Filed by Bowne Pure Compliance






	 	 	 	 	 



Exhibit 10.3




Execution version




 





MAIN STREET CAPITAL CORPORATION




as Borrower,




BRANCH BANKING AND TRUST COMPANY,

MORTGAGE CUSTODY DEPARTMENT OF CORPORATE TRUST SERVICES

as Custodian




and




BRANCH BANKING AND TRUST COMPANY

as Administrative Agent





 






CUSTODIAL AGREEMENT





 






Dated as of October 24, 2008




 


 









 







TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 1. Definitions
	 	 	1	 
	 
	 	 	 	 
	Section 2. Delivery of Investment Files
	 	 	2	 
	 
	 	 	 	 
	Section 3. Receipt of Investment Files
	 	 	3	 
	 
	 	 	 	 
	Section 4. Obligations of the Custodian
	 	 	3	 
	 
	 	 	 	 
	Section 5. Representations and Warranties of the Custodian
	 	 	5	 
	 
	 	 	 	 
	Section 6. Trust Receipts
	 	 	6	 
	 
	 	 	 	 
	Section 7. Future Defects
	 	 	7	 
	 
	 	 	 	 
	Section 8. Release
	 	 	7	 
	 
	 	 	 	 
	Section 9. Procedures Upon Default
	 	 	9	 
	 
	 	 	 	 
	Section 10. Fees and Expenses of Custodian
	 	 	10	 
	 
	 	 	 	 
	Section 11. Removal of Custodian
	 	 	10	 
	 
	 	 	 	 
	Section 12. Examination of Investment Files
	 	 	10	 
	 
	 	 	 	 
	Section 13. Insurance of Custodian
	 	 	11	 
	 
	 	 	 	 
	Section 14. Counterparts
	 	 	11	 
	 
	 	 	 	 
	Section 15. Governing Law/Submission to Jurisdiction
	 	 	11	 
	 
	 	 	 	 
	Section 16. Copies of Documents from Investment Files
	 	 	11	 
	 
	 	 	 	 
	Section 17. Resignation of Custodian
	 	 	12	 
	 
	 	 	 	 
	Section 18. Term of Agreement
	 	 	12	 
	 
	 	 	 	 
	Section 19. Notices
	 	 	12	 
	 
	 	 	 	 
	Section 20. Successors and Assigns
	 	 	13	 
	 
	 	 	 	 
	Section 21. Liability of the Custodian
	 	 	13	 
	 
	 	 	 	 
	Section 22. Indemnification
	 	 	13	 
	 
	 	 	 	 
	Section 23. Custodian’s Reliance
	 	 	14	 






 


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	 	 	Page	 
	 
	 	 	 	 
	Section 24. Merger or Consolidation of Custodian
	 	 	14	 
	 
	 	 	 	 
	Section 25. Transmission of Investment Files
	 	 	14	 
	 
	 	 	 	 
	Section 26. Authorized Representatives
	 	 	14	 
	 
	 	 	 	 
	Section 27. Reproduction of Documents
	 	 	15	 
	 
	 	 	 	 
	Section 28. Force Majeure
	 	 	15	 
	 
	 	 	 	 
	Section 29. Confidentiality Agreement
	 	 	15	 
	 
	 	 	 	 
	Section 30. No Amendments
	 	 	15	 
	 
	 	 	 	 
	Section 31. Express Duties
	 	 	16	 
	 
	 	 	 	 
	Section 32. Enforcement of Rights
	 	 	16	 
	 
	 	 	 	 
	Section 33. No Proceedings
	 	 	16	 
	 
	 	 	 	 
	Section 34. Custody Agreement
	 	 	16	 






	 	 	 
	Exhibit 1

	 	Intentionally Omitted
	 
	 	 
	Exhibit 2

	 	Trust Receipt
	 
	 	 
	Exhibit 3

	 	Request and Receipt for Release of Documents
	 
	 	 
	Exhibit 4

	 	Authorized Representatives of the Agent and Information for Notices
	 
	 	 
	Exhibit 5

	 	Authorized Representatives of the Borrower
	 
	 	 
	Exhibit 6

	 	Authorized Representatives of the Custodian
	 
	 	 
	Exhibit 7

	 	Form of List of Portfolio Investments
	 
	 	 
	Exhibit 8

	 	Form of Comfort Letter
	 
	 	 
	Exhibit 9

	 	Form of Bailee Letter
	 
	 	 
	Exhibit 10

	 	Form of Certification of Sale, Exchange, Transfer or Liquidation






 - ii - 





 


 









 







CUSTODIAL AGREEMENT




THIS CUSTODIAL AGREEMENT (this “Agreement”), dated as of October 24, 2008, by and
among Main Street Capital Corporation (the “Borrower”), Branch Banking and Trust Company,
Mortgage Custody Department of Corporate Trust Services, not individually, but solely in its
capacity as Custodian, having an address at 5130 Parkway Plaza Boulevard, Charlotte, North Carolina
28217 (the “Custodian”) and Branch Banking and Trust Company, acting in its capacity as
agent (the “Agent”) for itself and for the other Secured Parties (as defined in the Credit
Agreement described below).



PRELIMINARY STATEMENT




The Borrower and the Agent, among others, are parties to the Credit Agreement, dated as of
October 24, 2008 (as amended, supplemented, restated or otherwise modified and in effect from time
to time, the “Credit Agreement”), pursuant to which the Borrower has the benefit, subject
to the terms and conditions thereof, of advances from the Lenders (as defined in the Credit
Agreement) to finance, among other things, the making of Portfolio Investments (as defined below)
by the Borrower.



