Exhibit 10.3


 


Execution Version




 





 


MAIN STREET CAPITAL CORPORATION

as Borrower,


 


BRANCH BANKING AND TRUST COMPANY,

MORTGAGE CUSTODY DEPARTMENT OF CORPORATE TRUST SERVICES

as Custodian


 


and


 


BRANCH BANKING AND TRUST COMPANY

as Administrative Agent


 






 


AMENDED AND RESTATED


 


CUSTODIAL AGREEMENT


 






 


Dated as of September 20, 2010


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 1.

  	
  Definitions

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 2.

  	
  Delivery of Investment Files

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 3.

  	
  Receipt of Investment Files

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 4.

  	
  Obligations of the Custodian

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 5.

  	
  Representations and Warranties of the Custodian

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 6.

  	
  Trust Receipts

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 7.

  	
  Future Defects

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 8.

  	
  Release

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 9.

  	
  Procedures Upon Default

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 10.

  	
  Fees and Expenses of Custodian

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 11.

  	
  Removal of Custodian

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 12.

  	
  Examination of Investment Files

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 13.

  	
  Insurance of Custodian

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 14.

  	
  Counterparts

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 15.

  	
  Governing Law/Submission to Jurisdiction

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 16.

  	
  Copies of Documents from Investment Files

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 17.

  	
  Resignation of Custodian

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 18.

  	
  Term of Agreement

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 19.

  	
  Notices

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 20.

  	
  Successors and Assigns

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 21.

  	
  Liability of the Custodian

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 22.

  	
  Indemnification

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 23.

  	
  Custodian’s Reliance

  	
  14

  



 


i

















 


	
  Section 24.

  	
  Merger or Consolidation of Custodian

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 25.

  	
  Transmission of Investment Files

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 26.

  	
  Authorized Representatives

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 27.

  	
  Reproduction of Documents

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 28.

  	
  Force Majeure

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 29.

  	
  Confidentiality Agreement

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 30.

  	
  No Amendments

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 31.

  	
  Express Duties

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 32.

  	
  Enforcement of Rights

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 33.

  	
  No Proceedings

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 34.

  	
  Custody Agreement

  	
  16

  
	
   

  	
   

  	
   

  
	
  Exhibit 1

  	
  Intentionally
  Omitted

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 2

  	
  Trust
  Receipt

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 3

  	
  Request
  and Receipt for Release of Documents

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 4

  	
  Authorized
  Representatives of the Agent and Information for Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 5

  	
  Authorized
  Representatives of the Borrower

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 6

  	
  Authorized
  Representatives of the Custodian

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 7

  	
  Form of
  List of Portfolio Investments

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 8

  	
  Form of
  Comfort Letter

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 9

  	
  Form of
  Bailee Letter

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 10

  	
  Form of
  Certification of Sale, Exchange, Transfer or Liquidation

  	
   

  



 


ii

















 


AMENDED AND
RESTATED

CUSTODIAL AGREEMENT


 


THIS
AMENDED AND RESTATED CUSTODIAL AGREEMENT (this “Agreement”), dated as of
September 20, 2010, by and among Main Street Capital Corporation (the “Borrower”),
Branch Banking and Trust Company, Mortgage Custody Department of Corporate
Trust Services, not individually, but solely in its capacity as Custodian, having
an address at 5130 Parkway Plaza Boulevard, Charlotte, North Carolina 28217
(the “Custodian”) and Branch Banking and Trust Company, acting in its
capacity as agent (the “Agent”) for itself and for the other Secured
Parties (as defined in the Credit Agreement described below).


 


PRELIMINARY STATEMENT


 


The
Borrower and the Agent, among others, are parties to the Amended and Restated
Credit Agreement, dated as of September 20, 2010 (as amended,
supplemented, restated or otherwise modified and in effect from time to time,
the “Credit Agreement”), pursuant to which the Borrower has the benefit,
subject to the terms and conditions thereof, of advances from the Lenders (as
defined in the Credit Agreement) to finance, among other things, the making of
Portfolio Investments (as defined below) by the Borrower.


 


The
Credit Agreement amends and restates in its entirety that certain Credit
Agreement dated as of October 24, 2008 by and among Borrower, the Initial
Guarantors, the lenders party thereto, and Branch Banking and Trust Company as
a lender and as administrative agent (as amended or modified prior to the date
of the Credit Agreement, the “Original Credit Agreement”).


 


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


 


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


 


This
Agreement amends and restates in its entirety that certain Custodial Agreement
dated as of October 24, 2008 by and among the Borrower, the Custodian and
the Agent.


 


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


 

















 


Section 1.                                            Definitions.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


2

















 


Section 2.                                            Delivery of Investment Files.


 


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


 


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


 


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


 


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


 


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


 


Section 3.                                            Receipt of Investment Files.


