FS Investment Corporation III 8-K


 






Exhibit 10.1


 


EXECUTION


 


LOAN
AGREEMENT


 


dated
as of


 


May
8, 2015


 


among


 


JEFFERSON
SQUARE FUNDING LLC


 


the
Financing Providers party hereto


 


the
Collateral Administrator, Collateral Agent and Securities Intermediary party hereto


 


JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION, 


as
Administrative Agent 


 









    	 



    	 



    









  


TABLE OF CONTENTS


 





	 	 	Page
	 	 	 
	ARTICLE I	THE PORTFOLIO INVESTMENTS	20
	Section 1.01.	Purchases of Portfolio
    Investments	20
	Section 1.02.	Procedures for Purchases
    and Related Financings	20
	Section 1.03.	Conditions to Purchases	21
	Section 1.04.	Sales of Portfolio
    Investments	22
	Section 1.05.	Review of Portfolio
    Investments	23
	Section 1.06.	Deposits and Contributions
    by Parent	24
	 	 	 
	ARTICLE II	THE FINANCINGS	25
	Section 2.01.	Financing Commitments	25
	Section 2.02.	First Advance; Ramp-Up
    Period	25
	Section 2.03.	Financings; Use of
    Proceeds	25
	Section 2.04.	Other Conditions
    to Financings	26
	 	 	 
	ARTICLE III	ADDITIONAL TERMS APPLICABLE TO THE FINANCINGS	28
	Section 3.01.	The Advances	28
	Section 3.02.	General	29
	Section 3.03.	Taxes	29
	Section 3.04.	Mitigation Obligations	33
	 	 	 
	ARTICLE IV	COLLECTIONS AND PAYMENTS	34
	Section 4.01.	Interest Proceeds	34
	Section 4.02.	Principal Proceeds	35
	Section 4.03.	Principal and Interest
    Payments; Prepayments	35
	Section 4.04.	Payments Generally	37
	Section 4.05.	CE Cure Account	37
	Section 4.06.	Optional Redemption	37
	 	 	 
	ARTICLE V	[RESERVED]	38
	 	 	 
	ARTICLE VI	REPRESENTATIONS, WARRANTIES AND COVENANTS	38
	Section 6.01.	Representations and
    Warranties	38
	Section 6.02.	Representations Regarding
    the Portfolio Investments	41
	Section 6.03.	Covenants of the
    Company	42
	Section 6.04.	A	48







 






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TABLE OF CONTENTS

(continued)


 





	 	 	Page
	 	 	 
	ARTICLE VII	EVENTS OF DEFAULT	49
	 	 	 
	ARTICLE VIII	ACCOUNTS; COLLATERAL SECURITY	52
	Section 8.01.	The Accounts; Agreement as to Control	52
	Section 8.02.	Collateral Security; Pledge; Delivery	53
	Section 8.03.	Accountings	56
	Section 8.04.	Additional Reports	56
	 	 	 
	ARTICLE IX	THE AGENTS	57
	Section 9.01.	Appointment of Administrative Agent and
    Collateral Agent	57
	Section 9.02.	Additional Provisions Relating to the
    Collateral Agent and the	 
	 	Collateral Administrator	60
	 	 	 
	ARTICLE X	MISCELLANEOUS	63
	Section 10.01.	Non-Petition	63
	Section 10.02.	Notices	63
	Section 10.03.	No Waiver	64
	Section 10.04.	Expenses; Indemnity; Damage Waiver	64
	Section 10.05.	Amendments	65
	Section 10.06.	Confidentiality	65
	Section 10.07.	Non-Recourse	66
	Section 10.08.	Successors; Assignments	66
	Section 10.10.	Counterparts	69
	Section 10.11.	Headings	69







 






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	Schedules	 
	 	 
	Schedule 1	Transaction Schedule
	Schedule 2	Contents of Approval Requests
	Schedule 3	Eligibility Criteria
	Schedule 4	Concentration Limitations
	Schedule 5	[RESERVED]
	Schedule 6	Form of Position Report
	 	 
	Exhibit	 
	 	 
	Exhibit A	Form of Request for Advance
	Exhibit B	Moody’s Industry Classification Groups



 






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LOAN
AGREEMENT dated as of May 8, 2015 (this “Agreement”) among JEFFERSON SQUARE FUNDING LLC, a Delaware limited
liability company, as borrower (the “Company”); the Financing Providers party hereto; Citibank, N.A. (“Citibank”),
in its capacity as collateral agent (in such capacity, the “Collateral Agent”); Virtus Group, LP, in its capacity
as collateral administrator (in such capacity, the “Collateral Administrator”); Citibank, in its capacity as
securities intermediary (in such capacity, the “Securities Intermediary”); and JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, as administrative agent for the Financing Providers hereunder (in such capacity, the “Administrative Agent”).


 


The
Company, a newly formed special purpose vehicle wholly owned and managed by FS Investment Corporation III, which in turn is advised
by FSIC III Advisor, LLC and sub-advised by GSO / Blackstone Debt Funds Management LLC, wishes to accumulate certain loans and
other debt securities (the “Portfolio Investments”), all on and subject to the terms and conditions set forth
herein.


 


On
and subject to the terms and conditions set forth herein, JPMorgan Chase Bank, National Association (“JPMCB”)
has agreed to make advances to the Company (“Advances”) hereunder to the extent specified on the transaction
schedule attached as Schedule 1 hereto (the “Transaction Schedule”). JPMCB, together with its respective
successors and permitted assigns, are referred to herein as the “Financing Providers”, and the types of financings
to be made available by them hereunder are referred to herein as the “Financings”. For the avoidance of doubt,
the terms of this Agreement relating to types of Financings not indicated on the Transaction Schedule as being available hereunder
shall not bind the parties hereto, and shall be of no force and effect.


 


Furthermore,
on or about the date hereof, the Company intends to acquire certain Portfolio Investments pursuant to a Purchase Agreement (the
“Sale Agreement”), dated on or about the date hereof, between the Company and FS Investment Corporation III
(the “Parent”).


 


Accordingly,
the parties hereto agree as follows:


 


Defined
Terms


 


Except
as otherwise provided in this Agreement, whenever used herein, the following words and phrases, unless the context otherwise requires,
shall have the following meanings


 


“Account”
has the meaning ascribed to it in Section 8.01(a).


 


“Administrative
Agent” has the meaning ascribed to it in the preamble.


 


“Advances”
has the meaning ascribed to it in the preamble.


 


“Adverse
Claim” means any claim of ownership or any Lien, title retention, trust or other charge or encumbrance, or other type
of preferential arrangement having the effect or purpose of creating a Lien, other than Permitted Liens.


 


“Adverse
Proceeding” means any action, suit, proceeding (whether administrative, judicial or otherwise), governmental investigation
or arbitration (whether or not purportedly on behalf of Company) at law or in equity, or before or by any governmental authority,
domestic or foreign, whether pending, active or, to the Company’s knowledge, threatened against or affecting the Company
or its property that could reasonably be expected to result in a Material Adverse Effect.


 



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“Affiliate”
means, with respect to any Person, any Person directly or indirectly controlling, controlled by, or under common control with,
such Person (whether by virtue of ownership, contractual rights or otherwise). For the purposes of this definition, “control”
shall mean the possession, directly or indirectly (including through affiliated entities), 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,
and the terms “controlling” and “controlled” shall have meanings correlative thereto.


 


“Agent”
has the meaning ascribed to it in Section 9.01.


 


“Agent
Business Day” means any day on which commercial banks and foreign exchange markets settle payments in each of New York
City and the city in which the corporate trust office of the Collateral Agent is located.


 


“Agreement”
has the meaning ascribed to it in the preamble.


 


“Amendment”
has the meaning ascribed to it in Section 6.04.


 


“Annual
Cap” has the meaning ascribed to it in Section 9.02(e).


 


“Anti-Corruption
Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Company from time to time concerning
or relating to bribery or corruption.


 


“Applicable
Law” means, for any Person, all existing and future laws, rules, regulations (including temporary and final income tax
regulations), statutes, treaties, codes, ordinances, permits, certificates, orders, licenses of and interpretations by any Governmental
Authority applicable to such Person and applicable judgments, decrees, injunctions, writs, awards or orders of any court, arbitrator
or other administrative, judicial, or quasi-judicial tribunal or agency of competent jurisdiction.


 


“Applicable
Margin” has the meaning ascribed to it in the Fee Letter.


 


“Approval
Request” has the meaning ascribed to it in Section 1.02(a).


 


“Approved”
means, with respect to an Approval Request relating to any Portfolio Investment for which the Administrative Agent has received
all requested follow-up information, within ten (10) Business Days succeeding the latest date on which it received such Approval
Request or follow-up information it has requested, the Administrative Agent has notified the Investment Manager and the Company
that the Administrative Agent is approving the purchase of such Portfolio Investment. For the avoidance of doubt, an Approval
Request shall not be deemed “not Approved” until such ten (10) Business Day period has elapsed.


 



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“Asset
Based Loan” means any loan that (i) was underwritten primarily on the appraised value of the assets securing such Loan
and (ii) is governed by a borrowing base.


 


“Base
Rate” shall mean, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Effective Rate in effect on such day plus 0.5%. Any change in the Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective date
of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.


 


“Business
Day” means any day on which commercial banks are open in New York City; provided that, with respect to any provisions
herein relating to the setting of LIBOR, “Business Day” shall be deemed to exclude any day on which banks are required
or authorized to be closed in London, England.


 


“Calculation
Period” means the period from the date on which the First Advance is made hereunder to but excluding October 15, 2015,
and each successive quarterly period ending on January 15, April 15, July 15 and October 15 of each year during the term of this
Agreement (or, (i) if such date is not a Business Day, then the prior Business Day, and (ii) in the case of the last Calculation
Period, if the last Calculation Period does not end a Calculation Period Start Date, the period from and including the preceding
Calculation Period Start Date to but excluding the Maturity Date).


 


“Calculation
Period Start Date” means a quarterly anniversary of the date of the First Advance hereunder.


 


“Cash
Flow Report” has the meaning ascribed to it in Section 8.03(a).


 


“CE
Cure Account” has the meaning ascribed to it in Section 8.01(a).


 


“Change
in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking
effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration,
interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any
request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority.


 


“Change
of Control” means FS Investment Corporation III shall no longer be the sole equityholder of the Company; provided, however,
that a merger of FS Investment Corporation III with another business development company sponsored by Franklin Square Holdings,
L.P. or other fundamental change transaction the result of which effectively combines the ownership and/or assets of FS Investment
Corporation III and a business development company sponsored by Franklin Square Holdings, L.P., or merges or consolidates their
respective collateral advisors or sub-advisors shall not constitute a Change of Control.


 


“Citibank”
has the meaning ascribed to it in the preamble.


 


“Code”
means the United States Internal Revenue Code of 1986, as amended.


 



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“Collateral”
has the meaning ascribed to it in Section 8.02.


 


“Collateral
Administration Agreement” means the collateral administration agreement, dated on or about the date hereof, among the
Company, the Administrative Agent, the Investment Manager and the Collateral Administrator.


 


“Collateral
Administrator” has the meaning ascribed to it in the preamble.


 


“Collateral
Agent” has the meaning ascribed to it in the preamble.


 


“Company”
has the meaning ascribed to it in the preamble.


 


“Company
LLC Agreement” means the amended and restated limited liability company agreement of Jefferson Square Funding LLC, dated
May 8, 2015.


 


“Compliance
Condition” means, on any date of determination, a condition that is satisfied if the principal amount of then outstanding
Advances (assuming that Advances have been made for any outstanding Purchase Commitments which have traded but not settled) minus
the amounts then on deposit in the Accounts (including cash and Eligible Investments) representing Principal Proceeds and
Excess Interest Proceeds, is less than or equal to 55% of the Net Asset Value.


 


“Concentration
Limitations” has the meaning ascribed to it in Schedule 4.


 


“Corporate
Bonds” means debt securities issued by corporations.


 


“Coverage
Event” means (A) the occurrence of both of the following events: (i) the Administrative Agent shall have determined
and notified the Investment Manager in writing as of any date that the Net Asset Value does not equal or exceed the product of
(a) the Market Value Trigger specified on the Transaction Schedule and (b)(x) the principal amount of the outstanding Advances
(assuming that Advances have been made for any outstanding Purchase Commitments which have traded but not settled) minus (y)
the amounts then on deposit in the Accounts (including cash and Eligible Investments) representing Principal Proceeds and Excess
Interest Proceeds; provided that, solely for the purposes of calculating the Net Asset Value under this clause (A)(i),
the Market Value for any Portfolio Asset shall not be greater than the par amount thereof; and (ii) a Coverage Event Cure Failure
or (B) if in connection with any Coverage Event Cure, a Portfolio Investment sold, contributed or deemed to have been contributed
to the Company shall fail to settle within (1) fifteen (15) Business Days from the related Trade Date thereof with respect to
Portfolio Investments consisting of loans, and (2) three (3) Business Days from the related Trade Date thereof with respect to
Portfolio Investments consisting of Corporate Bonds or, in each case, in such longer period as may be agreed to by the Administrative
Agent in its sole discretion; provided that, the failure of such sale, contribution or deemed contribution to settle within
the applicable time frame shall not constitute a “Coverage Event” if the condition set forth in clause (A)(i) of this
definition of “Coverage Event” is otherwise satisfied at the end of such time frame.


 






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“Coverage
Event Cure” means, on any date of determination, (i) the contribution by Parent of cash to the Company (which shall
be deposited in the CE Cure Account) or, with the consent of the Administrative Agent, additional Portfolio Investments to the
Company and the pledge and Delivery thereof by the Company to the Collateral Agent pursuant to the terms hereof, (ii) the prepayment
by the Company of an aggregate principal amount of Advances (together with accrued and unpaid interest thereon) or (iii) any combination
of the foregoing clauses (i) and (ii), in each case during the Coverage Event Cure Period and in an amount such that the Net Asset
Value exceeds the product of (a) the Market Value Trigger specified on the Transaction Schedule and (b)(x) the principal amount
of the outstanding Advances (assuming that Advances have been made for any outstanding Purchase Commitments which have traded
but not settled) minus (y) the amounts then on deposit in the Accounts (including cash and Eligible Investments) representing
Principal Proceeds and Excess Interest Proceeds; provided that, any Portfolio Investment contributed or deemed to be contributed
to the Company in connection with the foregoing must meet all of the applicable Eligibility Criteria (unless otherwise consented
to by the Administrative Agent); and provided further, that solely for the purposes of the calculation set forth
above, when determining the Net Asset Value, the Market Value for any Portfolio Asset shall not be greater than the par amount
thereof. In connection with any Coverage Event Cure, a Portfolio Investment shall be deemed to have been sold or contributed to
the Company, as applicable, if there has been a valid, binding and enforceable contract for the assignment of such Portfolio Investment
and, in the reasonable judgment of the Investment Manager, such assignment will settle within (1) fifteen (15) Business Days from
the related Trade Date thereof with respect to Portfolio Investments consisting of loans and (2) three (3) Business Days from
the related Trade Date thereof with respect to Portfolio Investments consisting of Corporate Bonds; for the avoidance of doubt,
a Portfolio Investment will not be deemed to have been sold or contributed in connection with such Coverage Event Cure if such
assignment does not settle within its respective timeframe.


 


“Coverage
Event Cure Failure” means each of (i) the inability of the Company to demonstrate (as determined in the sole discretion
of the Administrative Agent), prior to the end of the applicable Coverage Event Cure Period, the non-existence of a Coverage Event
(whether due to an increase in the Net Asset Value during the Coverage Event Cure Period or otherwise) and (ii) the failure by
the Company to effect a Coverage Event Cure as set forth in the definition of such term.


 


“Coverage
Event Cure Period” means the period commencing on the Business Day on which the Administrative Agent notifies the Investment
Manager (which such notice shall be given by the Administrative Agent prior to 2:00 p.m., New York City time, on any Business
Day, and if not given by such time, such notice shall be deemed to have been given on the next succeeding Business Day) of the
occurrence of the events set forth in clause (A)(i) of the definition of the term Coverage Event and ending at (x) the close of
business in New York one (1) Business Day thereafter or (y) such later date and time as may be agreed to by the Administrative
Agent in its sole discretion.


 


“Credit
Risk Parties” has the meaning ascribed to it in Article VII.


 


“Current
Pay Obligation” means any Portfolio Investment that is in default but as to which no payments are due and payable that
are unpaid and with respect to which the Investment Manager has certified to the Administrative Agent (with a copy to the Collateral
Administrator and the Collateral Agent) in writing that it believes, in its reasonable business judgment, that (a) the issuer
or obligor of such Portfolio Investment will continue to make scheduled payments of interest thereon and will pay the principal
thereof by maturity or as otherwise contractually due, or (b) if the issuer or obligor is subject to a bankruptcy proceeding,
it has been the subject of an order of a bankruptcy court that permits it to make the scheduled payments on such Portfolio Investment
and all interest and principal payments due thereunder have been paid in cash when due.


 



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“Custodial
Account” has the meaning ascribed to it in Section 8.01(a).


 


“Default”
has the meaning ascribed to it in Section 1.03.


 


“Delayed
Funding Term Loan“ means any Portfolio Investment that (a) requires the holder thereof to make one or more future advances
to the obligor under the Underlying Instruments relating thereto, (b) specifies a maximum amount that can be borrowed on one or
more fixed borrowing dates, and (c) does not permit the re-borrowing of any amount previously repaid by the obligor thereunder;
but any such loan will be a Delayed Funding Term Loan only to the extent of undrawn commitments and only until all commitments
by the holders thereof to make advances to the obligor thereon expire or are terminated or reduced to zero.


 


“Deliver”
(and its correlative forms) means the taking of the following steps:


 


(1)       in
the case of Portfolio Investments, Eligible Investments and amounts deposited into the CE Cure Account, by instructing the Securities
Intermediary (x) to indicate by book entry that a financial asset comprised thereof has been credited to the Custodial Account
and (y) to comply with entitlement orders originated by the Collateral Agent with respect to each such security entitlement without
further consent by the Company;


 


(2)       in
the case of each general intangible (including any participation interest that is not, or the debt underlying which is not, evidenced
by an instrument), by notifying the obligor thereunder of the security interest of the Collateral Agent; provided the Company
shall not be required to notify the obligor unless an Event of Default has occurred and is continuing or a Coverage Event shall
have occurred;


 


(3)       in
the case of Possessory Collateral that do not constitute a financial asset forming the basis of a security entitlement delivered
to the Collateral Agent pursuant to clause (1) above, by causing (x) the Collateral Agent to obtain possession of such Possessory
Collateral in the State of New York, or (y) a person other than the Company and a securities intermediary (A)(I) to obtain possession
of such Possessory Collateral in the State of New York, and (II) to then authenticate a record acknowledging that it holds possession
of such Possessory Collateral for the benefit of the Collateral Agent or (B)(I) to authenticate a record acknowledging that it
will take possession of such Possessory Collateral for the benefit of the Collateral Agent and (II) to then acquire possession
of such Possessory Collateral in the State of New York;


 


(4)       in
the case of any account which constitutes a “deposit account” under Article 9 of the UCC, by instructing the Securities
Intermediary to continuously identify in its books and records the security interest of the Collateral Agent in such account and,
except as may be expressly provided herein to the contrary, establishing dominion and control over such account in favor of the
Collateral Agent; and


 



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(5)       with
respect to the security interest granted pursuant to Section 8.02, by filing or causing the filing of a financing statement with
respect to such Collateral with the Delaware Secretary of State.


 


“Designated
Email Notification Address” means andrew.jordan@gsocap.com and ken.miller@franklinsquare.com, provided that, so long
as no Event of Default shall have occurred and be continuing, Parent may, upon at least five (5) Business Day’s written
notice to the applicable Agent, designate any other email address with respect to Parent as the Designated Email Notification
Address.


 


“Designated
Independent Broker-Dealer” means JPMorgan Securities LLC; provided that, so long as no Coverage Event shall have
occurred and no Event of Default shall have occurred and be continuing, Parent may, upon at least five (5) Business Day’s
written notice to the applicable Agent, designate another Independent Broker-Dealer as the Designated Independent Broker-Dealer;
provided further that, with respect to the proposed sale of a Portfolio Investment, no other Independent Broker-Dealer
may be designated as the Designated Independent Broker-Dealer without the consent of the Administrative Agent.


 


“Effective
Date” has the meaning ascribed to it in Section 2.04.


 


“Eligibility
Criteria” means the eligibility criteria set forth in Schedule 3.


 


“Eligible
Assignee” means (i) an Affiliate of the related assignor, (ii) a bank, (iii) an insurance company or (iv) any Person,
other than (a) any Person primarily engaged in the business of private investment management as a business development company,
mezzanine fund, private debt fund, hedge fund or private equity fund, which is in direct or indirect competition with the Company,
the Investment Manager or the sub-advisor of the Investment Manager, or any Affiliate thereof that is an investment advisor, (b)
any Person controlled by, or controlling, or under common control with, or which is a sponsor of, a Person referred to in clause
(a) above, or (c) any Person for which a Person referred to in clause (a) above serves as an investment advisor with discretionary
investment authority.


 


“Eligible
Investments” means any (a) cash or (b) dollar denominated investment that, at the time it, or evidence of it, is Delivered
to the Collateral Agent (directly or through an intermediary or bailee), is one or more of the following obligations or securities:


 


		(i)	direct
                                         Registered debt obligations of, and Registered debt obligations the timely payment of
                                         principal and interest on which is fully and expressly guaranteed by, the United States
                                         of America or any agency or instrumentality of the United States of America the obligations
                                         of which are expressly backed by the full faith and credit of the United States of America
                                         that satisfies the Eligible Investment Required Ratings at the time of such investment
                                         or contractual commitment providing for such investment; provided, notwithstanding
                                         the foregoing, the following securities shall not be Eligible Investments: (i) General
                                         Services Administration participation certificates; (ii) U.S. Maritime Administration
                                         guaranteed Title XI financing; (iii) Financing Corp. debt obligations; (iv) Farmers Home
                                         Administration Certificates of Beneficial Ownership; and (v) Washington Metropolitan
                                         Area Transit Authority guaranteed transit bonds;



 






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		(ii)	demand
                                         and time deposits in, certificates of deposit of, trust accounts with, bankers’
                                         acceptances issued by, or federal funds sold by any depository institution or trust company
                                         incorporated under the laws of the United States of America (including Citibank) or any
                                         state thereof and subject to supervision and examination by federal and/or state banking
                                         authorities, so long as the commercial paper and/or the debt obligations of such depository
                                         institution or trust company (or, in the case of the principal depository institution
                                         in a holding company system, the commercial paper or debt obligations of such holding
                                         company) at the time of such investment or contractual commitment providing for such
                                         investment have the Eligible Investment Required Ratings;



 


		(iii)	unleveraged
                                         repurchase obligations with respect to (a) any security described in clause (i) above
                                         or (b) any other security issued or guaranteed by an agency or instrumentality of the
                                         United States of America, in either case entered into with a depository institution or
                                         trust company (acting as principal) described in clause (ii) above or entered into with
                                         an entity (acting as principal) with, or whose parent company has, the Eligible Investment
                                         Required Ratings;



 


		(iv)	Registered
                                         debt securities bearing interest or sold at a discount with maturities up to 365 days
                                         (but in any event such securities will mature by the next succeeding Interest Payment
                                         Date) issued by any entity formed under the laws of the United States of America or any
                                         State thereof that have a S&P Rating of “AA” at the time of such investment
                                         or contractual commitment providing for such investment;



 


		(v)	commercial
                                         paper or other short-term debt obligations with the Eligible Investment Required Ratings
                                         and that either bear interest or are sold at a discount from the face amount thereof;
                                         provided that this clause (v) will not include extendible commercial paper or asset backed
                                         commercial paper; and



 


		(vi)	money market funds
                                         which have, at the time of such reinvestment, a credit rating of “AAAm” by
                                         S&P;



 


provided that Eligible Investments
shall not include (a) any interest-only security, any security purchased at a price in excess of 100% of the par value thereof
or any security whose repayment is subject to substantial non-credit related risk as determined in the sole judgment of the Asset
Manager, or (b) any security whose rating assigned by Standard & Poor’s includes the subscript “f”, “p”,
“q”, “pi”, “r”, “sf” or “t”. Eligible Investments may include those
investments with respect to which Citibank or an Affiliate of Citibank is an obligor or provides services.