Pursuant to the Credit Agreement, the Borrower is required to take such action as shall be
necessary to maintain the perfection of the liens and security interests of the Agent, for the
benefit of the Secured Parties (as defined in the Credit Agreement) on the Collateral (as defined
in the Credit Agreement). The Borrower desires to have the Custodian take possession of the
related Investment File (as defined below) with respect to each Portfolio Investment, in accordance
with the terms and conditions hereof. The Borrower has agreed to deliver or cause to be delivered
to the Custodian the documents specified in Section 2 of this Agreement with respect to the
Portfolio Investments to be held pursuant to the terms of this Agreement.



The Custodian is a North Carolina banking corporation, and is otherwise authorized to act as
Custodian pursuant to this Agreement.



In consideration of the mutual undertakings herein, expressed, the parties hereto hereby agree
as follow:




Section 1. Definitions.



Unless otherwise defined herein, capitalized terms not otherwise defined herein are used as
defined in the Credit Agreement, and the following terms shall have the following meanings:




Agreement: shall mean this Agreement, as supplemented or amended from time to
time.




Authorized Person: shall have the meaning set forth in Section 26 of this
Agreement.


 


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Business Day: means any day other than a Saturday or Sunday, or a day on which
banking and savings and loan institutions in North Carolina are authorized or obligated by
law of executive order to be closed, and a day on which the Custodian is open in the State
of North Carolina.




Comfort Letter: means a letter substantially in the form attached hereto as
Exhibit 8 furnished to the Custodian by the Borrower in connection with the closing
of the transactions creating a Portfolio Investment, a copy of which letter is delivered to
the Custodian with the related Investment File.




Credit Agreement: shall have the meaning set forth in the first paragraph of
the Preliminary Statement.




Investment File: means those documents listed in Section 2(a) of this
Agreement that are delivered to the Custodian pursuant to Section 2 hereof or that otherwise
come into the possession of the Custodian.




List of Portfolio Investments: means a listing, substantially in the form of
which is attached hereto as Exhibit 7, of all Portfolio Investments delivered to the
Custodian (which List of Portfolio Investments may be in the form of microfiche or computer
file or other medium acceptable to the Custodian).




Person: shall mean an individual, general partnership, limited partnership,
limited liability partnership, corporation, business trust, joint stock company, limited
liability company, trust, unincorporated association, joint venture, governmental authority,
or other entity of whatever nature.




Portfolio Investment: shall have the meaning set forth in the Credit
Agreement.




Trust Receipt: shall mean a trust receipt, substantially in the form set forth
on Exhibit 2 hereto, covering the Investment Files relating to the Portfolio
Investment described therein, which trust receipt is issued to the Agent.




UCC: shall mean the Uniform Commercial Code as in effect in the applicable
jurisdiction.




Section 2. Delivery of Investment Files.




(a) Within five (5) Business Days of the date that the Borrower makes a Portfolio
Investment, the Borrower shall deliver or cause the Borrower’s closing agent to deliver to
the Custodian, the following documents pertaining to such Portfolio Investment, along with a
Comfort Letter listing each document to be included in the Investment File for such
Portfolio Investment so delivered to the Custodian, each of which Portfolio Investment shall
be identified in a Schedule delivered in printed and electronic format therewith:




(i) any and all original executed promissory notes issued by the Obligor
pursuant to the applicable agreements evidencing such Portfolio Investment, together
with an indorsement executed in blank;


 


2









 






(ii) any and all original certificates representing equity interests pledged to
secure the obligations of the Obligor relating to such Portfolio Investment,
together with transfer powers for each such certificate, executed in blank; and




(iii) any and all original letters of credit, instruments, certificates of
deposit or chattel paper or other original documents, the physical possession of
which is necessary in order for the Agent, on behalf of the Secured Parties, to
perfect or preserve the priority of its security interest therein.




(b) From time to time, the Borrower shall forward to the Custodian additional documents
of the type described in the foregoing clause (a) evidencing any assumption, modification,
consolidation or extension of any Portfolio Investment, in accordance with the terms of the
Credit Agreement, and upon receipt of any such additional documents, the Custodian shall
hold such additional documents in accordance with the terms of this Agreement. Any
additional documents forwarded shall include a transmittal with instructions on filing and
the name of the Portfolio Investment to which it relates and any other information
reasonably requested by the Custodian.




Section 3. Receipt of Investment Files.



After receipt of each Investment File, the Custodian shall deliver a Trust Receipt to the
Agent in accordance with Section 6 hereof.




Section 4. Obligations of the Custodian.



The Custodian hereby confirms that (i) with respect to Investment Files delivered to it on the
date hereof, it has reviewed the List of Portfolio Investments therewith, and with respect to any
subsequently delivered Investment Files, it will review the List of Portfolio Investments delivered
therewith, (ii) with respect to Investment Files delivered to it on the date hereof, it holds such
Investment Files corresponding to each Portfolio Investment listed on the List of Portfolio
Investments to which it relates and, with respect to any subsequently delivered Investment Files,
it will hold such Investment Files corresponding to each Portfolio Investment listed on the List of
Portfolio Investments to which it relates and (iii) for each Portfolio Investment, each Investment
File contains each of the documents listed on Schedule A to the Comfort Letter relating to such
Portfolio Investment (excluding the items listed on the schedule of exceptions attached to the
related Trust Receipt) and if Schedule A to the Comfort Letter indicates that a document is an
original, the Custodian confirms that it has received such original document (except as indicated
on the schedule of exceptions attached to the related Trust Receipt). The Custodian shall create a
separate account in the name of the Borrower in which all assets, including the Portfolio
Investments and any Investment Files, shall be held, subject to the security interests of the Agent
pursuant to the Collateral Documents. The Custodian shall
dispose of or release such assets only upon the receipt of proper instruction from the
Authorized Persons of the Borrower or as otherwise specifically set forth in this Agreement.


