exv10w2






Exhibit 10.2




EXECUTION VERSION



 




 





INCREMENTAL ASSUMPTION AGREEMENT




dated as of July 8, 2011,



relating to the



AMENDED AND RESTATED SENIOR SECURED REVOLVING CREDIT

AGREEMENT



dated as of February 22, 2011,



among



FIFTH STREET FINANCE CORP.,

as Borrower,



The Several Lenders and Agents

from Time to Time Parties Thereto,



and



ING CAPITAL LLC,

as Administrative Agent


 




 





 









 









INCREMENTAL ASSUMPTION AGREEMENT, dated as of July 8, 2011 (this “Assumption Agreement”),
by and among FIFTH STREET FINANCE CORP. (the “Borrower”), FSFC Holdings, Inc.
(“FSFC”), Fifth Street Fund of Funds LLC (“Fifth Street”; collectively with FSFC,
the “Subsidiary Guarantors”), ING CAPITAL LLC, in its capacity as Administrative Agent (the
“Administrative Agent”), and Royal Bank of Canada, as increasing lender (the
“Increasing Lender”) relating to the AMENDED AND RESTATED SENIOR SECURED
REVOLVING CREDIT AGREEMENT dated as of
February 22, 2011 (as amended by the Amendment No.1 to the Amended and Restated Senior Secured
Revolving Credit Agreement and Amendment No. 2 to the Guarantee, Pledge and Security Agreement
dated as of July 8, 2011 and as further amended, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among the Borrower, the Administrative Agent and the several
banks and other financial institutions or entities from time to time party to the Credit Agreement.



          A. The Borrower has requested that the Increasing Lender provide an additional
Commitment in an aggregate amount equal to $15,000,000 (the “Incremental Commitment”)
pursuant to Section 2.07(f) of the Credit Agreement.




          B. The Increasing Lender is willing to make such an Incremental Commitment to the
Borrower on the terms and subject to the conditions set forth herein and in the Credit Agreement.




          Accordingly, in consideration of the mutual agreements herein contained and other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto
agree as follows:




     SECTION 1. Defined Terms; Interpretation; Etc. Capitalized terms used and not defined
herein shall have the meanings assigned to such terms in the Credit Agreement. The rules of
construction set forth in Section 1.03 of the Credit Agreement shall apply equally to this
Assumption Agreement. This Assumption Agreement shall be a “Loan Document” for all purposes of the
Credit Agreement and the other Loan Documents.



     SECTION 2. Incremental Commitment. (a) Pursuant to Section 2.07(f) of the Credit
Agreement and subject to the terms and conditions hereof, the Increasing Lender hereby agrees to
make the Incremental Commitment to the Borrower effective on and as of the Effective Date (as
defined below). The Incremental Commitment shall constitute an additional “Commitment” for all
purposes of the Credit Agreement and the other Loan Documents.



 









 





          (b) The terms of the Incremental Commitment shall be the same as the other
Commitments made under the Credit Agreement.




          (c) On the Effective Date, in connection with the adjustments to any outstanding
Loans and participation interests contemplated by Section 2.07(f)(iv) of the Credit Agreement, the
Incremental Lender shall make a payment to the Administrative Agent, for account of the other
Lenders, in an amount calculated by the Administrative Agent in accordance with such section, so
that after giving effect to such payment and to the distribution thereof to the other Lenders in
accordance with such section, the Loans are held ratably by the Lenders in accordance with the
respective Commitments of such Lenders (after giving effect to the Incremental Commitment).




     SECTION 3. Conditions Precedent to Incremental Commitment. This Assumption Agreement,
and the obligations of the Increasing Lender to make the Incremental Commitment, shall become
effective on and as of the Business Day (the “Effective Date”) occurring on or before July 8, 2011
on which the following conditions precedent have been satisfied:



          (a) the Administrative Agent shall have received counterparts of this Assumption
Agreement that, when taken together, bear the signatures of the Borrower, the Subsidiary
Guarantors, the Administrative Agent and the Increasing Lender;




          (b) on the date hereof, each of the conditions set forth or referred to in Section
2.07(f)(i) of the Credit Agreement shall be satisfied, and pursuant to Section 2.07(f)(ii)(x) of
the Credit Agreement the Administrative Agent shall have received a certificate of a duly
authorized officer of the Borrower dated the date hereof certifying as to the foregoing;




          (c) the Administrative Agent shall have received for the account of the Lenders the
amounts, if any, payable under Section 2.14 of the Credit Agreement as a result of the adjustments
of Borrowings pursuant to Section 2(c) of this Assumption Agreement; and




          (d) the Increasing Lender shall have received all documented fees and expenses
related to this Assumption Agreement owing on the date hereof, including an up-front fee in an
amount equal to 0.875% of the Increased Commitment, due to the Increasing Lender on the date
hereof.




     SECTION 4. Representations and Warranties of the Borrower. To induce the other parties
hereto to enter into this Assumption Agreement, the Borrower represents and warrants to the
Administrative Agent and the Increasing Lender that, as of the date hereof:



          (a) This Assumption Agreement has been duly authorized, executed and delivered by the Borrower
and the Subsidiary Guarantors, and constitutes a legal, valid and binding obligation of the
Borrower and the Subsidiary Guarantors in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the





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enforcement of creditors’ rights generally and by general equitable principles (whether enforcement
is sought by proceedings in equity or at law).




