A.

ABA 091-000-022

Acct 104794201558

Acct name: MC Income Plus Financing SPV LLC

Ref: [Borrower Name] / MC Income Plus Financing SPV LLC

 

4.          The Borrower certifies that immediately after giving effect to the
proposed Borrowing on the Borrowing Date each of the applicable conditions
precedent set forth in Section 3.02 of the Credit Agreement is satisfied,
including:

 

(1)         immediately after the making of such Advance on the Borrowing Date
each Coverage Test shall be satisfied, as demonstrated on the Borrowing Base
Calculation Statement attached hereto;

 

(2)         each of the representations and warranties of the Borrower contained
in Article IV of the Credit Agreement is true and correct in all material
respects (except for representations and warranties already qualified by
materiality or Material Adverse Effect, which shall be true and correct) as of
such Borrowing Date (except to the extent such representations and warranties
expressly relate to any earlier date, in which case such representations and
warranties are true and correct in all material respects as of such earlier
date); and

 

(3)         no Default, Event of Default, Potential Collateral Manager
Termination Event or Collateral Manager Termination Event shall have occurred
and be continuing at the time of the making of such Advance or shall result upon
the making of such Advance.

 

[Signature Page to Follow]

 

 

1 If no Tranche Period is specified, the applicable Tranche Period shall be
three months.

 

 -2- 

 

 

This Notice of Borrowing is made this ____ day of ________, 201_.

 

  MC Income Plus Financing SPV LLC, as Borrower       By:  Monroe Capital Income
Plus Corporation, as Designated Manager         By       Name:            
Title:  

 

 -3- 

 

 

Schedule I

 

to Notice of Borrowing

 

 

 

 

Exhibit B

 

[Form of Notice of Prepayment]

 

[Date]

 

KeyBank National Association

as Administrative Agent

1000 McCaslin Boulevard

Superior, Colorado 80027

Attn: Richard Andersen

Telephone No: (720) 304-1247

Facsimile No.: (216) 370-9166

E-mail: LAS.OPERATIONS.KEF@key.com

Ref: MC Income Plus Financing SPV LLC

 

U.S. Bank National Association
as Collateral Agent
U.S. Bank National Association

Global Corporate Trust – CDO Unit

One Federal Street, Third Floor

Boston, Massachusetts

Attn: Lynne Caulfield

Ref: MC Income Plus Financing SPV LLC

 

Notice of Prepayment

 

This Notice of Prepayment is made pursuant to Section 2.05 of that certain
Revolving Credit and Security Agreement dated as of March 12, 2019 (as the same
may from time to time be amended, supplemented, waived or modified, the “Credit
Agreement”) among MC Income Plus Financing SPV LLC, a Delaware limited liability
company, as borrower (the “Borrower”); company, as borrower (together with its
permitted successors and assigns, the “Borrower”); Monroe Capital Income Plus
Corporation, a Maryland corporation, as the collateral manager (together with
its permitted successors and assigns, the “Collateral Manager”); the Lenders
from time to time party thereto; KeyBank National Association, as administrative
agent for the Secured Parties (in such capacity, together with its successors
and assigns, the “Administrative Agent”); U.S. Bank National Association, as
collateral agent for the Secured Parties (in such capacity, together with its
successors and assigns, the “Collateral Agent”); U.S. Bank National Association,
as document custodian; and U.S. Bank National Association, as collateral
administrator. Capitalized terms used but not otherwise defined herein shall
have the respective meanings assigned to such terms in the Credit Agreement.

 

 

 

 

1.          The Borrower hereby gives notice that on __________, 20__ (the
“Prepayment Date”) it will make a prepayment under the Credit Agreement in the
principal amount of _____________ Dollars ($ _________) (the “Prepayment
Amount”).

 

2.          This prepayment shall be applied to the Borrowing or Borrowings with
the Tranche Period(s) of (i) one month, ending [enter date]2; or (ii) three
months, ending [enter date]3.4

 

2.          The Borrower hereby gives notice of intent to prepay an aggregate
principal amount equal to the Prepayment Amount to the Collateral Agent pursuant
to Section 2.05 of the Credit Agreement and will remit, or cause to be remitted,
the proceeds thereof to the Agent’s Account. The calculation of the Coverage
Tests after giving effect to such prepayment is set forth in Schedule I hereto.

 

[Signature Page to Follow]

 

 

2 Enter last day of elected Tranche Period(s).

 

3 Enter last day of elected Tranche Period(s).

 

4 If no Borrowing or Borrowings are specified, then the Borrower shall be deemed
to have selected to apply such prepayment first, to the Borrowing or Borrowings
with Tranche Periods of one month duration, if any, until repaid in full, then,
to the Borrowing or Borrowings with Tranche Periods of three months duration, if
any.

