FS Investment Corporation II 8-K


 


Exhibit 10.3


 





CONTROL AGREEMENT


 


This Control Agreement (this “Agreement”),
dated February 23, 2016 is by and among FS Investment Corporation II (the “Borrower”), ING Capital LLC, as collateral
agent for the Lenders (as defined below) and certain other secured parties (in such capacity, including any successor in such capacity,
the “Agent”), and State Street Bank and Trust Company, a Massachusetts trust company (“Custodian”).


 


WHEREAS, the Borrower and the Custodian
are parties to that certain Custodian Agreement, dated as of February 8, 2012 (as amended, restated, modified, or supplemented
from time to time, the “Custodian Agreement”), pursuant to which the Borrower has appointed Custodian to act
as custodian for its securities and other assets;


 


WHEREAS, the Borrower has entered into
the Senior Secured Revolving Credit Agreement, dated as of the date hereof, among the Borrower, the lenders party thereto (the
“Lenders”), the Agent, as administrative agent for the Lenders and as Agent (the “Loan Agreement”)
pursuant to which such Lenders have agreed, subject to the terms and conditions therein specified, to extend credit to the Borrower.
In addition, the Borrower and the Agent, among others, have entered into a Guarantee, Pledge and Security Agreement dated as of
the date hereof (the “Security Agreement”) pursuant to which the Borrower, among other things, has agreed to
pledge and grant a security interest in all right, title and interest of the Borrower in, to and under certain of its property,
including the Collateral Account (as defined below) and any cash, securities or other assets therein or otherwise held by the Custodian
(collectively, the “Collateral”), in favor of the Agent for the benefit of the Agent, the Lenders, and certain
other secured parties, as collateral security for the obligations of the Borrower under the Loan Agreement and certain other Secured
Obligations (as such term is defined in the Security Agreement); and


 


WHEREAS, in connection with the Loan Agreement
and the Security Agreement, the Borrower intends to grant control (as defined in the Uniform Commercial Code, as in effect from
time to time in The State of New York (the “UCC”)) over the Collateral Account and possession of other Collateral
to the Agent and the Agent, the Borrower and the Custodian are entering into this Agreement to perfect the security interest of
the Agent in the Collateral Account and provide for the control of the Collateral Account and possession of other Collateral.


 


NOW THEREFORE, for valuable consideration,
the parties hereto agree as follows:


 


1. Establishment of Collateral Account.
The Custodian has established and will maintain on its books and records the Borrower’s (i) custodial account, Account No.
FSDC, which account and the assets credited thereto are pledged in favor of the Agent (the “Securities Account”),
and (ii) deposit accounts, set forth on Schedule I, which accounts and the assets credited thereto are pledged in favor
of the Agent (together, the “Deposit Account” and together with the Securities Account, the “Collateral
Account”). The Custodian will credit to the Collateral Account any assets delivered to it by the Borrower pursuant to
the Custodian Agreement except that Loan Documents and Identified Securities (as each such term is defined below) delivered to
the Custodian shall be held by the Custodian upon the terms of Section 5. The Custodian shall have no responsibility for determining
the adequacy of any Collateral required hereunder or under the Loan Agreement, nor will it assume responsibility for any calculations
related to any Collateral requirements under the Loan Agreement.


 






    	



    	 



    

 


2 Account Control.


 


2.1 Agent Security Interest. This
Agreement is intended by the Borrower and the Agent to grant “control” of the Collateral Account and possession of
other Collateral to the Agent for purposes of perfection of the Agent’s security interest in the Collateral Account and other
Collateral pursuant to Article 8 and Article 9 of the UCC and the Custodian hereby acknowledges that it has been advised of the
Borrower’s grant to Agent of a security interest in the Collateral and Collateral Account. Notwithstanding the foregoing,
the Custodian makes no representation or warranty with respect to the creation, attachment, perfection, priority or enforceability
of any security interest in the Collateral or Collateral Account.


