Exhibit 10.1


 


Execution
Version


 


 


AMENDED AND RESTATED


 


CREDIT AGREEMENT


 


dated as of


 


September 20, 2010


 


among


 


MAIN STREET CAPITAL CORPORATION


 


as Borrower,


 


The Initial Guarantors Listed Herein,


 


The Lenders Listed Herein


 


and


 


BRANCH BANKING AND TRUST COMPANY,


 


as Administrative Agent,


 


REGIONS CAPITAL MARKETS,


 


as Syndication Agent


 


and


 


BB&T CAPITAL MARKETS,


 


as Lead Arranger


 


 

















 


TABLE OF CONTENTS


 


	
   

  	
  ARTICLE I

  	
   

  
	
   

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  Definitions

  	
  1

  
	
  SECTION 1.02.

  	
  Accounting Terms and Determinations

  	
  39

  
	
  SECTION 1.03.

  	
  Use of Defined Terms

  	
  39

  
	
  SECTION 1.04.

  	
  Terms Generally

  	
  39

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE II

  	
   

  
	
   

  	
  THE
  CREDIT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  Commitments to Make Advances

  	
  40

  
	
  SECTION 2.02.

  	
  Method of Borrowing Advances

  	
  40

  
	
  SECTION 2.03.

  	
  Continuation and Conversion Elections

  	
  41

  
	
  SECTION 2.04.

  	
  Notes

  	
  42

  
	
  SECTION 2.05.

  	
  Maturity of Advances

  	
  42

  
	
  SECTION 2.06.

  	
  Interest Rates

  	
  42

  
	
  SECTION 2.07.

  	
  Fees

  	
  44

  
	
  SECTION 2.08.

  	
  Optional Termination or Reduction of
  Commitments

  	
  44

  
	
  SECTION 2.09.

  	
  Termination of Commitments

  	
  44

  
	
  SECTION 2.10.

  	
  Optional Prepayments

  	
  44

  
	
  SECTION 2.11.

  	
  Mandatory Prepayments

  	
  45

  
	
  SECTION 2.12.

  	
  General Provisions as to Payments

  	
  47

  
	
  SECTION 2.13.

  	
  Computation of Interest and Fees

  	
  50

  
	
  SECTION 2.14.

  	
  Increase in Commitments

  	
  51

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE III

  	
   

  
	
   

  	
  CONDITIONS
  TO BORROWINGS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  Conditions to Closing and First
  Borrowing

  	
  54

  
	
  SECTION 3.02.

  	
  Conditions to All Borrowings

  	
  56

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE IV

  	
   

  
	
   

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  Existence and Power

  	
  57

  
	
  SECTION 4.02.

  	
  Organizational and Governmental
  Authorization; No Contravention

  	
  57

  
	
  SECTION 4.03.

  	
  Binding Effect

  	
  57

  
	
  SECTION 4.04.

  	
  Financial Information

  	
  58

  
	
  SECTION 4.05.

  	
  Litigation

  	
  58

  
	
  SECTION 4.06.

  	
  Compliance with ERISA

  	
  58

  
	
  SECTION 4.07.

  	
  Payment of Taxes

  	
  58

  
	
  SECTION 4.08.

  	
  Subsidiaries

  	
  59

  
	
  SECTION 4.09.

  	
  Investment Company Act, Etc.

  	
  59

  
	
  SECTION 4.10.

  	
  All Consents Required

  	
  59

  
	
  SECTION 4.11.

  	
  Ownership of Property; Liens

  	
  59

  
	
  SECTION 4.12.

  	
  No Default

  	
  59

  



 


i

















 


	
  SECTION 4.13.

  	
  Full Disclosure

  	
  60

  
	
  SECTION 4.14.

  	
  Environmental Matters

  	
  60

  
	
  SECTION 4.15.

  	
  Compliance with Laws

  	
  60

  
	
  SECTION 4.16.

  	
  Capital Securities

  	
  60

  
	
  SECTION 4.17.

  	
  Margin Stock

  	
  61

  
	
  SECTION 4.18.

  	
  Insolvency

  	
  61

  
	
  SECTION 4.19.

  	
  Collateral Documents

  	
  61

  
	
  SECTION 4.20.

  	
  Labor Matters

  	
  61

  
	
  SECTION 4.21.

  	
  Patents, Trademarks, Etc.

  	
  62

  
	
  SECTION 4.22.

  	
  Insurance

  	
  62

  
	
  SECTION 4.23.

  	
  Anti-Terrorism Laws

  	
  62

  
	
  SECTION 4.24.

  	
  Ownership Structure

  	
  62

  
	
  SECTION 4.25.

  	
  Reports Accurate; Disclosure

  	
  62

  
	
  SECTION 4.26.

  	
  Location of Offices

  	
  63

  
	
  SECTION 4.27.

  	
  Affiliate Transactions

  	
  63

  
	
  SECTION 4.28.

  	
  Broker’s Fees

  	
  63

  
	
  SECTION 4.29.

  	
  Survival of Representations and
  Warranties, Etc.

  	
  63

  
	
  SECTION 4.30.

  	
  Loans and Investments

  	
  63

  
	
  SECTION 4.31.

  	
  No Default or Event of Default

  	
  64

  
	
  SECTION 4.32.

  	
  USA Patriot Act; OFAC

  	
  64

  
	
  SECTION 4.33.

  	
  Material Contracts

  	
  64

  
	
  SECTION 4.34.

  	
  Collateral-Mortgage Property

  	
  64

  
	
  SECTION 4.35.

  	
  Mortgaged Properties

  	
  65

  
	
  SECTION 4.36.

  	
  Common Enterprise

  	
  65

  
	
  SECTION 4.37.

  	
  Investment Policies

  	
  65

  
	
  SECTION 4.38.

  	
  Eligibility of Portfolio Investments

  	
  65

  
	
  SECTION 4.39.

  	
  Portfolio Investments

  	
  65

  
	
  SECTION 4.40.

  	
  Selection Procedures

  	
  66

  
	
  SECTION 4.41.

  	
  Coverage Requirement

  	
  66

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE V

  	
   

  
	
   

  	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  Information

  	
  66

  
	
  SECTION 5.02.

  	
  Inspection of Property, Books and
  Records

  	
  68

  
	
  SECTION 5.03.

  	
  Maintenance of RIC Status and
  Business Development Company

  	
  69

  
	
  SECTION 5.04.

  	
  Minimum Liquidity

  	
  69

  
	
  SECTION 5.05.

  	
  Capital Expenditures

  	
  69

  
	
  SECTION 5.06.

  	
  Sale/Leasebacks

  	
  69

  
	
  SECTION 5.07.

  	
  Minimum Consolidated Tangible Net
  Worth

  	
  69

  
	
  SECTION 5.08.

  	
  Acquisitions

  	
  69

  
	
  SECTION 5.09.

  	
  Interest Coverage Ratio

  	
  69

  
	
  SECTION 5.10.

  	
  Asset Coverage Ratio

  	
  70

  
	
  SECTION 5.11.

  	
  Loans or Advances

  	
  70

  
	
  SECTION 5.12.

  	
  Restricted Payments

  	
  70

  
	
  SECTION 5.13.

  	
  Investments

  	
  71

  
	
  SECTION 5.14.

  	
  Negative Pledge

  	
  71

  
	
  SECTION 5.15.

  	
  Maintenance of Existence, etc.

  	
  72

  
	
  SECTION 5.16.

  	
  Dissolution

  	
  72

  
	
  SECTION 5.17.

  	
  Consolidations, Mergers and Sales of
  Assets

  	
  73

  



 


ii

















 


	
  SECTION 5.18.

  	
  Use of Proceeds

  	
  73

  
	
  SECTION 5.19.

  	
  Compliance with Laws; Payment of
  Taxes

  	
  73

  
	
  SECTION 5.20.

  	
  Insurance

  	
  74

  
	
  SECTION 5.21.

  	
  Change in Fiscal Year

  	
  74

  
	
  SECTION 5.22.

  	
  Maintenance of Property

  	
  74

  
	
  SECTION 5.23.

  	
  Environmental Notices

  	
  74

  
	
  SECTION 5.24.

  	
  Environmental Matters

  	
  74

  
	
  SECTION 5.25.

  	
  Environmental Release

  	
  75

  
	
  SECTION 5.26.

  	
  [Intentionally omitted.]

  	
  75

  
	
  SECTION 5.27.

  	
  Transactions with Affiliates

  	
  75

  
	
  SECTION 5.28.

  	
  Joinder of Subsidiaries

  	
  75

  
	
  SECTION 5.29.

  	
  No Restrictive Agreement

  	
  76

  
	
  SECTION 5.30.

  	
  Partnerships and Joint Ventures

  	
  77

  
	
  SECTION 5.31.

  	
  Additional Debt

  	
  77

  
	
  SECTION 5.32.

  	
  [Intentionally omitted]

  	
  77

  
	
  SECTION 5.33.

  	
  Modifications of Organizational
  Documents

  	
  77

  
	
  SECTION 5.34.

  	
  ERISA Exemptions

  	
  77

  
	
  SECTION 5.35.

  	
  Hedge Transactions

  	
  77

  
	
  SECTION 5.36.

  	
  Performance of Loan Documents

  	
  78

  
	
  SECTION 5.37.

  	
  Operating Leases

  	
  78

  
	
  SECTION 5.38.

  	
  [Intentionally omitted]

  	
  78

  
	
  SECTION 5.39.

  	
  Compliance with Investment Policies
  and Investment Documents

  	
  78

  
	
  SECTION 5.40.

  	
  Delivery of Collateral to Collateral
  Custodian

  	
  78

  
	
  SECTION 5.41.

  	
  Custody Agreements

  	
  79

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VI

  	
   

  
	
   

  	
  DEFAULTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  Events of Default

  	
  79

  
	
  SECTION 6.02.

  	
  Notice of Default

  	
  83

  
	
  SECTION 6.03.

  	
  [Intentionally omitted.]

  	
  83

  
	
  SECTION 6.04.

  	
  Allocation of Proceeds

  	
  83

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VII

  	
   

  
	
   

  	
  THE
  ADMINISTRATIVE AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  Appointment and Authority

  	
  84

  
	
  SECTION 7.02.

  	
  Rights as a Lender

  	
  84

  
	
  SECTION 7.03.

  	
  Exculpatory Provisions

  	
  84

  
	
  SECTION 7.04.

  	
  Reliance by Administrative Agent

  	
  85

  
	
  SECTION 7.05.

  	
  Delegation of Duties

  	
  85

  
	
  SECTION 7.06.

  	
  Resignation of Administrative Agent

  	
  86

  
	
  SECTION 7.07.

  	
  Non-Reliance on Administrative Agent
  and Other Lenders

  	
  86

  
	
  SECTION 7.08.

  	
  No Other Duties, etc.

  	
  87

  
	
  SECTION 7.09.

  	
  Other Agents

  	
  87

  
	
  SECTION 7.10.

  	
  Hedging Agreements, Cash Management
  Services and Bank Products

  	
  87

  



 


iii

















 


	
   

  	
  ARTICLE VIII

  	
   

  
	
   

  	
  CHANGE
  IN CIRCUMSTANCES; COMPENSATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
  Basis for Determining Interest Rate
  Inadequate or Unfair

  	
  87

  
	
  SECTION 8.02.

  	
  Illegality

  	
  88

  
	
  SECTION 8.03.

  	
  Increased Cost and Reduced Return

  	
  88

  
	
  SECTION 8.04.

  	
  Base Rate Advances Substituted for
  Affected Euro-Dollar Advances

  	
  89

  
	
  SECTION 8.05.

  	
  Compensation

  	
  90

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE IX

  	
   

  
	
   

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01.

  	
  Notices Generally

  	
  91

  
	
  SECTION 9.02.

  	
  No Waivers

  	
  92

  
	
  SECTION 9.03.

  	
  Expenses; Indemnity; Damage Waiver

  	
  92

  
	
  SECTION 9.04.

  	
  Setoffs; Sharing of Set-Offs;
  Application of Payments

  	
  94

  
	
  SECTION 9.05.

  	
  Amendments and Waivers

  	
  95

  
	
  SECTION 9.06.

  	
  Margin Stock Collateral

  	
  97

  
	
  SECTION 9.07.

  	
  Successors and Assigns

  	
  97

  
	
  SECTION 9.08.

  	
  Defaulting Lenders

  	
  100

  
	
  SECTION 9.09.

  	
  Confidentiality

  	
  101

  
	
  SECTION 9.10.

  	
  Representation by Lenders

  	
  101

  
	
  SECTION 9.11.

  	
  Obligations Several

  	
  102

  
	
  SECTION 9.12.

  	
  Survival of Certain Obligations

  	
  102

  
	
  SECTION 9.13.

  	
  North Carolina Law

  	
  102

  
	
  SECTION 9.14.

  	
  Severability

  	
  102

  
	
  SECTION 9.15.

  	
  Interest

  	
  102

  
	
  SECTION 9.16.

  	
  Interpretation

  	
  102

  
	
  SECTION 9.17.

  	
  Counterparts; Integration;
  Effectiveness; Electronic Execution

  	
  102

  
	
  SECTION 9.18.

  	
  Jurisdiction; Waiver of Venue;
  Service of Process; Waiver of Jury Trial

  	
  103

  
	
  SECTION 9.19.

  	
  Independence of Covenants

  	
  104

  
	
  SECTION 9.20.

  	
  Concerning Certificates

  	
  104

  
	
  SECTION 9.21.

  	
  Amendment and Restatement

  	
  104

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE X

  	
   

  
	
   

  	
  GUARANTY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01.

  	
  Unconditional Guaranty

  	
  105

  
	
  SECTION 10.02.

  	
  Obligations Absolute

  	
  105

  
	
  SECTION 10.03.

  	
  Continuing Obligations; Reinstatement

  	
  107

  
	
  SECTION 10.04.

  	
  Additional Security, Etc.

  	
  108

  
	
  SECTION 10.05.

  	
  Information Concerning the Borrower

  	
  108

  
	
  SECTION 10.06.

  	
  Guarantors’ Subordination

  	
  108

  
	
  SECTION 10.07.

  	
  Waiver of Subrogation

  	
  108

  
	
  SECTION 10.08.

  	
  Enforcement

  	
  109

  
	
  SECTION 10.09.

  	
  Miscellaneous

  	
  109

  



 


iv

















 


Exhibits:


 


Schedule
A — Designation Notice


Exhibit A
— Form of Notice of Borrowing


Exhibit B-1
— Form of Revolver Note


Exhibit B-2
— Form of Amended and Restated Revolver Note


Exhibit C
— Form of Notice of Continuation or Conversion


Exhibit D
— Reserved


Exhibit E
— Form of Borrowing Base Certification Report


Exhibit F
— Form of Opinion of Borrower’s and Guarantors’ Counsel


Exhibit G
— Form of Closing Certificate


Exhibit H
— Form of Officer’s Certificate


Exhibit I-1
— Existing Control Agreements


Exhibit I-2 — Form of
Control Agreement Notice re Amendment and Restatement of Credit Agreement


Exhibit J
— Form of Compliance Certificate


Exhibit K
— Reserved


Exhibit L
— Form of Joinder and Reaffirmation Agreement


Exhibit M
— Form of Amended and Restated General Security Agreement


Exhibit N
— Form of Amended and Restated Equity Pledge Agreement


Exhibit O
— Form of Assignment and Assumption


 


v
















 


AMENDED AND RESTATED


 


CREDIT AGREEMENT


 


THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as
of September 20, 2010 among MAIN STREET CAPITAL CORPORATION, a Maryland
corporation, as borrower, the INITIAL GUARANTORS listed on the signature pages hereof,
as guarantors, the LENDERS listed on the signature pages hereof and BRANCH
BANKING AND TRUST COMPANY, as Administrative Agent.


 


The parties hereto agree as follows:


 


ARTICLE I

DEFINITIONS


 


SECTION 1.01.                 Definitions.  The terms as defined in this
Section 1.01 shall, for all purposes of this Agreement and any amendment
hereto (except as otherwise expressly provided or unless the context otherwise
requires), have the meanings set forth herein:


 


“Acquisition”
means any transaction or series of related transactions (other than a Portfolio
Investment) for the purpose of, or resulting in, directly or indirectly,
(a) the acquisition by the Borrower or any Subsidiary of all or
substantially all of the assets of a Person (other than a Subsidiary) or of any
business or division of a Person (other than a Subsidiary), (b) the
acquisition by the Borrower or any Subsidiary of more than 50% of any class of
Voting Stock (or similar ownership interests) of any Person (provided that
formation or organization of any Wholly Owned Subsidiary shall not constitute
an “Acquisition” to the extent that the amount of the Investment in such entity
is permitted under Sections 5.08 and 5.12), or (c) a merger,
consolidation, amalgamation or other combination by the Borrower or any
Subsidiary with another Person (other than a Subsidiary) if the Borrower or
such Subsidiary is the surviving entity; provided that in any merger involving
the Borrower, the Borrower must be the surviving entity.


 


“Adjusted
London InterBank Offered Rate” applicable to any Interest Period means a rate
per annum equal to the quotient obtained (rounded upwards, if necessary, to the
next higher 1/100th of 1%) by dividing (i) the applicable London InterBank
Offered Rate for such Interest Period by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage.


 


“Administrative
Agent” means BB&T, in its capacity as administrative agent for the Lenders,
and its successors and permitted assigns in such capacity.


 


“Administrative
Agent’s Letter Agreement” means that certain letter agreement, dated as of August 12,
2010, between Borrower and the Administrative Agent relating to the terms of
this Agreement, and certain fees from time to time payable by the Borrower to
the Administrative Agent, together with all amendments and modifications thereto.  If there is any


 


1

















 


conflict
between the provisions of this Agreement and the provisions of the
Administrative Agent’s Letter Agreement, the provisions of this Agreement will
control.


 


“Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied by the
Administrative Agent.


 


“Advance
Rate” means, as to any Eligible Investment and subject to adjustment as
provided in the definition of Borrowing Base, the following percentages with
respect to such Eligible Investment:


 


	
  Portfolio Investment

  	
   

  	
  Advance

  Rate

  	
   

  
	
  Cash and Cash Equivalents 

  	
   

  	
  100

  	
  %

  
	
  Eligible Quoted Senior Bank Loan Investments

  	
   

  	
  80

  	
  %

  
	
  Eligible Investment Grade Debt Securities

  	
   

  	
  80

  	
  %

  
	
  Eligible Core Portfolio Investments

  	
   

  	
  70

  	
  %

  
	
  Eligible Unquoted Senior Bank Loan Investments and
  Eligible Non-Investment Grade Debt Securities 

  	
   

  	
  65

  	
  %

  



 


“Advances”
means collectively the Revolver Advances. 
“Advance” means any one of such Advances, as the context may require.


 


“Affiliate”
of any Person means (i) any other Person which directly, or indirectly
through one or more intermediaries, controls such Person, (ii) any other
Person which directly, or indirectly through one or more intermediaries, is
controlled by or is under common control with such Person, or (iii) any
other Person of which such Person owns, directly or indirectly, 10% or more of
the common stock or equivalent equity interests.  As used herein, the term “control” means
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.  Notwithstanding the foregoing, the term “Affiliate”
shall not include any Person that is an “Affiliate” solely by reason of the
Borrower or any Subsidiary’s investment therein in connection with a Core
Portfolio Investment in the ordinary course of business and consistent with the
Investment Policies.


 


“Agreement”
means this Amended and Restated Credit Agreement, together with all amendments
and supplements hereto.


 


“Applicable
Laws” means all international, foreign, Federal, state and local statutes,
treaties, rules, guidelines, regulations, ordinances, codes, executive orders, and


 


2

















 


administrative
or judicial precedents or authorities, including the interpretation or
administration thereof by any Governmental Authority charged with the
enforcement, interpretation or administration thereof, and all applicable
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
whether or not having the force of law.


 


“Applicable
Margin” has the meaning set forth in Section 2.06(a).


 


“Applicable
Percentage” means with respect to any Lender, the percentage of the total
Revolver Commitments represented by such Lender’s Revolver Commitment.  If the Revolver Commitments have terminated
or expired, the Applicable Percentages shall be determined based upon the
Revolver Commitments most recently in effect, giving effect to any assignments.


 


“Approved
Dealer” means a broker-dealer acceptable to the Administrative Agent in its
sole discretion.  The Administrative
Agent acknowledges and agrees that the following broker-dealers are acceptable
as Approved Dealers:  Credit Suisse Group
AG, Bank of America, Wells Fargo & Company, Citigroup, Inc.,
Goldman Sachs & Co., Deutsche Bank AG, UBS AG, Toronto Dominion Bank,
Jefferies Group, Inc., Macquarie Group, Ltd., Barclays PLC, Royal
Bank of Scotland, Bank of New York, Royal Bank of Canada, JP Morgan Chase &
Co. and Morgan Stanley.


 


“Approved
Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.


 


“Approved
Pricing Service” means a pricing or quotation service acceptable to the
Administrative Agent in its sole discretion. 
The Administrative Agent acknowledges and agrees that the following
pricing and quotation services are acceptable as an Approved Pricing Service: (i) Markit;
(ii) Loan Pricing Corporation (LPC); (iii) LoanX, Inc.; and (iv) IDC.


 


“Asset
Coverage Ratio” means the ratio of Consolidated Tangible Net Worth plus
aggregate Revolver Advances to outstanding Revolver Advances.


 


“Assignment
and Assumption” means an assignment and assumption entered into by a Lender and
an Eligible Assignee (with the consent of any party whose consent is required
by Section 9.07), and accepted by the Administrative Agent, in
substantially the form of Exhibit O or any other form approved by
the Administrative Agent.


 


“Assignment
of Mortgage” means, as to each Portfolio Investment secured by an interest in
real property, one or more assignments, notices of transfer or equivalent
instruments, each in recordable form and sufficient under the laws of the
relevant jurisdiction to reflect the transfer of the related mortgage, deed of
trust, security deed or similar security instrument and all other documents
related to such Portfolio Investment and, to the extent requested by the
Administrative Agent, to grant a perfected lien thereon by the Borrower in
favor of the Administrative Agent on behalf of the Secured Parties, each such
Assignment of Mortgage to be in form and substance acceptable to the
Administrative Agent.


 


3

















 


“Authority”
has the meaning set forth in Section 8.02.


 


“Bailee
Agreement” means an agreement in form and substance reasonably acceptable to
the Administrative Agent and executed by a Person (other than an Obligor, a
Loan Party or any of their respective Affiliates) that is in possession of any
Collateral pursuant to which such Person acknowledges the Lien of the
Administrative Agent for the benefit of the Secured Parties.


 


“Bank
Products” means any:  (1) Hedging
Agreements; and (2) other services or facilities provided to any Loan
Party by BB&T or any Lender that provides the initial funding of any
Revolver Commitment on the Closing Date or any Additional Lender that provides
the funding of a Revolver Commitment on any Commitment Increase Date (but not
any assignee of any of the foregoing Lenders) or any of their respective
Affiliates, in each case solely until such Person has assigned all of its
interests under this Agreement (each, in such capacity, a “Bank Product Bank”)
(but excluding Cash Management Services) with respect to (a) credit cards,
(b) purchase cards, (c) merchant services constituting a line of
credit, and (d) leasing.


 


“Bankruptcy
Code” means the United States Bankruptcy Reform Act of 1978 (11 U.S.C.
§§101, et. seq.), as amended from time to time.


 


“Base
Rate” means for any Base Rate Advance for any day, the rate per annum equal to
the higher as of such day of (i) the Prime Rate, and (ii)  one-half
of one percent (0.5%) above the Federal Funds Rate.  For purposes of determining the Base Rate for
any day, changes in the Prime Rate or the Federal Funds Rate shall be effective
on the date of each such change.


 


“Base
Rate Advance” means, with respect to any Advance, such Advance when such
Advance bears or is to bear interest at a rate based upon the Base Rate.


 


“BB&T”
means Branch Banking and Trust Company, and its successors.


 


“Borrower”
means Main Street Capital Corporation, a Maryland corporation, and its
successors and its permitted assigns.


 


“Borrowing”
means a borrowing hereunder consisting of Revolver Advances made to the
Borrower at the same time by all of the Lenders pursuant to Article II.  A Borrowing is a “Base Rate Borrowing” if
such Advances are Base Rate Advances.  A
Borrowing is a “Euro-Dollar Borrowing” if such Advances are Euro-Dollar
Advances.  A Borrowing is a “Tranche
Euro-Dollar Borrowing” if such Advances are Tranche Euro-Dollar Advances.  A Borrowing is an “Index Euro-Dollar
Borrowing” if such Advances are Index Euro-Dollar Advances.


 


“Borrowing
Base” means, based on the most recent Borrowing Base Certification Report which
as of the date of a determination of the Borrowing Base has been received by
the Administrative Agent, the sum of the applicable Advance Rates of the Value
of each Eligible Investment identified in the definition of “Advance Rate” in
this Section 1.01 (including Pre-Positioned Investments); provided,
however, that:


 


4

















 


(a)           in
no event shall more than 20% of the aggregate value of the Borrowing Base
consist of Eligible Non-Investment Grade Debt Securities and Eligible Unquoted
Senior Bank Loan Investments (in each case after giving effect to Advance Rates);


 


(b)           in
no event shall more than 15% of the aggregate value of the Borrowing Base
consist of debtor-in-possession Investments (in each case after giving effect
to Advance Rates);


 


(c)           for
purposes of calculating the Borrowing Base, no single Portfolio Investment
shall be deemed to have a Value in excess of $10,000,000.00;


 


(d)           in
no event shall there be fewer than twelve (12) Core Portfolio Investments in
the Borrowing Base; and


 


(e)           all
filings and other actions required to perfect the first-priority security
interest of the Administrative Agent on behalf of the Secured Parties in the
Portfolio Investments comprising the Borrowing Base have been made or taken.


 


“Borrowing
Base Certification Report” means a report in the form attached hereto as Exhibit E,
and otherwise satisfactory to the Administrative Agent, certified by the chief
financial officer or other authorized officer of the Borrower regarding the
Eligible Investments, and including or attaching a list of all Portfolio
Investments included in the Borrowing Base and the most recent Value (and the
source of determination of the Value) for each. 
Upon receipt by the Administrative Agent, a Borrowing Base Certification
Report shall be subject to the Administrative Agent’s satisfactory review, acceptance
or correction, in the exercise of its reasonable discretion.


 


“Capital
Expenditures” means for any period the sum of all capital expenditures incurred
during such period by the Borrower and its Consolidated Subsidiaries, as
determined in accordance with GAAP; provided that in no event shall a Portfolio
Investment be considered a Capital Expenditure.


 


“Capital
Securities” means, with respect to any Person, any and all shares, interests
(including membership interests and partnership interests), participations or
other equivalents (however designated, whether voting or non-voting) of such
Person’s capital (including any instruments convertible into equity), whether
now outstanding or issued after the Closing Date.


 


“Cash”
means money, currency or a credit balance in any demand or deposit account with
a United States federal or state chartered commercial bank of recognized
standing having capital and surplus in excess of $500 million, so long as such
bank has not been a Defaulting Lender for more than three (3) business
days after notice to Borrower (which notice may be given by telephone or
e-mail), which bank or its holding company has a short-term commercial paper
rating of: (a) at least A-1 or the equivalent by Standard & Poor’s
Rating Services or at least P-1 or the equivalent by Moody’s Investors Service, Inc.,
or (b) at least A-2 or the equivalent by Standard & Poor’s Rating
Services or at least P-2 or the equivalent by Moody’s Investors Service, Inc.
(or, in the case of a current Lender only, if not rated by Standard &
Poor’s


 


5

















 


Rating
Services or Moody’s Investor’s Service, Inc., such Lender is rated by
another rating agency acceptable to the Administrative Agent and such Lender’s
rating by such rating agency is not lower than its rating by such rating agency
on the Closing Date) and (i) all amounts and assets credited to such
account are directly and fully guaranteed or insured by the United States of
America or any agency thereof (provided that the full faith and credit of the
United States is pledged in support thereof) or (ii) such bank is
otherwise acceptable at all times and from time to time to the Administrative
Agent in its sole discretion.  The
Administrative Agent acknowledges that, on the Closing Date, Amegy Bank,
National Association, and each current Lender hereunder are acceptable banks
within the meaning of clause (b)(ii) of this definition.


 


“Cash
Equivalents” means (a) securities issued or directly and fully guaranteed
or insured by the United States of America or any agency thereof (provided that
the full faith and credit of the United States is pledged in support thereof)
with maturities of not more than one year from the date acquired; (b) time
deposits and certificates of deposit with maturities of not more than one (1) year
from the date acquired issued by a United States federal or state chartered
commercial bank of recognized standing having capital and surplus in excess of
$500 million, and which bank or its holding company has a short-term commercial
paper rating of at least A-1 or the equivalent by Standard & Poor’s
Rating Services or at least P-1 or the equivalent by Moody’s Investors Service, Inc.;
and (c) investments in money market funds (i) which mature not more
than ninety (90) days from the date acquired and are payable on demand, (ii) with
respect to which there has been no failure to honor a request for withdrawal, (iii) which
are registered under the Investment Company Act of 1940, as amended, (iv) which
have net assets of at least $500,000,000 and (v) which maintain a stable
share price of not less than One Dollar ($1.00) per share and are either (A) directly
and fully guaranteed or insured by the United States of America or any agency
thereof (provided that the full faith and credit of the United States is
pledged in support thereof) or (B) maintain a rating of at least A-2 or
better by Standard & Poor’s Rating Services and are maintained with an
investment fund manager that is otherwise acceptable at all times and from time
to time to the Administrative Agent in its sole discretion; provided that,
notwithstanding the foregoing, no asset, agreement, or investment maintained or
entered into with, or issued, guaranteed by, or administered by a Lender that
has been a Defaulting Lender for more than three (3) business days after
notice to Borrower (which notice may be given by telephone or e-mail) shall be
a “Cash Equivalent” hereunder.  The
Administrative Agent acknowledges that, on the Closing Date, Fidelity
Investments is an acceptable investment fund manager within the meaning of the
foregoing clause (B).


 


“Cash
Management Services” means any one or more of the following types of services
or facilities provided to any Loan Party by BB&T or any Lender that
provides the initial funding of any Revolver Commitment on the Closing Date or
any Additional Lender that provides the funding of a Revolver Commitment on any
Commitment Increase Date (but not any assignee of any of the foregoing Lenders)
or any of their respective Affiliates, in each case solely until such Person
has assigned all of its interests under this Agreement (each, in such capacity,
a “Cash Management Bank”): (a) ACH transactions, (b) cash management
services, including, without limitation, controlled disbursement services,
treasury, depository, overdraft, and electronic funds transfer services, (c) foreign
exchange facilities, (d) credit or debit cards, and (e) merchant
services not constituting a Bank Product.


 


6

















 


“CERCLA”
means the Comprehensive Environmental Response Compensation and Liability Act,
42 U.S.C. §9601 et seq. and its implementing regulations and amendments.


 


“CERCLIS”
means the Comprehensive Environmental Response Compensation and Liability
Information System established pursuant to CERCLA.


 


“Change
in Control” means the occurrence after the Closing Date of any of the
following: (i) any Person or two or more Persons acting in concert
(excluding the Persons that are officers and directors of the Borrower on the
Closing Date) shall have acquired beneficial ownership (within the meaning of Rule 13d-3
of the Securities and Exchange Commission under the Securities Exchange Act of
1934) of 35% or more of the outstanding shares of the voting stock of the
Borrower; or (ii) as of any date a majority of the board of directors of
the Borrower consists of individuals who were not either (A) directors of
the Borrower as of the corresponding date of the previous year, (B) selected
or nominated to become directors by the board of directors of the Borrower of
which a majority consisted of individuals described in clause (A), or (C) selected
or nominated to become directors by the board of directors of the Borrower of
which a majority consisted of individuals described in clause (A) and
individuals described in clause (B).


 


“Change
in Law” has the meaning set forth in Section 8.02.


 


“Closing
Certificate” has the meaning set forth in Section 3.01(d).


 


“Closing
Date” means September 20, 2010.


 


“Code”
means the Internal Revenue Code of 1986, as amended, or any successor Federal
tax code.  Any reference to any provision
of the Code shall also be deemed to be a reference to any successor provision
or provisions thereof.


 


“Collateral”
means collectively:  (1) (i) 100%
of the Capital Securities of the Guarantors and of the current and future
Domestic Subsidiaries of the Borrower and Guarantors; (ii) 65% of the
voting and non-voting Capital Securities of any current or future Foreign
Subsidiaries and (iii) all of the other present and future property and
assets of the Borrower and each Guarantor including, but not limited to,
machinery and equipment, inventory and other goods, accounts, accounts
receivable, bank accounts, brokerage accounts, general intangibles, financial
assets, investment property, license rights, patents, trademarks, copyrights,
chattel paper, insurance proceeds, contract rights, hedge agreements,
documents, instruments, indemnification rights, tax refunds, and cash; and
(2) any other property which secures the Obligations pursuant to the
Collateral Documents; provided  that, notwithstanding the
foregoing, “Collateral” shall not include (i) equity interests in any SBIC
Entity until such time as a pledge thereof is required pursuant to Section 5.28(d) and
(ii) property rights in Capital Securities issued by a Person other than a
Subsidiary, or in any Operating Documents of any such issuer, to the extent the
security interest of the Administrative Agent does not attach thereto pursuant
to the terms of the Collateral Documents.


 


“Collateral
Custodian” means any and each of (i) BB&T, in its capacity as
Collateral Custodian under the Custodial Agreement to which it is a party,
together with its successors and permitted assigns and (ii) any other
Person acting as a collateral custodian with


 


7

















 


respect
to any Collateral under any Custodial Agreement entered into in accordance with
the terms of this Agreement. 
Notwithstanding the foregoing, the Collateral Custodian shall at all times
be satisfactory to the Administrative Agent, in its reasonable discretion.


 


“Collateral
Documents” means, collectively, the Security Agreement, the Pledge Agreement,
and all other agreements (including control agreements), instruments and other
documents, whether now existing or hereafter in effect, pursuant to which the
Borrower or any Subsidiary shall grant or convey (or shall have granted or
conveyed) to the Secured Parties a Lien in, or any other Person shall
acknowledge any such Lien in, property as security for all or any portion of
the Obligations, as any of them may be amended, modified or supplemented from
time to time.


 


“Compliance
Certificate” has the meaning set forth in Section 5.01(c).


 


“Consolidated
EBITDA” means and includes, for the Borrower and the Consolidated Subsidiaries
that are Guarantors for any period, an amount equal to the sum of (a) Consolidated
Net Investment Income for such period; plus, (b) to the extent such
amounts were deducted in computing Consolidated Net Investment Income for such
period: (i) Consolidated Interest Expense for such period; (ii) income
tax expense for such period, determined on a consolidated basis in accordance
with GAAP; and (iii) Depreciation and Amortization for such period,
determined on a consolidated basis in accordance with GAAP.  Notwithstanding the fact that the SBIC
Entities are not Loan Parties, the SBIC Entities shall be included for purposes
of calculating Consolidated EBITDA.


 


“Consolidated
Interest Expense” for any period means interest, whether expensed or
capitalized, in respect of Debt of the Borrower or any of its Consolidated
Subsidiaries that are Guarantors outstanding during such period on a
consolidated basis in accordance with GAAP. 
Notwithstanding the fact that the SBIC Entities are not Loan Parties,
the SBIC Entities shall be included for purposes of calculating Consolidated
Interest Expense.


