# EDGAR Filing Document

**Accession Number:** 0002089126
**File Stem:** 0001193125-25-309940
**Filing Date:** 2025-12
**Character Count:** 1189442
**Document Hash:** 7c20bdf882228adc739cd1ae5e757200
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-25-309940.hdr.sgml**: 20251205

**ACCESSION NUMBER**: 0001193125-25-309940

**CONFORMED SUBMISSION TYPE**: 10-12G/A

**PUBLIC DOCUMENT COUNT**: 3

**FILED AS OF DATE**: 20251205

**DATE AS OF CHANGE**: 20251205

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PennantPark Private Income Fund
- **CENTRAL INDEX KEY:** 0002089126

**ORGANIZATION NAME:**
- **EIN:** 334777837
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0930

**FILING VALUES:**
- **FORM TYPE:** 10-12G/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-56787
- **FILM NUMBER:** 251554031

**BUSINESS ADDRESS:**
- **STREET 1:** 1691 MICHIGAN AVENUE
- **CITY:** MIAMI BEACH
- **STATE:** FL
- **ZIP:** 33139
- **BUSINESS PHONE:** 7862979500

**MAIL ADDRESS:**
- **STREET 1:** 1691 MICHIGAN AVENUE
- **CITY:** MIAMI BEACH
- **STATE:** FL
- **ZIP:** 33139

##### [**Table of Contents**](#toc)
**As filed with the Securities and Exchange Commission on December 5, 2025** 

**File No. 000-56787** 

**U.S. SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

**Amendment No. 2 to** 

**FORM 10** 

**GENERAL FORM FOR REGISTRATION OF SECURITIES** 

**PURSUANT TO SECTION 12(b) OR 12(g) OF** 

**THE SECURITIES EXCHANGE ACT OF 1934** 

## PennantPark Private Income Fund
**(Exact name of registrant as specified in charter)** 

---

| | |
|:---|:---|
| **Delaware** | **33-4777837** |
| **(State or other jurisdiction**<br> **of incorporation or registration)** | **(I.R.S. Employer**<br> **Identification No.)** |
| **1691 Michigan Avenue**<br> **Miami Beach, FL** | **33139** |
| **(Address of principal executive offices)** | **(Zip Code)** |

---

**(786) 297-9500** 

**(Registrant's telephone number, including area code)** 

***with copies to:***

**Thomas J. Friedmann** 

**Dechert LLP** 

**One International Place, 40<sup>th</sup> Floor** 

**100 Oliver Street** 

**Boston, MA 02110** 

**(617) 728-7100** 

**Securities to be registered pursuant to Section 12(b) of the Exchange Act:** 

---

| | |
|:---|:---|
| **Title of each class to be so registered** | **Name of exchange on which each class is to be registered** |
| **None** | **N/A** |

---

**Securities to be registered pursuant to Section 12(g) of the Exchange Act:** 

**Common Shares, par value $0.001 per share** 

**(Title of class)** 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☐ |
|  |  | Emerging growth company | ☒ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

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##### [**Table of Contents**](#toc)
**TABLE OF CONTENTS** 

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| | |
|:---|:---|
|  [EXPLANATORY NOTE](#tx50016_1) | 1 |
|  [FORWARD-LOOKING STATEMENTS](#tx50016_2) | 2 |
|  [Item 1. BUSINESS](#tx50016_3) | 3 |
|  [Item 1A. RISK FACTORS](#tx50016_4) | 39 |
|  [Item 2. FINANCIAL INFORMATION](#tx50016_5) | 69 |
|  [Item 3. PROPERTIES](#tx50016_6) | 77 |
|  [Item 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT](#tx50016_7) | 77 |
|  [Item 5. TRUSTEES AND EXECUTIVE OFFICERS](#tx50016_8) | 77 |
|  [Item 6. EXECUTIVE COMPENSATION](#tx50016_9) | 86 |
|  [Item 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND TRUSTEE INDEPENDENCE](#tx50016_10) | 86 |
|  [Item 8. LEGAL PROCEEDINGS](#tx50016_11) | 88 |
|  [Item 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS](#tx50016_12) | 88 |
|  [Item 10. RECENT SALES OF UNREGISTERED SECURITIES](#tx50016_13) | 90 |
|  [Item 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED](#tx50016_14) | 90 |
|  [Item 12. INDEMNIFICATION OF TRUSTEES AND OFFICERS](#tx50016_15) | 98 |
|  [Item 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](#tx50016_16) | 98 |
|  [Item 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE](#tx50016_17) | 98 |
|  [Item 15. FINANCIAL STATEMENTS AND EXHIBITS](#tx50016_18) | 99 |

---

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##### [**Table of Contents**](#toc)
**EXPLANATORY NOTE** 

PennantPark Private Income Fund is filing this registration statement on Form 10 (the "<u>Registration Statement</u>") under the Securities Exchange Act of 1934, as amended (the "<u>Exchange Act</u>"), on a voluntary basis in connection with its election to be regulated as a business development company ("<u>BDC</u>") under the Investment Company Act of 1940, as amended, or the 1940 Act, and in order to provide current public information to the investment community. Once this Registration Statement is effective, we will be subject to the requirements of Section 13(a) of the Exchange Act, including the rules and regulations promulgated thereunder, which will require us, among other things, to file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and we will be required to comply with all other obligations of the Exchange Act applicable to issuers filing registration statements pursuant to Section 12(g) of the Exchange Act.

In this Registration Statement, unless otherwise specified, the terms:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *" PPIF, "   " we, " " us, "   " our " and " the Company " refer to PennantPark Private Income Fund , a Delaware statutory trust that is an externally managed, closed-end fund that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended;* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "*PPIA" refers to PennantPark Investment Advisers, LLC, our investment adviser prior to October 29, 2025;* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *"PPIFA" refers to PennantPark Private Income Fund Advisers LLC, a subsidiary of PPIA and our investment adviser after October 29, 2025;* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *"Investment Adviser" shall apply to PPIA or, following PPIFA becoming the investment adviser, as applicable, as our investment adviser;* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *"Administrator" refers to PennantPark Investment Administration, LLC, a wholly-owned subsidiary of PPIA, as our administrator; and* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *" PennantPark " refers, collectively, to the activities and operations of PPIA, PPIFA, the Administrator and associated investment funds and their respective affiliates.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**•** **PPIF's common shares (" <u>Shares</u> ") can only be sold to accredited investors as defined in rule 501(a) of Regulation D under the Securities Act of 1933 (as amended, the " <u>Securities Act</u> ") and cannot be sold without our written consent. An investment in PPIF is suitable only for sophisticated investors and requires the financial ability and willingness to accept the high risks and lack of liquidity inherent in an investment in PPIF.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**•** **Shares are not currently listed on a securities exchange, and it is uncertain whether a secondary market will develop. Therefore, shares of PPIF's common stock constitute illiquid investments.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**•** **Repurchases of common stock by PPIF, if any, are expected to be limited.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**•** **An investment in PPIF would not be suitable for investors who need the money they invest in a specified time frame.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**•** **Distributions can be funded from unlimited amounts of offering proceeds or borrowings, which could constitute a return of capital and reduce the amount of capital available to PPIF for investment. Any capital returned to shareholders through distributions will be distributed after payment of fees and expenses.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**•** **We have elected to be regulated as a business development company under the 1940 Act and are subject to the 1940 Act requirements applicable to business development companies.** 

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**FORWARD-LOOKING STATEMENTS** 

Some of the statements in this Registration Statement constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this Registration Statement involve risks and uncertainties, including statements as to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our future operating results;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our business prospects;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our contractual arrangements and relationships with third parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to raise capital and operate in a highly competitive market for investment opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the prospects of our portfolio companies and the ability of our portfolio companies to achieve their objectives,
the decline or failure of which may result in our borrowers defaulting on their payments to us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability of our Investment Adviser to hire and retain qualified personnel, to monitor and administer our
investments and to manage our future growth effectively;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of alternative reference rates on our business and certain of our investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our reliance on information systems, the failure of which could result in delays or other problems with our
business activities, and the susceptibility of such systems to cybersecurity threats;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to replicate historical performance of other investment companies and funds with which our
professionals have been affiliated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to raise additional capital while remaining in compliance with certain annual distribution, asset
coverage, asset composition and other regulatory requirements needed to maintain our status as a BDC and a regulated investment company (a " <u>RIC</u> ");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the use of leverage to fund our investments and the risk that we may fail to comply with the terms governing such
indebtedness or maintain certain asset coverage ratio requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our issuance of debt securities and/or preferred stock and the impact of such issuances on the value of our
Shares or our net asset value (" <u>NAV</u> ");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• potential conflicts of interest of our Investment Adviser and Administrator;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the potential dilution caused by any future issuances of subscription rights or warrants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of recent financial reform legislation, elevated levels of inflation and uncertainty about any future
laws and regulations on our business and our portfolio companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the investment objectives and decisions advanced by the board of trustees (the "Board") or the
Investment Adviser which are not subject to shareholder approval;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the illiquid nature of the assets in which we invest and our valuation procedures with respect to such assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• making investments in first lien secured debt, second lien secured debt, subordinated debt and the equity of
certain portfolio companies, and the risks of making such investments in privately held middle-market companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Investment Adviser's incentive to make speculative investments to earn a greater incentive fee and, in
some instances, our obligation to pay incentive compensation to our Investment Adviser even after we incur a loss;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the potential dilution of our Shares which may result from issuances of our Shares below the then current NAV per
share

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our allocation of net proceeds from offerings in ways which you may not agree and our inability to invest
proceeds from offerings in new investment opportunities, which could negatively affect our financial performance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• tax liabilities resulting from reinvestments in our Shares or from receiving our stock as a distribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to maintain our qualification as a BDC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes to political, economic or industry conditions or conditions affecting the financial and capital markets
that could cause volatility or prolonged disruption of the capital markets and impact the value of our assets, including the financial and political stability of the United States and other countries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our cash balances at financial institutions that exceed federally insured limits and the impact of adverse
developments affecting the financial services industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of economic sanction laws in the United States and other jurisdictions which may prohibit us and our
affiliates from transacting with certain countries, individuals and companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• potential litigation, whether initiated by shareholders or other parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of global climate change on the operations of our portfolio companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Company intends to invest primarily in privately held companies for which very little public information
exists. Such companies are also generally more vulnerable to economic downturns and may experience substantial variations in operating results; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the privately held companies and below-investment grade securities in which the Company invests will be difficult
to value and are illiquid.

We have based the forward-looking statements included in this Registration Statement on information available to us on the date of the filing of this Registration Statement. Actual results could differ materially from those anticipated in our forward-looking statements and future results could differ materially from historical performance. You are advised to consult any additional disclosures that we make directly to you or through reports that we in the future file with the Securities and Exchange Commission (the "<u>SEC</u>"), including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. This Registration Statement contains statistics and other data that have been obtained from or compiled from information made available by third-party service providers. We have not independently verified such statistics or data.

You should understand that, under Section 27A(b)(2)(B) of the Securities Act and Section 21E(b)(2)(B) of the Exchange Act, the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 do not apply to the forward-looking statements made in this Registration Statement or in periodic reports we will file under the Exchange Act upon effectiveness of this Registration Statement.

**ITEM 1. BUSINESS.** 

**PennantPark Private Income Fund** 

We are a closed-end, externally managed, non-diversified investment company that has elected to be regulated as a BDC under the 1940 Act. Prior to making the BDC election, we operated as a private fund classified as a partnership for U.S. federal income tax purposes. After making the BDC election, for U.S. federal income tax purposes, we intend to elect to be treated, and intend to qualify annually, as a RIC under the Internal Revenue Code of 1986 (the "<u>Code</u>"). We were formed with the intent to make investments and generate both current income and capital appreciation while seeking to preserve capital by investing a majority of our portfolio in senior first lien loans. We will also selectively invest in second lien loans, subordinated loans, and equity of private companies. Our investment objective is to generate current income and capital appreciation by investing primarily in senior secured debt of U.S. middle-market companies with last twelve-month earnings of between $10 million and $50 million.

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We execute our investment strategy directly and through our wholly owned subsidiaries. The term "subsidiary" means entities that primarily engage in investment activities in securities or other assets and are wholly owned by us. The Company does not intend to create or acquire primary control of any entity which primarily engages in investment activities of securities or other assets other than entities wholly owned by the Company. The subsidiaries comply with the provisions of Section 18 of the 1940 Act governing capital structure and leverage on an aggregate basis with the Company. Our subsidiaries comply with the provisions of Section 17 of the 1940 Act related to affiliated transactions and custody. To the extent that the Company forms a subsidiary advised by an investment adviser other than the Investment Adviser, the investment adviser to such subsidiaries will comply with the provisions of the 1940 Act relating to investment advisory contracts, including but not limited to, Section 15, as if it were an investment adviser to the Company under Section 2(a)(20) of the 1940 Act.

Through our wholly owned subsidiary, PennantPark Private Income Fund SPV LLC ("PPIF SPV"), we are a party to a loan and security agreement (as amended, the "CIBC Credit Agreement") with PennantPark Investment Advisers, LLC, as collateral manager, lenders from time to time party thereto, CIBC Bank USA ("CIBC"), as the administrative agent and Western Alliance Trust Company, N.A., as collateral agent and custodian. The CIBC Credit Agreement matures on October 2, 2030, unless extended. The aggregate commitment under the CIBC Credit Agreement is $65 million and allows us, through PPIF SPV, to increase such aggregate commitment to up to $300 million. Borrowings under the CIBC Credit Agreement bear interest at a rate equal to the Term Secured Overnight Financing Rate plus an applicable spread. As of November 30, 2025, approximately $20 million was outstanding under the CIBC Credit Agreement.

**Our Adviser** 

Our investment activities are currently managed by our investment adviser, PPIFA.

We will utilize the investing experience and contacts of PPIA in developing what we believe will be an attractive and diversified portfolio. The senior investment professionals of the Investment Adviser have worked together for many years and average over thirty-one (31) years of experience in the senior lending, mezzanine lending, leveraged finance, distressed debt and private equity businesses. In addition, our senior investment professionals have been involved in originating, structuring, negotiating, managing and monitoring investments in each of these businesses across changing economic and market cycles. We believe this experience and history have resulted in the Investment Adviser's strong reputation with financial sponsors, management teams, investment bankers, attorneys and accountants, which provides us with access to substantial investment opportunities across the capital markets. Our Investment Adviser has a rigorous investment approach, which is based upon extensive financial analysis with a focus on capital preservation, diversification and active management. Since its inception in 2007, the Investment Adviser has invested through its managed funds approximately $25 billion in over 800 investments with more than 250 different financial sponsors as of June 30, 2025.

PPIA will make a portion of the time and efforts of certain investment professionals on PPIA's investment team available to PPIFA for purposes of originating and identifying investment opportunities, conducting research and due diligence on prospective investments, analyzing and underwriting investment opportunities, structuring and selecting investments and monitoring and servicing the Company's investments in accordance with the services provided by the Investment Adviser to the Company.

**Our Administrator** 

PennantPark Investment Administration, LLC, our administrator and an affiliate of PPIA, provides the administrative services necessary for us to operate. The Administrator has experienced professionals with substantial backgrounds in finance and administration of registered investment companies. In addition to furnishing us with clerical, bookkeeping and record keeping services, the Administrator will oversee our financial records as well as the preparation of our reports to shareholders and reports filed with the SEC. The Administrator will assist in the determination and publication of our NAV, oversee the preparation and filing of our tax returns, and monitor the payment of our expenses as well as the performance of administrative and

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professional services rendered to us by others. Furthermore, our Administrator will offer, on our behalf, significant managerial assistance to those portfolio companies to which we are required to offer such assistance.

We will reimburse the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under our agreement with the Administrator (the "<u>Administration Agreement</u>"), including rent and our allocable portion of the costs of compensation and related expenses of our Chief Compliance Officer, Chief Financial Officer, Corporate Counsel and their respective staffs, as further discussed below under "Administration Agreement."

**Market Opportunity** 

We believe that the limited amount of capital available to middle-market companies, coupled with the desire of these companies for flexible sources of capital, creates an attractive investment environment for us.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **We believe middle-market companies have faced difficulty raising debt in private markets.** From time to
time, banks, finance companies, hedge funds and collateralized loan obligation (" <u>CLO</u> ") funds have withdrawn, and may again withdraw, capital from the middle-market, resulting in opportunities for alternative funding sources.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **We believe middle-market companies have faced difficulty in raising debt through the capital markets.** Many
middle-market companies look to raise funds by issuing high-yield bonds and broadly syndicated loans. We believe this approach to financing becomes difficult at times when institutional investors seek to invest in larger, more liquid offerings. We
believe this has made it harder for middle-market companies to raise funds by issuing high-yield securities from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **We believe that credit market dislocation for middle-market companies improves the risk-reward on our investments.** From time to time, market participants have reduced lending to middle-market and non-investment grade borrowers. As a result, we believe there is less competition in our market, more
conservative capital structures, higher yields and stronger covenants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **We believe there is a large pool of uninvested private equity capital likely to seek to combine their capital with sources of debt capital to complete private investments.** We expect that private equity firms will continue to be active investors in middle-market companies. These private equity funds generally seek to leverage their investments by
combining their capital with loans provided by other sources, and we believe that we are well-positioned to partner with such equity investors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **We believe there is substantial supply of opportunities resulting from maturing loans that seek refinancing.** A high volume of financings will come due in the next few years. Additionally, we believe that demand for debt financing from middle-market companies will remain strong because these companies will continue to require credit to refinance
existing debt, to support growth initiatives and to finance acquisitions. We believe the combination of strong demand by middle-market companies and, from time to time, the reduced supply of credit described above should increase lending
opportunities for us. We believe this supply of opportunities coupled with a lack of demand offers attractive risk-reward to investors.

**Competitive Strengths** 

We believe that we have the following competitive advantages over other capital providers to middle-market companies:

***Experienced Management Team***

The senior investment professionals of our Investment Adviser have worked together for many years and average over thirty-one (31) years of experience in senior lending, mezzanine lending, leveraged finance, distressed debt and private equity businesses. These senior investment professionals have been involved in originating, structuring, negotiating, managing and monitoring investments in each of these businesses across

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changing economic and market cycles. We believe this extensive experience and history have resulted in a strong reputation across the capital markets.

Lending to middle-market companies requires in-depth diligence, credit expertise, restructuring experience and active portfolio management. For example, lending to middle-market companies in the United States is generally more labor intensive than lending to larger companies due to the smaller size of each investment and the fragmented nature of the information available with respect to such companies. We are able to provide value-added customized financial solutions to middle-market companies as a result of specialized due diligence, underwriting capabilities and more extensive ongoing monitoring required as lenders.

***Disciplined Investment Approach with Strong Value Orientation***

We employ a disciplined approach in selecting investments that meet the long-standing, consistent value-oriented investment selection criteria employed by our Investment Adviser. Our value-oriented investment philosophy focuses on preserving capital and ensuring that our investments have an appropriate return profile in relation to risk. When market conditions make it difficult for us to invest according to our criteria, we will be highly selective in deploying our capital. We believe this approach continues to enable us to build an attractive investment portfolio that meets our return and value criteria over the long-term.

We believe it is critical to conduct extensive due diligence on investment targets. In evaluating new investments we, through our Investment Adviser, conduct a rigorous due diligence process that draws from our Investment Adviser's experience, industry expertise and network of contacts. Among other things, our due diligence is designed to ensure that each prospective portfolio company will be able to meet its debt service obligations.

In addition to engaging in extensive due diligence, our Investment Adviser seeks to reduce risk by focusing on businesses with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• strong competitive positions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• positive cash flow that is steady and stable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• experienced management teams with strong track records;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• potential for growth and viable exit strategies; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• capital structures offering appropriate risk-adjusted terms and covenants.

***Ability to Source and Evaluate Transactions through our Investment Adviser's Proactive Research Capability and Established Network***

The management team of our Investment Adviser has long-term relationships with financial sponsors, management consultants and management teams that we believe enable us to evaluate investment opportunities effectively in numerous industries, as well as provide us access to substantial information concerning those industries. We identify potential investments both through active origination and through dialogue with numerous financial sponsors, management teams, members of the financial community and corporate partners with whom the professionals of our Investment Adviser have long-term relationships.

***Flexible Transaction Structuring***

We are flexible in structuring investments and tailor investments to meet the needs of a portfolio company while also generating attractive risk-adjusted returns. We can invest in all parts of a capital structure and our Investment Adviser has extensive experience in a wide variety of securities for leveraged companies throughout economic and market cycles.

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Our Investment Adviser seeks to minimize the risk of capital loss without foregoing potential for capital appreciation. In making investment decisions, we seek to invest in companies that we believe can generate consistent positive risk-adjusted returns.

We believe that the in-depth experience of our Investment Adviser will enable us to invest throughout various stages of the economic and market cycles and to provide us with ongoing market insights in addition to a significant investment opportunity.

**Investment Criteria/Guidelines** 

We expect to commit to a value-oriented philosophy to seek to minimize the risk of capital loss without foregoing potential for capital appreciation.

We have identified several criteria, discussed below, that we believe are important in identifying and investing in prospective portfolio companies. These criteria will provide general guidelines for our investment decisions. However, we caution that not all of these criteria will be met by each prospective portfolio company in which we choose to invest. Generally, we will seek to use our experience and access to market information to identify investment opportunities and to structure investments efficiently and effectively.

***Leading and defensible competitive market positions***

The Investment Adviser invests in portfolio companies that it believes have developed strong positions within their markets. The Investment Adviser also seeks to invest in portfolio companies that it believes possess competitive advantages in, for example, scale, scope, customer loyalty, product pricing or product quality as compared to their competitors to protect their market position.

***Investing in stable borrowers with positive cash flow***

Our investment philosophy will place a premium on fundamental analysis and has a distinct value-orientation. The Investment Adviser invests in portfolio companies it believes to be stable and well-established, with strong cash flows and profitability. The Investment Adviser believes these attributes indicate portfolio companies that may be well-positioned to maintain consistent cash flow to service and repay their liabilities and maintain growth in their businesses or their relative market share. The Investment Adviser currently does not expect to invest significantly in start-up companies, companies in turnaround situations or companies with speculative business plans, although we are permitted to do so.

***Proven management teams***

The Investment Adviser focuses on investments in which the portfolio company has an experienced management team with an established track record of success. The Investment Adviser typically requires that portfolio companies have in place proper incentives to align management's goals with our goals, including having equity interests.

***Financial sponsorship***

The Investment Adviser may seek to cause us to participate in transactions sponsored by what it believes to be trusted financial sponsors. The Investment Adviser believes that a financial sponsor's willingness to invest significant equity capital in a portfolio company is an implicit endorsement of the quality of that portfolio company. Further, financial sponsors of portfolio companies with significant investments at risk may have the ability, and a strong incentive, to contribute additional capital in difficult economic times should financial or operational issues arise so as to maintain their ownership position.

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***Investments in different borrowers, industries and geographies***

The Investment Adviser seeks to invest our assets broadly among portfolio companies, across industries and geographical regions. The Investment Adviser believes that this approach may reduce the risk that a downturn in any one portfolio company, industry or geographical region will have a disproportionate impact on the value of our portfolio, although we are permitted to be non-diversified under the 1940 Act.

***Viable exit strategy***

The Investment Adviser seeks to invest in portfolio companies that it believes will provide a steady stream of cash flow to repay our loans while also reinvesting in their respective businesses. The Investment Adviser expects that such internally generated cash flow, leading to the payment of interest on, and the repayment of the principal of, our investments in portfolio companies to be a key means by which we will exit from our investments over time. In addition, the Investment Adviser also seeks to invest in portfolio companies whose business models and expected future cash flows offer attractive exit possibilities. These companies include candidates for strategic acquisition by other industry participants and companies that may repay our investments through an initial public offering of our Shares, refinancing or other capital markets transaction.

**Illustrative Deal Evaluation Process** 

***Due Diligence***

We believe it is critical to conduct extensive due diligence in evaluating new investment targets. Our Investment Adviser conducts a rigorous due diligence process that is applied to prospective portfolio companies and draws from our Investment Adviser's experience, industry expertise and network of contacts. In conducting due diligence, our Investment Adviser uses information provided by companies, financial sponsors and publicly available information as well as information from relationships with former and current management teams, consultants, competitors and investment bankers.

Our due diligence may include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• review of historical and prospective financial information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• research relating to the portfolio company's management, industry, markets, products and services and
competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• interviews with management, employees, customers and vendors of the potential portfolio company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• on-site visits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• review of loan documents; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• background checks.

Additional due diligence with respect to any investment may be conducted on our behalf by attorneys and accountants prior to the closing of the investment, as well as other outside advisers, as appropriate.

The Investment Adviser monitors our portfolio companies on an ongoing basis. The Investment Adviser also monitors the financial trends of each portfolio company to determine if it is meeting its respective business plans and to assess the appropriate course of action for each portfolio company.

The Investment Adviser has several methods of evaluating and monitoring the performance and fair value of our investments, which may include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• assessment of success in adhering to a portfolio company's business plan and compliance with covenants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• periodic or regular contact with portfolio company management and, if appropriate, the financial or strategic
sponsor, to discuss financial position, requirements and accomplishments;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• comparisons to other portfolio companies in the industry, if any;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• attendance at and participation in board meetings or presentations by portfolio companies; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• review of periodic financial statements and financial projections for portfolio companies.