 


2.2 Borrower Control. Unless and
until the Custodian receives written notice from the Agent pursuant to Section 2.3(ii) below instructing the Custodian that the
Agent is exercising its right to exclusive control over the Collateral Account, which notice is substantially in the form attached
hereto as Exhibit A (a “Notice of Exclusive Control”) and the Custodian has a reasonable time to act
thereon, or if all previous Notices of Exclusive Control have been revoked or rescinded in writing by the Agent: (i) the Borrower
shall be entitled to exercise all rights with respect to, and to direct the Custodian with respect to, the Collateral Account,
provided that the Borrower may not terminate the Collateral Account without the prior written consent of the Agent, and (ii) the
Custodian shall have no responsibility or liability to the Agent or any Lender for settling trades of financial assets and cash
carried in the Collateral Account at the direction of and in accordance with the instructions of the Borrower given in accordance
with the Custodian Agreement, or for complying with entitlement orders from the Borrower concerning the Collateral Account.


 


2.3 Control by Agent.


 


(i) The Borrower irrevocably authorizes
and directs the Custodian, and the Custodian agrees, to comply with any entitlement order or instructions (within the meaning of
Sections 8-102, 9-104 and 9-106 of the UCC) received from the Agent with respect to the Collateral Account, without further consent
of the Borrower.


 


(ii) Upon receipt by the Custodian
of a Notice of Exclusive Control and the Custodian having a reasonable time to act thereon, the Custodian shall thereafter follow
only the instruction of the Agent with respect to the Collateral Account, and shall comply only with any entitlement order or instructions
received from the Agent, without further consent of the Borrower, and shall be entitled to deal with the Agent as though the Agent
were the sole and absolute owner of the Collateral Account. Without limiting the Custodian’s obligations under Section 2.3(i)
and (ii), Agent agrees that it shall deliver a Notice of Exclusive Control prior to or simultaneously with any entitlement order
or instruction. For the avoidance of doubt, from and after delivery of a Notice of Exclusive Control and the Custodian having a
reasonable time to act thereon, the Borrower (whether directly or through its investment manager) shall have no right or ability
to access or receive or withdraw or transfer financial assets from, or to give other instructions concerning the Collateral Account
until such time as the Agent shall have notified the Custodian in writing of the withdrawal of the Notice of Exclusive Control
and instructed the Custodian to resume honoring instructions which the Borrower is entitled to give under the Custodian Agreement.


 


(iii) As between the Borrower
and the Agent, the Agent agrees with the Borrower that it shall not issue a Notice of Exclusive Control or any entitlement order
or instructions with respect to the Collateral Account pursuant to Section 2.3(i) or (ii) unless an Event of Default (as defined
in the Security Agreement) shall have occurred and be continuing; provided that, if instructed to do so by the Required
Secured Parties (as defined in the Security Agreement), the Agent may issue such notice without independent investigation as to
whether such Event of Default has occurred and is continuing.


 






    	 



    	 



    

 


(iv) The Custodian shall have
no responsibility or liability to the Borrower for complying with a Notice of Exclusive Control or complying with entitlement orders
or other instructions originated by the Agent concerning any Collateral or the Collateral Account. The Custodian shall have no
duty to investigate or make any determination as to whether an event of default or other like event exists under the Loan Agreement,
and the Custodian shall be fully protected in complying with a Notice of Exclusive Control whether or not the Borrower may allege
that no such event of default or other like event exists. Delivery of a Notice of Exclusive Control by the Agent to the Custodian
shall be effective whether or not a copy of the same is delivered to the Borrower.


 


(v) As between the Agent and the
Custodian, notwithstanding any provision contained herein or in any other document or instrument to the contrary, the Custodian
shall not be liable for any action taken or omitted to be taken at the instruction of the Agent, or any action taken or omitted
to be taken under or in connection with this Agreement, except for the Custodian’s own bad faith, gross negligence or willful
misconduct in carrying out such instructions.