          (b) Each of the representations and warranties made by the Borrower and the
Subsidiary Guarantors in or pursuant to the Loan Documents are true and correct in all material
respects as if made on such date (except to the extent they relate specifically to an earlier date,
in which case they are true and correct in all material respects as of such earlier date, and
unless a representation or warranty is already qualified by materiality or by Material Adverse
Effect, in which case it is true and correct in all respects).




          (c) No Default or Event of Default has occurred and is continuing on the date hereof
or shall result from the Incremental Commitment.




     SECTION 5. Representations, Warranties and Covenants of the Increasing Lender. The
Increasing Lender (a) represents and warrants that (i) from and after the Effective Date, it shall
have the obligations of a Lender under the Credit Agreement to the extent of its existing
Commitment as increased by the Incremental Commitment, and (ii) it has received a copy such
documents and information as it has deemed appropriate to make its own credit analysis and decision
to enter into this Assumption Agreement and to make the Incremental Commitment on the basis of
which it has made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender; and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, and (ii) it will continue to perform in
accordance with their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.



     SECTION 6. Consent and Reaffirmation. (a) Each Subsidiary Guarantor hereby consents to
this Assumption Agreement and the transactions contemplated hereby, (b) the Borrower and each
Subsidiary Guarantor agree that, notwithstanding the effectiveness of this Assumption Agreement,
the Guarantee and Security Agreement and each of the other Security Documents continue to be in
full force and effect, (c) the Borrower and each Subsidiary Guarantor acknowledge that the terms
“Credit Agreement Obligations,” “Guaranteed Obligations” and “Secured Obligations” (each as defined
in the Guarantee and Security Agreement) include any and all Loans made now or in the future by the
Increasing Lender in respect of the Incremental Commitment and all interest and other amounts owing
in respect thereof under the Loan Documents (including all interest and expenses accrued or
incurred subsequent to the commencement of any bankruptcy or insolvency proceeding with respect to
the Borrower, whether or not such interest or expenses are allowed as a claim in such proceeding),
and (d) each Subsidiary Guarantor confirms its guarantee of the Guaranteed Obligations and the
Borrower and each Subsidiary Guarantor confirm their grant of a security interest in their assets
as Collateral for the Secured Obligations, all as provided in the Loan Documents as originally
executed (and amended prior to the date hereof and supplemented hereby).



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     SECTION 7. Notices. All notices hereunder shall be given in accordance with the provisions
of Section 9.01 of the Credit Agreement.



     SECTION 8. Expenses. The Borrower agrees to pay all reasonable and documented out-of-pocket
expenses incurred by the Administrative Agent in connection with this Assumption Agreement in
accordance with the Credit Agreement, including the reasonable and documented fees, charges and
disbursements of one outside counsel for the Administrative Agent.



     SECTION 9. Counterparts. This Assumption Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same contract. Delivery of an executed counterpart of a signature page
of this Assumption Agreement by facsimile or electronic transmission shall be as effective as
delivery of a manually executed counterpart hereof.



     SECTION 10. Applicable Law; Jurisdiction; Consent to Service of Process; Other. THIS
ASSUMPTION AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS ASSUMPTION AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK. THE PROVISIONS OF SECTION 9.09 OF THE CREDIT AGREEMENT (AND ALL OTHER APPLICABLE PROVISIONS
OF ARTICLE IX OF THE CREDIT AGREEMENT) ARE HEREBY INCORPORATED BY REFERENCE.



     
SECTION 11. Headings. The headings of this Assumption Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.



     SECTION 12. No Third Party Beneficiaries. This Assumption Agreement is intended to be
solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or
create any rights in favor of, any other person or entity. No person or entity other than the
parties hereto shall have any rights under or be entitled to rely upon this Assumption Agreement.



[Remainder of page intentionally left blank]



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          IN WITNESS WHEREOF, the parties hereto have caused this Assumption Agreement to be duly
executed and delivered by their proper and duly authorized representatives as of the day and year
first above written.




	 	 	 	 	 
	 	FIFTH STREET FINANCE CORP., as Borrower

 	 
	 	By:  	/s/ Bernard D. Berman
 	 
	 	 	Name:  	Bernard D. Berman  	 
	 	 	Title:  	President 	 
	 
	 	FSFC HOLDINGS, INC., as Subsidiary Guarantor

 	 
	 	By:  	/s/ Bernard D. Berman
 	 
	 	 	Name:  	Bernard D. Berman  	 
	 	 	Title:  	President 	 
	 
	 	FIFTH STREET FUND OF FUNDS LLC,

 as Subsidiary Guarantor

	 
	 	By:  	/s/ Bernard D. Berman
 	 
	 	 	Name:  	Bernard D. Berman  	 
	 	 	Title:  	President 	 
	 



Signature Page to Incremental Assumption Agreement



 









 






	 	 	 	 	 
	 	ING CAPITAL LLC, as Administrative Agent

 	 
	 	By:  	/s/ Patrick Frisch
 	 
	 	 	Name:  	Patrick Frisch, CFA  	 
	 	 	Title:  	Managing Director 	 
	 



Signature Page to Incremental Assumption Agreement



 









 





	 	 	 	 	 
	 	ROYAL BANK OF CANADA,

 as Increasing Lender

 	 
	 	By:  	/s/ Tim Stephens
 	 
	 	 	Name:  	Tim Stephens  	 
	 	 	Title:  	Director 	 
	 



Signature Page to Incremental Assumption Agreement