 

 -2- 

 

 

Witness my hand on this ____ day of ___________, 201_.

 

MC Income Plus Financing SPV LLC, as   Borrower

 

By:Monroe Capital Income Plus Corporation, as Designated Manager

 

  By       Name:       Title:  

 

 -3- 

 

 

Schedule I

 

to Notice of Prepayment

 

Attached.

 

 

 

 

Exhibit C

 

[Form of Assignment and Acceptance]

 

KeyBank National Association

as Administrative Agent

1000 McCaslin Boulevard

Superior, Colorado 80027

Attn: Richard Andersen

Telephone No: (720) 304-1247

Facsimile No.: (216) 370-9166

E-mail: LAS.OPERATIONS.KEF@key.com

Ref: MC Income Plus Financing SPV LLC

 

cc: U.S. Bank National Association   as Collateral Agent   U.S. Bank National
Association   Global Corporate Trust – CDO Unit   One Federal Street, Third
Floor   Boston, Massachusetts   Attn:  Lynne Caulfield

 

MC Income Plus Financing SPV LLC

311 South Wacker Drive, Suite 6400

Chicago, Illinois 60606

Attn: Michael Furr

 

Ref: MC Income Plus Financing SPV LLC

 

Reference is made to the Revolving Credit and Security Agreement dated as of
March 12, 2019 (as the same may from time to time be amended, supplemented,
waived or modified, the “Credit Agreement”) among [Insert Name of Assigning
Lender] (the “Assignor”); MC Income Plus Financing SPV LLC, a Delaware limited
liability company, as borrower (the “Borrower”); Monroe Capital Income Plus
Corporation, a Maryland corporation, as the collateral manager (together with
its permitted successors and assigns, the “Collateral Manager”); the other
Lenders from time to time party thereto; KeyBank National Association, as
administrative agent for the Secured Parties (in such capacity, together with
its successors and assigns, the “Administrative Agent”); U.S. Bank National
Association, as collateral agent for the Secured Parties (in such capacity,
together with its successors and assigns, the “Collateral Agent”); U.S. Bank
National Association, as document custodian; and U.S. Bank National Association,
as collateral administrator. Capitalized terms used but not otherwise defined
herein shall have the respective meanings assigned to such terms in the Credit
Agreement.

 

 

 

 

The Assignor and the “Assignee” referred to on Schedule I hereto agree as
follows:

 

1.          As of the Effective Date (as defined below), the Assignor hereby
absolutely and unconditionally sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse to or
representation of any kind (except as set forth below) from Assignor, an
interest in and to the Assignor’s rights and obligations under the Credit
Agreement and under the other Facility Documents equal to the percentage
interest specified on Schedule I hereto, including the Assignor’s percentage
interest specified on Schedule I hereto of the outstanding principal amount of
the Advances to the Borrower (such rights and obligations assigned hereby being
the “Assigned Interests”). After giving effect to such sale, assignment and
assumption, the Assignee’s “Percentage” will be as set forth on Schedule I
hereto.

 

2.          The Assignor (i) represents and warrants that immediately prior to
the Effective Date it is the legal and beneficial owner of the Assigned Interest
free and clear of any Lien created by the Assignor; (ii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Facility
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
or ownership interest created or purported to be created under or in connection
with, the Facility Documents or any other instrument or document furnished
pursuant thereto or the condition or value of the Assigned Interest, Collateral
relating to the Borrower, or any interest therein; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
condition (financial or otherwise) of the Borrower, the Administrative Agent,
the Collateral Manager or any other Person, or the performance or observance by
any Person of any of its obligations under any Facility Document or any
instrument or document furnished pursuant thereto.

 

3.          The Assignee (i) confirms that it has received a copy of the Credit
Agreement and the other Facility Documents, together with copies of any
financial statements delivered pursuant to Section 5.01 of the Credit Agreement
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance upon
the Administrative Agent, the Assignor, or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under or in
connection with any of the Facility Documents; (iii) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Facility Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; and (iv) agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of the Facility Documents are required to be performed by it as a Lender.

 

 -2- 

 

 

4.          The Assignee, by checking the box below, (i) acknowledges that it is
required to be a Qualified Purchaser for purposes of the Investment Company Act
and a QIB as defined in Rule 144A under the Securities Act at the time it
becomes a Lender and on each date on which an Advance is made under the Credit
Agreement and (ii) represents and warrants to the Assignor, the Borrower and the
Agents that the Assignee is a Qualified Purchaser:

 

  ¨ By checking this box, the Assignee represents and warrants that it is a
Qualified Purchaser and a QIB.

 

5.          Following the execution of this Assignment and Acceptance, it will
be delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance (the
“Effective Date”) shall be the date of acceptance hereof by the Administrative
Agent, unless a later effective date is specified on Schedule I hereto.