 


“Consolidated
Net Investment Income” means, for any period, the net investment income of the
Borrower and the Consolidated Subsidiaries that are Guarantors set forth or
reflected on the consolidated income statement of the Borrower and its
Consolidated Subsidiaries for such period prepared in accordance with
GAAP.  Notwithstanding the fact that the
SBIC Entities are not Loan Parties, the SBIC Entities shall be included for
purposes of calculating Consolidated Net Investment Income.


 


“Consolidated
Subsidiary” means at any date any Subsidiary or other entity the accounts of
which, in accordance with GAAP, would be consolidated with those of the
Borrower in its consolidated financial statements as of such date.


 


“Consolidated
Tangible Net Worth” means, at any time, Net Assets less the sum of the value,
(to the extent reflected in determining Net Assets) as set forth or reflected
on the most recent consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries, on a consolidated basis prepared in accordance with
GAAP (but without giving effect to the operation of Accounting Standards
Codification No. 825-10), of


 


8
















 


(A)          All assets which would be
treated as intangible assets for balance sheet presentation purposes under
GAAP, including without limitation goodwill (whether representing the excess of
cost over book value of assets acquired, or otherwise), trademarks, tradenames,
copyrights, patents and technologies, and unamortized debt discount and
expense;


 


(B)           To the extent not included
in (A) of this definition, any amount at which the Capital Securities of
the Borrower appear as an asset on the balance sheet of the Borrower and its
Consolidated Subsidiaries;


 


(C)           To the extent not included
in (A) of this definition, any amount at which the investment in Main
Street Capital Partners, LLC appears as an asset on the balance sheet of the
Borrower and its Consolidated Subsidiaries; and


 


(D)          Loans or advances to owners
of Borrower’s Capital Securities, or to directors, officers, managers or
employees of Borrower and its Consolidated Subsidiaries.


 


Notwithstanding
the fact that the SBIC Entities are not Loan Parties, the SBIC Entities shall
be included for purposes of calculating Consolidated Tangible Net Worth.


 


In
addition, notwithstanding the foregoing, solely for purposes of determining the
Asset Coverage Ratio, “Consolidated Tangible Net Worth” shall be determined
solely with respect to the assets and liabilities of the Borrower on a
standalone basis.


 


“Controlled
Group” means all members of a controlled group of corporations and all trades
or businesses (whether or not incorporated) under common control which,
together with any Loan Party, are treated as a single employer under Section 414
of the Code.


 


“Core
Portfolio Investment” means a Portfolio Investment originated by the Borrower
(or co-originated by the Borrower so long as such Portfolio Investment complies
with all Borrower’s Investment Policies and is subject to the same due
diligence by Borrower as Portfolio Investments originated solely by the
Borrower).  For avoidance of doubt, Core
Portfolio Investments shall not include Cash, Cash Equivalents, any Senior Bank
Loan Investment or any Debt Security.


 


“Credit Exposure” means, as to any Lender at any time,
the outstanding principal amount of the Revolver Advances by such Lender.


 


“Credit
Party Expenses” means, without limitation, (a) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
in connection with this Agreement and the other Loan Documents, including
without limitation (i) the reasonable fees, charges and disbursements of (A) counsel
for the Administrative Agent, (B) outside consultants for the
Administrative Agent, (C) appraisers, (D) commercial finance
examinations, and (E) all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of the Obligations; and (ii) in
connection with (A) the syndication of the credit facilities provided for
herein, (B) the administration, management, execution and delivery of this
Agreement and the other Loan Documents, and the preparation, negotiation,
administration and management of any amendments, modifications or waivers of
the provisions of this Agreement and the other Loan


 


9

















 


Documents
(whether or not the transactions contemplated thereby shall be consummated), or
(C) the enforcement or protection of its rights in connection with this
Agreement or the Loan Documents or efforts to preserve, protect, collect, or
enforce the Collateral; and (b) all reasonable out-of-pocket expenses
incurred by the Secured Parties who are not the Administrative Agent or any
Affiliate of any of them, after the occurrence and during the continuance of an
Event of Default.


 


“Custodial
Agreement” means, collectively, the Amended and Restated Custodial Agreement of
even date herewith among Borrower, Administrative Agent and Branch Banking and
Trust Company, Mortgage Custody Department of Corporate Trust Services and any
and each other custodial agreement entered into among a Person acting as
Collateral Custodian, the Borrower and the Administrative Agent, in each case
as the same may from time to time be amended, restated, supplemented or
otherwise modified.


 


“Debt”
of any Person means at any date, without duplication, (i) all obligations
of such Person for borrowed money; (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (iii) all
obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business; (iv) all obligations of such Person as lessee under capital
leases; (v) all obligations of such Person to reimburse any bank or other
Person in respect of amounts payable under a banker’s acceptance; (vi) all
Redeemable Preferred Securities of such Person; (vii) all obligations (absolute
or contingent) of such Person to reimburse any bank or other Person in respect
of amounts which are available to be drawn or have been drawn under a letter of
credit or similar instrument; (viii) all Debt of others secured by a Lien
on any asset of such Person, whether or not such Debt is assumed by such
Person; (ix) all Debt of others Guaranteed by such Person; (x) all
obligations of such Person with respect to interest rate protection agreements,
foreign currency exchange agreements or other hedging agreements (valued at the
termination value thereof computed in accordance with a method approved by the
International Swap Dealers Association and agreed to by such Person in the
applicable hedging agreement, if any); (xi) all obligations of such Person
under any synthetic lease, tax retention operating lease, sale and leaseback
transaction, asset securitization, off-balance sheet loan or other off-balance
sheet financing product; (xii) all obligations of such Person to purchase
securities or other property arising out of or in connection with the sale of
the same or substantially similar securities or property; and (xiii) all
obligations of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such
Person.  The Debt of any Person shall
include the Debt of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefore as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Debt provide that such Person is
not liable therefor.


 


“Debt
Security” means a note, bond, debenture, trust receipt or other obligation,
instrument or evidence of indebtedness, including debt instruments of public
and private issuers and tax-exempt securities, but specifically excluding (i) Equity
Securities or (ii) any security which by its terms permits the payment
obligation of the Obligor thereunder to be converted into or exchanged for
equity capital of such Obligor.


 


10

















 


“Default”
means any condition or event which constitutes an Event of Default or which
with the giving of notice or lapse of time or both would, unless cured or
waived in writing, become an Event of Default.


 


“Default
Excess” means, with respect to any Defaulting Lender, the excess, if any, of
such Defaulting Lender’s ratable portion of the aggregate Credit Exposure of
all Lenders (calculated as if all Defaulting Lenders had funded all of their
respective Defaulted Advances) over the aggregate outstanding principal amount
of all Revolver Advances of such Defaulting Lender.


 


“Default Period” means, with respect to any Defaulting
Lender, (i) in the case of any Defaulted Advance, the period commencing on
the date the applicable Defaulted Advance was required to be extended to the
Borrower under this Agreement, in the case of a Revolver Advance (after giving
effect to any applicable grace period) and ending on the earlier of the
following: (x) the date on which (A) the Default Excess with respect
to such Defaulting Lender has been reduced to zero (whether by the funding of
any Defaulted Advance by such Defaulting Lender or by the non-pro-rata
application of any prepayment pursuant to Section 9.08(c)) and (B) such
Defaulting Lender shall have delivered to the Borrower and the Administrative
Agent a written reaffirmation of its intention to honor its obligations
hereunder; and (y) the date on which the Borrower, the Administrative
Agent and the Required Lenders (and not including such Defaulting Lender in any
such determination, in accordance with Section 9.08(a)) waive the
application of Section 9.08 with respect to such Defaulted Advances of
such Defaulting Lender in writing; (ii) in the case of any Defaulted
Payment, the period commencing on the date the applicable Defaulted Payment was
required to have been paid to the Administrative Agent or other Lender under
this Agreement (after giving effect to any applicable grace period) and ending
on the earlier of the following: (x) the date on which (A) such
Defaulted Payment has been paid to the Administrative Agent or other Lender, as
applicable, together with (to the extent that such Person has not otherwise
been compensated by the Borrower for such Defaulted Payment) interest thereon
for each day from and including the date such amount is paid but excluding the
date of payment, at the greater of the Federal Funds Rate plus two percent
(2.0%) and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation (whether by the funding
of any Defaulted Payment by such Defaulting Lender or by the application of any
amount pursuant to Section 9.08(c)) and (B) such Defaulting Lender
shall have delivered to the Administrative Agent or other Lender, as
applicable, a written reaffirmation of its intention to honor its obligations
hereunder with respect to such payments; and (y) the date on which the
Administrative Agent or any such other Lender, as applicable waives the
application of Section 9.08 with respect to such Defaulted Payments of
such Defaulting Lender in writing; and (iii) in the case of any Distress
Event determined by the Administrative Agent (in its good faith judgment) or
the Required Lenders (in their respective good faith judgment) to exist, the
period commencing on the date that the applicable Distress Event was so
determined to exist and ending on the earlier of the following: (x) the
date on which (A) such Distress Event is determined by the Administrative
Agent (in its good faith judgment) or the Required Lenders (in their respective
good faith judgment) to no longer exist and (B) such Defaulting Lender
shall have delivered to the Borrower and the Administrative Agent a written
reaffirmation of its intention to honor its obligations hereunder; and (y) such
date as the Borrower and the Administrative Agent mutually agree, in their sole
discretion, to waive


 


11

















 


the application of Section 9.08 with respect to
such Distress Event of such Defaulting Lender.


 


“Default
Rate” means, with respect to the Advances, on any day, the sum of 2% plus the
then highest interest rate (including the Applicable Margin) which may be
applicable to any Advance (irrespective of whether any such type of Advance is
actually outstanding hereunder).


 


“Defaulted Advance” has the meaning specified in the
definition of “Defaulting Lender”.


 


“Defaulted
Investment” means any Investment (a) that is 45 days or more past due with
respect to any interest or principal payments or (b) that is or otherwise
should be considered a non-accrual investment by the Borrower in connection
with its Investment Policies and GAAP.


 


“Defaulted Payment” has the meaning specified in the
definition of “Defaulting Lender”.


 


“Defaulting
Lender” means any Lender (i) that has failed to fund any portion of any
Revolver Advance required to be funded by it under this Agreement (each such
Revolver Advance, a “Defaulted Advance”) within three Domestic Business Days of
the date required to be funded by it hereunder, (ii) that has otherwise
failed to pay over to Administrative Agent or any other Lender any other amount
required to be paid by it hereunder (each such payment, a “Defaulted Payment”)
within three Domestic Business Days of the date when due, unless the subject of
a good faith dispute, or (iii) as to which a Distress Event has occurred,
in each case for so long as the applicable Default Period is in effect.


 


“Depreciation
and Amortization” means for any period an amount equal to the sum of all
depreciation and amortization expenses of the Borrower and its Consolidated
Subsidiaries that are Guarantors for such period, as determined on a
consolidated basis in accordance with GAAP. Notwithstanding the fact that the
SBIC Entities are not Loan Parties, the SBIC Entities shall be included for
purposes of calculating Depreciation and Amortization.


 


“Distress Event” means, with respect to any Person
(each, a “Distressed Person”), (i) a voluntary or involuntary case (or
comparable proceeding) has been commenced with respect to such Person under the
United States Bankruptcy Code or any other applicable debtor relief law, (ii) a
custodian, conservator, receiver or similar official has been appointed for
such Person or for any substantial part of such Person’s assets, (iii) after
the date hereof, such Person has consummated or entered into a commitment to
consummate a forced (in the good faith judgment of the Administrative Agent)
liquidation, merger, sale of assets or other transaction resulting, in the good
faith judgment of the Administrative Agent, in a change of ownership or
operating control of such Person supported in whole or in part by guaranties,
assumption of liabilities or other comparable credit support of (including
without limitation the nationalization or assumption of ownership or operating
control by) any Governmental Authority and the Administrative Agent (in its
good faith judgment) or the Required Lenders believe (in their respective good
faith judgment) that such event increases the risk that such Person could
default in performing its obligations hereunder for so long as the
Administrative Agent (in its good faith


 


12

















 


judgment) or the Required Lenders (in their respective
good faith judgment) so believe, or (iv) such Person has made a general
assignment for the benefit of creditors or has otherwise been adjudicated as,
or determined by any Governmental Authority having regulatory authority over
such Person or its assets to be, insolvent, bankrupt or deficient in meeting
any capital adequacy or liquidity requirement of any Governmental Authority
applicable to such Person.


 


“Distressed
Person” has the meaning specified in the definition of “Distress Event”.


 


“Dollars”
or “$” means dollars in lawful currency of the United States of America.


 


“Domestic
Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in North Carolina are authorized or required by law to close.


 


“Domestic
Subsidiary” means any Subsidiary which is organized under the laws of any state
or territory of the United States of America.


 


“Eligible
Assignee” means (a) a Lender, (b) an Affiliate of a Lender, and
(c) an Approved Fund; provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.


 


“Eligible Core Portfolio Investment” means, on any date
of determination, any Core Portfolio Investment that satisfies each of the
following requirements:


 


(i)            the Core
Portfolio Investment is evidenced by Investment Documents (including, in the
case of any Loan other than a Noteless Loan, an original promissory note) that
have been duly authorized and that are in full force and effect and constitute
the legal, valid and binding obligation of the Obligor of such Core Portfolio
Investment to pay the stated amount of the Loan and interest thereon, and the
related Investment Documents are enforceable against such Obligor in accordance
with their respective terms;


 


(ii)           the Core
Portfolio Investment was made in accordance with the terms of the Investment
Policies and arose in the ordinary course of the Borrower’s business;


 


(iii)          such Core
Portfolio Investment is a First Lien Investment, secured by a first priority,
perfected security interest on all or substantially all of the assets of the
Obligor;


 


(iv)          in the case of
any Core Portfolio Investment that is not solely held by the Borrower, the
terms and conditions of such Core Portfolio Investment provide the Borrower
with the right to vote to approve or deny any amendments, supplements, waivers
or other modifications of such terms and conditions (other than such routine
amendments, supplements, waivers or other modifications as are permitted to be
approved by the administrative agent only without the vote of the syndicate
members);


 


(v)           the Core
Portfolio Investment has an Eligible Investment Rating;


 


13

















 


(vi)          the Core Portfolio
Investment is not a Defaulted Investment and no other Loan of the Obligor with
respect to such Core Portfolio Investment is more than 45 days past due;


 


(vii)         the Obligor of
such Core Portfolio Investment has executed all appropriate documentation required
by the Borrower in accordance with the Investment Policies;


 


(viii)        the Core
Portfolio Investment, together with the Investment Documents related thereto,
is a “general intangible”, an “instrument”, an “account”, or “chattel paper”
within the meaning of the UCC of all jurisdictions that govern the perfection
of the security interest granted therein;


 


(ix)           all material
consents, licenses, approvals or authorizations of, or registrations or
declarations with, any Governmental Authority required to be obtained, effected
or given in connection with the making of such Core Portfolio Investment have
been duly obtained, effected or given and are in full force and effect;


 


(x)            the Core
Portfolio Investment is denominated and payable only in Dollars in the United
States;


 


(xi)           the Core
Portfolio Investment bears some current interest, which is due and payable no
less frequently than quarterly;


 


(xii)          the Core
Portfolio Investment, together with the Investment Documents related thereto,
does not contravene in any material respect any Applicable Laws (including,
without limitation, laws, rules and regulations relating to usury, truth
in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with respect to
which no Obligor party thereto is in violation of any Applicable Laws or the
terms and conditions of such Investment Documents, to the extent any such
violation results in or would be reasonably likely to result in (a) an
adverse effect upon the value or collectability of such Core Portfolio
Investment, (b) a material adverse change in, or a material adverse effect
upon, any of (1) the financial condition, operations, business or
properties of the Obligor or any of its respective Subsidiaries, taken as a
whole, (2) the rights and remedies of the Borrower under the Investment
Documents, or the ability of the Obligor or any other loan party thereunder to
perform its obligations under the Investment Documents to which it is a party,
as applicable, taken as a whole, or (3) the collateral securing the Core
Portfolio Investment, or the Borrower’s Liens thereon or the priority of such
Liens;


 


(xiii)         the Core
Portfolio Investment, together with the related Investment Documents, is fully
assignable (and if such Investment is secured by a mortgage, deed of trust or
similar lien on real property, and if requested by the Administrative Agent, an
Assignment of Mortgage executed in blank has been delivered to the Collateral
Custodian);


 


(xiv)        the Core Portfolio
Investment was documented and closed in accordance with the Investment
Policies, and each original promissory note, if any, representing the


 


14

















 


portion
of such Core Portfolio Investment payable to the Borrower, has been delivered
to the Collateral Custodian, duly endorsed as collateral or, in the case of a
Pre-Positioned Investment, held by a bailee on behalf of the Administrative
Agent, in accordance with the provisions of Section 5.40;


 


(xv)         the Core Portfolio
Investment is free of any Liens and the Borrower’s interest in all Related
Property is free of any Liens other than Liens permitted under the applicable
Investment Documents and all filings and other actions required to perfect the
security interest of the Administrative Agent on behalf of the Secured Parties
in the Core Portfolio Investment have been made or taken;


 


(xvi)        no right of
rescission, set off, counterclaim, defense or other material dispute has been
asserted with respect to such Core Portfolio Investment;


 


(xvii)       any Related
Property with respect to such Core Portfolio Investment is insured in
accordance with the Investment Policies;


 


(xviii)      the primary
business of the Obligor with respect to such Core Portfolio Investment is not
in the gaming, nuclear waste, bio-tech, or oil or gas exploration industries;


 


(xix)         the Core
Portfolio Investment is not a loan or extension of credit made by the Borrower
or one of its subsidiaries to an Obligor solely for the purpose of making any
principal, interest or other payment on such Core Portfolio Investment
necessary in order to keep such Core Portfolio Investment from becoming
delinquent;


 


(xx)          such Core
Portfolio Investment will not cause the Borrower to be deemed to own 5.0% or
more of the voting securities of any publicly registered issuer or any
securities that are immediately convertible into or immediately exercisable or
exchangeable for 5.0% or more of the voting securities of any publicly
registered issuer;


 


(xxi)         the financing
of such Core Portfolio Investment by the Lenders does not contravene in any
material respect Regulation U of the Federal Reserve Board, nor require the
Lenders to undertake reporting thereunder which it would not otherwise have
cause to make;


 


(xxii)        such Core
Portfolio Investment does not represent payment obligations relating to “put”
rights relating to Margin Stock;


 


(xxiii)       any taxes due
and payable in connection with the making of such Core Portfolio Investment
have been paid and the Obligor has been given any assurances (including with
respect to the payment of transfer taxes and compliance with securities laws)
required by the Investment Documents in connection with the making of the
Investment;


 


(xxiv)       the terms of
the Core Portfolio Investment have not been amended or subject to a deferral or
waiver the effect of which is to (A) reduce the amount (other than


 


15

















 


by
reason of the repayment thereof) or extend the time for payment of principal or
(B) reduce the rate or extend the time of payment of interest (or any
component thereof), in each case without the consent of the Administrative
Agent, not to be unreasonably withheld or delayed;


 


(xxv)        such Core
Portfolio Investment does not contain a confidentiality provision that
restricts the ability of the Administrative Agent, on behalf of the Secured
Parties, to exercise its rights under the Loan Documents, including, without
limitation, its rights to review the Core Portfolio Investment, the related
Investment File or the Borrower’s credit approval file in respect of such Core
Portfolio Investment;


 


(xxvi)       the Obligor
with respect to such Core Portfolio Investment is not (A) an Affiliate of
the Borrower or any other Person whose investments are primarily managed by the
Borrower or an Affiliate of the Borrower, unless (1) such Obligor is an
Affiliate solely by reason of the Borrower’s Portfolio Investment therein or
Borrower’s other Portfolio Investments or (2) such Core Portfolio
Investment is expressly approved by the Administrative Agent (in its sole
discretion) or (B) a Governmental Authority;


 


(xxvii)      all information
delivered by any Loan Party to the Administrative Agent with respect to such
Core Portfolio Investment is true and correct to the knowledge of such Loan Party;


 


(xxviii) such Core Portfolio Investment is not an Equity Security
and does not by its terms permit the payment obligation of the Obligor
thereunder to be converted into or exchanged for equity capital of such
Obligor;


 


(xxix)  the proceeds of such Core Portfolio Investment are not
used to finance construction projects or activities in the form of a
traditional construction loan where the only collateral for the loan is the
project under construction and draws are made on the loan specifically to fund construction
in progress; and


 


(xxx)  there is full recourse to the Obligor for principal and
interest payments with respect to such Core Portfolio Investment.


 


“Eligible Debt Security” means, on any date of determination, any Debt
Security held by Borrower as a Portfolio Investment that meets the following
conditions:


 


(i)            the investment
in the Debt Security was made in accordance with the terms of the Investment
Policies applicable to “private placements”, “marketable securities” or “idle
funds investments”;


 


(ii)                                  the Debt Security has an
Eligible Investment Rating;


 


(iii)          the Debt
Security is rated by a debt rating agency or other Person engaged in the
business of rating the creditworthiness of debt obligations and is generally
trading in the secondary market at no less than 90% of par value;


 


16

















 


(iv)          the Debt
Security is not a Defaulted Investment and is not owed by an Obligor that is
subject to an Insolvency Event or as to which the Borrower has received notice
of an imminent Insolvency Event proceeding;


 


(v)           the Obligor of
such Debt Security has executed all appropriate documentation, if any, required
in accordance with applicable Investment Policies;


 


(vi)          the Debt
Security, together with the Investment Documents related thereto (if any), is a
“general intangible”, an “instrument”, an “account”, or “chattel paper”, within
the meaning of the UCC of all jurisdictions that govern the perfection of the
security interest granted therein;


 


(vii)         all material
consents, licenses, approvals or authorizations of, or registrations or
declarations with, any Governmental Authority required to be obtained, effected
or given in connection with the purchase of such Debt Security have been duly
obtained, effected or given and are in full force and effect;


 


(viii)        the Debt
Security is denominated and payable only in Dollars in the United States and
the Obligor is organized under the laws of, and maintains its chief executive
office and principal residence in, the United States or any state thereof;


 


(ix)           the Debt
Security bears current all cash interest, which is due and payable no less
frequently than semi-annually;


 


(x)            the Obligor
with respect to the Debt Security is not (A) an Affiliate of the Borrower
or any other Person whose investments are primarily managed by the Borrower or
any Affiliate of the Borrower, unless such Debt Security is expressly approved
by the Administrative Agent (in its sole discretion), (B) a Governmental
Authority or (C) primarily in the business of gaming, nuclear waste,
bio-tech or oil or gas exploration;


 


(xi)           all information
delivered by any Loan Party to the Administrative Agent with respect to such
Debt Security is true and correct to the knowledge of such Loan Party;


 


(xii)          the proceeds of
such Debt Security are not used to finance construction projects or activities
in the form of a traditional construction loan where the only collateral for
the loan is the project under construction and draws are made on the loan
specifically to fund construction in progress;


 


(xiii)         the Debt
Security is a Quoted Investment; and


 


(xiv)        the Debt
Security can be converted to Cash in 30 Business Days or fewer without a
greater than ten percent (10%) reduction in the value of such Debt Security.


 


17
















 


“Eligible
Investment Grade Debt Security” means an Eligible Debt Security that has, as of
the applicable date of determination of Value for such Eligible Debt Security,
an Investment Grade Rating.


 


“Eligible Investment Rating” means, as of any date of
determination with respect to a Portfolio Investment, an investment rating of “Grade
3” or better as determined in accordance with the Investment Policies.


 


“Eligible Investments” means, collectively, Cash and
Cash Equivalents, the Eligible Quoted Senior Bank Loan Investments, the
Eligible Investment Grade Debt Securities, the Eligible Core Portfolio
Investments, the Eligible Unquoted Senior Bank Loan Investments and the
Eligible Non-Investment Grade Debt Securities.


 


“Eligible
Non-Investment Grade Debt Security” means an Eligible Debt Security that does
not have, as of the applicable date of determination of Value for such Eligible
Debt Security, an Investment Grade Rating.


 


“Eligible
Quoted Senior Bank Loan Investment” means an Eligible Senior Bank Loan Investment
that is a Quoted Investment.


 


“Eligible Senior Bank Loan Investment” means, on any date of
determination, any Senior Bank Loan Investment of Borrower that meets the
following conditions:


 


(i)            the Senior Bank
Loan Investment is evidenced by Investment Documents that are in full force and
effect and constitute the legal, valid and binding obligation of the Obligor of
such Senior Bank Loan Investment to pay the stated amount of the Loan and
interest thereon without right of rescission, set off, counterclaim or defense,
and the related Investment Documents are enforceable against such Obligor in
accordance with their respective terms and, to the knowledge of the Borrower,
are not the subject of any material dispute;


 


(ii)           the Senior Bank
Loan Investment was made in accordance with the terms of the Investment
Policies applicable to “private placements”, “marketable securities” or “idle
funds investments”;


 


(iii)          such Senior Bank
Loan Investment is secured by a first priority, perfected security interest on
a substantial portion of the assets of the respective Obligor(s);


 


(iv)          the terms and
conditions of such Senior Bank Loan Investment provide the Borrower with the
power to approve or deny any amendments, supplements, waivers or other
modifications of such terms and conditions that would (i) increase the
commitment or other obligations of the Borrower thereunder, (ii) reduce
the amount of, or defer the date fixed for any payment of, principal, interest
or fees due or owing to Borrower, or change the manner of application of any
payments owing to Borrower, under the Investment Documents, (iii) change
the percentage of lenders under such Senior Bank Loan


 


18

















 


Investment
required to take any action under the applicable Investment Documents, (iv) release
or substitute all or substantially all of the collateral held as security for,
or release any guaranty given to support payment of the obligations of, the
Obligor under the applicable Investment Documents;


 


(v)           the Senior Bank Loan
Investment has an Eligible Investment Rating;


 


(vi)          the terms of the
Senior Bank Loan Investment have not been amended or subject to a deferral or
waiver the effect of which is to (A) reduce the amount (other than by
reason of the repayment thereof) or, after giving effect to any applicable
grace or cure period, extend the time for payment of principal or (B) reduce
the rate or, after giving effect to any applicable grace or cure period, extend
the time of payment of interest (or any component thereof), in each case
without the consent of the Administrative Agent, not to be unreasonably
withheld or delayed;


 


(vii)         the Senior Bank Loan
Investment has a Value of no less than 90% of par value;


 


(viii)        the Senior Bank Loan
Investment is not a Defaulted Investment and is not owed by an Obligor that is
subject to an Insolvency Event or as to which the Borrower has received notice
of an imminent Insolvency Event proceeding;


 


(ix)           the Obligor of such
Senior Bank Loan Investment has executed all appropriate documentation required
in accordance with applicable Investment Policies;


 


(x)            the Senior Bank
Loan Investment, together with the Investment Documents related thereto, is a “general
intangible”, an “instrument”, an “account”, or “chattel paper”, within the
meaning of the UCC of all jurisdictions that govern the perfection of the
security interest granted therein;


 


(xi)           all material
consents, licenses, approvals or authorizations of, or registrations or
declarations with, any Governmental Authority required to be obtained, effected
or given in connection with the making of such Senior Bank Loan Investment have
been duly obtained, effected or given and are in full force and effect;


 


(xii)          the Senior Bank
Loan Investment is denominated and payable only in Dollars in the United States
and the Obligor is organized under the laws of, and maintains its chief
executive office and principal residence in, the United States or any state
thereof;


 


(xiii)         the Senior Bank
Loan Investment bears current interest, which is due and payable no less
frequently than semi-annually;


 


19

















 


(xiv)        the Senior Bank Loan
Investment, together with the Investment Documents related thereto, does not
contravene in any material respect any Applicable Laws and with respect to
which no Obligor is in violation of any Applicable Laws or the terms and
conditions of such Investment Documents, to the extent any such violation
results in or would be reasonably likely to result in (a) an adverse effect
upon the value or collectability of such Senior Bank Loan Investment, (b) a
material adverse change in, or a material adverse effect upon, any of (1) the
financial condition, operations, business or properties of the Obligor or any
of its respective Subsidiaries, taken as a whole, (2) the rights and
remedies of the Borrower under the Investment Documents, or the ability of the
Obligor or any other loan party thereunder to perform its obligations under the
Investment Documents to which it is a party, as applicable, taken as a whole,
or (3) the collateral securing the Senior Bank Loan Investment, or the
Liens thereon or the priority of such Liens;


 


(xv)         the Senior Bank Loan
Investment, together with the related Investment Documents, is fully assignable
subject to the customary right of the obligor in a syndicated loan or credit
facility to consent to an assignment (which consent shall not be unreasonably
withheld) prior to an event of default under such Senior Bank Loan Investment
and the customary right in a syndicated loan or credit facility of the
administrative agent under such syndicated loan or credit facility to consent
to the assignment (which consent shall not be unreasonably withheld);


 


(xvi)        the Senior Bank Loan
Investment was documented and closed in accordance with applicable Investment
Policies, and each original promissory note, if any, representing the portion
of such Senior Bank Loan Investment payable to the Borrower has been delivered
to the Collateral Custodian, duly endorsed as collateral;


 


(xvii)       the Senior Bank Loan
Investment is free of any Liens and the Borrower’s interest in all Related
Property is free of any Liens other than Liens permitted under the applicable
Investment Documents and all filings and other actions required to perfect the
security interest of the Administrative Agent on behalf of the Secured Parties
in the Senior Bank Loan Investment have been made or taken;


 


(xviii)      any Related Property
with respect to such Senior Bank Loan Investment is insured in accordance with the
applicable Investment Documents;


 


(xix)         such Senior Bank
Loan Investment will not cause the Borrower to be deemed to own 5.0% or more of
the voting securities of any publicly registered issuer or any securities that
are immediately convertible into or immediately exercisable or exchangeable for
5.0% or more of the voting securities of any publicly registered issuer;


 


20

















 


(xx)          the financing of
such Senior Bank Loan Investment by the Lenders does not contravene in any
material respect Regulation U of the Federal Reserve Board, nor require the
Lenders to undertake reporting thereunder which it would not otherwise have
cause to make and such Senior Bank Loan Investment does not represent payment
obligations relating to “put” rights relating to Margin Stock;


 


(xxi)         any taxes due and
payable in connection with the making of such Senior Bank Loan Investment have
been paid and the Obligor has been given any assurances (including with respect
to the payment of transfer taxes and compliance with securities laws) required
by the Investment Documents in connection with the making of the Investment;


 


(xxii)        such Senior Bank
Loan Investment does not contain a confidentiality provision that restricts the
ability of the Administrative Agent (assuming the Administrative Agent agrees
to be bound by the terms of the applicable confidentiality provision), on
behalf of the Secured Parties, to exercise its rights under the Loan Documents,
including, without limitation, its rights to review the Senior Bank Loan
Investment, the related Investment File or the Borrower’s credit approval file
in respect of such Senior Bank Loan Investment;


 


(xxiii)       the Obligor with
respect to such Senior Bank Loan Investment is not (A) an Affiliate of the
Borrower or any other Person whose investments are primarily managed by the
Borrower or any Affiliate of the Borrower, unless such Senior Bank Loan
Investment is expressly approved by the Administrative Agent (in its sole
discretion), (B) a Governmental Authority or (C) primarily in the
business of gaming, nuclear waste, bio-tech or oil or gas exploration;


 


(xxiv)       all information
delivered by any Loan Party to the Administrative Agent with respect to such
Senior Bank Loan Investment is true and correct to the knowledge of such Loan
Party;


 


(xxv)        such Senior Bank Loan
Investment is not (A) any type of bond, whether high yield or otherwise,
or any similar financial interest, (B) an Equity Security and does not by
its terms permit the payment obligation of the Obligor thereunder to be
converted into or exchanged for equity capital of such Obligor or (C) a
participation interest;


 


(xxvi)       the proceeds of such
Senior Bank Loan Investment are not used to finance construction projects or
activities in the form of a traditional construction loan where the only
collateral for the loan is the project under construction and draws are made on
the loan specifically to fund construction in progress; and


 


(xxvii)      there is full
recourse to the Obligor for principal and interest payments with respect to
such Senior Bank Loan Investment.


 


“Eligible
Unquoted Senior Bank Loan Investment” means an Eligible Senior Bank Loan
Investment that is an Unquoted Investment.


 


21

















 


“Environmental
Authority” means any foreign, federal, state, local or regional government that
exercises any form of jurisdiction or authority under any Environmental
Requirement.


 


“Environmental
Authorizations” means all licenses, permits, orders, approvals, notices, registrations
or other legal prerequisites for conducting the business of a Loan Party or any
Subsidiary of a Loan Party required by any Environmental Requirement.


 


“Environmental Judgments and Orders” means all
judgments, decrees or orders arising from or in any way associated with any
Environmental Requirements, whether or not entered upon consent or written
agreements with an Environmental Authority or other entity arising from or in
any way associated with any Environmental Requirement, whether or not incorporated
in a judgment, decree or order.


 


“Environmental Laws” means any and all federal, state,
local and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, agreements
or other governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment, including, without limitation, ambient air, surface water,
groundwater or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.


 


“Environmental Liabilities” means any liabilities,
whether accrued, contingent or otherwise, arising from and in any way
associated with any Environmental Requirements.


 


“Environmental Notices” means notice from any
Environmental Authority or by any other person or entity, of possible or
alleged noncompliance with or liability under any Environmental Requirement,
including without limitation any complaints, citations, demands or requests
from any Environmental Authority or from any other person or entity for
correction of any violation of any Environmental Requirement or any
investigations concerning any violation of any Environmental Requirement.


 


“Environmental Proceedings” means any judicial or
administrative proceedings arising from or in any way associated with any
Environmental Requirement.


 


“Environmental Releases” means releases as defined in
CERCLA or under any applicable federal, state or local environmental law or
regulation and shall include, in any event and without limitation, any release
of petroleum or petroleum related products.


 


“Environmental Requirements” means any legal requirement
relating to health, safety or the environment and applicable to a Loan Party,
any Subsidiary of a Loan Party or the Properties, including but not limited to
any such requirement under CERCLA or similar state legislation and all federal,
state and local laws, ordinances, regulations, orders, writs, decrees and
common law.


 


22

















 


“Equity Security” means any equity security or other
obligation or security that does not entitle the holder thereof to receive
periodic payments of interest and one or more installments of principal.


 


“ERISA” means the Employee Retirement Income Security
Act of 1974, as amended from time to time, or any successor law and all rules and
regulations from time to time promulgated thereunder.  Any reference to any provision of ERISA shall
also be deemed to be a reference to any successor provision or provisions
thereof.


 


“Euro-Dollar Advance” means, with respect to any
Advance, such Advance during Interest Periods when such Advance bears or is to
bear interest at a rate based upon the London InterBank Offered Rate.  A Euro-Dollar Advance is a Tranche
Euro-Dollar Advance if such Euro-Dollar Advance has an Interest Period
described in subsection (1) of the definition of Interest Period.  A Euro-Dollar Advance is an Index Euro-Dollar
Advance if such Euro-Dollar Advance has an Interest Period described in
subsection (2) of the definition of Interest Period.


 


“Euro-Dollar Business Day” means any Domestic Business
Day on which dealings in Dollar deposits are carried out in the London interbank
market.