The Investment Adviser monitors credit risk of each portfolio company regularly with a goal toward identifying early, and when able and appropriate, exiting investments with potential credit problems. This monitoring process may include reviewing: (1) a portfolio company's financial resources and operating history; (2) comparing a portfolio company's current operating results with the Investment Adviser's initial thesis for the investment and its expectations for the performance of the investment; (3) a portfolio company's sensitivity to economic conditions; (4) the performance of a portfolio company's management; (5) a portfolio company's debt maturities and capital requirements; (6) a portfolio company's interest and asset coverage; and (7) the relative value of an investment based on a portfolio company's anticipated cash flow.

***Investment Structure***

Once we determine that a prospective portfolio company is suitable for investment, we work with the management of that portfolio company and its other capital providers, including senior, junior and equity capital providers, to structure an investment. We negotiate with these parties to agree on how our investment is structured relative to the other capital in the portfolio company's capital structure.

We expect our floating rate loans to have terms of three to ten years. We generally obtain security interests in the assets of our portfolio companies that will serve as collateral in support of the repayment of these loans. This collateral may take the form of first priority liens on the assets of a portfolio company.

Typically, our second lien secured debt and subordinated debt investments have maturities of three to ten years. Second lien secured debt and subordinated debt may take the form of a second priority lien on the assets of a portfolio company and have interest-only payments in the early years with cash or payment-in-kind ("<u>PIK</u>"), or payments with amortization of principal deferred to the later years. In some cases, we may invest in debt securities that, by their terms, convert into equity or additional debt securities or defer payments of interest for the first few years after our investment. Also, in some cases, our second lien secured debt and subordinated debt may be collateralized by a subordinated lien on some or all of the assets of the borrower.

We will seek to tailor the terms of the investment to the facts and circumstances of the transaction and the prospective portfolio company, negotiating a structure that protects our rights and manages our risk while creating incentives for the portfolio company to achieve its business plan and improve its profitability. For example, in addition to seeking a senior position in the capital structure of our portfolio companies, we may seek to limit the downside potential of our investments by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• requiring a total return on our investments (including both interest in the form of a floor and potential equity
appreciation) that compensates us for credit risk;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• incorporating "put" rights and call protection into the investment structure; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• negotiating covenants in connection with our investments that afford our portfolio companies as much flexibility
in managing their businesses as possible, consistent with our focus of preserving capital. Such restrictions may include affirmative and negative covenants, default penalties, lien protection, change of control provisions and board rights, including
either observation or participation rights.

Our investments may include equity features, such as direct investments in the equity securities of borrowers or warrants or options to buy a minority interest in a portfolio company. Any warrants we may receive with our debt securities generally require only a nominal cost to exercise, so as a portfolio company appreciates in value, we may achieve additional investment return from these equity investments. We may structure the warrants to provide provisions protecting our rights as a minority-interest holder, as well as puts, or rights to sell such securities back to the portfolio company, upon the occurrence of specified events. In many cases, we may

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also obtain registration rights in connection with these equity investments, which may include demand and "piggyback" registration rights.

In addition, from time to time, we may also invest in derivative securities, subject to compliance with applicable laws including Rule 18f-4 under the 1940 Act.

While not intended to be a principal part of the Company's investment strategy, the Company may from time to time invest in other investment companies, subject to the requirements under applicable law.

We expect to hold most of our investments to maturity or repayment, but we may exit certain investments earlier when a liquidity event, such as the sale or refinancing of a portfolio company, takes place. We also may turn over investments to better position the portfolio in light of market conditions.

**Ongoing Relationships with Portfolio Companies** 

***Monitoring***

The Investment Adviser monitors our portfolio companies on an ongoing basis. The Investment Adviser also monitors the financial trends of each portfolio company to determine if it is meeting its respective business plans and to assess the appropriate course of action for each portfolio company.

The Investment Adviser has several methods of evaluating and monitoring the performance and fair value of our investments, which may include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• assessment of success in adhering to a portfolio company's business plan and compliance with covenants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• periodic or regular contact with portfolio company management and, if appropriate, the financial or strategic
sponsor, to discuss financial position, requirements and accomplishments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• comparisons to other portfolio companies in the industry, if any;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• attendance at and participation in board meetings or presentations by portfolio companies; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• review of periodic financial statements and financial projections for portfolio companies.

***Investments***

We intend to create a portfolio that includes primarily senior secured debt of middle-market companies in the United States with last twelve-months earnings of between $10 million and $50 million. Under normal circumstances, we expect that a majority of our portfolio will consist of senior first lien loans. We will also selectively invest in second lien loans, subordinated loans, and equity of private companies.

***Managerial Assistance***

We offer significant managerial assistance to our portfolio companies. As a BDC, we are required to make available such significant managerial assistance within the meaning of Section 2(a)(47) of the 1940 Act.

**Competition** 

Our primary competitors will provide financing to middle-market companies and include other BDCs, commercial and investment banks, commercial finance companies, CLO funds, private direct lending funds and, to the extent they provide an alternative form of financing, private equity funds. Additionally, alternative investment vehicles, such as hedge funds, frequently invest in middle-market companies. As a result, competition for investment opportunities in middle-market companies can be intense. However, we believe that from time to time there has been a reduction in the amount of debt capital available to middle-market companies, which we believe has resulted in a less competitive environment for making new investments.

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**Summary Risk Factors** 

*The risk factors described below are a summary of the principal risk factors associated with an investment in us. These are not the only risks we face. You should carefully consider these risk factors, together with the risk factors set forth in Item 1A. of this Registration Statement and the other reports and documents filed by us with the SEC.* 

Some, but not all, of the risks and uncertainties that we face are related to:

• our status as a new company with no operating history;

• our ability to operate in a highly competitive market for investment opportunities;

• the prospects of our portfolio companies and the ability of our portfolio companies to achieve their objectives,
the decline or failure of which may result in our borrowers defaulting on their payments to us;

• the ability of our Investment Adviser to hire and retain qualified personnel, to monitor and administer our
investments and to manage our future growth effectively;

• the impact of alternative reference rates on our business and certain investments;

• our reliance on information systems, the failure of which could result in delays or other problems with our
business activities, and the susceptibility of such systems to cybersecurity threats;

• our ability to replicate historical performance of other investment companies and funds with which our
professionals have been affiliated;

• our ability to raise additional capital while remaining in compliance with certain annual distribution, asset
coverage, asset composition and other regulatory requirements needed to maintain our status as a BDC and a RIC;

• the use of leverage to fund our investments and the risk that we may fail to comply with the terms governing such
indebtedness or maintain certain asset coverage ratio requirements;

• our issuance of debt or other securities and the impact of such issuances on the value of our Shares or NAV;

• market conditions that may make it difficult for us to refinance or extend the maturity of our existing
indebtedness;

• potential conflicts of interest of our Investment Adviser and Administrator;

• the potential dilution caused by any future issuances of subscription rights or warrants;

• the impact of recent financial reform legislation and uncertainty about any future laws and regulations on our
business and our portfolio companies;

• the investment objectives and decisions advanced by the Board or the Investment Adviser which are not subject to
shareholder approval;

• the illiquid nature of the assets in which we invest and our valuation procedures with respect to such assets;

• making investments in loans bearing a variable-rate of interest, or floating rate loans, first lien secured debt,
second lien secured debt, subordinated debt and the equity of certain portfolio companies, and the risks of making such investments in privately held middle-market companies;

• the Investment Adviser's incentive to make speculative investments to earn a greater incentive fee and, in
some instances, our obligation to pay incentive compensation to our Investment Adviser even after we incur a loss;

• our allocation of net proceeds from offerings in ways which you may not agree and our inability to invest
proceeds from offerings in new investment opportunities, which could negatively affect our financial performance;

• tax liabilities resulting from receiving our stock as a distribution;

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• changes to political, economic or industry conditions or conditions affecting the financial and capital markets,
could cause volatility or prolonged disruption of the capital markets and impact the value of our assets;

• our cash balances at financial institutions that exceed federally insured limits and the impact of adverse
developments affecting the financial services industry;

• the impact of economic sanction laws in the United States and other jurisdictions which may prohibit us and our
affiliates from transacting with certain countries, individuals and companies;

• potential litigation, whether initiated by shareholders or other parties, and the ability to enforce civil
judgments against us and our directors, officers and experts; and

• the impact of global climate change on the operations of our portfolio companies.

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also have a material adverse effect on our business, financial condition and/or operating results. For a more detailed discussion of the risks that you should consider prior to investing in our securities, see "*Item 1A. Risk Factors*" below.

**Private Offering of Our Common Shares** 

We have offered and intend to continue to offer and sell Shares in a private placement in the United States under the exemption provided by Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder, Regulation S under the Securities Act and other exemptions from the registration requirements of the Securities Act (the "<u>Private Offering</u>"). Investors who acquire Shares in our private placement are required to complete, execute and deliver a subscription agreement (a "<u>Subscription Agreement</u>"), and related documentation, which include customary representations and warranties, certain covenants and restrictions and indemnification provisions. Additionally, such investors could be required to provide due diligence information for compliance with certain legal requirements. We could, from time to time, engage placement or distribution agents and incur placement or distribution fees or sales commissions in connection with the private placement of our Shares in certain jurisdictions outside the United States. The cost of any such placement or distribution fees could be borne by an affiliate of the Investment Adviser. We will not incur any such fees or commissions if our net proceeds received upon a sale of our Shares after such costs would be less than the net asset value per share of our Shares. We entered into Subscription Agreements with a small number of accredited investors on or about September 16, 2025 prior to our election to be regulated as a BDC.

Pursuant to Subscription Agreements prior to our BDC election (the <u>"Drawdown Subscription Agreements</u>"), investors make commitments to purchase Shares ("<u>Capital Commitments</u>"). The Drawdown Subscription Agreements provide that investors are required to fund capital contributions to purchase Shares (a "<u>Drawdown Purchase</u>") each time we deliver a drawdown notice, which we deliver at least ten business days prior to the date on which contributions will be due. Drawdown Purchases are allocated among investors with unfunded Capital Commitments in amounts proportional to the Capital Commitment of each investor in our private placement. However, the Drawdown Subscription Agreements provide that we retain the right, at our discretion, to call Drawdown Purchases on a non-pro rata basis to comply with ownership limitations under the Employee Retirement Income Security Act of 1974, as amended ("<u>ERISA</u>"), or to allow an investor with less than 20% of its original Capital Commitment remaining unfunded to subscribe for the full unfunded balance. Rather than comply with such ownership limitations under ERISA, we may seek to comply with the rules applicable to VCOCs (as defined below), and/or compliance with such other ERISA related exceptions to avoid our assets becoming "plan assets" under U.S. Department of Labor regulation 29 C.F.R. 2510.3-101 as modified by Section 3(42) of ERISA (the "<u>Plan Assets Regulation</u>") in which case the initial Capital Commitments from Benefit Plan Investors (as defined below) and certain other investors may be deferred (with interest) until the time that we make our first investment intended to be a qualifying "venture capital operating company" (within

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the meaning of the Plan Assets Regulation ("<u>VCOC</u>")) investment, or until the Investment Adviser otherwise determines that the our assets will not constitute "plan assets" under the Plan Assets Regulation.

Each Drawdown Purchase under the Drawdown Subscription Agreements is made at a price per share of Shares equal to our most recent NAV per share as determined by the Board, provided that the purchase price is subject to adjustment to the extent required by Section 23 of the 1940 Act (which generally prohibits us from selling Shares at a price below the then-current NAV per share of the Shares as determined within 48 hours, excluding Sundays and holidays, of such sale, subject to certain exceptions). No investor in our private placement will be required to invest more than the total amount of its Capital Commitment. We called all outstanding Capital Commitments pursuant to the Drawdown Subscription Agreements prior to our BDC election.

Following the BDC election date, at such time as determined in our sole discretion, we commenced holding monthly closings for the Private Offering, in connection with which we will issue Shares to investors for immediate cash investment. In connection with the BDC election, we ceased accepting Capital Commitments pursuant to Drawdown Subscription Agreements and has not and will not enter into additional Drawdown Subscription Agreements following such BDC election. Such monthly closings will be conducted in reliance on exemptions from the registration requirements of the Securities Act, including the exemption provided by Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder, Regulation S under the Securities Act and other exemptions from the registration requirements of the Securities Act.

We reserve the right to conduct additional offerings of securities in the future in addition to this Private Offering. In addition, although we intend to issue Shares in the Private Offering on a monthly basis, we retain the right, if determined by us in our sole discretion, to accept subscriptions and issue Shares, in amounts to be determined by us, more or less frequently to one or more investors for regulatory, tax or other reasons as we may determine to be appropriate.

**Perpetual Term** 

Our term is perpetual.

While we may consider providing liquidity in the future through a listing of our Shares on a national securities exchange or a merger of the Company with a company listed on such an exchange, which could include an affiliate of the Investment Adviser (in either case, a "<u>Listing</u>"), we do not currently intend to undertake a Listing, and we will not be obligated to effect a Listing or other liquidity event at any time.

**Operating and Regulatory Structure** 

Our investment activities are managed by the Investment Adviser and supervised by the Board, a majority of whom are independent of us, the Investment Adviser and its affiliates.

As a BDC, we are required to comply with certain regulatory requirements. For example, we may acquire additional capital from the issuance of additional senior securities or other indebtedness, the issuance of additional Shares, the issuance of warrants or subscription rights to purchase certain of our securities, or from securitization transactions. However, under the 1940 Act, the asset coverage ratio requirements permit us to issue senior securities or incur indebtedness subject to certain limitations. Our ability to pay distributions or issue additional senior securities would be restricted if our asset coverage ratio was not met. See "*— Regulation."* The use of leverage to finance investments creates certain risks and potential conflicts of interest. See *"Item 1A. Risk Factors — Risks Relating to our Business and Structure — There are significant potential conflicts of interest which could impact our investment returns"* and *" — Risks Relating to our Business and Structure — Regulations governing our operation as a BDC affect our ability to, and the way in which we, raise additional capital."*

Also, as a BDC, we are generally prohibited from acquiring assets other than "qualifying assets" unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets. Qualifying assets include

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investments in U.S. operating companies whose securities are not listed on a national securities exchange and companies listed on a national securities exchange subject to maximum market capitalization of $250 million. Qualifying assets also include cash, cash equivalents, government securities and high quality debt securities maturing in one year or less from the time of the investments. See *" —Regulation."*

**Conflicts of Interest** 

PennantPark currently or in the future may provide investment advisory and other services, directly and through affiliates, to various affiliated entities, including other investment funds and separately managed accounts other than the Company ("<u>Adviser Accounts</u>"). The Company has no interest in these activities. The Investment Adviser and the investment professionals, who on behalf of the Investment Adviser provide investment advisory services to the Company, are engaged in activities other than on behalf of the Company, may have differing economic interests in respect of such activities, and may have conflicts of interest in allocating their time and activity between the Company and the Adviser Accounts. Such persons devote only so much time to the affairs of the Company as in their judgment is necessary and appropriate.

The Investment Adviser and its affiliates currently advise and manage and expect that they will in the future advise and manage additional investment accounts and investment funds, including proprietary accounts of the Investment Adviser, its affiliates and the personnel thereof (collectively, "<u>Other Accounts</u>") having investment guidelines substantially similar in whole or in part to those of the Company. As a result, the Investment Adviser may face conflicts in how it allocates both investment and disposition opportunities between the Company and the Other Accounts. The Investment Adviser intends to allocate such opportunities in a fair and equitable manner between the Company and the Other Accounts, in accordance with its investment allocation policy and the requirements of the 1940 Act. The Company may engage in co-investments with the Investment Adviser and its affiliates, including Other Accounts, pursuant to the co-investment exemptive order from the SEC (the "<u>Order</u>") granted to the Investment Adviser from the SEC, subject to conditions and restrictions in the Order.

As noted above, the Company may make investments in a portfolio company where one or more Other Accounts hold(s) an investment in a different category of debt or equity. In such circumstances, PennantPark may have conflicting interests between its duties to the Company and such other Accounts. Generally, the Company will make investments that potentially conflict with the interests of Other Accounts it advises only when, at the time of investment by the Company, PennantPark determines that (a) such investment is in the best interests of the Company, and (b) the possibility of actual conflict between the Company and such Other Accounts is remote, or (c) in light of the particular circumstances, PennantPark determines that such investment is appropriate for the Company, notwithstanding the potential for conflict.

**Amended and Restated Investment Advisory Management Agreement** 

We have entered into an agreement with PPIFA (the "<u>Amended and Restated Investment Management Agreement</u>") under which the Investment Adviser, subject to the overall supervision of our Board, manages the day-to-day operations of, and provides investment advisory services to, us. Mr. Penn, our Chairman and Chief Executive Officer, is the managing member and a senior investment professional of, and has a financial and controlling interest in, the Investment Adviser. The Amended and Restated Investment Management Agreement amends and restates on substantially identical terms, our prior investment advisory management agreement with

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PPIA (the "Investment Advisory Management Agreement"). Under the terms of our Amended and Restated Investment Advisory Management Agreement, the Investment Adviser, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• determines the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner
of implementing such changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identifies, evaluates and negotiates the structure of the investments we make (including performing due diligence
on our prospective portfolio companies);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• closes and monitors the investments we make; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provides us with such other investment advisory, research and related services as we may need from time to time.

The Investment Adviser's services under our Amended and Restated Investment Advisory Management Agreement are not exclusive, and it is free to furnish similar services, without the prior approval of our shareholders or our Board, to other entities so long as its services to us are not impaired. Our Board monitors for any potential conflicts that may arise upon such a development. For providing these services, the Investment Adviser receives a fee from us, consisting of two components—a base management fee and an incentive fee (collectively, "<u>Management Fees</u>").

***Incentive Advisory Fees***

The base management fee is calculated at an annual rate of 1.25% of our average adjusted net assets and is payable quarterly in arrears. For purposes of the Investment Advisory Management Agreement, "adjusted net assets" means Company's total assets less liabilities determined on a consolidated basis in accordance with GAAP.

The base management fee is calculated based on the average adjusted net assets at the end of the two most recently completed calendar quarters, and is appropriately adjusted for any Share issuances or repurchases during the current calendar quarter.

The incentive fee has two parts, as follows:

One part is calculated and payable quarterly in arrears based on our Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter. For this purpose, "Pre-Incentive Fee Net Investment Income" means interest income, dividend income and any other income, including any other fees (other than fees for providing managerial assistance) such as amendment, commitment, origination, prepayment penalties, structuring, diligence and consulting fees or other fees received from portfolio companies, accrued during the calendar quarter, minus our operating expenses for the quarter (including the base management fee, any expenses payable under the Administration Agreement, and any interest expense or amendment fees under any credit facility and distribution paid on any issued and outstanding Shares, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as original issue discount ("<u>OID</u>") debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, computed net of all realized capital losses or unrealized capital appreciation or depreciation. Pre-Incentive Fee Net Investment Income, expressed as a percentage of the value of our net assets at the end of the immediately preceding calendar quarter, is compared to the hurdle rate of one and one-quarter-of-one percent (1.25%) per quarter (five percent (5.00%) annualized). We pay the Investment Adviser an incentive fee with respect to our Pre-Incentive Fee Net Investment Income in each calendar quarter as follows: (1) no incentive fee in any calendar quarter in which our Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate of one and one-quarter-of-one percent (1.25%) per quarter (five percent (5.00%) annualized), (2) 100% of our Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than 1.4285% in any calendar quarter (5.7140% annualized) (we refer to this portion of our Pre-Incentive Fee Net Investment Income (which exceeds the hurdle but is less than 1.4285%) as the "catch-up," which is meant to provide our

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Investment Adviser with 12.50% of our Pre-Incentive Fee Net Investment Income, as if a hurdle did not apply, if this net investment income exceeds 1.4285% in any calendar quarter), and (3) 12.50% of the amount of our Pre-Incentive Fee Net Investment Income, if any, that exceeds 1.4285% in any calendar quarter. These calculations are pro-rated for any Share issuances or repurchases during the relevant quarter, if applicable.

The following is a graphical representation of the calculation of the income related portion of the incentive fee.

![LOGO](g50016g07g07.jpg)

The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Management Agreement, as of the termination date) and equals 12.50% of our realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees.

The Investment Adviser has agreed to waive all of the base management fee and incentive fee through the earlier of (x) the Company's election to be regulated as a BDC and (y) March 15, 2026. The Company elected to be regulated as a BDC on October 31, 2025, and accordingly, the fee waiver has expired.

**Examples of Quarterly Incentive Fee Calculation** 

**Example 1: Income Related Portion of Incentive Fee (\*):** 

**Alternative 1:** 

*Assumptions* 

Investment income (including interest, dividends, fees, etc.) = 1.00%

Hurdle<sup>(1)</sup> = 1.25%

Base management fee<sup>(2)</sup> = 0.3125%

Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.30%

Pre-Incentive Fee Net Investment Income

(investment income-(base management fee + other expenses)) = 0.3875%

Pre-Incentive Fee Net Investment Income does not exceed hurdle; therefore, there is no incentive fee.

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**Alternative 2:** 

*Assumptions* 

Investment income (including interest, dividends, fees, etc.) = 2.00%

Hurdle<sup>(1)</sup> = 1.25%

Base management fee<sup>(2)</sup> = 0.3125%

Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.30%

Pre-Incentive Fee Net Investment Income

(investment income-(base management fee + other expenses)) = 1.3875%

---

| | |
|:---|:---|
| Incentive fee | = 100% X Pre-Incentive Fee Net Investment Income, subject to "catch-up" |
|  | = 100% X (1.3875% - 1.25%) |
|  | = 0.1375% |

---

**Alternative 3:** 

*Assumptions* 

Investment income (including interest, dividends, fees, etc.) = 3.00%

Hurdle<sup>(1)</sup> = 1.25%

Base management fee<sup>(2)</sup> = 0.3125%

Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.30%

Pre-Incentive Fee Net Investment Income

(investment income-(base management fee + other expenses)) = 2.3875%

---

| | |
|:---|:---|
| Incentive fee | = 100% X Pre-Incentive Fee Net Investment Income, subject to "catch-up"<sup>(3)</sup> |
| Incentive fee | = 100% X "catch-up" + (12.5% x (Pre-Incentive Fee Net Investment Income - 1.4285%)) |
| Catch-up | = 1.4285% - 1.25% |
|  | = 0.1785% |
|  | = (100% X 0.1785%) + (12.5% X (2.3875% - 1.4285%)) |
|  | = 0.1785% + (12.5% X 0.9590%) |
|  | = 0.1785% + 0.1199% |
|  | = 0.2984% |

---

\* The hypothetical amount of Pre-Incentive Fee Net Investment Income shown is based on a percentage of total net assets. 

<sup>(1)</sup> Represents 5.0% annualized hurdle. 

<sup>(2)</sup> Represents 1.25% annualized base management fee. 

<sup>(3)</sup> The "catch-up" provision is intended to provide the Investment Adviser with an incentive fee of approximately 100% on all of our Pre-Incentive Fee Net Investment Income as if a hurdle rate did not apply when our net investment income exceeds 1.4285% in any calendar quarter. 

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**Example 2: Capital Gains Portion of Incentive Fee:** 

**Alternative 1:** 

*Assumptions* 

Year 1: $20 million investment made in Company A ("Investment A"), and $30 million investment made in Company B ("Investment B")

Year 2: Investment A sold for $50 million and fair market value ("FMV") of Investment B determined to be $32 million

Year 3: FMV of Investment B determined to be $25 million

Year 4: Investment B sold for $31 million

The capital gains portion of the incentive fee, if any, would be:

Year 1: None

Year 2: $3.75 million capital gains incentive fee

$30 million realized capital gains on sale of Investment A multiplied by 12.5%

Year 3: None

$3.125 million cumulative fee (12.5% multiplied by $25 million ($30 million cumulative realized capital gains less $5 million cumulative capital depreciation)) less $3.75 million (previous capital gains fee paid in Year 2)

Year 4: $125,000 capital gains incentive fee

$3.875 million cumulative fee ($31 million cumulative realized capital gains multiplied by 12.5 %) less $3.75 million (previous capital gains fee paid in Year 2).

**Alternative 2:** 

*Assumptions* 

Year 1: $20 million investment made in Company A ("Investment A"), $30 million investment made in Company B ("Investment B") and $25 million investment made in Company C ("Investment C")

Year 2: Investment A sold for $50 million, FMV of Investment B determined to be $25 million and FMV of Investment C determined to be $25 million

Year 3: FMV of Investment B determined to be $27 million and Investment C sold for $30 million

Year 4: FMV of Investment B determined to be $35 million

Year 5: Investment B sold for $20 million

The capital gains portion of the incentive fee, if any, would be:

Year 1: None

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Year 2: $3.125 million capital gains incentive fee

12.5% multiplied by $25 million ($30 million realized capital gains on sale of Investment A less $5 million unrealized capital depreciation on Investment B)

Year 3: $875,000 million capital gains incentive fee<sup>(1)</sup>

$4 million cumulative fee (12.5% multiplied by $32 million ($35 million cumulative realized capital gains less $3 million unrealized capital depreciation on Investment B)) less $3.125 million (previous capital gains fee paid in Year 2)

Year 4: $375,000 million capital gains incentive fee

$4.375 million cumulative fee (12.5% multiplied by $35 million ($35 million cumulative realized capital gains without regard to $5 million of unrealized appreciation on Investment B)) less $4 million (previous cumulative capital gains fee paid in Year 2 and Year 3)

Year 5: None

$3.125 million cumulative fee (12.5% multiplied by $25 million ($25 million cumulative realized capital gains) less $4.375 million (previous cumulative capital gains fee paid in Years 2, 3 and Year 4)

<sup>(1)</sup> As illustrated in Year 3 of Alternative 2 above, if we were to be wound up on a date other than September 30 of any year after year 3, we may have paid aggregate capital gain incentive fees that are more than the amount of such fees that would be payable if we had been wound up on September 30 of such year. 