 


3. Distributions. The Custodian shall, without further
action by Borrower or Agent, credit to the Collateral Account all interest, dividends and other income received by the Custodian
on the Collateral, unless and until the Custodian has received a Notice of Exclusive Control and has been directed otherwise by
the Agent, in which event all such receipts shall be credited to such account as directed by the Agent.


 


4. Duties and Services of Custodian.


 


(i)          Custodian agrees that it is acting as a “securities
intermediary,” as defined in Section 8-102 of the UCC with respect to the Securities Account, and as a “bank”
as defined in Section 9-102 of the UCC with respect to the Deposit Account. The parties hereto further agree that the securities
intermediary’s jurisdiction, within the meaning of Section 8-110(e) of the UCC, and the bank’s jurisdiction, within
the meaning of Section 9-304(b) of the UCC, is the State of New York and agree that none of them has or will enter into any agreement
to the contrary except that the parties acknowledge that the Custodian Agreement is otherwise governed by Massachusetts law.


 


(ii)         The Custodian shall have no duties, obligations,
responsibilities or liabilities with respect to the Collateral or the Collateral Account except as and to the extent expressly
set forth in this Agreement and the Custodian Agreement, and no implied duties of any kind shall be read into this Agreement against
the Custodian including, without limitation, the duty to preserve, exercise or enforce rights in the Collateral and Collateral
Account. The Custodian shall not be liable or responsible for anything done or omitted to be done by it in the absence of gross
negligence or willful misconduct and may rely and shall be protected in acting upon any notice, instruction or other communication
which it reasonably believes to be genuine and authorized.


 


(iii)        As between the Borrower and the Custodian,
except for the rights of control and possession in favor of the Agent agreed to herein, nothing herein shall be deemed to modify,
limit, restrict, amend or supercede the terms of the Custodian Agreement, and the Custodian shall be and remain entitled to all
of the rights, indemnities, powers, and protections in its favor under the Custodian Agreement, which shall apply fully to the
Custodian’s actions and omissions hereunder. If a provision of this Agreement in favor of the Agent conflicts with a provision
of the Custodian Agreement, this Agreement shall control. Instructions under this Agreement from a Borrower’s authorized
representative given in accordance with the terms of the Custodian Agreement shall also constitute Proper Instructions (as defined
in the Custodian Agreement) under the Custodian Agreement.


 






    	 



    	 



    

 


(iv)       The Agent agrees to provide to Custodian,
in the form of Exhibit B attached hereto, the names and signatures of authorized parties who may give written notices, instructions
or entitlement orders concerning the Collateral or the Collateral Account. Other means of notice or instruction may be used, provided
that the Agent and Custodian agree to appropriate security procedures. As between the Custodian and Agent, the Agent shall indemnify
and hold the Custodian harmless with regard to any losses or liabilities of the Custodian (including reasonable attorneys’
fees) imposed on or incurred by the Custodian arising out of any action or omission of the Custodian in accordance with any notice
or any entitlement order or other instruction of Agent under this Agreement.


 


(v)         The parties hereto acknowledge that no “security
entitlement” under the UCC shall exist with respect to (A) cash (which shall be credited to the Deposit Account), (B) any
Loan Document (as defined below), or the Borrower’s interest in a direct or participation or subparticipation interest in
or by assignment or novation of a loan or other extension of credit evidenced, governed or represented by the Loan Document, or
(C) any other asset which is registered in the name of the Borrower, payable to the order of the Borrower or specially indorsed
to the Borrower or any third party (each such other asset an “Identified Security”), except to the extent such
Identified Security has been specially indorsed by the Borrower to the Custodian or in blank.