 


“Euro-Dollar Reserve Percentage” has the meaning set
forth in Section 2.06(c).


 


“Event of Default” has the meaning set forth in Section 6.01.


 


“Excluded Taxes” means, with respect to the
Administrative Agent, any Lender or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder,
(a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes),
by the jurisdiction (or any political subdivision thereof) under the laws of
which such recipient 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, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which the
Borrower is located and (c) in the case of a Foreign Lender, any
withholding tax that is imposed on amounts payable to such Foreign Lender at
the time such Foreign Lender becomes a party hereto (or designates a new
lending office) or is attributable to such Foreign Lender’s failure or
inability (other than as a result of a Change in Law) to comply with Section 2.12(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment),
to receive additional amounts from the Borrower with respect to such
withholding tax pursuant to Section 2.12(e).


 


“Federal Funds Rate” means, for any day, the rate per
annum (rounded upward, if necessary, to the next higher 1/100th of 1%) equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if the day for
which such rate is to be determined is not a Domestic Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the next
preceding Domestic Business Day as so published on the next succeeding Domestic
Business Day, and (ii) if such rate is not so published


 


23

















 


for any day, the Federal Funds Rate for such day shall
be the average rate charged to BB&T on such day on such transactions as
determined by the Administrative Agent.


 


“First Lien Investment” means a Portfolio Investment
constituting a Debt obligation (other than a Senior Bank Loan Investment) that
is secured by the pledge of collateral and which has the most senior
pre-petition priority in any bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceedings.


 


“Fiscal Quarter” means any fiscal quarter of the Borrower.


 


“Fiscal Year” means any fiscal year of the Borrower.


 


“Foreclosed
Subsidiary” shall mean any Person that becomes a direct or indirect Subsidiary
of the Borrower solely as a result of the Borrower or any other Subsidiary of
the Borrower acquiring the Capital Securities of such Person, through a
bankruptcy, foreclosure or similar proceedings, with the intent to sell or
transfer all of the Capital Securities of such Person; provided, that,
in the event that the Borrower or such Subsidiary of the Borrower is unable to
sell all of the Capital Securities of such Person within 180 days after the
Borrower or such Subsidiary of the Borrower acquires the Capital Securities of
such Person, such Person shall no longer be considered a “Foreclosed Subsidiary”
for purposes of this Agreement.


 


“Foreign Lender” means any Lender that is organized
under the laws of a jurisdiction other than that in which the Borrower is
resident for tax purposes.  For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.


 


“Foreign Subsidiary” means any
Subsidiary which is not a Domestic Subsidiary.


 


“Fund” means any Person (other than a natural person)
that is (or will be) engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the ordinary
course of its business.


 


“GAAP” means generally accepted accounting principles
applied on a basis consistent with those which, in accordance with Section 1.02,
are to be used in making the calculations for purposes of determining
compliance with the terms of this Agreement.


 


“Governmental Authority” means the government of the
United States of America or any other nation, or of any political subdivision
thereof, whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government (including any supra-national bodies such as the
European Union or the European Central Bank).


 


“Guarantee” by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly guaranteeing any
Debt or other obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to secure, purchase or pay (or advance or
supply funds for the


 


24

















 


purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to provide
collateral security, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring
in any other manner the obligee of such Debt or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part), provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.  The term “Guarantee” used as a verb has a
corresponding meaning.


 


“Guaranteed Obligations” means the Obligations,
including without limitation, any and all liabilities, indebtedness and
obligations of any and every kind and nature, heretofore, now or hereafter
owing, arising, due or payable from the Borrower to one or more of the Lenders,
the Hedge Counterparties, any Secured Party, the Administrative Agent, or any
of them, arising under or evidenced by this Agreement, the Notes, the
Collateral Documents or any other Loan Document.


 


“Guarantors” means collectively:  (a) the Initial Guarantors; and (b) all
direct and indirect Subsidiaries of the Borrower or Guarantors acquired, formed
or otherwise in existence after the Closing Date and required to become a
Guarantor pursuant to Section 5.28; provided, however, no
SBIC Entity shall be a Guarantor until required pursuant to Section 5.28(d).


 


“Hazardous Materials” includes, without limitation, (a) solid
or hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. §6901 et seq. and its implementing regulations and amendments,
or in any applicable state or local law or regulation, (b) any “hazardous
substance”, “pollutant” or “contaminant”, as defined in CERCLA, or in any
applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, including crude oil or any fraction thereof, (d) toxic
substances, as defined in the Toxic Substances Control Act of 1976, or in any
applicable state or local law or regulation and (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable state or local law or
regulation, as each such Act, statute or regulation may be amended from time to
time.


 


“Hedge
Counterparty” means BB&T or any Lender that provides the initial funding of
any Revolver Commitment on the Closing Date or any Additional Lender that
provides the funding of a Revolver Commitment on any Commitment Increase Date
(but not any assignee of any of the foregoing Lenders) which Lender or
Additional Lender has provided the Administrative Agent with a fully executed
designation notice substantially in the form of Schedule A — Designation
Notice, or any of their respective Affiliates, in each case solely until such
Person has assigned all of its interests under this Agreement, that enters into
a Hedging Agreement with the Borrower that is permitted by Section 5.35.


 


“Hedge Transaction” of any Person shall mean any
transaction (including an agreement with respect thereto) now existing or
hereafter entered into by such Person that is a rate swap, basis swap, forward
rate transaction, commodity swap, interest rate option, foreign exchange
transaction, cap transaction, floor transaction, collateral transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or


 


25

















 


any other similar transaction (including any option with
respect to any of these transactions) or any combination thereof, whether
linked to one or more interest rates, foreign currencies, commodity prices,
equity prices or other financial measures.


 


“Hedging
Agreement” means each agreement or amended and restated agreement between the
Borrower and a Hedge Counterparty that governs one or more Hedge Transactions
entered into pursuant to Section 5.35, which agreement shall consist of a “Master
Agreement” in a form published by the International Swaps and Derivatives
Association, Inc., together with a “Schedule” thereto in the form the
Administrative Agent shall approve in writing, and each “Confirmation”
thereunder confirming the specific terms of each such Hedge Transaction.


 


“Hedging Obligations” of any Person shall mean any and
all obligations of such Person, whether absolute or contingent and howsoever
and whensoever created, arising, evidenced or acquired under (i) any and
all Hedge Transactions, (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Hedge Transactions and (iii) any
and all renewals, extensions and modifications of any Hedge Transactions and
any and all substitutions for any Hedge Transactions.


 


“Indemnified Taxes” means Taxes other than Excluded
Taxes.


 


“Initial
Guarantors” means Main Street Capital Partners, LLC, a Delaware limited
liability company, and Main Street Equity Interests, Inc., a Delaware
corporation.


 


“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 any 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 60 consecutive days; or (b) the commencement by such Person of a
voluntary case under any 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.


 


“Insolvency
Laws” means the Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, suspension of payments, or similar
debtor relief laws from time to time in effect affecting the rights of
creditors generally.


 


“Interest
Coverage Ratio” means the ratio of Consolidated EBITDA to Consolidated Interest
Expense.


 


26
















 


“Interest
Payment Date” means (a) with respect to any Base Rate Borrowing or Index
Euro-Dollar Borrowing, the first day of each month and (b) with respect to
any Tranche Euro-Dollar Borrowing, the last day of the Interest Period
applicable to such Borrowing and, in the case of any Tranche Euro-Dollar
Borrowing with an Interest Period that exceeds three months, the respective
dates that fall every three months after the beginning of such Interest Period.


 


“Interest
Period” means:  (i) with respect to
each Tranche Euro-Dollar Borrowing, the period commencing on the date of such
Borrowing and ending on the numerically corresponding day in the first, third
or, if available to Lenders, sixth month thereafter, as the Borrower may elect
in the applicable Notice of Borrowing; provided that:


 


(a)                                 any Interest Period (subject to clause (c) below)
which would otherwise end on a day which is not a Euro-Dollar Business Day
shall be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business Day;


 


(b)                                 any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall, subject to clause (c) below, end on the last Euro-Dollar Business Day of
the appropriate subsequent calendar month; and


 


(c)                                  no Interest
Period may be selected that begins before the Termination Date and would
otherwise end after the Termination Date.


 


(ii)                                  with respect to
each Base Rate Borrowing and each Index Euro-Dollar Borrowing, a calendar month
(commencing on the first day of each calendar month and ending on the last day
of each calendar month regardless of whether a Base Rate Borrowing or Index
Euro-Dollar Borrowing is outstanding on either date); provided that:


 


(a)                                 the initial
Interest Period applicable to Base Rate Borrowings and Index Euro-Dollar
Borrowings shall mean the period commencing on the Closing Date and ending September 30,
2010; and


 


(b)                                 the last
Interest Period applicable to Base Rate Borrowings and Index Euro-Dollar
Borrowings under this Agreement shall end on the Termination Date.


 


“Internal
Control Event” means a material weakness in, or fraud that involves management
of the Borrower, which fraud has a material effect on the Borrower’s internal
controls over public reporting.


 


“Investment”
means any investment in any Person, whether by means of (i) purchase or
acquisition of all or substantially all of the assets of such Person (or of a
division or line of business of such Person), (ii) purchase or acquisition
of obligations or securities of such Person, (iii) capital contribution to
such Person, (iv) loan or advance to such Person, 


 


27

















 


(v) making
of a time deposit with such Person, (vi) Guarantee or assumption of any
obligation of such Person or (vii) by any other means.


 


“Investment
Company Act” means the Investment Company Act of 1940, as amended.


 


“Investment
Documents” means, with respect to any Core Portfolio Investment or any Senior
Bank Loan Investment, any related loan agreement, security agreement, mortgage,
assignment, all guarantees, note purchase agreement, intercreditor and/or
subordination agreements, and UCC financing statements and continuation
statements (including amendments or modifications thereof) executed by the
Obligor thereof or by another Person on the Obligor’s behalf in respect of such
Core Portfolio Investment or Senior Bank Loan Investment and any related
promissory note, including, without limitation, general or limited guaranties
and, if requested by the Administrative Agent, for each Core Portfolio
Investment secured by real property by a mortgage document, an Assignment of
Mortgage, and for all Core Portfolio Investments or Senior Bank Loan
Investments with a promissory note, an assignment thereof (which may be by
allonge), in blank, signed by an officer of the Borrower.


 


“Investment
File” means, as to any Core Portfolio Investments, those documents that are
delivered to or held by the Collateral Custodian pursuant to the Custodial
Agreement.


 


“Investment
Grade Rating” means, as of any date of determination with respect to an
Investment, such Investment has a rating of at least Baa3 from Moody’s
Investors Service, BBB- from Standard & Poor’s, a division of The
McGraw-Hill Companies, Inc. or BBB- from Fitch Ratings Ltd.


 


“Investment
Policies” means those investment objectives, policies and restrictions of the
Borrower as in effect on the Closing Date as described in Borrower’s annual
report on Form 10-K for the year ended December 31, 2009 and
quarterly reports on Form 10-Q for the quarters ended March 31 and June 30,
2010, each as filed with the Securities and Exchange Commission, and any
modifications or supplements as may be adopted by the Borrower from time to
time in accordance with this Agreement.


 


“Joinder
Agreement” means a Joinder and Reaffirmation Agreement substantially in the
form of Exhibit L.


 


“Lender” means each lender listed on the signature pages hereof
as having a Revolver Commitment and their respective successors and assigns.


 


“Lenders’
Letter Agreement” means that certain Fee Letter, dated as of September 20,
2010, among Borrower and the Lenders (other than BB&T) signatory hereto
relating to the upfront fee payable by the Borrower to or for the account of
such Lenders.  If there is any conflict
between the provisions of this Agreement and the provisions of the Lenders’
Letter Agreement, the provisions of this Agreement will control.


 


28

















 


“Lending Office” means, as to each Lender, its office
located at its address set forth on the signature pages hereof (or identified
on the signature pages hereof as its Lending Office) or such other office
as such Lender may hereafter designate as its Lending Office by notice to the
Borrower and the Administrative Agent.


 


“Lien” means, with respect to any asset, any mortgage,
deed to secure debt, deed of trust, lien, pledge, charge, security interest,
security title, preferential arrangement which has the practical effect of
constituting a security interest or encumbrance, servitude or encumbrance of
any kind in respect of such asset to secure or assure payment of a Debt or a
Guarantee, whether by consensual agreement or by operation of statute or other
law, or by any agreement, contingent or otherwise, to provide any of the
foregoing.  For the purposes of this
Agreement, the Borrower or any Subsidiary shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.


 


“Liquidity” means at any time the aggregate Cash and
Cash Equivalents of the Borrower and the Guarantors, but excluding Cash and
Cash Equivalents included in the Borrowing Base.


 


“Loan” means any loan arising from the extension of
credit to an Obligor by the Borrower in the ordinary course of business of the
Borrower.


 


“Loan Documents” means this Agreement, the Notes, the
Collateral Documents, the Hedging Agreements, any other document evidencing or
securing the Advances, the Custodial Agreement, and any other document or
instrument delivered from time to time in connection with this Agreement, the
Notes, the Collateral Documents, the Hedging Agreements, the Advances, as such
documents and instruments may be amended or supplemented from time to time.


 


“Loan Parties” means collectively the Borrower and each
Guarantor that is now or hereafter a party to any of the Loan Documents.


 


“London InterBank Offered Rate” has the meaning set
forth in Section 2.06(c).


 


“Margin Stock” means “margin stock” as defined in
Regulations T, U or X of the Board of Governors of the Federal Reserve System,
as in effect from time to time, together with all official rulings and
interpretations issued thereunder.


 


“Material Adverse Effect” means, with respect to any
event, act, condition or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation or
proceeding), whether singly or in conjunction with any other event or events,
act or acts, condition or conditions, occurrence or occurrences, whether or not
related, a material adverse change in, or a material adverse effect upon, any
of (a) the financial condition, operations, business or properties of the
Loan Parties and any of their respective Subsidiaries, taken as a whole, (b) the
rights and remedies of the Administrative Agent or the Lenders under the Loan
Documents, or the ability of the Borrower or any other Loan Party to perform
its obligations under the Loan Documents to which it is a party, as applicable,
or (c) the 


 


29

















 


legality, validity or enforceability of any Loan
Document or (d) the Collateral, or the Administrative Agent’s Liens for
the benefit of the Secured Parties on the Collateral or the priority of such
Liens.


 


“Material
Contract” has the meaning given such term in Section 4.33.


 


“Minimum
Liquidity Requirement” has the meaning given such term in Section 5.04.


 


“Mortgage”
means, collectively the fee simple and leasehold mortgages, deeds of trust and
deeds to secure debt by the Borrower, in form and content satisfactory to the
Administrative Agent and in each case granting a Lien to the Administrative
Agent (or a trustee for the benefit of the Administrative Agent) for the
benefit of the Secured Parties in Collateral constituting real property
(including certain real property leases) and related personalty, as such
documents may be amended, modified or supplemented from time to time.


 


“Mortgaged
Property” means, collectively, the Mortgaged Property (as defined in the
Mortgages) covering the Properties described on Schedule 1.01 — Mortgaged
Property.


 


“Mortgaged
Property Owner” means the owner of a fee simple title (or leasehold interest to
the extent permitted under this Agreement) to a Mortgaged Property.


 


“Mortgaged
Property Security Documents” means collectively, the Mortgages and all other
agreements, instruments and other documents, whether now existing or hereafter
in effect, pursuant to which the Borrower or any Subsidiary grants or conveys to
the Administrative Agent and the Secured Parties a Lien in, or any other Person
acknowledges any such Lien in, real property as security for all or any portion
of the Obligations, as any of them may be amended, modified or supplemented
from time to time.


 


“Mortgaged Property Support Documents” means, for each
Mortgaged Property, (i) the Title Policy pertaining thereto, (ii) surveys
(unless the title insurance company will insure over the absence of survey),
flood hazard certifications and environmental assessments thereof in form and
substance satisfactory to Administrative Agent, prepared by recognized experts
in their respective fields acceptable to the Administrative Agent,
(iii) as to Mortgaged Properties located in a flood hazard area, flood hazard
insurance, (iv) lessees’ estoppel, waiver and consent certificates and
subordination, nondisturbance and attornment agreements, in form and substance
satisfactory to the Administrative Agent, (v) opinions of local counsel
with respect to the Mortgages or leasehold mortgages, as applicable, in form
and substance satisfactory to the Administrative Agent, and (vi) such
other documentation as the Administrative Agent may reasonably require, in each
case as shall be in form and substance reasonably acceptable to the
Administrative Agent.


 


“Multiemployer Plan” has the meaning set forth in Section 4001(a)(3) of
ERISA.


 


“Net Assets” means, at any time, the net assets of the
Borrower and its Consolidated Subsidiaries that are Guarantors, as set forth or
reflected on the most recent consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries prepared in 


 


30

















 


accordance with GAAP. 
Notwithstanding the fact that the SBIC Entities are not Loan Parties,
the SBIC Entities shall be included for purposes of calculating Net Assets.


 


“Net Offering Proceeds” means the proceeds received from
(a) the issuance of any Capital Securities (or capital contribution with
respect to Capital Securities) or (b) the incurrence of any Debt, in each
case net of any reasonable and customary costs and expenses incurred directly
in connection with such issuance or incurrence.


 


“Net Proceeds of Capital Securities/Conversion of Debt”
means any and all proceeds (whether cash or non-cash) or other consideration
received by the Borrower or any Subsidiary of the Borrower in respect of the
issuance of Capital Securities (including, without limitation, the aggregate
amount of any and all Debt converted into Capital Securities), after deducting
therefrom all reasonable and customary costs and expenses incurred by the
Borrower or any Subsidiary directly in connection with the issuance of such
Capital Securities.


 


“Noteless Loan” means a Core Portfolio Investment or a
Senior Bank Loan Investment with respect to which (i) the underlying
Investment Documents do not require the Obligor to execute and deliver a
promissory note to evidence the indebtedness created under such Core Portfolio
Investment or Senior Bank Loan Investment; and (ii) no Loan Party nor any
Subsidiary of a Loan Party has requested or received a promissory note from the
related Obligor.  Except as approved by
the Administrative Agent in writing, no Loan Party nor any Subsidiary of a Loan
Party shall request or receive a promissory note or other instrument from any
Obligor in connection with a Noteless Loan.


 


“Notes” means collectively the Revolver Notes and any
and all amendments, consolidations, modifications, renewals, substitutions and
supplements thereto or replacements thereof. 
“Note” means any one of such Notes.


 


“Notice of Borrowing” has the meaning set forth in Section 2.02.


 


“Notice of Continuation or Conversion” has the meaning
set forth in Section 2.03.


 


“Obligations” means the collective reference to all of
the following indebtedness obligations and liabilities:  (a) the due and punctual payment by the
Borrower of:  (i) the principal of
and interest on the Notes (including without limitation, any and all Revolver
Advances), when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise and any renewals, modifications or
extensions thereof, in whole or in part; (ii) each payment required to be
made by the Borrower under this Agreement when and as due, including payments
in respect of reimbursement of disbursements, interest thereon, and
obligations, if any, to provide cash collateral and any renewals, modifications
or extensions thereof, in whole or in part; and (iii) all other monetary
obligations of the Borrower to the Secured Parties under this Agreement and the
other Loan Documents to which the Borrower is or is to be a party and any
renewals, modifications or extensions thereof, in whole or in part; (b) the
due and punctual performance of all other obligations of the Borrower under
this Agreement and the other Loan Documents to which the Borrower is or is to
be a party, and any renewals, modifications or extensions thereof, in whole or
in part; (c) the due and punctual payment (whether at the stated maturity,
by acceleration or otherwise) of all obligations (including any and 


 


31

















 


all Hedging Obligations arising under the Hedging
Agreements and obligations which, but for the automatic stay under Section 362(a)
of the Bankruptcy Code, would become due), indebtedness and liabilities of the
Borrower, now existing or hereafter incurred under, arising out of or in
connection with any and all Hedging Agreements and any renewals, modifications
or extensions thereof (including, all obligations, if any, of the Borrower as
guarantor under the Credit Agreement in respect of Hedging Agreements), and the
due and punctual performance and compliance by the Borrower with all of the
terms, conditions and agreements contained in any Hedging Agreement and any
renewals, modifications or extensions thereof; (d) the due and punctual
payment and performance of all indebtedness, liabilities and obligations of any
one or more of the Borrower and Guarantors arising out of or relating to any
Bank Products; (e) the due and punctual payment and performance of all
indebtedness, liabilities and obligations of any one or more of the Borrower
and Guarantors arising out of or relating to any Cash Management Services; and (f) the
due and punctual payment and performance of all obligations of each of the
Guarantors under the Credit Agreement and the other Loan Documents to which
they are or are to be a party and any and all renewals, modifications or
extensions thereof, in whole or in part.


 


“Obligor” means, with respect to any Portfolio
Investment, the Person or Persons obligated to make payments pursuant to such
Portfolio Investment, including any guarantor thereof.


 


“OFAC” means The Office of Foreign Assets Control of the
U.S. Department of the Treasury.


 


“Officer’s Certificate” has the meaning set forth in Section 3.01(e).


 


“Operating Documents” means with respect to any
corporation, limited liability company, partnership, limited partnership,
limited liability partnership or other legally authorized incorporated or unincorporated
entity, the bylaws, operating agreement, partnership agreement, limited
partnership agreement, shareholder agreement or other applicable documents
relating to the operation, governance or management of such entity.


 


“Organizational Action” means with respect to any
corporation, limited liability company, partnership, limited partnership,
limited liability partnership or other legally authorized incorporated or
unincorporated entity, any corporate, organizational or partnership action
(including any required shareholder, member or partner action), or other
similar official action, as applicable, taken by such entity.


 


“Organizational Documents” means with respect to any
corporation, limited liability company, partnership, limited partnership, limited
liability partnership or other legally authorized incorporated or
unincorporated entity, the articles of incorporation, certificate of
incorporation, articles of organization, certificate of limited partnership or
other applicable organizational or charter documents relating to the creation
of such entity.


 


“Other Taxes” means all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or under any other Loan Document
or from the execution, delivery or enforcement of, or otherwise with respect
to, this Agreement or any other Loan Document.


 


32

















 


“Participant” has the meaning assigned to such term in
clause (d) of Section 9.07.


 


“Patriot Act” means the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, Pub. L. 107-56, signed into law October 26, 2001.


 


“PBGC” means the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.


 


“Permitted Encumbrances” means Liens described in Section 5.14.


 


“Person” means a natural person, a corporation, a
limited liability company, a partnership (including without limitation, a joint
venture), an unincorporated association, a trust or any other entity or
organization, including, but not limited to, a Governmental Authority.


 


“Plan” means at any time an employee pension benefit
plan which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code and is either (i) maintained
by a member of the Controlled Group for employees of any member of the
Controlled Group or (ii) maintained pursuant to a collective bargaining
agreement or any other arrangement under which more than one employer makes
contributions and to which a member of the Controlled Group is then making or
accruing an obligation to make contributions or has within the preceding 5 plan
years made contributions.


 


“Pledge Agreement” means the Amended and Restated Equity
Pledge Agreement, dated as of the Closing Date, substantially in the form of Exhibit N,
pursuant to which Borrower and, if applicable, Guarantors pledge to the
Administrative Agent for the benefit of the Secured Parties, among other
things, (i) all of the capital stock and equity interests of the
Guarantors and of each other current or future Subsidiary of the Borrower and
Guarantors except Foreign Subsidiaries and SBIC Entities (except as required
pursuant to Section 5.28(d)); and (ii) sixty-five percent (65%) of
the capital stock and equity interests of each current or future Foreign  Subsidiary.


 


“Portfolio Investment” means an investment made by the
Borrower in the ordinary course of business and consistent with the Investment
Policies in a Person that is accounted for under GAAP as a portfolio investment
of the Borrower.  Portfolio Investments
shall include Cash, Cash Equivalents, Core Portfolio Investments, Senior Bank
Loan Investments and Debt Securities.


 


“Prepayment Event” means the issuance by the Borrower or
any of its Subsidiaries of any Capital Securities (other than to an SBIC Entity
or a Loan Party), or the receipt by the Borrower or any of its Subsidiaries
(other than an SBIC Entity or a Loan Party) of any capital contribution or the
issuance of any Debt by the Borrower or any of its Subsidiaries (other than an
SBIC Entity).


 


“Pre-Positioned Investment” means any Investment that
will be funded with the proceeds of an Advance hereunder and which is
designated by the Borrower in writing to the Administrative Agent as a “Pre-Positioned
Investment”.


 


33

















 


“Prime Rate” refers to that interest rate so denominated
and set by BB&T from time to time as an interest rate basis for
borrowings.  The Prime Rate is but one of
several interest rate bases used by BB&T. 
BB&T lends at interest rates above and below the Prime Rate.  The Prime Rate is not necessarily the lowest
or best rate charged by BB&T to its customers or other banks.


 


“Proceeds”
shall have the meaning given to it under the UCC and shall include without
limitation the collections and distributions of Collateral, cash or non-cash.


 


“Properties” means all real property owned, leased or
otherwise used or occupied by a Loan Party or any Subsidiary of a Loan Party,
wherever located.  “Property” means any
one of such Properties.


 


“Quarterly Payment Date” means each March 31, June 30,
September 30 and December 31, or, if any such day is not a Domestic
Business Day, the next succeeding Domestic Business Day.


 


“Quoted Investment” means a Portfolio Investment for
which market quotations are readily available from an Approved Pricing Service,
or, in the case of Eligible Quoted Senior Bank Loan Investments, from an
Approved Pricing Service or an Approved Dealer. 
All Eligible Quoted Senior Bank Loan Investments and Eligible Debt
Securities must be Quoted Investments.


 


“Receivables” shall have the meaning assigned to the
term “Accounts” in the Security Agreement.


 


“Redeemable Preferred Securities” of any Person means
any preferred stock or similar Capital Securities (including, without
limitation, limited liability company membership interests and limited
partnership interests) issued by such Person which is at any time prior to the
Termination Date either (i) mandatorily redeemable (by sinking fund or
similar payments or otherwise) or (ii) redeemable at the option of the holder
thereof.


 


“Register”
has the meaning set forth in Section 9.07(c).


 


“Related
Fund” means, with respect to any Lender that is a fund that invests in lender
loans, any other fund that invests in lender loans and is advised or managed by
the same investment advisor as such Lender.


 


“Related
Parties” means, with respect to any Person, such Person’s Affiliates and the
partners, directors, officers, employees, agents and advisors of such Person
and of such Person’s Affiliates.


 


“Related
Property” means, with respect to any Portfolio Investment, any property or
other assets of the Obligor thereunder pledged or purported to be pledged as
collateral to secure the repayment of such Portfolio Investment.


 


“Required Lenders” means at any time Lenders having at
least 66-2/3% of the aggregate amount of the Revolver Commitments or, if the
Revolver Commitments are no longer 


 


34

















 


in effect, Lenders holding at least 66-2/3% of the
aggregate outstanding principal amount of the Revolver Notes; provided,
however, that the Revolver Commitments and any outstanding Revolver Advances of
any Defaulting Lender shall be excluded for purposes of making a determination
of Required Lenders.


 


“Responsible Officer” means, as to any Person, the
president, chief executive officer, chief financial officer, senior vice
president, vice president, senior managing director or treasurer of such
Person.


 


“Restricted
Payment” means (i) any dividend or other distribution on any shares of the
Borrower’s Capital Securities (except dividends payable solely in shares of its
Capital Securities); (ii) any payment of management, consulting, advisory
or similar fees; or (iii) any payment on account of the purchase,
redemption, retirement or acquisition of (a) any shares of the Borrower’s
Capital Securities (except shares acquired upon the conversion thereof into
other shares of its Capital Securities) or (b) any option, warrant or
other right to acquire shares of the Borrower’s Capital Securities.


 


“Restrictive
Provisions” has the meaning set forth in Section 5.28(d).


 


“Revolver Advance” means an advance made to the Borrower
under this Agreement pursuant to Section 2.01.  A Revolver Advance is a Tranche Euro-Dollar
Advance if such Revolver Advance has an Interest Period described in subsection
(1) of the definition of Interest Period. 
A Revolver Advance is an Index Euro-Dollar Advance if such Revolver
Advance is a Euro-Dollar Advance and has an Interest Period described in
subsection (2) of the definition of Interest Period.


 


“Revolver Commitment” means, with respect to each
Lender, (i) the amount set forth opposite the name of such Lender on the
signature pages hereof, or (ii) as to any Lender which enters into an
Assignment and Assumption (whether as transferor Lender or as assignee
thereunder), the amount of such Lender’s Revolver Commitment after giving
effect to such Assignment and Assumption, in each case as such amount may be
reduced from time to time pursuant to Sections 2.08 and 2.09.


 


“Revolver Notes” means (i) the promissory notes of
the Borrower, substantially in the form of Exhibit B-1 hereto, and (ii) the
amended and restated promissory notes of the Borrower, substantially in the
form of Exhibit B-2 hereto, in each case evidencing the obligation
of the Borrower to repay the Revolver Advances, together with all amendments,
consolidations, modifications, renewals, substitutions and supplements thereto
or replacements thereof and “Revolver Note” means any one of such Revolver
Notes.


 


“RIC” or “regulated investment company” shall mean an
investment company or business development company that qualifies for the
special tax treatment provided for by subchapter M of the Code.


 


“Sale/Leaseback Transaction” means any arrangement with
any Person providing, directly or indirectly, for the leasing by any Loan Party
or any of its Subsidiaries of real or personal property which has been or is to
be sold or transferred by any Loan Party or such 


 


35

















 


Subsidiary to such Person or to any other Person to whom
funds have been or are to be advanced by such Person on the security of such
property or rental obligations of any Loan Party or such Subsidiary.


 


“Sanctioned Entity” shall mean (i) a country or a
government of a country, (ii) an agency of the government of a country, (iii) an
organization directly or indirectly controlled by a country or its government, (iv) a
person or entity resident in or determined to be resident in a country, that is
subject to a country sanctions program administered and enforced by OFAC
described or referenced at http://www.ustreas.gov/offices/enforcement/ofac/ or
as otherwise published from time to time.


 


“SBIC Entities” means each of (1) Main Street
Mezzanine Fund, LP, (2) Main Street Mezzanine Management, LLC, (3) Main
Street Capital II, LP, (4) Main Street Capital II GP, LLC, (5) MSCII
Equity Interests, LLC and (6) any other future “small business investment
company” owned, directly or indirectly, by Borrower that is governed by the
Restrictive Provisions.


 


“Secured
Parties” shall mean collectively: (1) the Administrative Agent in its capacity
as such under this Agreement, the Collateral Documents and the other Loan
Documents; (2) the Lenders, (3) the Hedge Counterparties in their
capacity as such under the Hedging Agreements; (4) any Bank Product Bank
or Cash Management Bank; and (5) except as otherwise provided in the
definitions of “Bank Products”, “Cash Management Services” and “Hedging
Counterparties,” the successors and assigns of the foregoing.


 


“Security Agreement” means the Amended and Restated
General Security Agreement, substantially in the form of Exhibit M,
by and between the Borrower, the Guarantors and the Administrative Agent for
the benefit of the Secured Parties to be executed and delivered in connection
herewith.


 


“Senior
Bank Loan Investment” means a Portfolio Investment constituting a Debt
obligation (including without limitation term loans, the funded portion of
revolving credit lines and letter of credit facilities and other similar loans
and investments including interim loans) which is made by Borrower as a lender under
a syndicated loan or credit facility.


 


“Special
Purpose Subsidiary” shall mean any single purpose Subsidiary created for the
purpose of holding specific assets.


 


“Subsidiary” of any Person means a corporation,
partnership or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other
ownership interest having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person; provided however, the term “Subsidiary”
shall not include any Person that constitutes an investment made by the
Borrower or a Subsidiary in the ordinary course of business and consistently
with the Investment Policies in a Person that is accounted for under GAAP as a
portfolio investment of the Borrower.  Unless otherwise qualified, all references to
a 


 


36

















 


“Subsidiary” or to “Subsidiaries” in this Agreement
shall refer to a Subsidiary or Subsidiaries of the Borrower.


 


“Taxes” means all present or future taxes, levies,
imposts, duties, deductions, withholdings, assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.


 


“Termination
Date” means the earlier to occur of (i) September 20, 2013, (ii) the
date the Revolver Commitments are terminated pursuant to Section 6.01
following the occurrence of an Event of Default, or (iii) the date the
Borrower terminates the Revolver Commitments entirely pursuant to
Section 2.09.


 


“Third Parties” means all lessees, sublessees, licensees
and other users of the Properties, excluding those users of the Properties in
the ordinary course of the Borrower’s business and on a temporary basis.


 


“Title Policy” means with respect to each Mortgaged
Property, the mortgagee title insurance policy (together with such endorsements
as the Administrative Agent may reasonably require) issued to the
Administrative Agent in respect of such Mortgaged Property by an insurer
selected by the Administrative Agent, insuring (in an amount satisfactory to
the Administrative Agent) the Lien of the Administrative Agent for the benefit
of the Secured Parties on such Mortgaged Property to be duly perfected and
first priority, subject only to such exceptions as shall be acceptable to the
Administrative Agent.


 


“Total Unused Revolver Commitments” means at any date,
an amount equal to: (A) the aggregate amount of the Revolver Commitments
of all of the Lenders at such time, less (B) the sum of the aggregate
outstanding principal amount of the Revolver Advances of all of the Lenders at
such time.


 


“UCC” means the Uniform Commercial Code as from time to
time in effect in the specified jurisdiction.


 


“Unquoted Investment” means a Portfolio Investment for
which market quotations from an Approved Pricing Service, or, in the case of
Eligible Senior Bank Loan Investments, an Approved Pricing Service or Approved
Dealer, are not readily available.  Only
Cash, Cash Equivalents, Eligible Core Portfolio Investments and Eligible
Unquoted Senior Bank Loan Investments may be Unquoted Investments.


 


“Unrestricted
Cash and Cash Equivalents” means, as of any date of determination, the Cash and
Cash Equivalents of Borrower to the extent that such Cash and Cash Equivalents (a) are
free and clear of all Liens (other than Liens permitted under Sections 5.14(j) and
5.14(l)), any legal or equitable claim or other interest held by any other
Person, and any option or right held by any other Person to acquire any such
claim or other interest, (b) are not subject to any restriction pursuant
to any provision of any outstanding Capital Securities issued by any Person or
of any Material Contract to which it is a party or by which it or any of its
property  is bound (other than the Loan
Documents) and (c) are the subject of a control agreement that creates a 


 


37

















 


valid
and perfected first-priority security interest in and lien in favor of the
Administrative Agent for the benefit of the Secured Parties.


 


“Unused Commitment” means at any date, with respect to
any Lender, an amount equal to its Revolver Commitment less the sum of the
aggregate outstanding principal amount of the sum of its Revolver Advances.