 

6.          Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, (i) the Assignee shall be a party to and bound by the
provisions of the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under any other Facility Document, (ii) without limiting the
generality of the foregoing, the Assignee expressly acknowledges and agrees to
its obligations of indemnification to the Agents pursuant to and as provided in
Section 16.04 thereof, and (iii) the Assignor shall, to the extent provided in
this Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement and under any other Facility Document.

 

7.          Upon such acceptance and recording by the Administrative Agent, from
and after the Effective Date, the Borrower shall make all payments under the
Credit Agreement in respect of the Assigned Interest to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in payments under
the Credit Agreement and the Assigned Interests for periods prior to the
Effective Date directly between themselves.

 

8.          This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.

 

9.          Each of the Borrower, the Collateral Agent, the Collateral
Administrator, the Document Custodian and the Administrative Agent is an express
third-party beneficiary of this Assignment and Acceptance, with full rights as
if it were a party hereto.

 

10.         This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule I to this Assignment and Acceptance by telecopier shall
be effective as a delivery of a manually executed counterpart of this Assignment
and Acceptance.

 

 -3- 

 

 

In Witness Whereof, the Assignor and the Assignee have caused Schedule I to this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.

 

 -4- 

 

 

Schedule I

 

Percentage interest transferred by Assignor: __________%

 

  Assignor:       [Insert Name Of Assignor], as Assignor       By     Authorized
Signatory       Assignee:       [Insert Name of Assignee] as Assignee       By  
  Authorized Signatory

 

Accepted this ___ day of __________, 201_

 

KeyBank National Association, as Administrative Agent

 

By     Authorized Signatory  

 

[Consented to this ___ day of _________, 20__

 

MC Income Plus Financing SPV LLC, as Borrower

 

By: Monroe Capital Income Plus Corporation, as Designated Manager

 

By       Name:       Title:   ]1

  

 

1 Insert in an Assignment and Acceptance if Borrower consent is required

 

 

 

 

Exhibit D

 

Form of Account Control Agreement

 

 

 

 

Exhibit E-1

 

Form of Release of Related Documents

 

[Delivery Date]   BY FACSIMILE: (___) ____-____

 

           

 

Attention:    

 

Re: Revolving Credit and Security Agreement dated as of March 12, 2019 (as
extended, renewed, amended or restated from time to time, the “Credit
Agreement”), among MC Income Plus Financing SPV LLC, a Delaware limited
liability company, as borrower (together with its permitted successors and
assigns, the “Borrower”); Monroe Capital Income Plus Corporation, a Maryland
corporation, as the collateral manager (together with its permitted successors
and assigns, the “Collateral Manager”); the Lenders from time to time party
thereto; KeyBank National Association, as administrative agent (in such
capacity, together with its successors and assigns, the “Administrative Agent”);
U.S. Bank National Association, as collateral agent (in such capacity, together
with its successors and assigns, the “Collateral Agent”); U.S. Bank National
Association, as collateral administrator (in such capacity, together with its
successors and assigns, the “Collateral Administrator”) and U.S. Bank National
Association, as document custodian (in such capacity, together with its
successors and assigns, the “Document Custodian”).

 

Ladies and Gentlemen:

 

In connection with the Related Documents held by U.S. Bank National Association
as the Document Custodian on behalf of the Administrative Agent as agent for the
Secured Parties, under the Credit Agreement, we request the release of the
Related Documents (or such documents as specified below) for the Collateral
Loans described below, for the reason indicated. All capitalized terms used but
not defined herein shall have the meaning provided in the Credit Agreement.

 

Obligor’s Name, Address & Zip Code:

 

Loan Identification Number:

 

Related Documents to be released:

 

Reason for Requesting Documents (check one)

 

 

 

 

 ¨   1. Collateral Loan paid in full.  (The Collateral Manager hereby certifies
that all amounts received in connection with such Collateral Loan have been
credited to the Collection Account.)          ¨   2. Collateral Loan liquidated
by ____________________________. (The Collateral Manager hereby certifies that
all proceeds (net of liquidation expenses which the Collateral Manager may
retain to pay such expenses) of foreclosure, insurance, condemnation or other
liquidation have been finally received and credited to the Collection Account.)
         ¨   3. Collateral Loan in foreclosure.          ¨   4. Delivered in
Error.          ¨   5. Substitution.          ¨   6. Failure to satisfy Review
Criteria.          ¨   7. Repurchased.          ¨   8. Optional Sale.          ¨
  9. Discretionary Sale.          ¨   10. Termination of Agreement.          ¨  
11. Servicing.          ¨   12. Other (explain).                      