***Payment of Our Expenses***

All investment professionals of Investment Adviser and/or its affiliates, when and to the extent engaged in providing investment advisory and management services to us, and the compensation and routine overhead expenses of personnel allocable to these services to us, are provided and paid for by Investment Adviser and not by us. We bear all other out-of-pocket costs and expenses of our operations and transactions. See *"Item 2. Financial Information — Management's Discussion of Expected Operating Plans —Expenses."*

***Duration and Termination***

The Investment Advisory Management Agreement with PPIA was approved by our Board on September 16, 2025. This Investment Advisory Management Agreement terminated when we entered into an Amended and Restated Investment Advisory Management Agreement with PPIFA on October 29, 2025.

The Amended and Restated Investment Advisory Management Agreement with PPIFA was approved by our Board on October 17, 2025. Unless terminated earlier as described below, the Amended and Restated Investment Advisory Management Agreement will continue in effect for a period of one year through such date. The Amended and Restated Investment Advisory Management Agreement will automatically terminate in the event of its assignment. The Amended and Restated Investment Advisory Management Agreement may be terminated by either party without penalty upon 60 days' written notice to the other party.

The Investment Advisory Management Agreement was approved by our Board, including a majority of our trustees who are not interested persons of us or the Investment Adviser. It will remain in effect if approved annually by our Board, or by the affirmative vote of the holders of a majority of our outstanding voting securities, including, in either case, approval by a majority of our trustees who are not interested persons of us or the Investment Adviser. In determining to reapprove the Investment Advisory Management Agreement, our Board requested information from the

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Investment Adviser that enabled it to evaluate a number of factors relevant to its determination. These factors included the nature, quality and extent of services performed by the Investment Adviser, the Investment Adviser's ability to manage conflicts of interest effectively, our short and long-term performance, our costs, including as compared to comparable externally and internally managed BDCs that engage in similar investing activities, the Investment Adviser's profitability, any economies of scale, and any other benefits of the relationship for the Investment Adviser. Based on the information reviewed and the considerations detailed above, our Board, including all of our trustees who are not interested persons of us or the Investment Adviser, concluded that the investment advisory fee rates and terms are fair and reasonable in relation to the services provided and reapproved the Investment Advisory Management Agreement as being in the best interests of our shareholders.

***Indemnification***

Our Investment Advisory Management Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of their duties or by reason of the reckless disregard of their duties and obligations, the Investment Adviser and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with them are entitled to indemnification from us for any damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid in settlement) arising from the rendering of the Investment Adviser's services under our Investment Advisory Management Agreement or otherwise as the Investment Adviser or for us.

**Administration Agreement** 

We have entered into the Administration Agreement with the Administrator under which the Administrator furnishes us with office facilities, equipment and clerical, bookkeeping and record keeping services. Under our Administration Agreement, the Administrator performs, or oversees the performance of, our required administrative services, which include, among other activities, being responsible for the financial records we are required to maintain and preparing reports to our shareholders and reports filed with the SEC. In addition, the Administrator assists us in determining and publishing our NAV, oversees the preparation and filing of our tax returns and generally oversees the payment of our expenses and the performance of administrative and professional services rendered to us by others. For providing these services, facilities and personnel, we have agreed to reimburse the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including rent, technology systems, insurance, our allocable portion of the cost of compensation and related expenses of our Chief Compliance Officer, Chief Financial Officer, Corporate Counsel and their respective staffs, certain tax and general legal advice and/or services provided to the Company by in-house professionals of the Administrator related to ongoing operations of the Company and/or services provided to the Company or portfolio companies by in-house professionals of the Administrator or its affiliates on matters related to potential or actual investments and transactions, including due diligence.

The Adviser also offers on our behalf, significant managerial assistance to portfolio companies to which we are required to offer such assistance. To the extent that our Adviser outsources any of its functions, we will pay the fees associated with such functions on a direct basis without profit to the Adviser.

***Indemnification***

Our Administration Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of their duties or by reason of the reckless disregard of their duties and obligations, the Administrator and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with them are entitled to indemnification from us for any damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid in settlement) arising from the rendering of the Administrator's services under our Administration Agreement or otherwise as the Investment Adviser or for us.

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***Expense Holiday Agreement***

The Company entered into an expense holiday agreement (the "<u>Expense Holiday Agreement</u>") with the Investment Adviser on October 29, 2025. Under the Expense Holiday Agreement, the Investment Adviser agreed that the Investment Adviser will pay on behalf of the Company one hundred percent (100%) of the organizational and offering expenses until the Company receives $300 million in gross proceeds from the sale of Shares excluding Shares purchased by the Investment Adviser and by the Company's directors and officers (the "<u>Reimbursement Hurdle</u>"). Within ninety (90) days following the later of the (i) Second Anniversary Date or (ii) the Company meeting the Reimbursement Hurdle, or (iii) such later date as determined by the Investment Adviser in its sole discretion, the Company will reimburse the Investment Adviser for organizational and offering expenses incurred by the Investment Adviser up to $1.5 million.

The Investment Adviser may waive its right to receive all or a portion of any reimbursement under the Expense Holiday Agreement.

***Expense Limitation Agreement***

The Company entered into an Expense Limitation Agreement (the "<u>Expense Limitation Agreement</u>") with the Investment Adviser on October 29, 2025. Pursuant to the Expense Limitation Agreement, the Investment Adviser agreed to reimburse the Company for a portion of the Company's costs and expenses (the "<u>Specified</u> <u>Expenses</u>") to the effect that such expenses do not exceed an annual rate of 1.25% of the Company's NAV (the "<u>Expense Limitation</u>"). The Expense Limitation will be calculated based on the average quarterly net assets based on the two most recently completed calendar quarters. Reimbursements shall be paid, quarterly in arrears, by the Investment Adviser to the Company in any combination of cash or other immediately available funds and/or offset against amounts due from the Company to the Investment Adviser or its affiliates at the request of the Company. All reimbursement payments shall be deemed to relate to the earliest reimbursement payments made by the Investment Adviser to the Company within three (3) years to the last business day of the fiscal quarter in which such reimbursement payment obligation accrued.

The Company agreed to repay the amount reimbursed by the Investment Adviser as promptly as possible, on a quarterly basis, but only if and to the extent that such reimbursement does not cause the Company's Specified Expenses plus recoupment to exceed an annual rate of 1.25% of the value of the Company's net assets (or, if a lower expense limit is in effect, such lower limit) within the thirty-six (36) month period after the Investment Adviser bears the expenses ("<u>Excess Expenses</u>"). If within the thirty-six (36) month period after the Investment Adviser reimburses expenses, the Company has reimbursed the Investment Adviser for any Excess Expenses, and the Company's Specified Expenses once again exceed the Expense Limitation, the Investment Adviser shall promptly pay the Company an amount equal to the lesser of: (i) the amount by which the Specified Expenses exceed the Expense Limitation; and (ii) the amount of reimbursements for Excess Expenses paid by the Company to the Investment Adviser.

**Trademark License Agreement** 

We have entered into a trademark license agreement with PPIA (the "<u>Trademark License Agreement</u>") pursuant to which PPIA has granted us a royalty-free, non-exclusive license to use the name "PennantPark." Under this agreement, we will have a right to use the PennantPark name, for so long as PPIA or another affiliate of PPIA (including PPIFA) remains our investment adviser. Other than with respect to this limited license, we have no legal right to the "PennantPark" name.

**Staffing** 

We do not currently have any employees. PennantPark has hired and expect to continue to hire professionals with skills applicable to our business plan, including experience in middle-market investing, senior lending, mezzanine lending, leveraged finance, distressed debt and private equity businesses.

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**Regulation** 

We have elected to be treated as a BDC under the 1940 Act, and we intend to qualify for and elect to be treated as a RIC under Subchapter M of the Code. The 1940 Act contains prohibitions and restrictions relating to transactions between a BDC and its affiliates (including any investment advisers or sub-advisers), principal underwriters and affiliates of those affiliates or underwriters and requires that a majority of the trustees be persons other than "interested persons," as that term is defined in the 1940 Act. In addition, the 1940 Act provides that we may not change the nature of our business so as to cease to be, or to withdraw our election as, a BDC unless approved by holders of a majority of our outstanding voting securities.

We may invest up to 100% of our assets in securities acquired directly from issuers in privately negotiated transactions. With respect to such securities, we may, for the purpose of public resale, be deemed an "underwriter" as that term is defined in the Securities Act. We may purchase or otherwise receive warrants to purchase the Shares of our portfolio companies in connection with acquisition financing or other investments. Similarly, in connection with an acquisition, we may acquire rights to require the issuers of securities we own or their affiliates to repurchase them under certain circumstances. We do not intend to acquire securities issued by any registered investment company that exceed the limits imposed by the 1940 Act. Under these limits, we generally cannot acquire more than 3% of the voting Shares of any registered investment company, invest more than 5% of the value of our total assets in the securities of one registered investment company or invest more than 10% of the value of our total assets in the securities of more than one registered investment company. With regard to that portion of our portfolio invested in securities issued by investment companies, it should be noted that such investments might subject our shareholders to additional expenses. We may enter into hedging transactions to manage the risks associated with interest rate and currency fluctuations. None of these policies are fundamental and they may be changed without shareholder approval.

***Qualifying Assets***

Under the 1940 Act, a BDC may not acquire any asset other than assets of the type listed in Section 55(a) of the 1940 Act, which are referred to as qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the BDC's total assets. The principal categories of qualifying assets relevant to our business are the following:

(1) Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC. An eligible portfolio company is defined under the 1940 Act to include any issuer which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) is organized under the laws of, and has its principal place of business in, the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) is not an investment company (other than a small business investment company wholly-owned by the BDC) or a company that would be an investment company but is excluded from the definition of an investment company by Section 3(c) of the 1940 Act; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) satisfies any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) does not have any class of securities listed on a national securities exchange;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) has any class of securities listed on a national securities exchange subject to a maximum market capitalization of $250.0 million; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) is controlled by a BDC, either alone or as part of a group acting together, and such BDC in fact exercises a controlling influence over the management or policies of such eligible portfolio company and, as a result of such control, has an affiliated person who is a trustee of such eligible portfolio company.

(2) Securities of any eligible portfolio company which we control.

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(3) Securities purchased in a private transaction from a U.S. operating company or from an affiliated person of the issuer, or in transactions incidental thereto, if such issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements.

(4) Securities of an eligible portfolio company purchased from any person in a private transaction if there is no readily available market for such securities and we already own 60% of the outstanding equity of the eligible portfolio company.

(5) Securities received in exchange for or distributed on or with respect to securities described in (1) through (4) above, or pursuant to the exercise of warrants or rights relating to such securities.

(6) Cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment.

In addition, a BDC must have been organized and have its principal place of business in the United States and must be operated for the purpose of making investments in the types of securities described in (1), (2) or (3) above.

***Managerial Assistance to Portfolio Companies***

As a BDC, we are required to make available significant managerial assistance to our portfolio companies that constitute a qualifying asset within the meaning of Section 2(a)(47) of the 1940 Act. However, if a BDC purchases securities in conjunction with one or more other persons acting together, one of the other persons in the group may make available such significant managerial assistance. Making available significant managerial assistance means any arrangement whereby the BDC, through its trustees, officers or employees, offers to provide, and, if accepted, does provide, significant guidance and counsel concerning the management, operations or business objectives and policies of a portfolio company. Our Administrator may provide such assistance on our behalf to portfolio companies that request such assistance. Officers of our Investment Adviser and Administrator may provide assistance to controlled affiliates.

***Temporary Investments***

Pending investments in other types of qualifying assets, as described above, may consist of cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment, which we refer to, collectively, as temporary investments, so that 70% of our assets are qualifying assets. We may invest in U.S. Treasury bills or in repurchase agreements, provided that such agreements are fully collateralized by cash or securities issued by the U.S. government or its agencies. A repurchase agreement involves the purchase by an investor, such as us, of a specified security and the simultaneous agreement by the seller to repurchase it at an agreed-upon future date and at a price which is greater than the purchase price by an amount that reflects an agreed-upon interest rate. There is no percentage restriction on the proportion of our assets that may be invested in such repurchase agreements. However, if more than 25% of our total assets constitute repurchase agreements from a single counterparty, we would not meet the Diversification Tests, as defined below under "Certain U.S. Federal Income Tax Considerations," in order to qualify as a RIC for federal income tax purposes. Thus, we do not intend to enter into repurchase agreements with a single counterparty in excess of this limit. Our Investment Adviser will monitor the creditworthiness of the counterparties with which we may enter into repurchase agreement transactions. Accordingly, we do not intend to enter into repurchase agreements with a single counterparty in excess of this limit. The Investment Adviser will monitor the creditworthiness of the counterparties with which we enter into repurchase agreement transactions.

***Senior Securities***

We are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of shares senior to our Shares if our asset coverage, as defined in the 1940 Act and referred to as the asset coverage

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ratio, is compliant with the 1940 Act, immediately after each such issuance. In addition, while any senior securities remain outstanding, we must make provisions to prohibit any distribution to our shareholders or the repurchase of such securities or shares unless we meet the applicable asset coverage requirement at the time of the distribution or repurchase. We may also borrow amounts up to 5% of the value of our total assets for temporary or emergency purposes without regard to our asset coverage ratio.

***Codes of Ethics***

We and the Investment Adviser have adopted a joint code of ethics pursuant to Rule 17j-1 under the 1940 Act and a code of conduct that establish procedures for personal investments and restricts certain personal securities transactions. Personnel subject to each code may invest in securities for their personal investment accounts, including securities that may be purchased or held by us, so long as such investments are made in accordance with the codes' requirements.

***Proxy Voting Policies and Procedures***

We will delegate our proxy voting responsibility to our Investment Adviser. The Proxy Voting Policies and Procedures of our Investment Adviser are set forth below. The guidelines are reviewed periodically by our Investment Adviser and our non-interested trustees, and, accordingly, are subject to change. For purposes of these Proxy Voting Policies and Procedures described below, "we," "our" and "us" refer to our Investment Adviser.

*Introduction* 

The Investment Adviser has a fiduciary duty to act solely in the best interests of our clients. As part of this duty, we recognize that the Investment Adviser must vote client securities in a timely manner free of conflicts of interest and in the best interests of our clients.

These policies and procedures for voting proxies for our investment advisory clients are intended to comply with Section 206 of, and Rule 206(4)-6 under the Investment Advisers Act of 1940, as amended, or Advisers Act.

*Proxy Policies* 

The Investment Adviser will vote proxies relating to our portfolio securities in what we perceive to be the best interests of the Company's shareholders. The Investment Adviser will review on a case-by-case basis each proposal submitted to a shareholder vote to determine its impact on the portfolio securities held by our clients. Although the Investment Adviser will generally vote against proposals that may have a negative impact on our clients' portfolio securities, the Investment Adviser may vote for such a proposal if there exists compelling long-term reasons to do so.

The Investment Adviser's proxy voting decisions will be made by the senior investment professionals who are responsible for monitoring each of its clients' investments. To ensure that the Investment Adviser's vote is not the product of a conflict of interest, the Investment Adviser requires that: (1) anyone involved in the decision making process disclose to the Investment Adviser's Chief Compliance Officer any potential conflict that he or she is aware of and any contact that he or she has had with any interested party regarding a proxy vote; and (2) employees involved in the decision making process or vote administration are prohibited from revealing how the Investment Adviser intends to vote on a proposal in order to reduce any attempted influence from interested parties.

*Proxy Voting Records* 

You can obtain information without charge about how Investment Adviser voted proxies by making a written request for proxy voting information to: PennantPark Private Income Fund, Attention: 1691 Michigan Avenue, Miami Beach, Florida 33139.

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**Privacy Principles** 

We are committed to maintaining the privacy of our shareholders and to safeguarding their non-public personal information.

Generally, we do not receive any non-public personal information relating to our shareholders, although certain non-public personal information of our shareholders may become available to us. We do not disclose any non-public personal information about our shareholders or former shareholders to anyone, except as permitted by law or as is necessary in order to service shareholder accounts (for example, to a transfer agent or third party administrator).

We restrict access to non-public personal information about our shareholders to employees of the Investment Adviser and its affiliates with a legitimate business need for the information. We will maintain physical, electronic and procedural safeguards designed to protect the non-public personal information of our shareholders.

**Other** 

Under the 1940 Act, we are required to provide and maintain a bond issued by a reputable fidelity insurance company to protect us against larceny and embezzlement. Furthermore, after we elect to be treated as a BDC, we are prohibited from protecting any trustee or officer against any liability to us or our shareholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person's office.

We and the Investment Adviser are required to adopt and implement written policies and procedures reasonably designed to prevent violation of relevant federal securities laws, review these policies and procedures annually for their adequacy and the effectiveness of their implementation, and designate a chief compliance officer to be responsible for administering these policies and procedures.

We could also be prohibited under the 1940 Act from knowingly participating in certain transactions with our affiliates without the prior approval of the Board who are not interested persons and, in some cases, prior approval by the SEC. The SEC has interpreted the BDC prohibition on transactions with affiliates to prohibit "joint transactions" among entities that share a common investment adviser. The staff of the SEC has granted no-action relief permitting purchases of a single class of privately placed securities provided that the adviser negotiates no term other than price and certain other conditions are met. Any co-investment would be made subject to compliance with existing regulatory guidance, applicable regulations and our allocation procedures. If opportunities arise that would otherwise be appropriate for us and for another account sponsored or managed by the Investment Adviser to make different investments in the same issuer, the Investment Adviser will need to decide which account will proceed with the investment. Moreover, in certain circumstances, we could be unable to invest in an issuer in which another account sponsored or managed by the Investment Adviser has previously invested.

**Emerging Growth Company Status** 

We are an "emerging growth company," as defined by the Jumpstart Our Business Startups Act of 2012 (the "<u>JOBS Act</u>"). As an emerging growth company, we are eligible to take advantage of certain exemptions from various reporting and disclosure requirements that are applicable to public companies that are not emerging growth companies. For so long as we remain an emerging growth company, we will not be required to, among other things, have an auditor attestation report on our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 ("<u>SOX</u>").

In addition, the JOBS Act provides that an emerging growth company may take advantage of an extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies. This means that an emerging growth company can delay adopting certain accounting standards until such standards are otherwise applicable to private companies.

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We will remain an emerging growth company until the earliest of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the last day of our fiscal year in which the fifth anniversary of the date of the first sale of our common equity
securities pursuant to an effective registration statement occurs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the end of the fiscal year in which our total annual gross revenues first equal or exceed $1.235 billion;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the date on which we have, during the prior three-year period, issued more than $1.0 billion in non-convertible debt; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• December 31 of the fiscal year in which we become a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act.

We do not believe that being an emerging growth company will have a significant impact on our business or our private offering of Shares. As stated above, we have elected to opt-in to the extended transition period for complying with new or revised accounting standards available to emerging growth companies. Also, because we are not a large accelerated filer or an accelerated filer under Rule 12b-2 under the Exchange Act, and will not be for so long as our Shares are not traded on a securities exchange, we will not be subject to auditor attestation requirements of Section 404(b) of SOX even once we are no longer an emerging growth company. In addition, so long as we are externally managed by the Investment Adviser and we do not directly compensate our executive officers, or reimburse the Investment Adviser or its affiliates for the salaries, bonuses, benefits and severance payments for persons who also serve as one of our executive officers or as an executive officer of the Investment Adviser, we do not expect to include disclosures relating to executive compensation in our periodic reports or proxy statements and, as a result, do not expect to be required to seek shareholder approval of executive compensation and golden parachute compensation arrangements pursuant to Section 14A(a) and Section 14A(b) of the Exchange Act.

**Reporting Obligations** 

Subsequent to the effectiveness of this Registration Statement, we will be subject to the requirements of Section 13(a) of the Exchange Act, including the rules and regulations promulgated under the Exchange Act. Under the Exchange Act, we will be required to file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K with the SEC and to comply with all other obligations of the Exchange Act applicable to issuers filing registration statements pursuant to Section 12(g) of the Exchange Act. Upon the effectiveness of this Registration Statement, we will also be subject to the proxy rules in Section 14 of the Exchange Act, and we and our trustees, officers and principal shareholders will be subject to the reporting requirements of Sections 13 and 16 of the Exchange Act. This information will be available on the SEC's website at www.sec.gov.

**Certain U.S. Federal Income Tax Considerations** 

The following discussion is a general summary of certain U.S. federal income tax considerations applicable to us and the purchase, ownership and disposition of our Shares. This discussion does not purport to be complete or to deal with all aspects of U.S. federal income taxation that may be relevant to shareholders in light of their particular circumstances. Unless otherwise noted, this discussion applies only to U.S. shareholders that hold our Shares as capital assets.

A "U.S. shareholder" is a beneficial owner of our Shares that is for U.S. federal income tax purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a citizen or individual resident of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or
organized in or under the laws of the United States or any state thereof or the District of Columbia;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a trust if either a U.S. court can exercise primary supervision over its administration and one or more U.S.
persons have the authority to control all of its substantial decisions or the trust was in existence on August 20, 1996, was treated as a U.S. person prior to that date, and has made a valid election to be treated as a U.S. person.

A "non-U.S. shareholder" is a beneficial owner of our Shares that is not a U.S. shareholder.

If a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) holds our Shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. A prospective investor that is a partner in a partnership that will hold our Shares should consult its tax advisors with respect to the purchase, ownership and disposition of such Shares.

This discussion is based upon present provisions of the Code, the regulations promulgated thereunder, and judicial and administrative ruling authorities, all of which are subject to change, or differing interpretations (possibly with retroactive effect). The Company has not sought and will not seek any ruling from the Internal Revenue Service (the "<u>IRS</u>") regarding this offering. This discussion does not represent a detailed description of the U.S. federal income tax consequences relevant to special classes of taxpayers including financial institutions, insurance companies, regulated investment companies, investors in pass-through entities, U.S. shareholders whose "functional currency" is not the U.S. dollar, tax-exempt organizations, dealers in securities or currencies, traders in securities or commodities that elect mark to market treatment, or persons that will hold our Shares as a position in a "straddle," "hedge" or as part of a "constructive sale" for U.S. federal income tax purposes. In addition, this discussion does not address U.S. federal estate or gift taxes, the application of the Medicare tax on net investment income or the U.S. federal alternative minimum tax, or any tax consequences attributable to persons being required to accelerate the recognition of any item of gross income with respect to our Shares as a result of such income being recognized on an applicable financial statement.

Tax matters are very complicated and the tax consequences to an investor of an investment in our Shares will depend on the facts of their particular situation. Prospective investors should consult their tax advisors with regard to the U.S. federal tax consequences of the purchase, ownership, or disposition of our Shares, as well as the tax consequences arising under the laws of any state, foreign country or other taxing jurisdiction.

***Taxation as a Regulated Investment Company***

The Company intends to elect to be treated, and intends to qualify annually to maintain its election to be treated, as a RIC under Subchapter M of the Code. To maintain our RIC tax election, we must, among other requirements, meet certain annual source-of-income and quarterly asset diversification requirements (as described below). We also must annually distribute dividends for U.S. federal income tax purposes to our shareholders of an amount generally at least equal to 90% of the sum of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, or investment company taxable income, and determined without regard to any deduction for dividends paid, out of the assets legally available for distribution, or the "<u>Annual Distribution Requirement</u>".

In order to qualify as a RIC for federal income tax purposes, we must:

• maintain an election to be treated as a BDC under the 1940 Act at all times during each taxable year;

• derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to
certain securities loans, gains from the sale of stock or other securities, net income from certain qualified publicly traded partnerships or other income derived with respect to our business of investing in such stock or securities, or the
"90% Income Test"; and

• diversify our holdings, or the "Diversification Tests", so that at the end of each quarter of the
taxable year:

1) at least 50% of the value of our assets consists of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other securities if such other securities of any one issuer neither represents 

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more than 5% of the value of our assets nor more than 10% of the outstanding voting securities of the issuer; and

2) no more than 25% of the value of our assets is invested in the securities, other than U.S. Government securities or securities of other RICs, of one issuer or of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same or similar or related trades or businesses or in certain qualified publicly traded partnerships. 

Although not required for us to maintain our RIC tax status, in order to preclude the imposition of a 4% nondeductible federal excise tax imposed on RICs, we must distribute dividends for U.S. federal income tax purposes to our shareholders in respect of each calendar year of an amount at least equal to the sum of (1) 98% of our net ordinary income (subject to certain deferrals and elections) for the calendar year, (2) 98.2% of our capital gain net income (i.e., the excess, if any, of our capital gains over capital losses), adjusted for certain ordinary losses, generally for the one-year period ending on October 31 of the calendar year plus (3) any net ordinary income or capital gain net income for the preceding years that was not distributed during such years on which we did not incur any corporate income tax, or the "<u>Excise Tax Avoidance Requirement</u>".

While we intend to make sufficient distributions each taxable year to avoid incurring any material U.S. federal excise tax on our earnings, we may not be able to, or may choose not to, distribute amounts sufficient to avoid the imposition of the tax entirely. In that event, we generally will be liable for the excise tax only on the amount by which we do not meet the Excise Tax Avoidance Requirement. Under certain circumstances, however, we may, in our sole discretion, determine that it is in our best interests to retain a portion of our income or capital gains rather than distribute such amount as dividends and accordingly cause us to bear the excise tax burden associated therewith.

We may invest in partnerships which may result in our being subject to additional state, local or foreign income, franchise or other tax liabilities. In addition, some of the income and fees that we may recognize will not satisfy the 90% Income Test. In order to mitigate the risk that such income and fees would disqualify us as a RIC as a result of a failure to satisfy the 90% Income Test, we may recognize such income and fees indirectly through a taxable subsidiary, which is classified as a corporation for U.S. federal income tax purposes. Such taxable subsidiary generally will be subject to corporate income taxes on its earnings, which ultimately will reduce our return on such income and fees.