 


(vi)        For avoidance of doubt, the Agent hereby acknowledges
that any Collateral issued outside the United States (“Foreign Security System Assets”) which may be held by
the Custodian, a sub-custodian within the Custodian’s network of sub-custodians (each a “Sub-Custodian”)
or a depository or book-entry system for the central handling of securities and other financial assets in which the Custodian or
the Sub-Custodian are participants may not permit the Borrower to have a security entitlement under the UCC with respect to such
Foreign Security System Assets (and such property shall be deemed for purposes of this Agreement not to be a financial asset held
within the Collateral Account). The parties hereby further acknowledge that the Custodian gives no assurance that a security entitlement
is created under the UCC with respect to Borrower’s assets held in Euroclear or Clearstream or their successors. Solely as
between the Borrower and Agent, the Borrower hereby acknowledges that the foregoing shall not be deemed a waiver by the Agent of
any of the obligations of the Obligors to Deliver such Collateral or any other obligations of the Obligors under the Loan Documents
or the Debt Documents (as such terms are defined in the Security Agreement).


 


5. Bailment of Loan Documents and Identified Securities;
Loan Document Inspection Rights.


 


(i)          If the Borrower delivers or causes a third
party to deliver to the Custodian an instrument, document, certificate or other agreement evidencing, governing or representing
the Borrower’s ownership in or the Borrower’s interest in a direct or participation or subparticipation interest in
or by assignment or novation of a loan or other extension of credit that is not a “security” as defined in Section
8-102 of the UCC (a “Loan Document”) or an Identified Security, the Custodian agrees to hold the Loan Document
or Identified Security as bailee for the Agent (and not, for the avoidance of doubt, as “securities intermediary”).


 


(ii)         Until the Custodian receives a Notice of Exclusive
Control or if all previous Notices of Exclusive Control have been revoked in writing by the Agent, the Custodian shall comply with
the instructions of the Borrower in respect of any Loan Document or Identified Security. The Custodian agrees that following its
receipt from the Agent of a Notice of Exclusive Control and the Custodian having a reasonable time to act thereon, the Custodian
shall thereafter follow only the instruction of the Agent with respect to all Loan Documents and Identified Securities, without
the further consent of the Borrower and shall be entitled to deal with the Agent as though the Agent were the sole and absolute
owner of such Collateral. For the avoidance of doubt, from and after delivery of a Notice of Exclusive Control and the Custodian
having a reasonable time to act thereon, the Borrower (whether directly or through its investment manager) shall have no right
or ability to give any instructions concerning such Collateral until such time as the Agent shall have notified the Custodian in
writing of the withdrawal of the Notice of Exclusive Control and instructed the Custodian to resume honoring instructions which
the Borrower is entitled to give under the Custodian Agreement.


 






    	 



    	 



    

 


(iii)        Upon the Agent’s reasonable request
(which shall include reasonable advance written notice), copies of the Loan Documents and Identified Securities shall be subject
to the Agent’s inspection. The Custodian reserves the right to impose reasonable restrictions on the number, frequency, timing
and scope of any such inspection so as to prevent or minimize any potential impairment or disruption of its operations, distraction
of its personnel or breaches of security or confidentiality. In addition, the Custodian shall be entitled to impose a commercially
reasonable per person hourly charge for the cooperation and assistance of its personnel reasonably requested by the Agent in connection
with any such inspection (the “Custodian Inspection Expenses”). Nothing contained in this section shall obligate
the Custodian to provide access to or otherwise disclose any documents or information that the Custodian is obligated to maintain
in confidence as a matter of law or regulation (and, to the extent that any such obligation is waivable by the Borrower, the Borrower
hereby waives such obligation to the extent necessary to permit the Agent to have reasonable access to such documents or information).


 


(iv)        The Custodian shall have no responsibilities
or duties whatsoever with respect to a Loan Document or Identified Security, except for such responsibilities as are expressly
set forth herein or the Custodian Agreement. The Custodian shall be entitled to all exculpations, indemnities and other benefits
under this Agreement when acting as bailee for the Agent.


 


(v)         For the avoidance of doubt, as between the
Borrower and the Agent, the Borrower agrees that the fees and expenses of representatives retained by the Agent in connection with
any inspection requested by the Agent pursuant to Section 5(iii) (each, an “Agent Inspection”) will be covered
by Section 5.06 of the Loan Agreement subject to the limitations set forth in such Section 5.06.