 

If box 1, 2, 4, 5, 6, 7, 8, 9 or 10 above is checked, and if all or part of the
Related Documents were previously released to us, please release to us the
Related Documents, requested in our previous request and receipt on file with
you, as well as any additional documents in your possession relating to the
specified Collateral Loan.

 

If box 3, 11 or 12 above is checked, we will return of all of the above Related
Documents to you as the Document Custodian (i) promptly upon the request of the
Administrative Agent or (ii) when our need therefor no longer exists.

 

[Remainder of Page Intentionally Left Blank]

 

 -2- 

 

 

  Monroe Capital Income Plus Corporation, as the Collateral Manager         By  
    Name       Title  

  

Consent of Administrative Agent if required under the Agreement:

 

KeyBank National Association, as Administrative Agent

 

By       Name       Title    

  

 -3- 

 

 

EXHIBIT E-2

 

CERTIFICATE FOR RELEASE OF RELATED DOCUMENTS
[Liquidated Collateral Loans and Sales]

 

This Certificate for Release of Related Documents is made pursuant to the
Revolving Credit and Security Agreement dated as of March 12, 2019, among MC
Income Plus Financing SPV LLC, as Borrower, Monroe Capital Income Plus
Corporation, as Collateral Manager, U.S. Bank National Association, as
Collateral Agent, as Collateral Administrator and as Document Custodian, the
Lenders from time to time parties thereto, and KeyBank National Association, as
Administrative Agent (the “Revolving Credit and Security Agreement”).

 

[__________________] hereby certifies that he/she is a Responsible Officer (as
the term is defined in the Revolving Credit and Security Agreement) of Monroe
Capital Income Plus Corporation, and hereby further certifies in such capacity
and not in an individual capacity as follows:

 

With respect to the Collateral Loan(s) (as the term is defined in the Revolving
Credit and Security Agreement) described in Schedule 1 attached hereto:

 

(a) [Such Collateral Loan(s) has or have been liquidated and all amounts
received or to be received in connection with such liquidation that are required
to be deposited have been or will be so deposited as required by the Revolving
Credit and Security Agreement][Such Collateral Loan(s) have been sold pursuant
to an Optional Sale in accordance with Section 10.01 of the Revolving Credit and
Security Agreement][Such Collateral Loan(s) has or have been
repurchased/substituted in accordance with Section 10.03 of the Revolving Credit
and Security Agreement]; and     (b) No Potential Collateral Manager Termination
Event or Collateral Manager Termination Event (as each such term is defined in
the Revolving Credit and Security Agreement) has occurred and is continuing, or,
if such has occurred and is continuing, the consent of the Administrative Agent
has been obtained with respect to this request.

 

Dated: _______________

 

  MONROE CAPITAL INCOME PLUS CORPORATION       By:     Name:   Title:

 

 

 

 

SCHEDULE 1

Request for Release of Request

for Release and Receipt

 

[LIQUIDATED][SOLD][SUBSTITUTED] LOAN(S)

 

 -2- 

 

 

Exhibit F

 

Facility Amount Increase Request

 

_____________, 201__

 

To: KeyBank National Association, as Administrative Agent for the Lenders
parties to the Revolving Credit and Security Agreement dated as of March 12,
2019 (as extended, renewed, amended or restated from time to time, the “Credit
Agreement”), among MC Income Plus Financing SPV LLC, a Delaware limited
liability company, as borrower (together with its permitted successors and
assigns, the “Borrower”); Monroe Capital Income Plus Corporation, a Maryland
corporation, as the collateral manager (together with its permitted successors
and assigns, the “Collateral Manager”); the Lenders from time to time party
thereto; KeyBank National Association, as administrative agent (in such
capacity, together with its successors and assigns, the “Administrative Agent”);
U.S. Bank National Association, as collateral agent; U.S. Bank National
Association, as document custodian; and U.S. Bank National Association, as
collateral administrator.

 

Ladies and Gentlemen:

 

The Borrower hereby refers to the Credit Agreement and requests that the
Administrative Agent consent to an increase in the Facility Amount (the
“Facility Amount Increase”), in accordance with Section 2.15 of the Credit
Agreement, to be effected by [an increase in the Commitment of [name of existing
Lender] [the addition of [name of new Lender] (the “New Lender”) as a Lender
under the terms of the Credit Agreement]. Capitalized terms used herein without
definition shall have the same meanings herein as such terms have in the Credit
Agreement.

 

After giving effect to such Facility Amount Increase, the Commitment of the
[Lender] [New Lender] shall be $_____________.