 


“Eligible
Investment Required Ratings” means a long-term senior unsecured debt rating of at least “A” and a short-term
credit rating of at least “A-1” by S&P (or, if such institution has no short-term credit rating, a long-term senior
unsecured debt rating of at least “A+” by S&P).


 



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“Eligible
Jurisdictions” means Canada, Cayman Islands, Germany, Ireland, Luxembourg, Sweden, Switzerland, The Netherlands, the
United Kingdom and the United States.


 


“ERISA”
means the United States Employee Retirement Income Security Act of 1974, as amended.


 


“ERISA
Affiliate” means any trade or business (whether or not incorporated) under common control with the Company within the
meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section
412, 430 or 431 of the Code).


 


“ERISA
Event” means that (1) the Company has underlying assets which constitute “plan assets” within the Plan Asset
Rules or (2) the Company or any ERISA Affiliate sponsors, maintains, contributes to, is required to contribute to or has any liability
with respect to any Plan.


 


“Events
of Default” has the meaning ascribed to it in Article VII.


 


“Excess
Concentration Amount” means, as of any date of determination, the sum, without duplication, of the Market Value of each
Portfolio Investment, if any, that is in excess of any Concentration Limitations. If multiple Portfolio Investments are in excess
of the Concentration Limitations, then from those Portfolio Investments, the Company may select the Portfolio Investments to be
counted above, provided that, absent a selection by the Company, Portfolio Investments with the lowest Market Values shall be
counted above until the Concentration Limitations are satisfied.


 


“Excess
Interest Proceeds” means, at any time of determination, the excess of (1) amounts then on deposit in the Accounts representing
Interest Proceeds over (2) the sum of (a) the projected amount required to be paid pursuant to Section 4.03(b) on the next Interest
Payment Date plus (b) $30,000, in each case, as determined by the Company in good faith and in a commercially reasonable
manner and verified by in the case of clause (1) the Collateral Agent and otherwise by the Administrative Agent.


 


“Excluded
Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted
from a payment to a Recipient, (a) Taxes imposed on or measured by gross or net income (however denominated), franchise Taxes
and branch profits Taxes, in each case, imposed as a result of such Recipient being organized under the laws of, or having its
principal office or its applicable lending office (or relevant office for receiving payments from or on account of the Company
or making funds available to or for the benefit of the Company) located in, the jurisdiction imposing such Tax (or any political
subdivision thereof), (b) Other Connection Taxes, (c) U.S. federal withholding Taxes on amounts payable to or for the account
of such Recipient that are or would be required to be withheld pursuant to a law in effect on the date on which (i) such Recipient
acquires an interest in the Financing Commitment or Advance or becomes the Administrative Agent or (ii) such Recipient changes
its office for receiving payments by or on account of the Company or making funds available to or for the benefit of the Company,
except in each case to the extent that, pursuant to Section 3.03, amounts with respect to such Taxes were payable either to such
Recipient’s assignor immediately before such Recipient became a party hereto or to such Recipient immediately before it
changed its office for receiving payments by or on account of the Company or making funds available to or for the benefit of the
Company, (d) Taxes attributable to such Lender’s failure to comply with Section 3.03(f), (e) any U.S. federal withholding
Taxes imposed under FATCA and (f) U.S. backup withholding Taxes.


 






    	-9-



    	 



    

  


“FATCA”
means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof,
and intergovernmental agreements thereunder, similar or related non-U.S. Law that correspond to Sections 1471 to 1474 of the Code,
any agreements entered into pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement entered into in connection
with the implementation of such Sections of the Code and any U.S. or non-U.S. fiscal or regulatory Law, legislation, rules, guidance,
notes or practices adopted pursuant to such intergovernmental agreement.


 


“Federal
Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of
1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds
brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations
for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing
selected by it.


 


“Fee
Letter” means the fee letter, dated on or about the date hereof, among the Lender, the Administrative Agent and the
Company.


 


“Financing
Commitment” means, with respect to each Financing Provider and each type of Financing available hereunder at any time,
the commitment of such Financing Provider to provide such type of Financing to the Company hereunder in an amount up to but not
exceeding the portion of the applicable financing limit set forth on the Transaction Schedule that is held by such Financing Provider
at such time reduced by any Advances prepaid in connection with a Coverage Event.


 


“Financing
Providers” has the meaning ascribed to it in the preamble.


 


“Financings”
has the meaning ascribed to it in the preamble.


 


“First
Advance” has the meaning ascribed to it in Section 2.02(a).


 


“Foreign
Lender” means a Lender that is not a U.S. Person.


 


“Foreign
Subsidiary” means (i) any Subsidiary that is not incorporated or organized under the laws of a State within the United
States of America or the District of Columbia, and that is a “controlled foreign corporation” within the meaning of
Section 957 of the Code with respect to which a company is a “US Shareholder” within the meaning of Section 951(b)
of the Code, or (ii) any Subsidiary all or substantially all of the assets of which are stock or stock equivalents of, or debt
interests in, one or more Subsidiaries described in clause (i) above.


 



    	-10-



    	 



    

 





“GAAP”
means generally accepted accounting principles in the effect from time to time in the United States, as applied from time to time
by the Company.


 


“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).


 


“Indebtedness”
as applied to any Person, means, without duplication, (i) all obligations of such Person for borrowed money; (ii) all obligations
of such Person evidenced by bonds, debentures, notes, deferrable securities 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 non-contingent obligations of
such Person to reimburse or prepay any bank or other Person in respect of amounts paid under a letter of credit, banker’s
acceptance or similar instrument; (vi) all debt of others secured by a Lien on any asset of such Person, whether or not such debt
is assumed by such Person; and (vii) all debt of others guaranteed by such Person and other contingent obligations to purchase,
to provide funds for payment, to supply funds to invest in any Person or otherwise to assure a creditor against loss.


 


“Indemnified
Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of
any obligation of the Company under this Agreement and (b) to the extent not otherwise described in (a), Other Taxes.


 


“Indemnitee”
has the meaning ascribed to it in Section 10.04(b).


 


“Independent
Bid” means a firm bid for the full amount of the relevant Portfolio Investment from an Independent Broker-Dealer.


 


“Independent
Broker-Dealer” means any of the following (as such list may be revised from time to time by mutual agreement of the
Company and the Administrative Agent): Bank of America/Merrill Lynch, Barclays Bank, BNP Paribas, Citibank, Credit Suisse, Deutsche
Bank, Goldman Sachs, Morgan Stanley, Nomura, Royal Bank of Scotland, UBS, any Affiliate of any of the foregoing, but in no event
including the Company or any Affiliate of the Company.


 


“Ineligible
Investment” means, from time to time, any Portfolio Investment that fails, at such time, to satisfy the Eligibility
Criteria; provided, that, with respect to any Portfolio Investment for which the Administrative Agent has waived one or
more of the criteria set forth on Schedule 3 pursuant to Section 1.03 in its Approval of such Portfolio Investment, the Eligibility
Criteria in respect of such Portfolio Investment shall be deemed not to include such waived criteria at any time after such Approval
and such Portfolio Investment shall not be considered an “Ineligible Investment” by reason of its failure to meet
such waived criteria.


 


“Ineligible
Person” has the meaning ascribed to it in Section 10.08(b).


 



    	-11-



    	 



    

 





“Information”
means all information received from the Company or the Investment Manager relating to the Company or its business or any obligor
in respect of any Portfolio Investment.


 


“Interest
Collection Account” has the meaning ascribed to it in Section 8.01(a).


 


“Interest
Payment Date” means January 25, April 25, July 25 and October 25 of each year during the term of this Agreement or if
such date is not a Business Day, then the succeeding Business Day commencing October 25, 2015.


 


“Interest
Proceeds” means all payments of interest received by the Company in respect of the Portfolio Investments and Eligible
Investments (in each case other than accrued interest purchased by the Company, but including proceeds received from the sale
of interest accrued after the date on which the Company acquired the related Portfolio Investment), all other payments on the
Eligible Investments and all payments of fees and other similar amounts received by the Company or deposited into any of the Accounts
(including commitment fees, facility fees, late payment fees, prepayment premiums, amendment fees and waiver fees, but excluding
syndication or other up-front fees and administrative agency or similar fees); provided, however, that for the avoidance
of doubt, Interest Proceeds shall not include amounts or Eligible Investments in the CE Cure Account or any proceeds therefrom.


 


“Investment”
means (a) the purchase of any debt or equity security of any other Person, or (b) the making of any loan or advance
to any other Person, or (c) becoming obligated with respect to Indebtedness of any other Person.


 


“Investment
Management Agreement” means the Investment Management Agreement, dated on the date hereof, between the Company
and the Investment Manager relating to the management of the Portfolio Investments, as amended, restated, supplemented or otherwise
modified from time to time.


 


“Investment
Manager” means FS Investment Corporation III, a Maryland corporation.


 


“IRS”
means the United States Internal Revenue Service.


 


“JPMCB”
has the meaning ascribed to it in the preamble.


 


“Lender”
means a Financing Provider with a Financing Commitment to make Advances hereunder.


 


“Letter
of Credit” means a facility whereby (i) a fronting bank issues or will issue a letter of credit for or on behalf of
a borrower, (ii) if the letter of credit is drawn upon, and the borrower does not reimburse the letter of credit agent bank, the
lender/participant is obligated to fund its portion of the facility, and (iii) the letter of credit agent bank passes on (in whole
or in part) the fees and any other amounts it receives for providing the letter of credit to the lender.


 


“LIBO
Rate” means, for each Calculation Period, the greater of (A) 0.00% and (B)(i) the rate per annum equal to the offered
rate which appears on the page of the Reuters Screen which displays an average Inter-continental Exchange Benchmark Administration
Ltd. Interest Settlement Rate for dollar deposits (for delivery on the first day of such Calculation Period) with a term equivalent
to the LIBOR Period, determined as of approximately 11:00 a.m., London time, two London Banking Days prior to the commencement
of such Calculation Period, or (ii) if the rate referenced in the preceding clause (B)(i) does not appear on such page or service
or if such page or service shall cease to be available, the rate per annum equal to the rate determined by the Administrative
Agent to be the offered rate on such other page or other service which displays an average Intercontinental Exchange Benchmark
Administration Ltd. Interest Settlement Rate for dollar deposits (for delivery on the first day of such Calculation Period) with
a term equivalent to the LIBOR Period, determined as of approximately 11:00 a.m., London time, two London Banking Days prior to
the commencement of such Calculation Period. The LIBO Rate shall be determined by the Administrative Agent (and notified to the
Collateral Administrator), and such determination shall be conclusive absent manifest error.


 



    	-12-



    	 



    

 





“LIBOR
Period” has the meaning ascribed to it in the Fee Letter.


 


“Lien”
means any security interest, lien, charge, pledge, preference, equity or encumbrance of any kind, including tax liens, mechanics’
liens and any liens that attach by operation of law.


 


“Loan/Assignment
Agreement” has the meaning ascribed to it in Section 8.01(a).


 


“Loan
Documents” has the meaning ascribed to it in Section 2.04(b).


 


“Market
Value” means, on any date of determination, (i) with respect to each Portfolio Investment held by the Company that is
a Senior Secured Loan or a Second Lien Loan, the aggregate outstanding amount of such Portfolio Investment multiplied by, (x)
the indicative bid-side price determined by LoanX, Inc. or (y) if the Administrative Agent determines in its sole discretion that
the indicative bid-side price to be obtained in clause (x) above is unavailable or is not indicative of the actual current market
value, the market value of such Senior Secured Loan or Second Lien Loan as determined by the Administrative Agent in good faith
and in a commercially reasonable manner, after taking into consideration observable trading levels while accounting for size;
(ii) with respect to any other Portfolio Investment (other than cash) held by the Company, the aggregate outstanding amount of
such Portfolio Investment multiplied by the market value (expressed as a percentage) of such Portfolio Investment as determined
by the Administrative Agent in good faith and in a commercially reasonable manner; and (iii) with respect to any cash held by
the Company, the amount of such cash; provided, however, a Portfolio Investment shall have a Market Value of $0 if (i)
the related Approval Request was not Approved by the Administrative Agent or (ii) it is an Ineligible Investment. Except as otherwise
herein expressly provided, the Market Value for any Portfolio Investment shall not be greater than the par amount thereof. So
long as no Coverage Event has occurred or Event of Default has occurred and is continuing, the Borrower shall have the right to
initiate a dispute of the Market Value of certain Portfolio Investments as set forth in Section 1.05(b) and Market Value may then
be determine in accordance with Section 1.05(b).


 


“Material
Adverse Effect” means a material adverse effect on (a) the business, assets, operations or condition, financial
or otherwise, of the Company or the Investment Manager, (b) the ability of the Company or the Investment Manager to perform
its obligations under this Agreement or any of the other Loan Documents or (c) the rights of or benefits available to the
Administrative Agent or the Lenders under this Agreement or any of the other Loan Documents;


 



    	-13-



    	 



    

 





“Material
Amendment” means any amendment, modification or supplement to this Agreement that (i) increases the Financing Commitment
of any Lender, (ii) reduces the principal amount of any Advance or reduces the rate of interest thereon, or reduces any fees payable
hereunder, (iii) postpones the scheduled date of payment of the principal amount of any Advance, or any interest thereon, or any
other amounts payable hereunder, or reduces the amount of, waives or excuses any such payment, or postpones the scheduled date
of expiration of any Financing Commitment, (iv) changes any provision in a manner that would alter the pro rata sharing of payments
required hereby, or (v) changes any of the provisions of Section 10.08 or the definition of “Required Financing Providers”
or any other provision hereof specifying the number or percentage of Financing Providers required to waive, amend or modify any
rights hereunder or make any determination or grant any consent hereunder.


 


“Maturity
Date” means the date that is the earliest of (1) the Scheduled Termination Date set forth on the Transaction Schedule,
(2) the date on which the Secured Obligations become due and payable following the occurrence of an Event of Default under Article
VII and (3) the date specified for optional redemption in full in the written notice delivered pursuant to Section 4.06.


 


“Moody’s
Classified Industry”: An industry classified by a given Moody’s Industry Classification Group code (three digit).


 


“Moody’s
Industry Classification Group”: As set forth in Exhibit B hereto.


 


“Net
Asset Value” means the sum of the Market Value of each Portfolio Investment (both owned and in respect of which there
are outstanding Purchase Commitments which have traded but not settled) in the Portfolio that is not (x) an Ineligible Investment
or (y) a Portfolio Investment which has traded but not settled within (1) fifteen (15) Business Days from the related Trade Date
thereof with respect to Portfolio Investments consisting of loans or participation interests in loans and (2) three (3) Business
Days from the related Trade Date thereof with respect to Portfolio Investments consisting of Corporate Bonds minus the
Excess Concentration Amount.


 


“Net
Purchased Loan Balance” means, as of any date of determination, an amount equal to (a) the aggregate principal balance
of all Portfolio Investments acquired by the Company prior to such date minus (b) the aggregate principal balance
of all Portfolio Investments (other than Warranty Portfolio Investments) repurchased by the Parent or an Affiliate thereof prior
to such date.


 


“Other
Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection
between such Recipient and the jurisdiction imposing such Tax (other than connections arising as a result of such Recipient having
executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any Loan Document.


 



    	-14-



    	 



    

 





“Other
Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that
arise from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security
interest under, or otherwise with respect to, any Loan Document, except any such Taxes imposed with respect to an assignment,
grant of a participation, designation of a new office for receiving payments by or on account of a Recipient.


 


“Parent”
has the meaning ascribed to it in the preamble.


 


“Participant”
has the meaning ascribed to it in Section 10.08(c).


 


“Participant
Register” has the meaning ascribed to it in Section 10.08(d).


 


“Participation
Agreement” means the participation agreement, dated on the date hereof, between the Parent and the Company.


 


“Permitted
Distribution” means, only during the Reinvestment Period:


 


(a)    distributions
of Interest Proceeds (at the discretion of the Company) (i) to Parent (or other permitted equity holders of the Company) or (ii)
to the Investment Manager in respect of accrued management fees payable in accordance with the Investment Management Agreement;
provided that amounts may be distributed pursuant to this paragraph (a) only to the extent
of available Excess Interest Proceeds and so long as after giving effect to any such distribution, the Compliance Condition
is satisfied and would be satisfied after funding any outstanding purchase commitments;
and


 


(b)    distributions
of Principal Proceeds to Parent (or other permitted equity holders of the Company) so long as after giving effect to any such
distribution, the Compliance Condition is satisfied and would be satisfied after funding any outstanding purchase commitments.
Parent may contribute Portfolio Investments to the Company in order to enable the Company to satisfy the foregoing conditions
of this paragraph (b); provided that (i) the Company’s purchase of any such Portfolio Investments must be made in
compliance with the provisions set forth in Section 1.02 and (ii) the Market Value of such Portfolio Investments shall be $0 unless
the Administrative Agent approves such purchase.


 


“Permitted
Lien” means any of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced (a) Liens for Taxes if such Taxes shall not at the time be due and payable or if a Person shall currently
be contesting the validity thereof in good faith by appropriate proceedings and with respect to which reserves in accordance with
GAAP have been provided on the books of such Person, (b) Liens imposed by law, such as materialmen’s, warehousemen’s,
mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens, arising by operation of
law in the ordinary course of business for sums that are not overdue or are being contested in good faith, (c) with respect to
any collateral underlying a Portfolio Investment, the Lien in favor of the Company herein and Liens permitted under the Underlying
Instruments, (d) as to agented Portfolio Investments, Liens in favor of the agent on behalf of all the lenders of the related
obligor, and (e) Liens granted pursuant to or by the Transaction Documents.


 



    	-15-



    	 



    

 





“Person”
means any natural person, corporation, partnership, trust, limited liability company, association, governmental authority or unit,
or any other entity, whether acting in an individual, fiduciary or other capacity.


 


“Plan” means
any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Company or, with
respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.


 


“Plan
Asset Rules” means the regulations issued by the United States Department of Labor at Section 2510.3-101 of Part
2510 of Chapter XXV, Title 29 of the United States Code of Federal Regulations, as modified by Section 3(42) of ERISA.


 


“Portfolio”
has the meaning ascribed to it in Section 1.01.


 


“Portfolio
Investments” has the meaning ascribed to it in the preamble.


 


“Position
Report” has the meaning ascribed to it in Section 8.03(a).


 


“Possessory
Collateral” means Portfolio Investments consisting of money or instruments.


 


“Prime
Rate” means the rate of interest per annum publicly announced from time to time by JPMCB as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date
such change is publicly announced as being effective.


 


“Principal
Collection Account” has the meaning ascribed to it in Section 8.01(a).


 


“Principal
Proceeds” means all amounts received by the Company with respect to the Portfolio Investments or any other Collateral,
and all amounts otherwise on deposit in the Accounts (including cash contributed by the Company), in each case other than Interest
Proceeds.


 


“Proceedings”
has the meaning ascribed to it in Section 10.09(b).


 


“Purchase”
has the meaning ascribed to it in Section 1.01.


 


“Purchase
Commitment” has the meaning ascribed to it in Section 1.02(a).


 


“Ramp-Up
Period” means the period from and including the Effective Date to, but excluding, September 8, 2015.


 


“Recipient”
means any Agent and any Lender, as applicable.


 


“Register”
has the meaning ascribed to it in Section 3.01(c).


 



    	-16-



    	 



    

 





“Registered”
means a debt obligation that is issued after July 18, 1984 and that is in registered form within the meaning of Section 881(c)(2)(B)(i)
of the Code and the United States Treasury regulations promulgated thereunder, provided that an interest in a grantor trust will
be considered to be Registered if such interest is in registered form and each of the obligations or securities held by such trust
was issued after July 18, 1984.


 


“Reinvestment
Period” means the period beginning on, and including, the Effective Date and ending on, but excluding, November 8, 2018.


 


“Related
Parties” has the meaning ascribed to it in Section 9.01.


 


“Repayment
Event” means an event that occurs if at any time during the Reinvestment Period the Company has properly delivered at
least ten (10) Approval Requests over the course of the prior twelve (12) calendar months, so long as each such Approval Request
would have satisfied all conditions set forth in this Agreement, and the Administrative Agent has not Approved at least five (5)
of such Approval Requests.


 


“Required
Financing Providers” means, at all times, JPMCB.


 


“Restricted
Payment” means (i) any dividend or other distribution, direct or indirect, on account of any shares or other equity
interests in the Company now or hereafter outstanding; (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares or other equity interests in the Company now or hereafter
outstanding; and (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares or other equity interests in the Company now or hereafter outstanding.


 


“Restricted
Security” has the meaning ascribed to it in Schedule 1.


 


“Revolving
Credit Facility” means any Portfolio Investment (other than a Delayed Funding Term Loan) that is a loan (including revolving
loans, including funded and unfunded portions of revolving credit lines and letter of credit facilities, unfunded commitments
under specific facilities and other similar loans and investments) that by its terms may require one or more future advances to
be made to the obligor by the Company, provided that any such loan will be a Revolving Credit Facility only until all commitments
to make advances to the Company expire or are terminated or irrevocably reduced to zero.


 


“Sale
Agreement” has the meaning ascribed to it in the preamble.


 


“S&P”
means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business or any successor
to the ratings business thereof.


 


“Sanctions”
means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government,
including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department
of State, or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.


 


“Sanctioned
Country” means, at any time, a country or territory which is itself the subject or target of any Sanctions (at the time
of this Agreement, Cuba, Iran, North Korea, Sudan and Syria).


 



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“Sanctioned
Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by
the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or by the United
Nations Security Council, the European Union or any EU member state, (b) any Person operating, organized or resident in a Sanctioned
Country or (c) any Person owned or controlled by any such Person or Persons.


 


“Second
Lien Loan” means any interest in a loan, including any assignment of or participation in or other interest in a loan,
that (i) is not (and that by its terms is not permitted to become) subordinate in right of payment to any other obligation of
the related obligor other than a Senior Secured Loan with respect to the liquidation of such obligor or the collateral for such
loan, (ii) is secured by a valid second priority perfected Lien to or on specified collateral securing the related obligor’s
obligations under the loan, which Lien is not subordinate to the Lien securing any other debt for borrowed money other than a
Senior Secured Loan on such specified collateral (subject to Liens permitted under the applicable Underlying Instrument that are
reasonable for similar loans) and (iii) the Investment Manager determines in good faith that the value of the collateral for such
loan or the enterprise value securing the loan on or about the time of acquisition equals or exceeds the outstanding principal
balance of the loan plus the aggregate outstanding balances of all other loans of equal or higher seniority secured by a second
priority Lien over the same collateral.


 


“Secured
Obligations” has the meaning ascribed to it in Section 8.02.


 


“Secured
Parties” has the meaning ascribed to it in Section 8.02.


 


“Securities
Intermediary” has the meaning ascribed to it in the preamble.


 


“Settlement
Date” has the meaning ascribed to it in Section 1.03.


 


“Senior
Secured Loan” means any interest in a loan, including any assignment of or participation in or other interest in a loan,
that (i) is not (and is not expressly permitted by its terms to become) subordinate in right of payment to any obligation of the
obligor in any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceedings, (ii) is secured by
a pledge of collateral, which security interest is validly perfected and first priority under Applicable Law (subject to liens
permitted under the applicable credit agreement that are reasonable for similar loans, and liens accorded priority by law in favor
of any Governmental Authority), and (iii) the Investment Manager determines in good faith that the value of the collateral for
such loan or the enterprise value securing the loan on or about the time of acquisition equals or exceeds the outstanding principal
balance of the loan plus the aggregate outstanding balances of all other loans of equal or higher seniority secured by a first
priority Lien over the same collateral. For the avoidance of doubt, debtor-in-possession loans shall constitute Senior Secured
Loans.


 


“Solvent”
means, with respect to any entity, that as of the date of determination, both (i) (a) the sum of such entity’s debt (including
contingent liabilities) does not exceed the present fair value of such entity’s present assets; (b) such entity’s
capital is not unreasonably small in relation to its business as contemplated on the date of this Agreement; and (c) such entity
has not incurred debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise); and (ii) such
entity is “solvent” within the meaning given that term and similar terms under laws applicable to it relating to fraudulent
transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.