 


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


 


Section 4.                                            Obligations of the Custodian.


 


The
Custodian hereby confirms that (i) with respect to Investment Files
delivered to it on or before the date hereof, it has reviewed the List of
Portfolio Investments therewith, and with respect to any subsequently delivered
Investment Files, it will review the List of Portfolio Investments delivered
therewith, (ii) with respect to Investment Files delivered to it on or
before the date hereof, it holds such Investment Files corresponding to each
Portfolio Investment listed on the List of Portfolio Investments to which it
relates and, with respect to any subsequently delivered Investment Files, it
will hold such Investment Files corresponding to each Portfolio Investment
listed on the List of Portfolio Investments to which it relates and (iii) for
each 


 


3

















 


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


 


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


 


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


 


4

















 


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


 


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


 


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


 


Section 5.                                            Representations and Warranties of the Custodian.


 


The
Custodian represents and warrants to the Administrative Agent that:


 


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


 


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


 


(c)                                  This Agreement, when executed and delivered by
the Custodian, shall constitute the valid, legal and binding obligation of the
Custodian, enforceable against the Custodian in accordance with its terms,
except as the enforcement thereof may be limited by applicable receivership or
similar debtor relief laws and that certain equitable 


 


5

















 


remedies
may not be available regardless of whether enforcement is sought in equity or
at law.


 


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


 


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


 


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


 


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


 


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


 


Section 6.                                            Trust Receipts.


 


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


 


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


 


The
Custodian makes no representation as to: 
(i) the validity, legality, sufficiency, enforceability or
genuineness of any of the documents contained in each Investment File or (ii) the
collectability, insurability, effectiveness or suitability of any Portfolio
Investment.  The Custodian shall have no
obligation to verify the receipt of any documents, the existence of which was
not delivered or not made known to the Custodian as part of the Investment
File, and the Custodian shall have no obligation to determine whether the
recordation of any document is 


 


6

















 


necessary,
nor shall the Custodian be responsible for the value, form, substance,
validity, perfection, priority, effectiveness or enforceability of any of such
documents.


 


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


 


Section 7.                                            Future Defects.


 


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


 


Section 8.                                            Release.


 


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


 


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


 


7

















 


hereto,
duly completed and executed by the Custodian. 
The Custodian shall retain the executed Bailee Letter in the stead of
the related Investment File and shall notify the Agent and the Borrower in the
event that the third party designated to receive such Investment File or such
documents fails to execute and deliver to the Custodian a countersignature to
the Bailee Letter within three (3) Business Days of delivery thereof.


 


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


 


(d)                                 The Borrower
covenants and agrees that:


 


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


 


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


 


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


 


(iv)                              it shall
promptly instruct such third parties to whom any Investment File or documents
have been delivered to return to the Custodian any Investment File or other
such documents when the need therefor no longer exists, unless the Portfolio
Investment shall be sold, exchanged, transferred or liquidated, in which case,
thereupon it shall, in


 


8
















 


substantially
the form annexed hereto as Exhibit 10, certify to the Custodian and
the Agent that such sale, transfer or liquidation has occurred;


 


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


 


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


 


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


 


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


 


Section 9.                                            Procedures Upon Default.


 


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


 


9

















 


Custodian
shall have no duty to inquire whether a Default or an Event of Default has
occurred and is continuing.


 


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


 


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


 


Section 10.                                      Fees and Expenses of Custodian.


 


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


 


Section 11.                                      Removal of Custodian.


 


(a)                                  The Agent or the Borrower, upon (i) at
least thirty (30) days prior written notice to the Custodian and the other
party, may remove and discharge the Custodian (or any successor custodian
thereafter appointed), with cause, and (ii) at least sixty (60) days prior
written notice to the Custodian and the other party, and with the consent of
the other party (which consent shall  not
be unreasonably withheld), may remove and discharge the Custodian (or any
successor custodian thereafter appointed), without cause, from the performance
of its obligations under this Custodial Agreement; provided, that, if a Default
or an Event of Default has occurred and is continuing, (Y) the Borrower’s
consent shall not be required as a condition to Agent’s removing or discharging
the Custodian without cause, and (Z) the Borrower shall have no right to
remove or discharge the Custodian without cause.  Promptly after the giving of notice of
removal of the Custodian, the Agent shall appoint, by written instrument, a
successor custodian, which appointment shall, unless a Default or an Event of
Default has occurred and is continuing, require the consent of the Borrower,
which consent shall not be unreasonably withheld. One original counterpart of
such instrument of appointment shall be delivered to each of the Agent, the
Borrower, the Custodian and the successor custodian.


 


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


 


10

















 


otherwise
at the expense of the Borrower. The Borrower shall be responsible for the fees
and expenses of the successor custodian.


 


Section 12.                                      Examination of Investment Files.