 

[Include paragraphs 1-4 for a New Lender]

 

1.          The New Lender hereby confirms that it has received a copy of the
Facility Documents and the exhibits related thereto, together with copies of the
documents which were required to be delivered under the Credit Agreement as a
condition to the making of the Advances and other extensions of credit
thereunder. The New Lender acknowledges and agrees that it has made and will
continue to make, independently and without reliance upon the Administrative
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, its own credit analysis and decisions relating to the Credit
Agreement. The New Lender further acknowledges and agrees that the
Administrative Agent has not made any representations or warranties about the
credit worthiness of the Borrower or any other party to the Credit Agreement or
any other Facility Document or with respect to the legality, validity,
sufficiency or enforceability of the Credit Agreement or any other Facility
Document or the value of any security therefor.

 

 

 

 

2.          Except as otherwise provided in the Credit Agreement, effective as
of the date of acceptance hereof by the Administrative Agent, the New Lender
(i) shall be deemed automatically to have become a party to the Credit Agreement
and have all the rights and obligations of a “Lender” under the Credit Agreement
as if it were an original signatory thereto and (ii) agrees to be bound by the
terms and conditions set forth in the Credit Agreement as if it were an original
signatory thereto.

 

3.          The New Lender shall deliver to the Administrative Agent such
information and shall complete such forms as are reasonably requested of the New
Lender by the Administrative Agent.

 

[4.          The New Lender has delivered, if appropriate, to the Borrower and
the Administrative Agent (or is delivering to the Borrower and the
Administrative Agent concurrently herewith) the tax forms referred to in Section
16.03 of the Credit Agreement.]*

 

This Agreement shall be deemed to be a contractual obligation under, and shall
be governed by and construed in accordance with, the laws of the state of New
York.

 

The Facility Amount Increase shall be effective when the executed consent of the
Administrative Agent and each affected Lender is received or otherwise in
accordance with Section 2.15 of the Credit Agreement, but not in any case prior
to ___________________, 201__. It shall be a condition to the effectiveness of
the Facility Amount Increase that all expenses referred to in Section 2.15 of
the Credit Agreement shall have been paid.

 

The Borrower hereby certifies that no Default or Event of Default has occurred
and is continuing.

 

Please indicate the Administrative Agent’s consent to such Facility Amount
Increase by signing the enclosed copy of this letter in the space provided
below.

 

 

 

* Insert bracketed paragraph if New Lender is organized under the law of a
jurisdiction other than the United States of America or a state thereof.

 

 -2- 

 

 

Very truly yours,         MC Income Plus Financing SPV LLC         By: Monroe
Capital Income Plus Corporation, as Designated Manager         By       Name:  
    Title:             [New or existing Lender Increasing Commitments]          
By         Name       Title  

 

The undersigned hereby consents on
this __ day of _____________, 20__
to the above-requested Facility Amount Increase.

 

KeyBank National Association, as Administrative Agent

 

By       Name       Title    

 

 -3- 

 

 

Exhibit G

 

COLLATERAL LOANS CERTIFICATION

 

This Collateral Loans Certification is made pursuant to the Revolving Credit and
Security Agreement dated as of March 12, 2019 (together with all amendments, if
any, from time to time, the “Revolving Credit and Security Agreement”), among MC
Income Plus Financing SPV LLC, as Borrower, Monroe Capital Income Plus
Corporation, as Collateral Manager, U.S. Bank National Association, as
Collateral Agent, as Collateral Administrator and as Document Custodian, the
Lenders from time to time parties thereto, and KeyBank National Association, as
Administrative Agent. Unless otherwise defined herein or the context otherwise
requires, capitalized terms used herein have the meanings provided in the
Revolving Credit and Security Agreement.

 

[__________________] hereby certifies that he/she is a Responsible Officer of
the Collateral Manager, and hereby further certifies in such capacity and not in
an individual capacity as follows:

 

With respect to the Collateral Loan(s) described in Annex 1 attached hereto:

 

(c) Except to the extent provided in Section 7.05 and Section 14.07 of the
Revolving Credit and Security Agreement and subject to ongoing compliance with
such Sections, the Related Documents delivered to the Document Custodian include
all of the documents required to be delivered to the Document Custodian under
the Revolving Credit and Security Agreement, except those documents that do not
exist with respect to such Collateral Loan(s), as indicated on Annex 1 (each, an
“Exception”);     (d) Any Exception satisfies the requirements of the Revolving
Credit and Security Agreement; and     (e) All of the documents and the
information contained on Annex 1 are complete and correct in all material
respects.