 



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“Special
Purpose Provisions” shall have the meaning given to such term in the Company LLC Agreement.


 


“Structured
Finance Obligation” means an obligation issued by a special purpose vehicle and secured directly by, referenced to,
or representing ownership of, a pool of receivables or other financial assets of any obligor, including collateralized debt obligations
and mortgaged-backed securities.


 


“Subsidiary”
of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body
(other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially
owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person.


 


“Synthetic
Security” means a security or swap transaction, other than a participation or a Letter of Credit, that has payments
associated with either payments of interest on and/or principal of a reference obligation or the credit performance of a reference
obligation.


 


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


 


“Total
Principal Balance” means the sum of (i) the principal balances of all Portfolio Investments and (ii) the amounts on
deposit in the Accounts (including cash and Eligible Investments) representing Principal Proceeds.


 


“Trade
Date” has the meaning ascribed to it in Section 1.03.


 


“Transaction
Schedule” has the meaning ascribed to it in the preamble.


 


“UCC”
means the Uniform Commercial Code as in effect from time to time in the state of the United States that governs any relevant security
interest.


 


“Underlying
Instruments” means the loan agreement, credit agreement or other customary agreement pursuant to which a Portfolio Investment
has been created or issued and each other agreement that governs the terms of or secures the obligations represented by such Portfolio
Investment or of which the holders of such Portfolio Investment are the beneficiaries.


 


“U.S.
Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.


 










“U.S.
Tax Compliance Certificate” has the meaning ascribed to it in Section 3.03.


 


“Warranty
Portfolio Investments” means any Transferred Portfolio Investments (as such term is defined in the Sale Agreement) repurchased
or substituted in accordance with Section 5.1(p) of the Sale Agreement.


 



    	-19-



    	 



    

 





ARTICLE
I



THE PORTFOLIO INVESTMENTS


 


Section
1.01.       Purchases of Portfolio Investments.


 


From
time to time during the Reinvestment Period, the Company may acquire or originate Portfolio Investments, or request that Portfolio
Investments be acquired or originated for the Company’s account, all on and subject to the terms and conditions set forth
herein. Each such acquisition or origination is referred to herein as a “Purchase”, and all Portfolio Investments
so Purchased and not otherwise sold or liquidated are referred to herein as the Company’s “Portfolio.”


 


Section
1.02.      Procedures for Purchases and Related Financings.


 


(a)        Timing
of Approval Requests. No later than five (5) Agent Business Days (or such shorter period as the Administrative Agent may agree
in its sole discretion) before the date on which the Company proposes that a commitment to acquire any Portfolio Investment be
made by it or for its account (a “Purchase Commitment”), the Company shall cause the Investment Manager to
deliver to the Administrative Agent a request (an “Approval Request”) for such Purchase.


 


(b)        Contents
of Approval Requests. Each Approval Request shall consist of one or more electronic submissions to the Administrative Agent
(transmitted in such a manner as the Administrative Agent may specify to the Investment Manager and the Company from time to time),
shall be substantially in the form attached as Schedule 2 hereto and shall be accompanied by such other information as
the Administrative Agent may reasonably request.


 


(c)        [RESERVED].


 


(d)        Right
of the Administrative Agent to Approve Approval Requests. The Administrative Agent shall have the right, on behalf of all
Financing Providers, in its sole and absolute discretion, to Approve or not Approve any Approval Request and to request additional
information regarding any proposed Portfolio Investment. The Administrative Agent shall notify the Investment Manager and the
Company (including via e-mail or other electronic messaging system) of its Approval or failure to Approve each Approval Request
(and, if Approved, an initial determination of the Market Value for the related Portfolio Investment) no later than the fifth
(5th) Agent Business Day succeeding the date on which it receives such Approval Request and any information reasonably
requested in connection therewith. With respect to any Approved Approval Request, the Administrative Agent shall promptly forward
such request to the Lenders, together with a preliminary indication of the amount and type of Financing that each Lender is being
asked to provide in connection therewith.


 



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Section
1.03.      Conditions to Purchases.


 


No
Purchase Commitment or Purchase shall be entered into unless each of the following conditions is satisfied (or waived as provided
below) as of the date (such Portfolio Investment’s “Trade Date”) on which such Purchase Commitment is
entered into (and such Portfolio Investment shall not be Purchased, and the related Financing shall not be required to be made
available to the Company by the applicable Financing Providers, unless each of the following conditions is satisfied or waived
as of such Trade Date):


 


(1)         the
related Trade Date is not later than ten (10) Agent Business Days after the date on which the Administrative Agent has Approved
or not Approved the related Approval Request;


 


(2)        the
related Approval Request accurately describes such Portfolio Investment and such Portfolio Investment satisfies the Eligibility
Criteria;


 


(3)        the
proposed settlement date for such Portfolio Investment is not later than the end of the Reinvestment Period;


 


(4)         no
Event of Default or event that, with notice or lapse of time or both, would constitute an Event of Default (a “Default”),
in each case, has occurred and is continuing;


 


(5)        after
giving effect to the Purchase of such Portfolio Investment and the related provision of Financing (if any) hereunder:


 


(w)       the
Compliance Condition is satisfied;


 


(x)        the
aggregate amount of Financings then outstanding will not exceed the limit set forth in the Transaction Schedule; and


 


(y)       the
amount of any Financing requested shall be not less than U.S. $10,000,000;


 


The
Administrative Agent, on behalf of the Financing Providers, may waive any condition to a Purchase specified above in this Section
1.03 by written notice thereof to the Company, the Collateral Administrator, the Investment Manager and the Collateral Agent.


 


If
the above conditions to a Purchase are satisfied or waived, the Investment Manager shall determine, in consultation with the Administrative
Agent and with notice to any applicable Financing Providers and the Collateral Administrator, the date on which such Purchase
shall settle (the “Settlement Date” for such Portfolio Investment) and on which any related Financing shall
be provided.


 



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Section
1.04.      Sales of Portfolio Investments.


 


The
Company will not sell, transfer or otherwise dispose of any Portfolio Investment or any other asset without the prior consent
of the Administrative Agent (acting at the direction of the Required Financing Providers), except that, (i) the Company may make
Permitted Distributions in accordance with this Agreement and (ii) the Company may sell any Portfolio Investment, Ineligible Investment
or other asset so long as such sale is on an arm’s length basis and, after giving effect thereto, no Coverage Event has
occurred and no Default or Event of Default has occurred and is continuing; provided that, the principal balance of all
Portfolio Investments (other than Warranty Portfolio Investments) sold pursuant to this Section 1.04 to the Parent or an
Affiliate thereof by the Company shall not during the term of this Agreement exceed 20% of the Net Purchased Loan Balance measured
as of the date of such sale; provided further that the principal balance of all Portfolio Investments (other than
Warranty Portfolio Investments) that are in default as of the date of such sale and sold pursuant to this Section 1.04
to the Parent or an Affiliate thereof by the Company shall not during the term of this Agreement exceed 10% of the Net Purchased
Loan Balance measured as of the date of such sale.


 


Notwithstanding
anything in this Agreement to the contrary: (i) following the occurrence and during the continuance of an Event of Default, the
Company shall have no right to cause the sale, transfer or other disposition of a Portfolio Investment or any other asset (including,
without limitation, the transfer of amounts on deposit in the Accounts) without the consent of the Administrative Agent, (ii)
following the occurrence of a Coverage Event, the Company shall use commercially reasonable efforts to sell any or all of the
Collateral (individually or in lots, including a lot comprised of all of the Portfolio Investments) at the sole direction of,
and in the manner (including, without limitation, the time of sale, sale price, principal amount to be sold and purchaser) required
by the Administrative Agent (provided that each such sale shall be made at the direction of the Required Financing Providers)
at then-current fair market values and in accordance with the Administrative Agent’s standard market practices, and the
proceeds thereof shall be deposited into the CE Cure Account (iii) following the occurrence of a Coverage Event, the Investment
Manager shall have no right to act on behalf of, or otherwise direct, the Company, the Administrative Agent, the Collateral Agent
or any other person in connection with a sale of Portfolio Investments pursuant to any provision of this Agreement and (iv) in
connection with any Coverage Event Cure, the Company shall cause the Investment Manager to use its best efforts to effect an assignment
of any Portfolio Investment within the applicable time period specified in the definition of Coverage Event Cure; provided
that in connection with any sale of Portfolio Investments required by the Administrative Agent (or the Required Financing
Providers) pursuant to (x) the preceding clause (ii) or (y) Section 8.02(c) following the occurrence of an Event of Default, in
connection with such sale, the applicable Agent shall (a) use commercially reasonable efforts to solicit a bid for such Portfolio
Investments from the Designated Independent Broker-Dealer, (b) use reasonable efforts to notify the Company at the Designated
Email Notification Address promptly upon distribution of bid solicitations regarding the sale of such Portfolio Investments and
(c) sell such Portfolio Investments to the Designated Independent Broker-Dealer if the Designated Independent Broker-Dealer provides
the highest bid in the case where bids are received in respect of the sale of such Portfolio Investments, it being understood
that if the Designated Independent Broker-Dealer provides a bid to the applicable Agent that is the highest bona fide bid
to purchase a Portfolio Investment on a line-item basis where such Portfolio Investment is part of a pool of Portfolio Investments
for which there is a bona fide bid on a pool basis proposed to be accepted by the applicable Agent (in its sole discretion),
then the applicable Agent shall accept any such line-item bid only if such line-item bid (together with any other line-item bids
by the Designated Independent Broker-Dealer or any other bidder for other Portfolio Investments in such pool) is greater than
the bid on a pool basis. For purposes of this paragraph, the applicable Agent shall be entitled to disregard as invalid any bid
submitted by any Independent Broker-Dealer if, in such Agent’s good faith judgment: (i) either (x) such Independent Broker-Dealer
is ineligible to accept assignment or transfer of the relevant Portfolio Investments or any portion thereof, as applicable, substantially
in accordance with the then-current market practice in the principal market for the relevant Portfolio Investments or (y)
such Independent Broker-Dealer would not, through the exercise of its commercially reasonable efforts, be able to obtain any consent
required under any agreement or instrument governing or otherwise relating to the relevant Portfolio Investments to the assignment
or transfer of the relevant Portfolio Investments or any portion thereof, as applicable, to it; or (ii) such bid is not bona
fide, including, without limitation, due to (x) the insolvency of the Independent Broker-Dealer or (y) the inability, failure
or refusal of the Independent Broker-Dealer to settle the purchase of the relevant Portfolio Investments or any portion thereof,
as applicable, or otherwise settle transactions in the relevant market or perform its obligations generally.


 



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Following
the occurrence of a Coverage Event or an Event of Default, in connection with any sale of a Portfolio Investment directed by the
Administrative Agent pursuant to this Section 1.04 and the application of the net proceeds thereof, the Company hereby appoints
the Administrative Agent as the Company’s attorney-in-fact (it being understood that the Administrative Agent shall not
be deemed to have assumed any of the obligations of the Company by this appointment), with full authority in the place and stead
of the Company and in the name of the Company to effectuate the provisions of this Section 1.04 (including, without limitation,
the power to execute any instrument which the Administrative Agent or the Required Financing Providers may deem necessary or advisable
to accomplish the purposes of this Section 1.04 or any direction or notice to the Collateral Agent in respect to the application
of net proceeds of any such sales). None of the Administrative Agent, the Financing Providers, the Collateral Administrator, the
Securities Intermediary, the Collateral Agent nor any affiliate of any thereof shall incur any liability to the Company, the Investment
Manager or any other person in connection with any sale effected at the direction of the Administrative Agent in accordance with
this Section 1.04, including, without limitation, as a result of the price obtained for any Portfolio Investment, the timing of
any sale or sales of Portfolio Investments or the notice or lack of notice provided to any person in connection with any such
sale, so long as, in the case of the Administrative Agent only, any such sale does not violate Applicable Law.


 


After
the termination of the Financing Commitments and the payment in full in cash of the Secured Obligations, any remaining proceeds
of any sale or transfer of the Collateral shall be delivered to the Company.


 


Section
1.05.      Review of Portfolio Investments.


 


(a)        Two
(2) Business Days prior to each Interest Payment Date, or on such other date as the Administrative Agent may reasonably request,
the Company shall provide information related to the Portfolio Investments, including financials and such other information as
the Administrative Agent shall reasonably request, to the Administrative Agent. In addition, on the 15th day of each calendar
month, or the preceding Business Day if such 15th day is not a Business Day, commencing in June 2015, and upon request by the
Administrative Agent, the Company shall cause the Investment Manager to provide reports relating to the Portfolio Investments
by such means as mutually agreed upon by the Administrative Agent and the Investment Manager. Upon receipt by the Company of any
information related to the Portfolio Investments, the Company shall make reasonable efforts to provide such information to the
Administrative Agent on the 25th of each calendar month or, if such day is not a Business Day, the next Business Day.


 



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(b)        The
Company, acting in good faith and in a commercially reasonable manner, may dispute the Market Value of some or all of the Portfolio
Investments. By no later than 10:00 a.m., New York City Day, on the next Business Day of the related date of determination, the
Company may obtain an Independent Bid. The Independent Bid must be maintained by the Independent Broker-Dealer and actionable
for the Administrative Agent before 12:00 noon, New York City time, on such next Business Day. If the Company obtains an Independent
Bid and submits to the Administrative Agent evidence of such Independent Bid no later than 10:00 a.m., New York City time, on
such next Business Day, then such Independent Bid shall be used to determine the Market Value of such Portfolio Investment. Notwithstanding
the foregoing, the Administrative Agent shall be entitled to disregard as invalid any Independent Bid submitted by any Independent
Broker-Dealer if, in the Administrative Agent’s good faith judgment: (i) such Independent Broker-Dealer is ineligible to
accept assignment or transfer of the relevant Portfolio Investment or portion thereof, as applicable, substantially in accordance
with the then-current market practice in the principal market for such Portfolio Investment, as reasonably determined by the Administrative
Agent; or (ii) such firm bid or such firm offer is not bona fide due to the insolvency of the Independent Broker-Dealer or that,
as of the relevant date of determination, the Administrative Agent determines in good faith that such Independent Broker-Dealer
is in default under purchase contracts for assets similar to the Portfolio Investment in an aggregate amount in excess of $250,000,000.
For the avoidance of doubt, the Market Value of any (i) Portfolio Investment that has not been Approved by the Administrative
Agent or (ii) Ineligible Investment shall be $0 and cannot be disputed.


 


Section
1.06.     Deposits and Contributions by Parent. Notwithstanding any other provision of
this Agreement, Parent may, from time to time in its sole discretion, (x) deposit amounts into the Principal Collection Account,
and/or (y) transfer Portfolio Investments as equity contributions to the Company. All such amounts will be included in each applicable
calculation to the extent provided under this Agreement, including, without limitation, calculation of Market Value, Net Asset
Value, the Compliance Condition and Coverage Events.


 


ARTICLE
II



THE FINANCINGS


 


Section
2.01.      Financing Commitments.


 


Subject
to the terms and conditions set forth herein, during the Reinvestment Period, each Financing Provider hereby severally agrees
to make available to the Company the types of Financing identified on the Transaction Schedule as applicable to such Financing
Provider, in U.S. dollars, in an aggregate amount, for such Financing Provider and such type of Financing, not exceeding the amount
of its Financing Commitment for such type of Financing. The Financing Commitments shall terminate on the Maturity Date (or, if
earlier, the date of termination of the Financing Commitments pursuant to Article VII or upon a Coverage Event).


 



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Section
2.02.      First Advance; Ramp-Up Period.


 


(a)        Subject
to the satisfaction or waiver of the conditions set forth in Sections 2.03 and 2.04, each Financing Provider as of the Effective
Date agrees, severally and not jointly, to make or cause to be made on the Effective Date, an advance in an aggregate principal
amount equal to $131,440,000 subject to the conditions set forth in this Agreement (the “First Advance”). Each
Financing Provider shall make its portion of the First Advance available to the Company no later than 3:00 p.m. (New York City
time) on the Effective Date in accordance with the terms set forth in Section 3.01.


 


(b)        On
any date during the term of the Ramp-Up Period, subject to the conditions set forth in this Agreement, the Company may request,
and the Financing Provider may provide, additional Advances. No Advances may be requested after the Ramp-Up Period.


 


Section
2.03.      Financings; Use of Proceeds.


 


(a)        Subject
to the satisfaction or waiver of the conditions to the Purchase of a Portfolio Investment set forth in Section 1.03 both as of
the related Trade Date and Settlement Date, the applicable Financing Providers will make the applicable Financing available to
the Company on the related Settlement Date (or otherwise on the related specified borrowing date if no Portfolio Investment is
being acquired on such date) as provided herein; provided that, if no Portfolio Investment is being acquired on such date,
only the conditions set forth in clauses (4) and (5) of Section 1.03 shall require satisfaction or waiver.


 


(b)        Except
as expressly provided herein, the failure of any Financing Provider to make any Advance required hereunder shall not relieve any
other Financing Provider of its obligations hereunder. If any Financing Provider shall fail to provide any Financing to the Company
required hereunder, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply
any amounts thereafter received by the Administrative Agent for the account of such Financing Provider to satisfy such Financing
Provider’s obligations hereunder until all such unsatisfied obligations are fully paid.


 


(c)        If
applicable, the Company shall use the proceeds of the Financings received by it hereunder to purchase the Portfolio Investments
identified in the related Approval Request, provided that, if the proceeds of a Financing are deposited in the Principal
Collection Account as provided in Section 3.01 on or prior to the Settlement Date for any Portfolio Investment but the Company
is unable to Purchase such Portfolio Investment on such Settlement Date, or if there are proceeds of such Financing remaining
after such Purchase, then, subject to Section 3.01(a), the Collateral Agent shall apply such proceeds on such date as provided
in Article IV. The proceeds of the Financings shall not be used for any other purpose.


 


(d)        With
respect to any Advance, the Company shall cause the Investment Manager to submit a request substantially in the form of Exhibit
A to the Lenders and the Administrative Agent, with a copy to the Collateral Agent and the Collateral Administrator, not later
than 2:00 p.m. New York City time, two (2) Business Days prior to the Business Day specified as the date on which such Advance
shall be made and, upon receipt of such request, the Lenders shall make such Advances in accordance with the terms set forth in
Section 3.01. Any requested Advance shall be (i) if applicable, in an amount such that, after giving effect thereto and the related
purchase of the applicable Portfolio Investment(s), the Compliance Condition is satisfied, and (ii) if related to the Purchase
of any Portfolio Investment, no later than ten (10) Agent Business Days after the date on which the Administrative Agent Approved
the related Approval Request in accordance herewith.


 






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Section
2.04.     Other Conditions to Financings.


 


Notwithstanding
anything to the contrary herein, the obligations of the Lenders to make Advances shall not become effective until the date (the
“Effective Date” on which each of the following conditions is satisfied (or waived by the Administrative Agent
in its sole discretion)):


 


(a)         Executed
Counterparts. The Administrative Agent (or its counsel) shall have received from each party hereto either (i) a counterpart
of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which
may include electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of
this Agreement.


 


(b)        Loan
Documents. The Administrative Agent shall have received satisfactory evidence that the Sale Agreement, the Collateral Administration
Agreement, the Fee Letter, the Participation Agreement and the Investment Management Agreement (such documents, together with
this Agreement, the “Loan Documents”) have been executed and are in full force and effect, and that the initial
sales and contributions contemplated by the Sale Agreement shall have been consummated.


 


(c)       Corporate
Documents. The Administrative Agent shall have received certified copies of the resolutions of the board of managers (or similar
items) of the Company and the Investment Manager approving the Loan Documents to be delivered by it hereunder and the transactions
contemplated hereby, certified by its secretary or assistant secretary. Good standing certificates for each of the Company and
the Investment Manager issued by the applicable Governmental Authority of its jurisdiction of organization. A certificate of the
secretary or assistant secretary of each of the Company and the Investment Manager certifying the names and true signatures of
the officers authorized on its behalf to sign this Agreement and the other Loan Documents to be delivered by it.


 


(d)       Payment
of Fees, Etc. The Administrative Agent, the Lenders, the Collateral Agent and the Collateral Administrator shall have received
all fees and other amounts due and payable by the Company in connection herewith on or prior to the Effective Date and, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses (including legal fees and expenses) required to be reimbursed
or paid by the Company hereunder.


 


(e)       Patriot
Act, Etc. To the extent requested by the Administrative Agent or any Lender, the Administrative Agent or such Lender, as the
case may be, shall have received all documentation and other information required by regulatory authorities under the USA PATRIOT
Act (Title III of Pub. L. 107 56 (signed into law October 26, 2001)) and other applicable “know your customer” and
anti-money laundering rules and regulations.


 



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(f)        Filings.
Copies of proper financing statements, as may be necessary or, in the opinion of the Administrative Agent, desirable under the
UCC of all appropriate jurisdictions or any comparable law to perfect the security interest of the Collateral Agent on behalf
of the Secured Parties in all Collateral in which an interest may be pledged hereunder.


 


(g)        Certain
Acknowledgements and Search Reports. The Administrative Agent shall have received (a) UCC, tax and judgment lien searches
and (b) such other searches that the Administrative Agent deems necessary or appropriate.


 


(h)        Officers’
Certificates of the Company Regarding This Agreement. An officer’s certificate of the Company stating that, to the best
of the signing officer’s knowledge, there has been no Event of Default under this Agreement and that all representations
and warranties of the Company are true and correct in all material respects as of the Effective Date (provided that to
the extent such representations and warranties specifically refer to an earlier date, they shall be true and correct in all material
respects as of such earlier date).


 


(i)         Opinions.
Legal opinions of Dechert LLP, counsel for the Company and the Investment Manager, and counsel for the Collateral Agent each in
form and substance reasonably satisfactory to the Administrative Agent covering such matters as the Administrative Agent may reasonably
request.


 


(j)         [RESERVED].


 


(k)        [RESERVED].


 


(l)         Other
Documents. Such other documents as the Administrative Agent may reasonably require.


 


ARTICLE
III



ADDITIONAL TERMS APPLICABLE TO THE FINANCINGS


 


Section
3.01.      The Advances.


 


(a)        Making
the Advances. If the Lenders are required to make an Advance to the Company as provided in Sections 2.02 and 2.03, then each
Lender shall make such Advance on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon (or
3:00 p.m. with respect to the First Advance), New York City time, to the Collateral Agent for deposit to the Principal Collection
Account. Each Lender at its option may make any Advance by causing any domestic or foreign branch or affiliate of such Lender
to make such Advance, provided that any exercise of such option shall not affect the obligation of the Company to repay
such Advance in accordance with the terms of this Agreement. Once drawn, Advances may only be repaid or prepaid in accordance
with this Agreement and may not be reborrowed.


 



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(b)        Interest
on the Advances. All outstanding Advances shall bear interest (from and including the date on which such Advance is made)
at a per annum rate equal to the LIBO Rate for each Calculation Period in effect plus the Applicable Margin. Notwithstanding
the foregoing, if any principal of or interest on any Advance is not paid when due, whether at stated maturity, upon acceleration
or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to 2% plus
the rate otherwise applicable to the Advances as provided in the preceding sentence.


 


(c)        Evidence
of the Advances. Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness
of the Company to such Lender resulting from each Advance made by such Lender, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder. The Administrative Agent, acting solely for this purpose as an agent
of the Company, shall maintain at one of its offices in the United States a register (the “Register”) in which
it shall record the names and addresses of the Lenders and the Financing Commitment of, and principal amount of the Advances (and
related interest amounts) due and payable or to become due and payable from the Company to each Lender hereunder and the amount
of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.
The entries made in the Register shall be conclusive absent manifest error, and the parties hereto shall treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender and the owner of the amounts owing to it hereunder as
reflected in the Register for all purposes of this Agreement, notwithstanding notice to the contrary.