 


3









 





The Custodian hereby acknowledges that, (A) to secure its obligations under the Credit
Agreement, the Borrower has granted a security interest to the Agent in its Portfolio Investments
and related assets with respect to the Obligations (as defined in the Credit Agreement) including,
without limitation, each document listed on the schedule to each Trust Receipt and (B) (i) it has
in its physical possession the related Investment File with respect to each Portfolio Investment
listed on the schedule to each Trust Receipt (excluding the items listed on the schedule of
exceptions attached to the related Trust Receipt, if any) (the “Property”), (ii) it will
hold the Property as bailee for and on behalf of the Agent for purposes of perfecting the interests
of the Agent therein, for the benefit of the Secured Parties (as defined in the Credit Agreement),
as provided in Section 9-313 of the UCC, and (iii) it is not holding the Property on behalf
of the Borrower or any other person or entity (including itself). The Custodian agrees that it
will continue to hold the Property in its possession and not transfer the Property without the
prior written consent of the Agent and, so long as no Default or Event of Default has occurred and
is continuing, the Borrower, except in accordance with this Agreement. Following indefeasible
payment in full of all amounts owing under the Loan Documents in respect of the Obligations, and
the cancellation or termination of the commitments under the Credit Agreement and any other
contingent obligations, the security interest of the Agent shall be released in accordance with the
terms of the Loan Documents and the Property shall revert to the Borrower.



The Custodian hereby agrees to hold all documents evidencing or representing ownership in or
the Borrower’s interest or investment in a Portfolio Investment which have been or are delivered to
the Custodian by the Borrower or by any other third party at the written direction of the Borrower,
including without limitation all promissory notes, certificates and other “instruments” within the
meaning of the UCC, as agent and bailee of the Agent, as secured party, and acknowledges that this
Agreement constitutes notice in accordance with the UCC and other applicable law of the Agent’s
security interest in such collateral and does hereby consent thereto. The Custodian shall hold all
documents received by it constituting the related Investment File with respect to each Portfolio
Investment as described in the preceding paragraph, and shall make disposition thereof only in
accordance with the terms of this Agreement. The Custodian shall segregate and maintain continuous
custody of all documents constituting each Investment File in a fire resistant vault in accordance
with customary standards for such custody, and such Investment Files shall be clearly marked with
appropriate notation in the Custodian’s computer files to indicate that the Investment Files are
held by the Custodian pursuant to this Agreement in a custodial capacity only. The Borrower and the
Agent shall have the opportunity to inspect the filing procedures, facilities, and the security
procedures. The Agent has made such inspection and has found them to comply with this Agreement.



The Custodian shall conduct, or cause to be conducted, periodic reviews of all items held by
it under this Agreement in such a manner as shall enable the Agent or the Borrower to verify the
accuracy of the Custodian’s record keeping.



The Custodian agrees and covenants that it will separately identify the related Investment
Files with respect to each Portfolio Investment delivered to the Custodian pursuant to this
Agreement from any and all other files, documents or agreements at any time or from time to
time delivered to the Custodian by or on behalf the Borrower or any of its affiliates.


 


4









 





In the event that (i) the Agent, the Borrower or the Custodian shall be served by a third
party with any type of levy, attachment, writ or court order with respect to any Investment File or
any document included within an Investment File or (ii) a third party shall institute any court
proceeding by which any Investment File or a document included within an Investment File 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 Custodian shall, to the extent permitted by law and any court order, continue to
hold and maintain all Investment Files that are the subject of such proceedings pending an order of
a court of competent jurisdiction permitting or directing disposition thereof. Upon final
determination of such court, and if permitted by such determination, the Custodian shall release
such Investment File or any document included within such Investment File as directed in writing by
the Borrower (with notice to the Agent), or, if a Default or Event of Default has occurred and is
continuing, the Agent, which shall give a direction consistent with such court determination. The
Custodian shall have no obligation to monitor or appear in any such proceeding on behalf of or in
the name of the Borrower or the Agent. Expenses and fees (including without limitation, attorney’s
fees) of the Custodian incurred as a result of such proceedings shall be borne by the Borrower.




Section 5. Representations and Warranties of the Custodian.




The Custodian represents and warrants to the Administrative Agent that:




(a) The Custodian (i) is duly organized, validly existing and in good standing under
the laws of North Carolina, (ii) has full corporate power and authority to conduct its
business and affairs as a custodian and (iii) is a bank having the qualifications prescribed
in Section 26(a) of the Investment Company Act of 1940, as amended (the “1940 Act”) for the
trustees of unit investment trusts.




(b) The Custodian hereby represents and warrants that it does not control, is not
controlled by, nor is under common control with (either directly or indirectly) the Borrower
or any of its affiliates.




(c) This Agreement, when executed and delivered by the Custodian, shall constitute the
valid, legal and binding obligation of the Custodian, enforceable against the Custodian in
accordance with its terms, except as the enforcement thereof may be limited by applicable
receivership or similar debtor relief laws and that certain equitable remedies may not be
available regardless of whether enforcement is sought in equity or at law.




(d) The Custodian is not in material breach of any material agreement to which it is a
party.