If we qualify as a RIC, and satisfy the Annual Distribution Requirement, then we will not be subject to federal income tax on the portion of our investment company taxable income and net capital gains, determined without regard to any deduction for dividends paid, we distribute (or are deemed to have distributed) as dividends for U.S. federal income tax purposes to shareholders. Additionally, upon satisfying these requirements, we will be subject to U.S. federal income tax at the regular corporate rates on any investment company taxable income or net capital gains determined without regard to any deduction for dividends paid, that is not distributed (or deemed to have been distributed) as dividends for U.S. federal income tax purposes to our shareholders.

We may be required to recognize taxable income in circumstances in which we do not receive cash. For example, if we hold a debt instrument that is treated under applicable tax rules as having OID (such as debt instruments with PIK interest or, in certain cases, increasing interest rates or issued with warrants), we must include in income each taxable year a portion of the OID that accrues over the life of the debt instrument, regardless of whether cash representing such income is received by us in the same taxable year. Because any OID accrued will be included in our investment company taxable income in the taxable year of accrual, we may be required to make a distribution to our shareholders in order to satisfy the Annual Distribution Requirement, even though we will not have received any corresponding cash amount.

We invest in below investment grade instruments. Investments in these types of instruments may present special tax issues for us. U.S. federal income tax rules are not entirely clear about issues such as when we may

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cease to accrue interest, OID or market discount, when and to what extent deductions may be taken for bad debts or worthless debt instruments, how payments received on obligations in default should be allocated between principal and income and whether exchanges of debt instruments in a bankruptcy or workout context are taxable. We will address these and other issues to the extent necessary in order to continue to maintain our qualification to be subject to tax as a RIC.

In order to enable us to make distributions to shareholders that will be sufficient to enable us to satisfy the Annual Distribution Requirement and the Excise Tax Avoidance Requirement we may need to liquidate or sell some of our assets at times or at prices that are not advantageous, raise additional equity or debt capital, take out loans, forego new investment opportunities or otherwise take actions that are disadvantageous to our business (or be unable to take actions that are advantageous to our business). If we borrow money, we may be prevented by loan covenants from declaring and paying dividends in certain circumstances. Even if we are authorized to borrow funds and to sell assets in order to satisfy distribution requirements, under the 1940 Act, we are generally not permitted to make distributions to our shareholders while our debt obligations and senior securities are outstanding unless certain "asset coverage" tests or other financial covenants are met. Limits on our payment of dividends may prevent us from meeting the Annual Distribution Requirement, and may, therefore, jeopardize our qualification for taxation as a RIC, or subject us to the 4% excise tax on undistributed income.

A portfolio company in which we invest may face financial difficulty that requires us to work-out, modify or otherwise restructure our investment in the portfolio company. Any such restructuring could, depending on the specific terms of the restructuring, cause us to recognize taxable income without a corresponding receipt of cash, which could affect our ability to satisfy the Annual Distribution Requirement or the Excise Tax Avoidance Requirement, or result in unusable capital losses and future non-cash income. Any such restructuring could also result in our receiving assets that give rise to non-qualifying gross income for purposes of the 90% Income Test.

Certain of our investment practices may be subject to special and complex U.S. federal income tax provisions that may, among other things, (a) disallow, suspend or otherwise limit the allowance of certain losses or deductions, (b) convert long-term capital gain (currently taxed at lower rates for non-corporate taxpayers) into higher taxed short-term capital gain or ordinary income, (c) convert an ordinary loss or a deduction into a capital loss (the deductibility of which is more limited), (d) adversely affect the time as to when a purchase or sale of stock or securities is deemed to occur, (e) adversely alter the characterization of certain complex financial transactions, (f) treat dividends that would otherwise constitute qualified dividend income as non- qualified dividend income, (g) cause us to recognize income or gain without receipt of a corresponding cash payment, and (h) produce income that will not be qualifying income for purposes of the 90% Income Test. We will monitor our transactions and may make certain tax elections in order to mitigate the effects of these provisions; however, no assurance can be given that we will be eligible for any such tax elections or that any elections we make will fully mitigate the effects of these provisions.

Gain or loss realized by us from equity securities and warrants acquired by us as well as any loss attributable to the lapse of such warrants, generally will be treated as capital gain or loss. Such gain or loss generally will be long-term or short-term, depending on how long we held the particular equity security or warrant.

We are authorized to borrow funds and to sell assets in order to satisfy our Annual Distribution Requirement or Excise Tax Avoidance Requirement. However, under the 1940 Act, we are not permitted to make distributions to our shareholders while our debt instruments and other senior securities are outstanding unless certain asset coverage requirements are met. Moreover, our ability to dispose of assets to meet our distribution requirements may be limited by (1) the illiquid nature of our portfolio and/or (2) other requirements relating to our status as a RIC, including the Diversification Tests. If we dispose of assets in order to meet the Annual Distribution Requirement or the Excise Tax Avoidance Requirement, we may make such dispositions at times that, from an investment standpoint, are not advantageous.

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We may distribute Shares as a dividend of our taxable income and a shareholder could receive a portion of such distributions declared and distributed by us in Shares with the remaining amount in cash. A shareholder will be considered to have recognized dividend income generally equal to the fair market value of the Shares paid by us plus cash received with respect to such dividend. The total dividend declared and distributed by us generally would be taxable income to a shareholder even though only a small portion of the dividend was paid in cash, in which case the shareholder may be required to pay or incur tax with respect to such dividend in excess of any cash received. We have not yet elected to distribute Shares as a dividend but reserve the right to do so.

Our investment in non-U.S. securities may be subject to non-U.S. income, withholding and other taxes. In that case, our yield on those securities would be decreased. Shareholders will generally not be entitled to claim a U.S. foreign tax credit or deduction with respect to non-U.S. taxes paid by us. If we acquire shares in a passive foreign investment company, or "PFIC," we may be subject to U.S. federal income tax on a portion of any "excess distribution" received on, or gain from the disposition of, such shares, even if such income is distributed as a taxable dividend by us to our shareholders. Additional charges in the nature of interest may be imposed on us in respect of deferred taxes arising from such distributions or gains. Furthermore, if we hold shares in a PFIC and elect to treat the PFIC as a qualified electing fund, or "QEF," under the Code, in lieu of the foregoing requirements, we will be required to include in income each year a portion of the ordinary earnings and net capital gain of the QEF, even if such income is not distributed to us. Alternatively, we may elect to mark-to-market at the end of each taxable year our shares in such PFIC; in this case, we will recognize as ordinary income any increase in the value of such shares, and as ordinary loss any decrease in such value to the extent it does not exceed prior increases included in income. Our ability to make either election will depend on factors beyond our control, and we are subject to restrictions that may limit the availability or benefit of these elections. Under either election, we may be required to recognize in any year income in excess of our distributions from PFICs and our proceeds from dispositions of PFIC shares during that year, and such income will nevertheless be subject to the Annual Distribution Requirement and will be taken into account for purposes of determining whether we satisfy the Excise Tax Avoidance Requirement.

If we are deemed to own ten percent (10%) or more (by vote or value) of the shares of a non-U.S. corporation that qualifies as a "controlled foreign corporation," or "CFC," for U.S. federal income tax purposes, we would be required to include in income the amount of the CFC's "Subpart F income" to which it would have been entitled had the CFC currently distributed all of its earnings. Additionally, all or any part of any gain resulting from the sale or exchange of shares of the CFC could be treated as a dividend. For this purpose, a non-U.S. corporation is generally considered a CFC if more than 50% of the corporation's shares (by vote or value) is owned, directly or indirectly or through application of certain constructive ownership rules, by U.S. persons who each own, directly or indirectly or constructively, 10% or more (by vote or value) of the non-U.S. corporation's shares, or a "U.S. Shareholder." If we are treated as receiving a deemed inclusion of income from a CFC, we would be required to include such distribution in our investment company taxable income regardless of whether we receive any distributions from such CFC, and we would be required to include such deemed inclusion of income in determining our satisfaction of the Annual Distribution Requirement and the Excise Tax Avoidance Requirement.

The PFIC rules would not apply to us with respect to any investment for any period during which the CFC rules were applicable to such investment. Furthermore, in determining the amount of any deemed inclusion of income from any CFC, we are required to include in gross income each taxable year our share of any "global intangible low-taxed income," or "GILTI." Rules relating to GILTI and CFCs are complex. As such, shareholders should consult their own tax advisors about the applicability and U.S. federal income tax consequences of the CFC rules to their investment in our Shares, including the potential impact of rules governing the inclusion of Subpart F income and the related GILTI rules.

Our functional currency is the U.S. dollar for U.S. federal income tax purposes. Under Section 988 of the Code, gains or losses attributable to fluctuations in exchange rates between the time we accrue income, expenses or other liabilities denominated in a foreign currency and the time we actually collect such income or pay such

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expenses or liabilities may be treated as ordinary income or loss. Similarly, gains or losses on foreign currency forward contracts, the disposition of debt denominated in a foreign currency and other financial transactions denominated in foreign currency, to the extent attributable to fluctuations in exchange rates between the acquisition and disposition dates, may also be treated as ordinary income or loss. Some of the income and fees that we recognize, may not satisfy the 90% Income Test. In order to ensure that such income and fees do not disqualify us as a RIC for a failure to satisfy the 90% Income Test, we may be required to recognize such income or fees through one or more entities treated as U.S. corporations for U.S. federal income tax purposes. While we expect that recognizing such income through such corporations will assist us in satisfying the 90% Income Test, no assurance can be given that this structure will be respected for U.S. federal income tax purposes, which could result in such income not being counted towards satisfying the 90% Income Test. If the amount of such income were too great and we were otherwise unable to mitigate this effect, it could result in our disqualification as a RIC. If, as we expect, the structure is respected, such corporations will be required to pay U.S. corporate income tax on their earnings, which ultimately will reduce the yield on such income and fees.

We are limited in our ability to deduct expenses in excess of our investment company taxable income. If our expenses in a given year exceed our investment company taxable income, we will have a net operating loss for that year. However, we are not permitted to carry forward our net operating losses to subsequent years, so these net operating losses generally will not pass through to our shareholders. In addition, expenses can be used only to offset investment company taxable income, and may not be used to offset net capital gain. As a RIC, we may not use any net capital losses (that is, realized capital losses in excess of realized capital gains) to offset our investment company taxable income, but may carry forward those losses, and use them to offset future capital gains, indefinitely. Further, our deduction of net business interest expense is generally limited to 30% of our "adjusted taxable income" plus "floor plan financing interest expense."

***Failure to Qualify as a RIC***

If we fail to satisfy the Annual Distribution Requirement or fail to qualify as a RIC in any taxable year, unless certain cure provisions of the Code apply, we will be subject to tax in that taxable year on all of our taxable income at regular corporate tax rates, regardless of whether we make any dividend distributions to our shareholders. In that case, all of our income will be subject to corporate-level U.S. federal income tax, reducing the amount available to be distributed to our shareholders. In contrast, assuming we qualify as a RIC, our corporate-level U.S. federal income tax should be substantially reduced or eliminated. See "*Election to be Taxed as a RIC*" above for more information.

If we are unable to maintain our status as a RIC, we also would not be able to deduct distributions to shareholders, nor would distributions be required to be made. Distributions would generally be taxable as dividends to our shareholders as ordinary dividend income to the extent of our current and accumulated earnings and profits. Subject to certain limitations under the Code, U.S. non-corporate shareholders generally would be eligible to treat such dividends as "qualified dividend income," which generally would be subject to reduced rates of U.S. federal income tax, and dividends paid by us to certain U.S. corporate shareholders would be eligible for the dividends received deduction. Distributions in excess of our current and accumulated earnings and profits would be treated first as a return of capital to the extent of the shareholder's tax basis in our Shares, and any remaining distributions would be treated as a capital gain. Moreover, if we fail to qualify as a RIC in any taxable year, to qualify again to be treated as a RIC for U.S. federal income tax purposes in a subsequent taxable year, we would be required to distribute our earnings and profits attributable to any of our non-RIC taxable years as dividends to our shareholders. In addition, if we fail to qualify as a RIC for a period greater than two consecutive taxable years, to qualify as a RIC in a subsequent taxable year we may be subject to regular corporate tax on any net built-in gains with respect to certain of our assets (that is, the excess of the aggregate gains, including items of income, over aggregate losses that would have been realized with respect to such assets if we had sold the property at fair market value at the end of the taxable year) that we elect to recognize on requalification or when recognized over the next five taxable years.

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***Taxation of U.S. Shareholders***

Distributions by us, including distributions in the form of additional Shares pursuant to the DRIP (as defined below) or where shareholders can elect to receive cash or Shares, generally are taxable to U.S. shareholders as ordinary income or capital gains. Distributions of our "investment company taxable income" (which is, generally, our ordinary income plus realized net short-term capital gains in excess of realized net long-term capital losses) will be taxable as ordinary income to U.S. shareholders to the extent of our current or accumulated earnings and profits, whether paid in cash or reinvested in additional Shares. We may pay a large portion of any distribution qualifying as a dividend for U.S. federal income tax purposes in our Shares. The IRS has published guidance for publicly offered RICs stating that as long as at least 20% of the dividends are paid in cash and if certain other requirements are met, shareholders will be subject to tax on 100% of such dividends in the same manner as a cash dividend, even though most of the dividends were paid in Shares.

It is anticipated that distributions paid by us generally will not be attributable to dividends and, therefore, generally will not qualify for the preferential rates applicable to qualified dividends or the dividends received deduction available to corporations under the Code.

Distributions of our net capital gains (which is generally our realized net long-term capital gains in excess of realized net short- term capital losses) properly designated by us as "capital gain dividends" will be taxable to a U.S. shareholder as long-term capital gains at a reduced rate in the case of individuals, trusts or estates, regardless of the U.S. shareholder's holding period in such Shares and regardless of whether paid in cash or reinvested in additional Shares. Distributions in excess of our earnings and profits first will reduce a U.S. shareholder's adjusted tax basis in such shareholder's Shares and, after the adjusted basis is reduced to zero, will constitute capital gains to such U.S. shareholder.

Distributions out of our current and accumulated earnings and profits will not be eligible for the 20% pass through deduction under Section 199A of the Code.

Certain distributions reported by us as Section 163(j) interest dividends may be treated as interest income by U.S. shareholders for purposes of the tax rules applicable to interest expense limitations under Section 163(j) of the Code. Such treatment by U.S. shareholders is generally subject to holding period requirements and other potential limitations, although the holding period requirements are generally not applicable to dividends declared by money market funds and certain other funds that declare dividends daily and pay such dividends on a monthly or more frequent basis. The amount that we are eligible to report as a Section 163(j) dividend for a tax year is generally limited to the excess of our business interest income over the sum of our (i) business interest expense and (ii) other deductions properly allocable to our business interest income.

Although we currently intend to distribute any long-term capital gains as capital gain dividends at least annually, we may in the future decide to retain some or all of our long-term capital gains, but designate the retained amount as a "deemed distribution." In that case, among other consequences, we will be subject to tax on the retained amount, each U.S. shareholder will be required to include his, her or its share of the deemed distribution of net capital gains in income as if it had been actually distributed to the U.S. shareholder, and the U.S. shareholder will be entitled to claim a credit equal to his, her or its allocable share of the tax paid thereon by us. The amount of the deemed distribution of net capital gains net of such tax will be added to the U.S. shareholder's tax basis for his, her or its Shares. Since we expect to be subject to tax on any retained capital gains at our regular corporate tax rates, and since that rate is in excess of the maximum rate currently payable by individuals on long-term capital gains, the amount of tax that individual shareholders will be treated as having paid and for which they will receive a credit generally will exceed the tax they owe on the retained net capital gain. Such excess generally may be claimed as a credit against the U.S. shareholder's other U.S. federal income tax obligations or may be refunded to the extent it exceeds a shareholder's liability for U.S. federal income tax. A shareholder that is not subject to U.S. federal income tax or otherwise required to file a U.S. federal income tax return would be required to file a U.S. federal income tax return on the appropriate form in order to claim a

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refund for the taxes we paid. In order to use the deemed distribution approach, we must provide written notice to our shareholders. We cannot treat any of our investment company taxable income as a "deemed distribution."

Until and unless we are treated as a "publicly offered regulated investment company" (within the meaning of Section 67 of the Code) as a result of either (i) Shares and our preferred shares (if any) collectively being held by at least 500 persons at all times during a taxable year, (ii) our Shares being continuously offered pursuant to a public offering (within the meaning of Section 4 of the Securities Act) or (iii) Shares being treated as regularly traded on an established securities market for any taxable year, for purposes of computing the taxable income of U.S. shareholders that are individuals, trusts or estates, (a) our earnings will be computed without taking into account such U.S. shareholders' allocable shares of the management and incentive fees paid to our investment adviser and certain of our other expenses, (b) each such U.S. shareholder will be treated as having received or accrued a dividend from us in the amount of such U.S. shareholder's allocable share of these fees and expenses for such taxable year, (c) each such U.S. shareholder will be treated as having paid or incurred such U.S. shareholder's allocable share of these fees and expenses for the calendar year and (d) each such U.S. shareholder's allocable share of these fees and expenses will be treated as miscellaneous itemized deductions by such U.S. shareholder.

For purposes of determining (1) whether the Annual Distribution Requirement is satisfied for any year and (2) the amount of capital gain distributions paid for that year, we may, under certain circumstances, elect to treat a distribution that is paid during the following taxable year as if it had been paid during the taxable year in question. If we make such an election, the U.S. shareholder will still be treated as receiving the distribution in the taxable year in which the distribution is made. However, any distribution declared by us in October, November or December of any calendar year, payable to shareholders of record on a specified date in such a month and actually paid during January of the following calendar year, will be treated as if it had been received by our U.S. shareholders on December 31 of the calendar year in which the distribution was declared.

If an investor purchases Shares shortly before the record date of a distribution, the price of the Shares will include the value of the distribution and the investor will be subject to tax on the distribution even though economically it represents a return of his, her or its investment.

The IRS currently requires that a RIC that has two or more classes of stock allocate to each such class proportionate amounts of each type of its income (such as ordinary income and capital gains) based upon the percentage of total dividends paid to each class for the tax year. Accordingly, if we issue preferred stock, we intend each year to allocate capital gain dividends, if any, between our Shares and shares of preferred stock in proportion to the total dividends paid to each class with respect to such tax year.

A shareholder generally will recognize taxable gain or loss if the shareholder sells or otherwise disposes of his, her or its Shares. Any gain or loss arising from such sale or disposition generally will be treated as long-term capital gain or loss if the shareholder has held his, her or its Shares for more than one year. Otherwise, such gain or loss will be classified as short-term capital gain or loss. However, any capital loss arising from the sale or disposition of Shares held for six months or less will be treated as long-term capital loss to the extent of the amount of capital gain distributions received or undistributed capital gain deemed received, with respect to such shares. In addition, all or a portion of any loss recognized upon a disposition of Shares may be disallowed if other Shares are purchased (whether through reinvestment of dividends or other distributions or otherwise) within 30 days before or after the disposition.

In general, individual U.S. shareholders currently are subject to a maximum U.S. federal income tax rate of 20% (depending on whether the shareholder's income exceeds certain threshold amounts) on their net capital gain, i.e., the excess of realized net long-term capital gain over realized net short-term capital loss for a taxable year, including a long-term capital gain derived from an investment in our Shares. Such rate is lower than the maximum rate on ordinary income currently payable by individuals. Corporate U.S. shareholders currently are subject to U.S. federal income tax on net capital gain at the maximum rate of 21%, and this rate also applies to

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ordinary income. Non-corporate shareholders with net capital losses for a year (i.e., capital losses in excess of capital gains) generally may deduct up to $3,000 of such losses against their ordinary income each year; any net capital losses of a non-corporate shareholder in excess of $3,000 generally may be carried forward and used in subsequent years as provided in the Code. Corporate shareholders generally may not deduct any net capital losses for a year, but may carryback such losses for three taxable years or carry forward such losses for five taxable years.

A 3.8% Medicare tax is imposed on certain net investment income (including ordinary dividends and capital gain distributions received from us and net gains from redemptions or other taxable dispositions of our Shares) of U.S. individuals and on the undistributed net investment income of certain estates and trusts to the extent that such person's "modified adjusted gross income" (in the case of an individual) or "adjusted gross income" (in the case of an estate or trust) exceeds certain threshold amounts.

Under U.S. Treasury regulations, if a U.S. Shareholder recognizes a loss with respect to either our Shares of $2 million or more for a non-corporate U.S. Shareholder or $10 million or more for a corporate U.S. shareholder in any single taxable year, such shareholder must file with the IRS a disclosure statement on an IRS Form 8886. Direct U.S. Shareholders of certain "portfolio securities" in many cases are excepted from this reporting requirement, but under current guidance, equity owners of a RIC are not excepted. The fact that a loss is reportable under these U.S. Treasury regulations does not affect the legal determination of whether the taxpayer's treatment of the loss is proper. Significant monetary penalties apply to a failure to comply with this reporting requirement. States may also have a similar reporting requirement. U.S. Shareholders should consult their own tax advisors to determine the applicability of these regulations in light of their individual circumstances.

We (or if a U.S. Shareholder holds our Shares through an intermediary, such intermediary) will provide information to our U.S. shareholders, as promptly as possible after the end of each calendar year, detailing, on a per share and per distribution basis, the amounts includible in such U.S. shareholder's taxable income for such year as ordinary income and as long-term capital gain. In addition, the federal tax status of each year's distributions generally will be reported to the IRS (including the amount of distributions, if any, eligible for the preferential rate). Distributions may also be subject to additional state, local and foreign taxes depending on a U.S. shareholder's particular situation.

The Code requires reporting of adjusted cost basis information for covered securities, which generally include shares of a RIC to the IRS and to taxpayers. Shareholders should contact their financial intermediaries with respect to reporting of cost basis and available elections for their accounts.

A U.S. shareholder (other than an "exempt recipient," including a "C" corporation and certain other persons who, when required, demonstrate their exempt status) may be subject to U.S. federal income tax withholding ("backup withholding") at the applicable rate from all taxable distributions to any U.S. shareholder (1) who fails to furnish a correct taxpayer identification number or a certificate that such shareholder is exempt from backup withholding, or (2) with respect to whom the IRS notifies a withholding agent that such shareholder has failed to properly report certain interest and distribution income to the IRS and to respond to notices to that effect. An individual's taxpayer identification number is his or her social security number. Backup withholding is not an additional tax. Any amount withheld under backup withholding is allowed as a credit against the U.S. shareholder's U.S. federal income tax liability and may entitle such shareholder to a refund, provided that proper information is timely provided to the IRS.

***Taxation of Tax-Exempt U.S. Shareholders***

A U.S. shareholder that is a tax-exempt organization for U.S. federal income tax purposes and therefore generally exempt from U.S. federal income taxation may nevertheless be subject to taxation to the extent that it is considered to derive unrelated business taxable income ("UBTI"). The direct conduct by a tax-exempt U.S. shareholder of the activities that we propose to conduct could give rise to UBTI. However, a RIC is a corporation

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for U.S. federal income tax purposes and its business activities generally will not be attributed to its shareholders for purposes of determining their treatment under current law. Therefore, a tax-exempt U.S. shareholder should not be subject to U.S. federal income taxation solely as a result of such shareholder's direct or indirect ownership of our Shares and receipt of distributions with respect to such Shares (regardless of whether we incur indebtedness). Moreover, under current law, if we incur indebtedness, such indebtedness will not be attributed to a tax-exempt U.S. shareholder. Therefore, a tax-exempt U.S. shareholder should not be treated as earning income from "debt-financed property" and distributions we pay should not be treated as "unrelated debt-financed income" solely as a result of indebtedness that we incur. Certain tax-exempt private universities are subject to an additional 1.4% excise tax on their "net investment income," including income from interest, dividends, and capital gains. Proposals periodically are made to change the treatment of "blocker" investment vehicles interposed between tax-exempt investors and non-qualifying investments. In the event that any such proposals were to be adopted and applied to RICs, the treatment of dividends payable to tax-exempt investors could be adversely affected. In addition, special rules would apply if we were to invest in certain real estate mortgage investment conduits or taxable mortgage pools, which we do not currently plan to do, that could result in a tax-exempt U.S. shareholder recognizing income that would be treated as UBTI.

***Taxation of Non-U.S. Shareholders***

Whether an investment in the Shares is appropriate for a non-U.S. shareholder will depend upon that person's particular circumstances. An investment in the Shares by a non-U.S. shareholder may have adverse tax consequences. Non-U.S. shareholders should consult their tax advisers before investing in our Shares.

Subject to the discussions below, distributions of our "investment company taxable income" to non-U.S. shareholders (including interest income and net short-term capital gain), whether paid in cash or in additional Shares pursuant to the DRIP, are generally expected to be subject to withholding of U.S. federal taxes at a 30% rate (or lower rate provided by an applicable treaty) to the extent of our current and accumulated earnings and profits. If the distributions are effectively connected with a U.S. trade or business of the non-U.S. shareholder, we will not be required to withhold U.S. federal tax if the non-U.S. shareholder complies with applicable certification and disclosure requirements, although the distributions will be subject to U.S. federal income tax at the rates applicable to U.S. persons. Special certification requirements apply to a non-U.S. shareholder that is a foreign partnership or a foreign trust, and such entities are urged to consult their own tax advisors. Backup withholding will not be applied to payments that have been subject to the 30% (or lower applicable treaty rate) withholding tax described in this paragraph.