 


(vi)        The Borrower agrees to bear the cost of the
Custodian Inspection Expenses for (a) the first Agent Inspection requested in each calendar year and (b) any Agent Inspection conducted
while an Event of Default has occurred and is continuing. The Agent agrees to bear the cost of any Custodian Inspection Expenses
that are not required to be borne by the Borrower in accordance with the preceding sentence.


 


6. Force Majeure; Special Damages. The Custodian shall
not be liable for delays, errors or losses occurring by reason of circumstances beyond its control, including, without limitation,
acts of God, market disorder, terrorism, insurrection, war, riots, failure of transportation or equipment, or failure of vendors,
communication or power supply. In no event shall the Custodian be liable to any person or entity for consequential or special damages,
even if the Custodian has been advised of the possibility or likelihood of such damages.


 


7. Compliance with Legal Process and Judicial Orders.
The Custodian shall have no responsibility or liability to the Borrower or to the Agent or to any other person or entity for acting
in accordance with any judicial or arbitral process, order, writ, judgment, decree or claim of lien relating to the Collateral
or Collateral Account subject to this Agreement notwithstanding that such order or process is subsequently modified, vacated or
otherwise determined to have been without legal force or effect.


  






    	 



    	 



    

 


8. Custodian Representations.


 


8.1 The Custodian agrees and confirms,
as of the date hereof, and at all times until the termination of this Agreement that it has not entered into, and until the termination
of this Agreement will not enter into, any agreement (other than the Custodian Agreement) with any other person or entity relating
to the Collateral or the Collateral Account under which it has agreed to comply with entitlement orders (as defined in Section
8-102 of the UCC) or other instructions of such other person or entity.


 


8.2 The Collateral Account will be maintained
in the manner set forth in the Custodian Agreement subject to the provisions hereof until termination of this Agreement, and the
Custodian will not change the name or account number of the Collateral Account without prior notice to the Agent.


 


8.3 The Custodian has no knowledge of any
claim to or interest in the Collateral Account, other than the interests therein of the Custodian, the Agent and the Borrower.
If the Custodian is notified by any person or entity that such person or entity asserts any lien, encumbrance or adverse claim
(including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Collateral Account,
the Custodian will notify the Agent and the Borrower promptly thereof.


 


9. Access To Reports. Upon any pledge, release or substitution
of Collateral in the Collateral Account, and upon any release of other Collateral otherwise in the possession of the Custodian,
Custodian shall notify Agent within one business day of such change. The Custodian will provide to the Agent a copy of a statement
of the Collateral Account and other Collateral in the possession of the Custodian within twenty (20) business days of the end of
the calendar month (or more frequently as the Agent may reasonably request); provided, however, that the Custodian’s
failure to forward a copy of such statement to the Agent shall not give rise to any liability hereunder. Upon the Agent’s
request, the Borrower hereby authorizes the Custodian to, and based on such authorization the Custodian hereby agrees to use commercially
reasonable efforts to, provide to the Agent such other information concerning the Collateral Account and/or the Collateral as the
Agent may reasonably request, provided that nothing contained herein shall obligate the Custodian to provide the Agent such information
if it is not obligated to provide such information to the Borrower under the Custodian Agreement, and provided, further, that the
Custodian’s failure to forward such information to the Agent shall not give rise to any liability hereunder


 


10. Fees and Expenses, Etc. of Custodian.


 


10.1 Reimbursement For Costs; Indemnity.
In addition to the terms of the Custodian Agreement, the Borrower hereby agrees (a) to pay and reimburse the Custodian for any
advances, costs, expenses (including, without limitation, reasonable attorney’s fees and costs) and disbursements that may
be paid or incurred by the Custodian in connection with this Agreement or the arrangement contemplated hereby, including any that
may be incurred in performing its duties or responsibilities pursuant to the terms of this Agreement and (b) to indemnify and hold
the Custodian harmless from and against any other loss, cost or expense sustained or incurred by the Custodian in connection with
this Agreement or the arrangement contemplated hereby, including any that may be incurred in performing its duties or responsibilities
pursuant to the terms of this Agreement.