 


“Value” means, as of any date of determination, the
value assigned by the Borrower to each of its Portfolio Investments as provided
below:


 


(a)                                 Quoted Investments.  With respect to Quoted Investments, the
Borrower shall, not less frequently than once per week, or upon request of the
Administrative Agent, determine the market value of such Portfolio Investments
in accordance with the following methodologies, as applicable:


 


(i)                                            in the case of any Portfolio Investment traded on an exchange, the
closing price for such Portfolio Investment most recently posted on such exchange;


 


(ii)                                         in the case of any Portfolio Investment not traded on an exchange, the
fair market value thereof as determined by an Approved Pricing Service or other
quotation acceptable to the Administrative Agent in its sole discretion; and


 


(iii)                                      in the case of any Eligible Quoted Senior Bank Loan Investment not traded
on an exchange or priced by an Approved Pricing Service, the average ask and
bid prices as determined by two Approved Dealers selected by the Borrower;
provided, however, that to the extent a single agent or counterparty makes the
market in the Eligible Quoted Senior Bank Loan Investment, the average ask and
bid prices as determined by the single Approved Dealer shall be used.


 


(b)                                 Unquoted Investments.   With respect to Unquoted Investments, the
fair value of such Investment shall be determined, not less frequently than
once per Fiscal Quarter, in accordance with, the Investment Company Act and any
orders of the Securities and Exchange Commission by the Board of Directors of
the Borrower in its good faith judgment and consistent with past practices as
described in the Borrower’s 2009 annual report on Form 10-K filed with the
Securities and Exchange Commission as such practices may be amended from time
to time in accordance with the last sentence in this definition of “Value”,
including consideration of valuation procedures of a third-party valuation firm
selected by the Borrower and reasonably acceptable to the Administrative Agent,
and as approved by the Administrative Agent in its reasonable credit
judgment.  The valuation practices
described in the Borrower’s 2009 Annual Report on Form 10-K filed with the
Securities and Exchange Commission may be amended from time to time provided
that the Borrower shall furnish to the Administrative Agent, prior to the
effective date of any such amendment or modification, prompt notice of any
changes in such practices and shall not agree or otherwise permit to occur any
modification of such practices in any manner that would or would reasonably be
expected to adversely affect the interests or remedies of the Administrative
Agent or the Secured Parties under this Agreement or any Loan Document or
impair the collectability of any Investment without the prior written consent
of the Administrative Agent (in its sole discretion).


 


38






 












 


“Voting
Stock” means securities (as such term is defined in Section 2(1) of
the Securities Act of 1933, as amended) of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to cast votes
in any election of any corporate directors (or Persons performing similar
functions).


 


“Wholly Owned Subsidiary” means any Subsidiary all of
the Capital Securities of which are at the time directly or indirectly owned by
the Borrower.


 


SECTION 1.02.                                             Accounting Terms and
Determinations.  Unless otherwise specified herein, all terms
of an accounting character used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required
to be delivered hereunder shall be prepared in accordance with GAAP, applied on
a basis consistent (except for changes concurred in by the Borrower’s
independent public accountants or otherwise required by a change in GAAP) with
the most recent audited consolidated financial statements of the Borrower and
its Consolidated Subsidiaries delivered to the Administrative Agent for
distribution to the Lenders, unless with respect to any such change concurred
in by the Borrower’s independent public accountants or required or permitted by
GAAP, in determining compliance with any of the provisions of this Agreement or
any of the other Loan Documents:  (i) the
Borrower shall have objected to determining such compliance on such basis at
the time of delivery of such financial statements, or  (ii) the Required Lenders shall so
object in writing within 30 days after the delivery of such financial
statements, in either of which events such calculations shall be made on a
basis consistent with those used in the preparation of the latest financial
statements as to which such objection shall not have been made (which, if
objection is made in respect of the first financial statements delivered under Section 5.01
hereof, shall mean the financial statements referred to in Section 4.04).


 


SECTION 1.03.                                             Use of Defined Terms.  All terms defined in this
Agreement shall have the same meanings when used in any of the other Loan
Documents, unless otherwise defined therein or unless the context shall
otherwise require.


 


SECTION 1.04.                                             Terms Generally.  The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined.  Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.  The words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation.”  The word “will” shall be
construed to have the same meaning and effect as the word “shall.” Unless the
context requires otherwise (a) any definition of or reference to any
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), (b) any
reference herein to any Person shall be construed to include such Person’s
successors and assigns, (c) the words “herein,” “hereof” and “hereunder,”
and words of similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, (e) any reference to any law or regulation herein shall,
unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to 


 


39

















 


time; (f) the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights; and (g) titles
of Articles and Sections in this Agreement are for convenience only, and
neither limit nor amplify the provisions of this Agreement.


 


ARTICLE II

THE CREDIT


 


SECTION 2.01.                                             Commitments to Make
Advances.  Each Lender severally agrees, on the terms
and conditions set forth herein, to make Revolver Advances to the Borrower from
time to time before the Termination Date; provided that, immediately
after each such Revolver Advance is made, the aggregate outstanding principal
amount of Revolver Advances by such Lender shall not exceed the amount of the
Revolver Commitment of such Lender at such time, provided  further
that the aggregate principal amount of all Revolver Advances shall not exceed
the: lesser of: (1) the Borrowing Base; and (2) the aggregate amount
of the Revolver Commitments of all of the Lenders at such time.  Each Borrowing under this Section 2.01
shall be in an aggregate principal amount of $1,000,000 or any larger multiple
of $100,000 (except that any such Borrowing may be in the aggregate amount of
the Total Unused Revolver Commitments) and shall be made from the several
Lenders ratably in proportion to their respective Revolver Commitments.  Within the foregoing limits, the Borrower may
borrow under this Section, repay or, to the extent permitted by Section 2.10,
prepay Revolver Advances and reborrow under this Section 2.01 at any time
before the Termination Date.


 


SECTION 2.02.                                             Method of Borrowing
Advances.


 


(a)                                 The Borrower
shall give the Administrative Agent notice in the form attached hereto as Exhibit A
(a “Notice of Borrowing”) prior to (i) 12:00 P.M. (Eastern time) at
least one Domestic Business Day before each Base Rate Borrowing, and each Index
Euro-Dollar Borrowing, and (ii) 11:00 A.M. (Eastern time) at least
three (3) Euro-Dollar Business Days before each Tranche Euro-Dollar
Borrowing, specifying:


 


(i)                                     the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Base Rate Borrowing or Index Euro-Dollar
Borrowing and a Euro-Dollar Business Day in the case of a Tranche Euro-Dollar
Borrowing,


 


(ii)                                  the aggregate amount of such Borrowing,


 


(iii)                               whether the Revolver Advances comprising such
Borrowing are to be Base Rate Advances, Tranche Euro-Dollar Advances or Index
Euro-Dollar Advances and


 


(iv)                              in the case of a Tranche Euro-Dollar Borrowing,
the duration of the Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period.


 


(b)                                 Upon receipt of
a Notice of Borrowing, the Administrative Agent shall promptly notify each
Lender of the contents thereof and of such Lender’s ratable share of 


 


40

















 


such Borrowing and such Notice of Borrowing, once
received by the Administrative Agent, shall not thereafter be revocable by the
Borrower.


 


(c)                                  Not later than
11:00 A.M. (Eastern time) on the date of each Borrowing, each Lender shall
make available its ratable share of such Borrowing, in Federal or other funds
immediately available in Winston-Salem, North Carolina, to the Administrative
Agent at its address referred to in or specified pursuant to Section 9.01.  Unless the Administrative Agent determines
that any applicable condition specified in Article III has not been
satisfied, the Administrative Agent will disburse the funds so received from
the Lenders to the Borrower.


 


(d)                                 Notwithstanding
anything to the contrary contained in this Agreement, no Euro-Dollar Borrowing
may be made if there shall have occurred a Default, which Default shall not
have been cured or waived.


 


(e)                                  In the event
that a Notice of Borrowing fails to specify whether the Revolver Advances
comprising such Borrowing are to be Base Rate Advances, Tranche Euro-Dollar
Advances or Index Euro-Dollar Advances, such Revolver Advances shall be made as
Base Rate Advances.  If the Borrower is
otherwise entitled under this Agreement to repay any Revolver Advances maturing
at the end of an Interest Period applicable thereto with the proceeds of a new
Borrowing, and the Borrower fails to repay such Revolver Advances using its own
moneys and fails to give a Notice of Borrowing in connection with such new
Borrowing, a new Borrowing shall be deemed to be made on the date such Revolver
Advances mature in an amount equal to the principal amount of the Revolver
Advances so maturing, and the Revolver Advances comprising such new Borrowing
shall be Base Rate Advances.


 


(f)                                   Notwithstanding
anything to the contrary contained herein, there shall not be more than five (5) Interest
Periods outstanding at any given time; provided that for purposes of this Section 2.02(f),
neither Base Rate Advances nor Index Euro-Dollar Advances shall be deemed to
have an outstanding Interest Period.


 


SECTION 2.03.                                             Continuation and
Conversion Elections.  By delivering a notice (a “Notice of
Continuation or Conversion”), which shall be substantially in the form of Exhibit C,
to the Administrative Agent on or before 12:00 P.M., Eastern time, on a
Domestic Business Day (or Euro-Dollar Business Day, in the case of Tranche
Euro-Dollar Advances outstanding), the Borrower may from time to time
irrevocably elect, by notice one Domestic Business Day prior in the case of a continuation
of or conversion to Base Rate Advances or Index Euro-Dollar Advances or three (3) Euro-Dollar
Business Days prior in the case of a continuation of or conversion to Tranche
Euro-Dollar Advances, that all, or any portion in an aggregate principal amount
of $1,000,000 or any larger integral multiple of $100,000 be, (i) in the
case of Base Rate Advances, converted into Euro-Dollar Advances or (ii) in
the case of Euro-Dollar Advances, converted into Base Rate Advances or
continued as Euro-Dollar Advances; provided, however, that (x) each
such conversion or continuation shall be pro rated among the applicable
outstanding Revolver Advances of all Lenders that have made such Revolver
Advances, and (y) no portion of the outstanding principal amount of any
Revolver Advances may be continued 


 


41

















 


as, or be converted
into, any Tranche Euro-Dollar Advance when any Default has occurred and is
continuing.  In the absence of delivery
of a Notice of Continuation or Conversion with respect to any Tranche
Euro-Dollar Advance at least three (3) Euro-Dollar Business Days before
the last day of the then current Interest Period with respect thereto, such
Tranche Euro-Dollar Advance shall, on such last day, automatically convert to a
Base Rate Advance.


 


SECTION 2.04.                                             Notes.  The Revolver Advances of each
Lender shall be evidenced by a single Revolver Note payable to the order of
such Lender for the account of its Lending Office in an amount equal to the
original principal amount of such Lender’s Revolver Commitment.  Upon receipt of each Lender’s Note pursuant
to Section 3.01, the Administrative Agent shall deliver such Note to such
Lender.  Each Lender shall record, and
prior to any transfer of its Note shall endorse on the schedule forming a part
thereof appropriate notations to evidence, the date, amount and maturity of,
and effective interest rate for, each Advance made by it, the date and amount
of each payment of principal made by the Borrower with respect thereto and such
schedule shall constitute rebuttable presumptive evidence of the principal
amount owing and unpaid on such Lender’s Note; provided that the failure
of any Lender to make, or any error in making, any such recordation or
endorsement shall not affect the obligation of the Borrower hereunder or under
the Note or the ability of any Lender to assign its Notes.  Each Lender is hereby irrevocably authorized
by the Borrower so to endorse its Notes and to attach to and make a part of any
Note a continuation of any such schedule as and when required.


 


SECTION 2.05.                                             Maturity of Advances.  Each Revolver Advance included
in any Borrowing shall mature, and the principal amount thereof, together with
all accrued unpaid interest thereon, shall be due and payable on the Termination
Date.


 


SECTION 2.06.                                             Interest Rates.


 


(a)                                 “Applicable
Margin” means (a) with respect to any Base Rate Advance, 1.50% and (b) with
respect to any Euro-Dollar Advance, 2.50%.


 


(b)                                 Each Base Rate
Advance shall bear interest on the outstanding principal amount thereof, for
each day from the date such Advance is made until it becomes due, at a rate per
annum equal to the Base Rate for such day plus the Applicable Margin.  Such interest shall be payable on each Interest
Payment Date while such Base Rate Advance is outstanding and on the date such
Base Rate Advance is converted to a Tranche Euro-Dollar Advance or repaid.  Any overdue principal of and, to the extent
permitted by applicable law, overdue interest on any Base Rate Advance shall
bear interest, payable on demand, for each day until paid in full at a rate per
annum equal to the Default Rate.


 


(c)                                  Each
Euro-Dollar Advance shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum equal
to the sum of: (1) the Applicable Margin, plus (2) the applicable
Adjusted London InterBank Offered Rate for such Interest Period.  Such interest shall be payable on each
applicable Interest Payment Date.  Any
overdue principal of and, to the extent permitted by applicable law, overdue
interest on any Euro-Dollar Advance shall bear interest, payable on demand, for
each day until paid in full at a rate per annum equal to the Default Rate.


 


42

















 


The “London
InterBank Offered Rate” applicable to any Euro-Dollar Advance means for the
Interest Period of such Euro-Dollar Advance the rate per annum determined on
the basis of the rate for deposits in Dollars of amounts equal or comparable to
the principal amount of such Euro-Dollar Advance offered for a term comparable
to such Interest Period, which rate appears on the display designated as
Reuters Screen LIBOR01 Page (or such other successor page as may
replace Reuters Screen LIBOR01 Page or such other service or services as
may be nominated by the British Banker’s Association for the purpose of
displaying London InterBank Offered Rates for U.S. dollar deposits) determined
as of 11:00 a.m. London, England time, two (2) Euro-Dollar Business
Days prior to the first day of such Interest Period, provided that if no
such offered rates appear on such page, the “London InterBank Offered Rate” for
such Interest Period will be the arithmetic average (rounded upward, if
necessary, to the next higher 1/100th of 1%) of rates quoted by not less than
two (2) major lenders in New York City, selected by the Administrative
Agent, at approximately 10:00 A.M., New York City time, two (2) Euro-Dollar
Business Days prior to the first day of such Interest Period, for deposits in
Dollars offered by leading European banks for a period comparable to such
Interest Period in an amount comparable to the principal amount of such
Euro-Dollar Advance.


 


“Euro-Dollar
Reserve Percentage” means for any day that percentage (expressed as a decimal)
which is in effect on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum reserve
requirement for a member bank of the Federal Reserve System in respect of “Eurocurrency
liabilities” (or in respect of any other category of liabilities which includes
deposits by reference to which the interest rate on such Euro-Dollar Advance is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any Lender to United States
residents).  The Adjusted London
InterBank Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve Percentage.


 


(d)                                 The
Administrative Agent shall determine each interest rate applicable to the
Advances hereunder in accordance with the terms of this Agreement.  The Administrative Agent shall give prompt
notice to the Borrower and the Lenders by telecopy of each rate of interest so
determined, and its determination thereof shall be conclusive in the absence of
manifest error.


 


(e)                                  After the
occurrence and during the continuance of an Event of Default (other than an
Event of Default under Sections 6.01(g) or (h)), the principal amount of
the Advances (and, to the extent permitted by applicable law, all accrued
interest thereon) may, at the election of the Required Lenders, bear interest
at the Default Rate; provided, however, that automatically whether or not the
Required Lenders elect to do so, (i) any overdue principal of and, to the
extent permitted by law, overdue interest on the Advances shall bear interest
payable on demand, for each day until paid at a rate per annum equal to the
Default Rate, and (ii) after the occurrence and during the continuance of
an Event of Default described in Section 6.01(g) or 6.01(h), the principal
amount of the Advances (and, to the extent permitted by applicable law, all
accrued interest thereon) 


 


43

















 


shall bear interest payable on demand for each day
until paid at a rate per annum equal to the Default Rate.


 


SECTION 2.07.                                             Fees.


 


(a)                                 The Borrower
shall pay to the Administrative Agent for the ratable account of each Lender an
unused commitment fee equal to the product of: 
(i) the aggregate of the daily average amounts of such Lender’s
Unused Commitment, times (ii) a per annum percentage equal to 0.375%.  Such unused commitment fee shall accrue from
but not including the Closing Date to and including the Termination Date.  Unused commitment fees shall be determined
quarterly in arrears and shall be payable on each Quarterly Payment Date and on
the Termination Date; provided that should the Revolver Commitments be
terminated at any time prior to the Termination Date for any reason, the entire
accrued and unpaid fee shall be paid on the date of such termination.


 


(b)                                 The Borrower
shall pay (i) to the Administrative Agent, for the account and sole
benefit of the Administrative Agent, such fees and other amounts at such times
as set forth in the Administrative Agent’s Letter Agreement, and (ii) such
fees and other amounts at such times as set forth in the Lenders’ Letter
Agreement.


 


SECTION 2.08.                                             Optional Termination
or Reduction of Commitments.  The Borrower may, subject to
any applicable prepayments pursuant to Section 2.11, upon at least 3
Domestic Business Day’s irrevocable notice to the Administrative Agent,
terminate at any time, or proportionately reduce from time to time by an
aggregate amount of at least $10,000,000 or any larger multiple of $1,000,000,
the Revolver Commitments; provided, however: 
(1) each termination or reduction, as the case may be, shall be
permanent and irrevocable; (2) no such termination or reduction shall be
in an amount greater than the Total Unused Revolver Commitments on the date of
such termination or reduction; and (3) no such reduction pursuant to this Section 2.08
shall result in the aggregate Revolver Commitments of all of the Lenders being
reduced to an amount less than $30,000,000, unless the Revolver Commitments are
terminated in their entirety, in which case all accrued fees (as provided under
Section 2.07) shall be payable on the effective date of such
termination.  Each reduction shall be
made ratably among the Lenders in accordance with their respective Revolver
Commitments.


 


SECTION 2.09.                                             Termination of
Commitments.  The Revolver Commitments shall terminate on
the Termination Date and any Revolver Advances then outstanding (together with
accrued interest thereon) shall be due and payable on such date.


 


SECTION 2.10.                                             Optional Prepayments.


 


(a)                                 The Borrower
may, upon at least one (1) Domestic Business Day’s notice to the
Administrative Agent, prepay any Base Rate Borrowing or Index Euro-Dollar
Borrowing in whole at any time, or from time to time in part in amounts
aggregating at least $1,000,000 or any larger integral multiple of $100,000 (or  any
lesser amount equal to the outstanding balance of such Advance), by paying the principal amount to be
prepaid together with accrued interest thereon to the date of prepayment.  Each such optional prepayment shall be
applied to prepay ratably the Base Rate Advances and Index 


 


44

















 


Euro-Dollar Advances of the several Lenders included
in such Base Rate Borrowing or Index Euro-Dollar Borrowing, as the case may be.


 


(b)                                 Subject to any
payments required pursuant to the terms of Article VIII for such Tranche
Euro-Dollar Borrowing, the Borrower may, upon at least three (3) Domestic
Business Day’s prior written notice, prepay in minimum amounts of $1,000,000
with additional increments of $100,000 (or any lesser amount equal to the
outstanding balance of such Advances) all or any portion of the principal
amount of any Tranche Euro-Dollar Borrowing prior to the maturity thereof, by
paying the principal amount to be prepaid together with accrued interest
thereon to the date of prepayment and such payments required pursuant to the
terms of Article VIII.  Each such
optional prepayment shall be applied to prepay ratably the Tranche Euro-Dollar
Advances of the several Lenders included in such Tranche Euro-Dollar Borrowing.


 


(c)                                  Upon receipt of
a notice of prepayment pursuant to this Section 2.10, the Administrative
Agent shall promptly notify each Lender of the contents thereof and of such
Lender’s ratable share of such prepayment and such notice, once received by the
Administrative Agent, shall not thereafter be revocable by the Borrower.


 


SECTION 2.11.                                             Mandatory
Prepayments.


 


(a)                                 On each date on
which the Revolver Commitments are reduced or terminated pursuant to
Section 2.08 or Section 2.09, the Borrower shall repay or prepay such
principal amount of the outstanding Revolver Advances, if any (together with
interest accrued thereon and any amount due under Section 8.05), as may be
necessary so that after such payment the aggregate unpaid principal amount of
the Revolver Advances does not exceed the aggregate amount of the Revolver
Commitments as then reduced.  Each such
payment or prepayment shall be applied ratably to the Revolver Advances of the
several Lenders outstanding on the date of payment or prepayment in the
following order or priority:  (i) first,
to Base Rate Advances; (ii) second, to Index Euro-Dollar Advances; and (iii) lastly,
to Tranche Euro-Dollar Advances.


 


(b)                                 In the event
that the aggregate principal amount of all Revolver Advances at any one time
outstanding shall at any time exceed the aggregate amount of the Revolver
Commitments of all of the Lenders at such time, the Borrower shall immediately
repay so much of the Revolver Advances as is necessary in order that the
aggregate principal amount of the Revolver Advances thereafter outstanding,
shall not exceed the aggregate amount of the Revolver Commitments of all of the
Lenders at such time.  Each such payment
or prepayment shall be applied ratably to the Revolver Advances of the several
Lenders outstanding on the date of payment or prepayment in the following order
or priority:  (i) first, to Base
Rate Advances; (ii) second, to Index Euro-Dollar Advances; and (iii) lastly,
to Tranche Euro-Dollar Advances.


 


(c)                                  In the event
that the aggregate principal amount of all Advances at any one time outstanding
shall at any time exceed the Borrowing Base, the Borrower shall immediately
repay so much of the Advances as is necessary in order that the aggregate 


 


45

















 


principal amount of the Advances thereafter
outstanding shall not exceed the Borrowing Base.


 


(d)                                 If at any time
the Borrower is not in compliance with the Minimum Liquidity Requirement, the
Borrower shall immediately repay so much of the Revolver Advances as is
necessary in order that, after giving effect to such repayment, the Minimum
Liquidity Requirement is satisfied.  Each
such payment or prepayment shall be applied ratably to the Revolver Advances of
the several Lenders outstanding on the date of payment or prepayment in the
following order or priority:  (i) first,
to Base Rate Advances, and (ii) lastly to Euro-Dollar Advances.


 


(e)                                  If at any time (i) the
Administrative Agent on behalf of the Secured Parties does not own or have a
valid and perfected first priority security interest in any Eligible Investment
or (ii) any representation or warranty with respect to any Eligible
Investment included in the Borrowing Base is not true and correct, then upon
the earlier of the Borrower’s receipt of notice from the Administrative Agent
or the Borrower becoming aware thereof, the Borrower shall either (x) repay
the Advances outstanding (together with any amounts owing under Article VIII
relating to such repayment) to the extent required by Section 2.11(c) after
giving effect to the exclusion of such ineligible Portfolio Investment from the
Borrowing Base, or (y) substitute an Eligible Investment for such
ineligible Portfolio Investment; provided  that no such
substitution shall be permitted unless (1) such substitute Portfolio
Investment is an Eligible Investment on the date of substitution, (2) after
giving effect to the inclusion of the substitute Eligible Investment, no repayment
of any Advances outstanding shall be required under Section 2.11(c) (after
giving effect to the exclusion of such ineligible Portfolio Investment from the
Borrowing Base), (3) all representations and warranties of the Borrower
contained in Article IV shall be true and correct as of the date of
substitution, (4) all actions or additional actions (if any) necessary to
perfect the security interest of the Administrative Agent in such substitute
Portfolio Investment and related Collateral shall have been taken as of or
prior to the date of substitution and (4) the Borrower shall deliver to
the Administrative Agent on the date of such substitution (A) a
certificate of a Responsible Officer certifying that each of the foregoing is
true and correct as of such date and (B) a Borrowing Base Certification
Report (including a calculation of Borrowing Base after giving effect to such
substitution).


 


46

















 


(f)                                   Upon the
occurrence of any Prepayment Event, the Borrower shall immediately repay the
Obligations in an amount equal to 75% of the Net Offering Proceeds in respect
of such Prepayment Event, on the Domestic Business Day of receipt thereof.  Any such payment or prepayment shall be
applied ratably to the Revolver Advances of the several Lenders outstanding on
the date of payment or prepayment in the following order or priority:  (i) first, to Base Rate Advances; (ii) second,
to Index Euro-Dollar Advances; and (iii) lastly, to Tranche Euro-Dollar
Advances.  Notwithstanding the foregoing,
to the extent that the amount to be repaid under this Section 2.11(f) is
less than the undrawn amount of the Borrowing Base, no such repayment shall be
required.


 


(g)                                  Any repayment
or prepayment made pursuant to this Section shall not affect the Borrowers’
obligation to continue to make payments under any Hedging Agreement, which
shall remain in full force and effect notwithstanding such repayment or
prepayment, subject to the terms of such Hedging Agreement.


 


(h)                                 Any repayment
or prepayment made pursuant to this Section shall be in cash without any
prepayment premium or penalty (but including all breakage or similar costs) on
the customary terms of the Administrative Agent.


 


SECTION 2.12.                                             General Provisions
as to Payments.


 


(a)                                 The Borrower
shall make each payment of principal of, and interest on, the Revolver Advances
and of fees hereunder without any set off, counterclaim or any deduction
whatsoever, not later than 12:00 P.M. (Eastern time) on the date when due,
in Federal or other funds immediately available in Winston-Salem, North
Carolina, to the Administrative Agent at its address referred to in Section 9.01.  The Administrative Agent will promptly
distribute to each Lender its ratable share of each such payment received by
the Administrative Agent for the account of the Lenders.


 


(b)                                 Whenever any
payment of principal of, or interest on, the Base Rate Advances or of fees
shall be due on a day which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next succeeding Domestic Business
Day.  Whenever any payment of principal
of or interest on, the Euro-Dollar Advances shall be due on a day which is not
a Euro-Dollar Business Day, the date for payment thereof shall be extended to
the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day.  If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon shall be payable
for such extended time.


 


(c)                                  Funding by
Lenders; Presumption by Administrative Agent.  Unless the Administrative Agent shall have
received notice from a Lender prior to the proposed date of any Borrowing that
such Lender will not make available to the Administrative Agent such Lender’s
share of such Borrowing, the Administrative Agent may assume that such Lender
has made such share available on such date in accordance with Section 2.02
and may, in reliance upon such assumption, make available to the Borrower a
corresponding 


 


47

















 


amount.  In
such event, if a Lender has not in fact made its share of the applicable
Borrowing available to the Administrative Agent, then the applicable Lender and
the Borrower severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (i) in the
case of a payment to be made by such Lender, the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation and (ii) in the case
of a payment to be made by the Borrower, the interest rate applicable to Base
Rate Advances.  If the Borrower and such
Lender shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the
applicable Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender’s Advance included in such Borrowing.  Any payment by the Borrower shall be without
prejudice to any claim the Borrower may have against a Lender that shall have
failed to make such payment to the Administrative Agent


 


(d)                                 Payments by
Borrower; Presumptions by Administrative Agent.  Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any payment is due
to the Administrative Agent for the account of the Lenders hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders the amount
due.  In such event, if the Borrower has
not in fact made such payment, then each of the Lenders severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed
to such Lender, with interest thereon, for each day from and including the date
such amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation


 


(e)                                  Taxes.


 


(i)                                     Payments Free of Taxes.  Any
and all payments by or on account of any obligation of the Borrower hereunder
or under any other Loan Document shall be made free and clear of and without
reduction or withholding for any Indemnified Taxes or Other Taxes, provided
that if the Borrower shall be required by applicable law to deduct any
Indemnified Taxes (including any Other Taxes) from such payments, then
(A) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section) the Administrative Agent or Lender, as the case may
be, receives an amount equal to the sum it would have received had no such
deductions been made, (B) the Borrower shall make such deductions and (C) the
Borrower shall timely pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.


 


48






 












 


(ii)           Payment of Other Taxes by the Borrower. 
Without limiting the provisions of paragraph (i) above, the
Borrower shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.


 


(iii)          Indemnification by the Borrower.  The
Borrower shall indemnify the Administrative Agent and each Lender, within 10
days after demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) paid by the
Administrative Agent or such Lender, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.


 


(iv)          Evidence of Payments.  As
soon as practicable after any payment of Indemnified Taxes or Other Taxes by
the Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.


 


(v)           Status of Lenders.  Any
Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
resident for tax purposes, or any treaty to which such jurisdiction is a party,
with respect to payments hereunder or under any other Loan Document shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law or reasonably requested by the Borrower or
the Administrative Agent, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by the
Borrower or the Administrative Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by the Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements.


 


Without limiting the generality of the foregoing, in
the event that the Borrower is resident for tax purposes in the United States
of America, any Foreign Lender shall deliver to the Borrower and the
Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the request of
the Borrower or the Administrative 


 


49

















 


Agent,
but only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:


 


(A)          duly
completed copies of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States of
America is a party,


 


(B)           duly
completed copies of Internal Revenue Service Form W-8ECI,


 


(C)           in the
case of a Foreign Lender claiming the benefits of the exemption for portfolio
interest under section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (1) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of
the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (3) a
“controlled foreign corporation” described in section 881(c)(3)(C) of the
Code and (y) duly completed copies of Internal Revenue Service Form W-8BEN,
or


 


(D)          any
other form prescribed by applicable law as a basis for claiming exemption from
or a reduction in United States Federal withholding tax duly completed together
with such supplementary documentation as may be prescribed by applicable law to
permit the Borrower to determine the withholding or deduction required to be
made.


 


(vi)          Treatment of Certain Refunds.  If the Administrative Agent or a Lender
determines, in its sole discretion, that it has received a refund of any Taxes
or Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section, it shall pay to the Borrower an amount equal to such refund (but only
to the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Lender, as the case may be, and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund), provided that the Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over
to the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. 
This paragraph shall not be construed to require the Administrative Agent
or any Lender 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.


 


SECTION 2.13.                    Computation of
Interest and Fees.  Interest on the Advances shall be computed on
the basis of a year of 360 days and paid for the actual number of 


 


50

















 


days elapsed
(including the first day but excluding the last day).  Utilization fees, unused commitment fees and
any other fees payable hereunder shall be computed on the basis of a year of
360 days and paid for the actual number of days elapsed (including the first
day but excluding the last day).


 


SECTION 2.14.                    Increase in
Commitments.


 


(a)           The Borrower shall have the
right, at any time prior to the date that is one hundred eighty (180) days
prior to the Termination Date by written notice to and in consultation with the
Administrative Agent, to request an increase in the aggregate Revolver
Commitments (each such requested increase, a “Commitment Increase”), by having
one or more existing Lenders increase their respective Revolver Commitments
then in effect (each, an “Increasing Lender”), by adding as a Lender with a new
Revolver Commitment hereunder one or more Persons that are not already Lenders
(each, an “Additional Lender”), or a combination thereof, provided that (i) any
such request for a Commitment Increase shall be in a minimum amount of
$10,000,000, (ii) immediately after giving effect to any Commitment
Increase, (y) the aggregate Revolver Commitments shall not exceed
$150,000,000 and (z) the aggregate of all Commitment Increases effected
shall not exceed $65,000,000, (iii) no
Default or Event of Default shall have occurred and be continuing on the
applicable Commitment Increase Date (as hereinafter defined) or shall result
from any Commitment Increase, (iv) immediately after giving effect to any
Commitment Increase (including any Borrowings in connection therewith and the
application of the proceeds thereof), the Borrower shall be in compliance with
the covenants contained in Article V, (v) no consent of any Lender to
such Commitment Increase shall be required and no Lender shall be obligated to
participate as a Lender in such Commitment Increase, and (vi) the Borrower
shall give the existing Lenders the right of first refusal for participating in
any such Commitment Increase by providing such notice to the Administrative
Agent ten (10) Domestic Business Days before executing a commitment with
any Person that is not already a Lender. 
An existing Lender shall have priority over Additional Lenders to
participate in such requested Commitment Increase if such existing Lender
provides written notice of its election to participate within ten (10) Domestic
Business Days of such existing Lender’s receipt of such notice.  Such notice from the Borrower shall specify
the requested amount of the Commitment Increase.  No Lender shall have any obligation to become
an Increasing Lender and any decision by a Lender to increase its Commitment
shall be made in its sole discretion independently from any other Lender.  Other than fees payable under the
Administrative Agent’s Letter Agreement, which shall be paid in accordance with
its terms, any fees paid by the Borrower for a Commitment Increase to an
Increasing Lender, an Additional Lender, the Administrative Agent or BB&T,
as arranger, shall be for their own account and shall be in an amount, if any,
mutually agreed upon by each such party and the Borrower, in each party’s sole
discretion.


 


(b)           Each Additional Lender must
qualify as an Eligible Assignee (the selection of which shall include the prior
approval of the Administrative Agent). 
The Borrower and each Additional Lender shall execute a joinder agreement,
and the Borrower and each Lender shall execute all such other documentation as
the Administrative Agent and the 


 


51

















 


Borrowers may reasonably require, all in form and
substance reasonably satisfactory to the Administrative Agent and the Borrower,
to evidence the Revolver Commitment adjustments referred to in
Section 2.14(e); provided that the failure of any
Lender that is not an Additional Lender or an Increasing Lender to execute any
such documentation shall not impair the ability of the Additional Lenders, the
Increasing Lenders and the Borrower to effect a Commitment Increase pursuant to
this Section 2.14.


 


(c)           If the aggregate Revolver
Commitments are increased in accordance with this Section 2.14, the
Borrower (in consultation with the Administrative Agent), Increasing
Lender(s) (if any) and Additional Lender(s) (if any) shall agree upon
the effective date (the “Commitment Increase Date,” which shall be a Domestic
Business Day not less than thirty (30) days prior to the Termination
Date).  The Administrative Agent shall
promptly notify the Lenders of such increase and the Commitment Increase Date.


 


(d)           Notwithstanding anything set
forth in this Section 2.14 to the contrary, the Borrower shall not incur
any Revolver Advances pursuant to any Commitment Increase (and no Commitment
Increase shall be effective) unless the conditions set forth in
Section 2.14(a) as well as the following conditions precedent are
satisfied on the applicable Commitment Increase Date:


 


(i)            The Administrative Agent shall have received
the following, each dated the Commitment Increase Date and in form and
substance reasonably satisfactory to the Administrative Agent:


 


(A)          a
supplement to this Agreement signed by the Required Lenders and each other
Lender committing to the Commitment Increase, setting forth the reallocation of
Commitments referred to in Section 2.14(e), all other documentation
required by the Administrative Agent pursuant to Section 2.14(b) and
such other modifications, documents or items as the Administrative Agent, the
Lenders or their counsel may reasonably request;


 


(B)           an
instrument, duly executed by the Borrower and each Guarantor acknowledging and
reaffirming its obligations under this Agreement, the Collateral Documents, and
the other Loan Documents to which it is a party;


 


(C)           a
certificate of the secretary or an assistant secretary of the Borrower and each
Guarantor, certifying to and attaching the resolutions adopted by the board of
directors (or similar governing body) of such party approving or consenting to
such Commitment Increase;


 


(D)          a
certificate of the Chief Financial Officer or another Responsible Officer of
the Borrower, certifying that (x) as of the Commitment Increase Date, all
representations and warranties of the Borrower and the Guarantors contained in
this Agreement and the other Loan Documents are true and correct (except to the
extent any such 


 


52

















 


representation or warranty is expressly stated to have
been made as of a specific date, in which case such representation or warranty
is true and correct as of such date), (y) immediately after giving effect
to such Commitment Increase (including any Borrowings in connection therewith
and the application of the proceeds thereof), the Borrower is in compliance
with the covenants contained in Article V, and (z) no Default or
Event of Default has occurred and is continuing, both immediately before and
after giving effect to such Commitment Increase (including any Borrowings in
connection therewith and the application of the proceeds thereof);


 


(E)           an
opinion or opinions of counsel for the Borrower and the Guarantors, in a form
satisfactory to Administrative Agent and covering such matters as
Administrative Agent may reasonably request, addressed to the Administrative
Agent and the Lenders, together with such other documents, instruments and
certificates as the Administrative Agent shall have reasonably requested; and


 


(F)           such
other documents or items that the Administrative Agent, the Lenders or their
counsel may reasonably request.