In addition, with respect to certain distributions made by RICs to non-U.S. Shareholders, no withholding is required and the distributions generally are not subject to U.S. federal income tax if (i) the distributions are properly designated in a notice timely delivered to our shareholders as "interest-related dividends" or "short-term capital gain dividends," (ii) the distributions are derived from sources specified in the Code for such dividends and (iii) certain other requirements are satisfied. Nevertheless, it should be noted that in the case of Shares held through an intermediary, the intermediary may have withheld U.S. federal income tax even if we designated the payment as an interest-related dividend or as a short-term capital gain dividend. Moreover, depending on the circumstances, we may designate all, some or none of our potentially eligible dividends as ineligible for this exemption from withholding.

Actual or deemed distributions of our net long-term capital gains to a non-U.S. shareholder, and gains realized by a non-U.S. shareholder upon the sale of our Shares, will not be subject to federal withholding tax and generally will not be subject to federal income tax unless, (i) the distributions or gains, as the case may be, are effectively connected with a U.S. trade or business of the non-U.S. shareholder and, if an income tax treaty applies, are attributable to a permanent establishment maintained by the non-U.S. shareholder in the United States or (ii) in the case of an individual shareholder, the shareholder is present in the United States for a period or periods aggregating 183 days or more during the year of the sale or the receipt of the distributions or gains and certain other conditions are met.

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We are required to withhold U.S. tax (at a 30% rate) on payments of taxable dividends (whether paid in cash or in additional Shares pursuant to the DRIP) made to certain non-U.S. entities that fail to comply (or be deemed compliant) with extensive reporting and withholding requirements designed to inform the U.S. Department of the Treasury of U.S.-owned foreign investment accounts. Shareholders may be requested to provide additional information to the withholding agents to enable the withholding agents to determine whether withholding is required. A non-U.S. shareholder may be exempt from the withholding described in this paragraph under an applicable intergovernmental agreement between the U.S. and a foreign government, provided that the non-U.S. shareholder and the applicable foreign government comply with the terms of such agreement.

If we distribute our net capital gains in the form of deemed rather than actual distributions (which we may do in the future), a non-U.S. shareholder will be entitled to claim a U.S. federal income tax credit or tax refund equal to the shareholder's allocable share of the tax we pay on the capital gains deemed to have been distributed. In order to obtain the refund, the non-U.S. shareholder would be required to obtain a U.S. taxpayer identification number and file a U.S. federal income tax return even if the non-U.S. shareholder would not otherwise be required to obtain a U.S. taxpayer identification number or file a U.S. federal income tax return. For a corporate non-U.S. shareholder, distributions (both actual and deemed), and gains realized upon the sale of our Shares that are effectively connected with a U.S. trade or business may, under certain circumstances, be subject to an additional "branch profits tax" at a 30% rate (or at a lower rate if provided for by an applicable treaty). Accordingly, investment in our Shares may not be appropriate for a non-U.S. shareholder.

We have the ability to declare and pay a large portion of any distribution qualifying as a dividend for U.S. federal income tax purposes in our Shares. Generally, were we to declare such a distribution, each non-U.S. shareholder generally would be treated as having received a taxable distribution (including for purposes of the application of the withholding tax rules discussed above) on the date the distribution is received in an amount equal to the cash that such non-U.S. shareholder would have received if the entire distribution had been paid in cash, even if such non-U.S. shareholder received all or most of the distribution in our Shares. In such a circumstance, all or substantially all of the cash that would otherwise be distributed to a non-U.S. shareholder may be withheld or our Shares may be withheld and sold to fund the applicable withholding.

A non-U.S. shareholder who is a non-resident alien individual, and who is otherwise subject to withholding of federal income tax, may be subject to information reporting and backup tax withholding of federal income tax on distributions unless the non-U.S. shareholder provides us or the distribution paying agent with an IRS Form W-8BEN, IRS Form W-8BEN-E, or other applicable IRS Form W-8, or otherwise meets documentary evidence requirements for establishing that it is a non-U.S. shareholder or otherwise establishes an exemption from backup withholding.

Non-U.S. shareholders may also be subject to U.S. estate tax with respect to their investment in our Shares.

Non-U.S. persons should consult their own tax advisors with respect to the U.S. federal income tax and withholding tax, and state, local and foreign tax consequences of an investment in the Shares.

***Other Taxation***

Shareholders may be subject to state, local and foreign taxes on their distributions from the Company. Shareholders are advised to consult their own tax advisers with respect to the particular tax consequences to them of an investment in the Company.

***Change in Tax Laws***

Each prospective investor should be aware that tax laws and regulations are changing on an ongoing basis, and such laws and/or regulations may be changed with retroactive effect. Moreover, the interpretation and/or application of tax laws and regulations by certain tax authorities may not be clear, consistent or transparent.

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Uncertainty in the tax law may require the Company to accrue potential tax liabilities even in situations in which the Company and/or shareholders do not expect to be ultimately subject to such tax liabilities. In that regard, accounting standards and/or related tax reporting obligations may change, giving rise to additional accrual and/or other obligations.

**Developments in the tax laws could have a material effect on the tax consequences to shareholder, to the Company, and/or the Company's direct and indirect subsidiaries, and shareholders may be required to provide certain additional information to the Company (which may be provided to the IRS or other taxing authorities) and may be subject to other adverse consequences as a result of such change in tax laws. In the event of any such change in tax law, each shareholder is urged to consult its own advisors.** 

***Certain ERISA Considerations***

ERISA imposes certain requirements on "employee benefit plans" (as defined in Section 3(3) of ERISA) that are subject to Title I of ERISA, and entities whose underlying assets include the assets of such plans (collectively, "<u>ERISA Plans</u>") and persons who are fiduciaries with respect to ERISA Plans. Section 406 of ERISA and Section 4975 of the Code also prohibit certain transactions involving the assets of an ERISA Plan and of other plans that are subject to Section 4975 of the Code, such as individual retirement accounts and "Keogh" plans (together with ERISA Plans, "<u>Plans</u>"), and certain persons (referred to as "parties in interest" or "disqualified persons") having certain relationships to such Plans, unless a statutory or administrative exemption is applicable to the transaction. A party in interest or disqualified person who engages in a prohibited transaction could be subject to excise taxes and other penalties and liabilities under ERISA and Section 4975 of the Code, unless a statutory or administrative exemption is available. Each Plan that acquires Shares is responsible for determining the extent, if any, to which the purchase and holding of Shares will constitute a non-exempt prohibited transaction under ERISA or Section 4975 of the Code, and otherwise for determining compliance with ERISA and Section 4975 of the Code.

The Plan Assets Regulation specifies when the assets of an entity are to be treated as "plan assets" for purposes of ERISA and Section 4975 of the Code. Under the Plan Assets Regulation, subject to certain exceptions, if a "benefit plan investor" as such term is defined for purposes of the Plan Assets Regulation ("<u>Benefit Plan Investor</u>"), acquires an "equity interest" (such as the Shares) in an entity that is neither a "publicly-offered security" nor a security issued by an investment company registered under the 1940 Act, the assets of the Benefit Plan Investor generally include not only such equity interest, but also an undivided interest in each of the underlying assets of such entity, unless it is established that (a) equity participation in the entity by Benefit Plan Investors is less than 25% of the total value of each class of equity interest in the entity within the meaning of the Plan Assets Regulation or (b) the entity is an "operating company," as defined in the Plan Assets Regulation. For purposes of the Plan Assets Regulation, the term "Benefit Plan Investor" is defined to include (i) an "employee benefit plan" as defined in ERISA and subject to Part 4 of Subtitle B of Title I of ERISA, (ii) any "plan" as defined in and subject to Section 4975 of the Code and (iii) any entity whose underlying assets include plan assets by reason of investment in the entity by other Benefit Plan Investors. Benefit Plan Investors also include the general account of an insurance company whose assets could, under certain circumstances, be treated as "plan assets." Under the Plan Assets Regulation, any equity interests held by a person having discretionary authority or control over the assets of the entity or providing investment advice for a fee with respect to such assets or any affiliate of such person, other than interests held by such person through a Benefit Plan Investor (each, a "<u>Controlling Person</u>"), will be disregarded in determining compliance with the 25% limitation.

The definition of an "operating company" in the Plan Assets Regulation includes, among other things, a <u>VCOC</u>. Generally, in order to qualify as a VCOC, an entity must demonstrate on its "initial valuation date" (as defined in the Plan Assets Regulation), and on at least one day within each "annual valuation period" of the entity, that at least 50% of the entity's assets, valued at cost (other than short-term investments pending long-term commitment or distribution to investors), are invested in operating companies (other than VCOCs) (i.e.,

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operating entities that (x) are primarily engaged directly, or through a majority owned subsidiary or subsidiaries, in the production or sale of a product or service other than the investment of capital, or (y) qualify as "real estate operating companies," as defined in the Plan Assets Regulation) in which such entity has direct contractual rights to substantially participate in, or substantially influence the conduct of, the management of the operating company. In addition, to qualify as a VCOC, such entity must, in the ordinary course of its business, actually exercise its management rights with respect to at least one of the operating companies in which it invests. The term "initial valuation date" is the date on which an entity first makes an investment that is not a short-term investment of funds pending long-term commitment. An entity's "annual valuation period" is a pre-established period not exceeding 90 days in duration, which begins no later than the first anniversary of the entity's initial valuation date. The Plan Assets Regulation does not provide specific guidance regarding what rights will qualify as management rights, and U.S. Department of Labor has consistently taken the position that such determination can only be made in light of the surrounding facts and circumstances of each particular case, substantially limiting the degree to which it can be determined with certainty whether particular rights will satisfy this requirement.

The Plan Assets Regulation defines a "publicly-offered security" as a security that is "widely held," "freely transferable," and either part of a class of securities registered under the Exchange Act or sold pursuant to an effective registration statement under the Securities Act if the securities are registered under the Exchange Act within 120 days after the end of the fiscal year of the issuer during which the public offering occurred. For these purposes, a security is considered "widely held" only if it is part of a class of securities that is owned by 100 or more investors that are independent of the issuer and of one another. A security will not fail to be "widely held" because the number of independent investors falls below 100 subsequent to the initial offering as a result of events beyond the issuer's control. In addition, the Plan Assets Regulation provides that whether a security is "freely transferable" is a factual question to be determined on the basis of all relevant facts and circumstances. The Plan Assets Regulation further provides that, when a security is part of an offering in which the minimum investment is $10,000 or less certain restrictions ordinarily will not, alone or in combination, affect the finding that such securities are "freely transferable." It is noted that the Plan Assets Regulation only establishes a presumption in favor of the finding of free transferability where the restrictions are consistent with the particular types of restrictions listed in the Plan Assets Regulation.

In order to attempt to avoid our assets being treated as "plan assets" for purposes of ERISA and Section 4975 of the Code during any time during which the Shares are not a "publicly-offered security" for purposes of the Plan Assets Regulation, we either intend to (a) limit investment in the Company so that, at all such times, less than 25% of the Shares (as determined for purposes of the Plan Assets Regulation) are held by Benefit Plan Investors based on assurances provided by investors or their transferees or (b) endeavor that the Company qualify as a VCOC. Initial or additional investments by Benefit Plan Investors could be restricted, and existing Benefit Plan Investors could be required to redeem Shares in our attempt to avoid our assets being treated as "plan assets" for purposes of ERISA and Section 4975 of the Code. Any such restrictions or mandatory redemptions will be effected in such manner as our Board, in its discretion, determines to be reasonable and appropriate under the circumstances.

Prior to accepting any investments from any investor, each investor will be required to make certain representations to us as set forth in its Subscription Agreement with respect to ERISA matters, including whether the investor is, or is not and will not be, a Benefit Plan Investor or Controlling Person.

The foregoing discussion is general in nature and does not purport to address every issue under ERISA or Section 4975 of the Code that could be applicable to the Company or a particular investor. In addition, this summary does not include a discussion of any laws that could apply to employee benefit plans that are not subject to ERISA or Section 4975 of the Code. Such plans (and entities in which they invest, as applicable) should consult their own professional advisors about any laws applicable thereto.

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**THE SALE OF COMMON SHARES TO A PLAN IS IN NO RESPECT A REPRESENTATION BY US THAT AN INVESTMENT IN THE SHARES MEETS APPLICABLE LEGAL REQUIREMENTS WITH RESPECT TO INVESTMENTS BY PLANS GENERALLY OR ANY PLAN IN PARTICULAR. PRIOR TO PURCHASING COMMON SHARES, FIDUCIARIES OF PLANS SHOULD CONSULT WITH THEIR OWN LEGAL COUNSEL CONCERNING THE IMPLICATIONS UNDER ERISA, SECTION 4975 OF THE CODE OR OTHER APPLICABLE LAW OF AN INVESTMENT IN THE COMPANY.** 

**ITEM 1A. RISK FACTORS.** 

*Investing in our Shares involves a number of significant risks. Before you invest in our Shares, you should be aware of various risks, including those described below. The risks set out below are not the only risks we face. Additional risks and uncertainties not presently known to us or not presently deemed material by us could also impair our operations and performance. If any of the following events occur, our business, financial condition, results of operations and cash flows could be materially and adversely affected. In such case, our net asset value could decline, and you could lose all or part of your investment. The risk factors described below are the principal risk factors associated with an investment in us as well as those factors generally associated with an investment company with investment objectives, investment policies, capital structure or trading markets similar to ours.* 

**Risks Relating to this Offering** 

***There are restrictions on your ability to transfer the Shares in excess of the restrictions typically associated with a private placement of securities, and these additional restrictions further limit the liquidity of your investment.***

The Shares will not be registered under the Securities Act, nor any other securities laws, and Shares will not be readily transferable. As such, absent an effective registration statement covering the Shares sold hereunder, such Shares may be resold only in transactions that are exempt from the registration requirements of the Securities Act. The Shares sold hereunder will have limited transferability and require the consent of the Company, which can be withheld in the Company's sole discretion, to any transfer. Although the Company, in its discretion, can permit a transfer of Shares or, if authorized by the Board, repurchase Shares, an investor generally will have no right to transfer its Shares.

***Investing in our Shares could involve an above average degree of risk.***

The investments we make in accordance with our investment objective could result in a higher amount of risk than alternative investment options and a higher risk of volatility or loss of principal. Our investments in portfolio companies involve higher levels of risk, and therefore, an investment in our securities is not suitable for someone with a lower risk tolerance.

***There is a risk that shareholders in our Shares will not receive distributions or that our distributions will not grow over time and a portion of our distributions could be a return of capital.***

We intend to make distributions on a quarterly basis to our shareholders out of assets legally available for distribution. We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions. Our ability to pay distributions could be adversely affected by the impact of one or more of the risk factors described in this Registration Statement. Due to our expectation of using leverage to finance investments and the asset coverage test that will be applicable to us under the 1940 Act as a BDC, we could be limited in our ability to make distributions. If we declare a distribution and if more shareholders opt to receive cash distributions rather than participate in our distribution reinvestment plan, we could be forced to sell some of our investments in order to make cash distribution payments. To the extent we make distributions to shareholders that include a return of capital, such portion of the

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distribution essentially constitutes a return of the shareholder's investment. Although such return of capital is generally not currently taxable, such distributions would generally decrease a shareholder's basis in our Shares and could therefore increase such shareholder's tax liability upon the future sale or other disposition of such Shares. A return of capital distribution could cause a shareholder to recognize a capital gain from the sale of our Shares even if the shareholder sells its Shares for less than the original purchase price.

***There is no guarantee of a Listing; therefore, there is no guarantee that an investor will be able to exit its investment in the Company by a specific date.***

While we may consider providing liquidity in the future through a Listing, we are not be obligated to effect a Listing or other liquidity event at any time or at all. If we do not successfully complete a Listing, investors will not be able to fully exit their investment in the Company until such time as the Company completes its liquidation, which is not required to be complete by any specific date and could be expected to occur over a prolonged period of time.

From time to time, our Board may consider implementing a quarterly share repurchase program to permit shareholders to obtain partial liquidity. If our Board adopts any such share repurchase program, our Board would retain the right to amend, suspend or terminate it at any time, if it deems such action to be in our best interest and the best interest of our shareholders. We intend to conduct any such repurchase offers (also referred to as tender offers) in accordance with the requirements of the 1940 Act and Rule 13e-4 under the Exchange Act. All Shares purchased by us pursuant to the terms of each tender offer will be retired and thereafter will be authorized and unissued Shares

***We are subject to risks associated with a Listing and we cannot provide any assurance that we will be able to complete a liquidity event on acceptable terms or at all.***

We cannot assure you that we will complete a Listing. In addition to the fact that no trading market may develop for our Shares after a Listing, there is a separate and distinct risk that any such secondary market trading in our Shares may not perform as well as other publicly traded funds advised by the Investment Adviser have historically performed.

We will be subject to risks in connection with a sale of all or substantially all of our assets or Shares to, or other liquidity event with, an entity for consideration of cash or securities of the acquirer. Risks of a Listing include the risk that our shareholders experience a reduction in percentage ownership and voting power in any resulting entity and the risk that the anticipated benefits of any merger or liquidity event are not realized by the resulting entity. In addition, a Listing could trigger "change of control" provisions and other restrictions in certain of our contracts, including credit facilities, and the failure to obtain any required consents or waivers from counterparties could permit such counterparties to terminate, or otherwise increase their rights or our obligations under, any such agreements. If such agreements are terminated or amended, we cannot assure you that we would be able to replace, amend or obtain a waiver under any such agreement on acceptable terms, or at all.

If we enter into an agreement to complete a Listing in which our shareholders will receive securities of an acquirer, our shareholders will be subject to risks associated with such securities. Potential acquirers include closed-end investment companies and BDCs, shares of which could be publicly traded and could trade at a discount to net asset value or could be subject to restrictions on transfer because such Shares are not publicly traded. This characteristic of closed-end investment companies and BDCs is separate and distinct from the risk that their net asset value per share could decline. We cannot assure you whether any Shares or other securities to be received by our shareholders in a Listing, if any, will be publicly traded and, if so, if such securities will trade at, above or below their net asset value either before or after closing of the Listing. In addition, if we seek to enter into a transaction in which our shareholders receive Shares of a fund that is advised by our Investment Adviser, such transaction will need to comply with the requirements under the 1940 Act governing transactions with affiliates, which could complicate the negotiation and closing of such transaction.

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**Risks Relating to Our Business and Structure** 

***We are a new company with no operating history.***

We were formed in April 24, 2025 and commenced operations as a private fund in September 2025 and elected to be regulated as a BDC on October 31, 2025. We are subject to all of the business risks and uncertainties associated with any new business, including the risk that we will not achieve our investment objective, that we will not qualify or maintain our qualification to be treated as a RIC, and that the value of your investment could decline substantially.

We anticipate that we will use substantially all of the net proceeds from the sale of Shares, depending on the availability of appropriate investment opportunities consistent with our investment objectives and market conditions. Until such appropriate investment opportunities can be found, we will invest the net proceeds of the sale of Shares primarily in cash, cash equivalents, U.S. government securities, high-quality debt investments that mature in one year or less from the date of investment. We can also invest the net proceeds from the sale of Shares in broadly syndicated loans to be held for short term investment purposes until appropriate investment opportunities can be found. We expect these temporary investments to earn yields substantially lower than the income that we expect to receive in respect of investments in senior secured and one-stop loans. As a result, any distributions we make during this period could be substantially smaller than the distributions that we expect to pay when our portfolio is fully invested.

***We operate in a highly competitive market for investment opportunities.***

A number of entities compete with us to make the types of investments that we plan to make in middle-market companies. We will compete with public and private funds, including other BDCs, commercial and investment banks, commercial financing companies, CLO funds and, to the extent they provide an alternative form of financing, private equity funds. Additionally, alternative investment vehicles, such as hedge funds, also invest in middle-market companies. As a result, competition for investment opportunities at middle-market companies can be intense. Many of our potential competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. For example, we believe some competitors will have a lower cost of funds and access to funding sources that are not available to us. In addition, some of our competitors have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that the 1940 Act will impose on use once we elect to be regulated as a BDC. We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations. Also, as a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we can offer no assurance that we will be able to identify and make investments that are consistent with our investment objectives.

Participants in our industry compete on several factors, including price, flexibility in transaction structuring, customer service, reputation, market knowledge and speed in decision-making. We do not seek to compete primarily based on the interest rates we offer, and we believe that some of our competitors may make loans with interest rates that are lower than the rates we offer. We may lose investment opportunities if we do not match our competitors' pricing, terms and structure. However, if we match our competitors' pricing, terms and structure, we may experience decreased net interest income and increased risk of credit loss.

***Our borrowers may default on their payments, which may have a materially negative effect on our financial performance.***

Our primary business exposes us to credit risk, and the quality of our portfolio has a significant impact on our earnings. Credit risk is a component of our fair valuation of our portfolio companies. Negative credit events will lead to a decrease in the fair value of our portfolio companies.

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In addition, market conditions have affected consumer confidence levels, which may harm the business of our portfolio companies and result in adverse changes in payment patterns. Increased delinquencies and default rates would negatively impact our results of operations. Deterioration in the credit quality of our portfolio could have a material adverse effect on our business, financial condition and results of operations. If interest rates rise, some of our portfolio companies may not be able to pay the escalating interest on our loans and may default.

We make long-term loans and debt investments, which may involve a high degree of repayment risk. Our investments with a deferred interest feature, such as OID income and PIK interest, could represent a higher credit risk than investments that must pay interest in full in cash on a regular basis. We invest in companies that may have limited financial resources, typically are highly leveraged and may be unable to obtain financing from traditional sources. Accordingly, a general economic downturn or severe tightening in the credit markets could materially impact the ability of our borrowers to repay their loans, which could significantly damage our business. Numerous other factors may affect a borrower's ability to repay its loan, including the failure to meet its business plan or a downturn in its industry. A portfolio company's failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination of its loans or foreclosure on the secured assets.

This could trigger cross-defaults under other agreements and jeopardize our portfolio company's ability to meet its obligations under the loans or debt securities that we hold. In addition, our portfolio companies may have, or may be permitted to incur, other debt that ranks senior to or equally with our securities. This means that payments on such senior-ranking securities may have to be made before we receive any payments on our subordinated loans or debt securities. Deterioration in a borrower's financial condition and prospects may be accompanied by deterioration in any related collateral and may adversely affect our financial condition and results of operations

***Any unrealized losses we experience on our investment portfolio may be an indication of future realized losses, which could reduce our income available for distribution.***

As a BDC, we are required to carry our investments at fair value, which is derived from a market value or, if no market value is ascertainable or if market value does not reflect the fair value of such investment in the bona fide determination of our Board, then we would carry our investments at fair value as determined in good faith by or under the direction of our Board. Decreases in the market values or fair values of our investments are recorded as unrealized depreciation or loss. Unrealized losses of any given portfolio company could be an indication of such company's inability in the future to meet its repayment obligations to us.

If the fair value of our portfolio companies reflects unrealized losses that are subsequently realized, we could experience reductions of our income available for distribution in future periods that could materially harm our results of operations.

***We are dependent upon PennantPark's key personnel for our future success, and if PennantPark is unable to hire and retain qualified personnel or if PennantPark loses any member of its management team, our ability to achieve our investment objectives could be significantly harmed.***

We depend on the diligence, skill and network of business contacts of the senior investment professionals of PennantPark for our future success. We also depend, to a significant extent, on PennantPark's access to the investment information and deal flow generated by these senior investment professionals and any others that may be hired by PennantPark. Subject to the overall supervision of our Board, the managers of our Investment Adviser evaluate, negotiate, structure, close and monitor our investments. Our future success depends on the continued service of management personnel of PennantPark. The departure of managers of PennantPark could have a material adverse effect on our ability to achieve our investment objectives. In addition, we can offer no assurance that the Investment Adviser will remain our Investment Adviser. The Investment Adviser has the right, under the Investment Advisory Management Agreement, to resign at any time upon 60 days' written notice, whether we have found a replacement or not.

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If our Investment Advisory Management Agreement is terminated, our costs under new agreements that we enter into may increase. In addition, we will likely incur significant time and expense in locating alternative parties to provide the services we expect to receive under our Investment Advisory Management Agreement. Any new investment management agreement would also be subject to approval by our shareholders.

***We are exposed to risks associated with changes in interest rates that may affect our cost of capital and net investment income.***

To the extent we borrow money or issue debt securities or Shares to make investments, our net investment income will depend, in part, upon the difference between the rate at which we borrow funds or pay interest or dividends on such debt securities or Shares and the rate at which we invest these funds. In addition, many of our debt investments and borrowings have floating interest rates that rest on a periodic basis, and many of our investments and borrowing have floating interest rates that reset on a periodic basis, and any of our investments and subject to interest rate floors. As a result, we can offer no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income, in particular with respect to increases from current levels to the level of the interest rate floors on certain investments. In periods of rising interest rates, our cost of funds will increase because the interest rates on the amounts borrowed under our credit facilities or other financing arrangements are typically floating, which could reduce our net investment income to the extent any debt investments have fixed interest rates, and the interest rate on investments with an interest rate floor will not increase until interest rates exceed the applicable floor, which will reduce our net investment income. We may use interest rate risk management techniques, such as total return swaps and interest rate swaps, in an effort to limit our exposure to interest rate fluctuations. These techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act and applicable commodities laws. These activities may limit our ability to participate in the benefits of lower interest rates with respect to the hedged portfolio. Adverse developments resulting from changes in interest rates or hedging transactions could have a material adverse effect on our business, financial condition and results of operations. Also, we have limited experience in entering into hedging transactions and we will initially have to purchase or develop such expertise, which may diminish the actual benefits of any hedging strategy we employ.