 


5









 






(e) By execution of this Agreement, the Custodian represents, warrants and covenants
that it does not currently hold, and during the existence of this Agreement shall
not hold, any adverse interest, by way of security or otherwise, in any Portfolio
Investment, and hereby waives any lien which the Custodian might have pursuant to statute or
otherwise available at law or in equity on the Portfolio Investments and the documents
constituting the related Investment File with respect to each Portfolio Investment held by
the Custodian hereunder, including all monies and proceeds derived therefrom or relating
thereto.




(f) The Custodian shall not, except with respect to the Custodian’s right to receive
its reasonable and customary fees and expenses hereunder, at any time exercise or seek to
enforce any claim, right or remedy, including any statutory or common law rights of set-off,
if any, that the Custodian may otherwise have against all or any part of an Investment File,
a Portfolio Investment, or any proceeds of the foregoing or against the Borrower or the
Agent.




(g) The
Custodian maintains insurance as required by Section 13 hereof.



The representations and warranties of the Custodian set forth above shall survive the
execution, delivery and termination of this Agreement shall inure to the benefit of the Agent and
the Borrower so long as this Agreement is in effect.




Section 6. Trust Receipts.



Within two Business Days after the receipt of the Investment Files pursuant to Section 2
hereof or such other time period mutually agreed to by the Borrower, the Agent and the Custodian,
the Custodian shall ascertain that (i) all documents required to be delivered to it are in its
possession, and (ii) that each note, certificate or other original collateral document, if any,
listed in Schedule A to each Comfort Letter is an original, executed counterpart of such document,
except as set forth on the exception schedule and (iii) shall deliver to the Agent a Trust Receipt
substantially in the form of Exhibit 2 attached hereto.



Each Trust Receipt issued hereunder shall be numbered sequentially, and the Custodian shall
maintain a record of such numbers and the name of the party to which such Trust Receipt was issued.



The Custodian makes no representation as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Investment File or (ii) the
collectability, insurability, effectiveness or suitability of any Portfolio Investment. The
Custodian shall have no obligation to verify the receipt of any documents, the existence of which
was not delivered or not made known to the Custodian as part of the Investment File, and the
Custodian shall have no obligation to determine whether the recordation of any document is
necessary, nor shall the Custodian be responsible for the value, form, substance, validity,
perfection, priority, effectiveness or enforceability of any of such documents.



The Custodian shall provide the Agent and the Borrower with an exception report which shall be
attached to such Trust Receipt and shall specifically identify any missing endorsements or
documents required to be delivered to the Custodian pursuant to Section 2 and the party or parties
whose signatures may be required for any such endorsement. The Custodian shall have no duty to
obtain any missing endorsement or document. The Custodian shall be under no duty
or obligation to inspect, review or examine any such documents, instruments, certificates or
other papers to determine that they are genuine, enforceable, executed by an authorized officer, or
appropriate for the represented purpose or that they are other than what they purport to be on
their face.


 


6









 






Section 7. Future Defects.



During the term of this Agreement, the Custodian shall immediately notify the Agent and the
Borrower of any defect with respect to an Investment File or any failure on its part to hold the
Investment Files as herein provided.




Section 8. Release.



(a) From time to time and as requested by the Agent, the Custodian is hereby authorized, upon
receipt from the Agent of a request and receipt for release of documents, in substantially the form
annexed hereto as Exhibit 3, reasonably believed by the Custodian to be signed by an
Authorized Person of the Agent whose name appears on Exhibit 4 hereof to release to the
Agent or its designee the related Investment File or the documents set forth in such request and
receipt of such Person. The Agent agrees with Borrower that it will not make any request for
release unless a Default or Event of Default has occurred and is continuing.



(b) From time to time so long as no Default or an Event of Default has occurred and is
continuing, in connection with a sale, transfer, exchange, liquidation, payment in full or
modification or extension of any Portfolio Investment in the ordinary course of business, and
subject to the other provisions set forth in this Section 8, the Custodian is also authorized, upon
receipt from the Borrower of a request and receipt for release of documents, in substantially the
form annexed hereto as Exhibit 3, reasonably believed by the Custodian to be signed by an
Authorized Person of the Borrower whose name appears on Exhibit 5 hereof, to release the
related Investment File or the related documents set forth in such request and receipt for release
to a party other than the Borrower or any of its Affiliates. The Borrower shall provide a copy of
any such request and receipt for release to the Agent simultaneously with the delivery thereof to
the Custodian. At any time when three (3) or more Investment Files are currently released pursuant
to any request by or on behalf of the Borrower, the Custodian shall, prior to giving effect to such
release, obtain the consent of the Agent prior to complying with such requested release (which
consent shall not be unreasonably withheld prior to the occurrence and continuance of any Default
or Event of Default). The Custodian shall promptly notify the Agent after it has released any
Investment File or any document therein. Any transmittal of documentation pursuant to a request
and receipt for release under this clause (b) shall be under the cover of a transmittal letter
substantially in the form of the Bailee Letter attached as Exhibit 9 hereto, duly completed
and executed by the Custodian. The Custodian shall retain the executed Bailee Letter in the stead
of the related Investment File and shall notify the Agent and the Borrower in the event that the
third party designated to receive such Investment File or such documents fails to execute and
deliver to the Custodian a countersignature to the Bailee Letter within three (3) Business Days of
delivery thereof.