 


(ii)           In the case of any Borrowing of Revolver
Advances in connection with such Commitment Increase for the purpose of funding
an Acquisition, the applicable conditions set forth in this Agreement with
respect to Acquisitions shall have been satisfied.


 


(e)           On the
Commitment Increase Date, (i) the aggregate principal outstanding amount
of the Revolver Advances (the “Initial Advances”) immediately prior to giving
effect to the Commitment Increase shall be deemed to be repaid, (ii) immediately
after the effectiveness of the Commitment Increase, the Borrower shall be
deemed to have made new Borrowings of Revolver Advances (the “Subsequent
Borrowings”) in an aggregate principal amount equal to the aggregate principal
amount of the Initial Advances and of the types and for the Interest Periods
specified in a Notice of Borrowing delivered to the Administrative Agent in
accordance with Section 2.01, (iii) each Lender shall pay to the
Administrative Agent in immediately available funds an amount equal to the
difference, if positive, between (y) such Lender’s pro rata percentage
(calculated after giving effect to the Commitment Increase) of the Subsequent
Borrowings and (z) such Lender’s pro rata percentage (calculated without
giving effect to the Commitment Increase) of the Initial Advances, (iv) after
the Administrative Agent receives the funds specified in clause (iii) above,
the Administrative Agent shall pay to each Lender the portion of such funds
equal to the difference, if positive, between (y) such Lender’s pro rata
percentage (calculated without giving effect to the Commitment Increase) of the
Initial Advances and (z) such Lender’s pro rata percentage (calculated
after giving effect to the Commitment Increase) of the amount of the Subsequent
Borrowings, (v) the Lenders shall be deemed to hold the Subsequent
Borrowings ratably in accordance with their respective Revolver Commitments
(calculated after giving effect to the Commitment Increase), (vi) the
Borrower shall pay all accrued but unpaid interest on the Initial Advances to
the Lenders 


 


53

















 


entitled thereto, and (vii) the signature pages hereto
shall be deemed amended to reflect the Revolver Commitments of all Lenders
after giving effect to the Commitment Increase. 
The deemed payments made pursuant to clause (i) above in respect of
each Tranche Euro-Dollar Advance shall be subject to indemnification by the
Borrower pursuant to the provisions of Section 8.05 if the Commitment Increase
Date occurs other than on the last day of the Interest Period relating thereto.


 


ARTICLE III

CONDITIONS TO BORROWINGS


 


SECTION 3.01.                    Conditions to
Closing and First Borrowing.  The obligation of each Lender
to make an Advance on the Closing Date is subject to the satisfaction of the
conditions set forth in Section 3.02 and the following additional
conditions:


 


(a)           receipt by the
Administrative Agent from each of the parties hereto of a duly executed
counterpart of this Agreement signed by such party;


 


(b)           receipt by the
Administrative Agent of a duly executed Revolver Note for the account of each
Lender, complying with the provisions of Section 2.04;


 


(c)           receipt by the
Administrative Agent of an opinion of counsel to the Loan Parties, dated as of
the Closing Date (or in the case of an opinion delivered pursuant to
Section 5.28 hereof such later date as specified by the Administrative
Agent) in a form satisfactory to Administrative Agent and covering such matters
set forth in Exhibit F hereto and such additional matters relating
to the transactions contemplated hereby as the Administrative Agent may
reasonably request;


 


(d)           receipt by the
Administrative Agent of a certificate (the “Closing Certificate”), dated the
date of the first Borrowing, substantially in the form of Exhibit G
hereto, signed by a chief financial officer or other authorized officer of each
Loan Party, to the effect that, to his knowledge, (i) no Default has
occurred and is continuing on the date of the first Borrowing and (ii) the
representations and warranties of the Loan Parties contained in Article IV
are true on and as of the date of the first Borrowing hereunder;


 


(e)           receipt by the
Administrative Agent of all documents which the Administrative Agent or any
Lender may reasonably request relating to the existence of each Loan Party, the
authority for and the validity of this Agreement, the Notes and the other Loan
Documents, and any other matters relevant hereto, all in form and substance
satisfactory to the Administrative Agent, including without limitation a
certificate of incumbency of each Loan Party (the “Officer’s Certificate”),
signed by the Secretary, an Assistant Secretary, a member, manager, partner,
trustee or other authorized representative of the respective Loan Party,
substantially in the form of Exhibit H hereto, certifying as to the
names, true signatures and incumbency of the officer or officers of the
respective Loan Party, authorized to execute and deliver the Loan Documents,
and certified copies of the following items: 
(i) the Loan Party’s Organizational Documents; (ii) the Loan
Party’s Operating Documents; (iii) if applicable, a certificate of the
Secretary 


 


54

















 


of State of such Loan Party’s state of organization as
to the good standing or existence of such Loan Party, and (iv) the
Organizational Action, if any, taken by the board of directors of the Loan
Party or the members, managers, trustees, partners or other applicable Persons
authorizing the Loan Party’s execution, delivery and performance of this
Agreement, the Notes and the other Loan Documents to which the Loan Party is a
party;


 


(f)            completion of due diligence
to the satisfaction of the Administrative Agent with respect to the Borrower
and its Subsidiaries, including but not limited to review of the Investment
Policies, risk management procedures, accounting policies, systems integrity,
compliance, management and organizational structure and the loan and investment
portfolio of the Borrower and its Subsidiaries;


 


(g)           the Security Agreement and
the other Collateral Documents, each in form and content satisfactory to the
Administrative Agent shall have been duly executed by the applicable Loan
Parties and such documents shall have been delivered to the Administrative
Agent and shall be in full force and effect and each document (including each
UCC financing statement) required by law or reasonably requested by the
Administrative Agent to be filed, registered or recorded in order to create in
favor of the Administrative Agent for the benefit of the Secured Parties, upon
filing, recording or possession by the Administrative Agent, as the case may
be, a valid, legal and perfected first-priority security interest in and lien
on the Collateral described in the Collateral Documents shall have been
delivered to the Administrative Agent; Borrower shall also deliver or cause to
be delivered the certificates (with undated stock powers executed in blank) for
all shares of stock or other equity interests pledged to the Administrative
Agent for the benefit of Lenders pursuant to the Pledge Agreement;


 


(h)           the Administrative Agent
shall have received the results of a search of the UCC filings (or equivalent
filings) made with respect to the Loan Parties in the states (or other
jurisdictions) in which the Loan Parties are organized, the chief executive
office of each such Person is located, any offices of such persons in which
records have been kept relating to Collateral described in the Collateral
Documents and the other jurisdictions in which UCC filings (or equivalent
filings) are to be made pursuant to the preceding paragraph, together with
copies of the financing statements (or similar documents) disclosed by such
search, and accompanied by evidence satisfactory to the Administrative Agent
that the Liens other than Permitted Encumbrances indicated in any such
financing statement (or similar document) have been released or subordinated to
the satisfaction of Administrative Agent;


 


(i)            receipt by the
Administrative Agent of a Borrowing Base Certification Report, dated as of the
date of the initial Notice of Borrowing and satisfactory in all respects to the
Administrative Agent;


 


(j)            [Intentionally omitted];


 


55

















 


(k)           the Borrower shall have paid
all fees required to be paid by it on the Closing Date, including all fees
required hereunder and under the Administrative Agent’s Letter Agreement to be
paid as of such date, and shall have reimbursed the Administrative Agent for
all fees, costs and expenses of closing the transactions contemplated hereunder
and under the other Loan Documents, including the reasonable legal, audit and
other document preparation costs incurred by the Administrative Agent; and


 


(l)            such other documents or items
as the Administrative Agent, the Lenders or their counsel may reasonably
request.


 


For purposes of determining compliance with the
conditions specified in this Section 3.01, each Lender that has signed
this Agreement shall be deemed to have consented to, approved or accepted or to
be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless
the Administrative Agent shall have received notice from such Lender prior to
the proposed Closing Date specifying its objection thereto.


 


SECTION 3.02.                    Conditions to All
Borrowings.  The obligation of each Lender to make an
Advance on the occasion of each Borrowing is subject to the satisfaction of the
following conditions:


 


(a)           receipt by the
Administrative Agent of a Notice of Borrowing as required by Section 2.02,
together with a Borrowing Base Certification Report dated as of the date of
delivery and satisfactory in all respects to the Administrative Agent;


 


(b)           receipt by the
Administrative Agent of such documentation as the Administrative Agent shall
reasonably require confirming that the Borrower shall be in compliance with the
Minimum Liquidity Requirement;


 


(c)           the fact that, immediately
before and after such Borrowing, no Default shall have occurred and be
continuing;


 


(d)           the fact that the
representations and warranties of the Loan Parties contained in Article IV
of this Agreement and the other representations and warranties contained in the
Loan Documents shall be true, on and as of the date of such Borrowing (except
to the extent that any such representations and warranties speak as to a
specific date, in which case such representations and warranties shall be true
as of such date);


 


(e)           the fact that, immediately
after such Borrowing:  (A) the
aggregate outstanding principal amount of the Revolver Advances of each Lender
will not exceed the amount of its Revolver Commitment and (B) the
aggregate outstanding principal amount of the Revolver Advances will not exceed
the aggregate amount of the Revolver Commitments of all of the Lenders as of
such date;


 


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(f)            with respect to each
Pre-Positioned Investment that is funded with the proceeds of such Advance, the
Administrative Agent and the Collateral Custodian shall have received a faxed
copy of the executed note, if any, evidencing such Pre-Positioned Investment,
and, if requested in writing by the Administrative Agent, the Administrative
Agent shall have received a copy of the credit analysis, underwriting materials
and any similar document previously prepared by the Borrower in connection with
its investment decision in such Pre-Positioned Investment; and


 


(g)           the fact that, immediately
after such Borrowing the aggregate outstanding principal amount of the Revolver
Advances will not exceed the lesser of: 
(A) the aggregate amount of the Revolver Commitments of all of the
Lenders as of such date; and (B) the Borrowing Base.


 


Each Borrowing and each Notice of Continuation or
Conversion hereunder shall be deemed to be a representation and warranty by the
Loan Parties on the date of such Borrowing as to the truth and accuracy of the
facts specified in clauses (c), (d) and (e) of this Section.


 


ARTICLE IV

REPRESENTATIONS AND WARRANTIES


 


The Borrower and Guarantors represent and warrant that:


 


SECTION 4.01.                 Existence and Power.  The Borrower is a corporation,
and each Guarantor is a corporation, limited liability company or other legal
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or organization, as the case may be, is
duly qualified to transact business in every jurisdiction where, by the nature
of its business, such qualification is necessary, and has all organizational
powers and all governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.


 


SECTION 4.02.                    Organizational and
Governmental Authorization; No Contravention.  The execution, delivery and
performance by each Loan Party of this Agreement, the Notes, the Collateral
Documents and the other Loan Documents to which such Loan Party is a party (i) are
within such Loan Party’s organizational powers, (ii) have been duly
authorized by all necessary Organizational Action, (iii) require no action
by or in respect of, or filing with, any Governmental Authority that has not
been obtained or made when required, (iv) do not contravene, or constitute
a default under, any provision of applicable law or regulation or of the
Organizational Documents and Operating Documents of such Loan Party or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
such Loan Party or any of its Subsidiaries, and (v) do not result in the
creation or imposition of any Lien on any asset of such Loan Party or any of
its Subsidiaries (other than Liens in favor of the Administrative Agent for the
benefit of the Secured Parties to secure the Obligations).


 


SECTION 4.03.                    Binding Effect.  This Agreement constitutes a
valid and binding agreement of the Loan Parties enforceable in accordance with
its terms, and the Notes, the Collateral Documents and the other Loan
Documents, when executed and delivered in accordance with this Agreement, will
constitute valid and binding obligations of the Loan Parties 


 


57

















 


party to such Loan
Document enforceable in accordance with their respective terms, provided
that the enforceability hereof and thereof is subject in each case to general
principles of equity and to bankruptcy, insolvency and similar laws affecting
the enforcement of creditors’ rights generally.


 


SECTION 4.04.                    Financial
Information.


 


(a)           The audited consolidated
balance sheet of the Borrower as of December 31, 2009 and the related
consolidated statements of income, shareholders’ equity and cash flows for the
Fiscal Year then ended, reported on by Grant Thornton LLP, copies of which have
been delivered to the Administrative Agent for delivery to each of the Lenders,
and the unaudited consolidated financial statements of the Borrower for the
interim period ended June 30, 2010, copies of which have been delivered to
each of the Lenders, fairly present, in conformity with GAAP, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
dates and their consolidated results of operations and cash flows for such
periods stated.


 


(b)           Since December 31, 2009
there has been no event, act, condition or occurrence having a Material Adverse
Effect.


 


SECTION 4.05.                    Litigation.  There is no action, suit or
proceeding pending, or to the knowledge of the Loan Parties threatened, against
or affecting the Loan Parties or any of their respective Subsidiaries before
any court or arbitrator or any Governmental Authority which in any manner draws
into question the validity or enforceability of, or could impair the ability of
the Loan Parties to perform their respective obligations under, this Agreement,
the Notes, the Collateral Documents or any of the other Loan Documents.


 


SECTION 4.06.                    Compliance with
ERISA.


 


(a)           The Loan Parties and each
member of the Controlled Group have fulfilled their obligations under the
minimum funding standards of ERISA and the Code with respect to each Plan and
are in compliance with the applicable provisions of ERISA and the Code, and
have not incurred any liability to the PBGC or a Plan under Title IV of ERISA.


 


(b)           Neither the Loan Parties nor
any member of the Controlled Group is or ever has been obligated to contribute
to any Multiemployer Plan.


 


(c)           The assets of the Loan
Parties or any Subsidiary of any Loan Party do not and will not constitute “plan
assets,” within the meaning of ERISA, the Code and the respective regulations
promulgated thereunder.  The execution,
delivery and performance of this Agreement, and the borrowing and repayment of
amounts hereunder, do not and will not constitute “prohibited transactions”
under ERISA or the Code.


 


SECTION 4.07.                    Payment of Taxes.  There have been filed on
behalf of the Loan Parties and their respective Subsidiaries all Federal, state
and local income, excise, property and other tax returns which are required to
be filed by them and all taxes due pursuant to such 


 


58

















 


returns or pursuant
to any assessment received by or on behalf of the Loan Parties or any
Subsidiary have been paid other than those being contested in good faith and by
appropriate proceedings diligently conducted and with respect to which such
Person has established adequate reserves in accordance with GAAP.  The charges, accruals and reserves on the
books of the Loan Parties and their respective Subsidiaries in respect of taxes
or other governmental charges are, in the opinion of the Loan Parties,
adequate.  No Loan Party has been given
or been requested to give a waiver of the statute of limitation relating to the
payment of Federal, state, local or foreign taxes.


 


SECTION 4.08.                    Subsidiaries.  Each of the Subsidiaries
(other than any Foreclosed Subsidiary) of each Loan Party is a corporation, a
limited liability company or other legal entity, duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, is duly qualified to transact business in every jurisdiction
where, by the nature of its business, such qualification is necessary, and has
all organizational powers and all governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.  No Loan Party has any Subsidiaries except
those Subsidiaries listed on Schedule 4.08 and as set forth in any
Compliance Certificate provided to the Administrative Agent and Lenders
pursuant to Section 5.01(c) after the Closing Date, which accurately
sets forth each such Subsidiary’s complete name and jurisdiction of
organization.


 


SECTION 4.09.                    Investment Company
Act, Etc.  Neither the Borrower nor any of its
Affiliates is a “holding company” as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935, as amended.  The Borrower qualifies as an RIC and is an “investment
company” that has elected to be a “business development company” as defined in Section 2(a)(48)
of the Investment Company Act and is subject to regulation as such under the
Investment Company Act including Section 18, as modified by Section 61,
of the Investment Company Act.  The
business and other activities of the Borrower, including but not limited to,
the making of the Advances by the Lenders, the application of the proceeds and
repayment thereof by the Borrower and the consummation of the transactions
contemplated by the Loan Documents to which the Borrower is a party do not result
in any violations, with respect to the Borrower, of the provisions of the
Investment Company Act or any rules, regulations or orders issued by the
Securities and Exchange Commission thereunder.


 


SECTION 4.10.                    All Consents
Required.  All approvals, authorizations, consents,
orders or other actions of any Person or of any Governmental Authority (if any)
required in connection with the due execution, delivery and performance by the
Loan Parties of this Agreement and any Loan Document to which any Loan Party is
a party, have been obtained.


 


SECTION 4.11.                    Ownership of
Property; Liens.  Each of the Loan Parties and their respective
Subsidiaries has title or the contractual right to possess its properties
sufficient for the conduct of its business and none of such properties is
subject to any Lien except as permitted in Section 5.14.


 


SECTION 4.12.                    No Default.  No Loan Party nor any of their
respective Subsidiaries is in default under or with respect to any agreement,
instrument or undertaking to 


 


59

















 


which it is a party
or by which it or any of its property is bound. 
No Default or Event of Default has occurred and is continuing.


 


SECTION 4.13.                    Full Disclosure.  The Loan Parties have
disclosed to the Lenders in writing any and all facts which, alone or in the
aggregate, could reasonably be expected to have a Material Adverse Effect or to
materially affect or alter the business of the Loan Parties as presently
conducted.


 


SECTION 4.14.                    Environmental
Matters.


 


(a)           No Loan Party nor any
Subsidiary of a Loan Party is subject to any Environmental Liability which
would reasonably be expected to have a Material Adverse Effect and no Loan
Party nor any Subsidiary of a Loan Party has been designated as a potentially
responsible party under CERCLA.  None of
the Properties has been identified on any current or proposed (i) National
Priorities List under 40 C.F.R. § 300, (ii) CERCLIS list or (iii) any
list arising from a state statute similar to CERCLA.


 


(b)           No Hazardous Materials have
been or are being used, produced, manufactured, processed, treated, recycled,
generated, stored, disposed of, managed or otherwise handled at, or shipped or
transported to or from the Properties or are otherwise present at, on, in or
under the Properties, or, to the best of the knowledge of the Loan Parties, at
or from any adjacent site or facility, except for Hazardous Materials, such as
cleaning solvents, pesticides and other materials used, produced, manufactured,
processed, treated, recycled, generated, stored, disposed of, and managed or
otherwise handled in minimal amounts in the ordinary course of business of such
Loan Party or Subsidiary of a Loan Party in compliance with all applicable
Environmental Requirements.


 


(c)           The Loan Parties, and each
of their respective Subsidiaries, has procured all Environmental Authorizations
necessary for the conduct of the business contemplated on such Property, and is
in compliance in all material respects with all Environmental Requirements in
connection with the operation of the Properties and the Loan Party’s, and each
of their respective Subsidiary’s, respective businesses.


 


SECTION 4.15.                    Compliance with Laws.  Each Loan Party and each
Subsidiary of a Loan Party is in compliance with all applicable laws, including,
without limitation, all Environmental Laws and all regulations and requirements
of the Securities and Exchange Commission and the National Association of
Securities Dealers, Inc. (including with respect to timely filing of
reports).


 


SECTION 4.16.                    Capital Securities.  All Capital Securities,
debentures, bonds, notes and all other securities of each Loan Party and their
respective Subsidiaries presently issued and outstanding are validly and
properly issued in accordance with all applicable laws, including, but not
limited to, the “Blue Sky” laws of all applicable states and the federal
securities laws.  The issued shares of
Capital Securities of each of the Loan Party’s respective Subsidiaries are
owned by the Loan Parties free and clear of any Lien or adverse claim.


 


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SECTION 4.17.                    Margin Stock.  No Loan Party nor any of their
respective Subsidiaries is engaged principally, or as one of its important
activities, in the business of purchasing or carrying any Margin Stock, and no
part of the proceeds of any Advance 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, or be used for any purpose which violates, or which
is inconsistent with, the provisions of Regulation X of the Board of Governors
of the Federal Reserve System.  Following
the application of the proceeds from each Advance, not more than 25% of the
value of the assets, either of the Borrower only or of the Borrower and its
Subsidiaries on a consolidated basis, will be “Margin Stock.”


 


SECTION 4.18.                    Insolvency.  After giving effect to the
execution and delivery of the Loan Documents and the making of the Advances
under this Agreement, no Loan Party will be “insolvent,” within the meaning of
such term as defined in § 101 of Title 11 of the United States Code or Section 2
of either the Uniform Fraudulent Transfer Act or the Uniform Fraudulent
Conveyance Act, or any other applicable state law pertaining to fraudulent
transfers, as each may be amended from time to time, or be unable to pay its
debts generally as such debts become due, or have an unreasonably small capital
to engage in any business or transaction, whether current or contemplated.


 


SECTION 4.19.                    Collateral Documents.  Upon execution by the
applicable Loan Parties, the Collateral Documents shall be effective to create
in favor of the Administrative Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral,
securing the Obligations, and, upon (i) the filing of one or more UCC
financing statements in the appropriate jurisdictions, (ii) delivery of
the certificates evidencing shares of stock, membership interests and other
equity interests and delivery of the original notes and other instruments
representing debt or other obligations owing to the Loan Parties to the
Collateral Custodian as bailee for the Administrative Agent and (iii) execution
and delivery of notices to the depositary banks in the form attached hereto as Exhibit I-2
with respect to the amendment and restatement of the Credit Agreement provided
in this Agreement, the Administrative Agent shall have or continue to have a
fully perfected first priority Lien on, and security interest in, all right,
title and interest of the applicable Loan Parties, in such Collateral and the
proceeds thereof that can be perfected upon filing of one or more UCC financing
statements and execution and delivery of such equity interests, notes and other
instruments and such control agreements, in each case prior and superior in any
right to any other Person.  The
representations and warranties of the Loan Parties contained in the Collateral
Documents are true and correct.


 


SECTION 4.20.                    Labor Matters.  There are no strikes,
lockouts, slowdowns or other labor disputes against any Loan Party or any
Subsidiary of any Loan Party pending or, to the knowledge of any Loan Party,
threatened.  The hours worked by and
payment made to employees of the Loan Parties and each Subsidiary of any Loan
Party have been in compliance with the Fair Labor Standards Act and any other
applicable federal, state or foreign law dealing with such matters.  All payments due from the Loan Parties or any
of their respective Subsidiaries, or for which any claim may be made against
the Loan Parties or any of their respective Subsidiaries, on account of wages
and employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of the Loan Party or such 


 


61

















 


Subsidiary, as
appropriate.  No Loan Party nor any
Subsidiary of a Loan Party is party to a collective bargaining agreement.


 


SECTION 4.21.                    Patents, Trademarks, Etc.  The Loan Parties and their
respective Subsidiaries own, or are licensed to use, all patents, trademarks,
trade names, copyrights, technology, know-how and processes, service marks and
rights with respect to the foregoing that are material to the businesses,
assets, operations, properties or condition (financial or otherwise) of the
Loan Parties and their respective Subsidiaries taken as a whole. The use of
such patents, trademarks, trade names, copyrights, technology, know-how,
processes and rights with respect to the foregoing by the Loan Parties and
their respective Subsidiaries, does not infringe on the rights of any Person.


 


SECTION 4.22.                    Insurance.  The Loan Parties and each of
their Subsidiaries has (either in the name of such Loan Party or in such
Subsidiary’s name), with financially sound and reputable insurance companies,
insurance in at least such amounts and against at least such risks (including
on all its property, and public liability and worker’s compensation) as are
usually insured against in the same general area by companies of established
repute engaged in the same or similar business.


 


SECTION 4.23.                    Anti-Terrorism Laws.  None of the Loan Parties, nor
any of their respective Subsidiaries, is in violation of any laws relating to
terrorism or money laundering, including, without limitation, the Patriot Act.


 


SECTION 4.24.                    Ownership Structure.  As of the Closing Date, Schedule 4.24
is a complete and correct list of all Subsidiaries and Affiliates of the
Borrower and of each Loan Party setting forth for each such Subsidiary, (i) the
jurisdiction of organization of such Subsidiary, (ii) each Person holding
any Capital Securities in such Subsidiary, (iii) the nature of the Capital
Securities held by each such Person, and (iv) the percentage of ownership
of such Subsidiary represented by such Capital Securities.  Except as disclosed in such Schedule, as of
the Closing Date (i) the Borrower and its Subsidiaries owns, free and
clear of all Liens and has the unencumbered right to vote, all outstanding
Capital Securities in each Person shown to be held by it on such Schedule, (ii) all
of the issued and outstanding Capital Securities of each Person is validly
issued, fully paid and nonassessable and (iii) there are no outstanding
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including, without limitation, any stockholders’ or voting trust
agreements) for the issuance, sale, registration or voting of, or outstanding
securities convertible into, any additional Capital Securities of any type in,
any such Person.


 


SECTION 4.25.                    Reports Accurate;
Disclosure.  All information, exhibits, financial
statements, documents, books, records or reports furnished or to be furnished
by the Loan Parties to the Administrative Agent or any Lender in connection
with this Agreement or any Loan Document, including without limitation all
reports furnished pursuant to Section 4.04, are true, complete and
accurate in all material respects; it being recognized by the Administrative
Agent and the Lenders that the projections and forecasts provided by Borrower
in good faith and based upon reasonable assumptions are not to be viewed as
facts and that actual results during the period or periods covered by any such
projections and forecasts may differ from the projected 


 


62

















 


or forecasted
results.  Neither this Agreement, nor any
Loan Document, nor any agreement, document, certificate or statement furnished
to the Administrative Agent or the Lenders in connection with the transactions
contemplated hereby contains any untrue statement of material fact or omits to
state a material fact necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances under which they
were made.  There is no fact known to any
Loan Party which materially and adversely affects the Borrower and its
Subsidiaries, or in the future is reasonably likely to have a Material Adverse
Effect.


 


SECTION 4.26.                    Location of Offices.  The Borrower’s name is Main Street
Capital Corporation.  The Initial
Guarantors’ names are Main Street Capital Partners, LLC and Main Street Equity
Interests, Inc.  The location of
Borrower (within the meaning of Article 9 of the UCC) is Maryland.  The Location of the Initial Guarantors
(within the meaning of Article 9 of the UCC) is Delaware.  Neither the Borrower nor any Initial
Guarantor has changed its name, identity, structure, existence or state of
formation, whether by amendment of its Organizational Documents, by reorganization
or otherwise, or has changed its location (within the meaning of Article 9
of the UCC) within the four (4) months preceding the Closing Date or any
subsequent date on which this representation is made.


 


SECTION 4.27.                    Affiliate
Transactions.  Except as permitted by Section 5.27,
neither the Borrower nor any Subsidiary nor any other Loan Party is a party to
or bound by any agreement or arrangement (whether oral or written) to which any
Affiliate of the Borrower, any Subsidiary or any other Loan Party is a party.


 


SECTION 4.28.                    Broker’s Fees.  Except as set forth in the
Administrative Agent’s Letter Agreement, no broker’s or finder’s fee,
commission or similar compensation will be payable with respect to the
transactions contemplated hereby.  Except
as set forth in the Administrative Agent’s Letter Agreement, no other similar
fees or commissions will be payable by any Loan Party for any other services
rendered to the Borrower or any of its Subsidiaries ancillary to the
transactions contemplated hereby.


 


SECTION 4.29.                    Survival of
Representations and Warranties, Etc.  All statements contained in
any certificate, financial statement or other instrument delivered by or on
behalf of the Borrower, any Subsidiary or any other Loan Party to the
Administrative Agent or any Lender pursuant to or in connection with this
Agreement or any of the other Loan Documents (including, but not limited to,
any such statement made in or in connection with any amendment thereto or any
statement contained in any certificate, financial statement or other instrument
delivered by or on behalf of any Loan Party prior to the Closing Date and
delivered to the Administrative Agent or any Lender in connection with the
underwriting or closing of the transactions contemplated hereby) shall constitute
representations and warranties made by the Loan Parties in favor of the
Administrative Agent and each of the Lenders under this Agreement.  All such representations and warranties shall
survive the effectiveness of this Agreement, the execution and delivery of the
Loan Documents and the making of the Advances.


 


SECTION 4.30.                    Loans and
Investments.  No Loan Party nor any of their respective
Subsidiaries has made a loan, advance or Investment which is outstanding or
existing on the Closing Date except (i) Portfolio Investments in the
ordinary course of business and 


 


63

















 


consistently with
the Investment Policies, (ii) Investments in Subsidiaries and Affiliates
as set forth on Schedule 4.24, (iii) Investments in Cash and Cash
Equivalents, and (iv) other Investments in existence on the Closing Date
and described on Schedule 4.30.


 


SECTION 4.31.                    No Default or Event
of Default.  No event has occurred and is continuing and
no condition exists, or would result from any Advance or from the application
of the proceeds therefrom, which constitutes or would reasonably be expected to
constitute a Default or Event of Default.


 


SECTION 4.32.                    USA Patriot Act;
OFAC.


 


(a)           No Loan Party nor any
Affiliate of a Loan Party is (1) a Person that resides or has a place of
business in a country or territory named on such lists or which is designated
as a Non-Cooperative Jurisdiction by the Financial Action Task Force on Money
Laundering (“FATF”), or whose subscription funds are transferred from or
through such a jurisdiction; (2) a “Foreign Shell Bank” within the meaning
of the USA Patriot Act, i.e., a foreign lender that does not have a physical
presence in any country and that is not affiliated with a Lender that has a
physical presence and an acceptable level of regulation and supervision; or (3) a
person or entity that resides in or is organized under the laws of a
jurisdiction designated by the United States Secretary of the Treasury under Section 311
or 312 of the USA Patriot Act as warranting special measures due to money
laundering concerns.


 


(b)           No Loan Party or any
Affiliate of a Loan Party (i) is a Sanctioned Entity, (ii) has a more
than 10% of its assets located in Sanctioned Entities, or (iii) derives
more than 10% of its operating income from investments in, or transactions with
Sanctioned Entities.  The proceeds of any
Advance will not be used and have not been used to fund any operations in,
finance any investments or activities in or make any payments to, a Sanctioned
Entity.  No Loan Party or any Affiliate
of a Loan Party are in violation of and shall not violate any of the country or
list based economic and trade sanctions administered and enforced by OFAC that
are described or referenced at http://www.ustreas.gov/offices/enforcement/ofac/
or as otherwise published from time to time.


 


SECTION 4.33.                    Material Contracts.  Schedule 4.33 is,
as of the Closing Date, a true, correct and complete listing of all contracts
to which any Loan Party is a party, the breach of or failure to perform which,
either by a Loan Party or other party to such contract, could reasonably be
expected to have a Material Adverse Effect (“Material Contract”).  The Borrower, its Subsidiaries and the other
Loan Parties that is a party to any Material Contract has performed and is in
compliance with all of the material terms of such Material Contract, and no
Loan Party has knowledge of any default or event of default, or event or
condition which with the giving of notice, the lapse of time, or both, would constitute
such a default or event of default, that exists with respect to any such
Material Contract.


 


SECTION 4.34.                    Collateral-Mortgage
Property.  With respect to each Mortgaged Property
within the Collateral the Administrative Agent has:  (i) a first priority lien 


 


64

















 


upon the fee simple
title to the Mortgaged Property; (ii) a first priority lien upon the
leases and rents applicable to the Mortgaged Property; (iii) a first
priority lien upon all equipment and fixtures applicable to the Mortgaged
Property; and (iv) all Mortgaged Property Security Documents reasonably
requested by the Administrative Agent.


 


SECTION 4.35.                    Mortgaged Properties.  As of the Closing Date,
Schedule 1.01 is a correct and complete list of all Mortgaged Properties
included in the Collateral.


 


SECTION 4.36.                    Common Enterprise.  The successful operation and
condition of the Loan Parties is dependent on the continued successful
performance of the functions of the group of Loan Parties as a whole and the
successful operation of each of the Loan Parties is dependent on the successful
performance and operation of each other Loan Party.  Each Loan Party expects to derive benefit
(and its board of directors or other governing body has determined that it may
reasonably be expected to derive benefit), directly and indirectly, from
(i) successful operations of each of the other Loan Parties and
(ii) the credit extended by the Lenders to the Borrower hereunder, both in
their separate capacities and as members of the group of companies.  Each Loan Party has determined that
execution, delivery, and performance of this Agreement and any other Loan
Documents to be executed by such Loan Party is within its purpose, will be of
direct and indirect benefit to such Loan Party, and is in its best interest.


 


SECTION 4.37.                    Investment Policies.  Since the Closing Date, (i) there
have been no changes in the Investment Policies other than in accordance with
this Agreement and (ii)  the Borrower has at all times complied in all
material respects with the Investment Policies with respect to each Portfolio
Investment.  The Investment Policies are
fully and accurately described in all material respects in the Borrower’s
annual report on Form 10-K most recently filed with the Securities and
Exchange Commission, and any subsequent quarterly reports on Form 10-Q
filed with the Securities and Exchange Commission.


 


SECTION 4.38.                    Eligibility of
Portfolio Investments.  On the date of each Borrowing, (i) the
information contained in the Borrowing Base Certification Report delivered
pursuant to Section 3 is an accurate and complete listing in all material
respects of all the Eligible Investments that are part of the Collateral as of
such date, and the information contained therein with respect to the identity
of such Portfolio Investment and the amounts owing thereunder is true and
correct in all material respects as of such date and (ii) each such
Portfolio Investment is an Eligible Investment.


 


SECTION 4.39.                    Portfolio
Investments.  The Borrower has not authorized the filing of
and is not aware of any financing statements against the Borrower that include
a description of collateral covering the Portfolio Investments other than any
financing statement that has been terminated and financing statements naming
the Administrative Agent for the benefit of the Secured Parties as secured
party.  The Borrower is not aware of the
filing of any judgment or tax Lien filings against the Borrower. Each Portfolio
Investment was originated without any fraud or material misrepresentation by
the Borrower or, to the best of the Borrower’s knowledge, on the part of the
Obligor.


 


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SECTION 4.40.               Selection Procedures.  No procedures believed by the
Borrower to be adverse to the interests of the Administrative Agent and the
Lenders were utilized by the Borrower in identifying and/or selecting the
Portfolio Investments that are part of the Eligible Investments and are
included in the Borrowing Base.


 


SECTION 4.41.               Coverage Requirement.  The Advances outstanding do
not exceed the lesser of (i) the aggregate amount of the Revolver
Commitments of all the Lenders and (ii) the Borrowing Base.