 


10.2 Liens. Any fees, expenses or
other amounts that may be owing to the Custodian from time to time pursuant to the terms hereof or of the Custodian Agreement shall
be secured by any lien, encumbrance and other rights that the Custodian may have under the Custodian Agreement or applicable law;
and (subject to Section 10.4) the Custodian shall be entitled to exercise such rights and interests against the Collateral and
Collateral Account in accordance with the terms of the Custodian Agreement.


  






    	 



    	 



    

 


10.3 Advances. It is hereby expressly
acknowledged and agreed by the parties that the Custodian (including its affiliates, subsidiaries and agents) shall not be obligated
to advance cash or investments to, for or on behalf of the Borrower in the Collateral Account; provided, however,
that if the Custodian does advance cash or investments to the Collateral Account for any purpose (including but not limited to
securities settlements, foreign exchange contracts, assumed settlement or account overdraft) for the benefit of the Borrower, any
property at any time held pursuant to this Agreement and the Custodian Agreement shall be security therefor and, should the Borrower
fail to repay the Custodian promptly, the Custodian shall (subject to Section 10.4) be entitled to utilize available cash and to
dispose of Collateral to the extent necessary to obtain reimbursement.


 


10.4 Subordination. The Custodian
subordinates any security interest or right of recoupment or setoff that it may have in or against the Collateral or the Collateral
Account to the security interest in favor of the Agent. However, the subordination will not apply to the extent that the Custodian’s
security interest or right of recoupment or setoff secures or may reduce obligations of the Borrower to pay, reimburse or indemnify
the Custodian for (i) the Custodian’s losses, fees, costs, or expenses incurred under Section 10.1 of this Agreement or Sections
13 and 14 of the Custodian Agreement as in effect on the date of this Agreement (other than any advances or investments except
to the extent provided in clause (iv) of this Section 10.4), (ii) returned or charged-back items, (iii) reversals or cancellations
of payment orders and other electronic fund transfers, or (iv) payments owed to the Custodian for advances or investments made
by the Custodian for the purposes of clearing and settling purchases and sales of securities or other financial assets credited
to the Securities Account, provided that the Custodian’s rights with respect to this clause (iv) arising from any security
or financial asset shall be limited to such security or financial asset.


 


11. Notices. Any notice, instruction or other instrument
required to be given hereunder, or any requests and demands to or upon the respective parties hereto shall be in writing and may
be sent by hand, or by facsimile transmission, telex, or overnight delivery by any recognized delivery service, prepaid or, for
termination of this Agreement only, by certified or registered mail, and addressed as follows, or to such other address as any
party may hereafter notify the other respective parties hereto in writing:





	 	 	 	 	 
	(a)	 	If to the Custodian,	 	 
	 	 	then:	 	State Street Bank and Trust Company
	 	 	 	 	John Hancock Tower
	 	 	 	 	200 Clarendon Street
	 	 	 	 	Boston, Massachusetts 02116
	 	 	 	 	Attention: Paul Woods, Senior Vice President
	 	 	 	 	Telephone: 617-662-9289
	 	 	 	 	Telecopy: 617- 
	 	 	 
	(b)	 	If to the Agent,	 	 
	 	 	then:	 	
        ING Capital LLC 

        1325 Avenue of the Americas

        

	 	 	 	 	New York, New York 10019
	 	 	 	 	Attention: Dominik Breuer

Telecopy Number: (646) 424-6919
	 	 	 	 	Telephone Number: (646) 424-6269
	 	 	 	 	E-mail: Dominik.Breuer@ing.com


  






    	 



    	 



    




	 	 	 	 	 
	(c)	 	If to the Borrower,	 	 
	 	 	then:	 	FS Investment Corporation II
	 	 	 	 	201 Rouse Boulevard
	 	 	 	 	Philadelphia, PA 19112
	 	 	 	 	Attention: Gerald F. Stahlecker
	 	 	 	 	Telephone: (215) 222-4649
	 	 	 	 	Telecopy: (215) 495-1169


 


12. Amendment. No amendment or modification of this Agreement
will be effective unless it is in writing and signed by each of the parties hereto. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but such counterparts together shall constitute one and the same instrument.