 


7









 





(c) The Custodian shall release any requested Investment Files pursuant to the foregoing at
the direction of the Borrower or the Agent, as the case may be, on the same day, if
the request therefor is received by the Custodian prior to 2:00 p.m. Eastern time, or,
otherwise, on the next succeeding Business Day after receipt of a request of release therefor. The
Custodian shall maintain a list of the Investment Files or if less than the entire Investment File,
the documents released. Upon return of the documents or the Investment File, the Custodian shall
maintain a list of the Investment Files or the documents returned.




(d) The Borrower covenants and agrees that:




(i) in the case of any documents of a type described in clauses 2(a)(i) or 2(a)(iii),
it shall not make any request for the release thereof until the obligations of the Obligor
under the related Portfolio Investment have been repaid in full, except for (A) ultimate
sale or exchange, and in such case the Borrower further agrees that all cash proceeds
thereof shall be deposited in a deposit account that is the subject of a control agreement
that creates a valid and perfected first-priority security interest in and lien in favor of
the Administrative Agent for the benefit of the Secured Parties or (B) renewal, amendment or
registration of transfer; provided that any document received in replacement, substitution
or exchange thereof is delivered to the Custodian prior to release of the existing original;




(ii) it shall not, directly or indirectly, maintain physical possession or “control”
within the meaning of the UCC of any Investment Files or documents released pursuant to this
Section 8 or instruct any Person to release or deliver the Investment Files or any documents
to it or any of its Affiliates or any agent on its or their behalf (other than the Agent);




(iii) it shall instruct each third party to which an Investment File is delivered
pursuant to clause (b) to execute and deliver to the Custodian a countersignature to the
Bailee Letter delivered to such Person in connection therewith (which delivery may be by
facsimile) and, in the event that such Person fails to do so within three (3) Business Days
of receipt of any Investment File or documents, and the Portfolio Investment relating to
such Investment File or document has not yet been sold, exchanged, transferred, liquidated
or paid in full, it shall direct such Person, and shall use its best efforts to cause such
Person, to immediately return the Investment File and any documents to the Custodian;




(iv) it shall promptly instruct such third parties to whom any Investment File or
documents have been delivered to return to the Custodian any Investment File or other such
documents when the need therefor no longer exists, unless the Portfolio Investment shall be
sold, exchanged, transferred or liquidated, in which case, thereupon it shall, in
substantially the form annexed hereto as Exhibit 10, certify to the Custodian and
the Agent that such sale, transfer or liquidation has occurred;




(v) at any time an Investment File or documents therein are not held by the Custodian
or by a bailee that has executed and delivered a valid, binding and effective Bailee Letter
in favor of the Agent , the related Portfolio Investment shall not be eligible for inclusion
in the Borrowing Base unless otherwise agreed in writing by the Agent in its sole
discretion; and


 


8









 






(vi) it shall not make any request for release of any Investment File or documents
therein if, after giving effect to such release, a Default shall occur and be continuing.




The Agent shall have the right to instruct the Custodian not to release, and Custodian
in such instance agrees not to so release, an Investment File if, in its good faith
judgment, the Agent believes that the Borrower’s request does not or shall not comply with
the foregoing covenants.



(e) Any Person may provide an electronic transmission for release of documents in a form
agreed to in advance of the initial transmission by the Borrower, the Agent and the Custodian
containing information readable without intervention by the Custodian’s data processing operations
or computer hardware and software staff, and arranged in a record layout to be specified by the
Custodian (a “Paperless Release Request”). All parties agree to maintain and control
access to electronic signature information and assume liability for any unauthorized use thereof.
Such parties also agree to maintain accurate records of electronic transactions related to the
Investment Files. Each such Person hereby authorizes the Custodian to automatically append the
electronic signature of an Authorized Representative to the applicable request for release of
documents and agrees and acknowledges that by appending such Authorized Representative’s electronic
signature, the Custodian shall be entitled to rely thereon. For purposes of this Agreement, the
term “electronic signature” is defined as an “electronic identifier intended by the person using it
to have the same force and effect as the use of a manual signature.” Each Paperless Release
Request shall be confirmed in writing and delivered to all parties in accordance with Section 19.
All parties agree in advance to comply with all of the Custodian’s security and record layout
standards in connection with any Paperless Release Request as may be amended from time to time upon
notice from the Custodian to such parties. The Custodian reserves the right to restrict or suspend
such parties’ access to the Custodian’s computer systems for maintenance or repairs or for any
other reason in the Custodian’s sole discretion, provided, however, that the
Custodian shall promptly provide such parties notice of such restriction or suspension.
Notwithstanding the foregoing, such parties are authorized to transmit, and the Custodian is
authorized to accept, signed facsimile copies of requests for release.




Section 9. Procedures Upon Default.




(a) The Agent shall notify the Custodian when a Default or an Event of Default has
occurred and is continuing. No knowledge of any Default or Event of Default will be implied
against the Custodian in the absence of such notice. The Custodian shall have no duty to
inquire whether a Default or an Event of Default has occurred and is continuing.




(b) Following notification by the Agent (which may be by facsimile) to the Custodian
that a Default or an Event of Default has occurred and is continuing, the Custodian shall
not release any item relating to any Portfolio Investment (including without limitation the
Investment Files) to the Borrower or any other Person without the express prior written
consent and at the direction of the Agent.


 


9









 






(c) Upon the written direction of the Agent from and after the occurrence of a Default
or an Event of Default, the Custodian shall submit for recording and/or filing any
assignments, instruments of transfer or other documents with respect to each Portfolio
Investments. The Borrower shall be responsible for all reasonable out-of-pocket costs and
expenses of the Custodian associated with the recording and/or filing of any such
assignments, instruments of transfer or other documents with respect to the Portfolio
Investments.