 

Dated:___________

 

  MONROE CAPITAL INCOME PLUS CORPORATION, as Collateral Manager       By:    
Name:   Title:

 

 

 

 

Exhibit H

 

Form of Closing Certificate

 

Pursuant to Section 3.01(p) of that certain Revolving Credit and Security
Agreement (the “Credit Agreement”), dated as March 12, 2019, by and among MC
Income Plus Financing SPV LLC, a Delaware limited liability company, as borrower
(the “Borrower”), Monroe Capital Income Plus Corporation, a Maryland
corporation, as collateral manager, the Lenders from time to time party thereto,
KeyBank National Association, as Administrative Agent, and U.S. Bank National
Association, as collateral agent (the “Collateral Agent”), as collateral
administrator and as document custodian, Borrower does hereby certify that, in
the case of each item of Collateral pledged to the Collateral Agent, on the date
hereof and immediately prior to the delivery thereof on the date hereof:

 

1.          The calculation of the Borrowing Base and the Maximum Advance Rate
Test on the Closing Date is set forth on Schedule I hereto.

 

2.          On the Closing Date, each Coverage Test is satisfied and no Default
or Event of Default has occurred and is continuing under the Credit Agreement.

 

Capitalized terms used but not defined herein shall have the meaning given to
such terms in the Credit Agreement.

 

 

 

 

IN WITNESS WHEREOF, the Borrower has caused this Closing Certificate to be duly
executed as of the day and year first above written.

 

  MC Income Plus Financing SPV LLC, as Borrower         By:   Monroe Capital
Income Plus Corporation, as Designated Manager

 

  By:       Name:       Title:  

 

 

 

 

Schedule I

to Closing Certificate

 

[To be attached.]

 

 

 

 

Exhibit I-A

 

[Form of]
U.S. Tax Compliance Certificate

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is made to the Revolving Credit and Security Agreement dated as of
March 12, 2019 (as extended, renewed, amended or restated from time to time, the
“Credit Agreement”) among MC Income Plus Financing SPV LLC, as Borrower, Monroe
Capital Income Plus Corporation, as Collateral Manager, the Lenders from time to
time party thereto, KeyBank National Association, as Administrative Agent (the
“Administrative Agent”), and U.S. Bank National Association, as Collateral
Agent, Collateral Administrator and Document Custodian. Terms defined in the
Credit Agreement are used herein with the same meaning.

 

Pursuant to the provisions of Section 16.03 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Advance(s) in respect of which it is providing this certificate, (ii) it
is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it
is not a ten percent shareholder of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form
W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees
that (1) if the information provided on this certificate changes, the
undersigned shall promptly so inform the Borrower and the Administrative Agent,
and (2) the undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

[Name of Lender]

 

  By:       Name:       Title:  

 

  Date:   , 20[_]

 

 

 

 

Exhibit I-B

 

[Form of]
U.S. Tax Compliance Certificate

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is made to the Revolving Credit and Security Agreement dated as of
March 12, 2019 (as extended, renewed, amended or restated from time to time, the
“Credit Agreement”) among MC Income Plus Financing SPV LLC, as Borrower, Monroe
Capital Income Plus Corporation, as Collateral Manager, the Lenders from time to
time party thereto, KeyBank National Association, as Administrative Agent (the
“Administrative Agent”), and U.S. Bank National Association, as Collateral
Agent, Collateral Administrator and Document Custodian. Terms defined in the
Credit Agreement are used herein with the same meaning.

 

Pursuant to the provisions of Section 16.03 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation(s) in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a ten percent shareholder of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non U.S. Person status on IRS Form W-8BEN or IRS Form
W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees
that (1) if the information provided on this certificate changes, the
undersigned shall promptly so inform the Borrower and the Administrative Agent,
and (2) the undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

[Name of Participant]

 

  By:       Name:       Title:  

 

  Date:   , 20[_]

  

 -2- 

 

 

Exhibit I-C

 

[Form of]
U.S. Tax Compliance Certificate

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is made to the Revolving Credit and Security Agreement dated as of
March 12, 2019 (as extended, renewed, amended or restated from time to time, the
“Credit Agreement”) among MC Income Plus Financing SPV LLC, as Borrower, Monroe
Capital Income Plus Corporation, as Collateral Manager, the Lenders from time to
time party thereto, KeyBank National Association, as Administrative Agent (the
“Administrative Agent”), and U.S. Bank National Association, as Collateral
Agent, Collateral Administrator and Document Custodian. Terms defined in the
Credit Agreement are used herein with the same meaning.