 


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


 


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


 


Section 13.                                      Insurance of Custodian.


 


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


 


Section 14.                                      Counterparts.


 


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


 


Section 15.                                      Governing Law/Submission to Jurisdiction.


 


This
Agreement shall be deemed to have been made in and shall be construed in
accordance with the laws of the State of North Carolina and its validity,
construction and effect shall be governed by the internal laws of the State of
North Carolina applicable to agreements wholly performed therein.  The appropriate state and federal courts
located in the County of Mecklenburg or the County of Forsyth in the State of
North Carolina shall be an appropriate venue for any action, suit or other
proceeding arising from or based upon this Agreement.  The parties hereto waive any objection to the
propriety or convenience of venue in such courts or to 


 


11

















 


the
jurisdiction of such courts over any party and agree that any judgment entered
therein may be enforced with no further defense or offset in any jurisdiction
in which the defendant is a citizen, resides or owns property.  Nothing in this Section 15 shall
affect the right of the Agent to bring any action or proceeding against any
party hereto or its property in the courts of any other jurisdiction.


 


Section 16.                                      Copies of Documents from Investment Files.


 


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


 


Section 17.                                      Resignation of Custodian.


 


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


 


Section 18.                                      Term of Agreement.


 


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


 


Section 19.                                      Notices.


 


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


 


12

















 


If
to Borrower:


 


Main Street Capital Corporation

1300 Post Oak Boulevard, Suite 800

Houston, Texas  77056

Attention:  Rodger Stout

Telephone:  (713) 350-6000

Facsimile:  (713) 350-6042


 


If
to the Agent:


 


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


 


If
to the Custodian:


 


Branch Banking and Trust Company,

Mortgage Custody Department of Corporate Trust Services

5130 Parkway Plaza Boulevard

Charlotte, North Carolina 28217-1964

Attention:  Susan Tittl

Telephone:  (704) 954-1852

Telecopy:  (704) 954-1830


 


Section 20.                                      Successors and Assigns.


 


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


 


Section 21.                                      Liability of the Custodian.


 


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


 


13

















 


Section 22.                                      Indemnification.


 


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


 


Section 23.                                      Custodian’s Reliance.


 


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


 


Section 24.                                      Merger or Consolidation of Custodian.


 


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


 


Section 25.                                      Transmission of Investment Files.


 


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


 


14

















 


damages
to any person, including without limitation, the Borrower, arising out of
actions of the Custodian consistent with instructions of the Borrower.


 


Section 26.                                      Authorized Representatives.


 


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


 


Section 27.                                      Reproduction of Documents.


 


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


 


Section 28.                                      Force Majeure.


 


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


 


Section 29.                                      Confidentiality Agreement.


 


The
Custodian acknowledges that the Investment Files may contain information which
the Borrower deems “confidential”, “proprietary” and “secret.”  The Custodian shall hold and, shall at all
times ensure that its employees and agents hold in confidence all information
contained in the Investment Files, and will prevent (a) the disclosure by
it or its agents or 


 


15

















 


employees
to others of any such proprietary, confidential or secret information of the
Portfolio Investments or (b) the use of such information other than for
purposes set forth herein, unless authorized to do so in writing by the
Borrower.


 


Section 30.                                      No Amendments.


 


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


 


Section 31.                                      Express Duties.


 


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


 


Section 32.                                      Enforcement of Rights.


 


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


 


Section 33.                                      No Proceedings.


 


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


 


Section 34.                                      Custody Agreement.


 


Each
party hereto represents that this Agreement is a 1940 Act custody agreement and
shall be interpreted in accordance therewith; provided, however, that nothing
in the foregoing 


 


16

















 


shall
be deemed to adversely affect the perfection of the security interests of the
Agent for the benefit of the Secured Parties in the Collateral pursuant to the
provisions of this Agreement.


 


17

















 


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


 


	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  MAIN
  STREET CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Todd A. Reppert

  
	
   

  	
   

  	
  Name:
  

  	
  Todd
  A. Reppert

  
	
   

  	
   

  	
  Title:
  

  	
  President
  and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CUSTODIAN:

  
	
   

  	
   

  
	
   

  	
  BRANCH
  BANKING AND TRUST COMPANY, MORTGAGE CUSTODY DEPARTMENT OF CORPORATE TRUST SERVICES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Susan Tittl

  
	
   

  	
   

  	
  Name:
  

  	
  Susan
  Tittl

  
	
   

  	
   

  	
  Title:
  

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AGENT:

  
	
   

  	
   

  
	
   

  	
  BRANCH
  BANKING AND TRUST COMPANY, as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Gregory Drabik

  
	
   

  	
   

  	
  Name:
  

  	
  Gregory
  Drabik

  
	
   

  	
   

  	
  Title:
  

  	
  Senior
  Vice President

  



 


18