Section 10. Fees and Expenses of Custodian.



All reasonable fees of the Custodian for its services under this Agreement, and any reasonable
expenses incurred by the Custodian (including but not limited to reasonable counsel fees), will be
promptly paid and reimbursed by the Borrower, or its affiliate, pursuant to a fee agreement between
the Borrower, or its affiliate, and the Custodian.




Section 11. Removal of Custodian.




(a) The Agent or the Borrower, upon (i) at least thirty (30) days prior written notice
to the Custodian and the other party, may remove and discharge the Custodian (or any
successor custodian thereafter appointed), with cause, and (ii) at least sixty (60) days
prior written notice to the Custodian and the other party, may remove and discharge the
Custodian (or any successor custodian thereafter appointed), without cause, from the
performance of its obligations under this Custodial Agreement; provided, that, unless a
Default or an Event of Default has occurred and is continuing, neither the Agent nor the
Borrower shall remove or discharge the Custodian without cause without the consent of the
other party, which consent shall not be unreasonably withheld. Promptly after the giving of
notice of removal of the Custodian, the Agent shall appoint, by written instrument, a
successor custodian, which appointment shall, unless a Default or an Event of Default has
occurred and is continuing, require the consent of the Borrower, which consent shall not be
unreasonably withheld. One original counterpart of such instrument of appointment shall be
delivered to each of the Agent, the Borrower, the Custodian and the successor custodian.




(b) In the event of any such removal, the Custodian shall promptly transfer to the
successor custodian, as directed in writing, all the Investment Files being administered
under this Custodial Agreement. The cost of the shipment of Investment Files shall be at the
expense of the Custodian, in the event of a removal for cause, and otherwise at the expense
of the Borrower. The Borrower shall be responsible for the fees and expenses of the
successor custodian.




Section 12. Examination of Investment Files.



Upon reasonable prior written notice to the Custodian, the Borrower and the Agent and their
respective agents, designees, accountants, attorneys and auditors will be permitted during normal
business hours to examine the Investment Files. In addition, the Custodian shall permit access
during normal business hours to vendors, professionals and others employed by the Borrower for the
purpose of reviewing and repairing document deficiencies contained in the
Investment Files. All records relating to the Borrower’s assets shall remain the property of
the Borrower, and the Custodian shall maintain such records in accordance with the 1940 Act. Any
such examination shall be subject to the reasonable procedures of the Custodian. The Borrower
shall indemnify and hold the Custodian harmless from all claims, costs, expenses, losses and
damages incurred by the Custodian as a result of the loss or misplacement of any Investment Files
or documents or papers contained in the Investment Files while in the possession of the examining
party, except in the case of any loss or misplacement resulting from the gross negligence or
willful misconduct of the Agent or its respective agents, designees, accountants, attorneys or
auditors.


 


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The Investment Files will initially be maintained at the Custodian’s office located at 5130
Parkway Plaza Boulevard, Charlotte, North Carolina 28217 and the Custodian will provide at least 30
days prior written notice to the Borrower and the Agent before such location is changed.




Section 13. Insurance of Custodian.



At its own expense, the Custodian shall maintain at all times during the existence of this
Agreement and keep in full force and effect fidelity insurance, theft of documents insurance, and
such insurance shall be in amounts with standard coverage and subject to deductibles as is
customary for insurance typically maintained by banks which act as custodian of assets similar to
the Portfolio Investments, and in no event in an annual amount less than $1,000,000.




Section 14. Counterparts.



For the purpose of facilitating the execution of this Agreement as herein provided and for
other purposes, this Agreement may be executed simultaneously in any number of counterparts each of
which counterparts shall be deemed to be an original, and such counterparts shall constitute and be
one and the same instrument.




Section 15. Governing Law/Submission to Jurisdiction.



This Agreement shall be deemed to have been made in and shall be construed in accordance with
the laws of the State of North Carolina and its validity, construction and effect shall be governed
by the internal laws of the State of North Carolina applicable to agreements wholly performed
therein. The appropriate state and federal courts located in the County of Mecklenburg or the
County of Forsyth in the State of North Carolina shall be an appropriate venue for any action, suit
or other proceeding arising from or based upon this Agreement. The parties hereto waive any
objection to the propriety or convenience of venue in such courts or to the jurisdiction of such
courts over any party and agree that any judgment entered therein may be enforced with no further
defense or offset in any jurisdiction in which the defendant is a citizen, resides or owns
property. Nothing in this Section 15 shall affect the right of the Agent to bring any action or
proceeding against any party hereto or its property in the courts of any other jurisdiction.




Section 16. Copies of Documents from Investment Files.



Upon the request of the Borrower or, with notice to the Borrower, the Agent and at the cost
and expense of the Borrower (including fees and expenses associated with researching and
making its copies), the Custodian shall provide the Borrower or the Agent with copies of the
documents in the related Investment File with respect to each Portfolio Investment.


 


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Section 17. Resignation of Custodian.



The Custodian may resign upon at least 60 days prior written notice to the Borrower and the
Agent. Upon such resignation, the Agent may appoint a successor custodian in accordance with
Section 11 hereof, and the resigning Custodian shall immediately comply with the provisions of such
Section 11. If a successor is not appointed within forty-five (45) days, the Custodian may petition
a court of competent jurisdiction for a successor. Regardless of the reasons for the removal or
resignation of the Custodian, the obligations of a removed or resigning Custodian under this
Custodial Agreement and its status as custodian for and bailee of the Agent with respect to the
Collateral covered hereby shall continue until all of the Investment Files being administered under
this Custodial Agreement have been transferred to the successor custodian in accordance with
Section 11. The payment of such successor custodian’s fees shall be solely the responsibility of
the Borrower.