 


Any
Lender may request that Advances made by it be evidenced by a promissory note. In such event, the Company shall prepare, execute
and deliver to such Lender a promissory note payable to such Lender (or its registered assigns) and in a form approved by the
Administrative Agent. Notwithstanding the creation of a promissory note, any transfer of an interest in such note shall not be
effective until reflected in the Register. Thereafter, the Advances evidenced by such promissory note and interest thereon shall
at all times be represented by one or more promissory notes in such form payable to such payee and its registered assigns.


 


(d)       Pro
Rata Treatment. Except as otherwise provided herein, all borrowings of, and payments in respect of, the Advances shall be
made on a pro rata basis by or to the Lenders in accordance with their respective portions of the Financing Commitments
in respect of Advances held by them.


 


(e)       Illegality.
Notwithstanding any other provision of this Agreement, if any Lender or the Administrative Agent shall notify the Company that
the adoption of any law, rule or regulation, or any change therein 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, makes
it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for a Lender or the Administrative
Agent to perform its obligations hereunder to fund or maintain Advances hereunder, then (1) the obligation of such Lender or the
Administrative Agent hereunder shall immediately be suspended until such time as such Lender or the Administrative Agent determines
(in its sole discretion) that such performance is again lawful, (2) such Lender or the Administrative Agent, as applicable, shall
use reasonable efforts (which will not require such party to incur a loss, other than immaterial, incidental expenses), to transfer
within twenty (20) days after it gives notice under this clause (e), all of its rights and obligations under this Agreement to
another of its offices, branches or affiliates with respect to which such performance would not be unlawful, and (3) if such Lender
or the Administrative Agent is unable to effect a transfer under clause (2), then any outstanding Advances of such Lender shall
be promptly paid in full by the Company (together with all accrued interest and other amounts owing hereunder) but not later than
the end of the then-current Calculation Period (or, if sooner repayment is required by law, be repaid within ten (10) Business
Days of such Lender giving the Company notice thereof); provided that, to the extent that any such adoption or change makes
it unlawful for the Advances to bear interest by reference to the LIBO Rate, then the foregoing clauses (1) through (3) shall
not apply and the Advances shall bear interest (from and after the last day of the Calculation Period ending immediately after
such adoption or change) at a per annum rate equal to the Base Rate plus the Applicable Margin for Advances set forth in
the Fee Letter.


 



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(f)        Change
in Law. If any Change in Law shall subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Excluded Taxes
and (C) Other Taxes) on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities
or capital attributable thereto; and the result shall be to increase the cost to such Lender or such other Recipient of making,
converting to, continuing or maintaining any 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 or other Recipient hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender or other Recipient, the Company will pay to such Lender or other Recipient, as the case
may be, such additional amount or amounts as will compensate such Lender or other Recipient, as the case may be, for such additional
costs incurred or reduction suffered.


 


All
payments to be made hereunder by the Company in respect of the Advances shall be made without set-off or counterclaim.


 


Section
3.02.      General.


 


The
provisions of Section 3.01 and any other provisions relating to the types of Financings contemplated by each such section shall
not be operative until and unless such types of Financing have been made available to the Company, as evidenced by the Transaction
Schedule.


 


Section
3.03.      Taxes.


 


(a)        Payments
Free of Taxes. All payments to be made hereunder by the Company in respect of the Advances shall be made without deduction
or withholding for any Taxes, except as required by Applicable Law. If any Applicable Law requires the deduction or withholding
of any Tax from any such payment by the Company, then the Company shall be entitled to make such deduction or withholding and
shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law
and, if such Tax is an Indemnified Tax, then the sum payable by the Company shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under
this Section) the applicable Lender receives an amount equal to the sum it would have received had no such deduction or withholding
been made.


 



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(b)        Payment
of Other Taxes by the Company. Without duplication of other amounts payable by the Company under this Section 3.03, the Company
shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at the option of the Administrative
Agent timely reimburse it for the payment of, any Other Taxes.


 


(c)        Indemnification
by the Company. The Company shall indemnify each Lender, within ten (10) Business Days after demand therefor, for the full
amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this
Section) payable or paid by such Lender and any reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified 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 Company 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.


 


(d)        Indemnification
by the Lenders. Each Lender shall indemnify, within ten (10) days after demand therefor, (i) the Administrative Agent for
any Indemnified Taxes attributable to such Lender (but only to the extent that the Company has not already indemnified the Administrative
Agent for such Indemnified Taxes and without limiting the obligation of the Company to do so), and (ii) the Administrative Agent
for any (A) Taxes attributable to such Lender’s failure to comply with the provisions of 10.08 relating to the maintenance
of a Participant Register and (B) Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative
Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or
not such 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 any Lender by the Administrative Agent shall be conclusive absent manifest error. Each
Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under
any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (d).


 


(e)        Evidence
of Payments. As soon as practicable after any payment of Taxes by the Company to a Governmental Authority pursuant to this
Section 3.03, the Company 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.


 


(f)        Status
of Lenders. (i) Any Recipient that is entitled to an exemption from or reduction of withholding Tax with respect to payments
made under any Loan Document shall deliver to the Company and the Administrative Agent, at the time or times reasonably requested
by the Company or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Company
or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In
addition, any Lender, if reasonably requested by the Company or the Administrative Agent, shall deliver such other documentation
prescribed by Applicable Law or reasonably requested by the Company or the Administrative Agent as will enable the Company or
the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.


 



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Without
limiting the generality of the foregoing,


 


(A)       any
Recipient that is a U.S. Person shall deliver to the Company and the Administrative Agent on or prior to the date on which such
Recipient becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Company
or the Administrative Agent), an executed IRS Form W-9 certifying that such Recipient is exempt from U.S. federal backup withholding
Tax; provided, however, that if the Recipient is a disregarded entity for U.S. federal income Tax purposes, it shall
provide the appropriate withholding form of its owner for U.S. federal income Tax purposes (together with appropriate supporting
documentation);


 


(B)       any
Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Company and the Administrative Agent (in such
number of copies as shall be reasonably 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 reasonable request of the Company or the Administrative
Agent or any information in a previously provided form changes), whichever of the following is applicable:


 


(i)        in
the case of a Foreign Lender claiming the benefits of an income Tax treaty to which the United States is a party (x) with respect
to payments of interest under any Loan Document, an executed IRS Form W-8BEN, W-8BEN-E, W-8EXP or applicable successor form establishing
an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such Tax treaty
and (y) with respect to any other applicable payments under any Loan Document, an IRS Form W-8BEN, W-8BEN-E or W-8EXP or applicable
successor form establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits”
or “other income” article of such Tax treaty;


 


(ii)       an
executed IRS Form W-8ECI;


 


(iii)     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 a “bank” within the meaning of Section 881(c)(3)(A) of
the Code, is not a “10 percent shareholder” of the Company within the meaning of Section 881(c)(3)(B) of the Code,
and is not a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax
Compliance Certificate”) and (y) an executed IRS Form W-8BEN, W-8BEN-E or applicable successor form; or


 


(iv)      to
the extent a Foreign Lender is not the beneficial owner, an executed IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form
W-8BEN, IRS Form W-8BEN-E or applicable successor form, a U.S. Tax Compliance Certificate, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable;


 



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(C)       any
Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Company and the Administrative Agent (in such
number of copies as shall be reasonably 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 reasonable request of the Company or the Administrative
Agent), executed originals of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction
in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable
Law to permit the Company or the Administrative Agent to determine the withholding or deduction required to be made; and


 


(D)       if
a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender
were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b)
of the Code, as applicable), such Lender shall deliver to the Company and the Administrative Agent at the time or times prescribed
by Law and at such time or times reasonably requested by the Company or the Administrative Agent such documentation prescribed
by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably
requested by the Company or the Administrative Agent as may be necessary for the Company and the Administrative Agent to comply
with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA
or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA”
shall include any amendments made to FATCA after the date of this Agreement.


 


Each
Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect,
it shall update such form or certification or promptly notify the Company and the Administrative Agent in writing of its legal
inability to do so.


 


(g)         Treatment
of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund
of any Taxes or credit in lieu thereof as to which it has been indemnified pursuant to this Section 3.03 (including by the payment
of additional amounts pursuant to this Section 3.03), it shall pay to the indemnifying party an amount equal to such refund or
credit (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund
or credit), net of reasonable out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such refund or credit). Such indemnifying party, upon
the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g)
(plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified
party is required to repay such refund or credit to such Governmental Authority. Notwithstanding anything to the contrary in this
paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this
paragraph (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified
party would have been in if the indemnification payments or additional amounts giving rise to such refund or credit had never
been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.


 



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(h)        Administrative
Agent’s Tax Status. The Administrative Agent represents to the Company that it is a “U.S. person” and a
“financial institution” within the meaning of Treasury Regulations Section 1.1441-1 and a “U.S. financial institution”
within the meaning of Treasury Regulations Section 1.1471-3T and that it will comply with its obligations to withhold under Section
1441 and FATCA.


 


(i)        Survival.
Each party’s obligations under this Section 3.03 shall survive the resignation or replacement of the Administrative Agent
or any assignment of rights by, or the replacement of, a Lender, and the termination, satisfaction or discharge of all obligations
under any Loan Document.


 


Section
3.04.      Mitigation Obligations.


 


(a)        Designation
of a Different Office. If any Recipient requests compensation under Section 3.01(e), or requires the Company to pay any Indemnified
Taxes or additional amounts to any Recipient or any Governmental Authority for the account of any Recipient pursuant to Section
3.03, then such Recipient shall at the request of the Company use reasonable efforts to designate a different office for funding
or booking the Advances hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates,
if, in the judgment of such Recipient, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to
Section 3.01(e) or Section 3.03, as the case may be, in the future, and (ii) would not subject such Recipient to any unreimbursed
cost or expense and would not otherwise be disadvantageous to such Recipient. The Company hereby agrees to pay all reasonable
costs and expenses incurred by any Recipient in connection with any such designation or assignment.


 


(b)        Replacement
of Recipient. If any Recipient requests compensation under Section 3.01(e), or if the Company is required to pay any Indemnified
Taxes or additional amounts to any Recipient or any Governmental Authority for the account of any Recipient pursuant to Section
3.03 and, in each case, such Recipient has declined or is unable to designate a different lending office in accordance with Section
3.04(a) or such designation would not eliminate the need for such payments, or if any Lender is a defaulting Lender, then the
Company may, at its sole expense and effort, upon notice to such Recipient and the Administrative Agent, require such Recipient
to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required
by, Section 10.08), all of its interests, rights (other than its existing rights to payments pursuant to Section 3.01(e) or Section
3.03) and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such rights and obligations
(which assignee may be another Lender, if a Lender accepts such assignment); provided that:


 



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(i)        such
Lender shall have received payment of an amount equal to the outstanding principal of its Advances, accrued interest thereon,
and all other amounts payable to it hereunder and under the other Loan Documents from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Company (in the case of all other amounts);


 


(ii)       in
the case of any such assignment resulting from payments required to be made pursuant to Section 3.03, such assignment will result
in a reduction in such compensation or payments thereafter; and


 


(iii)       such
assignment does not conflict with Applicable Law.


 


No
Lender shall be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Company to require such assignment and delegation cease to apply.


 





ARTICLE
IV



COLLECTIONS AND PAYMENTS


 


Section
4.01.     Interest Proceeds.


 


The
Company shall cause all Interest Proceeds on the Portfolio Investments owned by it to be deposited in the Interest Collection
Account or remitted to the Collateral Agent, and the Collateral Agent shall credit to the Interest Collection Account all Interest
Proceeds received by it immediately upon receipt thereof.


 


All
Interest Proceeds shall be retained in the Interest Collection Account and invested (and reinvested) at the written direction
of the Administrative Agent in Eligible Investments. Eligible Investments shall mature no later than the end of the next succeeding
Calculation Period.


 


Interest
Proceeds on deposit in the Interest Collection Account may be withdrawn by the Collateral Agent (at the written direction of the
Company (or, upon the occurrence and during the continuance of an Event of Default or upon the occurrence of a Coverage Event,
the Administrative Agent)) and remitted to the Company to be applied (i) to make payments or (ii) to make Permitted Distributions,
in each case, in accordance with this Agreement and with two (2) Business Days prior notice to the Administrative Agent.


 


The
Investment Manager shall notify the Administrative Agent and the Collateral Agent if the Investment Manager reasonably determines
in good faith that any amounts in the Interest Collection Account have been deposited in error or do not otherwise constitute
Interest Proceeds, whereupon such amounts on deposit in the Interest Collection Account may be withdrawn by the Collateral Agent
(at the direction of the Company (or, upon the occurrence and during the continuance of an Event of Default or upon the occurrence
of a Coverage Event, the Administrative Agent)) on the next succeeding Business Day and remitted to or at the direction of the
Company.


 



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Section
4.02.      Principal Proceeds.


 


The
Company shall cause all Principal Proceeds received on the Portfolio Investments owned by it to be deposited in the Principal
Collection Account or remitted to the Collateral Agent, and the Collateral Agent shall credit to the Principal Collection Account
all Principal Proceeds received by it immediately upon receipt thereof.


 


All
Principal Proceeds shall be retained in the Principal Collection Account and invested at the written direction of the Administrative
Agent in overnight Eligible Investments selected by the Investment Manager (unless an Event of Default has occurred and is continuing
or a Coverage Event has occurred, in which case, selected by the Administrative Agent). All investment income on such Eligible
Investments shall constitute Interest Proceeds.


 


Principal
Proceeds on deposit in the Principal Collection Account may be withdrawn by the Collateral Agent (at the written direction of
the Company (or, upon the occurrence and during the continuance of an Event of Default or upon the occurrence of a Coverage Event,
the Administrative Agent)) and remitted to the Company to be applied (i) to make payments, (ii) towards the purchase price of
Portfolio Investments or (iii) to make Permitted Distributions, in each case, in accordance with this Agreement and with, in the
case of clauses (i) and (iii), two (2) Business Days prior notice to the Administrative Agent, and in the case of clause (ii),
with one (1) Business Day prior notice to the Administrative Agent.


 


The
Investment Manager shall notify the Administrative Agent and the Collateral Agent if the Investment Manager reasonably determines
in good faith that any amounts in the Principal Collection Account have been deposited in error or do not otherwise constitute
Principal Proceeds, whereupon such amounts on deposit in the Principal Collection Account may be withdrawn by the Collateral Agent
(at the direction of the Company (or, upon the occurrence and during the continuance of an Event of Default or upon the occurrence
of a Coverage Event, the Administrative Agent)) on the next succeeding Business Day and remitted to or at the direction of the
Company.


 


Section
4.03.     Principal and Interest Payments; Prepayments.


 


(a)        The
unpaid aggregate principal amount of the Advances (together with accrued interest thereon) shall be paid in full in cash to the
Administrative Agent for the account of each Lender on the Maturity Date and any and all cash in the Accounts shall be applied
to the satisfaction of the Secured Obligations on the Maturity Date.


 


(b)        Accrued
interest on the Advances shall be payable in cash in arrears on each Interest Payment Date; provided that (i) interest
accrued pursuant to the second sentence of Section 3.01(b) shall be payable on demand and (ii) in the event of any repayment
or prepayment of any Advances, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment.


 



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(c)        Subject
to the requirements of this Section 4.03(c), the Company shall have the right from time to time to prepay outstanding Advances
in whole or in part (i) on any Business Day that JPMorgan Chase Bank, National Association ceases to act as Administrative Agent,
(ii) upon the occurrence of a Repayment Event, (iii) in connection with a Coverage Event Cure or (iv) subject to the payment of
the premium described in Section 4.03(d), on the last day of any Calculation Period; provided that, the Company may not prepay
any outstanding Advances pursuant to this Section 4.03(c)(iv) prior to the 24-month anniversary of the date hereof. The Company
shall notify the Administrative Agent by telephone (confirmed by facsimile with a copy to the Collateral Agent and the Collateral
Administrator) of any prepayment hereunder not later than 2:00 p.m., New York City time, three (3) Business Days
before the date of prepayment (which shall be the last day of a Calculation Period). Each such notice shall be irrevocable and
shall specify the prepayment date and the principal amount of the Advances to be prepaid. Promptly following receipt of any such
notice, the Administrative Agent shall advise the Lenders of the contents thereof. Except in connection with a Coverage Event
Cure, each partial prepayment of outstanding Advances shall be in an amount not less than $25,000,000. Prepayments shall be accompanied
by accrued and unpaid interest.


 


(d)        Each
prepayment pursuant to Section 4.03(c)(iv) or optional redemption pursuant to Section 4.06, whether in full or in part, shall
be accompanied by a premium equal to 1% of the principal amount of such prepayment or optional redemption, as applicable. Notwithstanding
anything in this Article IV, no premium shall be payable by the Company in the event that the Company terminates or reduces the
Financing Commitments or prepays Advances outstanding hereunder, in each case as expressly permitted hereunder, (i) if JPMorgan
Chase Bank, National Association ceases to act as Administrative Agent hereunder, (ii) if the Company elects to terminate or reduce
the Financing Commitments as a result of a Lender’s default in its obligations hereunder, (iii) the Advances are prepaid
in connection with a Coverage Event Cure, (iv) the Advances are prepaid at any time after the 36-month anniversary of the Effective
Date or (v) in connection with a Repayment Event.


 


(e)        Once
paid, all fees or any part thereof payable hereunder shall not be refundable under any circumstances.


 


(f)         The
Financing Commitments shall be automatically reduced in part on the date of any prepayment made in accordance with the terms of
this Agreement, in each case in an amount equal to the amount of such prepayment.


 






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Section
4.04.      Payments Generally.


 


All
payments to the Lenders or the Administrative Agent shall be made to the Administrative Agent at the account designated in writing
to the Company and the Collateral Agent for further distribution by the Administrative Agent (if applicable). The Administrative
Agent shall give written notice to the Collateral Agent and the Collateral Administrator (on which the Collateral Agent and the
Collateral Administrator may conclusively rely) and the Investment Manager of the calculation of amounts payable to the Financing
Providers in respect of the Financings and the amounts payable to the Investment Manager. At least three (3) Business Days prior
to each Interest Payment Date, the Administrative Agent shall deliver an invoice to the Investment Manager, the Collateral Agent
and the Collateral Administrator in respect of the interest due on such Interest Payment Date. All payments not made to the Administrative
Agent for distribution to the Lenders shall be made as directed in writing by the Administrative Agent. All payments hereunder
shall be made without setoff or counterclaim. All payments hereunder shall be made in U.S. dollars. All interest hereunder shall
be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).


 


Section
4.05.     CE Cure Account.


 


(a)        The
Company shall cause all cash received by it in connection with a Coverage Event Cure to be deposited in the CE Cure Account or
remitted to the Collateral Agent, and the Collateral Agent shall credit to the CE Cure Account such amounts received by it (and
identified as such) immediately upon receipt thereof. Prior to the Maturity Date, all cash amounts in the CE Cure Account shall
be invested in overnight Eligible Investments at the written direction of the Administrative Agent (as directed by the Required
Financing Providers). All amounts contributed to the Company by Parent in connection with a Coverage Event Cure shall be paid
free and clear of any right of chargeback or other equitable claim.


 


(b)        Amounts
on deposit in the CE Cure Account may be withdrawn by the Collateral Agent (at the written direction of the Company (or, upon
the occurrence and during the continuance of an Event of Default or upon the occurrence of a Coverage Event, the Administrative
Agent)) and remitted to the Company with prior notice to the Administrative Agent (or, upon the occurrence and during the continuance
of an Event of Default or upon the occurrence of a Coverage Event, to the Lenders for prepayment of Advances and reduction of
Financing Commitment); provided that the Company may not direct any withdrawal from the CE Cure Account if the Compliance
Condition is not satisfied (or would not be satisfied after such withdrawal).


 


Section
4.06.      Optional Redemption.


 


From
and after the 24-month anniversary of the date hereof, the Company shall be entitled at its option and upon three (3) Business
Days’ prior written notice to the Administrative Agent to terminate the Financing Commitments in whole upon payment in full,
including the premium specified in Section 4.03(d), of all Advances, all accrued and unpaid interest and all other Secured Obligations
(other than unmatured contingent indemnification obligations).


 



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ARTICLE
V



[RESERVED]


 


ARTICLE
VI



REPRESENTATIONS, WARRANTIES AND COVENANTS


 


Section
6.01.      Representations and Warranties.


 


The
Company represents to the other parties hereto solely with respect to itself that as of the date hereof (or as of such other date
as maybe expressly set forth below):


 


(a)        it
is duly organized or incorporated, as the case may be, and validly existing under the laws of the jurisdiction of its organization
or incorporation and has all requisite power and authority to execute, deliver and perform this Agreement and each other Loan
Document to which it is a party and to consummate the transactions herein and therein contemplated;


 


(b)        the
execution, delivery and performance of this Agreement and each such other Loan Document, and the consummation of the transactions
contemplated therein have been duly authorized by it and this Agreement and each such other Loan Document constitutes its legal,
valid and binding obligation enforceable against it in accordance with its terms (subject to (A) bankruptcy, insolvency, reorganization,
or other similar laws affecting the enforcement of creditors’ rights generally, (B) equitable limitations on the availability
of specific remedies, regardless of whether such enforceability is considered in a proceeding in equity or at law and (C) implied
covenants of good faith and fair dealing);


 










(c)        the
execution, delivery and performance of this Agreement and each other Loan Document and the consummation of such transactions do
not conflict with the provisions of its governing instruments and will not violate in any material way any provisions of Applicable
Law or regulation or any applicable order of any court or regulatory body and will not result in the material breach of, or constitute
a default, or require any consent, under any material agreement, instrument or document to which it is a party or by which it
or any of its property may be bound or affected;


 


(d)        no
actions, suits, proceedings or governmental investigations at law or in equity are pending or active (or, to its knowledge, threatened)
against it before any Governmental Authority or any arbitrator (A) asserting the invalidity of this Agreement or any of the other
Loan Documents, (B) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any of the
other Loan Documents, (C) seeking any determination or ruling that might materially and adversely affect the performance by the
Company of its obligations under, or the validity or enforceability of, this Agreement or any of the other Loan Documents or (D)
seeking any determination or ruling that would reasonably be expected to have a Material Adverse Effect;


 


(e)        it
has obtained all consents and authorizations (including all required consents and authorizations of any governmental authority)
that are necessary or advisable to be obtained by it in connection with the execution, delivery and performance of this Agreement
and each other Loan Document and each such consent and authorization is in full force and effect;


 


(f)     
   it is not an “investment company” as defined in the Investment Company Act of 1940, as amended;


 


(g)        it
has not issued any securities that are or are required to be registered under the Securities Act of 1933, as amended, and it is
not a reporting company under the Securities Exchange Act of 1934, as amended;


 


(h)        the
Company has no Indebtedness or other indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation),
other than (i) Indebtedness incurred under the terms of the Loan Documents and (ii) Indebtedness incurred pursuant to certain
ordinary business expenses arising pursuant to the transactions contemplated by this Agreement and the other Loan Documents;


 



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(i)         (x)
it does not have underlying assets which constitute “plan assets” within the Plan Asset Rules; and (y) neither it
nor any ERISA Affiliate has sponsored, maintained, contributed to, been required to contribute to or have any liability with respect
to any Plan;


 


(j)         as
of the date of this Agreement it is, and after giving effect to any Advance it will be, Solvent and it is not entering into this
Agreement or any other Loan Document or consummating any transaction contemplated hereby or thereby with any intent to hinder,
delay or defraud any of its creditors;


 


(k)        it
is not in default under any other contract to which it is a party;


 


(l)        it
has complied and will comply in all material respects with all Applicable Laws, judgments, agreements with governmental authorities,
decrees and orders with respect to its business and properties and the Portfolio;


 


(m)      it
does not have any Subsidiaries or own any Investments in any Person other than the Portfolio Investments or Investments (i) constituting
Eligible Investments and (ii) those the Company shall have acquired or received as a distribution in connection with a workout,
bankruptcy, foreclosure, restructuring or similar process or proceeding involving a Portfolio Investment or any issuer thereof;


 