A rise in the general level of interest rates can be expected to lead to higher interest rates applicable to our debt investments once the interest rate exceeds the applicable floor. Accordingly, an increase in interest rates would make it easier for us to meet or exceed the incentive fee hurdle and may result in a substantial increase of the amount of incentive fees payable to our Investment Adviser with respect to Pre-Incentive Fee Net Investment Income.

General interest rate fluctuations may have a substantial negative impact on our investments, the value of our Shares and our rate of return on invested capital. A reduction in interest rates may result in both lower interest rates on new investments and higher repayments on current investments with higher interest rates, which may have an adverse impact on our net investment income. An increase in interest rates could decrease the value of any investments we hold which earn fixed interest rates or are subject to interest rate floors, thereby decreasing our net investment income. Also, an increase in interest rates available to investors could make an investment in our Shares less attractive if we are not able to increase our dividend rate, which could reduce the value of our Shares.

If general interest rates rise, there is a risk that the portfolio companies in which we hold floating rate securities will be unable to pay escalating interest amounts, which could result in a default under their loan documents with us. Rising interest rates could also cause portfolio companies to shift cash from other productive uses to the payment of interest, which may have a material adverse effect on their business and operations and could, over time, lead to increased defaults. In addition, rising interest rates may increase pressure on us to provide fixed rate loans to our portfolio companies, which could adversely affect our net investment income, as any increases in our cost of borrowed funds would not be accompanied by increased interest income from such fixed-rate investment.

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***Our financial condition and results of operation depend on our ability to manage future growth effectively.***

Our ability to achieve our investment objectives depends on our ability to grow, which depends, in turn, on our Investment Adviser's ability to identify, invest in and monitor companies that meet our investment selection criteria. Accomplishing this result on a cost-effective basis is largely a function of our Investment Adviser's structuring of the investment process, its ability to provide competent, attentive and efficient services to us and our access to financing on acceptable terms. The management team of the Investment Adviser has substantial responsibilities under our Investment Advisory Management Agreement. In order for us to grow, our Investment Adviser will need to hire, train, supervise and manage new employees. However, we can offer no assurance that any current or future employees will contribute effectively to the work of, or remain associated with, the Investment Adviser. We caution you that the principals of our Investment Adviser or Administrator may also be called upon to provide and currently do provide significant managerial assistance to portfolio companies and other investment vehicles, including other BDCs, which are managed by the Investment Adviser. Such demands on their time may distract them or slow our rate of investment. Any failure to manage our future growth effectively could have a material adverse effect on our business, financial condition and results of operations.

***We are highly dependent on information systems and systems failures could have a material adverse effect on our business, financial condition and results of operations.***

Our business depends on the communications and information systems, including financial and accounting systems, of the Investment Adviser, the Administrator and our external service providers. Any failure or interruption of such systems could cause delays or other problems in our activities. This, in turn, could have a material adverse effect on our business, financial condition and results of operations.

***If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our Shares.***

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404 of SOX, or the subsequent testing by our independent registered public accounting firm (when undertaken, as noted below), may reveal deficiencies in our internal controls over financial reporting that are deemed to be significant deficiencies, material weaknesses or that may require prospective or retroactive changes to our consolidated financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors and lenders to lose confidence in our reported financial information, which could have a negative effect on the trading price of our Shares.

***We may not replicate the historical performance of other investment companies and funds with which our senior and other investment professionals have been or are affiliated.***

The 1940 Act imposes numerous constraints on the investment activities of BDCs. For example, BDCs are required to invest at least 70% of their total assets primarily in securities of U.S. private companies or thinly traded public companies (i.e., public companies with a market capitalization of less than $250 million), cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. These constraints may hinder the Investment Adviser's ability to take advantage of attractive investment opportunities and to achieve our investment objectives. In addition, the investment philosophy and techniques used by the Investment Adviser may differ from those used by other investment companies and funds advised by the Investment Adviser. Accordingly, we can offer no assurance that we will replicate the historical performance of other investment companies and funds with which our senior and other investment professionals have been affiliated, and we caution that our investment returns could be substantially lower than the returns achieved by such other companies.

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***Any failure on our part to maintain our status as a BDC would reduce our operating flexibility.***

If we do not remain a BDC, we might be regulated as a closed-end investment company under the 1940 Act, which would subject us to substantially more regulatory restrictions under the 1940 Act and correspondingly decrease our operating flexibility, which could have a material adverse effect on our business, financial condition and results of operations.

**Tax Risks During the Private Fund Period** 

The Company's income, gains, expenses and losses for each taxable year will be allocated to, and includible in, a shareholder's taxable income whether or not cash or other property is actually distributed in an amount sufficient for the shareholder to pay its income tax liability. Accordingly, each shareholder of the Company should have alternative sources from which to pay its U.S. federal income tax liability, as such income and gain may exceed distributions to such shareholder for a taxable year.

The Company may take positions with respect to certain tax issues that depend on legal conclusions not yet addressed by the courts. Should any such positions be successfully challenged by the IRS, a shareholder might be found to have a different tax liability for that year than that reported on its U.S. federal income tax return, and the Company's ability to make distributions may be adversely affected.

In addition, absent certain elections by the Company, an audit of the Company could cause adjustments to the Company's tax items, and any resulting tax liability, to be determined and collected at the Company level and thus borne by its investors in the year in which the audit is completed, rather than the year to which the audit relates. The shareholders (including former shareholders) may be required to indemnify the Company for any taxes (and related interest, penalties or other charges or expenses) payable the Company and attributable to such person's interests.

The Company will provide IRS Form 1065, Schedule Ks as well as any related state and local partnership information statements (collectively, "Schedule Ks") to its shareholders as soon as practicable after receipt of all of the necessary information. Schedule Ks will not be available until completion of the Company's annual audit, and the Company should not be expected to be able to provide final Schedule Ks to shareholders for any given calendar year until after July 15 of the following year. The shareholders should be prepared to obtain extensions of the filing date for their income tax returns at the U.S. federal, state and local level.

**UBTI.** U.S. tax-exempt investors, if any, in the Company should be aware that a portion of the Company's income may be treated as unrelated business taxable income. U.S. tax-exempt investors in the Company generally will be required to report and pay tax on their share of such unrelated business taxable income. For this reason, the Company may not be a suitable investment vehicle for U.S. tax-exempt investors prior to the Company's conversion to a RIC. Tax-exempt investors should consult with their own legal and financial advisors regarding the tax and other considerations involved in an investment in the Company.

**ECI.** Non-U.S. investors should expect that the Company may derive income that is effectively connected with the conduct of a trade or business with the United States.

There are a number of additional considerations associated with an investment in the Company. See "*Certain U.S. Federal Income Tax Considerations*".

*The foregoing list of certain risk factors does not purport to be a complete explanation of the risks involved in investing in the company. Potential investors should read this entire document, the Company's amended and restated Declaration of Trust (the "<u>Amended and Restated Declaration of Trust</u>") and the other fund documents before determining whether to invest in the company and consult with their own financial and tax advisors. Potential investors should also be aware that, if they decide to purchase Shares, they will have no role in the management of the companies and will be required to rely on the expertise of the investment adviser in dealing with the foregoing (and other) risks on a day-to-day basis.* 

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***Loss of RIC tax status would substantially reduce our net assets and income available for debt service and distributions.***

We intend to operate so as to be able to elect and maintain our election to be treated as a RIC under Subchapter M of the Code. If we meet the 90% Income Test, the Diversification Tests, and the Annual Distribution Requirement, we generally will not be subject to corporate-level U.S. federal income taxation on income we timely distribute, or are deemed to distribute, as dividends for U.S. federal income tax purposes to our shareholders. We would cease to qualify for such tax treatment if we were unable to comply with these requirements. In addition, we may have difficulty meeting our Annual Distribution Requirement to our shareholders because, in certain cases, we may recognize income before or without receiving cash representing such income. If we fail to qualify as a RIC, we will have to pay corporate-level U.S. federal income taxes on all of our income whether or not we distribute it, which would substantially reduce the amount of income available for debt service as well as reduce and/or affect the character and amount of our distributions to our shareholders. Even if we qualify as a RIC, we generally will be subject to a four percent (4%) nondeductible excise tax if we do not distribute to our shareholders in respect of each calendar year an amount at least equal to the Excise Tax Avoidance Requirement.

***We are subject to certain restrictions of the Employee Retirement Income Security Act of 1974 (ERISA) as amended.***

We anticipate that, during any time during which the Shares are not a "publicly-offered security" for purposes of the Plan Assets Regulation, we either intend to limit Benefit Plan Investors to less than twenty-five percent (25%) of the value of each class of equity interest in the Company or endeavor that the Company qualify as a VCOC, and therefore we expect that our assets will not be treated as "plan assets" subject to Title I of ERISA or Section 4975 of the Code although there is no assurance that this will be the case. Were our assets to be treated as "plan assets" (that is, if our Shares are not a "publicly-offered security" and another exception under the Plan Assets Regulation is not available to us), we could, among other things, be subject to certain restrictions on our ability to carry out our activities as described herein. Moreover, we can require certain Benefit Plan Investors or other employee benefit plans not subject to Title I of ERISA or Section 4975 of the Code to reduce or terminate their interests in us at such time.

***We may have difficulty paying our Annual Distribution Requirement if we recognize income before or without receiving cash representing such income.***

For U.S. federal income tax purposes, we may be required to include in income certain amounts that we have not yet received in cash, such as OID and PIK interest, which represents interest added to the loan balance and due at the end of the loan term. OID, which could be significant relative to our overall investment assets, and increases in loan balances as a result of PIK interest will be included in income before we receive any corresponding cash payments. We also may be required to include in income certain other amounts that we will not receive in cash, such as amounts attributable to foreign currency transactions. Our investments with a deferred interest feature, such as PIK interest, may represent a higher credit risk than loans for which interest must be paid in full in cash on a regular basis. For example, even if the accounting conditions for income accrual are met, the borrower could still default when our actual collection is scheduled to occur upon maturity of the obligation.

The part of the incentive fee payable by us that relates to our net investment income is computed and paid on income that may include interest that has been accrued but not yet received in cash. If a portfolio company defaults on a loan that is structured to provide PIK or OID interest, it is possible that accrued interest previously used in the calculation of the incentive fee will become uncollectible.

Since in certain cases we may recognize income before or without receiving cash representing such income, we may have difficulty in satisfying the Annual Distribution Requirement, in which case, we may have to sell

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some of our investments at times or prices we would not consider advantageous, or raise additional debt or equity capital or reduce new investment originations to meet these distribution requirements, which could have a material adverse effect on our business, financial condition and results of operations. If we are not able to obtain cash from other sources, we may lose our ability to be subject to tax as a RIC and thus be subject to corporate-level U.S. federal income tax.

***Legislation enacted in 2018 allows us to incur additional leverage.***

A BDC has historically been able to issue "senior securities," including borrowing money from banks or other financial institutions, only in amounts such that its asset coverage, as defined in Section 61(a)(2) of the 1940 Act, equals at least 200% after such incurrence or issuance. In March 2018, the Consolidated Appropriations Act of 2018 was enacted which amended the 1940 Act to decrease this percentage from 200% (*i.e.*, $1 of debt outstanding for each $1 of equity) to 150% (i.e., $2 of debt outstanding for each $1 of equity) for a BDC that has received either shareholder approval or approval of a "required majority" (as defined in Section 57(o) of the 1940 Act) of its Board of the application of such lower asset coverage ratio to the BDC. As such, we are able to incur additional indebtedness so long as we comply with the applicable disclosure requirement, which may increase the risk of investing in us. Under the 150% minimum asset coverage ratio, we are permitted to borrow up to two dollars for investment purposes for every one dollar of investor equity. In other words, Section 61(a)(2) of the 1940 Act permits BDCs to potentially increase their debt-to-equity ratio from a maximum of 1-to-1 to a maximum of 2-to-1.

***Because we intend to distribute substantially all of our income to our shareholders to maintain our ability to be subject to tax as a RIC, we may need to raise additional capital to finance our growth. If funds are not available to us, we may need to curtail new investments.***

We intend to distribute to our shareholders substantially all of our investment company taxable income and net capital gains each taxable year in connection with satisfying the requirements to be subject to tax as a RIC for U.S. federal income tax purposes. However, we may retain all or a portion of our net capital gains and incur applicable income taxes with respect thereto and elect to treat such retained net capital gains as deemed dividend distributions to our shareholders.

If we incur additional indebtedness under this provision, the risk of investing in us will increase. If the value of our assets declines, we may be unable to satisfy this asset coverage test. If that happens, we may be required to sell a portion of our investments or sell additional Shares and, depending on the nature of our leverage, to repay a portion of our indebtedness at a time when such sales and repayments may be disadvantageous. In addition, the issuance of additional securities could dilute the percentage ownership of our current shareholders in us.

***Regulations governing our operation as a BDC will affect our ability to, and the way in which we, raise additional capital.***

Our business requires a substantial amount of capital. We may acquire additional capital from the issuance of additional senior securities or other indebtedness, the issuance of additional Shares, the issuance of warrants or subscription rights to purchase certain of our securities, or from securitization transactions. However, we may not be able to raise additional capital in the future on favorable terms or at all. We may issue debt securities or preferred securities, which we refer to collectively as "senior securities," and we may borrow money from banks, or other financial institutions, up to the maximum amount permitted by the 1940 Act. Under the 1940 Act, the asset coverage ratio requirements permit us to issue senior securities or incur indebtedness subject to certain limitations. Our ability to pay distributions or issue additional senior securities would be restricted if our asset coverage ratio was not met. If the value of our assets declines, we may be unable to satisfy the asset coverage ratio. If that happens, we may be required to liquidate a portion of our investments and repay a portion of our

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indebtedness at a time when such sales may be disadvantageous, which could materially harm our business, financial condition and results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•  ***Senior Securities*** . If we issue senior securities, we may become subject to typical risks associated
with leverage, including an increased risk of loss. If we issue preferred securities, they would rank "senior" to Shares in our capital structure. Shareholders would have separate voting rights and may have rights, preferences or
privileges more favorable than those of holders of our Shares. Furthermore, the issuance of preferred securities could have the adverse effect of delaying, deferring or preventing a transaction or a change of control that might involve a premium
price for our shareholders or otherwise be in your best interest. Our senior securities may include conversion features that cause them to bear risks more closely associated with an investment in our Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•  ***Additional Shares.*** Our Board may decide to issue Shares to finance our operations rather than
issuing debt or other senior securities. As a BDC, we are generally not able to issue our Shares at a price below NAV per share without first obtaining certain approvals from our shareholders and our Board. Also, subject to the requirements of the
1940 Act, we may issue rights to acquire our Shares at a price below the current NAV per share of the Shares if our Board determines that such sale is in our best interests and the best interests of our shareholders. In any such case, the price at
which our securities are to be issued and sold may not be less than a price that, in the determination of our Board, closely approximates the market value of such securities. However, when required to be undertaken, the procedures used by the Board
to determine the NAV per share of our Shares within 48 hours of each offering of our Shares may differ materially from and will necessarily be more abbreviated than the procedures used by the Board to determine the NAV per share of our Shares at the
end of each quarter because there is an extensive process each quarter to determine the NAV per share of our Shares which cannot be completed in 48 hours. The quarterly process includes preliminary valuation conclusions, engagement of independent
valuation firms and review by those firms of preliminary valuation conclusions. By contrast, the procedures in connection with an offering may yield a NAV that is less precise than the NAV determined at the end of each quarter. We will not offer
transferable subscription rights to our shareholders at a price equivalent to less than the then current NAV per share of Shares, excluding underwriting commissions, unless we first file a post-effective amendment that is declared effective by the
SEC with respect to such issuance and the Shares to be purchased in connection with such rights represents no more than one-third of our outstanding Shares at the time such rights are issued. We may actually
issue Shares above or below a future NAV. If we raise additional funds by issuing more Shares or warrants or senior securities convertible into, or exchangeable for, our Shares, the percentage ownership of our shareholders at that time would
decrease, and our shareholders would experience voting dilution.

***We intend to use borrowed funds to make investments and are exposed to the typical risks associated with leverage.***

Because we intend to borrow funds to make investments, we are exposed to increased risk of loss due to our use of debt to make investments. A decrease in the value of our investments will have a greater negative impact on the NAV attributable to our Shares than it would if we did not use debt. Our ability to pay distributions may be restricted when our asset coverage ratio is not met and any cash that we use to service our indebtedness is not available for distribution to our shareholders. Our future debt may be governed by an indenture or other instrument containing covenants restricting our operating flexibility. We, and indirectly our shareholders, will bear the cost of issuing and servicing debt Any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our Shares and may also carry leverage related risks. Leverage magnifies the potential risks for loss and the risks of investing in us, both as detailed below.

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***If we incur debt, it could increase the risk of investing in our Shares.***

We expect in the future to borrow under various credit arrangements, subject to market availability. The amount of leverage that we employ will depend upon our assessment of the market and other factors at the time of any proposed borrowing. Lenders will have fixed dollar claims on our assets that are superior to the claims of our shareholders or shareholders, if any. In the case of a liquidation event, those lenders would receive proceeds before our shareholders. Any future debt issuance will increase our leverage. In addition, borrowings or debt issuances, also known as leverage, magnify the potential for loss or gain on amounts invested and, therefore, increase the risks associated with investing in our securities. Leverage is generally considered a speculative investment technique. If the value of our assets decreases, then the use of leverage would cause the NAV attributable to our Shares to decline more than it otherwise would have had we not utilized leverage. Similarly, any decrease in our revenue would cause our net income to decline more than it would have had we not borrowed funds and could negatively affect our ability to make distributions on our Shares. Our ability to service any debt that we incur depends largely on our financial performance and is subject to prevailing economic conditions and competitive pressures.

***We may in the future determine to fund a portion of our investments with preferred shares, which is another form of leverage and would magnify the potential for loss and the risks of investing in us.***

Preferred shares, which is another form of leverage, has the same risks to our common shareholders as borrowings because the distributions on any Shares we issue must be cumulative. If we issue preferred securities they would rank "senior" to Shares in our capital structure. Payment of distributions on, and repayment of the liquidation preference of, such preferred shares would typically take preference over any distributions or other payments to our common shareholders. Also, preferred shareholders are not typically subject to any of our expenses or losses and are not entitled to participate in any income or appreciation in excess of their stated preference. Furthermore, preferred shareholders would have separate voting rights and may have rights, preferences or privileges more favorable than those of our common shareholders. Also, the issuance of preferred securities could have the adverse effect of delaying, deferring or preventing a transaction or a change of control that might involve a premium price for our shareholders or otherwise be in the best interest of shareholders.

***We may in the future determine to fund a portion of our investments with debt securities, which would magnify the potential for loss and the risks of investing in us.***

As a result of any issuance of debt securities and borrowings, we will be exposed to typical risks associated with leverage, including an increased risk of loss and an increase in expenses, which are ultimately borne by our shareholders. Payment of interest on such debt securities must take preference over any other distributions or other payments to our shareholders. If we issue additional debt securities in the future, it is likely that such securities will be governed by an indenture or other instrument containing covenants restricting our operating flexibility. In addition, such securities may be rated by rating agencies, and in obtaining a rating for such securities, we may be required to abide by operating and investment guidelines that could further restrict our operating flexibility. Furthermore, any cash that we use to service our indebtedness would not be available for the payment of distributions to our shareholders.

***Our credit ratings may not reflect all risks of an investment in our debt securities.***

Our credit ratings, if any, are an assessment of our ability to pay our obligations. Consequently, real or anticipated changes in our credit ratings will generally affect the market value of any publicly issued debt securities. Our credit ratings may not reflect the potential impact of risks related to market conditions or other factors discussed above on the market value of, or trading market for, any publicly issued debt securities. Rating agencies have reviewed, and may continue to review. Such a downgrade in our credit ratings may adversely affect our securities.

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***There are significant potential conflicts of interest which could impact our investment returns.***

The professionals of the Investment Adviser and Administrator and their affiliates may serve as officers, trustees or principals of entities that operate in the same or a related line of business as we do or of investment funds managed by affiliates of us that currently exist or may be formed in the future. The Investment Adviser and Administrator and their affiliates may be engaged by such funds at any time and without the prior approval of our shareholders or our Board. Our Board monitors any potential conflict that may arise upon such a development. Accordingly, if this occurs, they may have obligations to investors in those entities, the fulfillment of which might not be in the best interests of us or our shareholders. Currently, the executive officers and trustees, as well as the current senior investment professionals of the Investment Adviser and their affiliates, may serve as officers and trustees of our affiliated funds. In addition, we note that any affiliated investment vehicles currently formed or formed in the future and managed by the Investment Adviser or its affiliates may have overlapping investment objectives with our own and, accordingly, may invest in asset classes similar to those targeted by us. As a result, the Investment Adviser may face conflicts in allocating investment opportunities between us and such other entities. Although the Investment Adviser will endeavor to allocate investment opportunities in a fair and equitable manner, it is possible that, in the future, we may not be given the opportunity to participate in investments made by investment funds managed by the Investment Adviser or an investment manager affiliated with the Investment Adviser. In any such case, when the Investment Adviser identifies an investment, it is forced to choose which investment fund should make the investment. We may co-invest on a concurrent basis with any other affiliates that the Investment Adviser currently has or forms in the future, subject to compliance with applicable regulations and regulatory guidance, our exemptive relief and our allocation procedures.

In the ordinary course of our investing activities, we pay investment advisory and incentive fees to the Investment Adviser, and reimburse the Investment Adviser for certain expenses it incurs. As a result, investors in our Shares invest on a "gross" basis and receive distributions on a "net" basis after expenses, resulting in a lower rate of return than an investor might achieve through direct investments. Accordingly, there may be times when the management team of the Investment Adviser has interests that differ from those of our shareholders, giving rise to a conflict. For example, the Investment Adviser may seek to invest in more speculative investments in order to increase its incentive fee, which practice could result in higher investment losses, particularly during economic downturns.

We have entered into a Trademark License Agreement with PPIA pursuant to which PPIA will grant us a royalty-free non-exclusive license to use the name "PennantPark." The License Trademark Agreement will expire (i) upon expiration or termination of the Investment Advisory Management Agreement, (ii) if PPIA or an affiliate of PPIA (including PPIFA) ceases to serve as our investment adviser, (iii) by either party upon 60 days' written notice or (iv) by PPIA at any time in the event we assign or attempt to assign or sublicense the Trademark License Agreement or any of our rights or duties thereunder without the prior written consent of the Investment Adviser. Other than with respect to this limited license, we have no legal right to the "PennantPark" name.

In addition, we pay PennantPark Investment Administration, an affiliate of the Investment Adviser, our allocable portion of overhead and other expenses incurred by PennantPark Investment Administration in performing its obligations under the Administration Agreement, including rent and our allocable portion of the cost of our Chief Financial Officer, Corporate Counsel and Chief Compliance Officer and their respective staffs. These arrangements may create conflicts of interest that our Board must monitor.

***We may experience fluctuations in our quarterly results.***

We could experience fluctuations in our quarterly operating results due to a number of factors, including the interest rate payable on the debt securities we acquire, the default rate on such securities, the level of our expenses, variations in, and the timing of the recognition of, realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions. Similarly, future increases in the fair value of our debt may have a corresponding decrease to our NAV. This is expected to mitigate volatility

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in our earnings and NAV. As a result, results for any period should not be relied upon as being indicative of future performance.

***We may in the future issue securities for which there is no public market and for which we expect no public market to develop.***

In order to raise additional capital, we may issue debt or other securities for which no public market exists, and for which no public market is expected to develop. To the extent we issue securities for which no public market exists and for which no public market develops, a purchaser of such securities may not be able to liquidate the investment without considerable delay, if at all. If a market should develop for our debt and other securities, the price may be highly volatile, and our debt and other securities may lose value.

***If we issue preferred stock, debt securities or convertible debt securities the NAV and market value of our Shares may become more volatile.***

We cannot assure you that the issuance of preferred stock and/or debt securities would result in a higher yield or return to the holders of our Shares. The issuance of preferred stock, debt securities and/or convertible debt would likely cause the NAV and market value of our Shares to become more volatile. If the dividend rate on the preferred stock, or the interest rate on the debt securities, were to approach the net rate of return on our investment portfolio, the benefit of leverage to the holders of our Shares would be reduced or entirely eliminated. If the dividend rate on the preferred stock, or the interest rate on the debt securities, were to exceed the net rate of return on our portfolio, the use of leverage would result in a lower rate of return to the holders of Shares than if we had not issued the preferred stock or debt securities. Any decline in the NAV of our investment would be borne entirely by the holders of our Shares. Therefore, if the market value of our portfolio were to decline, the leverage would result in a greater decrease in NAV to the holders of our Shares than if we were not leveraged through the issuance of preferred stock, debt securities or convertible debt. This decline in NAV would also tend to cause a greater decline in the market price for our Shares.

There is also a risk that, in the event of a sharp decline in the value of our net assets, we would be in danger of failing to maintain required asset coverage ratios or other covenants which may be required by the preferred stock, debt securities and/or convertible debt or risk a downgrade in the ratings of the preferred stock, debt securities and/or convertible debt or our current investment income might not be sufficient to meet the dividend requirements on the preferred stock or the interest payments on the debt securities. In order to counteract such an event, we might need to liquidate investments in order to fund redemption of some or all of the preferred stock, debt securities or convertible debt. In addition, we would pay (and the holders of our Shares would bear) all costs and expenses relating to the issuance and ongoing maintenance of the preferred stock, debt securities, convertible debt or any combination of these securities. Holders of preferred stock, debt securities, convertible debt or any combination of these securities may have different interests than holders of Shares and may at times have disproportionate influence over our business.