 


ARTICLE V

COVENANTS


 


The Borrower and Guarantors agree, jointly and
severally, that, so long as any Lender has any Revolver Commitment hereunder or
any Obligation remains unpaid:


 


SECTION 5.01.               Information.  The Borrower will deliver to
the Administrative Agent, who will then promptly deliver to each of the
Lenders:


 


(a)           as soon as
available and in any event within 90 days after the end of each Fiscal Year, a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such Fiscal Year and the related consolidated statements of
income, shareholders’ equity and cash flows for such Fiscal Year, setting forth
in each case in comparative form the figures for the previous Fiscal Year, all
certified by Grant Thornton LLP or other independent public accountants
reasonably acceptable to the Administrative Agent, with such certification to
be free of exceptions and qualifications not acceptable to the Required
Lenders; provided, that to the extent that any Special Purpose
Subsidiary or Foreclosed Subsidiary that is treated as a consolidated entity
and reflected on the consolidated balance sheet of the Borrower and its
Subsidiaries, concurrently with the delivery of the financial statements
referred to in this paragraph (a), the Borrower shall provide to the
Administrative Agent a balance sheet for each such Special Purpose Subsidiary
and such Foreclosed Subsidiary as of the end of such Fiscal Year and the
related statements of income, stockholders’ equity and cash flows (together
with all footnotes thereto) of such Special Purpose Subsidiary and such
Foreclosed Subsidiary for such Fiscal Year, setting forth in each case in
comparative form the figures for the previous Fiscal Year;


 


(b)           as soon as
available and in any event within 45 days after the end of each of the four
Fiscal Quarters of each Fiscal Year, consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of the end of such Fiscal Quarter and the
related statement of income and statement of cash flows for such Fiscal Quarter
and for the portion of the Fiscal Year ended at the end of such Fiscal Quarter,
setting forth in each case in comparative form the figures for the
corresponding Fiscal Quarter and the corresponding portion of the previous
Fiscal Year, all certified (subject to normal year-end adjustments) as to
fairness of presentation, GAAP and consistency by the chief financial officer
of the Borrower; provided, that to the extent that any Special Purpose
Subsidiary or any Foreclosed Subsidiary that is treated as a consolidated
entity and 


 


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reflected on the consolidated balance sheet of the
Borrower and its Subsidiaries, concurrently with the delivery of the financial
statements referred to in this paragraph (b), the Borrower shall provide to the
Administrative Agent a balance sheet for each such Special Purpose Subsidiary
and such Foreclosed Subsidiary as of the end of such Fiscal Quarter and the
related statements of income, stockholders’ equity and cash flows (together
with all footnotes thereto) of such Special Purpose Subsidiary and such
Foreclosed Subsidiary for such Fiscal Quarter, setting forth in each case in
comparative form the figures for the previous Fiscal Quarter;


 


(c)           simultaneously
with the delivery of each set of financial statements referred to in clauses (a) and
(b) above, a certificate, substantially in the form of Exhibit  J
and with compliance calculations in form and content satisfactory to the
Administrative Agent (a “Compliance Certificate”), of the chief financial
officer or other authorized officers of the Borrower (i) setting forth in
reasonable detail the calculations required to establish whether the Loan
Parties were in compliance with the requirements of Sections 5.04, 5.05,
5.07, 5.09, 5.10, 5.11, 5.12 and 5.37 on the date of such financial statements,
(ii) setting forth the identities of the respective Subsidiaries on the
date of such financial statements, and (iii) stating whether any Default
exists on the date of such certificate and, if any Default then exists, setting
forth the details thereof and the action which the Loan Parties are taking or
propose to take with respect thereto;


 


(d)           [Intentionally
omitted.];


 


(e)           within 5
Domestic Business Days after the Borrower becomes aware of the occurrence of
any Default, a certificate of the chief financial officer or other authorized
officer of the Borrower setting forth the details thereof and the action which
the Borrower is taking or proposes to take with respect thereto;


 


(f)            promptly after the same
become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all functions of
said Commission, or with any national securities exchange, or distributed by
the Borrower to its shareholders generally, as the case may be;


 


(g)           if and when the
Borrower or any member of the Controlled Group (i) gives or is required to
give notice to the PBGC of any “reportable event” (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows
that the plan administrator of any Plan has given or is required to give notice
of any such reportable event, a copy of the notice of such reportable event
given or required to be given to the PBGC; (ii) receives notice of
complete or partial withdrawal liability under Title IV of ERISA, a copy
of such notice; or (iii) receives notice from the PBGC under Title IV
of ERISA of an intent to terminate or appoint a trustee to administer any Plan,
a copy of such notice;


 


(h)           promptly after
the Borrower knows of the commencement thereof, notice of any litigation,
dispute or proceeding (and any material development in respect of such 


 


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proceedings) involving a claim against a Loan Party
and/or any Subsidiary of a Loan Party for $1,000,000 or more in excess of
amounts covered in full by applicable insurance (subject to customary
deductibles);


 


(i)            a Borrowing
Base Certification Report, substantially in the form of Exhibit E
and otherwise in form and content reasonably satisfactory to the Administrative
Agent, which report is certified as to truth and accuracy by the Chief
Financial Officer or other authorized officer of the Borrower and which report
shall be delivered (A) while any Advances or other amounts are
outstanding, by the 5th  Domestic Business Day following the last day
of each month and (B) otherwise, by the 10th Domestic
Business Day following the last day of each Fiscal Quarter.


 


(j)            promptly at the
request of the Administrative Agent, (i) copies of the Investment
Documents with respect to any Portfolio Investment and (ii) to the extent
not subject to a nondisclosure provision, the most recent valuation report of
the Borrower’s and its Subsidiaries’ loan and investment portfolio, conducted
by Deloitte Financial Advisory Services LLP or such other third party appraiser
reasonably acceptable to the Administrative Agent; provided that, the Borrower
shall use its best efforts to obtain the consent of Deloitte Financial Advisory
Services LLP or such other appraiser to release such report to the
Administrative Agent;


 


(k)           as soon as
possible and in any event within 10 days of filing thereof, copies of all tax
returns filed by any Loan Party with the U.S. Internal Revenue Service;


 


(l)            promptly upon
the occurrence of any Internal Control Event which is required to be publicly
disclosed of which a Responsible Officer (other than a Responsible Officer
committing the fraud constituting such Internal Control Event) has knowledge;
and


 


(m)          from time to
time such additional information regarding the financial position or business
of the Borrower, its Subsidiaries, and each Loan Party as the Administrative
Agent, at the request of any Lender, may reasonably request.


 


For purposes of clauses (a), (b) and (f) of
this Section 5.01, all financial statements and other information
contained therein filed with the Securities and Exchange Commission shall be
deemed delivered hereunder; provided, however, that nothing in
the foregoing shall be deemed to relieve the Borrower of its obligation to
deliver a Compliance Certificate pursuant to clause (c).


 


SECTION 5.02.               Inspection of
Property, Books and Records.  The Borrower will (i) keep,
and will cause each of its Subsidiaries to keep, proper books of record and
account in which full, true and correct entries in conformity with GAAP shall
be made of all dealings and transactions in relation to its business and
activities; (ii) permit, and will cause each Subsidiary of the Borrower
and each Loan Party to permit, with at least five (5) Domestic Business
Days’ prior notice (or such lesser time period agreed upon by the
Administrative Agent and the Borrower), which notice shall not be required in
the case of an emergency, the Administrative Agent or its designee, at the
expense of the Borrower and Loan Parties, to 


 


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perform periodic
field audits and investigations of the Borrower, the Loan Parties and the
Collateral, from time to time; and (iii) permit, and will cause each
Subsidiary to permit, with at least five (5) Domestic Business Days’ prior
notice (or such lesser time period agreed upon by the Administrative Agent and
the Borrower), the Administrative Agent or its designee, at the expense of the
Borrower and the Loan Parties, to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books
and records and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants;
provided that the Borrower shall only be required to reimburse the
Administrative Agent for only one such inspection each Fiscal Quarter unless a
Default shall have occurred and be continuing. 
The Loan Parties agree to cooperate and assist in such visits and
inspections, in each case at such reasonable times and as often as may
reasonably be desired.


 


SECTION 5.03.               Maintenance of RIC
Status and Business Development Company.  The Borrower will maintain its
status as an RIC under the Code and as a “business development company” under
the Investment Company Act.


 


SECTION 5.04.               Minimum Liquidity.  The Borrower will maintain, at
any time when the aggregate Revolver Advances exceed 80% of the Borrowing Base,
Liquidity of not less than 10% of the aggregate outstanding principal amount of
the sum of all Revolver Advances as of the date of determination (the “Minimum
Liquidity Requirement”).


 


SECTION 5.05.               Capital Expenditures.  Capital Expenditures will not
exceed in the aggregate in any Fiscal Year the sum of $1,000,000; provided that
after giving effect to the incurrence of any Capital Expenditures permitted by
this Section, no Default shall have occurred and be continuing (with the effect
that amounts not incurred in any Fiscal Year may not be carried forward to a
subsequent period).


 


SECTION 5.06.               Sale/Leasebacks.  The Loan Parties shall not,
nor shall they permit any Subsidiary to, enter into any Sale/Leaseback
Transaction


 


SECTION 5.07.               Minimum Consolidated
Tangible Net Worth.  Consolidated Tangible Net Worth shall not be
less than the sum of (i) 80.0% of the Consolidated Tangible Net Worth on
the Closing Date plus (ii) 80.0% of the cumulative Net Proceeds of Capital
Securities/Conversion of Debt received after the Closing Date, calculated
quarterly at the end of each Fiscal Quarter.


 


SECTION 5.08.               Acquisitions.  No Loan Party nor any
Subsidiary of a Loan Party shall make any Acquisition, or take any action to
solicit the tender of securities or proxies in respect thereof in order to
effect any Acquisition.


 


SECTION 5.09.               Interest Coverage
Ratio. 
The Borrower will maintain, as of the end of each Fiscal Quarter,
commencing with the Fiscal Quarter ending [December 31], 2010, an Interest
Coverage Ratio of not less than 2.00:1.00, determined for the period of the
four consecutive preceding Fiscal Quarters ending on the date of determination.


 


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SECTION 5.10.               Asset Coverage Ratio.  The Borrower will maintain, as
of the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending [December 31],
2010, an Asset Coverage Ratio of not less than 2.50:1.00.


 


SECTION 5.11.               Loans or Advances.  No Loan Party nor any
Subsidiary of a Loan Party shall make loans or advances to any Person except:
(i) solely to the extent not prohibited by Applicable Laws, employee loans
or advances that do not exceed Five Hundred Thousand Dollars ($500,000) in the
aggregate at any one time outstanding made on an arms’-length basis in the
ordinary course of business and consistently with practices existing on
June 30, 2010 and described in the Borrower’s Form 10-Q for the
quarter ended June 30, 2010 filed with the Securities and Exchange
Commission; (ii) deposits required by government agencies or public
utilities; (iii) loans or advances to the Borrower or any Guarantor that
is a Consolidated Subsidiary; (iv) loans and advances by SBIC Entities in
the ordinary course of business, (v) loans or advances consisting of
Portfolio Investments and (vi) loans and advances outstanding on the
Closing Date and set forth on Schedule 5.11; provided that after giving effect
to the making of any loans, advances or deposits permitted by this Section 5.11,
no Default shall have occurred and be continuing.  All loans or advances permitted under this
Section 5.11 (excluding Senior Bank Loan Investments that are Noteless Loans)
shall be evidenced by written promissory notes. 
Except as approved by the Administrative Agent in writing, no Loan Party
nor any Subsidiary of a Loan Party shall request or receive a promissory note
or other instrument from any Obligor in connection with a Noteless Loan.


 


SECTION 5.12.               Restricted Payments.  The Loan Parties will not
declare or make any Restricted Payment during any Fiscal Year, except that:


 


(a)           any Subsidiary
of the Borrower may pay Restricted Payments to the Borrower, on at least a pro
rata basis with any other shareholders if such Subsidiary is not wholly owned
by the Borrower and other Wholly Owned Subsidiaries; and


 


(b)           the Borrower
may declare or make Restricted Payments from time to time in accordance with
Applicable Law to owners of its Capital Securities so long as (i) at the
time when any such Restricted Payment is to be made, no Default or Event of
Default has occurred and is continuing or would result therefrom; (ii) after
giving effect to the making of such Restricted Payment, Consolidated Tangible
Net Worth, on a pro forma basis, determined as of the last day of the last
Fiscal Quarter of Borrower for which the Borrower has provided financial
statements and the corresponding Compliance Certificate to the Administrative
Agent and Lenders as if such Restricted Payment had been paid during such
Fiscal Quarter, shall not be less than the sum of (x) 87.5% of the
Consolidated Tangible Net Worth on the Closing Date plus (y) 87.5% of the
cumulative Net Proceeds of Capital Securities/Conversion of Debt received after
the Closing Date; and (iii) the chief executive officer, chief financial
officer or other authorized officer of the Borrower shall have certified to the
Administrative Agent and Lenders as to compliance with the preceding
clauses (i) and (ii) in a certificate attaching calculations; provided,
however, that notwithstanding the existence of a Default or an Event of
Default (other than an Event of Default specified in Sections 6.01(g) or
(h)), the Borrower may pay dividends in an amount equal to its investment
company taxable income, net tax-


 


70

















 


exempt interest and net capital gains that is
required to be distributed to its shareholders in order to maintain its status
as an RIC and to avoid excise taxes imposed on RICs.


 


SECTION 5.13.               Investments.  No Loan Party nor any
Subsidiary of a Loan Party shall make Investments in any Person except as
permitted by Sections 5.08 and 5.11(i) through (iv) and except
Investments in (i) Cash and Cash Equivalents, (ii) Investments not
constituting loans or advances in the Capital Securities of their respective
Subsidiaries and equity investments as set forth on Schedule 4.24 and (iii)  Investments in Portfolio
Investments made in the ordinary course of business and consistently with the
Investment Policies.


 


SECTION 5.14.               Negative Pledge.  No Loan Party nor any
Subsidiary of a Loan Party will create, assume or suffer to exist any Lien on
any asset now owned or hereafter acquired by it, except:


 


(a)           Liens existing
on the date of this Agreement encumbering assets (other than Collateral)
securing Debt outstanding on the date of this Agreement, in each case as
described and in the principal amounts set forth on Schedule 5.14;


 


(b)           Liens for
taxes, assessments or similar charges, incurred in the ordinary course of
business that are not yet due and payable or that are being contested in good
faith and with due diligence by appropriate proceedings;


 


(c)           pledges or
deposits made in the ordinary course of business to secure payment of workers’
compensation, or to participate in any fund in connection with workers’
compensation, unemployment insurance, old-age pensions or other social security
programs which in no event shall become a Lien prior to any Collateral
Documents;


 


(d)           Liens of
mechanics, materialmen, warehousemen, carriers or other like liens, securing
obligations incurred in the ordinary course of business that:  (1) are not yet due and payable and
which in no event shall become a Lien prior to any Collateral Documents; or (2) are
being contested diligently in good faith pursuant to appropriate proceedings
and with respect to which the Loan Party has established reserves reasonably
satisfactory to the Administrative Agent and Required Lenders and which in no
event shall become a Lien prior to any Collateral Documents;


 


(e)           good faith
pledges or deposits made in the ordinary course of business to secure
performance of bids, tenders, contracts (other than for the repayment of
borrowed money) or leases, not in excess of ten percent (10%) of the aggregate
amount due thereunder, or to secure statutory obligations, or surety, appeal,
indemnity, performance or other similar bonds required in the ordinary course
of business which in no event shall become a Lien prior to any Collateral
Document;


 


(f)            any Lien
arising out of the refinancing, extension, renewal or refunding of any Debt
secured by any Lien permitted by any of the foregoing clauses of this Section, provided
that (i) such Debt is not secured by any additional assets, and (ii) the
amount of such Debt secured by any such Lien is not increased;


 


71

















 


(g)           encumbrances
consisting of zoning restrictions, easements or other restrictions on the use
of real property, none of which materially impairs the use of such property by
Borrower in the operation of its business, and none of which is violated in any
material respect by existing or proposed restrictions on land use;


 


(h)           any Lien on
Margin Stock;


 


(i)            any Lien
imposed as a result of a taking under the exercise of the power of eminent
domain by any governmental body or by any Person acting under governmental
authority;


 


(j)            Liens securing
reasonable and customary fees of banks and other depository institutions on
Cash and Cash Equivalents held on deposit with such banks and institutions;
provided that such Liens are subordinated to the Liens described in Section 5.14(l);


 


(k)           Liens
restricting the ability of any SBIC Entity to encumber its assets pursuant to (i) Applicable
Law, (ii) agreements with the Small Business Administration entered into
in the ordinary course of business or (iii) Debt obligations of the SBIC
Entities permitted under Section 5.31;


 


(l)            Liens securing
the Administrative Agent and the Secured Parties created or arising under the
Loan Documents; and


 


(m)          Liens securing
Debt permitted under Section 5.31(d), provided that (i) such Liens do
not at any time encumber any property other than property financed by such
Debt, (ii) the Debt secured thereby does not exceed the cost or fair
market value, whichever is lower, of the property being acquired on the date of
acquisition, and (iii) such Liens attach to such property concurrently
with or within ninety (90) days after the acquisition thereof.


 


Notwithstanding anything
contained in this Section 5.14 to the contrary, no Loan Party or any
Subsidiary of a Loan Party will create, assume or suffer to exist any Lien on
the Collateral except the Liens in favor of the Secured Parties under the
Collateral Documents and the Permitted Encumbrances.


 


SECTION 5.15.               Maintenance of
Existence, etc.  Each Loan Party shall, and shall cause each
Subsidiary of a Loan Party to, maintain its organizational existence and carry
on its business in substantially the same manner and in substantially the same
line or lines of business or line or lines of business reasonably related to
the business now carried on and maintained. 
Any Subsidiary pledging Collateral hereunder shall be organized as a
corporation, limited liability company, limited partnership or other legal
entity.


 


SECTION 5.16.               Dissolution.  No Loan Party nor any
Subsidiary of a Loan Party shall suffer or permit dissolution or liquidation
either in whole or in part or redeem or retire any shares of its own Capital Securities
or that of any Subsidiary of a Loan Party, except: (1) 


 


72

















 


through corporate or
company reorganization to the extent permitted by Section 5.17; and (2) Restricted
Payments permitted by Section 5.12.


 


SECTION 5.17.               Consolidations,
Mergers and Sales of Assets.  No Loan Party will, nor will
it permit any Subsidiary of a Loan Party to, consolidate or merge with or into,
or sell, lease or otherwise transfer all or any substantial part of its assets
to, any other Person, or discontinue or eliminate any business line or segment,
provided that (a) pursuant to the consummation of an Acquisition permitted
under Section 5.08 (but not otherwise) a Loan Party may merge with another
Person if (i) such Person was organized under the laws of the United
States of America or one of its states, (ii) the Loan Party is the Person
surviving such merger, (iii) immediately after giving effect to such
merger, no Default shall have occurred and be continuing, and (iv) if the
Borrower merges with another Loan Party, the Borrower is the Person surviving
such merger; (b) Subsidiaries of a Loan Party (excluding Loan Parties) may
merge with one another; and (c) the foregoing limitation on the sale,
lease or other transfer of assets and on the discontinuation or elimination of
a business line or segment shall not prohibit (1) a transfer of assets or
the discontinuance or elimination of a business line or segment (in a single
transaction or in a series of related transactions) in the ordinary course of
business if, after giving effect thereto the Borrower and its Subsidiaries
shall be in compliance on a pro forma basis, after giving effect to such
transfer, discontinuation or elimination, with the terms and conditions of this
Agreement and (2) divestitures of Portfolio Investments in the ordinary
course of business if, after giving effect thereto the Borrower and its
Subsidiaries shall be in compliance on a pro forma basis, after giving effect
to any such divestiture, with the terms and conditions of this Agreement; provided,
however, that upon the occurrence and during the continuance of a
Default or an Event of Default, the Borrower shall not sell, transfer or
otherwise dispose of any asset (including without limitation any Portfolio Investment)
without the prior written consent of the Administrative Agent.


 


SECTION 5.18.               Use of Proceeds.  No portion of the proceeds of
any Advance will be used by the Borrower or any Subsidiary (i) in
connection with, either directly or indirectly, any tender offer for stock of
any corporation with a view towards obtaining control of such other corporation
(other than a Portfolio Investment; provided  that the board of
directors or comparable governing body of the Obligor in which such Investment
is made has approved such offer and change of control), (ii) directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any Margin Stock, or (iii) for any purpose in
violation of any applicable law or regulation.  Except as otherwise provided herein, the
proceeds of the Advances shall be used: 
(i) to refinance the Borrower’s existing debt pursuant to that
certain Credit Agreement dated as of October 24, 2008, among Borrower, the
Administrative Agent, the Initial Guarantors listed therein and the lenders
party thereto, as amended, (ii) for working capital and other lawful
corporate purposes, (iii) to pay fees and expenses incurred in connection
with this Agreement and (iv) for investments in Portfolio
Investments.  No part of the proceeds of
any Advance will be used, whether directly or indirectly, for any purpose that
would violate any rule or regulation of the Board of Governors of the
Federal Reserve System, including Regulations T, U or X.


 


SECTION 5.19.               Compliance with
Laws; Payment of Taxes.  Each Loan Party will, and will cause each
Subsidiary of a Loan Party and each member of the Controlled 


 


73

















 


Group to, comply in
all material respects with applicable laws (including but not limited to ERISA
and the Patriot Act), regulations and similar requirements of governmental
authorities (including but not limited to PBGC), except where the necessity of
such compliance is being contested in good faith through appropriate proceedings
diligently pursued.  Each Loan Party
will, and will cause each Subsidiary of a Loan Party to, pay promptly when due
all taxes, assessments, governmental charges, claims for labor, supplies, rent
and other obligations which, if unpaid, might become a lien against the
property of a Loan Party or any Subsidiary of a Loan Party, except liabilities
being contested in good faith by appropriate proceedings diligently pursued and
against which, if requested by the Administrative Agent, the Borrower shall
have set up reserves in accordance with GAAP.


 


SECTION 5.20.               Insurance.  Each Loan Party will maintain,
and will cause each Subsidiary of a Loan Party to maintain (either in the name
of such Loan Party or in such Subsidiary’s own name), with financially sound
and reputable insurance companies, insurance on all its Property in at least
such amounts and against at least such risks as are usually insured against in
the same general area by companies of established repute engaged in the same or
similar business.  Upon request, the Loan
Parties shall promptly furnish the Administrative Agent copies of all such
insurance policies or certificates evidencing such insurance and such other
documents and evidence of insurance as the Administrative Agent shall request.


 


SECTION 5.21.               Change in Fiscal
Year. 
No Loan Party will make any significant change in accounting treatment
or reporting practices, except as required or permitted by GAAP, or change its
Fiscal Year (except to conform with the Fiscal Year of the Borrower) without
the consent of the Required Lenders.


 


SECTION 5.22.               Maintenance of
Property.  Each Loan Party shall, and shall cause each
Subsidiary of a Loan Party to, maintain all of its properties and assets in
good condition, repair and working order, ordinary wear and tear excepted.


 


SECTION 5.23.               Environmental
Notices. 
Each Loan Party shall furnish to the Lenders and the Administrative
Agent prompt written notice of all Environmental Liabilities, pending,
threatened or anticipated Environmental Proceedings, Environmental Notices,
Environmental Judgments and Orders, and Environmental Releases at, on, in,
under or in any way affecting in any material respects the Properties or any
adjacent property, and all facts, events, or conditions that could lead to any
of the foregoing.


 


SECTION 5.24.               Environmental
Matters. 
No Loan Party or any Subsidiary of a Loan Party will, nor will any Loan
Party permit any Third Party to, use, produce, manufacture, process, treat,
recycle, generate, store, dispose of, manage at, or otherwise handle or ship or
transport to or from the Properties any Hazardous Materials except for
Hazardous Materials such as cleaning solvents, pesticides and other similar
materials used, produced, manufactured, processed, treated, recycled, generated,
stored, disposed, managed or otherwise handled in minimal amounts in the
ordinary course of business in compliance with all applicable Environmental
Requirements.


 


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SECTION 5.25.               Environmental
Release.  Each Loan Party agrees that upon the
occurrence of an Environmental Release at, under or on any of the Properties it
will act immediately to investigate the extent of, and to take appropriate
remedial action to eliminate, such Environmental Release, whether or not
ordered or otherwise directed to do so by any Environmental Authority.


 


SECTION 5.26.               [Intentionally omitted.]


 


SECTION 5.27.               Transactions with
Affiliates.  No Loan Party nor any Subsidiary of a Loan
Party shall enter into, or be a party to, any transaction with any Affiliate of
a Loan Party or such Subsidiary (which Affiliate is not a Loan Party or a
Subsidiary of a Loan Party), except as permitted by law and in the ordinary
course of business and pursuant to reasonable terms which are no less favorable
to the Loan Party or such Subsidiary than would be obtained in a comparable arm’s
length transaction with a Person which is not an Affiliate.


 


SECTION 5.28.               Joinder of
Subsidiaries.


 


(a)           The Loan
Parties shall cause any Person which becomes a Domestic Subsidiary of a Loan
Party (other than a Foreclosed Subsidiary or, subject to clause (d), any SBIC
Entity) after the Closing Date to become a party to, and agree to be bound by
the terms of, this Agreement and the other Loan Documents pursuant to a Joinder
Agreement in the form attached hereto as Exhibit L and otherwise
satisfactory to the Administrative Agent in all respects and executed and
delivered to the Administrative Agent within ten (10) Domestic Business
Days after the day on which such Person became a Domestic Subsidiary.  The Loan Parties shall also cause the items
specified in Section 3.01(c), (e), (g) and (h) to be delivered
to the Administrative Agent concurrently with the instrument referred to above,
modified appropriately to refer to such instrument and such Subsidiary.


 


(b)           The Loan
Parties shall, or shall cause any Subsidiary (other than, subject to clause
(d), any SBIC Entity) (the “Pledgor Subsidiary”) to pledge:  (a) the lesser of 65% or the entire
interest owned by the Loan Parties and such Pledgor Subsidiary, of the Capital
Securities or equivalent equity interests in any Person which becomes a Foreign
Subsidiary after the Closing Date; and (b) the entire interest owned by
the Loan Parties and such Pledgor Subsidiary, of the Capital Securities or
equivalent equity interest in any Person which becomes a Domestic Subsidiary
after the Closing Date, all pursuant to a Pledge Agreement executed and
delivered by the Loan Parties or such Pledgor Subsidiary to the Administrative
Agent within ten (10) Domestic Business Days after the day on which such
Person became a Domestic Subsidiary and shall deliver to the Collateral
Custodian, as bailee for the Administrative Agent, such shares of capital stock
together with stock powers executed in blank. 
The Loan Parties shall also cause the items specified in
Section 3.01(c), (e), (g) and (h) to be delivered to the
Administrative Agent concurrently with the pledge agreement referred to above,
modified appropriately to refer to such pledge agreement, the pledgor and such
Subsidiary.


 


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(c)           Once any
Subsidiary becomes a party to this Agreement in accordance with Section 5.28(a) or
any Capital Securities (or equivalent equity interests) of a Subsidiary are
pledged to the Administrative Agent in accordance with Section 5.28(b),
such Subsidiary (including, without limitation, all Initial Guarantors)
thereafter shall remain a party to this Agreement and the Capital Securities
(or equivalent equity interests) in such Subsidiary (including, without
limitation, all initial Subsidiaries) shall remain subject to the pledge to the
Administrative Agent, as the case may be, even if such Subsidiary ceases to be
a Subsidiary; provided that if a Subsidiary ceases to be a Subsidiary of the
Borrower as a result of the Borrower’s transfer or sale of all of the Capital
Securities of such Subsidiary owned by Borrower in accordance with and to the
extent permitted by the terms of Section 5.17, the Administrative Agent
and the Lenders agree to release such Subsidiary from this Agreement and
release the Capital Securities of such Subsidiary from the Pledge Agreement.


 


(d)           The Loan
Parties acknowledge that the SBIC Entities are not Loan Parties because the
Loan Parties have advised the Administrative Agent and Lenders that the SBIC
Entities are restricted by the terms of certain agreements, regulations and
other restrictions that prohibit the SBIC Entities from being Guarantors, from
granting any security interest in their property to secure the Obligations and
from having their respective issued equity interests subject to a pledge to
secure the Obligations (the “Restrictive Provisions”).  The Loan Parties shall immediately notify the
Administrative Agent if either there is: 
(1) a modification, expiration or termination of the Restrictive
Provisions the result of which will permit any SBIC Entity to be a Guarantor,
to grant a security interest in its property to secure the Obligations or to
have its issued equity interests pledged to secure the Obligations; or (2) the
Restrictive Provisions are waived for any other transaction in which any SBIC
Entity guarantees or becomes a co-borrower of, grants a security interest in
any of its property to secure, or the equity interests it has issued are
pledged to secure, the indebtedness, liabilities and obligations of, any one or
more of the Loan Parties.  In either of
such events, the Loan Parties shall cause the SBIC Entities, as applicable, to
become a party to, and agree to be bound by the terms of, this Agreement and
the other Loan Documents pursuant to a Joinder Agreement, in the form attached
hereto as Exhibit L satisfactory to the Administrative Agent in all
respects and executed and delivered to the Administrative Agent within ten (10) Domestic
Business Days after the occurrence of such event.  The Loan Parties shall also cause the items
specified in Section 3.01(c), (e), (g) and (h) to be delivered
to the Administrative Agent concurrently with the instrument referred to above,
modified appropriately to refer to such instrument, and the new Loan Party (the
SBIC Entities, as applicable) and shall take all such further actions and
execute all such further documents and instruments as may be necessary or, in
the opinion of Administrative Agent, desirable, to effect the transactions
described herein.  Notwithstanding the
fact that the SBIC Entities are not Loan Parties, the SBIC Entities shall be
included for purposes of calculating Consolidated EBITDA, Consolidated Interest
Expense, Consolidated Net Investment Income, Consolidated Tangible Net Worth
and Depreciation and Amortization.


 


SECTION 5.29.               No Restrictive
Agreement.  No Loan Party will, nor will any Loan Party
permit any of its Subsidiaries to, enter into, after the date of this
Agreement, any 


 


76

















 


indenture, agreement,
instrument or other arrangement that, directly or indirectly, prohibits or
restrains, or has the effect of prohibiting or restraining, or imposes
materially adverse conditions upon, any of the following by the Loan Party or
any such Subsidiary:  (i) the
incurrence or payment of Debt, (ii) the granting of Liens (other than
normal and customary restrictions on the granting of Liens on Capital
Securities issued by a Person other than a Subsidiary in respect of any
Portfolio Investment made in the ordinary course of business) or (iii) the
making of loans, advances or Investments or the sale, assignment, transfer or
other disposition of property, real, personal or mixed, tangible; except in
each case for prohibitions and restraints on SBIC Entities arising in the
ordinary course of business as a result of Applicable Law.  No Loan Party will, nor will any Loan Party
permit any of its Subsidiaries to, enter into, after the date of this
Agreement, any indenture, agreement, instrument or other arrangement that, directly
or indirectly, prohibits or restrains, or has the effect of prohibiting or
restraining, or imposes materially adverse conditions upon, the ability of the
Loan Party or any of its Subsidiaries to declare or pay Restricted Payments or
other distributions in respect of Capital Securities of the Loan Party or any
Subsidiary.


 


SECTION 5.30.               Partnerships and
Joint Ventures.  No Loan Party shall become a general partner
in any general or limited partnership or a joint venturer in any joint venture.


 


SECTION 5.31.               Additional Debt.  No Loan Party or Subsidiary of
a Loan Party shall directly or indirectly issue, assume, create, incur or
suffer to exist any Debt or the equivalent (including obligations under capital
leases), except for:  (a) the Debt
owed to the Lenders and Hedge Counterparties under the Loan Documents; (b) Debt
of SBIC Entities incurred in the ordinary course of business; (c) the Debt
existing and outstanding on the Closing Date described on Schedule 5.31;
and (d) purchase money Debt hereafter incurred by the Borrower or any of
its Subsidiaries to finance the purchase of equipment so long as (i) such
Debt when incurred shall not exceed the purchase price of the asset(s) financed,
and (ii) the aggregate outstanding principal amount of all Debt permitted
under this clause (d) shall not at any time exceed $3,000,000.00.


 


SECTION 5.32.               [Intentionally omitted].


 


SECTION 5.33.               Modifications of
Organizational Documents.  The Borrower shall not, and shall not permit
any Loan Party or other Subsidiary to, amend, supplement, restate or otherwise
modify its Organizational Documents or Operating Documents or other applicable
document if such amendment, supplement, restatement or other modification has
or would reasonably be expected to have a Material Adverse Effect.


 


SECTION 5.34.               ERISA Exemptions.  The Loan Parties shall not
permit any of their respective assets to become or be deemed to be “plan assets”
within the meaning of ERISA, the Code and the respective regulations
promulgated thereunder.


 


SECTION 5.35.               Hedge Transactions.  The Loan Parties will not, and
will not permit any of their Subsidiaries to, enter into any Hedge Transaction,
other than Hedge Transactions entered into in the ordinary course of business
to hedge or mitigate risks to which 


 


77

















 


the Loan Parties are
exposed in the conduct of their business or the management of their
liabilities.  Solely for the avoidance of
doubt, the Borrower acknowledges that a Hedge Transaction entered into for speculative
purposes or of a speculative nature (which shall be deemed to include any Hedge
Transaction under which any Loan Party is or may become obliged to make any
payment (i) in connection with the purchase by any third party of any
common stock or any Debt or (ii) as a result of changes in the market
value of any common stock or any Debt) is not a Hedge Transaction entered into
in the ordinary course of business to hedge or mitigate risks.


 


SECTION 5.36.               Performance of Loan
Documents.  Each Loan Party will at its own expense duly
fulfill and comply with all obligations on its part to be fulfilled or complied
with under or in connection with the Collateral and all documents related
thereto and will do nothing to impair the rights of any Loan Party or the Administrative
Agent, as agent for the Secured Parties, or of the Secured Parties in, to and
under the Collateral.  Each Loan Party
shall clearly and unambiguously set forth, in a manner reasonably satisfactory
to the Administrative Agent, in its financial statements filed with the
Securities and Exchange Commission that the Administrative Agent, as agent for
the Secured Parties has the interest therein granted by the Loan Parties
pursuant to the Loan Documents.


 


SECTION 5.37.               Operating Leases.  No Loan Party nor any
Subsidiary of a Loan Party shall create, assume or suffer to exist any
operating lease except operating leases which: 
(A) (1) are entered into in the ordinary course of business,
and (2) the aggregate indebtedness, liabilities and obligations of the
Loan Parties under all such operating leases during any period of four (4) consecutive
Fiscal Quarters shall at no time exceed $3,000,000; (B) are between a
Borrower or Guarantor, as landlord and a Borrower or Guarantor as tenant; or
(C) are set forth on Schedule 5.37.


 


SECTION 5.38.               [Intentionally omitted].


 


SECTION 5.39.               Compliance with
Investment Policies and Investment Documents.  The Borrower shall, and shall
cause its Subsidiaries to, comply at all times with its Investment Policies in
all material respects and, at their own expense, timely and fully perform and
comply with all material provisions, covenants and other promises required to
be observed by each of them under the Portfolio Investments and the related
Investment Documents.  The Borrower shall
furnish to the Administrative Agent, prior to its effective date, prompt notice
of any changes in the Investment Policies and shall not agree or otherwise
permit to occur any modification of the Investment Policies in any manner that
would or would reasonably be expected to adversely affect the interests or
remedies of the Administrative Agent or the Secured Parties under this
Agreement or any Loan Document or impair the collectability of any Portfolio
Investment without the prior written consent of the Administrative Agent (in
its sole discretion).