(n)       (x)
it has disclosed to the Administrative Agent all agreements, instruments and corporate or other restrictions to which it is subject,
and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect and (y) all information (other than projections, forward-looking information, general economic data, industry information
or information relating to third parties) heretofore furnished by or on behalf of the Company in writing to the Administrative
Agent or any Lender in connection with this Agreement or any transaction contemplated hereby (after taking into account all updates,
modifications and supplements to such information) is (when taken as a whole) true and correct in all material respects (or if
not prepared by or under the direction of the Company, is true and correct in all material respects to the Company’s knowledge)
and does not omit to state a material fact necessary to make the statements contained therein (when taken as a whole) not misleading
(or, if not prepared by or under the direction of the Company, does not omit to state such a fact to the Company’s knowledge);


 


(o)       except
as otherwise permitted by this Agreement or the other Loan Documents, no Portfolio Investment has been sold, transferred, assigned
or pledged by the Company (other than liens in favor of the Secured Parties pursuant to the Loan Documents, Permitted Liens and
inchoate liens arising by operation of law);


 


(p)        the
Company has timely filed all Tax returns required by Law to have been filed by it; all such Tax returns are true and correct in
all material respects; and the Company has paid or withheld (as applicable) all Taxes owing or required to be withheld by it (if
any) shown on such Tax returns, except any such Taxes which are being contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside in accordance with GAAP on its books and records;


 



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(q)        the
Company is and will be treated as a disregarded entity for U.S. federal income Tax purposes;


 


(r)        the
Company is wholly owned by FS Investment Corporation III , which is a U.S. Person; provided, however, that a merger of FS Investment
Corporation III with another business development company sponsored by Franklin Square Holdings, L.P. or other fundamental change
transaction the result of which effectively combines the ownership and/or assets of FS Investment Corporation III and a business
development company sponsored by Franklin Square Holdings, L.P., or merges or consolidates their respective collateral advisors
or sub-advisors shall not constitute a breach of this representation;


 


(s)        prior
to the date hereof, the Company has not engaged in any business operations or activities other than as an ownership entity for
Portfolio Investments and similar loan or debt obligations and activities incidental thereto;


 


(t)        neither
the Company nor any Affiliate of the Company is (i) a country, territory, organization, person or entity named on an Office of
Foreign Asset Control (OFAC) list; (ii) 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,
or whose subscription funds are transferred from or through such a jurisdiction; (iii) a “Foreign Shell Bank” within
the meaning of the USA Patriot Act, i.e., a foreign bank that does not have a physical presence in any country and that is not
affiliated with a bank that has a physical presence and an acceptable level of regulation and supervision; or (iv) 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 Sections 311 or 312 of the USA Patriot Act as warranting special measures due to money laundering concerns. The Company
is in compliance with all applicable OFAC rules and regulations and also in compliance with all applicable provisions of the USA
Patriot Act;


 


(u)        the
Company has implemented and maintains in effect policies and procedures designed to ensure compliance by the Company and its agents
with Anti-Corruption Laws and applicable Sanctions, and the Company and its agents are in compliance with Anti-Corruption Laws
and applicable Sanctions in all material respects and are not knowingly engaged in any activity that would reasonably be expected
to result in the Company being designated as a Sanctioned Person. None of (i) the Company or (ii) to the knowledge of the Company,
any agent of the Company that will act in any capacity in connection with or benefit from the credit facility established hereby,
is a Sanctioned Person. No Advances, use of proceeds or other transaction contemplated by the Agreement will directly, or to the
knowledge of the Company, indirectly violate Anti-Corruption Laws or applicable Sanctions;


 


(v)        the
Loan Documents represent all of the material agreements between the Investment Manager, on the one hand, and the Company, on the
other. Upon the purchase and/or contribution of each Portfolio Investment (or an interest in a Portfolio Investment) pursuant
to this Agreement or the Sale Agreement, the Company shall be the lawful owner of, and have good title to, such Portfolio Investment
and all assets relating thereto, free and clear of any Adverse Claim (other than Permitted Liens). All such assets are transferred
to the Company without recourse to the Investment Manager except as described in the Sale Agreement. The purchases of such assets
by the Company constitute valid and true sales for consideration (and not merely a pledge of such assets for security purposes)
and the contributions of such assets received by the Company constitute valid and true transfers for consideration, each enforceable
against creditors of the Investment Manager, and no such assets shall constitute property of the Investment Manager;


 



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(w)        the
Company is not relying on any advice (whether written or oral) of any other party other than the Investment Manager; and


 


(x)        there
are no judgments or Liens for Taxes with respect to the Company and no claim is being asserted with respect to the Taxes of the
Company.


 


Section
6.02.     Representations Regarding the Portfolio Investments. The Company represents
to the other parties hereto that:


 


(a)       both
as of the related Trade Date and the Settlement Date for each Portfolio Investment, such Portfolio Investment meets all of the
applicable Eligibility Criteria (unless otherwise consented to by the Administrative Agent);


 


(b)       all
of the conditions to the acquisition of the Portfolio Investments specified in Section 1.03 of this Agreement have been satisfied;


 


(c)       all
of the information contained in the related Approval Request is true, correct and complete, provided that, to the extent any such
information was furnished to the Company by any third party or was not prepared by or under the direction of the Company, such
information is as of its delivery date true, complete and correct to the knowledge of the Company;


 


(d)       the
Company has good and marketable title to such Collateral free and clear of any Adverse Claim (other than Permitted Liens) or restrictions
on transferability and the Company has the full right, power and lawful authority to assign, transfer and pledge the same and
interests therein, and upon the making of each Advance, the Collateral Agent, for the benefit of the Secured Parties, will have
acquired a perfected, first priority and valid security interest (except, as to priority, for any Permitted Liens) in such Collateral,
free and clear of any Adverse Claim (other than Permitted Liens) or restrictions on transferability, to the extent (as to perfection
and priority) that a security interest in said Collateral may be perfected under the applicable UCC; and


 


(e)        the
Company has not pledged, assigned, sold, granted a security interest in or otherwise encumbered or conveyed any interest in any
of the Collateral and no effective financing statement (other than with respect to Permitted Liens) or other instrument similar
in effect naming or purportedly naming the Company or any of its Affiliates as debtor and covering all or any part of the Collateral
is on file in any recording office, except such as may have been filed in favor of the Collateral Agent as “Secured Party”
pursuant hereto or as necessary or advisable in connection with the Sale Agreement;.


 






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Section
6.03.      Covenants of the Company.


 


The
Company:


 


(a)        shall
at all times: (i) maintain at least one independent manager or director (who is in the business of serving as an independent manager
or director); (ii) maintain its own separate books and records and bank accounts; (iii) hold itself out to the public and all
other Persons as a legal entity separate from any other Person; (iv) have a board of managers separate from that of any other
Person; (v) file its own Tax returns, except to the extent that the Company is treated as a “disregarded entity” for
Tax purposes and is not required to file Taxes under Applicable Law, and pay any Taxes so required to be paid under Applicable
Law, except for those Taxes being contested in good faith by appropriate proceedings and in respect of which the Company has established
proper reserves on its books in accordance with GAAP; (vi) not commingle its assets with assets of any other Person; (vii) conduct
its business in its own name and strictly comply with all organizational formalities to maintain its separate existence; (viii)
maintain separate financial statements; provided, however, that the Company’s assets may be included in a consolidated financial
statement of its Affiliate if (A) appropriate notation shall be made on such consolidated financial statements to indicate the
separateness of the Company from such Affiliate and to indicate that the Company’s assets and credit are not available to
satisfy the debts and other obligations of such Affiliate or any other Person and (B) such assets shall also be listed on the
Company’s own separate balance sheet (if the Company prepares its own separate balance sheet); (ix) pay its own liabilities
only out of its own funds; (x) maintain an arm’s length relationship with Parent and each of its other Affiliates; (xi)
not hold out its credit or assets as being available to satisfy the obligations of others; (xii) allocate fairly and reasonably
any overhead expenses that are shared with an Affiliate, including for shared office space; (xiii) use separate stationery, invoices
and checks; (xiv) except as expressly permitted by this Agreement, not pledge its assets as security for the obligations of any
other Person; (xv) correct any known misunderstanding regarding its separate identity; (xvi) maintain adequate capital in light
of its contemplated business purpose, transactions and liabilities and pay its operating expenses and liabilities from its own
assets; (xvii) cause its board of managers to meet at least annually or act pursuant to written consent and keep minutes of such
meetings and actions and observe in all respects all other requirements under its constituent documents and Delaware limited liability
company formalities; (xviii) not acquire the obligations or any securities of its Affiliates; (xix) cause the managers, officers,
agents and other representatives of the Company to act at all times with respect to the Company consistently and in furtherance
of the foregoing and in the best interests of the Company; and (xx) maintain at least one special member, who, upon the dissolution
of the sole member or the withdrawal or the disassociation of the sole member from the Company, shall immediately become the member
of the Company in accordance with its organizational documents.


 


(b)      shall
not (i) engage, directly or indirectly, in any business, other than the actions required or permitted to be performed under the
preceding clause (a), including, other than with respect to any warrants received in connection with a Portfolio Investment, controlling
the decisions or actions respecting the daily business or affairs of any other Person except as otherwise permitted hereunder;
(ii) fail to be solvent; (iii) release, sell, transfer, convey or assign any Portfolio Investment unless in accordance with the
Loan Documents; (iv) except for capital contributions or capital distributions permitted under the terms and conditions of this
Agreement and properly reflected on the books and records of the Company, enter into any transaction with an Affiliate of the
Company except on commercially reasonable terms similar to those available to unaffiliated parties in an arm’s-length transaction;
(v) identify itself as a department or division of any other Person; or (vi) own any asset or property other than the Portfolio
and the related assets and incidental personal property necessary for the ownership or operation of these assets.


 






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(c)       shall
take all actions consistent with and shall not take any action contrary to the “Assumptions and Facts” section in
the opinions of Dechert LLP, dated the date hereof, relating to certain nonconsolidation and true sale matters;


 


(d)       shall
not create, incur, assume or suffer to exist any Indebtedness other than Indebtedness permitted under the Loan Documents. The
Company shall incur no Indebtedness secured by the Collateral other than the Secured Obligations. The Company shall not assume,
guarantee, endorse or otherwise be or become directly or contingently liable for the obligations of any Person by, among other
things, agreeing to purchase any obligation of another Person, agreeing to advance funds to such Person or causing or assisting
such Person to maintain any amount of capital, other than as expressly permitted under the Loan Documents;


 


(e)       shall
comply with Anti-Corruption Laws and applicable Sanctions;


 


(f)       shall
not amend any of its constituent documents or any document to which it is a party in any manner that could reasonably be expected
to, or that does, adversely affect the Lenders in any material respect without the prior written consent of the Administrative
Agent and the Required Financing Providers;


 


(g)       shall
not amend the Special Purpose Provisions (as defined therein) of its limited liability company agreement, except in accordance
therewith, without the prior written consent of the Administrative Agent and the Required Financing Providers;


 


(h)      shall
not, without the prior consent of the Administrative Agent (acting at the direction of the Required Financing Providers), which
consent may be withheld in the sole and absolute discretion of the Required Financing Providers, enter into any hedge agreement;


 


(i)       shall
not change its name, identity or corporate structure in any manner that would make any financing statement or continuation statement
filed by the Company (or by the Collateral Agent on behalf of the Company) in accordance with subsection (a) above seriously misleading
or change its jurisdiction of organization, unless the Company shall have given the Administrative Agent and the Collateral Agent
at least 30 days prior written notice thereof, and shall promptly file, or authorize the filing of, appropriate amendments to
all previously filed financing statements and continuation statements (and shall provide a copy of such amendments to the Collateral
Agent and Administrative Agent together with written confirmation to the effect that all appropriate amendments or other documents
in respect of previously filed statements have been filed);


 


(j)        shall
do or cause to be done all things necessary to (i) preserve and keep in full force and effect its existence as a limited liability
company and take all reasonable action to maintain its rights, franchises, licenses and permits material to its business in the
jurisdiction of its formation and (ii) qualify and remain qualified as a limited liability company in good standing in each jurisdiction
where the failure to qualify and remain qualified would reasonably be expected to have a Material Adverse Effect;


 









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(k)      shall
comply with all Applicable Law (whether statutory, regulatory or otherwise), the noncompliance with which could reasonably be
expected to have, individually or collectively, a Material Adverse Effect;


 


(l)        shall
not merge into or consolidate with any person or dissolve, terminate or liquidate in whole or in part, in each case, without the
prior written consent of the Administrative Agent;


 


(m)     except
for Investments permitted by Section 6.03(u) and without the prior written consent of the Administrative Agent, shall not form,
or cause to be formed, any Subsidiaries; or make or suffer to exist any loans or advances to, or extend any credit to, or make
any investments (by way of transfer of property, contributions to capital, purchase of stock or securities or evidences of indebtedness,
acquisition of the business or assets, or otherwise) in, any Affiliate or any other Person except investments as otherwise permitted
herein and pursuant to the other Loan Documents;


 


(n)      shall
ensure that (i) its affairs are conducted so that its underlying assets do not constitute “plan assets” within the
meaning of the Plan Asset Rules, and (ii) neither it nor any ERISA Affiliate sponsors, maintains, contributes to or is required
to contribute to or have any liability with respect to any Plan;


 


(o)      except
for the security interest granted hereunder and as otherwise permitted hereunder, shall not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any Lien on the Collateral or any interest therein (other
than Permitted Liens), and the Company shall defend the right, title, and interest of the Collateral Agent (for the benefit of
the Secured Parties) and the Lenders in and to the Collateral against all claims of third parties claiming through or under the
Company (other than Permitted Liens);


 


(p)      shall
promptly furnish to the Administrative Agent, and the Administrative Agent shall furnish to the Lenders, copies of the following
financial statements, reports and information: (i) as soon as available, but in any event within 120 days after the end of each
fiscal year of Parent, a copy of the audited consolidated and consolidating balance sheet of Parent and its consolidated Subsidiaries
as at the end of such year, the related consolidated and consolidating statements of income for such year and the related consolidated
statements of changes in net assets and of cash flows for such year, setting forth in each case in comparative form the figures
for the previous year; provided, that the financial statements required to be delivered pursuant to this clause (i) which are
made available via EDGAR, or any successor system of the Securities Exchange Commission, in Parent’s annual report on Form
10-K, shall be deemed delivered to the Administrative Agent on the date such documents are made so available; (ii) as soon as
available and in any event within 45 days after the end of each fiscal quarter of each fiscal year (other than the last fiscal
quarter of each fiscal year), an unaudited consolidated and consolidating balance sheet of Parent and its consolidated Subsidiaries
as of the end of such fiscal quarter and including the prior comparable period (if any), and the unaudited consolidated and consolidating
statements of income of Parent and its consolidated Subsidiaries for such fiscal quarter and for the period commencing at the
end of the previous fiscal year and ending with the end of such fiscal quarter, and the unaudited consolidated statements of cash
flows of Parent and its consolidated Subsidiaries for the period commencing at the end of the previous fiscal year and ending
with the end of such fiscal quarter; provided, that the financial statements required to be delivered pursuant to this clause
(ii) which are made available via EDGAR, or any successor system of the Securities Exchange Commission, in Parent’s quarterly
report on Form 10-Q, shall be deemed delivered to the Administrative Agent on the date such documents are made so available; and
(iii) from time to time, such other information or documents (financial or otherwise) as the Administrative Agent or the Required
Financing Providers may reasonably request;


 









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(q)      shall
pay or discharge or cause to be paid or discharged, before the same shall become delinquent, all Taxes levied or imposed upon
the Company or upon the income, profits or property of the Company; provided that the Company shall not be required to
pay or discharge or cause to be paid or discharged any such Tax (i) the amount, applicability or validity of which is being contested
in good faith by appropriate proceedings and for which disputed amounts adequate reserves in accordance with GAAP have been made
or (ii) the failure of which to pay or discharge could not reasonably be expected to have a Material Adverse Effect;


 


(r)       shall
permit representatives of the Administrative Agent at any time and from time to time as the Administrative Agent shall reasonably
request (A) to inspect and make copies of and abstracts from its records relating to the Portfolio Investments and (B) to visit
its properties in connection with the collection, processing or managing of the Portfolio Investments for the purpose of examining
such records, and to discuss matters relating to the Portfolio Investments or such Person’s performance under this Agreement
and the other Loan Documents with any officer or employee or auditor (if any) of such Person having knowledge of such matters.
The Company agrees to render to the Administrative Agent such clerical and other assistance as may be reasonably requested with
regard to the foregoing; provided, that such assistance shall not interfere in any material respect with the Company’s or
the Investment Manager’s business and operations. So long as no Event of Default has occurred and is continuing, such visits
and inspections shall occur only (i) upon five (5) Business Days’ prior written notice, (ii) during normal business hours
and (iii) no more than once in any calendar year. During the existence of an Event of Default, there shall be no limit on the
timing or number of such inspections and only one (1) Business Day’ prior notice will be required before any inspection;


 


(s)       [RESERVED];


 


(t)       shall
not make any Restricted Payments without the prior written consent of the Administrative Agent; provided that the Company
may make Permitted Distributions so long as no Default or Event of Default has occurred and is continuing (or would occur after
giving effect to such Permitted Distribution) and the Company gives at least two (2) Business Days’ prior written notice
thereof to the Administrative Agent; 


 


(u)      shall
not make or hold any Investments, except the Portfolio Investments or Investments (A) constituting Eligible Investments, (B) that
have been consented to by the Administrative Agent or (C) those the Company shall have acquired or received as a distribution
in connection with a workout, bankruptcy, foreclosure, restructuring or similar process or proceeding involving a Portfolio Investment
or any issuer thereof;


 









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(v)      shall
not request any Advance, and the Company shall not directly, or to the knowledge of the Company, indirectly, use, and shall procure
that its agents shall not directly, or to the knowledge of the Company, indirectly, use, the proceeds of any Advance (A) in furtherance
of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person
in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or
transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (C) in any manner that would result in the violation
of any Sanctions applicable to any party hereto;


 


(w)      shall
not cancel, terminate or consent to or accept any cancellation or termination of, amend, modify or change in any manner any term
or condition of the Management Agreement in any manner that adversely affects the Lenders in any material respect;


 


(x)       other
than pursuant to the Sale Agreement, shall not (A) transfer to any of its Affiliates any Portfolio Investment purchased from any
of its Affiliates (other than sales to Affiliates conducted on terms and conditions consistent with those of an arm’s length
transaction at fair market value so long as the Investment Manager obtains bid prices from at least two nationally recognized
dealers (unaffiliated with the Investment Manager or its Affiliates) for such Portfolio Investment) or (B) enter into any other
transaction with any of its Affiliates, other than any transaction on terms that are no less favorable than those obtainable in
an arm’s-length transaction with a wholly unaffiliated Person and on terms that are fair and equitable to the Company under
all the facts or circumstances under Applicable Law;


 


(y)      shall
cause the Investment Manager to furnish to the Administrative Agent, with respect to each obligor, within fifteen (15) Business
Days of the completion of the Investment Manager’s portfolio review of such obligor (which, for any individual obligor,
shall occur no less frequently than quarterly), without duplication of any other reporting requirements set forth in this Agreement
or any other Loan Document, any financial reporting packages with respect to such obligor and with respect to each Portfolio Investment
for such obligor (including any attached or included information, statements and calculations) received by the Company and/or
the Investment Manager as of the date of the completion of such review. In no case, however, shall the Investment Manager be obligated
hereunder to deliver such obligor reports to the Administrative Agent more than once per quarter. Upon demand by the Administrative
Agent, the Company shall cause the Investment Manager to provide such other information as the Administrative Agent may reasonably
request with respect to any Portfolio Investment or obligor (to the extent reasonably available to the Investment Manager);


 


(z)       shall
not elect to be classified as other than a disregarded entity or partnership for U.S. federal income Tax purposes, nor shall the
Company take any other action or actions that would cause it to be classified, taxed or treated as a corporation or publicly traded
partnership taxable as a corporation for U.S. federal income Tax purposes (including transferring interests in the Company on
or through an established securities market or secondary market (or the substantial equivalent thereof), within the meaning of
Section 7704(b) of the Code (and Treasury regulations thereunder);


 









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(aa)      shall
only have partners or owners that are treated as U.S. Persons or that are disregarded entities owned by a U.S. Person and shall
not recognize the transfer of any interest in the Company that constitutes equity for U.S. federal income Tax purposes to a person
that is not a U.S. Person;


 


(bb)     shall
from time to time execute and deliver all such supplements and amendments hereto and all such financing statements, continuation
statements, instruments of further assurance and other instruments, and shall take such other action as may be reasonably necessary
to secure the rights and remedies of the Secured Parties hereunder and to grant more effectively all or any portion of the Collateral,
maintain or preserve the security interest (and the priority thereof) of this Agreement or to carry out more effectively the purposes
hereof, perfect, publish notice of or protect the validity of any grant made or to be made by this Agreement, preserve and defend
title to the Collateral and the rights therein of the Collateral Agent and the Secured Parties in the Collateral and the Collateral
Agent against the claims of all persons and parties, pay any and all Taxes levied or assessed upon all or any part of the Collateral
and use its commercially reasonable efforts to minimize Taxes and any other costs arising in connection with its activities or
give, execute, deliver, file and/or record any financing statement, notice, instrument, document, agreement or other papers that
may be necessary or desirable to create, preserve, perfect or validate the security interest granted pursuant to this Agreement
or to enable the Collateral Agent to exercise and enforce its rights hereunder with respect to such pledge and security interest,
and hereby authorizes the Collateral Agent to file a UCC financing statement listing ‘all assets of the debtor’ in
the collateral description of such financing statement;


 


(cc)      shall
not (A) permit the validity or effectiveness of this Agreement or any grant hereunder to be impaired, or permit the lien of this
Agreement to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants
or obligations with respect to this Agreement or the Advances, except as may be expressly permitted hereby, (B) permit any lien,
charge, adverse claim, security interest, mortgage or other encumbrance (including any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever or otherwise, other than the lien of this Agreement) to
be created on or extend to or otherwise arise upon or burden the Collateral or any part thereof, any interest therein or the proceeds
thereof, in each case, other than Permitted Liens, or (C) take any action that would cause the lien of this Agreement not to constitute
a valid perfected security interest in the Collateral that is of first priority, free of any adverse claim or the legal equivalent
thereof, as applicable, except as may be expressly permitted hereby (or in connection with a disposition of Collateral required
hereby);


 


(dd)       shall
not make or incur any capital expenditures, except as reasonably required to perform its functions in accordance with the terms
of this Agreement;


 


(ee)      shall
not become liable in any way, whether directly or by assignment or as a guarantor or other surety, for the obligations of a lessee
under any lease, hire any employees or make any distributions (other than in accordance with this Agreement);


 









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(ff)       shall
not maintain any bank accounts other than the Accounts;


 


(gg)     shall
not authorize or otherwise permit the Investment Manager to act in contravention of the representations, warranties and agreements
of the Investment Manager under any Loan Document;


 


(hh)     shall
not act on behalf of, a country, territory, entity or individual of prohibited countries, territories, entities and individuals
listed on, among other places, the OFAC website, and none of the Company, the Investment Manager or any of their respective Affiliates,
owners, directors or officers is a natural person or entity with whom dealings with U.S. persons or persons under the jurisdiction
of the United States are prohibited under any OFAC regulation or other applicable federal law or acting on behalf of such a person
or entity. The Company does not own and will not acquire, and the Investment Manager will not cause the Company to own or acquire,
any security issued by, or interest in, any country, territory, or entity whose direct ownership by U.S. persons or persons under
the jurisdiction of the U.S. would be or is prohibited under any OFAC regulation or other applicable federal law;


 


(ii)       except
as otherwise expressly permitted herein, shall not cancel or terminate any of the Loan Documents to which it is party (in any
capacity), or consent to or accept any cancellation or termination of any of such agreements, or amend or otherwise modify any
term or condition of any of the Loan Documents to which it is party (in any capacity) or give any consent, waiver or approval
under any such agreement, or waive any default under or breach of any of the Loan Documents to which it is party (in any capacity)
or take any other action under any such agreement not required by the terms thereof, unless (in each case) the Administrative
Agent shall have consented thereto in its sole discretion;


 


(jj)      shall,
and shall cause the Investment Manager to perform each of its obligations under this Agreement and the other Loan Documents and
comply with all Applicable Laws, including those applicable to the Portfolio Investments and the collection of all Interest Proceeds
and Principal Proceeds thereof, except to the extent that the failure to so comply would not reasonably be expected to have a
Material Adverse Effect; and


 


(kk)      shall
give notice to the Administrative Agent promptly in writing upon the occurrence of any of the following:


 


(i)       any
Adverse Proceeding; and


 


(ii)      any
Adverse Claim asserted against any of the Portfolio Investments, the Accounts or any other Collateral.