Section 18. Term of Agreement.



Promptly after written notice from the Agent of the termination of the Credit Agreement and
payment in full of all amounts owing to the Secured Parties and the Agent thereunder, the Custodian
shall deliver all documents remaining in the Investment Files to the Borrower in accordance with
the Borrower’s written instructions. The Borrower shall not be obligated to pay any fees or
expenses of the Custodian, except for shipping costs, attributable to periods following delivery of
the Borrower’s written delivery instructions to the Custodian.




Section 19. Notices.



All demands, notices and communications hereunder shall be in writing and shall be deemed to
have been duly given when received by the recipient party at the address shown on the first page
hereof or at such other address as may hereafter be furnished to the other party by like notice.
Any such demand, notice or communication hereunder shall be deemed to have been received on the
date actually delivered to or received at the premises of the addressee (as evidenced, in the case
of registered or certified mail, by the date noted on the return receipt).




If to Borrower:




Main Street Capital Corporation

1300 Post Oak Boulevard, Suite 800

Houston, Texas 77056

Attention: Rodger Stout

Telephone: (713) 350-6000

Facsimile: (713) 350-6042




If to the Agent:




At such address, phone number and facsimile number as set forth in Exhibit 4 hereto.


 


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If to the Custodian:




Branch Banking and Trust Company,

Mortgage Custody Department of Corporate Trust Services

5130 Parkway Plaza Boulevard

Charlotte, North Carolina 28217-1964

Attention: Susan Tittl

Telephone: (704) 954-1852

Telecopy: (704) 954-1830



Section 20. Successors and Assigns.



Except as provided herein, the Custodian may not assign its rights or delegate its obligations
under this Agreement without the express written consent of the Borrower and the Agent. Any
attempted assignment of rights or delegation of duties by the Custodian without such consent shall
be void. This Agreement shall inure to the benefit of the successors and assigns of the parties
hereto.




Section 21. Liability of the Custodian.



Neither the Custodian nor any of its directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them hereunder or in connection herewith in
good faith and believed by it or them to be within the purview of this Agreement, including without
limitation in the selection of shippers and methods of shipment, except for its or their own gross
negligence or willful misconduct. In no event shall the Custodian or its directors, officers,
agents and employees be held liable for any special, indirect or consequential damages resulting
from any action taken or omitted to be taken by it or them hereunder or in connection herewith.
The Custodian shall not be responsible to any party for recitals, statements or warranties or
representations of the Borrower contained herein or in any document or be bound to ascertain or
inquire as to the performance or observance of any of the terms of this Agreement or any
participation and servicing agreement with respect to the Portfolio Investments on the part of the
Borrower, except as may otherwise be specifically set forth herein.




Section 22. Indemnification.



The Borrower agrees to defend, indemnify and hold the Custodian and its directors, agents and
employees harmless against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursement of any kind or nature whatsoever,
including reasonable attorney’s fees, that may be imposed on, incurred by, or asserted against it
or them in any way relating to or arising out of this Agreement or any action taken or not taken by
it or them hereunder unless such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs or expenses are determined by a final judicial decree to result from the
gross negligence, lack of good faith or willful misconduct of the Custodian, its directors,
officers, agents or employees. The foregoing indemnification shall survive any termination of this
Agreement or the resignation or removal of the Custodian.


 


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Section 23. Custodian’s Reliance.



In the absence of bad faith on the part of the Custodian, the Custodian may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed therein, upon any
request, instructions, certificate, opinion or other document furnished to the Custodian, believed
by the Custodian to be genuine and to have been signed or presented by the proper party or parties
and conforming to the requirements of this Agreement; but in the case of any Investment File or
other request, instruction, document or certificate which by any provision hereof is specifically
required to be furnished to the Custodian, the Custodian shall be under a duty to examine the same
to determine whether or not it conforms to the requirements of this Agreement. The Custodian may
consult with outside counsel approved by the Borrower and any opinion shall be full and complete
authorization and protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such opinion of counsel.




Section 24. Merger or Consolidation of Custodian.



Any Person into which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or consolidation to which the
Custodian shall be a party, or any Person succeeding to the business of the Custodian, shall be the
successor of the Custodian under this Agreement, without the execution of filing of any paper or
any further act on the part of the parties hereto, anything herein to the contrary notwithstanding.




Section 25. Transmission of Investment Files.



The Custodian shall use United Parcel Service, Federal Express or other nationally recognized
overnight courier service for the purpose of transmission of the Investment Files in the
performance of the Custodian’s duties hereunder. The Borrower will arrange for the provision of
such services at its sole cost and expense (or, at the Custodian’s option, reimburse the Custodian
for all costs and expenses incurred by the Custodian consistent with such instruction) and will
maintain such insurance against loss or damage to Investment Files as the Agent deems appropriate.
Without limiting the generality of the provisions of
Section 21 above, it is expressly agreed that
in no event shall the Custodian have any liability for any losses or damages to any person,
including without limitation, the Borrower, arising out of actions of the Custodian consistent with
instructions of the Borrower.




Section 26. Authorized Representatives.