 


SECTION 5.40.               Delivery of
Collateral to Collateral Custodian.  The Borrower shall deliver possession of all “instruments”
(within the meaning of Article 9 of the UCC) not constituting part of “chattel
paper” (within the meaning of Article 9 of the UCC) that evidence any
Investment, including all original promissory notes, and certificated
securities to the Administrative Agent for the benefit of the Secured Parties,
or to a Collateral Custodian on 


 


78

















 


its behalf, indorsed
in blank without recourse and transfer powers executed in blank, as applicable;
provided, however, that notwithstanding the foregoing, with
respect to any Pre-Positioned Investment, the Borrower shall (i) have a
copy of the executed note, if any, evidencing such Pre-Positioned Investment
and any certificates representing Capital Securities pledged in connection with
such Pre-Positioned Investment faxed to a Collateral Custodian on the applicable
date of Borrowing with the original to be received by such Collateral Custodian
within five (5) Domestic Business Days after such date of Borrowing;
provided that, prior to delivery thereof, such original and indorsement are
held in the custody of a bailee that has delivered a valid, binding and
effective Bailee Agreement to the Administrative Agent.


 


SECTION 5.41.               Custody Agreements.  No Loan Party shall enter into
any custody agreement or equivalent arrangement with any person to hold
securities, cash or other assets of any Loan Party unless the Person acting as
custodian shall have delivered a Custodial Agreement and, if requested by the
Administrative Agent, a control agreement, to the Administrative Agent (in each
case in form and substance satisfactory to the Administrative Agent).


 


ARTICLE VI

DEFAULTS


 


SECTION 6.01.               Events of Default.  If one or more of the
following events (“Events of Default”) shall have occurred and be continuing:


 


(a)           the Borrower
shall fail to pay when due any principal of any Advance (including, without
limitation, any Advance or portion thereof to be repaid pursuant to Section 2.11)
or shall fail to pay any interest on any Advance within three Domestic Business
Days after such interest shall become due, or any Loan Party shall fail to pay
any fee or other amount payable hereunder within three Domestic Business Days
after such fee or other amount becomes due; or


 


(b)           any Loan Party
shall fail to observe or perform any covenant contained in Section 5.01(e) and
(i), 5.02 (ii) and (iii), 5.03, 5.04, 5.05, 5.06, 5.07, 5.08, 5.09, 5.10,
5.12, 5.13, 5.14, 5.15, 5.16, 5.17, 5.18, 5.21, 5.28, 5.29, 5.31, 5.33, 5.34,
and 5.41; or


 


(c)           any Loan Party
shall fail to observe or perform any covenant or agreement contained or
incorporated by reference in this Agreement (other than those covered by clause
(a) or (b) above or clauses (n) or (q) below) or any other
Loan Document; provided that such failure continues for (1) ten (10) days
in the case of Section 5.01, Section 5.11 or 5.27 or (2) otherwise,
thirty days, in each case after the earlier of (A) the first day on which
any Loan Party has knowledge of such failure or (B) written notice thereof
has been given to the Borrower by the Administrative Agent at the request of
any Lender; or 


 


(d)           any
representation, warranty, certification or statement made or deemed made by the
Loan Parties in Article IV of this Agreement, any other Loan Document or
in any financial statement, material certificate or other material document or
report delivered pursuant to any Loan Document shall prove to have been untrue
or misleading in any material respect when made (or deemed made); or


 


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(e)           any Loan Party
or any Subsidiary of a Loan Party shall fail to make any payment in respect of
Debt (other than the Notes) having an aggregate principal amount in excess of
$1,000,000.00 after expiration of any applicable cure or grace period; or


 


(f)            any event or
condition shall occur which results in the acceleration of the maturity of Debt
outstanding of any Loan Party or any Subsidiary of a Loan Party in an aggregate
principal amount in excess of $1,000,000.00 or the mandatory prepayment or
purchase of such Debt by any Loan Party (or its designee) or such Subsidiary of
a Loan Party (or its designee) prior to the scheduled maturity thereof, or
enables (or, with the giving of notice or lapse of time or both, would enable)
the holders of such Debt or commitment to provide such Debt or any Person
acting on such holders’ behalf to accelerate the maturity thereof, terminate
any such commitment or require the mandatory prepayment or purchase thereof
prior to the scheduled maturity thereof, without regard to whether such holders
or other Person shall have exercised or waived their right to do so; or


 


(g)           any Loan Party
or any Subsidiary of a Loan Party shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any Bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, administrator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment
for the benefit of creditors, or shall fail generally, or shall admit in
writing its inability, to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing; or


 


(h)           an involuntary
case or other proceeding shall be commenced against any Loan Party or any
Subsidiary of a Loan Party seeking liquidation, reorganization or other relief
with respect to it or its debts under any Bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, administrator, custodian or other similar official of it
or any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days; or an
order for relief shall be entered against any Loan Party or any Subsidiary of a
Loan Party under the federal Bankruptcy laws as now or hereafter in effect; or


 


(i)            any Loan Party
or any member of the Controlled Group shall fail to pay when due any material
amount which it shall have become liable to pay to the PBGC or to a Plan under
Title IV of ERISA; or notice of intent to terminate a Plan or Plans shall be
filed under Title IV of ERISA by any Loan Party, any member of the
Controlled Group, any plan administrator or any combination of the foregoing;
or the PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any such Plan or
Plans or a proceeding shall be instituted by a fiduciary of any such Plan or
Plans to enforce Section 515 or 4219(c)(5) of ERISA and such
proceeding shall not have been dismissed within 30 days thereafter; or a
condition shall exist by 


 


80

















 


reason of which the PBGC would be entitled to obtain
a decree adjudicating that any such Plan or Plans must be terminated; or


 


(j)            one or more
judgments or orders for the payment of money in an aggregate amount in excess
of $1,000,000.00 (after taking into account the application of insurance
proceeds) shall be rendered against any Loan Party or any Subsidiary of a Loan
Party and such judgment or order shall continue unsatisfied and unstayed for a
period of 30 days; or


 


(k)           a federal tax
lien shall be filed against any Loan Party or any Subsidiary of a Loan Party
under Section 6323 of the Code or a lien of the PBGC shall be filed
against any Loan Party or any Subsidiary of a Loan Party under
Section 4068 of ERISA and in either case such lien shall remain
undischarged for a period of 30 days after the date of filing; or


 


(l)            a Change in
Control shall occur; or


 


(m)          the
Administrative Agent, as agent for the Secured Parties, shall fail for any
reason to have a valid first priority security interest in any of the
Collateral (other than by reason of any act or omission solely on behalf of the
Administrative Agent); or


 


(n)           a default or
event of default shall occur and be continuing under any of the Collateral
Documents or any Loan Party shall fail to observe or perform any obligation to
be observed or performed by it under any Collateral Document, and such default,
event of default or failure to perform or observe any obligation continues
beyond any applicable cure or grace period provided in such Collateral
Document; or


 


(o)           a default or
event of default shall occur and be continuing under any of the Material
Contracts that would reasonably be likely to have a Material Adverse Effect or
any Loan Party shall fail to observe or perform any material provision or any
payment obligation to be observed or performed by it under any Material
Contract, and such default, event of default or failure to perform or observe
any such provision or obligation continues beyond any applicable cure or grace
period provided in such Material Contract; or


 


(p)           Vincent D.
Foster shall cease to hold the office of Chief Executive Officer of the
Borrower and the Todd A. Reppert shall cease to hold the offices of President
and Chief Financial Officer of the Borrower and in each case such individual is
not replaced as such officer(s) by an individual satisfactory to the
Administrative Agent and Required Lenders within 90 days after the date on
which such individual ceases to be such officer; or


 


(q)           (i) any of
the Guarantors shall fail to pay when due any Guaranteed Obligations (after
giving effect to any applicable grace period) or shall fail to pay any fee or
other amount payable hereunder when due; or (ii) any Guarantor shall
disaffirm, contest or deny its obligations under Article X; or


 


81

















 


(r)            if the Borrower
at any time fails to own (directly or indirectly, through Wholly Owned Subsidiaries)
100% of the outstanding shares of the voting stock, voting membership interests
or equivalent equity interests of each Guarantor; or


 


(s)            any Loan Party
shall (or shall attempt to) disaffirm, contest or deny its obligations under
any Loan Document or any material provision of any Loan Document for any reason
ceases to be valid, binding and enforceable in accordance with its terms; or


 


(t)            a Collateral
Custodian that is in the possession of any Collateral (1) shall (or shall
attempt to) disaffirm, contest or deny its obligations under, or terminates or
attempts to terminate, or is in default of its obligations under, a Custodial
Agreement or (2) ceases in any respect to be acceptable to the
Administrative Agent in its reasonable discretion and, in each case, such
Collateral Custodian is not replaced by, and any Collateral held by such
Collateral Custodian is not delivered to, a replacement Collateral Custodian
satisfactory to the Administrative Agent within 10 days after (A) the
first date of such occurrence, in the case of clause (1) or (B) the
date written notice thereof has been given to the Borrower by the
Administrative Agent, in the case of clause (2); or


 


(u)           any SBIC Entity
becomes the subject of an enforcement action and is transferred into liquidation
status by the U.S. Small Business Administration; or


 


(v)           the Borrower
agrees or consents to, or otherwise permits any amendment, modification,
change, supplement or rescission of or to the Investment Policies in whole or
in part that has or would reasonably be expected to adversely affect the
interests or remedies of the Administrative Agent or the Secured Parties under
this Agreement or any Loan Document or impair the collectability of any
Portfolio Investment without the prior written consent of the Administrative
Agent; or


 


(w)          the occurrence
of any event, act or condition which the Required Lenders determine either does
or has a reasonable probability of causing a Material Adverse Effect,


 


then, and in every such event, the Administrative Agent
shall (i) if requested by the Required Lenders, by notice to the Borrower
terminate the Revolver Commitments and they shall thereupon terminate and (ii) if
requested by the Required Lenders, by notice to the Borrower declare the Notes
(together with accrued interest thereon) and all other amounts payable
hereunder and under the other Loan Documents to be, and the Notes (together
with all accrued interest thereon) and all other amounts payable hereunder and
under the other Loan Documents shall thereupon become, immediately due and
payable without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Loan Parties; provided that if any
Event of Default specified in clause (g) or (h) above occurs with
respect to any Loan Party or any Subsidiary of a Loan Party, without any notice
to any Loan Party or any other act by the Administrative Agent or the Lenders,
the Revolver Commitments shall thereupon automatically terminate and the Notes
(together with accrued interest thereon) and all other amounts payable
hereunder and under the other Loan Documents shall automatically become
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby 


 


82

















 


waived by the Loan Parties.  Notwithstanding the foregoing, the
Administrative Agent shall have available to it all rights and remedies
provided under the Loan Documents (including, without limitation, the rights of
a secured party pursuant to the Collateral Documents) and in addition thereto,
all other rights and remedies at law or equity, and the Administrative Agent
shall exercise any one or all of them at the request of the Required Lenders.


 


SECTION 6.02.               Notice of Default.  The Administrative Agent shall
give notice to the Borrower of any Default under Section 6.01(c) promptly
upon being requested to do so by any Lender and shall thereupon notify all the
Lenders thereof.


 


SECTION 6.03.               [Intentionally omitted.]


 


SECTION 6.04.               Allocation of
Proceeds.  If an Event of Default has occurred and not
been waived, and the maturity of the Notes has been accelerated pursuant to Article VI
hereof, all payments received by the Administrative Agent hereunder or under
the other Loan Documents, in respect of any principal of or interest on the
Obligations or any other amounts payable by the Borrower or any other Loan
Party hereunder or under the other Loan Documents, shall be applied by the
Administrative Agent in the following order:


 


(a)           To payment of
that portion of the Obligations constituting fees, indemnities, Credit Party
Expenses and other amounts (including fees, charges and disbursements of
counsel to the Administrative Agent and amounts payable under Article VIII
and Section 2.12) payable to the Administrative Agent in its capacity as
such; and then


 


(b)           To payment of
that portion of the Obligations constituting indemnities, Credit Party Expenses
and other amounts (other than principal, interest and fees) payable to the
Lenders (including fees, charges and disbursements of counsel to the respective
Lenders and amounts payable under Article VIII and Section 2.12),
ratably among them in proportion to the amounts described in this clause
payable to them; and then


 


(c)           To payment of
that portion of the Obligations constituting accrued and unpaid interest on the
Advances and other Obligations, and fees (including unused commitment fees),
ratably among the Lenders in proportion to the respective amounts described in
this clause payable to them; and then


 


(d)           To payment of
that portion of the Obligations constituting unpaid principal of the Advances,
ratably among the Lenders in proportion to the respective amounts described in
this clause held by them; and then


 


(e)           To payment of
all other Obligations (excluding any Obligations arising from Cash Management
Services and Bank Products), ratably among the Secured Parties in proportion to
the respective amounts described in this clause held by them; and then


 


(f)            To payment of
all other Obligations arising from Bank Products and Cash Management Services
to the extent secured under the Collateral Documents, ratably 


 


83

















 


among the Secured Parties in proportion to the
respective amounts described in this clause held by them; and then


 


(g)           The balance, if
any, after all of the Obligations have been indefeasibly paid in full, to the
Loan Parties or as otherwise required by law.


 


ARTICLE VII

THE ADMINISTRATIVE AGENT


 


SECTION 7.01.               Appointment and
Authority.  Each of the Lenders hereby irrevocably
appoints Branch Banking and Trust Company to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and
authorizes the Administrative Agent to take such actions on its behalf and to exercise
such powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto.  The provisions of this Article are
solely for the benefit of the Administrative Agent and the Lenders and neither
the Borrower nor any other Loan Party shall have rights as a third party
beneficiary of any of such provisions.


 


SECTION 7.02.               Rights 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 the term “Lender” or “Lenders” shall,
unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Administrative Agent hereunder in its
individual capacity.  Such Person and its
Affiliates may accept deposits from, lend money to, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind
of business with the Borrower or any Subsidiary or other Affiliate thereof as
if such Person were not the Administrative Agent hereunder and without any duty
to account therefor to the Lenders


 


SECTION 7.03.               Exculpatory
Provisions.  The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents.  Without limiting the
generality of the foregoing, the Administrative Agent:


 


(a)           shall not be subject to any fiduciary or other implied duties, regardless
of whether a Default has occurred and is continuing;


 


(b)           shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative
Agent is required to exercise as directed in writing by the Required Lenders
(or such other number or percentage of the Lenders as shall be expressly
provided for herein or in the other Loan Documents), provided that the
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable law; and


 


(c)           shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure
to disclose, 


 


84

















 


any information relating to the Borrower or any of its
Affiliates that is communicated to or obtained by the Person serving as the
Administrative Agent or any of its Affiliates in any capacity.


 


The Administrative Agent shall not be liable for any
action taken or not taken by it (i) with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary, or as the Administrative Agent shall believe in good faith
shall be necessary, under the circumstances as provided in Sections 9.05
and 6.01) or (ii) in the absence of its own gross negligence or willful
misconduct.  The Administrative Agent
shall be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower or
a Lender.


 


The Administrative Agent shall not be responsible for or
have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other Loan
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or thereunder or in connection herewith or therewith,
(iii) the performance or observance of any of the covenants, agreements or
other terms or conditions set forth herein or therein or the occurrence of any
Default, (iv) the validity, enforceability, effectiveness or genuineness
of this Agreement, any other Loan Document or any other agreement, instrument
or document or (v) the satisfaction of any condition set forth in
Article III or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.


 


SECTION 7.04.               Reliance by
Administrative Agent.  The Administrative Agent shall be entitled to
rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or
other distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person. 
The Administrative Agent also may rely upon any statement made to it
orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition
hereunder to the making of an Advance, that by its terms must be fulfilled to
the satisfaction of a Lender, the Administrative Agent may presume that such
condition is satisfactory to such Lender unless the Administrative Agent shall
have received notice to the contrary from such Lender prior to the making of
such Advance.  The Administrative Agent
may consult with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.


 


SECTION 7.05.               Delegation of Duties.  The Administrative Agent may
perform any and all of its duties and exercise its rights and powers hereunder
or under any other Loan Document by or through any one or more sub-agents
appointed by the Administrative Agent. 
The Administrative Agent and any such sub-agent may perform any and all
of its duties and exercise its rights and powers by or through their respective
Related Parties.  The exculpatory
provisions of this Article shall apply to any such sub-agent and to the
Related Parties of the Administrative Agent and any such sub-agent, and shall
apply to their respective activities 


 


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in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative
Agent.


 


SECTION 7.06.               Resignation of
Administrative Agent.  The Administrative Agent may at any time give
notice of its resignation to the Lenders and the Borrower.  Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with
the Borrower, to appoint a successor, which shall be a bank with an office in
the United States of America, or an Affiliate of any such bank with an office
in the United States of America.  If no
such successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders, appoint a successor
Administrative Agent meeting the qualifications set forth above provided that
if the Administrative Agent shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the
case of any collateral security held by the Administrative Agent on behalf of
the Lenders under any of the Loan Documents, the retiring Administrative Agent
shall continue to hold such collateral security until such time as a successor
Administrative Agent is appointed) and (2) all payments, communications
and determinations provided to be made by, to or through the Administrative
Agent shall instead be made by or to each Lender directly, until such time as
the Required Lenders appoint a successor Administrative Agent as provided for
above in this paragraph.  Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and
the retiring Administrative Agent shall be discharged from all of its duties
and obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this paragraph).  The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such
successor.  After the retiring
Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Administrative Agent
was acting as Administrative Agent.


 


SECTION 7.07.               Non-Reliance on Administrative
Agent and Other Lenders.  Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. 
Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document
or any related agreement or any document furnished hereunder or thereunder.


 


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SECTION 7.08.               No Other Duties, etc.  Anything herein to the
contrary notwithstanding, none of the Arrangers listed on the cover page hereof
shall have any powers, duties or responsibilities under this Agreement or any
of the other Loan Documents, except in its capacity, as applicable, as the
Administrative Agent or a Lender hereunder.


 


SECTION 7.09.               Other Agents.  The Borrower and each Lender
hereby acknowledges that any Lender designated as an “Agent” on the signature pages hereof
(other than the Administrative Agent) shall not have any obligations, duties or
liabilities hereunder other than in its capacity as a Lender.


 


SECTION 7.10.               Hedging Agreements,
Cash Management Services and Bank Products.  Except as otherwise expressly
set forth herein or in any Collateral Document, no Bank Product Bank, Cash
Management Bank or Hedge Counterparty that obtains the guarantees hereunder or
any Collateral by virtue of the provisions hereof or of any Collateral Document
shall have any right to notice of any action or to consent to, direct or object
to any action hereunder or under any other Loan Document or otherwise in
respect of the Collateral (including the release or impairment of any
Collateral) or any Guaranty (including the release or impairment of any
Guaranty) other than in its capacity as a Lender and, in such case, only to the
extent expressly provided in the Loan Documents.  Notwithstanding any other provision of this Article VII
to the contrary, the Administrative Agent shall not be required to verify the
payment of, or that other satisfactory arrangements have been made with respect
to, Obligations arising under or related to Cash Management Services, Bank
Products and Hedge Agreements unless the Administrative Agent has received
written notice of such Obligations, together with such supporting documentation
as the Administrative Agent may request, from the applicable Cash Management
Bank, Bank Product Bank or Hedge Counterparty, as the case may be.


 


ARTICLE VIII

CHANGE IN CIRCUMSTANCES; COMPENSATION


 


SECTION 8.01.               Basis for
Determining Interest Rate Inadequate or Unfair.  If on or prior to the first
day of any Interest Period:


 


(a)           the
Administrative Agent determines that deposits in Dollars (in the applicable
amounts) are not being offered in the relevant market for such Interest Period,
or


 


(b)           the Required
Lenders advise the Administrative Agent that the London InterBank Offered Rate
as determined by the Administrative Agent will not adequately and fairly
reflect the cost to such Lenders of funding the Euro-Dollar Advances for such
Interest Period,


 


the Administrative Agent shall forthwith give notice
thereof to the Borrower and the Lenders, whereupon until the Administrative
Agent notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of the Lenders to make Euro-Dollar
Advances specified in such notice, or to permit continuations or conversions
into Euro-Dollar Advances, shall be suspended. 
Unless the Borrower notifies the Administrative Agent at least two (2) Euro-Dollar
Business Days before the date of any Borrowing of Euro-Dollar Advances 


 


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for which a Notice of Borrowing has previously been
given, or continuation or conversion into such Euro-Dollar Advances for which a
Notice of Continuation or Conversion has previously been given, that it elects
not to borrow or so continue or convert on such date, such Borrowing shall
instead be made as a Base Rate Borrowing, or such Euro-Dollar Advance shall be converted
to a Base Rate Advance.


 


SECTION 8.02.               Illegality.  If, after the date hereof, the
adoption of any applicable law, rule, treaty or regulation, or any change in
any existing or future law, rule, treaty or regulation, or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof (any such authority, bank or agency being referred to as an “Authority”
and any such event being referred to as a “Change in Law”), or compliance by
any Lender (or its Lending Office) with any request or directive (whether or
not having the force of law) of any Authority shall make it unlawful or
impossible for any Lender (or its Lending Office) to make, maintain or fund its
Euro-Dollar Advances and such Lender shall so notify the Administrative Agent,
the Administrative Agent shall forthwith give notice thereof to the other
Lenders and the Borrower, whereupon until such Lender notifies the Borrower and
the Administrative Agent that the circumstances giving rise to such suspension
no longer exist, the obligation of such Lender to make or permit continuations
or conversions of Euro-Dollar Advances shall be suspended.  Before giving any notice to the Administrative
Agent pursuant to this Section, such Lender shall designate a different Lending
Office if such designation will avoid the need for giving such notice and will
not, in the judgment of such Lender, be otherwise disadvantageous to such
Lender.  If such Lender shall determine
that it may not lawfully continue to maintain and fund any of its portion of
the outstanding Euro-Dollar Advances to maturity and shall so specify in such
notice, the Borrower shall immediately prepay in full the then outstanding principal
amount of the Euro-Dollar Advances of such Lender, together with accrued
interest thereon and any amount due such Lender pursuant to Section 8.05.  Concurrently with prepaying such Euro-Dollar
Advances, the Borrower shall borrow a Base Rate Advance in an equal principal
amount from such Lender (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Advances of the other Lenders),
and such Lender shall make such a Base Rate Advance.


 


SECTION 8.03.               Increased Cost and
Reduced Return.


 


(a)           If after the
date hereof, a Change in Law or compliance by any Lender (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any Authority shall:


 


(i)             impose, modify or deem applicable any reserve,
special deposit, compulsory loan, insurance charge or similar requirement  against assets of, deposits with or for the
account of, or credit extended or participated in by, any Lender (except any
reserve requirement reflected in the applicable Euro-Dollar Reserve
Percentage); or


 


(ii)            subject any Lender to any tax of any kind whatsoever
with respect to this Agreement or any Euro-Dollar Advances made by it, or change
the basis of 


 


88

















 


taxation
of payments to such Lender in respect thereof (except for Indemnified Taxes or
Other Taxes covered by Section 2.08(e) and the imposition of, or any
change in the rate of, any Excluded Tax payable by such Lender); or


 


(iii)           impose on any Lender or the London interbank market
any other condition, cost or expense affecting this Agreement or Euro-Dollar
Advances by such Lender or participation therein;


 


and the result of any of the foregoing is to increase
the cost to such Lender of making or maintaining any Euro-Dollar Advance (or of
maintaining its obligation to make any such Advance), or to reduce the amount
of any sum received or receivable by such Lender hereunder (whether of
principal, interest or any other amount) then, upon request of such Lender, the
Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction
suffered.


 


(b)           If any Lender
determines that any Change in Law affecting such Lender or any lending office
of such Lender or such Lender’s holding company, if any, regarding capital
requirements has or would have the effect of reducing the rate of return on
such Lender’s capital or on the capital of such Lender’s holding company, if
any, as a consequence of this Agreement, the Revolver Commitments of such
Lender or the Advances made by such Lender, to a level below that which such
Lender or such Lender’s holding company could have achieved but for such Change
in Law (taking into consideration such Lender’s policies and the policies of
such Lender’s holding company with respect to capital adequacy), then from time
to time the Borrower will pay to such Lender such additional amount or amounts
as will compensate such Lender or such Lender’s holding company for any such
reduction suffered.


 


(c)           A certificate
of a Lender setting forth the amount or amounts necessary to compensate such
Lender or its holding company, as the case may be, as specified in
paragraph (a) or (b) of this Section and delivered to
the Borrower shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.


 


(d)           Failure or
delay on the part of any Lender to demand compensation pursuant to this Section shall
not constitute a waiver of such Lender’s right to demand such compensation, provided
that the Borrower shall not be required to compensate a Lender pursuant to this
Section for any increased costs incurred or reductions suffered more than
nine months prior to the date that such Lender notifies the Borrower of the
Change in Law giving rise to such increased costs or reductions and of such
Lender’s intention to claim compensation therefor (except that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the nine-month period referred to above shall be extended to include the period
of retroactive effect thereof).


 


SECTION 8.04.               Base Rate Advances
Substituted for Affected Euro-Dollar Advances.  If (i) the obligation of
any Lender to make or maintain a Euro-Dollar Advance has been suspended
pursuant to Section 8.02 or (ii) any Lender has demanded compensation
under 


 


89

















 


Section 8.03,
and the Borrower shall, by at least five (5) Euro-Dollar Business Days’
prior notice to such Lender through the Administrative Agent, have elected that
the provisions of this Section shall apply to such Lender, then, unless
and until such Lender notifies the Borrower that the circumstances giving rise
to such suspension or demand for compensation no longer apply:


 


(a)           all Advances
which would otherwise be made by such Lender as or permitted to be continued as
or converted into Euro-Dollar Advances shall instead be made as or converted
into Base Rate Advances, (in all cases interest and principal on such Advances
shall be payable contemporaneously with the related Euro-Dollar Advances of the
other Lenders), and


 


(b)           after its
portion of the Euro-Dollar Advance has been repaid, all payments of principal
which would otherwise be applied to repay such Euro-Dollar Advance shall be
applied to repay its Base Rate Advance instead.


 


In the event that the Borrower shall elect that the
provisions of this Section shall apply to any Lender, the Borrower shall
remain liable for, and shall pay to such Lender as provided herein, all amounts
due such Lender under Section 8.03 in respect of the period preceding the
date of conversion of such Lender’s portion of any Advance resulting from the
Borrower’s election.


 


SECTION 8.05.               Compensation.  Upon the request of any
Lender, delivered to the Borrower and the Administrative Agent, the Borrower
shall pay to such Lender such amount or amounts as shall compensate such Lender
for any loss, cost or expense incurred by such Lender as a result of:


 


(a)           any payment or
prepayment (pursuant to Sections 2.10, 2.11, 6.01, 8.02 or otherwise) of a
Euro-Dollar Advance on a date other than the last day of an Interest Period for
such Advance; or


 


(b)           any failure by
the Borrower to prepay a Euro-Dollar Advance on the date for such prepayment
specified in the relevant notice of prepayment hereunder; or


 


(c)           any failure by
the Borrower to borrow a Euro-Dollar Advance on the date for the Borrowing of
which such Euro-Dollar Advance is a part specified on the Closing Date;


 


such compensation to include, without limitation, an
amount equal to the excess, if any, of (x) the amount of interest which
would have accrued on the amount so paid or prepaid or not prepaid or borrowed
for the period from the date of such payment, prepayment or failure to prepay
or borrow to the last day of the then current Interest Period for such
Euro-Dollar Advance (or, in the case of a failure to prepay or borrow, the
Interest Period for such Euro-Dollar Advance which would have commenced on the
date of such failure to prepay or borrow) at the applicable rate of interest
for such Euro-Dollar Advance provided for herein over (y) the amount of
interest (as reasonably determined by such Lender) such Lender would have paid
on deposits in Dollars of comparable amounts having terms comparable to such
period placed with it by leading lenders in the London interbank market (if
such Advance is a Euro-Dollar Advance).


 


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ARTICLE IX

MISCELLANEOUS


 


SECTION 9.01.               Notices Generally.


 


(a)           Except in the
case of notices and other communications expressly permitted to be given by
telephone (and except as provided in paragraph (b) below), all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopier as follows:


 


(i)             if to the
Borrower or any other Loan Party, to it at 1300 Post Oak Boulevard,
Suite 800, Houston, TX 77056, Attention of Rodger Stout (Telecopier No. (713)
350-6042; Telephone No. (713) 350-6000;


 


(ii)            if to the
Administrative Agent, to Branch Banking and Trust Company at 200 West Second
Street, 16th Floor, Winston-Salem, NC 27101, Attention of
Gregory Drabik (Telecopier No. (336) 733-2740; Telephone No. (336)
733-2730;


 


(iii)           if to a Lender,
to it at its address (or telecopier number) set forth in its Administrative
Questionnaire.


 


Notices
sent by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by
telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient).  Notices delivered through
electronic communications to the extent provided in paragraph (b) below,
shall be effective as provided in said paragraph (b).


 


(b)           Electronic
Communications.  Notices and
other communications to the Lenders hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, provided
that the foregoing shall not apply to notices to any Lender pursuant to
Article II if such Lender has notified the Administrative Agent that it is
incapable of receiving notices under such Article by electronic
communication.  The Administrative Agent
or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may
be limited to particular notices or communications.


 


Unless
the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other
communication is not sent during the normal


 


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business
hours of the recipient, such notice or communication shall be deemed to have
been sent at the opening of business on the next business day for the
recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the intended
recipient at its e-mail address as described in the foregoing clause (i) of
notification that such notice or communication is available and identifying the
website address therefor.


 


(c)           Change of
Address, Etc.  Any party
hereto may change its address or telecopier number for notices and other
communications hereunder by notice to the other parties hereto.


 


SECTION 9.02.               No Waivers.  No failure or delay by the
Administrative Agent or any Lender in exercising any right, power or privilege
hereunder or under any Note or other Loan Document shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.  The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.


 


Notwithstanding anything to the contrary contained
herein or in any other Loan Document, the authority to enforce rights and
remedies hereunder and under the other Loan Documents against the Loan Parties
or any of them shall be vested exclusively in, and all actions and proceedings
at law in connection with such enforcement shall be instituted and maintained
exclusively by, the Administrative Agent in accordance with Article VI for
the benefit of all the Lenders; provided, however, that the foregoing shall not
prohibit (a) the Administrative Agent from exercising on its own behalf
the rights and remedies that inure to its benefit (solely in its capacity as
Administrative Agent) hereunder and under the other Loan Documents, (b) any
Lender from exercising setoff rights in accordance with Section 9.04, or (c) any
Lender from filing proofs of claim or appearing and filing pleadings on its own
behalf during the pendency of a proceeding relative to any Loan Party under the
Bankruptcy Code or any other applicable debtor relief law.


 


SECTION 9.03.               Expenses; Indemnity;
Damage Waiver.


 


(a)           Costs and
Expenses.  The Loan
Parties shall, jointly and severally, pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates (including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent), in connection with the syndication of the credit facilities provided
for herein, the preparation, negotiation, execution, delivery and
administration of this Agreement and the other Loan Documents or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), and (ii)  all reasonable out-of-pocket expenses incurred by
the Administrative Agent or any Lender (including the fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Loan Documents, including its
rights under this Section, or (B) in 


 


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connection with the Advances made hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Advances.


 


(b)           Indemnification
by the Loan Parties.  The Loan
Parties shall, jointly and severally, indemnify the Administrative Agent (and
any sub-agent thereof) and each Lender and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
penalties, damages, liabilities and related expenses (including the reasonable
fees, charges and disbursements of any counsel for any Indemnitee), incurred by
any Indemnitee or asserted against any Indemnitee by any third party or by the
Borrower or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) any Advance or the use or proposed use of the proceeds
therefrom, (iii) any actual or alleged presence or Environmental Releases
on or from any property owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to the Borrower
or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower or any other Loan Party, and regardless of whether any
Indemnitee is a party thereto, provided that such indemnity shall not,
as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by the Borrower or any other Loan Party
against an Indemnitee for breach in bad faith of such Indemnitee’s obligations
hereunder or under any other Loan Document, if the Borrower or such Loan Party
has obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction.


 


(c)           Reimbursement
by Lenders.  To the
extent that a Loan Party for any reason fails to pay any amount required under
paragraph (a) or (b) of this Section to be paid by it
to the Administrative Agent (or any sub-agent thereof), or any Related Party of
any of the foregoing, each Lender severally agrees to pay to the Administrative
Agent (or any such sub-agent) or such Related Party, as the case may be, such
Lender’s Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided
that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) in its capacity as such, or
against any Related Party of any of the foregoing acting for the Administrative
Agent (or any such sub-agent) in connection with such capacity.  The obligations of the Lenders under this
paragraph (c) are subject to the provisions of Sections 9.10 and
9.13.


 


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(d)           Waiver of
Consequential Damages, Etc.  To the fullest extent permitted by applicable
law, the Loan Parties shall not assert, and hereby waive, any claim against any
Indemnitee, on any theory of liability, for indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Advance or the use of the proceeds thereof.  No Indemnitee referred to in paragraph (b) above
shall be liable for any damages arising from the use by unintended recipients
of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby.


 


(e)           Payments.  All amounts due under this Section shall
be payable promptly after demand therefor.


 


SECTION 9.04.               Setoffs; Sharing of
Set-Offs; Application of Payments.


 


(a)           If an Event of
Default shall have occurred and be continuing, each Lender and each of their
respective Affiliates is hereby authorized at any time and from time to time,
to the fullest extent permitted by applicable law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final, in
whatever currency) at any time held and other obligations (in whatever
currency) at any time owing by such Lender or any such Affiliate to or for the
credit or the account of the Borrower or any other Loan Party against any and
all of the obligations of the Borrower or such Loan Party now or hereafter
existing under this Agreement or any other Loan Document to such Lender,
irrespective of whether or not such Lender shall have made any demand under
this Agreement or any other Loan Document and although such obligations of the
Borrower or such Loan Party may be contingent or unmatured or are owed to a
branch or office of such Lender different from the branch or office holding
such deposit or obligated on such indebtedness. 
The rights of each Lender and their respective Affiliates under this Section are
in addition to other rights and remedies (including other rights of setoff)
that such Lender or their respective Affiliates may have.  Each Lender agrees to notify the Borrower and
the Administrative Agent promptly after any such setoff and application, provided
that the failure to give such notice shall not affect the validity of such
setoff and application.


 


(b)           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 (excluding any Obligations arising under or related to Cash
Management Services, Bank Products and Hedging Agreements) hereunder or under
any other Loan Document resulting in such Lender’s receiving payment of a
proportion of the aggregate amount of its Advances and accrued interest thereon
or other such Obligations (excluding any Obligations arising under or related
to Cash Management Services, Bank Products and Hedging Agreements) 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 


 


94

















 


in the Advances and such other Obligations
(excluding any Obligations arising under or related to Cash Management
Services, Bank Products and Hedging Agreements) 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:


 


(i)             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


 


(ii)            the provisions
of this paragraph shall not be construed to apply to (x) any payment made
by a Loan Party pursuant to and in accordance with the express terms of this
Agreement 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, other than to the Borrower or any Subsidiary thereof (as to
which the provisions of this paragraph shall apply).


 


Each
Loan Party 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 each
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of each Loan Party in the
amount of such participation.


 


SECTION 9.05.               Amendments and
Waivers.