 

Pursuant to the provisions of Section 16.03 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation(s) in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation(s), (iii) with respect to the extension of credit pursuant to this
Credit Agreement or any other Facility Documents, neither the undersigned nor
any of its direct or indirect partners/members is a bank within the meaning of
Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect
partners/members is a ten percent shareholder of the Borrower within the meaning
of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect
partners/members is a controlled foreign corporation related to the Borrower as
described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or IRS Form W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMY
accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, from each
of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Borrower and the Administrative Agent, and (2) the
undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

[Name of Participant]

 

  By:       Name:       Title:  

 

  Date:   , 20[_]

  

 -3- 

 

 

Exhibit I-D

 

[Form of]
U.S. Tax Compliance Certificate

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to the Revolving Credit and Security Agreement dated as of
March 12, 2019 (as extended, renewed, amended or restated from time to time, the
“Credit Agreement”) among MC Income Plus Financing SPV LLC, as Borrower, Monroe
Capital Income Plus Corporation, as Collateral Manager, the Lenders from time to
time party thereto, KeyBank National Association, as Administrative Agent (the
“Administrative Agent”), and U.S. Bank National Association, as Collateral
Agent, Collateral Administrator and Document Custodian. Terms defined in the
Credit Agreement are used herein with the same meaning.

 

Pursuant to the provisions of Section 16.03 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
Advance(s) in respect of which it is providing this certificate, (ii) its direct
or indirect partners/members are the sole beneficial owners of such Advance(s),
(iii) with respect to the extension of credit pursuant to this Credit Agreement
or any other Facility Documents, neither the undersigned nor any of its direct
or indirect partners/members is a bank within the meaning of Section
881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members
is a ten percent shareholder of the Borrower within the meaning of Section
871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members
is a controlled foreign corporation related to the Borrower as described in
Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or IRS Form W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMY
accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, from each
of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Borrower and the Administrative Agent, and (2) the
undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

[Name of Lender]

 

  By:       Name:       Title:  

 

  Date:   , 20[_]

  

 -4- 

 

 

Exhibit J

 

Form of Compliance Certificate

 

Pursuant to Section 5.01(d)(ix) of that certain Revolving Credit and Security
Agreement (the “Credit Agreement”), dated as of March 12, 2019, by and among MC
Income Plus Financing SPV LLC, a Delaware limited liability company, as borrower
(the “Borrower”), Monroe Capital Income Plus Corporation, a Maryland
corporation, as collateral manager, the Lenders from time to time party thereto,
KeyBank National Association, as Administrative Agent, and U.S. Bank National
Association, as collateral agent (the “Collateral Agent”), as collateral
administrator, as document custodian, Borrower does hereby certify that as of
the most recent Determination Date:

 

1.          The calculation of (a) the BDC’s unencumbered liquidity (calculated
as the sum of (i) cash or cash equivalents, (ii) committed, undrawn and
available amounts under any of the BDC’s facilities, (iii) loans that would
constitute Eligible Loans under the Credit Agreement if they were sold or
contributed to the Borrower, and (iv) the amount (if any) by which the Borrowing
Base on such date exceeds the aggregate outstanding principal amount of Advances
under the Credit Agreement) and (b) the BDC’s equity determined in accordance
with GAAP and as shown in the BDC’s most recently delivered quarterly
consolidated financials and audited annual consolidated financial statements are
set forth on Schedule I hereto.

 

2.          On such Determination Date, each Coverage Test was satisfied and no
Default or Event of Default has occurred and is continuing under the Credit
Agreement, as demonstrated on the “Compliance Certificate” and related
“Calculation Sheet” delivered as part of the Monthly Report with respect to the
____________ __, 201_ Monthly Report Determination Date.

 

Capitalized terms used but not defined herein shall have the meaning given to
such terms in the Credit Agreement.

 

 

 

 

IN WITNESS WHEREOF, the Borrower has caused this Closing Certificate to be duly
executed as of the day and year first above written.

 

  MC Income Plus Financing SPV LLC, as Borrower         By: Monroe Capital
Income Plus Corporation, as Designated Manager

 

  By:       Name:       Title:  

 

 

 

 

Schedule I to Compliance Certificate

 

Fund Liquidity

 

[Attach completed forms of Monthly Report]

 

 

 

 

Exhibit K

 

[Form of Tranche Period Election Request]

 

[Date]

 

KeyBank National Association

as Administrative Agent

1000 McCaslin Boulevard

Superior, Colorado 80027

Attn: Richard Andersen

Telephone No: (720) 304-1247

Facsimile No.: (216) 370-9166

E-mail: LAS.OPERATIONS.KEF@key.com

Ref: MC Income Plus Financing SPV LLC

 

U.S. Bank National Association
as Collateral Agent
U.S. Bank National Association

Global Corporate Trust – CDO Unit

One Federal Street, Third Floor

Boston, Massachusetts

Attn: Lynne Caulfield

Ref: MC Income Plus Financing SPV LLC

 

Tranche Period Election Request

 