***The trading market or market value of any publicly issued debt or convertible debt securities may be volatile.***

If we publicly issue debt or convertible debt securities, they initially will not have an established trading market. We cannot assure investors that a trading market for our publicly issued debt or convertible debt securities would develop or be maintained if developed. In addition to our creditworthiness, many factors may have a material adverse effect on the trading market for, and market value of, our publicly issued debt or convertible debt securities. These factors include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the time remaining to the maturity of these debt securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the outstanding principal amount of debt securities with terms identical or similar to these debt securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the supply of debt securities trading in the secondary market, if any;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the redemption, repayment or convertible features, if any, of these debt securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the level, direction and volatility of market interest rates; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• market rates of interest higher or lower than rates borne by the debt securities.

There also may be a limited number of buyers for our debt securities. This too may have a material adverse effect on the market value of the debt securities or the trading market for the debt securities. Our debt securities may include convertible features that cause them to more closely bear risks associated with an investment in our Shares.

***Terms relating to debt redemption may have a material adverse effect on the return on any debt securities.***

If we issue debt securities that are redeemable at our option, we may choose to redeem the debt securities at times when prevailing interest rates are lower than the interest rate paid on the debt securities. In addition, if the debt securities are subject to mandatory redemption, we may be required to redeem the debt securities at times when prevailing interest rates are lower than the interest rate paid on the debt securities. In this circumstance, a holder of our debt securities may not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as the debt securities being redeemed.

***If we issue subscription rights or warrants for our Shares, your interest in us may be diluted as a result of such rights or warrants offering.***

Shareholders who do not fully exercise rights or warrants issued to them in an offering of subscription rights or warrants to purchase our Shares should expect that they will, at the completion of an offering, own a smaller proportional interest in us than would otherwise be the case if they fully exercised their rights or warrants. We cannot state precisely the amount of any such dilution in Share ownership because we do not know what proportion of the Shares would be purchased as a result of any such offering.

In addition, if the subscription price or warrant exercise price is less than our NAV per share at the time of an offering, then our shareholders would experience an immediate dilution of the aggregate NAV of their Shares as a result of the offering. The amount of any such decrease in NAV is not predictable because it is not known at this time what the subscription price, warrant exercise price or NAV per share will be on the expiration date of such rights offering or what proportion of our Shares will be purchased as a result of any such offering.

***Changes in laws or regulations governing our operations or those of our portfolio companies may adversely affect our business.***

We and our portfolio companies are subject to laws and regulations at the U.S. federal, state and local levels and, in some cases, foreign levels. These laws and regulations, as well as their interpretation, may change from time to time, and new laws, regulations and interpretations may come into effect. Accordingly, any change in law and regulations, changes in administration or control of U.S. Congress, changes in interpretations, or newly enacted laws or regulations could have a material adverse effect on our business or the business of our portfolio companies.

Over the past several years, there also has been increasing regulatory attention to the extension of credit outside of the traditional banking sector, raising the possibility that some portion of the non-bank financial sector may be subject to new regulation. While it cannot be known at this time whether any regulation will be implemented or what form it will take, increased regulation of non-bank lending could be materially adverse to our business, financial conditions and results of operation. We may experience fluctuations in our quarterly results.

The United States may also potentially withdraw from or renegotiate various trade agreements and take other actions that would change current trade policies of the United States. We cannot predict which, if any, of

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these actions will be taken or, if taken, their effect on the financial stability of the United States. Such actions could have a material adverse effect on our business, financial condition and results of operations.

***Our Board may change our investment objectives, operating policies and strategies without prior notice or shareholder approval.***

Our Board has the authority to modify or waive certain of our operating policies and strategies without prior notice and without shareholder approval (except as required by the 1940 Act). However, absent shareholder approval, under the 1940 Act, we may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC. We cannot predict the effect any changes to our current operating policies and strategies would have on our business, operating results and value of our Shares. Nevertheless, the effects may adversely affect our business and impact our ability to make distributions.

**Risks Relating to the Illiquid Nature of Our Portfolio Assets** 

***We expect to invest in illiquid assets, and our valuation procedures with respect to such assets may result in recording values that are materially different than the values we ultimately receive upon disposition of such assets.***

All of our investments will be recorded using broker or dealer quotes, if available, or at fair value as determined in good faith by our Board. We expect that most, if not all, of our investments (other than cash and cash equivalents) will be classified as Level 3 under the Financial Accounting Standards Board ("<u>FASB</u>"), Accounting Standards Codification ("<u>ASC</u>") Topic 820, Fair Value Measurements and Disclosures ("<u>ASC 820</u>"). This means that the portfolio valuations will be based on unobservable inputs and our own assumptions about how market participants would price the asset or liability. We expect that inputs into the determination of fair values of our portfolio investments will require significant management judgment or estimation. Even if observable market data are available, such information may be the result of consensus pricing information or broker quotes, which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by such a disclaimer materially reduces the reliability of such information. As a result, there will be uncertainty as to the value of our portfolio investments.

Determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. In determining fair value in good faith, we generally obtain financial and other information from portfolio companies, which may represent unaudited, projected or pro forma financial information. Unlike banks, we are not permitted to provide a general reserve for anticipated loan losses; we are instead required by the 1940 Act to specifically fair value each individual investment on a quarterly basis. We record unrealized appreciation if we believe that our investment has appreciated in value. Likewise, we record unrealized depreciation if we believe that our investment has depreciated in value. We adjust quarterly the valuation of our portfolio to reflect our Board' determination of the fair value of each investment in our portfolio. Any changes in fair value are recorded on our Consolidated Statements of Operations as net change in unrealized appreciation or depreciation.

All of our investments will be recorded at fair value as determined in good faith by our Board. Our Board uses the services of nationally recognized independent valuation firms to aid it in determining the fair value of our investments. The factors that may be considered in fair value pricing of our investments include the nature and realizable value of any collateral, the portfolio company's ability to make payments and its earnings and cash flows, the markets in which the portfolio company does business, comparison to publicly traded companies and other relevant factors. Because valuations may fluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the value received in an actual transaction. Additionally, valuations of private securities and private companies are inherently uncertain. Our NAV could be adversely affected if our determinations regarding the fair value of our investments were materially lower than the values that we ultimately realize upon the disposal of such investments.

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***The lack of liquidity in our investments may adversely affect our business.***

We may acquire our investments directly from the issuer in privately negotiated transactions. Substantially all of these securities are subject to legal and other restrictions on resale or are otherwise less liquid than publicly traded securities. We expect to typically exit our investments when the portfolio company has a liquidity event such as a sale, refinancing, or initial public offering of the company, but we are generally not required to do so.

The illiquidity of our investments may make it difficult or impossible for us to sell such investments if the need arises, particularly at times when the market for illiquid securities is substantially diminished. In addition, if we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the value at which we have previously recorded our investments, which could have a material adverse effect on our business, financial condition and results of operations. In addition, we may face other restrictions on our ability to liquidate an investment in a portfolio company to the extent that we have material non-public information regarding such portfolio company.

Investments purchased by us that are liquid at the time of purchase may subsequently become illiquid due to events relating to the issuer of the investments, market events, economic conditions or investor perceptions. Domestic and foreign markets are complex and interrelated, so that events in one sector of the world markets or economy, or in one geographical region, can reverberate and have materially negative consequences for other market, economic or regional sectors in a manner that may not be foreseen and which may materially harm our business.

***A general disruption in the credit markets could materially damage our business.***

We are susceptible to the risk of significant loss if we are forced to discount the value of our investments in order to provide liquidity to meet our debt maturities. A general disruption in the credit markets could result in diminished demand for our securities. In addition, with respect to over-the-counter traded securities, the continued viability of any over-the-counter secondary market depends on the continued willingness of dealers and other participants to purchase the securities.

If the fair value of our assets declines substantially, we may fail to maintain the asset coverage ratio stipulated by the 1940 Act, which could, in turn, cause us to lose our status as a BDC and materially impair our business operations. Our liquidity could be impaired further by an inability to access the capital markets. These situations may arise due to circumstances that we may be unable to control, such as a general disruption in the credit markets, a severe decline in the value of the U.S. dollar, an economic downturn or recession or an operational problem that affects our counterparties or us, and could materially damage our business.

***We may invest in over-the-counter securities, which have and may continue to face liquidity constraints, to provide us with liquidity.***

The market for over-the-counter traded securities has and may continue to experience limited liquidity and other weakness as the viability of any over-the-counter secondary market depends on the continued willingness of dealers and other participants to purchase the securities.

**Risks Relating to Our Investments** 

***Our investments in prospective portfolio companies may be risky, and an investor could lose all or part of an investment.***

***Floating Rate Loans:*** The floating rate loans we invest in are usually rated below investment grade or may also be unrated. Securities rated below investment grade are often referred to as "junk bonds." Investments in floating rate loans rated below investment grade are considered speculative because of the credit risk of their issuers. Such companies are more likely than investment grade issuers to default on their payments of interest

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and principal owed to us, and such defaults could reduce our NAV and income distributions. An economic downturn would generally lead to a higher default rate by portfolio companies. A floating rate loan may lose significant market value before a default occurs and we may experience losses due to the inherent illiquidity of the investments. Moreover, any specific collateral used to secure a floating rate loan may decline in value or become illiquid, which would adversely affect the floating rate loan's fair value. Floating rate loans are subject to a number of risks, including liquidity risk and the risk of investing in below investment grade, variable-rate securities.

Floating rate loans are subject to the risk of non-payment of scheduled interest or principal. Such non-payment would result in a reduction of income to us, a reduction in the fair value of the investment and a potential decrease in our NAV. There can be no assurance that the liquidation of any collateral securing a floating rate loan would satisfy the borrower's obligation in the event of non-payment of scheduled interest or principal payments, or that the collateral could be readily liquidated. In the event of bankruptcy or insolvency of a borrower, we could experience delays or limitations with respect to our ability to realize the benefits of the collateral securing a floating rate loan. The collateral securing a floating rate loan may lose all or substantially all of its value in the event of the bankruptcy or insolvency of a borrower. Some loans are subject to the risk that a court, pursuant to fraudulent conveyance or other similar laws, could subordinate the rights in collateral of such loans to presently existing or future indebtedness of the borrower or take other actions detrimental to the holders of loans including, in certain circumstances, invalidating such loans or causing interest previously paid to be refunded to the borrower. Either such action could materially negatively affect our performance.

We may acquire floating rate loans through assignments or participations of interests in such loans. The purchaser of an assignment typically succeeds to all the rights and obligations of the assigning institution and becomes a lender under the credit agreement with respect to such debt obligation. However, the purchaser's rights can be more restricted than those of the assigning institution, and we may not be able to unilaterally enforce all rights and remedies under an assigned debt obligation and with regard to any associated collateral. A participation typically results in a contractual relationship only with the institution participating out the interest and not directly with the borrower. Sellers of participations typically include banks, broker-dealers, other financial institutions and lending institutions. In purchasing participations, we generally will have no right to enforce compliance by the borrower with the terms of the loan agreement against the borrower, and we may not directly benefit from the collateral supporting the debt obligation in which we have purchased the participation. As a result, we will be exposed to the credit risk of both the borrower and the institution selling the participation. Further, in purchasing participations in lending syndicates, we will not be able to conduct the same level of due diligence on a borrower or the quality of the floating rate loan with respect to which we are buying a participation as we would conduct if we were investing directly in the floating rate loan. This difference may result in us being exposed to greater credit or fraud risk with respect to such floating rate loans than we expected when initially purchasing the participation. Floating rate loans can be first lien secured debt, second lien secured debt or subordinated debt.

***First Lien Secured Debt:*** When we extend first lien secured debt, we will generally take a security interest in the available assets of these portfolio companies, including the equity interests of their subsidiaries, although this may not always be the case. We expect this security interest, if any, to help mitigate the risk that we will not be repaid. However, there is a risk that the collateral securing our loans may decrease in value over time, may be difficult to sell in a timely manner, may be difficult to appraise and may fluctuate in value based upon the success of the business and market conditions, including as a result of the inability of the portfolio company to raise additional capital. Also, in some circumstances, our lien could be subordinated to claims of other creditors. In addition, deterioration in a portfolio company's financial condition and prospects, including its inability to raise additional capital, may be accompanied by deterioration in the value of the collateral for the loan. Consequently, the fact that a first lien secured debt investment is secured does not guarantee that we will receive principal and interest payments according to the loan's terms, or at all, or that we will be able to collect on the loan should we be forced to enforce our remedies.

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***Second Lien Secured Debt:*** Our second lien secured debt will generally rank junior in priority of payment to first lien secured debt. Second lien secured debt holds a second priority with regard to right of payment in the event of insolvency. Second lien secured debt ranks senior to subordinated debt and common and preferred equity in borrowers' capital structures. This may result in an above average amount of risk and volatility or a loss of principal. These investments may involve additional risks that could adversely affect our investment returns. To the extent interest payments associated with such debt are deferred, such debt may be subject to greater fluctuations in valuations, and such debt could subject us and our shareholders to non-cash income. Since we may not receive cash interest or principal prior to the maturity of some of our second lien secured debt investments, such investments may be of greater risk than cash paying loans.

***Subordinated Debt:*** Our subordinated debt will generally rank junior in priority of payment to first lien secured debt and second lien secured debt and are often unsecured. As such, other creditors may rank senior to us in the event of insolvency. Subordinated debt ranks senior to common and preferred equity in borrowers' capital structures. This may result in an above average amount of risk and volatility or a loss of principal. These investments may involve additional risks that could adversely affect our investment returns. To the extent interest payments associated with such debt are deferred, such debt may be subject to greater fluctuations in valuations, and such debt could subject us and our shareholders to non-cash income. Since we may not receive cash interest or principal prior to the maturity of some of our subordinated debt investments, such investments may be of greater risk than cash paying loans.

***Equity Investments:*** We may make select equity investments, all of which will be subordinated to debt investments. In addition, when we invest in first lien secured debt, second lien secured debt or subordinated debt, we may acquire warrants to purchase equity investments from time to time. Our goal is ultimately to dispose of these equity investments and realize gains upon our disposition of such interests. However, the equity investments we receive may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our equity investments, and any gains that we do realize on the disposition of any equity investments may not be sufficient to offset any other losses we experience. In addition, many of the equity securities in which we will invest may not pay dividends on a regular basis, if at all. Furthermore, we may hold equity investments in partnerships through a taxable subsidiary for federal income tax purposes. Upon sale or exit of such investment, we may pay taxes at regular corporate tax rates, which will reduce the amount of gains or dividends available for distributions to our shareholders.

In addition, investing in middle-market companies involves a number of significant risks, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• companies may be highly leveraged, have limited financial resources and may be unable to meet their obligations
under their debt securities that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of us realizing any guarantees we may have obtained in connection with our investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• they typically have shorter operating histories, more limited publicly available information, narrower product
lines, more concentration of revenues from customers and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors' actions and changing market conditions, as well as general economic downturns;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• they are more likely to depend on the management talents and efforts of a small group of persons; therefore, the
death, disability, resignation or termination of one or more of these persons could have a material adverse impact on our portfolio company and, in turn, on us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• they generally have less predictable operating results, may from time to time be parties to litigation, may be
engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position. In addition,
our executive officers, trustees and our Investment Adviser may be named as defendants in litigation arising from our investments in the portfolio companies; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• they may have difficulty accessing the capital markets to meet future capital needs, which may limit their
ability to grow or to refinance their outstanding indebtedness upon maturity.

***Under the 1940 Act, we may invest up to 30% of our assets in investments that are not qualifying assets for BDCs. If we do not invest a sufficient portion of our assets in qualifying assets, we could be precluded from investing in assets that we deem to be attractive.***

As a BDC, we may not acquire any asset other than qualifying assets, as defined under the 1940 Act, unless at the time the acquisition is made such qualifying assets represent at least 70% of the value of our total assets. Qualifying assets include investments in U.S. operating companies whose securities are not listed on a national securities exchange and companies listed on a national securities exchange subject to a maximum market capitalization of $250 million. Qualifying assets also include cash, cash equivalents, government securities and high-quality debt securities maturing in one year or less from the time of investment.

We believe that most of our debt and equity investments will constitute qualifying assets. However, we may be precluded from investing in what we believe are attractive investments if such investments are not qualifying assets for purposes of the 1940 Act. If we have not invested a sufficient portion of our assets in qualifying assets at the time of a proposed investment, we will be prohibited from making any additional investment that is not a qualifying asset and could be forced to forgo attractive investment opportunities. Similarly, these rules could prevent us from making follow-on investments in existing portfolio companies (which could result in the dilution of our position) or could require us to dispose of investments at inappropriate times in order to comply with the 1940 Act. If we need to dispose of such investments quickly, it would be difficult to dispose of such investments on favorable terms. For example, we may have difficulty in finding a buyer and, even if we do find a buyer, we may have to sell the investments at a substantial loss.

***We are a non-diversified investment company within the meaning of the 1940 Act, and therefore we generally are not limited with respect to the proportion of our assets that may be invested in securities of a single issuer.***

We intend to be classified as a non-diversified investment company within the meaning of the 1940 Act, which means that we are not limited by the 1940 Act with respect to the proportion of our assets that we may invest in securities of a single issuer, excluding limitations on investments in other investment companies and compliance with the RIC U.S. tax regulations. To the extent that we assume large positions in the securities of a small number of issuers, our NAV may fluctuate to a greater extent than that of a diversified investment company as a result of changes in the financial condition or the market's assessment of the issuer. We may also be more susceptible to any single economic or regulatory occurrence than a diversified investment company. Beyond the diversification requirements, we do not have fixed guidelines for portfolio diversification, and our investments could be concentrated in relatively few portfolio companies or industries. Although we are classified as a non-diversified investment company within the meaning of the 1940 Act, we maintain the flexibility to operate as a diversified investment company and may do so for an extended period of time.

***Economic recessions or downturns could impair our portfolio companies and harm our operating results.***

Many of our portfolio companies will be susceptible to economic or industry centric slowdowns or recessions and may be unable to repay debt from us during these periods. Therefore, our non-performing assets are likely to increase, and the value of our portfolio is likely to decrease during these periods. Adverse economic conditions also may decrease the value of collateral securing some of our debt investments and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our portfolio and a material decrease in revenues, net income and assets. Unfavorable economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events could prevent us from increasing investments and materially harm our operating results.

A portfolio company's failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and potential termination of its debt and foreclosure on its secured assets, which could

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trigger cross-defaults under other agreements and jeopardize our portfolio company's ability to meet its obligations under the debt securities that we hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company, and any restructuring could further cause adverse effects on our business. Depending on the facts and circumstances of our investments and the extent of our involvement in the management of a portfolio company, upon the bankruptcy of a portfolio company, a bankruptcy court may recharacterize our debt investments as equity investments and subordinate all or a portion of our claim to that of other creditors. This could occur regardless of how we may have structured our investment. In addition, we cannot assure you that a bankruptcy court would not take actions contrary to our interests.

***If we fail to make follow-on investments in our portfolio companies, this could materially impair the value of our portfolio.***

Following an initial investment in a portfolio company, we may make additional investments in that portfolio company as "follow-on" investments, in order to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increase or maintain in whole or in part our equity ownership percentage;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exercise warrants, options or convertible securities that were acquired in the original or subsequent financing;
or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• attempt to preserve or enhance the value of our investment.

We have the discretion to make any follow-on investments, subject to the availability of capital resources and regulatory considerations. We may elect not to make follow-on investments or otherwise lack sufficient funds to make those investments. Any failure to make follow-on investments may, in some circumstances, jeopardize the continued viability of a portfolio company and our initial investment, or may result in a missed opportunity for us to increase our participation in a successful transaction or business. Even if we have sufficient capital to make a desired follow-on investment, we may elect not to make a follow-on investment because we may not want to increase our concentration of risk, either because we prefer other opportunities or because we are inhibited by compliance with BDC requirements or the desire to maintain our RIC tax status.

***Because we generally do not expect to hold controlling equity interests in our portfolio companies, we are not in a position to exercise control over our portfolio companies or to prevent decisions by management of our portfolio companies that could decrease the value of our investments.***

Because we generally do not expect to hold controlling equity positions in our portfolio companies, we are subject to the risk that a portfolio company may make business decisions with which we disagree, and the shareholders and management of a portfolio company may take risks or otherwise act in ways that are adverse to our interests. Due to the lack of liquidity for the debt and equity investments that we will typically hold in our portfolio companies, we may not be able to dispose of our investments in the event we disagree with the actions of a portfolio company, and may therefore suffer a decrease in the market value of our investments.

***An investment strategy focused primarily on privately held companies, including controlling equity interests, presents certain challenges, including the lack of available or comparable information about these companies, a dependence on the talents and efforts of only a few key portfolio company personnel and a greater vulnerability to economic downturns.***

We intend to invest primarily in privately held companies. Generally, little public information exists about these companies, and we rely on the ability of our Investment Adviser's investment professionals to obtain adequate information to evaluate the potential returns from investing in these companies. If they are unable to uncover all material information about these companies, we may not make a fully informed investment decision, and we may lose value on our investments. Also, privately held companies frequently have less diverse product lines and smaller market presence than larger competitors. These factors could have a material adverse impact on our investment returns as compared to companies investing primarily in the securities of public companies.

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***Our portfolio companies may incur debt that ranks equally with, or senior to, our investments in such companies and our portfolio companies may be highly leveraged.***

We intend to invest primarily in floating rate loans issued by our portfolio companies. The portfolio companies usually will have, or may be permitted to incur, other debt that ranks equally with, or senior to, our investments, and they may be highly leveraged. By their terms, such debt instruments may provide that the holders are entitled to receive payment of interest or principal on or before the dates on which we are entitled to receive payments with respect to our debt investments. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any distribution in respect of our investment. After repaying such senior creditors, the portfolio company may not have any remaining assets to use for repaying its obligation to us. In the case of debt ranking equally with debt securities in which we invest, we would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

***Our incentive fee may induce the Investment Adviser to make speculative investments.***

The incentive fee payable by us to the Investment Adviser may create an incentive for the Investment Adviser to make investments on our behalf that are risky or more speculative than would be the case in the absence of such compensation arrangement. The incentive fee payable to our Investment Adviser is calculated based on a percentage of our NAV. This may encourage our Investment Adviser to use leverage to increase the return on our investments. Under certain circumstances, the use of leverage may increase the likelihood of default, which would disfavor the holders of our Shares. In addition, our Investment Adviser will receive the incentive fee based, in part, upon net capital gains realized on our investments. Unlike that portion of the incentive fee based on income, there is no hurdle applicable to the portion of the incentive fee based on net capital gains. As a result, the Investment Adviser may have a tendency to invest more capital in investments that are likely to result in capital gains as compared to income producing securities. Such a practice could result in our investing in more speculative securities than would otherwise be the case, which could result in higher investment losses, particularly during economic downturns.

The part of our incentive fee payable by us to the Investment Adviser that relates to net investment income is computed and paid on income that has been accrued but that has not been received in cash. The Investment Adviser is not obligated to reimburse us for any such incentive fees even if we subsequently incur losses or never receive in cash the deferred income that was previously accrued. As a result, there is a risk that we will pay incentive fees with respect to income that we never receive in cash.

***Any investments in distressed debt may not produce income and may require us to bear large expenses in order to protect and recover our investment.***

Distressed debt investments may not produce income and may require us to bear certain additional expenses in order to protect and recover our investment. Therefore, to the extent we invest in distressed debt, our ability to achieve current income for our shareholders may be diminished. We also will be subject to significant uncertainty as to when, in what manner and for what value the distressed debt in which we invest will eventually be satisfied (e.g., through liquidation of the obligor's assets, an exchange offer or plan of reorganization involving the distressed debt securities or a payment of some amount in satisfaction of the obligation). In addition, even if an exchange offer is made or plan of reorganization is adopted with respect to distressed debt we hold, there can be no assurance that the securities or other assets received by us in connection with such exchange offer or plan of reorganization will not have a lower value or income potential than may have been anticipated when the investment was made. Moreover, any securities received by us upon completion of an exchange offer or plan of reorganization may be restricted as to resale. If we participate in negotiations with respect to any exchange offer or plan of reorganization with respect to an issuer of distressed debt, we may be restricted from disposing of such securities.

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***Our investments in foreign securities may involve significant risks in addition to the risks inherent in U.S. investments.***

Our investment strategy contemplates potential investments in securities of companies located outside of the United States. Investments in securities of companies located outside the United States would not be qualifying assets under Section 55(a) of the 1940 Act. Investing in companies located outside of the United States may expose us to additional risks not typically associated with investing in U.S. companies. These risks include changes in exchange control regulations, political, economic and social instability, expropriation, imposition of foreign taxes, less liquid markets and less available information than is generally the case in the United States, higher transaction costs, less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility.

Although most of our investments will be U.S. dollar-denominated, any investments denominated in a foreign currency will be subject to the risk that the value of a particular currency will change in relation to one or more other currencies. Among the factors that may affect currency values are trade balances, the level of interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital appreciation, and economic and political developments. We may employ hedging techniques to minimize these risks, but we can offer no assurance that we will, in fact, hedge currency risk or, that if we do, such strategies will be effective.

***We may make investments that cause our shareholders to bear investment advisory fees and other expenses on such investments in addition to our management fees and expenses.***

We may invest, to the extent permitted by law, in the securities and instruments of other investment companies and companies that would be investment companies but are excluded from the definition of an investment company provided in Section 3(c) of the 1940 Act. To the extent we so invest, we will bear our ratable share of any such investment company's expenses, including management and performance fees. We will also remain obligated to pay investment advisory fees, consisting of a base management fee and an incentive fee, to the Investment Adviser with respect to investments in the securities and instruments of other investment companies under our Investment Advisory Management Agreement. With respect to any such investments, each of our shareholders will bear his or her share of the investment advisory fees of the Investment Adviser as well as indirectly bearing the investment advisory fees and other expenses of any investment companies in which we invest.