 


Section
6.04.      Amendments, Etc.


 


If the Company
or the Investment Manager receives any notice of an amendment, supplement, consent, waiver or other modification of any Portfolio
Investment or any related Underlying Instrument or rights thereunder (each, an “Amendment”) with respect to
any Portfolio Investment or any related Underlying Instrument, or makes any affirmative determination to exercise or refrain from
exercising any rights or remedies thereunder, it will give prompt (and in any event, not later than three (3) Business Days’)
notice thereof to the Administrative Agent. In any such event, the Company shall exercise all voting and other powers of ownership
relating to such Amendment or the exercise of such rights or remedies as the Investment Manager shall deem appropriate under the
circumstances. If an Event of Default has occurred and is continuing or a Coverage Event has occurred, the Company will exercise
all voting and other powers of ownership as the Administrative Agent (acting at the direction of the Required Financing Providers)
shall instruct (it being understood that if the terms of the related Underlying Instrument expressly prohibit or restrict any
such rights given to the Administrative Agent, then such right shall be limited to the extent necessary so that such prohibition
or restriction is not violated); and (b) the Company shall not take any action with respect to any Portfolio Investment that is
inconsistent with (and it agrees that it will not vote or otherwise exercise powers of ownership pertaining thereto in any manner
that is inconsistent with) the terms of this Agreement.


 









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ARTICLE
VII



EVENTS OF DEFAULT


 


If
any of the following events (“Events of Default”) shall occur:


 


(a)       the
Company shall fail to pay (i) any principal amount owing by it in respect of the Secured Obligations when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise or (ii) any other
amount in respect of the Secured Obligations (whether for interest, fees or other amounts owing by it) within two (2) Business
Days of when such amount becomes due and payable; or


 


(b)       any
representation or warranty made or deemed made by or on behalf of the Company, the Parent or the Investment Manager (collectively,
the “Credit Risk Parties”) herein or in any other Loan Document or any amendment or modification thereof or
waiver thereunder, or in any report, certificate, or other document furnished pursuant hereto or in connection herewith or any
amendment or modification thereof or waiver thereunder shall prove to have been false or incorrect in any material respect when
made or deemed to have been made and the same continues unremedied for a period of thirty (30) days (if such failure can be remedied)
after the earlier to occur of (i) the date on which written notice of such failure requiring the same to be remedied shall
have been given to the Company or the Investment Manager, and (ii) the date on which the Company or the Investment Manager
acquires knowledge thereof; or


 


(c)       (A)
  the Company shall fail to observe or perform any covenant, condition or agreement contained in Sections 6.03(a), (b),
(d), (f), (g), (h), (i), (l), (m), (o), (p), (t), (u), (v), (x), (ff)(B), (ff)(C) or (hh) or (B) any Credit Risk Party shall fail
to observe or perform any other covenant, condition or agreement contained herein (it being understood that the failure of a Portfolio
Investment to satisfy the Eligibility Criteria after the date of its purchase shall not constitute such a failure) or in any other
Loan Document and, in the case of this clause (B), if such failure is capable of being remedied, such failure shall not have been
remedied or waived within thirty (30) days after the earlier of (i) receipt by such Credit Risk Party of written notice of such
failure from the Administrative Agent and (ii) an officer of such Credit Risk Party becoming aware of such failure


 









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(d)      an
involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization
or other relief in respect of either the Company or the Investment Manager or its debts, or of a substantial part of its assets,
under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for either the Company or the Investment
Manager or for a substantial part of its assets, and, in each such case, such proceeding or petition shall continue undismissed
for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered; or


 


(e)       either
the Company or the Investment Manager shall (i) voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding
or petition described in clause (d) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Company or the Investment Manager, as applicable, or for a substantial
part of its assets, or (iv) make a general assignment for the benefit of creditors; or


 


(f)       any
Credit Risk Party shall become unable, admit in writing its inability or fail generally to pay its debts as they become due; or


 


(g)      the
Investment Manager resigns in accordance with the Investment Management Agreement as in effect on the Effective Date and an Affiliate
of the Investment Manager is not appointed (or has not accepted such appointment) or the Investment Management Agreement is subject
to termination in accordance with the Investment Management Agreement in each case; or


 


(h)      the
passing of a resolution by the equity holders of the Company in respect of the winding up on a voluntary basis of the Company;
or


 


(i)       any
final judgments or orders (not subject to appeal or otherwise non-appealable) by one or more courts of competent jurisdiction
for the payment of money in an aggregate amount in excess of $5,000,000 (after giving effect to insurance, if any, available with
respect thereto) shall be rendered against the Company, and the same shall remain unsatisfied, unvacated, unbonded or unstayed,
un-discharged or not set aside for a period of sixty (60) days after the date on which the right to appeal has expired; or


 


(j)        an
ERISA Event occurs; or


 


(k)       a
Change of Control occurs; or


 


(l)        the
Company, or the arrangements contemplated by the Loan Documents, shall become required to register as an “investment company”
within the meaning of the Investment Company Act of 1940, as amended; or


 


(m)       the
aggregate Advances do not equal the Financing Commitment at the end of the Ramp-Up Period; or


 









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(n)        (x)
the Company amends a Loan Document in a manner materially adverse to the Administrative Agent without the written consent of the
Administrative Agent, or (y) the Company or any other party to the Loan Documents disaffirms, disclaims, repudiates or rejects,
in whole or in part, or challenges the validity of, the Loan Documents; provided, notwithstanding the materiality limits contained
in subclause (x) above, the Company shall provide the Administrative Agent with notice of any amendment of the Loan Documents
at least two (2) Business Days prior to the execution thereof, regardless of whether such amendment will materially adversely
affect the Administrative Agent; or


 


(o)       GSO
/ Blackstone Debt Funds Management LLC or an Affiliate of GSO / Blackstone Debt Funds Management LLC ceases to be the investment
sub-advisor of FS Investment Corporation III; then, and in every such event (other than an event with respect to the Company described
in clause (d) or (e) of this Article), and at any time thereafter in each case during the continuance of such event, the Administrative
Agent may, and at the request of the Required Financing Providers shall, by notice to the Company, take either or both of the
following actions, at the same or different times: (i) terminate the Financing Commitments, and thereupon the Financing Commitments
shall terminate immediately, and (ii) declare all of the Secured Obligations then outstanding to be due and payable in cash
in whole (or in part, in which case any Secured Obligations not so declared to be due and payable may thereafter be declared to
be due and payable), and thereupon the Secured Obligations so declared to be due and payable, together with accrued interest thereon
and all fees and other obligations of the Company accrued hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by the Company; and in case of any event with respect
to the Company described in clause (d) or (e) of this Article, the Financing Commitments shall automatically terminate and all
Secured Obligations then outstanding, together with accrued interest thereon and all fees and other obligations of the Company
accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Company.


 


ARTICLE
VIII



ACCOUNTS; COLLATERAL SECURITY


 


Section
8.01.     The Accounts; Agreement as to Control.


 


(a)       Establishment
and Maintenance of Accounts. The Company has directed and the Securities Intermediary hereby acknowledges that it has established
(1) an account designated as the “Custodial Account”; (2) an account designated as the “CE Cure Account”;
(3) an account designated as the “Interest Collection Account” and (4) an account designated as the “Principal
Collection Account” (the Custodial Account, CE Cure Account, Interest Collection Account and Principal Collection Account,
each, an “Account” and, collectively, the “Accounts”), and the account numbers for the Accounts
are set forth on the Transaction Schedule. The Securities Intermediary agrees to maintain each of the Accounts as a securities
intermediary in the name of the Company subject to the lien of the Collateral Agent under this Agreement, and agrees not to change
the name or account number of any Account without the prior consent of the Collateral Agent. The Securities Intermediary hereby
certifies that it is a bank or trust company that in the ordinary course of business maintains securities accounts for others
and in that capacity has established the Accounts in the name of the Company.



 









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Nothing
herein shall require the Securities Intermediary to credit to any Account or to treat as a financial asset (within the meaning
of Section 8-102(a)(9) of the UCC) any asset in the nature of a general intangible (as defined in Section 9-102(a)(42) of the
UCC) or to “maintain” a sufficient quantity thereof (within the meaning of Section 8-504 of the UCC). Notwithstanding
any term hereof or elsewhere to the contrary, it is hereby expressly acknowledged that (a) interests in loans may be acquired
and delivered by the Company to the Securities Intermediary or the Collateral Agent from time to time that are not evidenced by,
or accompanied by delivery of, a security (as that term is defined in UCC Section 8-102) or an instrument (as that term is defined
in Section 9-102(a)(47) of the UCC), and may be evidenced solely by delivery to the Collateral Agent of a facsimile copy of a
loan agreement, participation agreement or an assignment agreement (“Loan/Assignment Agreement”) in favor of
the Company, (b) any such Loan/Assignment Agreement (and the registration of the related loan on the books and records of the
applicable obligor or bank agent) shall be registered in the name of the Company and (c) any duty on the part of the Securities
Intermediary or Collateral Agent with respect to such loan (including in respect of any duty it might otherwise have to maintain
a sufficient quantity of such loan for purposes of UCC Section 8-504) shall be limited to the exercise of reasonable care by the
Collateral Agent in the physical custody of any such Loan/Assignment Agreement that may be delivered to it. It is acknowledged
and agreed that neither the Collateral Agent nor the Securities Intermediary is under a duty to examine Underlying Instruments
to determine the validity or sufficiency of any Loan/Assignment Agreement (and shall have no responsibility for the genuineness
or completeness thereof), or for the issuer’s title to any related loan.


 


(b)       Collateral
Agent in Control of Securities Accounts. Each of the parties hereto hereby agrees that (1) each Account shall be deemed to
be a “securities account” (within the meaning of Section 8-501 of the UCC in effect in the State of New York), (2)
all property credited to any Account shall be treated as a financial asset for purposes of Article 8 of the UCC and (3) except
as otherwise expressly provided herein, the Collateral Agent will be exclusively entitled to exercise the rights that comprise
each financial asset credited to each Account. The parties hereto agree that the Securities Intermediary shall act only on entitlement
orders or other instructions with respect to the Accounts originated by the Collateral Agent and no other person (and without
further consent by any other person); and the Collateral Agent, for the benefit of the Secured Parties, shall have exclusive control
and the sole right of withdrawal over each Account. The only permitted withdrawals from the Accounts shall be in accordance with
the provisions of this Agreement.


 


(c)       Subordination
of Lien, Etc. If the Securities Intermediary has or subsequently obtains by agreement, operation of law or otherwise a security
interest in any Account or any security entitlement credited thereto, the Securities Intermediary hereby agrees that such security
interest shall be subordinate to the security interest of the Collateral Agent. The property credited to any Account will not
be subject to deduction, set-off, banker’s lien, or any other right in favor of any person other than the Collateral Agent
(except that the Securities Intermediary may set-off (1) all amounts due to the Securities Intermediary in respect of its customary
fees and expenses for the routine maintenance and operation of the Accounts, and (2) the face amount of any checks which
have been credited to any Account but are subsequently returned unpaid because of uncollected or insufficient funds).


 









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(d)      Property
Registered, Indorsed, etc. to Securities Intermediary. All securities or other property underlying any financial assets credited
to any Account shall be registered in the name of the Securities Intermediary, indorsed to the Securities Intermediary in blank
or credited to another securities account maintained in the name of the Securities Intermediary, and in no case will any financial
asset credited to any Account be registered in the name of the Company, payable to the order of the Company or specially indorsed
to the Company except to the extent the foregoing have been specially indorsed to the Securities Intermediary or in blank.


 


(e)       Jurisdiction;
Governing Law of Accounts. The establishment and maintenance of each Account and all interests, duties and obligations related
thereto shall be governed by the law of the State of New York and the “securities intermediary’s jurisdiction”
(within the meaning of Section 8-110 of the UCC) shall be the State of New York. Terms used in this Section 8.01 without definition
have the meanings given to them in the UCC.


 


(f)        No
Duties. The parties hereto acknowledge and agree that the Securities Intermediary shall not have any additional duties other
than those expressly set forth in this Section 8.01, and the Securities Intermediary shall satisfy those duties expressly set
forth in this Section 8.01 so long as it acts without gross negligence or willful misconduct. Without limiting the generality
of the foregoing, the Securities Intermediary shall not be subject to any fiduciary or other implied duties, and the Securities
Intermediary shall not have any duty to take any discretionary action or exercise any discretionary powers.


 


Section
8.02.     Collateral Security; Pledge; Delivery.


 


(a)       Grant
of Security Interest. As collateral security for the prompt payment in full when due of all the Company’s obligations
to the Agents and the Lenders (collectively, the “Secured Parties”) under this Agreement (collectively, the
“Secured Obligations”), the Company hereby pledges, hypothecates, assigns, charges, mortgages, delivers, and
transfers the Collateral to the Collateral Agent, including a continuing first priority security interest in favor of the Collateral
Agent in all of the Company’s right, title and interest in, to and under (in each case, whether now owned or existing, or
hereafter acquired or arising) all accounts, payment intangibles, general intangibles, chattel paper, electronic chattel paper,
instruments, deposit accounts, letter-of-credit rights, investment property, and any and all other assets or property of any type
or nature owned by it (all of the property described in this clause (a) being collectively referred to herein as “Collateral”),
including: (1) each Portfolio Investment, (2) the Accounts and all investments, obligations and other property from time to time
credited thereto, (3) the Investment Management Agreement and all rights relating thereto, (4) the Sale Agreement and all rights
related thereto, (5) all other property of the Company and (6) all proceeds thereof, all accessions to and substitutions and replacements
for, any of the foregoing, and all rents, profits and products of any thereof.


 









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Notwithstanding
any provision of any Loan Document to the contrary, no interests in or of any Foreign Subsidiary of the Company shall be pledged
or similarly hypothecated to guarantee or support any obligations of the Company; provided, that this exception shall not apply
to a pledge of equity interests of any first tier Foreign Subsidiary representing sixty-five percent (65%) or less of the voting
equity interests and 100% or less of the non-voting equity interests of such Foreign Subsidiary. The parties agree that any pledge,
guaranty or security or similar interest made or granted in contravention of the immediately preceding sentence shall be void
ab initio.


 


(b)      Delivery
and Other Perfection. In furtherance of the collateral arrangements contemplated herein, the Company shall (1) Deliver to
the Collateral Agent the Collateral hereunder as and when acquired by the Company; and (2) if any of the securities, monies or
other property pledged by the Company hereunder are received by the Company, forthwith take such action as is necessary to ensure
the Collateral Agent’s continuing perfected security interest in such Collateral (including Delivering such securities,
monies or other property to the Collateral Agent).


 


(c)       Remedies,
Etc. During the period in which an Event of Default shall have occurred and be continuing, the Collateral Agent shall (but
only if and to the extent directed in writing by the Required Financing Providers) do any of the following:


 


(1)       Exercise
in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the
rights and remedies of a secured party under the UCC (whether or not the UCC applies to the affected Collateral) and also may,
without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private
sale, at any of the Collateral Agent’s offices or elsewhere, for cash, on credit or for future delivery, and upon such other
terms as the Collateral Agent (acting at the direction of the Required Financing Providers) may deem commercially reasonable.
The Company agrees that, to the extent notice of sale shall be required by law, at least ten (10) days’ prior notice to
the Company of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any sale of the Collateral regardless of notice of sale having
been given. The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.


 


(2)       Transfer
all or any part of the Collateral into the name of the Collateral Agent or a nominee thereof.


 


(3)        Enforce
collection of any of the Collateral by suit or otherwise, and surrender, release or exchange all or any part thereof, or compromise
or extend or renew for any period (whether or not longer than the original period) any obligations of any nature of any party
with respect thereto.


 


(4)        Endorse
any checks, drafts, or other writings in the Company’s name to allow collection of the Collateral.


 


(5)        Take
control of any proceeds of the Collateral.


 









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(6)        Execute
(in the name, place and stead of any of the Company) endorsements, assignments, stock powers and other instruments of conveyance
or transfer with respect to all or any of the Collateral.


 


(7)        Perform
such other acts as may be reasonably required to do to protect the Collateral Agent’s rights and interest hereunder.


 


In
connection with the sale of Portfolio Investments by any Agent in accordance with the terms of this Section 8.02(c), subject to
the limitations set forth therein, the provisions set forth in the second paragraph of Section 1.04 regarding the sale of Portfolio
Investments by an Agent shall apply to any such sale hereunder.


 


After
the termination of the Financing Commitments and the payment in full in cash of the Secured Obligations, any remaining proceeds
of any sale or transfer of the Collateral shall be delivered to the Company.


 


(d)     Compliance
with Restrictions. The Company agrees that in any sale of any of the Collateral whenever an Event of Default shall have occurred
and be continuing, the Collateral Agent is hereby authorized to comply with any limitation or restriction in connection with such
sale as it may be advised by counsel is necessary in order to avoid any violation of Applicable Law (including compliance with
such procedures as may restrict the number of prospective bidders and purchasers, require that such prospective bidders and purchasers
have certain qualifications, and restrict such prospective bidders and purchasers to persons who will represent and agree that
they are purchasing for their own account for investment and not with a view to the distribution or resale of such Collateral),
or in order to obtain any required approval of the sale or of the purchaser by any governmental regulatory authority or official,
and the Company further agrees that such compliance shall not, in and of itself, result in such sale being considered or deemed
not to have been made in a commercially reasonable manner, nor shall the Collateral Agent be liable or accountable to the Company
or the Investment Manager for any discount allowed by the reason of the fact that such Collateral is sold in compliance with any
such limitation or restriction.


 


(e)       Private
Sale. The Collateral Agent shall incur no liability as a result of a sale of the Collateral, or any part thereof, at any private
sale pursuant to clause (c) above conducted in a commercially reasonable manner. In the absence of fraud, gross negligence or
willful misconduct, the Company hereby waives any claims against each Agent and Financing Provider arising by reason of the fact
that the price at which the Collateral may have been sold at such a private sale was less than the price which might have been
obtained at a public sale.


 


(f)       Collateral
Agent Appointed Attorney-in-Fact. The Company hereby appoints the Collateral Agent as the Company’s attorney-in-fact
(it being understood that the Collateral Agent shall not be deemed to have assumed any of the obligations of the Company by this
appointment), with full authority in the place and stead of the Company and in the name of the Company, from time to time in the
Collateral Agent’s discretion (exercised at the written direction of the Administrative Agent or the Required Financing
Providers, as the case may be), after the occurrence and during the continuation of an Event of Default, to take any action and
to execute any instrument which the Administrative Agent or the Required Financing Providers may deem necessary or advisable to
accomplish the purposes of this Agreement. The Company hereby acknowledges, consents and agrees that the power of attorney granted
pursuant to this clause is irrevocable during the term of this Agreement and is coupled with an interest.


 









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(g)      Further
Assurances. The Company covenants and agrees that, from time to time upon the request of the Collateral Agent (as directed
by the Administrative Agent), the Company will execute and deliver such further documents, and do such other acts and things as
the Collateral Agent (as directed by the Administrative Agent) may reasonably request in order fully to effect the purposes of
this Agreement and to protect and preserve the priority and validity of the security interest granted hereunder or to enable the
Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to any Collateral.


 


(h)     Termination.
Upon the payment in full in cash of all Secured Obligations, the security interest granted herein shall automatically (and without
further action by any party) terminate and all rights to the Collateral shall revert to the Company. Upon any such termination,
the Collateral Agent will, at the Company’s sole expense, deliver to the Company, or cause the Securities Intermediary to
deliver, without any representations, warranties or recourse of any kind whatsoever, all certificates and instruments representing
or evidencing all of the Collateral held by the Securities Intermediary hereunder, and execute and deliver to the Company or its
nominee such documents as the Company shall reasonably request to evidence such termination.


 


Section
8.03.     Accountings.


 


(a)       Daily
Reports. On each Business Day, commencing on May 12, 2015, the Company shall compile and provide (or cause to be compiled
and provided) to the Agents and the Lenders, a position report (each, a “Position Report”) and a cash flow
report (the “Cash Flow Report”) for the previous Business Day. The Position Report shall be substantially in
the form set forth in Schedule 6 and the Cash Flow Report shall contain such information as the Administrative Agent shall reasonably
request. For the avoidance of doubt, the Company has engaged the Collateral Administrator pursuant to the Collateral Administration
Agreement to compile and provide the information and reports to be provided in this Section 8.03.


 


(b)      Cooperation.
The Company shall cause the Investment Manager to cooperate with the Collateral Administrator in the preparation of the reports
to be delivered under this Section 8.03. Without limiting the generality of the foregoing, the Company shall cause the Investment
Manager to supply in a timely fashion any information maintained by it that the Collateral Administrator may from time to time
reasonably request with respect to the Portfolio Investments and any information reasonably necessary to complete the reports
to be prepared by the Collateral Administrator hereunder or required to permit the Collateral Administrator to perform its obligations
hereunder.


 


Section
8.04.    Additional Reports. In addition to the information and reports specifically
required to be provided pursuant to the terms of this Agreement, the Company (at its expense), or the Collateral Administrator,
at the direction of the Company, shall compile and the Company shall then provide the Administrative Agent with all information
or reports, and such additional information as the Administrative Agent may from time to time reasonably request and the Company
shall reasonably determine may be obtained and provided without unreasonable burden or expense.


 









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ARTICLE
IX



THE AGENTS


 


Section
9.01.     Appointment of Administrative Agent and Collateral Agent.


 


Each
of the Financing Providers hereby irrevocably appoints each of the Administrative Agent and the Collateral Agent (each, an “Agent”
and collectively, the “Agents”) as its agent and authorizes such Agent to take such actions on its behalf and
to exercise such powers as are delegated to such Agent by the terms hereof, together with such actions and powers as are reasonably
incidental thereto. Anything contained herein to the contrary notwithstanding, each Agent and each Financing Provider hereby agree
that no Financing Provider shall have any right individually to realize upon any of the Collateral hereunder, it being understood
and agreed that all powers, rights and remedies hereunder with respect to the Collateral shall be exercised solely by the Collateral
Agent for the benefit of the Secured Parties in accordance with the terms of this Agreement.


 


Each
financial institution serving as an Agent hereunder shall have the same rights and powers in its capacity as a Financing Provider
(if applicable) as any other Financing Provider and may exercise the same as though it were not an Agent, and such financial institution
and its affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Company as if
it were not an Agent hereunder.


 


No
Agent shall have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing,
(a) no Agent shall be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and
is continuing, (b) no Agent shall have any duty to take any discretionary action or exercise any discretionary powers, except
that the foregoing shall not limit any duty expressly set forth in this Agreement to include such rights and powers expressly
contemplated hereby that such Agent is required to exercise in writing as directed by (i) in the case of the Collateral Agent
(A) in respect of the exercise of remedies under Section 8.02(c), the Required Financing Providers, or (B) in all other cases,
the Administrative Agent or (ii) in the case of any Agent, the Required Financing Providers (or such other number or percentage
of the Financing Providers as shall be necessary under the circumstances as provided herein), and (c) except as expressly set
forth herein, no Agent shall have any duty to disclose, and shall not be liable for the failure to disclose, any information relating
to the Company that is communicated to or obtained by the financial institution serving in the capacity of such Agent or any of
its affiliates in any capacity. The Collateral Agent shall not be liable for any action taken or not taken by it in the absence
of its own gross negligence or willful misconduct or with the consent or at the request or direction of the Administrative Agent
or the Required Financing Providers (or such other number or percentage of the Financing Providers that shall be permitted herein
to direct such action or forbearance). No Agent shall be liable for any action taken or not taken by it in the absence of its
own gross negligence or willful misconduct or with the consent or at the request or direction of the Administrative Agent (in
the case of the Collateral Administrator and the Collateral Agent only) or the Required Financing Providers (or such other number
or percentage of the Financing Providers that shall be permitted herein to direct such action or forbearance). Each Agent shall
be deemed not to have knowledge of any Default unless and until written notice thereof is given to it by the Company or a Financing
Provider, and no Agent shall 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, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or observance of any of the covenants, agreements or
other terms or conditions set forth herein, (iv) the validity, enforceability, effectiveness, genuineness, value or sufficiency
of this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth herein,
other than to confirm receipt of items expressly required to be delivered to such Agent. No Agent shall be required to risk or
expend its own funds in connection with the performance of its obligations hereunder if it reasonably believes it will not receive
reimbursement therefor hereunder.