 


(a)           Any provision
of this Agreement, the Notes or any other Loan Documents may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed by
the Borrower and the Required Lenders (and, if the rights or duties of the
Administrative Agent are affected thereby, by the Administrative Agent); provided
that no such amendment or waiver shall, unless signed by all the Lenders, (i) increase
the Revolver Commitment of any Lender or subject any Lender to any additional
obligation (it being understood and agreed that a waiver of any condition
precedent set forth in Section 3.02 or of any Default or Event of Default
is not considered an increase in Revolver Commitments of any Lender or any
Lender’s obligation to fund), (ii) reduce the principal of or decrease the
rate of interest on any Advance or decrease any fees hereunder, (iii) defer
the date fixed for any payment of principal of (including any extension of the
Termination Date but excluding mandatory prepayments) or interest on any
Advance or any fees hereunder; provided, however, that only the consent of the
Required Lenders shall be necessary to amend the definition of “Default Rate”
or to waive any obligation of the Borrower to pay interest at the Default Rate,
(iv) reduce the amount of principal, decrease the amount of interest or
decrease the amount of fees due on any date fixed for the payment thereof;
provided, however, that only the consent of the Required Lenders shall be
necessary to amend the definition of “Default Rate” or to waive any obligation
of the Borrower to pay interest at the Default Rate, (v) change the 


 


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percentage of the Revolver Commitments or of the
aggregate unpaid principal amount of the Notes, or the percentage of Lenders,
which shall be required for the Lenders or any of them to take any action under
this Section or any other provision of this Agreement, (vi) change
the application of any payments made under this Agreement or the other Loan
Documents in a manner that would alter any pro rata sharing requirements, (vii) release,
share or substitute all or substantially all of the Collateral held as security
for the Obligations, (viii) change or modify the definition of “Required
Lenders,” or this Section 9.05, or (ix) change the definition of the
term “Borrowing Base”, “Eligible Portfolio Investment”, “Unrestricted Cash and
Cash Equivalents” or any component definition of any of them if as a result
thereof the amounts available to be borrowed by the Borrower would be increased
without the consent of each Lender, provided that the foregoing shall not limit
the discretion of the Administrative Agent to change, establish or eliminate
any reserves or to make determinations with respect to the eligibility or value
of any Investment, (x) release any guaranty given to support payment of
the Guaranteed Obligations, or (xi) amend or waive any provision of the
Loan Documents in any manner that permits a Defaulting Lender to cure its
status as a Defaulting Lender without requiring such Defaulting Lender to pay
in full its unfunded obligations. 
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 may be effected with the consent of all Lenders
other than Defaulting Lenders) provided that, without in any way limiting Section 9.08,
any such amendment, waiver, or consent that would increase or extend the term
of the Revolver Commitment or Revolver Advances of such Defaulting Lender,
extend the date fixed for the payment of principal or interest owing to such
Defaulting Lender hereunder, reduce the principal amount of any obligation
owing to such Defaulting Lender, reduce the amount of or the rate or amount of
interest on any amount owing to such Defaulting Lender or of any fee payable to
such Defaulting Lender hereunder, or alter the terms of this proviso, will
require the consent of such Defaulting Lender. 
Notwithstanding the foregoing, (1) the Hedging Agreements, the
Administrative Agent’s Letter Agreement and the agreements evidencing the Bank
Products and Cash Management Services may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto and
(2) any Commitment Increase meeting the conditions set forth in
Section 2.14 shall not require the consent of any Lender other than (i) the
Required Lenders and (ii) those Lenders, if any, which have agreed to
increase their Revolver Commitment in connection with the proposed Commitment
Increase.


 


(b)           Notwithstanding
anything in clause (a), (i) unless also signed by the Administrative
Agent, no amendment, waiver or consent shall affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document, and (ii) the
Administrative Agent’s Letter Agreement may be amended, or rights or privileges
thereunder waived, only by means of a written agreement executed by all of the
parties thereto. Additionally, notwithstanding anything to the contrary herein,
each Lender is entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Advances, and each Lender acknowledges
that the provisions of Section 1126(c) of the Bankruptcy Code of the
United States supersedes the unanimous consent provisions set forth herein and
the Required Lenders shall determine whether or not to allow a Loan 


 


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Party to use cash collateral in the context of a
bankruptcy or insolvency proceeding and such determination shall be binding on
all of the Lenders.


 


SECTION 9.06.               Margin Stock
Collateral.  Each of the Lenders represents to the
Administrative Agent and each of the other Lenders that it in good faith is
not, directly or indirectly (by negative pledge or otherwise), relying upon any
Margin Stock as collateral in the extension or maintenance of the credit
provided for in this Agreement.


 


SECTION 9.07.               Successors and
Assigns.


 


(a)           Successors and
Assigns Generally.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that neither the Borrower nor any other Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(i) to an Eligible Assignee in accordance with the provisions of
paragraph (b) of this Section, (ii) by way of participation in
accordance with the provisions of paragraph (d) of this Section or
(iii) by way of pledge or assignment of a security interest subject to the
restrictions of paragraph (f) of this Section (and any other
attempted assignment or transfer by any party hereto shall be null and
void).  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in paragraph (d) of this Section and,
to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.


 


(b)           Assignments by
Lenders.  Any Lender may at any time
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Revolver
Commitment and the Revolver Advances at the time owing to it); provided
that


 


(i)            except in the case of an assignment of the entire
remaining amount of the assigning Lender’s Revolver Commitment and the Revolver
Advances at the time owing to it or in the case of an assignment to a Lender or
an Affiliate of a Lender or an Approved Fund with respect to a Lender, the
aggregate amount of the Revolver Commitment (which for this purpose includes
Revolver Advances outstanding thereunder) or, if the applicable Revolver
Commitment is not then in effect, the principal outstanding balance of the
Revolver Advances of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent or, if “Trade Date” is
specified in the Assignment and Assumption, as of the Trade Date) shall not be
less than $10,000,000, unless each of the Administrative Agent and, so long as
no Default has occurred and is continuing, the Borrower otherwise consent (each
such consent not to be unreasonably withheld or delayed);


 


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(ii)                                  each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Revolver Advances or the
Revolver Commitment assigned;


 


(iii)                               no assignment shall be made to any Defaulting
Lender or its Subsidiaries or Affiliates;


 


(iv)                              any assignment of a Revolver Commitment must be
approved by the Administrative Agent unless the Person that is the proposed
assignee is itself a Lender with a Revolver Commitment (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee); and


 


(v)                                 the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee of $3,500, and the Eligible Assignee, if
it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.


 


Subject to acceptance and recording thereof by the
Administrative Agent pursuant to paragraph (c) of this Section, from
and after the effective date specified in each Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto) but shall continue to be entitled to the
benefits of Sections 8.03 and 9.03 with respect to facts and circumstances
occurring prior to the effective date of such assignment.  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (d) of this Section.


 


(c)                                  Register.  The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain at one of its offices
in Winston-Salem, North Carolina a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Revolver Commitments of, and principal amounts of the
Revolver Advances owing to, each Lender pursuant to the terms hereof from time
to time (the “Register”).  In
addition, the Administrative Agent shall maintain on the Register the
designation, and the revocation of designation, of any Lender as a Defaulting
Lender of which it has received notice. 
The entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice 


 


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to the contrary.  The Register
shall be available for inspection by the Borrower and any Lender, at any
reasonable time and from time to time upon reasonable prior notice


 


(d)                                 Participations.  Any Lender may at any time, without the
consent of, or notice to, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or the Borrower or
any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Revolver Commitment and/or the
Revolver Advances owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Borrower, the Administrative Agent and
the Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.


 


Any agreement or instrument 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 or instrument may
provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver described in  Section 9.05(a) (i) through (x) (inclusive)
that affects such Participant.  Subject
to paragraph (e) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 8.01 through 8.05
inclusive to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this
Section.  To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 9.04 as
though it were a Lender, provided such Participant agrees to be subject to Section 9.04
as though it were a Lender.


 


(e)                                  Limitations
upon Participant Rights.  A
Participant shall not be entitled to receive any greater payment under Section 8.03
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent.  A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.12 unless the Borrower is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of the Borrower,
to comply with Section 2.12 as though it were a Lender.


 


(f)                                    Certain Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.


 


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SECTION 9.08.                                                   Defaulting Lenders.  Notwithstanding anything
contained in this Agreement, if any Lender becomes a Defaulting Lender, then,
to the extent permitted by Applicable Laws:


 


(a)                                  during any
Default Period with respect to such Defaulting Lender, 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 Section 9.05(a);


 


(b)                                 until such time
as the Default Excess with respect to such Defaulting Lender shall have been
reduced to zero:


 


except as otherwise provided in this Section 9.08,
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,
and including any amounts made available to the Administrative Agent by such
Defaulting Lender pursuant to Section 9.08), shall be deemed paid to and
redirected by such Defaulting Lender to 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, if so determined by the Administrative Agent
and the Borrower, to be held in a non-interest bearing deposit account and
released in order to satisfy obligations of that Defaulting Lender to fund
Revolver Advances under this Agreement; third, as the Borrower may
request, so long as no Default exists and is continuing, to the funding of any
Revolver 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;  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 that
Defaulting Lender as a result of that Defaulting Lender’s breach of its
obligations under this Agreement; fifth, so long as no Default exists
and is continuing, 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 that
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 Revolver Advance in respect of which that Defaulting
Lender has not fully funded its appropriate share and (y) such Revolver
Advance was 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
Revolver Advance of all non-Defaulting Lenders on a pro rata basis prior to
being applied to the payment of any Revolver Advance of that Defaulting Lender;


 


(c)                                  until such time
as all Defaulted Payments with respect to such Defaulting Lender shall have
been paid, the Administrative Agent may (in its discretion) apply any amounts
thereafter received by the Administrative Agent for the account of such


 


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Defaulting Lender to satisfy such Defaulting Lender’s
obligations to make such Defaulted Payments until such Defaulted Payments have
been fully paid; and


 


(d)                                 no assignments
otherwise permitted by Section 9.07 shall be made to a Defaulting Lender
or any of its Subsidiaries or Affiliates that are Distressed Persons.


 


Any payments, prepayments or
other amounts paid or payable to a Defaulting Lender that are applied (or held)
as provided in the above Section 9.08(b) to pay amounts owed by a
Defaulting Lender shall be deemed paid to and redirected by that Defaulting
Lender, and each Lender irrevocably consents hereto.


 


SECTION 9.09.                                                   Confidentiality.  Each of the Administrative
Agent and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its
Affiliates and to its and its Affiliates’ respective partners, directors,
officers, employees, agents, advisors and other representatives (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other
party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations, (g) with the consent
of the Borrower or (h) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or
(y) becomes available to the Administrative Agent, any Lender or any of
their respective Affiliates on a nonconfidential basis from a source other than
the Loan Parties or their Affiliates.


 


For purposes of this Section, “Information” means
all information received from the Loan Parties or any of their Subsidiaries
relating to the Loan Parties or any of their Subsidiaries or any of their
respective businesses, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Loan Parties or any of their Subsidiaries.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential  information.


 


SECTION 9.10.                                                   Representation by
Lenders. 
Each Lender hereby represents that it is a commercial lender or
financial institution which makes loans in the ordinary course of its business
and that it will make its Advances hereunder for its own account in the


 


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ordinary course of
such business; provided, however, that, subject to Section 9.07,
the disposition of the Note or Notes held by that Lender shall at all times be
within its exclusive control.


 


SECTION 9.11.                                                   Obligations Several.  The obligations of each Lender
hereunder are several, and no Lender shall be responsible for the obligations
or commitment of any other Lender hereunder. 
Nothing contained in this Agreement and no action taken by the Lenders
pursuant hereto shall be deemed to constitute the Lenders to be a partnership,
an association, a joint venture or any other kind of entity.  The amounts payable at any time hereunder to
each Lender shall be a separate and independent debt and each Lender shall be
entitled to protect and enforce its rights arising out of this Agreement or any
other Loan Document and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.


 


SECTION 9.12.                                                   Survival of Certain
Obligations.  Sections 8.03(a), 8.03(b), 8.05, 9.03
and 9.09, and the obligations of the Loan Parties thereunder, shall survive,
and shall continue to be enforceable notwithstanding, the termination of this
Agreement, and the Revolver Commitments and the payment in full of the
principal of and interest on all Advances.


 


SECTION 9.13.                                                   North Carolina Law.  This Agreement and each Note
shall be construed in accordance with and governed by the law of the State of
North Carolina.


 


SECTION 9.14.                                                   Severability.  In case any one or more of the
provisions contained in this Agreement, the Notes or any of the other Loan
Documents should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby and
shall be enforced to the greatest extent permitted by law.


 


SECTION 9.15.                                                   Interest.  In no event shall the amount
of interest due or payable hereunder or under the Notes exceed the maximum rate
of interest allowed by applicable law, and in the event any such payment is
inadvertently made to any Lender by the Borrower or inadvertently received by
any Lender, then such excess sum shall be credited as a payment of principal,
unless the Borrower shall notify such Lender in writing that it elects to have
such excess sum returned forthwith.  It
is the express intent hereof that the Borrower not pay and the Lenders not
receive, directly or indirectly in any manner whatsoever, interest in excess of
that which may legally be paid by the Borrower under applicable law.


 


SECTION 9.16.                                                   Interpretation.  No provision of this Agreement
or any of the other Loan Documents shall be construed against or interpreted to
the disadvantage of any party hereto by any court or other governmental or
judicial authority by reason of such party having or being deemed to have
structured or dictated such provision.


 


SECTION 9.17.                                                   Counterparts;
Integration; Effectiveness; Electronic Execution.


 


(a)                                  Counterparts;
Integration; Effectiveness.  This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute 


 


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a single contract. 
This Agreement and the other Loan Documents, and any separate letter
agreements with respect to fees payable to the Administrative Agent, constitute
the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. 
Except as provided in Section 3.01, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof that, when taken
together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as
delivery of a manually executed counterpart of this Agreement


 


(b)                                 Electronic
Execution of Assignments.  The
words “execution,” “signed,” “signature,” and words of like import in any
Assignment and Assumption shall be deemed to include electronic signatures or
the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or
the use of a paper-based recordkeeping system, as the case may be, to the
extent and as provided for in any applicable law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.


 


SECTION 9.18.                                                   Jurisdiction; Waiver
of Venue; Service of Process; Waiver of Jury Trial.


 


(a)                                  Submission to
Jurisdiction.  Each Loan
Party irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of the courts of the State of North Carolina
sitting in Forsyth County and of the United States District Court of the Middle
District of North Carolina, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or any other
Loan Document, or for recognition or enforcement of any judgment, and each of
the parties hereto irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
North Carolina State court or, to the fullest extent permitted by applicable
law, in such Federal court.  Each of the
parties hereto agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Nothing in this Agreement or in any other
Loan Document shall affect any right that the Administrative Agent or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against the Borrower or its properties in
the courts of any jurisdiction.


 


(b)                                 Waiver of Venue.  The Borrower irrevocably and unconditionally
waives, to the fullest extent permitted by applicable law, any objection that
it may now or hereafter have to the laying of venue of any action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (a) of this Section.  Each of the parties hereto hereby irrevocably
waives, to the fullest extent


 


103

















 


permitted by applicable law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.


 


(c)                                  Service of
Process.  Each party hereto irrevocably
consents to service of process in the manner provided for notices in
Section 9.01.  Nothing in this
Agreement will affect the right of any party hereto to serve process in any
other manner permitted by applicable law.


 


(d)                                 Waiver of Jury
Trial.  EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). 
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.


 


SECTION 9.19.                                                   Independence of
Covenants.  All covenants under this Agreement and the
other Loan Documents shall be given independent effect so that if a particular
action or condition is not permitted by any such covenant, the fact that it
would be permitted by an exception to, or would be otherwise allowed by,
another covenant shall not avoid the occurrence of a Default if such action is taken
or such condition exists.


 


SECTION 9.20.                                                   Concerning
Certificates.  All certificates required hereunder to be
delivered by the Borrower, any Guarantor or any Subsidiary and that are
required to be executed or certified by the Chief Financial Officer or any
other authorized officer of the Borrower, any Guarantor or any Subsidiary shall
be executed or certified by such officer in such capacity solely on behalf of
the entity for whom he is acting, and not in any individual capacity; provided
that nothing in the foregoing shall be deemed as a limitation on liability of
any officer for any acts of willful misconduct, fraud, intentional
misrepresentation or dishonesty in connection with such execution or
certification.


 


SECTION 9.21.                                                   Amendment and
Restatement.  This Agreement amends and restates in its
entirety that certain Credit Agreement dated as of October 24, 2008 among
the Borrower, the Initial Guarantors, the lenders party thereto, and Branch
Banking and Trust Company, as Administrative Agent.


 


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ARTICLE X

GUARANTY


 


SECTION 10.01.                                             Unconditional
Guaranty.  Each Guarantor hereby irrevocably,
unconditionally and jointly and severally guarantees, each as a primary obligor
and not merely as a surety, to the Administrative Agent, the Lenders and the
other Secured Parties the due and punctual payment of the principal of and the
premium, if any, and interest on the Guaranteed Obligations and any and all
other amounts due under or pursuant to the Loan Documents, when and as the same
shall become due and payable (whether at stated maturity or by optional or
mandatory prepayment or by declaration, redemption or otherwise) in accordance
with the terms of the Loan Documents. 
The Guarantors’ guaranty under this Section is an absolute, present
and continuing guarantee of payment and not of collectability, and is in no way
conditional or contingent upon any attempt to collect from the Borrower, any of
the Guarantors or any other guarantor of the Guaranteed Obligations (or any
portion thereof) or upon any other action, occurrence or circumstances
whatsoever.  In the event that the
Borrower or any Guarantor shall fail so to pay any such principal, premium,
interest or other amount to the Administrative Agent, a Lender or any other
Secured Party, the Guarantors will pay the same forthwith, without demand,
presentment, protest or notice of any kind (all of which are waived by the
Guarantors to the fullest extent permitted by law), in lawful money of the
United States, at the place for payment specified in the Loan Documents or
specified by such Administrative Agent in writing, to such Administrative
Agent.  The Guarantors further agree,
promptly after demand, to pay to the Administrative Agent, the Lenders and the
other Secured Parties the costs and expenses incurred by such Administrative
Agent, Lender or other Secured Party in connection with enforcing the rights of
such Administrative Agent, Lenders and the other Secured Parties against the
Borrower and any or all of the Guarantors (whether in a Bankruptcy proceeding
or otherwise) following any default in payment of any of the Guaranteed
Obligations or the obligations of the Guarantors hereunder, including, without
limitation, the fees and expenses of counsel to the Administrative Agent, such
Lenders and the other Secured Parties.


 


SECTION 10.02.                                             Obligations Absolute.  The obligations of the
Guarantors hereunder are and shall be absolute and unconditional, irrespective
of the validity, regularity or enforceability of this Agreement, any of the
Guaranteed Obligations or any of the Loan Documents, shall not be subject to
any counterclaim, set-off, deduction or defense based upon any claim any of the
Guarantors may have against the Borrower, any other Guarantor or the
Administrative Agent, any Lender or any other Secured Party, hereunder or
otherwise, and shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, to the fullest
extent permitted by law, any circumstance or condition whatsoever (whether or
not any of the Guarantors shall have any knowledge or notice thereof),
including, without limitation:


 


(a)                                  any amendment
or modification of or supplement to any of the Loan Documents or any other
instrument referred to herein or therein, or any assignment or transfer of any
thereof or of any interest therein, or any furnishing or acceptance of
additional security for any of the Guaranteed Obligations;


 


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(b)                                 any waiver,
consent or extension under any Loan Document or any such other instrument, or
any indulgence or other action or inaction under or in respect of, or any
extensions or renewals of, any Loan Document, any such other instrument or any
Guaranteed Obligation;


 


(c)                                  any failure,
omission or delay on the part of the Administrative Agent to enforce, assert or
exercise any right, power or remedy conferred on or available to the
Administrative Agent or any Lender against the Borrower or any Guarantor, any
Subsidiary of the Borrower or any Subsidiary of any Guarantor;


 


(d)                                 any Bankruptcy,
insolvency, readjustment, composition, liquidation or similar proceeding with
respect to the Borrower, any Guarantor, any Subsidiary of the Borrower or any
Subsidiary of any Guarantor or any property of the Borrower, any Guarantor or
any such Subsidiary or any unavailability of assets against which the
Guaranteed Obligations, or any of them, may be enforced;


 


(e)                                  any merger or
consolidation of the Borrower, any Subsidiary of the Borrower or any Guarantor
or any of the Guarantors into or with any other Person or any sale, lease or
transfer of any or all of the assets of any of the Guarantors, the Borrower or
any Subsidiary of the Borrower or any Guarantor to any Person;


 


(f)                                    any failure on
the part of the Borrower, any Guarantor or any Subsidiary of the Borrower or
any Guarantor for any reason to comply with or perform any of the terms of any
agreement with any of the Guarantors;


 


(g)                                 any exercise or
non-exercise by the Administrative Agent, any Lender or any other Secured
Party, of any right, remedy, power or privilege under or in respect of any of
the Loan Documents or the Guaranteed Obligations, including, without
limitation, under this Section;


 


(h)                                 any default,
failure or delay, willful or otherwise, in the performance or payment of any of
the Guaranteed Obligations;


 


(i)                                     any furnishing
or acceptance of security, or any release, substitution or exchange thereof,
for any of the Guaranteed Obligations;


 


(j)                                     any failure to
give notice to any of the Guarantors of the occurrence of any breach or
violation of, or any event of default or any default under or with respect to,
any of the Loan Documents or the Guaranteed Obligations;


 


(k)                                  any partial
prepayment, or any assignment or transfer, of any of the Guaranteed
Obligations; or


 


(l)                                     any other
circumstance (other than payment in full) which might otherwise constitute a
legal or equitable discharge or defense of a guarantor or which might in any
manner or to any extent vary the risk of such Guarantor.


 


106
















 


The Guarantors covenant that their respective
obligations hereunder will not be discharged except by complete performance of
the obligations contained in the Loan Documents and this Agreement and the
final payment in full of the Guaranteed Obligations.  The Guarantors unconditionally waive, to the
fullest extent permitted by law (A) notice of any of the matters referred
to in this Section, (B) any and all rights which any of the
Guarantors may now or hereafter have arising under, and any right to claim a discharge
of the Guarantor’s obligations hereunder by reason of the failure or refusal by
the Administrative Agent, any Lender or any other Secured Party to take any
action pursuant to any statute permitting a Guarantor to request that the
Administrative Agent or any Lender attempt to collect the Guaranteed
Obligations from the Borrower, any of the Guarantors or any other guarantor
(including without limitation any rights under Sections 26-7, 26-8 or 26-9 of
the North Carolina General Statutes, O.C.G.A. § 10-7-24, or any similar or
successor provisions), (C) all notices which may be required by statute, rule of
law or otherwise to preserve any of the rights of the Administrative Agent, any
Lender or any other Secured Party against the Guarantors, including, without
limitation, presentment to or demand of payment from the Borrower, any of the
Subsidiaries of the Borrower or any Guarantor, or any of the other Guarantors
with respect to any Loan Document or this agreement, notice of acceptance of
the Guarantors’ guarantee hereunder and/or notice to the Borrower, any of the
Subsidiaries of the Borrower or any Guarantor, or any Guarantor of default or
protest for nonpayment or dishonor, (D) any diligence in collection from
or protection of or realization upon all or any portion of the Guaranteed
Obligations or any security therefor, any liability hereunder, or any party
primarily or secondarily liable for all or any portion of the Guaranteed
Obligations, and (E) any duty or obligation of the Administrative Agent,
any Lender or any other Secured Party to proceed to collect all or any portion
of the Guaranteed Obligations from, or to commence an action against, the
Borrower, any Guarantor or any other Person, or to resort to any security or to
any balance of any deposit account or credit on the books of the Administrative
Agent, any Lender or any other Secured Party in favor of the Borrower, any
Guarantor or any other Person, despite any notice or request of any of the
Guarantors to do so.


 


SECTION 10.03.                                             Continuing Obligations;
Reinstatement.  The obligations of the Guarantors under this Article X
are continuing obligations and shall continue in full force and effect until
such time as all of the Guaranteed Obligations (and any renewals and extensions
thereof) shall have been finally paid and satisfied in full.  The obligations of the Guarantors under this Article X
shall continue to be effective or be automatically reinstated, as the case may
be, if any payment made by the Borrower, any Guarantor or any Subsidiary of the
Borrower or any Guarantor on, under or in respect of any of the Guaranteed
Obligations is rescinded or must otherwise be restored or returned by the
recipient upon the insolvency, Bankruptcy, dissolution, liquidation or
reorganization of the Borrower, any Guarantor or any such Subsidiary, or upon
or as a result of the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to the Borrower, any Guarantor or any
such Subsidiary or any substantial part of the property of the Borrower, any
Guarantor or any such Subsidiary, or otherwise, all as though such payment had
not been made.  If an event permitting
the acceleration of all or any portion of the Guaranteed Obligations shall at any
time have occurred and be continuing, and such acceleration shall at such time
be stayed, enjoined or otherwise prevented for any reason, including without
limitation because of the pendency of a case or proceeding relating to the
Borrower, any Guarantor or any Subsidiary of the Borrower or any Guarantor
under any Bankruptcy or insolvency law, for purposes of this Article X
and the obligations of the Guarantors hereunder,


 


107

















 


such Guaranteed
Obligations shall be deemed to have been accelerated with the same effect as if
such Guaranteed Obligations had been accelerated in accordance with the terms
of the applicable Loan Documents or of this Agreement.


 


SECTION 10.04.                                             Additional Security, Etc.  The Guarantors authorize the
Administrative Agent on behalf of the Lenders without notice to or demand on
the Guarantors and without affecting their liability hereunder, from time to
time (a) to obtain additional or substitute endorsers or guarantors; (b) to
exercise or refrain from exercising any rights against, and grant indulgences
to, the Borrower, any Subsidiary of the Borrower or any Guarantor, any other
Guarantor or others; and (c) to apply any sums, by whomsoever paid or
however realized, to the payment of the principal of, premium, if any, and interest
on, and other obligations consisting of, the Guaranteed Obligations.  The Guarantors waive any right to require the
Administrative Agent, any Lender or any other Secured Party to proceed against
any additional or substitute endorsers or guarantors or the Borrower or any of
their Subsidiaries or any other Person or to pursue any other remedy available
to the Administrative Agent, any such Lender or any such other Secured Party.


 


SECTION 10.05.                                             Information
Concerning the Borrower.  The Guarantors assume all responsibility for
being and keeping themselves informed of the financial condition and assets of
the Borrower, the other Guarantors and their respective Subsidiaries, and of
all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which the Guarantors
assume and insure hereunder, and agree that neither the Administrative Agent,
any Lender nor any other Secured Party shall have any duty to advise the
Guarantors of information known to the Administrative Agent, any such Lender or
any such other Secured Party regarding or in any manner relevant to any of such
circumstances or risks.


 


SECTION 10.06.                                             Guarantors’
Subordination.  The Guarantors hereby absolutely subordinate,
both in right of payment and in time of payment, any present and future
indebtedness of the Borrower or any Subsidiary of the Borrower or any Guarantor
to any or all of the Guarantors to the indebtedness of the Borrower or any such
Subsidiary or to the Administrative Agent, Lenders and the other Secured
Parties (or any of them), provided that
the Guarantors may receive scheduled payments of principal, premium (if any)
and interest in respect of such present or future indebtedness so long as there
is no Event of Default then in existence.


 


SECTION 10.07.                                             Waiver of
Subrogation.  Notwithstanding anything herein to the
contrary, until the payment in full of the Guaranteed Obligations, the
Guarantors hereby waive any right of subrogation (under contract, Section 509
of the Bankruptcy Code or otherwise) or any other right of indemnity,
reimbursement or contribution and hereby waive any right to enforce any remedy
that the Administrative Agent, any Lender or any other Secured Party now has or
may hereafter have against the Borrower, any Guarantor or any endorser or any
other guarantor of all or any part of the Guaranteed Obligations, and the
Guarantors hereby waive any benefit of, and any right to participate in, any
security or collateral given to the Administrative Agent, any Lender or any
other Secured Party to secure payment or performance of the Guaranteed
Obligations or any other liability of the Borrower to the Administrative Agent,
any Lender or any other Secured Party. 
The waiver contained in this Section shall continue and 


 


108

















 


survive the
termination of this Agreement and the final payment in full of the Guaranteed
Obligations.


 


SECTION 10.08.                                             Enforcement.  In the event that the
Guarantors shall fail forthwith to pay upon demand of the Administrative Agent,
any Lender or any other Secured Party any amounts due pursuant to this Article X
or to perform or comply with or to cause performance or compliance with any
other obligation of the Guarantors under this Agreement the Administrative
Agent, any Lender and any other Secured Party shall be entitled and empowered
to institute any action or proceeding at law or in equity for the collection of
the sums so due and unpaid or for the performance of or compliance with such
terms, and may prosecute any such action or proceeding to judgment or final
decree and may enforce such judgment or final decree against the Guarantors and
collect in the manner provided by law out of the property of the Guarantors,
wherever situated, any monies adjudged or decreed to be payable.  The obligations of the Guarantors under this
Agreement are continuing obligations and a fresh cause of action shall arise in
respect of each default hereunder.


 


SECTION 10.09.                                             Miscellaneous.  Except as may otherwise be
expressly agreed upon in writing, the liability of the Guarantors under this
Article X shall neither affect nor be affected by any prior or subsequent
guaranty by the Guarantors of any other indebtedness to the Administrative
Agent, the Lenders or any other Secured Party. 
Notwithstanding anything in this Article X to the contrary, the
maximum liability of each Guarantor hereunder shall in no event exceed the
maximum amount which could be paid out by such Guarantor without rendering such
Guarantor’s obligations under this Article X, in whole or in part, void or
voidable under applicable law, including, without limitation, (i) the
Bankruptcy Code of 1978, as amended, and (ii) any applicable state or
federal law relative to fraudulent conveyances.


 


109

















 


IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, under seal, by their respective authorized officers as of the day and
year first above written.


 


	
   

  	
  MAIN STREET CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Todd A. Reppert

  
	
   

  	
  Name: 

  	
  Todd A. Reppert

  
	
   

  	
  Title:

  	
  President and Chief Financial Officer

  



 


110

















 


	
   

  	
  INITIAL GUARANTOR

  
	
   

  	
   

  
	
   

  	
  MAIN STREET CAPITAL PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rodger Stout

  
	
   

  	
  Name: 

  	
  Rodger Stout

  
	
   

  	
  Title:

  	
  Chief Financial & Administrative Officer

  



 


111

















 


	
   

  	
  INITIAL GUARANTOR

  
	
   

  	
   

  
	
   

  	
  MAIN STREET EQUITY INTERESTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rodger Stout

  
	
   

  	
  Name: 

  	
  Rodger Stout

  
	
   

  	
  Title:

  	
  Vice President, Treasurer and Assistant Secretary

  



 


112
















 


	
  COMMITMENTS

  	
   

  	
  BRANCH BANKING AND TRUST COMPANY,

  
	
   

  	
   

  	
  as Administrative Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gregory Drabik 

  	
  (SEAL)

  
	
   

  	
   

  	
  Name: 

  	
  Gregory Drabik

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
	
  Revolver

  	
   

  	
   

  
	
  Commitment:

  	
   

  	
   

  
	
  $30,000,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lending Office

  
	
   

  	
   

  	
  Branch Banking and Trust Company

  
	
   

  	
   

  	
  200 West Second Street, 16th Floor

  
	
   

  	
   

  	
  Winston-Salem, NC 27101

  
	
   

  	
   

  	
  Attention: Gregory Drabik, Senior Vice President

  
	
   

  	
   

  	
  Telecopy number: (336) 733-2740

  
	
   

  	
   

  	
  Telephone number: (336) 733-2709

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  And a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Jacqueline E. Camp, Esq.

  
	
   

  	
   

  	
  Womble Carlyle Sandridge & Rice, PLLC

  
	
   

  	
   

  	
  300 North Greene Street

  
	
   

  	
   

  	
  Suite 1900

  
	
   

  	
   

  	
  Greensboro, NC 27401

  
	
   

  	
   

  	
  Telecopy number: (336) 574-4547

  
	
   

  	
   

  	
  Telephone number: (336) 574-8069

  



 


113

















 


	
  COMMITMENTS

  	
   

  	
  COMPASS BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Tom Brosig

  	
  (SEAL)

  
	
   

  	
   

  	
  Name: 

  	
  Tom Brosig

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
	
  Revolver

  	
   

  	
   

  
	
  Commitment:

  	
   

  	
   

  
	
  $15,000,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lending Office

  
	
   

  	
   

  	
  Compass Bank

  
	
   

  	
   

  	
  24
  Greenway Plaza, Suite 1601

  
	
   

  	
   

  	
  Houston,
  TX 77046

  
	
   

  	
   

  	
  Attn: Tom Brosig, Senior Vice President

  
	
   

  	
   

  	
  Telecopy number: (713) 966-2388

  
	
   

  	
   

  	
  Telephone number: (713) 968-8264

  



 


114

















 


	
  COMMITMENTS

  	
   

  	
  REGIONS BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William Bobbora

  	
  (SEAL)

  
	
   

  	
   

  	
  Name: 

  	
  William Bobbora

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
  Revolver

  	
   

  	
   

  
	
  Commitment:

  	
   

  	
   

  
	
  $20,000,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lending Office

  
	
   

  	
   

  	
  Regions
  Bank

  
	
   

  	
   

  	
  5005
  Woodway, Suite 110

  
	
   

  	
   

  	
  Houston,
  TX 77056

  
	
   

  	
   

  	
  Attn: William Bobbora, Vice President

  
	
   

  	
   

  	
  Telecopy number: (713) 426-7180

  
	
   

  	
   

  	
  Telephone number: (713) 426-7110

  



 


115

















 


	
  COMMITMENTS

  	
   

  	
  THE FROST NATIONAL BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Larry C. Stephens

  	
  (SEAL)

  
	
   

  	
   

  	
  Name: 

  	
  Larry C. Stephens

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
  Revolver

  	
   

  	
   

  
	
  Commitment:

  	
   

  	
   

  
	
  $10,000,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lending Office

  
	
   

  	
   

  	
  The Frost National Bank

  
	
   

  	
   

  	
  1234 Clear Lake City Blvd.

  
	
   

  	
   

  	
  Houston, TX 77062

  
	
   

  	
   

  	
  Attn: Larry C. Stephens, Vice President

  
	
   

  	
   

  	
  Telecopy number: (713) 388-1100

  
	
   

  	
   

  	
  Telephone number: (713) 388-1058

  



 


116

















 


	
  COMMITMENTS

  	
   

  	
  TEXAS CAPITAL BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Eric Luttrell

  	
  (SEAL)

  
	
   

  	
   

  	
  Name: 

  	
  Eric Luttrell

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
	
  Revolver

  	
   

  	
   

  
	
  Commitment:

  	
   

  	
   

  
	
  $10,000,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lending
  Office

  
	
   

  	
   

  	
  Texas
  Capital Bank

  
	
   

  	
   

  	
  One
  Riverway, Floor 21

  
	
   

  	
   

  	
  Houston,
  TX 77051

  
	
   

  	
   

  	
  Attn: Eric Luttrell, Senior Vice President

  
	
   

  	
   

  	
  Telecopy number: (832) 308-7019

  
	
   

  	
   

  	
  Telephone number: (832) 308-7018

  



 


117