Each representative of the Agent, the Borrower and the Custodian who is named on
Exhibit 4, Exhibit 5, or Exhibit 6 hereto, respectively (an “Authorized
Person”) is authorized to give and receive notices, requests and instructions, to deliver
certificates and documents in connection with this Agreement on behalf of the Agent, the Borrower
or the Custodian, respectively, and may, by delivering to the others a revised exhibit, change the
information previously given, but each of the other parties hereto shall be entitled to rely
conclusively on the last exhibit until receipt of a superseding exhibit.


 


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Section 27. Reproduction of Documents.



This Agreement and all documents relating thereto, including, without limitation, (a)
consents, waivers and modifications which may hereafter be executed, and (b) certificates and other
information previously or hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, microcard, miniature photographic or other similar process. The parties agree that any
such production shall be admissible in evidence as the original itself in any judicial or
administrative proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.




Section 28. Force Majeure.



To the maximum extent permitted by law and notwithstanding any other provision of this
Agreement, the Custodian will not be liable for, and the Borrower hereby releases the Custodian
from responsibility for all losses, claims, liabilities, expenses (including counsel fees both
outside and internal allocated costs) and damages due to errors, delays or inaccuracies in
transmission and from all liability for losses arising out of interruption of business due to acts
of God, acts of governmental authority, acts of a public enemy, or due to any and all wars, riots,
fires, floods, civil commotion, insurrections, labor difficulties, severe weather conditions,
interruption, delay in, or loss (partial or complete) of electrical power or external computer
(hardware or software) or communications services, strikes or other labor disturbance by employees
or nonaffiliates, government, judicial or regulatory organization order, rule or regulation; energy
or natural resource difficulty or storage, and inability to obtain materials, equipment or
transportation and equipment, system and software failures or any other causes beyond the
reasonable control of the Custodian, preventing or delaying performance of any obligation under
this Agreement. This release shall survive termination of this Agreement.




Section 29. Confidentiality Agreement.



The Custodian acknowledges that the Investment Files may contain information which the
Borrower deems “confidential”, “proprietary” and “secret.” The Custodian shall hold and, shall at
all times ensure that its employees and agents hold in confidence all information contained in the
Investment Files, and will prevent (a) the disclosure by it or its agents or employees to others of
any such proprietary, confidential or secret information of the Portfolio Investments or (b) the
use of such information other than for purposes set forth herein, unless authorized to do so in
writing by the Borrower.




Section 30. No Amendments.



No amendments or modifications to this Agreement shall be effective unless agreed to in
witting by all the parties hereto.


 


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Section 31. Express Duties.



It is expressly agreed by the parties hereto that the Custodian has no duties or obligations
regarding the Investment Files other than that specifically set forth in this Agreement and has no
obligation to sign any documents except for those specifically agreed to be executed by the
Custodian under this Agreement as custodian and the Custodian shall not be required to place its
funds at risk and may require written indemnification for any action requested to be taken that is
not specifically set forth in this Agreement. The Custodian may without incurring any liability to
any person delay performance hereunder to verify the authority of any Authorized Person or to
consult with its legal counsel.




Section 32. Enforcement of Rights.



The Custodian and the Borrower each acknowledge that the Agent shall have the right, subject
to the terms of the Loan Documents, to enforce the Borrower’s rights and remedies under this
Agreement, including, without limitation, the right at any time to enforce this Agreement and the
obligations of the Custodian hereunder, and the right at any time to give or withhold any and all
consents, requests, notices, directions, approvals, demands, extensions or waivers under or with
respect to this Agreement with respect to Investment Files; provided, however, that the Agent shall
not be obligated to perform any of the obligations of the Borrower under this Agreement. The
Custodian acknowledges that the rights of the Agent with respect to the rights and remedies in
connection with any indemnification or any breach of any representation, warranty or covenant made
by the Custodian under this Agreement shall be continuing and shall survive any termination of this
Agreement.




Section 33. No Proceedings.



The Custodian hereby agrees that it will not institute suit against the Borrower, or join any
other Person in instituting against the Borrower, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or any other proceedings under any federal or state
bankruptcy or similar law. The foregoing shall not limit the Custodian’s right to file any claim
in or otherwise take any action with respect to any insolvency proceeding that was instituted by
any Person other than the Custodian.




Section 34. Custody Agreement.



Each party hereto represents that this Agreement is a 1940 Act custody agreement and shall be
interpreted in accordance therewith; provided, however, that nothing in the foregoing shall be
deemed to adversely affect the perfection of the security interests of the Agent for the benefit of
the Secured Parties in the Collateral pursuant to the provisions of this Agreement.


 


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IN WITNESS WHEREOF, the Borrower, the Agent and the Custodian have caused their names to be
duly signed hereto by their respective officers’ thereunto duly authorized, all as of the first
above written.



	 	 	 	 	 
	 	
BORROWER:



MAIN STREET CAPITAL CORPORATION

 	 
	 	By:  	/s/
Todd A. Reppert 
 	 
	 	 	Name:  	Todd A. Reppert 	 
	 	 	Title:  	President and Chief Financial Officer 	 



	 	 	 	 	 
	 	
CUSTODIAN:



BRANCH BANKING AND TRUST COMPANY,

MORTGAGE CUSTODY DEPARTMENT OF 

CORPORATE TRUST SERVICES

 	 
	 	By:  	/s/
Susan E. Tittl 
 	 
	 	 	Name:  	Susan E. Tittl 	 
	 	 	Title:  	Vice President 	 



	 	 	 	 	 
	 	
AGENT:



BRANCH BANKING AND TRUST COMPANY,

as Agent

 	 
	 	By:  	
/s/ Gregory Drabik
 	 
	 	 	Name:  	Gregory Drabik 	 
	 	 	Title:  	Vice President 	 



 


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