 









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Each
Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, direction, opinion, document or other writing believed by it to be genuine and to have been signed or sent
by the proper person. Each Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made
by the proper person, and shall not incur any liability for relying thereon. Each Agent may consult with legal counsel (who may
be counsel for the Company), 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 or be responsible for the misconduct
or negligence of attorneys appointed by it with due care.


 


In
the event the Collateral Agent or the Collateral Administrator shall receive conflicting instruction from the Administrative Agent
and the Required Financing Providers, the instruction of the Required Financing Providers shall govern. Neither the Collateral
Administrator nor the Collateral Agent shall have any duties or obligations under or in respect of any other agreement (including
any agreement that may be referenced herein) to which it is not a party. The grant of any permissive right or power to the Collateral
Agent hereunder shall not be construed to impose a duty to act.


 


It
is expressly acknowledged and agreed that neither the Collateral Administrator nor the Collateral Agent shall be responsible for,
and shall not be under any duty to monitor or determine, compliance with the Eligibility Criteria (Schedule 3) or the conditions
to any purchase hereunder in any instance, or to determine if the conditions of “Deliver” have been satisfied or otherwise
to monitor or determine compliance by any other person with the requirements of this Agreement.


 


Each
Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed
by it; provided, however, that any such sub-agent receiving payments from the Company shall be a “U.S. person”
and a “financial institution” within the meaning of Treasury Regulations Section 1.1441-1 and a “U.S. financial
institution” within the meaning of Treasury Regulations Section 1.1471-3T. No Agent shall be responsible for any misconduct
or negligence on the part of any sub-agent or attorney appointed by such Agent with due care. Each Agent and any such sub-agent
may perform any and all its duties and exercise its rights and powers through their respective affiliates and the respective directors,
officers, employees, agents and advisors of such person and its affiliates (the “Related Parties”) for such
Agent. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of
each Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent or Collateral Agent, as the case may be.


 









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Subject
to the appointment and acceptance of a successor Agent as provided in this paragraph, each Agent may resign at any time by notifying
the other Agents, the Financing Providers, the Investment Manager and the Company. Upon any such resignation, the Required Financing
Providers shall have the right (with, so long as no Event of Default has occurred and is continuing or no Coverage Event has occurred,
the consent of the Company) to appoint a successor; provided, however, that any such successor receiving payments
from the Company shall be a “U.S. person” and a “financial institution” within the meaning of Treasury
Regulations Section 1.1441-1 and a “U.S. financial institution” within the meaning of Treasury Regulations Section
1.1471-3T. If no successor shall have been so appointed by the Required Financing Providers and shall have accepted such appointment
within thirty (30) days after the retiring Agent gives notice of its resignation, then the Administrative Agent may, on behalf
of the Financing Providers, appoint a successor Agent which shall be a financial institution with an office in New York, New York,
or an affiliate of any such bank provided, however, that any such successor receiving payments from the Company
shall be a “U.S. person” and a “financial institution” within the meaning of Treasury Regulations Section
1.1441-1 and a “U.S. financial institution” within the meaning of Treasury Regulations Section 1.1471-3T. If no successor
shall have been so appointed by the Administrative Agent and shall have accepted such appointment within sixty (60) days after
the retiring Agent gives notice of its resignation, such Agent may petition a court of competent jurisdiction for the appointment
of a successor provided, however, that any such successor receiving payments from the Company shall be a “U.S.
person” and a “financial institution” within the meaning of Treasury Regulations Section 1.1441-1 and a “U.S.
financial institution” within the meaning of Treasury Regulations Section 1.1471-3T. Upon the acceptance of its appointment
as Administrative Agent or Collateral Agent, as the case may be, hereunder by a successor, such successor shall succeed to and
become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After the retiring Agent’s resignation hereunder, the provisions of this Article
and Section 10.04 shall continue in effect for the benefit of such retiring 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 it was acting as Administrative Agent or Collateral
Agent, as the case may be.


 


Each
Financing Provider acknowledges that it has, independently and without reliance upon any Agent or any other Financing Provider
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 Financing Provider also acknowledges that it will, independently and without reliance upon any Agent or any
other Financing Provider 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 related agreement or any document
furnished hereunder or thereunder.


 









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Anything
in this Agreement notwithstanding, in no event shall any Agent, the Collateral Administrator or the Securities Intermediary be
liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including lost profits), even if
such Agent, the Collateral Administrator or the Securities Intermediary, as the case may be, has been advised of such loss or
damage and regardless of the form of action.


 


Each
Agent and the Collateral Administrator shall not be liable for any error of judgment made in good faith by an officer or officers
of such Agent or the Collateral Administrator, unless it shall be conclusively determined by a court of competent jurisdiction
that such Agent or the Collateral Administrator was grossly negligent in ascertaining the pertinent facts.


 


Each
Agent and the Collateral Administrator shall not be responsible for the accuracy or content of any certificate, statement, direction
or opinion furnished to it in connection with this Agreement.


 


Each
Agent and the Collateral Administrator shall not be bound to make any investigation into the facts stated in any resolution, certificate,
statement, instrument, opinion, report, consent, order, approval, bond or other document or have any responsibility for filing
or recording any financing or continuation statement in any public office at any time or to otherwise perfect or maintain the
perfection of any security interest or lien granted to it hereunder.


 


In
the absence of gross negligence, willful misconduct or bad faith on the part of the Agents, the Agents may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed therein, upon any request, instruction, certificate,
opinion or other document furnished to the Agents, reasonably believed by the Agents 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 a request, instruction,
document or certificate which by any provision hereof is specifically required to be furnished to the Agents, the Agents shall
be under a duty to examine the same in accordance with the requirements of this Agreement to determine that it conforms to the
form required by such provision.


 


No
Agent shall be responsible for delays or failures in performance resulting from acts beyond its control. Such acts include but
are not limited to acts of God, strikes, lockouts, riots and acts of war. The protections set forth in this Section 9.01 shall
likewise be available and applicable to the Securities Intermediary and the Collateral Administrator.


 


Section
9.02.     Additional Provisions Relating to the Collateral Agent and the Collateral Administrator.


 


(a)      Collateral
Agent May Perform. The Collateral Agent shall from time to time take such action (at the written direction of the Administrative
Agent or the Required Financing Providers) for the maintenance, preservation or protection of any of the Collateral or of its
security interest therein, provided that the Collateral Agent shall have no obligation to take any such action in the absence
of such direction and shall have no obligation to comply with any such direction if it reasonably believes that the same (1) is
contrary to Applicable Law or (2) might subject the Collateral Agent to any loss, liability, cost or expense, unless the Administrative
Agent or the Required Financing Providers, as the case may be, issuing such instruction makes provision satisfactory to the Collateral
Agent for payment of same. With respect to actions which are incidental to the actions specifically delegated to the Collateral
Agent hereunder, the Collateral Agent shall not be required to take any such incidental action hereunder, but shall be required
to act or to refrain from acting (and shall be fully protected in acting or refraining from acting) upon the written direction
of the Administrative Agent; provided that the Collateral Agent shall not be required to take any action hereunder at the request
of the Administrative Agent, the Required Financing Providers or otherwise if the taking of such action, in the determination
of the Collateral Agent, (1) is contrary to Applicable Law or (2) is reasonably likely to subject the Collateral Agent to any
loss, liability, cost or expense, unless the Administrative Agent or the Required Financing Providers, as the case may be, issuing
such instruction make provision satisfactory to the Collateral Agent for payment of same. In the event the Collateral Agent requests
the consent of the Administrative Agent and the Collateral Agent does not receive a consent (either positive or negative) from
the Administrative Agent within ten (10) Business Days of its receipt of such request, the Administrative Agent shall be deemed
to have declined to consent to the relevant action.


 









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If,
in performing its duties under this Agreement, the Collateral Agent is required to decide between alternative courses of action,
the Collateral Agent may request written instructions from the Administrative Agent as to the course of action desired by it.
If the Collateral Agent does not receive such instructions within five (5) Business Days after it has requested them, the Collateral
Agent may, but shall be under no duty to, take or refrain from taking any such courses of action and shall have no liability in
connection therewith except as otherwise provided in this Agreement. The Collateral Agent shall act in accordance with instructions
received after such five (5) Business Day period except to the extent it has already, in good faith, taken or committed itself
to take, action inconsistent with such instructions. The Collateral Agent shall be entitled to rely on the advice of legal counsel
and independent accountants in performing its duties hereunder with no liability therefor and shall be deemed to have acted in
good faith if it acts in accordance with such advice.


 


(b)      Reasonable
Care. The Collateral Agent is required to exercise reasonable care in the custody and preservation of any of the Collateral
in its possession, provided that the Collateral Agent shall be deemed to have exercised reasonable care in the custody
and preservation of any of the Collateral if it takes such action for that purpose as the Company reasonably requests at times
other than upon the occurrence and during the continuance of any Event of Default, but failure of the Collateral Agent to comply
with any such request at any time shall not in itself be deemed a failure to exercise reasonable care. The Collateral Agent will
not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public
office at any time or times or otherwise perfecting or maintaining the perfection of any liens thereon.


 


(c)      Collateral
Agent Not Liable. The Collateral Agent shall not be liable by reason of its compliance with the terms of this Agreement with
respect to (1) the investment of funds held thereunder in Eligible Investments (other than for losses attributable to the Collateral
Agent’s failure to make payments on investments issued by the Collateral Agent, in its commercial capacity as principal
obligor and not as collateral agent, in accordance with their terms) or (2) losses incurred as a result of the liquidation
of any Eligible Investment prior to its stated maturity. It is expressly agreed and acknowledged that the Collateral Agent is
not guaranteeing performance of or assuming any liability for the obligations of the other parties hereto or any parties to the
Portfolio Investments or other Collateral.


 









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(d)      Certain
Rights and Obligations of the Collateral Agent. Without further consent or authorization from any Financing Providers, the
Collateral Agent may execute any documents or instruments necessary to release any lien encumbering any item of Collateral that
is the subject of a sale or other disposition of assets permitted by this Agreement or as otherwise permitted or required hereunder
or to which the Required Financing Providers have otherwise consented. Anything contained herein to the contrary notwithstanding,
in the event of a foreclosure by the Collateral Agent on any of the Collateral pursuant to a public or private sale, any Agent
or Financing Provider may be the purchaser of any or all of such Collateral at any such sale and the Collateral Agent, as agent
for and representative of the Financing Providers (but not any Financing Provider in its individual capacity unless the Required
Financing Providers shall otherwise agree), shall be entitled, for the purpose of bidding and making settlement or payment of
the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any collateral payable by the purchaser at such sale.


 


(e)      Collateral
Agent, Collateral Administrator and Securities Intermediary Fees and Expenses. The Company agrees to pay to the Collateral
Agent, the Securities Intermediary and the Collateral Administrator such fees as agreed to in a separate fee letter agreement,
dated April 28, 2015, among the Collateral Agent, the Collateral Administrator and the Company and acknowledged hereby by the
Administrative Agent and as may be subsequently modified as agreed among the Company, the Administrative Agent, the Collateral
Agent, the Securities Intermediary and the Collateral Administrator in writing. The Company further agrees to pay to the Collateral
Agent, the Securities Intermediary and the Collateral Administrator, or reimburse the Collateral Agent, the Securities Intermediary
and the Collateral Administrator for paying, reasonable and documented out-of-pocket expenses in connection with this Agreement,
the Collateral Administration Agreement and the transactions contemplated hereby. On each Interest Payment Date, prior to the
payment of any other amounts due under this Agreement or the other Loan Documents, the Company agrees that it shall first pay
any fees and amounts due to the Collateral Agent, Collateral Administrator and Securities Intermediary under this Agreement to
the extent of Interest Proceeds available for distribution in the Interest Collection Account on such Interest Payment Date; provided
that in no event shall the aggregate amount of such fees and amounts exceed $260,000 in any 12 month period (the “Annual
Cap”) during the term of this Agreement. If any amounts are due and owing in excess of the Annual Cap on any Interest
Payment Date, the Company agrees to pay such excess amounts, to the extent of Proceeds available for distribution in the Interest
Collection Account on such Interest Payment Date, on a pari passu basis with any indemnities or expense reimbursements
payable to the Administrative Agent, immediately after payment of any interest and principal amounts owed and fees and other amounts
payable to the Lenders and prior to payments to any other party under this Agreement or the other Loan Documents.


 


(f)       Execution
by the Collateral Agent and the Collateral Administrator. The Collateral Agent and the Collateral Administrator are executing
this Agreement solely in their capacity as Collateral Agent and Collateral Administrator hereunder and in no event shall have
any obligation to make any Advance, provide any Financing or perform any obligation of the Administrative Agent hereunder.





 









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(g)     Information
Provided to Collateral Agent and Collateral Administrator. Without limiting the generality of any terms of this Section, neither
the Collateral Agent nor the Collateral Administrator shall have liability for any failure, inability or unwillingness on the
part of the Investment Manager, the Administrative Agent or the Company to provide accurate and complete information on a timely
basis to the Collateral Agent or the Collateral Administrator, as applicable, or otherwise on the part of any such party to comply
with the terms of this Agreement, and, absent gross negligence, willful misconduct or bad faith, shall have no liability for any
inaccuracy or error in the performance or observance on the Collateral Agent’s or Collateral Administrator’s, as applicable,
part of any of its duties hereunder that is caused by or results from any such inaccurate, incomplete or untimely information
received by it, or other failure on the part of any such other party to comply with the terms hereof.



 


ARTICLE
X



MISCELLANEOUS


 


Section
10.01.   Non-Petition.


 


Each
of the Collateral Agent, the Securities Intermediary and the Collateral Administrator hereby agrees not to commence, or join in
the commencement of, any proceedings in any jurisdiction for the bankruptcy, winding-up, reorganization, arrangement, insolvency,
moratorium or liquidation of the Company or any similar proceedings, in each case prior to the date that is one year and one day
(or if longer, any applicable preference period plus one day) after the payment in full of all Indebtedness, Secured Obligations
or other obligations owing by the Company. The foregoing restrictions are a material inducement for the parties hereto to enter
into this Agreement and are an essential term of this Agreement. The Administrative Agent or the Company may seek and obtain specific
performance of such restrictions (including injunctive relief), including, without limitation, in any bankruptcy, winding-up,
reorganization, arrangement, insolvency, moratorium or liquidation or similar proceedings. The Company shall promptly object to
the institution of any bankruptcy, winding-up, reorganization, arrangement, insolvency, moratorium or liquidation or similar proceedings
against it and take all necessary or advisable steps to cause the dismissal of any such proceeding; provided that such
obligation shall be subject to the availability of funds therefor.


 


Section
10.02.   Notices.


 


All
notices and other communications in respect hereof (including, without limitation, any modifications hereof, or requests, waivers
or consents hereunder) to be given or made by a party hereto shall be in writing (including by electronic mail or other electronic
messaging system) to the other parties hereto at the addresses for notices specified on the Transaction Schedule (or, as to any
such party, at such other address as shall be designated by such party in a notice to each other party hereto). All such notices
and other communications shall be deemed to have been duly given when transmitted by facsimile, electronic mail or personally
delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid.


 









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Section
10.03.   No Waiver.


 


No
failure on the part of any party hereto to exercise and no delay in exercising, and no course of dealing with respect to, any
right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.


 


Section
10.04.   Expenses; Indemnity; Damage Waiver.


 


(a)      The
Company agrees to pay on demand all reasonable and documented out-of-pocket costs and expenses of the Administrative Agent, the
Collateral Agent, the Collateral Administrator and the Lenders in connection with the preparation, execution, delivery, syndication
and administration of this Agreement or any amendments, modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) and the other documents and agreements to be delivered hereunder
or with respect hereto, in each case, subject to any cap on such costs and expenses set forth in the Loan Documents or otherwise
agreed by the parties, and the Company further agrees to pay all reasonable and documented out-of-pocket costs and expenses of
the Administrative Agent, the Collateral Agent and the Collateral Administrator in connection with any amendments, waivers or
consents executed in connection with this Agreement, including the reasonable fees and out of pocket, documented expenses of counsel
for the Administrative Agent, the Collateral Agent, the Collateral Administrator and the Lenders with respect thereto and with
respect to advising the Administrative Agent and the Lenders as to its rights and remedies under this Agreement, and to pay all
reasonable, documented and out-of-pocket costs and expenses, if any (including reasonable counsel fees and expenses), of the Administrative
Agent, the Collateral Agent, the Collateral Administrator and the Lenders, in connection with the enforcement against the Company
of this Agreement or any of the other Loan Documents and the other documents and agreements to be delivered hereunder or with
respect hereto; provided, that in the case of reimbursement of (A) counsel for the Lenders other than the Administrative Agent,
such reimbursement shall be limited to one counsel for all the Administrative Agent and Lenders, (B) counsel for the Collateral
Agent shall be limited to one counsel for such Person and (C) counsel for the Collateral Administrator shall be limited to one
counsel for such Person.


 


(b)      The
Company shall indemnify the Agents, the Collateral Administrator, the Securities Intermediary, the Lenders 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, damages, liabilities and related expenses, including reasonable fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a
result of (1) the execution or delivery of this Agreement or any agreement or instrument contemplated thereby, the performance
by the parties thereto of their respective obligation, the exercise of the parties thereto of their respective rights or the consummation
of the transactions contemplated hereby, including any breach of any representation, warranty or covenant of the Company or the
Investment Manager in any Loan Document, (2) any Financing or the use of the proceeds therefrom or (3) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing, whether based in tort or contract or any other
theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee,
be available (a) to the extent determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted
from gross negligence, bad faith or willful misconduct on the part of any Indemnitee, (b) to the extent resulted from the nonperformance
or noncompliance by the Agents, the Collateral Administrator, the Securities Intermediary or the Lenders with their respective
obligations under this Agreement or (c) resulting from the performance of the Portfolio Investments. In addition, this Section
10.04(b) shall not apply to Taxes. Payments under this Section 10.04(b) shall be made by the Company to the Administrative Agent
for the benefit of the relevant Indemnitee


 









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(c)       To
the extent permitted by Applicable Law, neither the Company nor any Indemnitee shall assert, and each hereby waives, any claim
against the Company or any Indemnitee, as applicable, on any theory of liability, for special, 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 or any
agreement, instrument or transaction contemplated hereby, any Financing or the use of the proceeds thereof.


 


(d)      For
the avoidance of doubt, the costs and expenses described in this Section 10.04 shall not include Taxes.


 


Section
10.05.   Amendments.


 


No
amendment, modification or waiver in respect of this Agreement will be effective unless in writing (including, without limitation,
a writing evidenced by a facsimile transmission or electronic mail) and executed by each of the Company, the Agents and the Required
Financing Providers; provided, however, that the Administrative Agent may waive any of the Eligibility Criteria
and the requirements set forth in Schedule 3 or Schedule 4 in its sole discretion.


 


Section
10.06.   Confidentiality.


 


Each
Agent, the Securities Intermediary and each Lender agrees to maintain the confidentiality of the Information after receipt thereof
(or, with respect to Information relating to or provided by an obligor in respect of a Portfolio Investment, for a period (as
notified to the Agents, the Securities Intermediary and the Lenders) commencing upon receipt thereof and ending on the date on
which the confidentiality obligations of the Company with respect to such obligor terminate) (it being understood that documents
provided to the Administrative Agent hereunder may in all cases be distributed by the Administrative Agent to the Lenders) except
that the Agents, the Securities Intermediary or such Lender may disclose such information (i) to its affiliates, officers, directors,
employees, agents, counsel, accountants, auditors, advisors or representatives, (ii) to the extent such information has become
available to the public other than as a result of a disclosure in violation of this Agreement, (iii) to the extent such information
was available to such party on a non-confidential basis prior to its disclosure to such party hereunder, (iv) in connection with
the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document
or the enforcement of rights hereunder or thereunder, (v) subject to an agreement containing provisions substantially the same
as those of this Section 10.06, to (x) any assignee of or Participant in (to the extent such Person is permitted to become an
assignee or Participant hereunder), or any prospective assignee of or Participant in, any of its rights or obligations under this
Agreement or (y) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the
Company and its obligations, (vi) with the consent of the Investment Manager, or (vii) to the extent the such party should be
(A) required in connection with any legal or regulatory proceeding or (B) requested by any Governmental Authority to disclose
such information; provided, that in the case of clause (vii) above, the Agent, the Securities Intermediary or such Lender, as
applicable, will use reasonable efforts to maintain confidentiality and will (unless otherwise prohibited by law) notify the Investment
Manager of its intention to make any such disclosure prior to making any such disclosure. Any Person required to maintain the
confidentiality of Information as provided in this Section 10.06 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. Notwithstanding the foregoing, a Lender may disclose the U.S. tax treatment and U.S.
tax structure with respect to the Financings.


 









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Section
10.07.   Non-Recourse.


 


Notwithstanding
any other provision of this Agreement, no recourse under any obligation, covenant or agreement of the Company or the Investment
Manager contained in this Agreement or any other Loan Document shall be had against any incorporator, stockholder, partner, officer,
director, member, manager, employee or agent of Company, the Investment Manager or any of their respective Affiliates (solely
by virtue of such capacity) by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute
or otherwise; it being expressly agreed and understood that this Agreement is solely a corporate obligation of the Company and/or
the Investment Manager, and that no personal liability whatever shall attach to or be incurred by any incorporator, stockholder,
officer, director, member, manager, employee or agent of the Company, the Investment Manager or any of their respective Affiliates
(solely by virtue of such capacity) or any of them under or by reason of any of the obligations, covenants or agreements of the
Company or the Investment Manager contained in this Agreement, or implied therefrom, and that any and all personal liability for
breaches by the Company or the Investment Manager of any of such obligations, covenants or agreements, either at common law or
at equity, or by statute, rule or regulation, of every such incorporator, stockholder, officer, director, member, manager, employee
or agent is hereby expressly waived as a condition of and in consideration for the execution of this Agreement; provided however,
the foregoing shall not be construed so as to exonerate or exculpate the Company or the Investment Manager from any liability
by reason of a breach by such party of any of its obligations, covenants or agreements contained in the Loan Documents or its
willful misconduct or gross negligence.


 


Section
10.08.   Successors; Assignments


 


(a)      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 the Company may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and the Required Financing Providers (and any attempted assignment
or transfer by the Company without such consent shall be null and void). Except as expressly set forth herein, nothing in this
Agreement, expressed or implied, shall be construed to confer upon any person any legal or equitable right, remedy or claim under
or by reason of this Agreement.


 









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(b)      Subject
to the conditions set forth below, any Lender may assign to one or more Persons all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Financing Commitment and the Advances at the time owing to it) with the
prior written consent (such consent not to be unreasonably withheld) of the Administrative Agent and, if such assignee is not
an Eligible Assignee, the Company; provided that no consent of the Administrative Agent or the Company shall be required
for an assignment of any Financing Commitment to an assignee that is a Lender with a Financing Commitment immediately prior to
giving effect to such assignment.


 


Assignments
shall be subject to the following additional conditions: (A) 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; and (B) the parties to each assignment shall
execute and deliver to the Administrative Agent an assignment and assumption agreement in form and substance acceptable to the
Administrative Agent.


 


Subject
to acceptance and recording thereof below, from and after the effective date specified in each assignment and assumption the assignee
thereunder shall be a party hereto 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 as a Lender but shall continue to be entitled to the benefits of Section 10.04).