Reference is hereby made to that certain Revolving Credit and Security Agreement
dated as of March 12, 2019 (as the same may from time to time be amended,
supplemented, waived or modified, the “Credit Agreement”) among MC Income Plus
Financing SPV LLC, a Delaware limited liability company, as borrower (together
with its permitted successors and assigns, the “Borrower”); Monroe Capital
Income Plus Corporation, a Maryland corporation, as the collateral manager
(together with its permitted successors and assigns, the “Collateral Manager”);
the Lenders from time to time party thereto; KeyBank National Association, as
administrative agent for the Secured Parties (as hereinafter defined) (in such
capacity, together with its successors and assigns, the “Administrative Agent”);
U.S. Bank National Association, as collateral agent for the Secured Parties (in
such capacity, together with its successors and assigns, the “Collateral
Agent”); U.S. Bank National Association, as document custodian; and U.S. Bank
National Association, as collateral administrator. Capitalized terms used but
not otherwise defined herein shall have the respective meanings assigned to such
terms in the Credit Agreement.

 

 

 

 

The Borrower hereby gives you notice pursuant to Section 2.17 of the Credit
Agreement that it requests to convert an existing Borrowing under the Credit
Agreement, and in that connection the Borrower Agent specifies the following
information with respect to such conversion requested hereby:

 

1.          List date, principal amount and Tranche Period of existing
Borrowing:                 

 

2.          Aggregate principal amount of resulting Borrowing:                 

 

3.          Effective date of Tranche Period election (which shall be the first
day after the end of the then applicable Tranche Period):                 

 

4.          Elected Tranche Period and the last day thereof: ___________________

 

[Signature Page Follows]

 

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This Tranche Period Election Request is made this ____ day of ________, 201_.

 

MC Income Plus Financing SPV LLC, as Borrower

 

  By: Monroe Capital Income Plus Corporation, as Designated Manager

 

  By:       Name:       Title:  

 

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EXHIBIT L

 

FORM OF CUSTODIAL CERTIFICATION

[Date]

 

MC Income Plus Financing SPV LLC

311 South Wacker Drive, Suite 6400

Chicago, Illinois 60606

Attn: Michael Furr

Telephone No: (312) 523-2383

Facsimile No.: (312) 258-8350

E-mail: mfurr@monroecap.com

 

U.S. Bank National Association

Global Corporate Trust – CDO Unit

One Federal Street, Third Floor

Boston, Massachusetts

Attn: Lynora Caulfield

Ref: MC Income Plus Financing SPV LLC

Telephone No: (617) 603-6641

Facsimile No.: (855) 791-2099

E-mail: lynora.caulfield@usbank.com

 

KeyBank National Association

1000 McCaslin Boulevard

Superior, Colorado 80027

Attn: Richard Andersen

Telephone No: (720) 304-1247

Facsimile No.: (216) 370-9166

E-mail: LAS.OPERATIONS.KEF@key.com

 

Re:     Revolving Credit and Security Agreement dated as of March 12, 2019 (the
“Credit Agreement”), by and among MC Income Plus Financing SPV LLC, as the
borrower (the “Borrower”), Monroe Capital Income Plus Corporation, as collateral
manager (the “Collateral Manager”), the lenders from time to time parties
thereto, KeyBank National Association, as administrative agent (in such
capacity, the “Administrative Agent”) and U.S. Bank National Association, as
collateral agent (in such capacity, the “Collateral Agent”), as collateral
administrator (in such capacity, the “Collateral Administrator”) and as document
custodian (in such capacity, the “Document Custodian”)

 

Ladies and Gentlemen:

 

In accordance with the provisions of Section 14.02(b) of the above-referenced
Agreement, the undersigned, as Document Custodian, hereby certifies and confirms
that with respect to each of the Related Documents listed on the Loan Checklist
annexed hereto as Schedule I, except as noted on the report of exceptions
attached hereto as Exhibit 1;

 

 

 

 

  (i) all Related Documents and Loan Checklist required to be delivered to the
Document Custodian pursuant to Section 7.05 of the Agreement are in the Document
Custodian’s possession; and         (ii) all Related Documents delivered to the
Document Custodian related to each such Collateral Loans and the related Loan
Checklist have been reviewed by the Document Custodian and appear regular on
their face and relate to such applicable Collateral Loans.

 

The Document Custodian shall have no liability for or obligation with respect
to, and shall not be construed or obliged to make any representation or warranty
as to: (i) the validity, sufficiency, marketability, genuineness, value,
contents or enforceability of any Collateral or Related Document; (ii) the
validity, adequacy or perfection of any lien upon or security interest purported
to be evidenced or created thereby; or (iii) to determine that the contents of
any Collateral or Related Documents are appropriate for the represented purpose
or that any Collateral or Related Document has actually been recorded or filed,
as maybe applicable, or that any Collateral or Related Document is other than
what it purports on its face to be.

 

  U.S. BANK NATIONAL ASSOCIATION,
as Document Custodian         By:     Name:   Title:

 

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