 


13. Termination. This Agreement shall continue in effect
until the Agent has notified the Custodian in writing that this Agreement is to be terminated. Upon receipt of such notice, the
Agent shall have no further right to originate instructions with respect to the Collateral or Collateral Account. This Agreement
may not be terminated by the Borrower without the prior written consent of the Agent (which consent shall be given pursuant to
Section 10.11 of the Security Agreement). This Agreement may be terminated by the Custodian, and shall terminate in the event of
termination of the Custodian Agreement, in each case following not less than thirty (30) days’ prior written notice to each
of the other parties hereto. Upon termination of this Agreement by any party, any Collateral that has not been released by the
Agent at or prior to the time of termination shall be transferred to a successor custodian or bank designated by the Borrower and
reasonably acceptable to the Agent (or, from and after receipt by the Custodian of a Notice of Exclusive Control, designated by
the Agent). In the event no successor is agreed upon, the Custodian shall be entitled to petition a court of competent jurisdiction
to appoint a successor custodian and shall be indemnified by the Borrower for any costs and expenses (including, without limitation,
attorney’s fees) relating thereto.


 


14. Severability. In the event any provision of this
Agreement is held illegal, void or unenforceable, the remainder of this Agreement shall remain in effect


 


15. Successors; Assignment. This Agreement shall be binding
upon the parties hereto and their respective successors and assigns. No party may assign or transfer any of its rights or obligations
hereunder without the prior written consent of the other parties hereto; provided that this agreement shall be binding on any successor
Agent under the Security Agreement so long as such successor Agent agrees in writing to be bound as “Agent” in accordance
with the terms hereof.


 


16. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of The State of New York, without giving effect to the conflict of law provisions thereof.


 


17. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but such counterparts together shall constitute one and the same
instrument.


 


18. Headings. Any headings appearing on this Agreement
are for convenience only and shall not affect the interpretation of any of the terms of this Agreement.


 






    	 



    	 



    

 


19. Confidentiality. Each of the Custodian, the Borrower
and the Agent agrees that it shall use commercially reasonable efforts to maintain, and to cause its agents, attorneys and accountants
to maintain, the confidentiality of the specific terms of this Agreement, and to not discuss or disclose, nor authorize such agents,
attorneys or accountants to discuss or disclose, such terms, directly or indirectly, to any person, other than: (1) to such agents,
attorneys or accountants, subject to the terms hereof; (2) as may be legally required by applicable law or regulation or by any
subpoena or similar legal process, or as may be requested by a regulator having jurisdiction over such party; (3) in connection
with litigation to which such party is a party; (4) to the extent such terms become publicly available other than as a result of
a breach of this Agreement; or (5) in the case of the Agent any other person to whom the Agent is permitted to disclose confidential
information of the Borrower in accordance with Section 10.12 of the Security Agreement.


 


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IN WITNESS WHEREOF, the undersigned have
executed this Agreement under their respective seals as of the date first written above. 





	 	 	 	 
	 	STATE STREET BANK AND TRUST COMPANY 



	 	 	 	 
	 	By:	/s/ George Sullivan
	 	Name:	George Sullivan
	 	Title:	Executive Vice President
	 	 	 	 
	 	ING CAPITAL LLC, as Collateral Agent
	 	 	 	 
	 	By:	/s/ Kunduck Moon
	 	 	Name:	Kunduck Moon
	 	 	Title:	Managing Director
	 	 	 	 
	 	By:	/s/ Grace Fu
	 	 	Name:	Grace Fu
	 	 	Title:	Vice President
	 	 	 	 
	 	FS INVESTMENT CORPORATION II
	 	 	 	 
	 	By:	/s/ Michael Lawson
	 	 	Name:	Michael Lawson
	 	 	Title:	Chief Financial Officer