 


The
Administrative Agent, acting for this purpose as an agent of the Company, shall maintain at one of its offices in the United States
a copy of each assignment and assumption delivered to it and the Register. The entries in the Register shall be conclusive absent
manifest error, and the parties hereto shall treat each person whose name is recorded in the Register pursuant to the terms hereof
as a Lender and the owner of the amounts owing to it hereunder as reflected in the Register for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for inspection by the Company, any Lender and the Investment
Manager, at any reasonable time and from time to time upon reasonable prior notice. Upon its receipt of a duly completed assignment
and assumption executed by an assigning Lender and an assignee, the Administrative Agent shall accept such assignment and assumption
and record the information contained therein in the Register.


 


(c)       Any
Lender may, without the consent of the Company or the Administrative Agent, sell participations to one or more banks or other
entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Financing Commitment and the Advances owing to it); provided that (1) such Lender’s
obligations under this Agreement shall remain unchanged, (2) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (3) the Company, the Agents and the other Financing Providers shall continue
to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement
and the Participant shall not be in privity with the Company. 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 Material Amendment that affects such Participant.


 









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(d)      Each
Lender that sells a participation shall, acting solely for this purpose as an agent of the Company, maintain a register on which
it enters the name and address of each Participant and the principal amounts (and related interest amounts) of each Participant’s
interest in the Advances or other obligations under this Agreement (the “Participant Register”); provided
that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity
of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit
or its other obligations under any Loan Document) to any Person except to the extent that such disclosure (i) is necessary to
establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of
the United States Treasury Regulations, (ii) is reasonably requested by the Borrower to determine whether a Participant is eligible
to receive additional amounts pursuant to Section 3.01(e) or (f) as a result of a Change in Law occurring after the Participant
acquired the applicable participation or (iii) is otherwise required thereunder. The entries in the Participant Register shall
be conclusive absent manifest error, and each Person whose name is recorded in the Participant Register shall be treated as the
owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant
Register. The Company agrees that each Participant shall be entitled through the Lender granting such participation (and for the
avoidance of doubt shall have no direct rights against the Company) to the benefits of Sections 3.01(e) and 3.03 (subject
to the requirements and limitations therein, including the requirements under Section 3.03(f) (it being understood that the documentation
required under Section 3.03(f) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees
to be subject to the provisions of Section 3.04 as if it were an assignee under Section 10.08(b) and (B) shall not be entitled
to receive any greater payment under Sections 3.01(e) and 3.03, with respect to any participation, than its participating
Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a
Change in Law that occurs after the Participant acquired the applicable participation.


 


Section
10.09.   Governing Law; Submission to Jurisdiction; Etc.


 


(a)      Governing
Law. This Agreement will be governed by and construed in accordance with the law of the State of New York.


 









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(b)      Submission
to Jurisdiction. With respect to any suit, action or proceedings relating to this Agreement (collectively, “Proceedings”),
each party hereto irrevocably (i) submits to the non-exclusive jurisdiction of the courts of the State of New York and the
United States District Court located in the Borough of Manhattan in New York City and (ii) waives any objection which it
may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings
have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party. Nothing in this Agreement precludes any party hereto from bringing Proceedings
in any other jurisdiction, nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings
in any other jurisdiction.


 


(c)      Waiver
of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.


 


Section
10.10.   Counterparts.


 


This
Agreement may be executed in any number of counterparts by facsimile or other written form of communication including electronic
mail, each of which shall be deemed to be an original as against the party whose signature appears thereon, and all of which shall
together constitute one and the same instrument.


 


Section
10.11.   Headings.


 


Article
and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement
and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.


 


[remainder
of page intentionally blank]


 









    	-69-



    	 



    

 





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


  





	 	JEFFERSON SQUARE FUNDING LLC, as Company
	 	 
	 	By:	 	/s/ Gerald F. Stahlecker
	 	 	 	Name: Gerald F. Stahlecker
	 	 		Title: Executive Vice President



 


	 	JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as Administrative
    Agent
	 	 
	 	By:	 	/s/ Louis J. Cerrotta
	 	 	 	 Name: Louis J. Cerrotta
	 	 		Title: Executive Director
	 	 	 	 







	 	CITIBANK, N.A.,

    as Collateral Agent
	 	 
	 	By:	 	/s/ Thomas J. Varcados
	 	 	 	 Name: Thomas J. Varcados
	 	 		Title: Vice President
	 	 	 	 







	 	CITIBANK, N.A.,

    as Securities Intermediary
	 	 
	 	By:	 	/s/ Thomas J. Varcados
	 	 	 	 Name: Thomas J. Varcados
	 	 		Title: Vice President




 








	 	VIRTUS GROUP, LP,

    as Collateral Administrator
	 	 
	 	By:	 	/s/ Robert Tomick
	 	 	 	 Name: Robert Tomick
	 	 		Title: Partner







 


[Signature
Page to Jefferson Square Funding Loan Agreement] 


 



    	 



    	 



    







 





	 	The Financing Providers
	 	 
	 	JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as Lender
	 	 
	 	By:	 	/s/ Louis J. Cerrotta
	 	 	 	 Name: Louis J. Cerrotta
	 	 		Title: Executive Director







 





[Signature
Page to Jefferson Square Funding Loan Agreement] 


 









    	 



    	 



    

 
















SCHEDULE 1





Transaction
Schedule


 


	1.	Types
of Financing	Available	Financing
Limit
	 	Advances	yes	U.S.
$300,000,000



  


	2.	Financing
Providers		Financing
Commitment
	 	Lender:	JPMorgan
Chase Bank, National Association	U.S.$300,000,000,
as reduced from time to time pursuant to Section 1.04, Section 4.03(c) or Section 4.06





 


	3.	Scheduled
Termination Date:	May
8, 2019



 


 


	4.	Account
Numbers	 
	 	Custodial
Account:[	[*]
	 	CE
Cure Account:	[*]
	 	Interest
Collection Account:	[*]
	 	Principal
Collection Account:	[*]



  


	5.	Market
Value Trigger:	150%



 


 


	6.	Purchases
of Restricted Securities	 
	 	Notwithstanding
anything herein to the contrary, no Portfolio Investment may constitute a Restricted Security. As used herein, “Restricted
Security“ means any security that forms part of a new issue of publicly issued securities (a) with respect to which
an affiliate of any Financing Provider that is a “broker” or a “dealer”, within the meaning of the Securities
Exchange Act of 1934, participated in the distribution as a member of a selling syndicate or group within thirty (30) days of
the proposed purchase by the Company and (b) that the Company proposes to purchase from any such affiliate of any Financing
Provider.



  









    	Sch. 1-1



    	 



    

 


Addresses
for Notices


 


	The Company:	Jefferson
Square Funding LLC
 c/o FS Investment Corporation III
 201 Rouse Boulevard   

Philadelphia, PA 19112	Attention:
Gerald F. Stahlecker, 

Executive Vice President   

Telephone: (215) 495-1169   

Facsimile: (215) 222-4649
	The
Investment Manager:	FS Investment
Corporation III
 201 Rouse Boulevard   

Philadelphia, PA 19112	Attention:
Gerald F. Stahlecker, 

Executive Vice President   

Telephone: (215) 495-1169   

Facsimile: (215) 222-4649
	The
Administrative Agent:	JPMorgan
Chase Bank, National Association
 c/o JPMorgan Services Inc.
 500 Stanton Christiana Rd., 3rd Floor
 Newark, Delaware
19713	Attention:
Ryan Hanks
 Telephone: (302) 634-2030


 

	 	with
a copy to:	
	 	JPMorgan
Chase Bank, National Association
 383 Madison Ave.
 New York, New York 10179	Attention:
Louis Cerrotta
 Telephone: 212-622-7092
 Email: louis.cerrotta@jpmorgan.com
 doreen.l.markowitz@jpmorgan.com
 vincenzo.f.buffolino@jpmorgan.com

ruchira.patel@jpmorgan.com
 Keith.Harden@jpmchase.com
 Allison.Shapiro@jpmorgan.com
 Sud.X.Subrahmanyan@jpmorgan.com

de_custom_business@jpmchase.com
	The
Collateral Agent:	Citibank,
N.A.
 480 Washington Blvd, 30th Floor
 Jersey City, New Jersey 07310	Attention:
Agency & Trust - Jefferson Square Funding LLC
 Facsimile: (212) 816-5527
	The
Securities Intermediary:	Citibank,
N.A.
 388 Greenwich Street, 14th Floor
 New York, New York 10013	Attention:
Agency & Trust - Jefferson Square Funding LLC
 Facsimile: (212) 816-5527
	The
Collateral Administrator:	Virtus
Group, LP
 5400 Westheimer Court, Suite 760
 Houston, Texas 77056	Attention:
Jefferson Square Funding LLC
 Facsimile: (866) 816-3203
	JPMCB:	JPMorgan
Chase Bank, National Association
 c/o JPMorgan Services Inc.
 500 Stanton Christiana Rd., 3rd Floor
 Newark, Delaware
19713	Attention:
Robert Nichols
 Facsimile: (302) 634-1092
	 	with
a copy to:	 
	 	JPMorgan
Chase Bank, National Association
 270 Park Avenue
 New York, New York 10017	Attention:
Eugene O’Neill
 Telephone: 212-834-9295
	Each
other Financing Provider:	The address
(or facsimile number or electronic mail address) provided by it to the Administrative Agent.	 



 









    	Sch. 1-2



    	 



    




 








SCHEDULE 2


 


Contents
of Approval Requests


 


Each Approval Request shall include
the below information for the related Portfolio Investment. Additionally, the excel file attached as Exhibit I to the Approval
Request shall be emailed separately to the following addresses:





louis.cerrotta@jpmorgan.com; vincenzo.f.buffolino@jpmorgan.com;


ruchira.patel@jpmorgan.com; Allison.Shapiro@jpmorgan.com; 

Sud.X.Subrahmanyan@jpmorgan.com; Larry.w.wise@jpmorgan.com; 

Jacob.s.pollack@jpmorgan.com; ravi.d.sarawgi@jpmorgan.com; lori.ying@jpmorgan.com; 

jason.e.adler@jpmorgan.com; de_custom_business@jpmchase.com; 

ct.financing.requests@jpmorgan.com


 


JPMorgan Chase Bank, National Association,

as Administrative Agent

c/o JPMorgan Services Inc.

500 Stanton Christiana Rd., 3rd Floor

Newark, Delaware 19713

Attention: Ryan Hanks

Email:ryan.j.hanks@jpmorgan.com


 


JPMorgan Chase Bank, National Association,

as Administrative Agent

383 Madison Avenue

New York, New York 10179

Attention: Louis Cerrotta

Email: Allison.Shapiro@jpmorgan.com





Larry.w.wise@jpmorgan.com





Jeffrey.l.panzo@jpmorgan.com





Arthur.flynn@jpmorgan.com


 


JPMorgan Chase Bank, National Association,

as Lender

c/o JPMorgan Services Inc.

500 Stanton Christiana Rd., 3rd Floor

Newark, Delaware 19713

Attention: Ryan Hanks


 









    	Sch. 2-1



    	 



    

 





cc:


 


Citibank, N.A., as Collateral Agent





480 Washington Blvd, 30th Floor





Jersey City, New Jersey 07310





Attention: Agency & Trust - Jefferson
Square Funding LLC


 


Virtus Group, LP, as Collateral Administrator





5400 Westheimer Court, Suite 760

Houston, Texas 77056

Attention: Jefferson Square Funding LLC





Ladies and Gentlemen:


 


Reference
is hereby made to the Loan Agreement, dated as of May 8, 2015 (the “Agreement”), among Jefferson Square Funding
LLC, as borrower (the “Company”), JPMorgan Chase Bank, National Association, as administrative agent (the “Administrative
Agent”), the financing providers party thereto, and the collateral agent, collateral administrator and securities intermediary
party thereto. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given such terms
in the Agreement.


 


Pursuant
to the Agreement, the Investment Manager hereby requests approval for the Company to acquire the Portfolio Investment described
in Exhibit I hereto.


 


To
the extent available, we have included herewith (1) the Underlying Instruments (including the collateral and security documents)
relating to each such Portfolio Investment, (2) audited financial statement for the previous most recently ended three years of
the obligor of each such Portfolio Investment, (3) quarterly statements for the previous most recently ended eight fiscal quarters
of the obligor of each such Portfolio Investment, (4) any appraisal or valuation reports conducted by third parties, (5) applicable
“proof of existence” details (if requested by the Administrative Agent) and (6) the ratio of indebtedness to EBITDA
as calculated by the Investment Manager using information provided to the Investment Manager by the related obligor. The Investment
Manager acknowledges that it will provide such other information customary and typical in performing a detailed credit analysis
on each applicable obligor and from time to time reasonably requested by the Administrative Agent.


 


	 	Very truly yours,
	 	 
	 	FS INVESTMENT CORPORATION III,

    as Investment Manager
	 	 
	 	By:	 	
	 	 	 	Name:
	 	 		Title:







  









    	Sch. 2-2



    	 



    




 


Exhibit I
to Approval Request


 


(attach an Excel
file containing the following information relating to the Portfolio Investment)


 


	 	Fund
	 	Issuer / Obligor
	 	Identifier (LoanX; CUSIP)
	 	Requested Notional Amount
	 	Asset Class
	 	Syndication Type
	 	Lien
	 	Tranche Size (Pro Forma)
	 	Price
	 	Spread / Coupon
	 	Base Rate
	 	LIBOR Floor
	 	Maturity
	 	Moody’s SIC
	 	LTM EBITDA (In Millions)
	 	LTM Capital Expenditures (in
    Millions)
	 	Leverage Through Tranche (Net)



 









    	Sch. 2-3



    	 



    

 







SCHEDULE 3


 


Eligibility
Criteria


 


		(i)	it is a debt obligation payable in U.S. dollars, purchased at a
price that is at least 80% of the par amount of such obligation;




 


		(ii)	it is issued by a company organized in an Eligible Jurisdiction
and if such company is organized in an Eligible Jurisdiction other than the United States, such company has submitted to jurisdiction
in the United States in the related Underlying Instrument and the related Underlying Instrument is governed by the laws of a State
of the United States;




 


		(iii)	it is eligible to be entered into by, sold, assigned or participated
to the Company and pledged to the Collateral Agent;




 


		(iv)	it provides for periodic payments of interest thereon in cash at
least semi-annually;




 


		(v)	it is an obligation upon which no payments are subject to deduction
or withholding for or on account of any withholding Taxes imposed by any jurisdiction unless the related obligor is required to
make “gross-up” payments that cover the full amount of any such withholding Taxes (subject to customary conditions
to such payments which the Company (or the Investment Manager on behalf of the Company) in its good faith reasonable judgment
expects to be satisfied);




 


		(vi)	it is not in default (unless it is a Current Pay Obligation);




 


		(vii)	it is not at the time of purchase or commitment to purchase the
subject of an offer other than (a) an offer of publicly registered securities with equal or greater face value and substantially
identical terms issued in exchange for securities issued under Rule 144A or (b) an offer pursuant to the terms of which the offeror
offers to acquire a debt obligation in exchange for consideration consisting solely of cash in an amount equal to or greater than
the full face amount of such debt obligation plus any accrued and unpaid interest;




 


		(viii)	it is not an obligation on which the stated rate of interest is
scheduled to decrease (although interest payments may decrease due to unscheduled events such as a decrease of the index relating
to a Portfolio Investment that bears interest at a floating rate, the change from a default rate of interest to a non-default
rate or an improvement in the obligor’s financial condition);




 


		(ix)	it is not a security whose repayment is subject to substantial material
non-credit related risk as determined by the Investment Manager or to the non-occurrence of certain catastrophes specified in
the documents governing such security;




 









    	Sch. 3-1



    	 



    

 


		(x)	if such obligation provides for the payment of interest at a floating
rate, such floating rate is determined by reference to (1) the Dollar prime rate, the LIBO Rate, Euro rate or similar interbank
offered rate or commercial deposit rate or (2) any other index approved by the Administrative Agent;




 


		(xi)	it will not cause the Company or the pool of Collateral to be required
to register as an investment company under the Investment Company Act of 1940, as amended;




 


		(xii)	it is not an obligation that at the time of purchase or commitment
to purchase provides for conversion into an equity security (1) automatically after a specified period of time or (2) at the option
of the Company thereof at any time;




 


		(xiii)	is not a Structured Finance Obligation, Letter of Credit, Synthetic
Security Delayed Funding Term Loan, Revolving Credit Facility or Asset Based Loan;




 


		(xiv)	the related security is primarily located in an Eligible Jurisdiction;
and




 


		(xv)	if it is a participation, (a) it is transferred pursuant to the
Participation Agreement, (b) if the participation becomes part of the Collateral in connection with a Coverage Event Cure it is
not part of the Collateral for more than fifteen (15) Business Days (or such longer period, if any, consented to by the Administrative
Agent, in its sole discretion) and (c) if the participation becomes part of the Collateral other than in connection with a Coverage
Event Cure it is not part of the Collateral for more than thirty (30) calendar days (or such longer period, if any, consented
to by the Administrative Agent, in its sole discretion), provided that a participation sold on or prior to the Closing Date may
be part of the Collateral for up to sixty (60) days following the Closing Date (or such longer period, if any, consented to by
the Administrative Agent, in its sole discretion);




 


provided,
however, that one or more of the foregoing requirements may be waived in writing by the Administrative Agent (in its sole
and absolute discretion) prior to the Company’s commitment to purchase a Portfolio Investment.


 









    	Sch. 3-2



    	 



    

 





SCHEDULE 4


 


Concentration
Limitations


 


The “Concentration
Limitations” shall be satisfied on any date of determination if, in the aggregate, the Portfolio Investments owned (or
in relation to a proposed purchase of a Portfolio Investment, proposed to be owned) by the Company comply with all the requirements
set forth below:


 


		1.	Portfolio Investments issued by a single obligor and its affiliates
may not exceed an aggregate principal balance equal to $30,000,000 (or, prior to the end of the Ramp-Up Period, the greater of
(i) 5.00% of the Total Principal Balance and (ii) $30,000,000); provided that Portfolio Investments issued by three (3)
obligors and their respective affiliates may each constitute up to an aggregate principal balance equal to $45,000,000 (or, prior
to the end of the Ramp-Up Period, the greater of (i) 8.25% of the Total Principal Balance and (ii) $45,000,000).




 


		2.	Not less than 60% of the Total Principal Balance may consist of
Senior Secured Loans and cash and Eligible Investments on deposit in the Accounts representing Principal Proceeds.




 


		3.	Not more than an aggregate of 40% of the Total Principal Balance
may consist of Second Lien Loans.





 


		4.	Not more than an aggregate of 20% of the Total Principal Balance
may consist of any Portfolio Investments other than Senior Secured Loans or Second Lien Loans.




 


		5.	Not more than 20% of the Total Principal Balance may consist of
Portfolio Investments that are issued by obligors that belong to a given Moody’s Classified Industry, with the exception
of any one Moody’s Classified Industry, for which up to 30% of the Total Principal Balance may be issued by obligors that
belong to such Moody’s Classified Industry.




 


		6.	Not more than 5% of the Total Principal Balance minus the
Excess Concentration Amount (without giving effect to clause (6) of the definition of Concentration Limitations) may consist of
Portfolio Investments that are Current Pay Obligations.




 


		7.	Not more than an aggregate of 10% of the Total Principal Balance
may consist of fixed rate Portfolio Investments.




 


		8.	Not more than an aggregate of 10% of the Total Principal Balance
may consist of participations in loans.




 












    	Sch. 4-1



    	 



    

 


SCHEDULE 5


 


[RESERVED]








 









    	Sch. 5-1



    	 



    

 


SCHEDULE 6


 


Form
of Position Report


 


	Asset ID	Issuer
Name	Asset
Name	Asset
Detail Type Name	Asset
Rate Type Name	Asset
Maturity Date	Asset
SecurityID	Issuer
ID	Currency
Type Identifier	Asset
Type Name	Facility
LIBOR Spread	Outstanding
Settled
	 	 	 	 	 	 	 	 	 	 	 	 









 






    	Sch. 6-2



    	 



    

 


EXHIBIT A




Form of Request for Advance


 


JPMorgan Chase Bank, National Association,

as Administrative Agent

c/o JPMorgan Services Inc.

500 Stanton Christiana Rd., 3rd Floor

Attention: Ryan Hanks


 


JPMorgan Chase Bank, National Association,

as Administrative Agent

383 Madison Avenue

New York, New York 10179

Attention: Louis Cerrotta

Email: louis.cerrotta@jpmorgan.com

doreen.l.markowitz@jpmorgan.com

vincenzo.f.buffolino@jpmorgan.com

ruchira.patel@jpmorgan.com

Keith.Harden@jpmchase.com

Allison.Shapiro@jpmorgan.com

Sud.X.Subrahmanyan@jpmorgan.com

de_custom_business@jpmchase.com


 


JPMorgan Chase Bank, National Association,

as Lender

c/o JPMorgan Services Inc.

500 Stanton Christiana Rd., 3rd Floor

Newark, Delaware 19713

Attention: Robert Nichols


 


cc:


 


Jefferson Square Funding LLC

c/o FS Investment Corporation III

201 Rouse Boulevard





Philadelphia, PA 19112


 


Citibank, N.A., as Collateral Agent

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Agency & Trust - Jefferson Square Funding LLC


 


Virtus Group, LP, as Collateral Administrator

5400 Westheimer Court, Suite 760

Houston, Texas 77056

Attention: Jefferson Square Funding LLC


 



    	Exh. A-1



    	 



    







 


Ladies and Gentlemen:


 


Reference is hereby made
to the Loan Agreement, dated as of May 8, 2015 (the “Agreement”), among Jefferson Square Funding LLC, as borrower
(the “Company”), JPMorgan Chase Bank, National Association, as administrative agent (the “Administrative
Agent”), the financing providers party thereto, and the collateral agent, collateral administrator and securities intermediary
party thereto. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given such terms
in the Agreement.


 


Pursuant to the Agreement,
you are hereby notified of the following:


 


(1)The Company hereby
requests an Advance under Section 2.03 of the Agreement to be funded on [*].


 


(2)The aggregate amount
of the Advance requested hereby is $[*].[1]


 


(3)The proposed purchases
(if any) relating to this request are as follows:


 


	Asset Name(s)	Draw Amount(s) Requested	Market Value of Asset(s)	Price of Asset(s)	Purchased 

Interest (if any)
	 	 	 	 	 
	 	 	 	 	 



  


We hereby certify that
all conditions to the Purchase of such Portfolio Investment(s) set forth in Section 1.03 of the Agreement have been satisfied or
waived as of the related Trade Date (and shall be satisfied or waived as of the related Settlement Date).


 


	 	Very truly yours,
	 	 
	 	FS INVESTMENT CORPORATION
III
	 	 
	 	By:	 	
	 	 	 	Name:
	 	 		Title:







 



























		1	Note: The requested Financing shall be in an amount such that, after giving effect thereto and
the related purchase of the applicable Portfolio Investment(s) and/or Permitted Distribution (if any), the Compliance Condition
is satisfied.








    	Exh. A-2



    	 



    




 


EXHIBIT B


 


Moody’s Industry Classification
Groups


 





	 
	 Industry 

Code 	 Description
	1	Aerospace & Defense
	2	Automotive
	3	Banking, Finance, Insurance & Real Estate
	4	Beverage, Food & Tobacco
	5	Capital Equipment
	6	Chemicals, Plastics & Rubber
	7	Construction & Building
	8	Consumer goods: Durable
	9	Consumer goods: Non-durable
	10	Containers, Packaging & Glass
	11	Energy: Electricity
	12	Energy: Oil & Gas
	13	Environmental Industries
	14	Forest Products & Paper
	15	Healthcare & Pharmaceuticals
	16	High Tech Industries
	17	Hotel, Gaming & Leisure
	18	Media: Advertising, Printing & Publishing
	19	Media: Broadcasting & Subscription
	20	Media: Diversified & Production
	21	Metals & Mining
	22	Retail
	23	Services: Business
	24	Services: Consumer
	25	Sovereign & Public Finance
	26	Telecommunications
	27	Transportation: Cargo
	28	Transportation: Consumer
	29	Utilities: Electric
	30	Utilities: Oil & Gas
	31	Utilities: Water
	32	Wholesale 




 


 


Exh. B-1