***We may be obligated to pay our Investment Adviser incentive compensation even if we incur a loss.***

Our Investment Adviser is entitled to incentive compensation for each fiscal quarter in an amount equal to a percentage of the excess of our investment income for that quarter (before deducting incentive compensation, net operating losses and certain other items) above a threshold return for that quarter. Our Pre-Incentive Fee Net Investment Income for incentive compensation purposes excludes realized and unrealized capital losses that we may incur in the fiscal quarter, even if such capital losses result in a net loss on our Consolidated Statements of Operations for that quarter. Thus, we may be required to pay the Investment Adviser incentive compensation for a fiscal quarter even if there is a decline in the value of our portfolio, NAV or we incur a net loss for that quarter. In addition, increases in interest rates may increase the amount of incentive fees we pay to the Investment Adviser even though our performance relative to the market has not increased.

***We may invest in derivatives or other assets that expose us to certain risks, including market risk, liquidity risk, counterparty risk, operational and legal risk, and other risks similar to those associated with the use of leverage.***

The Company may invest in derivatives and other assets that are subject to many of the same types of risks related to the use of leverage. Derivative transactions, if any, will generally create leverage for the Company and

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involve significant risks. The primary risks related to derivative transactions include counterparty, correlation, liquidity, leverage, volatility, over-the-counter trading, operational and legal risks. In addition, a small investment in derivatives could have a large potential impact on our performance, effecting a form of investment leverage on our portfolio. In certain types of derivative transactions, the Company could lose the entire amount of its investment; in other types of derivative transactions the potential loss is theoretically unlimited.

Rule 18f-4 under the 1940 Act ("<u>Rule 18f-4</u>") regulates the use of derivatives, short sales, reverse repurchase agreements and certain other transactions by registered investment companies and BDCs. Upon the Company's BDC election, the Company is permitted to enter into derivatives and other transactions that create future payment or delivery obligations, including short sales, under Rule 18f-4 notwithstanding the senior security provisions of the 1940 Act if it complies with certain value-at-risk leverage limits and derivatives risk management program and board oversight and reporting requirements or comply with a "limited derivatives users" exception. Rule 18f-4 also permits the Company to enter into reverse repurchase agreements or similar financing transactions notwithstanding the senior security provisions of the 1940 Act if the Company aggregates the amount of indebtedness associated with our reverse repurchase agreements or similar financing transactions with the aggregate amount of any other senior securities representing indebtedness when calculating the asset coverage ratios as discussed herein, or treats all reverse repurchase agreements or similar financing transactions as derivatives transactions for all purposes under Rule 18f-4. In addition, the Company is permitted to invest in a security on a when-issued or forward-settling basis, or with a non-standard settlement cycle, and the transaction will be deemed not to involve a senior security under the 1940 Act, provided that (i) the Company intends to physically settle the transaction and (ii) the transaction will settle within 35 days of its trade date (the "<u>Delayed-Settlement Securities Provision</u>"). The Company may otherwise engage in such transactions that do not meet the conditions of the Delayed-Settlement Securities Provision so long as the Company treats any such transaction as a "derivatives transaction" for purposes of compliance with the rule. Furthermore, the Company is permitted to enter into an unfunded commitment agreement, and such unfunded commitment agreement will not be subject to the asset coverage requirements under the 1940 Act, if the Company reasonably believes at the time it enters into such agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all such agreements as they come due. The Company has adopted updated policies and procedures in compliance with Rule 18f-4. The Company expects to qualify as a "limited derivatives user" under Rule 18f-4.

Future legislation or rules may modify how the Company treats derivatives and other financial arrangements for purposes of the Company's compliance with the leverage limitations of the 1940 Act. Future legislation or rules, may modify how leverage is calculated under the 1940 Act and, therefore, may increase or decrease the amount of leverage available to the Company under the 1940 Act, which may be materially adverse to the Company and the Company's shareholders.

**Risks Relating to an Investment in Our Shares** 

***There is a risk that our shareholders may not receive distributions or that our distributions may not grow over time.***

We intend to make distributions on a monthly basis to our shareholders out of assets legally available for distribution. We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions. In addition, due to the asset coverage ratio requirements applicable to us as a BDC, we may be limited in our ability to make distributions. Further, we may be forced to liquidate some of our investments and raise cash in order to make distribution payments, which could materially harm our business. Finally, to the extent we make distributions to shareholders which include a return of capital, that portion of the distribution essentially constitutes a return of the shareholders' investment. Although such return of capital may not be taxable, such distributions will decrease an investor's adjusted tax basis in the investor's Shares (but not below zero) and may increase an investor's tax liability for capital gains upon the future sale of our Shares.

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***Investing in our Shares may involve an above average degree of risk.***

The investments we make in accordance with our investment objectives may result in a higher amount of risk and volatility than alternative investment options or loss of principal. Our investments in portfolio companies may be highly speculative and aggressive and, therefore, an investment in our Shares may not be suitable for someone with lower risk tolerance.

***Sales of substantial amounts of our securities may have an adverse effect on the market price of our securities.***

Sales of substantial amounts of our securities, or the availability of such securities for sale, could adversely affect the prevailing market prices for our securities. If this occurs and continues it could impair our ability to raise additional capital through the sale of securities should we desire to do so.

***We may allocate the net proceeds from any offering of our securities in ways with which you may not agree.***

We have significant flexibility in investing the net proceeds of any offering of our securities and may use the net proceeds from an offering in ways with which you may not agree or for purposes other than those contemplated at the time of the offering.

***We may be unable to invest the net proceeds raised from offerings on acceptable terms, which would harm our financial condition and operating results.***

Until we identify new investment opportunities, we intend to either invest the net proceeds of future offerings in cash equivalents, U.S. government securities and other high-quality debt investments that mature in one year or less or use the net proceeds from such offerings to reduce then-outstanding obligations under any future credit facility. We cannot assure you that we will be able to find enough appropriate investments that meet our investment selection criteria or that any investment we complete using the proceeds from an offering will produce a sufficient return.

***We may obtain the approval of our shareholders to issue Shares at prices below the then current NAV per share of our Shares. If we receive such approval from shareholders in the future, we may issue Shares at a price below the then current NAV per Shares. Any such issuance could materially dilute your interest in our Shares and reduce our NAV per Share.***

We will not generally be able to issue and sell our Shares at a price below NAV per share. The Company may, however, sell Shares, or warrants, options or rights to acquire the Company's Shares at a price below the then-current NAV per share of the Company's Shares if the Board determines that such sale is in the Company's best interests, and if investors approve such sale. In any such case, the price at which our securities are to be issued and sold may not be less than a price that, in the determination of the Board, closely approximates the market value of such securities (less any distributing commission or discount). If we raise additional funds by issuing Shares or senior securities convertible into, or exchangeable for, Shares, then the percentage ownership of investors at that time will decrease, and investors may experience dilution.

***There is a risk that our common shareholders may receive our Shares as distributions in which case they may be required to pay taxes in excess of the cash they receive.***

After making the BDC election, in order to satisfy the Annual Distribution Requirement, we may distribute the Shares as a dividend of our taxable income and a shareholder could receive a portion of the dividends declared and distributed by us in Shares with the remaining amount in cash. Revenue procedures issued by the IRS allow a "publicly offered regulated investment company" (as such term is defined in the Code) to distribute its own Shares as a dividend for the purpose of fulfilling its distribution requirements, if certain conditions are satisfied. As long as a portion of such dividend is paid in cash (which portion may be as low as 20% of such dividend) and certain requirements are met, the entire distribution will be treated as a dividend for U.S. federal

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income tax purposes. As a result, a shareholder will be considered to have recognized dividend income generally equal to the fair market value of the Shares paid by us plus cash received with respect to such dividend. The total dividend declared would be taxable income to a shareholder even though he or she may only receive a relatively small portion of the dividend in cash, in which case the shareholder may be required to pay or incur tax with respect to such dividend in excess of any cash received. We have not elected to distribute Shares as a dividend but reserve the right to do so.

***If we are not treated as a "publicly offered regulated investment company," as defined in the Code, our U.S. shareholders that are individuals, trusts or estates will be taxed as though they received a distribution of some of our expenses.***

After making the BDC election, we do not expect to be treated initially as a "publicly offered regulated investment company." Until and unless we are treated as a "publicly offered regulated investment company" as a result of either (1) Shares and our preferred shares (if any) collectively being held by at least 500 persons at all times during a taxable year, (2) Shares are continuously offered pursuant to a public offering (within the meaning of Section 4 of the Securities Act) or (3) Shares being treated as regularly traded on an established securities market, each U.S. shareholder that is an individual, trust or estate will be treated as having received a dividend for U.S. federal income tax purposes from us in the amount of such U.S. shareholder's allocable share of the management and incentive fees paid to our investment adviser and certain of our other expenses for the calendar year, and these fees and expenses will be treated as miscellaneous itemized deductions of such U.S. shareholder. Miscellaneous itemized deductions generally are not deductible by a U.S. shareholder that is an individual, trust or estate.

***Provisions of the Delaware Statutory Trust Act and of our charter and bylaws could deter takeover attempts and have an adverse impact on the price of our Shares.***

The Delaware Statutory Trust Act, our charter and our bylaws contain provisions that may discourage, delay or make more difficult a change in control of us or the removal of our trustees. We are subject to Section 203 of the Delaware General Corporation Law, the application of which is subject to any applicable requirements of the 1940 Act. The Board has adopted a resolution exempting the Delaware General Corporation Law any business combination between us and any other person, subject to prior approval of such business combination by our board, including approval by a majority of our disinterested trustees. If the resolution exempting business combinations is repealed or our board does not approve a business combination, the Delaware General Corporation Law may discourage third parties from trying to acquire control of us and increase the difficulty of consummating such an offer. In addition, our bylaws exempt from the Delaware Control Beneficial Interest Acquisition Statute acquisitions of our Shares by any person. If we amend our bylaws to repeal the exemption from such act, it may make it more difficult for a third party to obtain control of us and increase the difficulty of consummating such an offer. Our bylaws require us to consult with the SEC staff before we repeal such exemption. Also, our charter provides for classifying the Board in three classes serving staggered three-year terms, and provisions of our charter authorize the Board to classify or reclassify Shares of our Shares in one or more classes or series, to cause the issuance of additional Shares, and to amend our charter, without shareholder approval, to increase or decrease the number of Shares that we have authority to issue.

These anti-takeover provisions may inhibit a change of control in circumstances that could give our shareholders the opportunity to realize a premium over the market price for our Shares.

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**General Risk Factors** 

***We and our portfolio companies may maintain cash balances at financial institutions that exceed federally insured limits and may otherwise be materially affected by adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties.***

Our cash is held in accounts at U.S. banking institutions that we believe are of high quality. Cash held by us and by our portfolio companies in non-interest-bearing and interest-bearing operating accounts may exceed the Federal Deposit Insurance Corporation insurance limits. If such banking institutions were to fail, we or our portfolio companies could lose all or a portion of those amounts held in excess of such insurance limitations. In addition, actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems, which could adversely affect our and our portfolio companies' business, financial condition, results of operations, or prospects.

Although we assess our and our portfolio companies' banking relationships as we believe necessary or appropriate, our and our portfolio companies' access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our respective current and projected future business operations could be significantly impaired by factors that affect us or our portfolio companies, the financial institutions with which we or our portfolio companies have arrangements directly, or the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry. These factors could involve financial institutions or financial services industry companies with which we or our portfolio companies have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally.

In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us or our portfolio companies to acquire financing on acceptable terms or at all.

***Inflation may adversely affect the business, results of operations and financial condition of our portfolio companies.***

Certain of our portfolio companies will be in industries that may be impacted by inflation. If such portfolio companies are unable to pass any increases in their costs of operations along to their customers, it could adversely affect their operating results and impact their ability to pay interest and principal on our loans, particularly if interest rates rise in response to inflation. In addition, any projected future decreases in our portfolio companies' operating results due to inflation could adversely impact the fair value of those investments. Any decreases in the fair value of our investments could result in future realized or unrealized losses and therefore reduce our net assets resulting from operations.

***Global capital markets could enter a period of severe disruption and instability due to future recessions, disease pandemics and other serious health events, political instability, geopolitical turmoil and foreign hostilities. These market conditions have historically had and could again have a materially adverse effect on debt and equity capital markets in the United States, which could have a materially negative impact on our business, financial condition and results of operations.***

The U.S. and global capital markets have, from time to time, experienced periods of disruption characterized by the freezing of available credit, a lack of liquidity in the debt capital markets, significant losses

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in the principal value of investments, the re-pricing of credit risk in the broadly syndicated credit market, the failure of certain financial institutions and general volatility in the financial markets. During these periods of disruption, general economic conditions deteriorated with material and adverse consequences for the broader financial and credit markets, and the availability of debt and equity capital for the market as a whole, and financial services firms in particular, was reduced significantly. These conditions may reoccur for a prolonged period of time or materially worsen in the future. In addition, uncertainty between the United States and other countries with respect to trade policies, treaties and tariffs, among other factors, have caused disruptions in the global markets, including markets in which we participate, and we cannot assure you that these market conditions will not continue or worsen in the future. We may in the future have difficulty accessing debt and equity capital markets, and a severe disruption in the global financial markets, deterioration in credit and financing conditions or uncertainty regarding U.S. government spending and deficit levels or other global economic and political conditions, including future recessions, political instability, geopolitical turmoil and foreign hostilities, and disease, pandemics and other serious health events, could have a material adverse effect on our business, financial condition and results of operations.

***Changes to U.S. tariff and import/export regulations may have a negative effect on our portfolio companies.***

There have been significant changes to U.S. trade policies, treaties and tariffs, and in the future there may be additional significant changes. Existing or new tariffs imposed on foreign goods imported by the United States or on U.S. goods imported by foreign countries could subject us or our portfolio companies to additional risks. Among other effects, tariffs may increase the cost of production for certain of our portfolio companies or reduce demand for their products, which could adversely affect their results of operations. We cannot predict whether, or to what extent, any tariff or other trade protections may affect our portfolio companies or our business, financial condition or results of operations.

***Volatility or a prolonged disruption in the credit markets could materially damage our business.***

We are required to record our assets at fair value, as determined in good faith by our Board, in accordance with our valuation policy. As a result, volatility in the capital markets may have a material adverse effect on our valuations and our NAV, even if we hold investments to maturity. Volatility or dislocation in the capital markets may depress our share price below our NAV per share and create a challenging environment in which to raise equity and debt capital. Once we elect to be regulated as a BDC, we will generally not be able to issue additional Shares at a price less than our NAV without first obtaining approval for such issuance from our shareholders and our independent trustees. Additionally, our ability to incur indebtedness is limited by the asset coverage ratio requirements for a BDC, as defined under the 1940 Act. Declining portfolio values negatively impact our ability to borrow additional funds under the any credit facility because our NAV is reduced for purposes of the asset coverage ratio. If the fair value of our assets declines substantially, we may fail to maintain the asset coverage ratio stipulated by the 1940 Act, which could, in turn, cause us to lose our status as a BDC and materially impair our business operations. A lengthy disruption in the credit markets could also materially decrease demand for our investments and could materially damage our business, financial condition and results of operations.

The significant disruptions in the capital markets experienced in the past has had, and may in the future have, a negative effect on the valuations of our investments and on the potential for liquidity events involving our investments. The debt capital that may be available to us in the future may be at a higher cost and have less favorable terms and conditions than those currently in effect. If our financing costs increase and we have no increase in interest income, then our net investment income will decrease. A prolonged inability to raise capital may require us to reduce the volume of investments we originate and could have a material adverse impact on our business, financial condition and results of operations. This may also increase the probability that other structural risks negatively impact us. These situations may arise due to circumstances that we may be unable to control, such as a lengthy disruption in the credit markets, a severe decline in the value of the U.S. dollar, a sharp economic downturn or recession or an operational problem that affects third parties or us, and could materially damage our business, financial condition and results of operations.

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***Any public health emergency, including any outbreak of existing or new diseases, and the resulting financial and economic market uncertainty could have a significant adverse impact on us.***

The extent of the impact of any public health emergency on our and our portfolio companies' operational and financial performance will depend on many factors, including the duration and scope of such public health emergency, the actions taken by governmental authorities to contain its financial and economic impact, the extent of any related travel advisories and restrictions implemented, the impact of such public health emergency on overall supply and demand, investor liquidity and levels of economic activity and the extent of its disruption to important global, regional and local supply chains and economic markets, all of which are highly uncertain and cannot be predicted. In addition, our and our portfolio companies' operations may be significantly impacted, or halted, as a result of government quarantine measures, restrictions on travel and other factors related to a public health emergency, including its potential adverse impact on the health of any of our or our portfolio companies' personnel. This could create widespread business continuity issues for us and our portfolio companies. These factors may also cause the valuation of our investments to differ materially from the values that we may ultimately realize. Any public health emergency, any outbreak of existing or new epidemic diseases, or the threat thereof, and the resulting financial and economic market uncertainty could have a significant adverse impact on us and the fair value of our investments and our portfolio companies.

**ECONOMIC SANCTION LAWS IN THE UNITED STATES AND OTHER JURISDICTIONS MAY PROHIBIT US AND OUR AFFILIATES FROM TRANSACTING WITH CERTAIN COUNTRIES, INDIVIDUALS AND COMPANIES.** 

Economic sanction laws in the United States and other jurisdictions may prohibit us or our affiliates from transacting with certain countries, individuals and companies. In the United States, the U.S. Department of the Treasury's Office of Foreign Assets Control administers and enforces laws, executive orders and regulations establishing U.S. economic and trade sanctions, which prohibit, among other things, transactions with, and the provision of services to, certain non-U.S. countries, territories, entities and individuals. These types of sanctions may significantly restrict or completely prohibit investment activities in certain jurisdictions, and if we, our portfolio companies or other issuers in which we invest were to violate any such laws or regulations, we may face significant legal and monetary penalties.

The Foreign Corrupt Practices Act ("<u>FCPA</u>") and other anti-corruption laws and regulations, as well as anti-boycott regulations, may also apply to and restrict our activities, our portfolio companies and other issuers of our investments. If an issuer or we were to violate any such laws or regulations, such issuer or we may face significant legal and monetary penalties. The U.S. government has indicated that it is particularly focused on FCPA enforcement, which may increase the risk that an issuer or us becomes the subject of such actual or threatened enforcement. In addition, certain commentators have suggested that private investment firms and the funds that they manage may face increased scrutiny and/or liability with respect to the activities of their underlying portfolio companies. As such, a violation of the FCPA or other applicable regulations by us or an issuer of our portfolio investments could have a material adverse effect on us. We are committed to complying with the FCPA and other anti-corruption laws and regulations, as well as anti-boycott regulations, to which it is subject. As a result, we may be adversely affected because of our unwillingness to enter into transactions that violate any such laws or regulations.

***We may be the target of litigation.***

We may be the target of securities litigation in the future, particularly if the trading price of our Shares fluctuates significantly. We could also generally be subject to litigation, including derivative actions by our shareholders. Any litigation could result in substantial costs and divert management's attention and resources from our business and cause a material adverse effect on our business, financial condition and results of operations.

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***The effect of global climate change may impact the operations of our portfolio companies.***

There may be evidence of global climate change. Climate change creates physical and financial risk and some of our portfolio companies may be adversely affected by climate change. For example, the needs of customers of energy companies vary with weather conditions, primarily temperature and humidity. To the extent weather conditions are affected by climate change, energy use could increase or decrease depending on the duration and magnitude of any changes. Increases in the cost of energy could adversely affect the cost of operations of our portfolio companies if the use of energy products or services is material to their business. A decrease in energy use due to weather changes may affect some of our portfolio companies' financial condition through, for example, decreased revenues. Extreme weather conditions in general require more system backup, adding to costs, and can contribute to increased system stresses, including service interruptions.

***Legislative or regulatory tax changes could adversely affect investors.***

At any time, the federal income tax laws governing RICs or the administrative interpretations of those laws or regulations may be amended. The likelihood of any new legislation being enacted is uncertain. Any new laws, regulations or interpretations may take effect retroactively and could adversely affect the taxation of us or our shareholders. Therefore, changes in tax laws, regulations or administrative interpretations or any amendments thereto could diminish the value of an investment in our Shares or the value or the resale potential of our investments.

***We are subject to risks associated with cybersecurity and cyber incidents.***

Our internal computer systems and infrastructure and those of our Investment Adviser, strategic collaborators, vendors, contractors, consultants or regulators with whom we share confidential, protected or sensitive data or information, or upon which our business relies, are vulnerable to damage from computer viruses, unauthorized access, misuse, natural disasters, terrorism, cybersecurity threats, war and telecommunication and electrical failures, as well as security compromises or breaches, which may compromise our systems, infrastructure, data or that of those with whom we share such data or information or upon which our business relies, or lead to data compromise, misuse, misappropriation or leakage. We may experience, and from time to time have experienced, cyber attacks on our information technology systems and infrastructure by threat actors of all types (including nation states, criminal enterprises, individual actors or advanced persistent threat groups, among others). In addition to extracting sensitive information, such attacks could include the deployment of harmful malware, ransomware, digital extortion, business email compromises and denial-of-service attacks, social engineering (including phishing attacks) and other means to affect server reliability and threaten the confidentiality, integrity and availability of information, systems or infrastructure.

As our reliance on technology has increased, so have the risks posed to our information systems, both internal and those provided by our Investment Adviser and other third-parties. We, along with our Investment Adviser, have implemented processes, procedures and internal controls to help mitigate cybersecurity risks and cyber-attacks, but these measures, as well as our increased awareness of the nature and extent of the risk of a cyber attack, may be ineffective and do not guarantee that a cyber attack will not occur or that our financial results, operations or confidential information will not be negatively impacted by such an attack. Further, our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages or claims related to our privacy and data security obligations. Further, although we maintain cyber liability insurance, this insurance may not provide adequate coverage against potential liabilities related to any experienced cybersecurity attack or breach.

Furthermore, cybersecurity continues to be a priority for regulators around the world, and some jurisdictions have enacted laws requiring companies to notify individuals and/or regulators of data security breaches involving certain types of personal information. If we fail to comply with the relevant laws and regulations, we could suffer

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financial losses, a disruption of our businesses, liability to investors, regulatory intervention or reputational damage.

***We are subject to risks related to artificial intelligence.***

Artificial intelligence, including machine learning and similar tools and technologies that collect, aggregate, analyze or generate data or other materials (collectively, "AI"), and its current and potential future applications including in the private investment and financial industries, as well as the legal and regulatory frameworks within which AI operates, continue to rapidly evolve. While we and our Investment Adviser do not use AI at this time to make investment recommendations, the use of AI could exacerbate or create new and unpredictable risks to our business, including by potentially significantly disrupting the markets in which we operate or subjecting us and our Investment Adviser to increased competition and regulation, which could materially and adversely affect business, financial condition or results of operations of our Investment Adviser and us. In addition, the use of AI by bad actors could heighten the sophistication and effectiveness of cyber and security attacks experienced by the Investment Adviser and us.

***As an SEC-reporting company, we are subject to regulations not applicable to private companies, such as provisions of SOX. Efforts to comply with such regulations involve significant expenditures, and non-compliance with such regulations may adversely affect us.***

As an SEC-reporting company, we are subject to SOX, and the related rules and regulations promulgated by the SEC. Our management is required to report on our internal control over financial reporting pursuant to Section 404 of SOX. We are required to review on an annual basis our internal control over financial reporting, and are required on a quarterly and annual basis to evaluate and disclose changes in our internal control over financial reporting. As a relatively new company, developing and maintaining an effective system of internal controls may require significant expenditures, which may negatively impact our financial performance and our ability to make distributions. This process also may result in a diversion of our management's time and attention. We cannot be certain of when our evaluation, testing and remediation actions will be completed or the impact of the same on our operations. In addition, we may be unable to ensure that the process is effective or that our internal controls over financial reporting are or will be effective in a timely manner. In the event that we are unable to develop or maintain an effective system of internal controls and maintain or achieve compliance with SOX and related rules, we may be adversely affected.

We are not required to comply with the requirements of SOX, including the internal control evaluation and certification requirements of Section 404, and will not be required to comply with all of those requirements until we have been subject to the reporting requirements of the Exchange Act for a specified period of time or the date we are no longer an emerging growth company under the JOBS Act. Accordingly, our internal controls over financial reporting do not currently meet all of the standards contemplated by Section 404 that we will eventually be required to meet. We are in the process of addressing our internal controls over financial reporting and are establishing formal procedures, policies, processes and practices related to financial reporting and to the identification of key financial reporting risks, assessment of their potential impact and linkage of those risks to specific areas and activities within the Company.

Our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an emerging growth company under the JOBS Act. Because we do not currently have comprehensive documentation of our internal controls and have not yet tested our internal controls in accordance with Section 404, we cannot conclude in accordance with Section 404 that we do not have a material weakness in our internal controls or a combination of significant deficiencies that could result in the conclusion that we have a material weakness in our internal controls.

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**ITEM 2. FINANCIAL INFORMATION.** 

**Discussion of Management's Expected Operating Plans** 

*The information in this section contains forward-looking statements that involve risks and uncertainties. Please see "Item 1A. Risk Factors" and "Forward-Looking Statements" for a discussion of the uncertainties, risks and assumptions associated with these statements.* 

**Overview** 

We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the 1940 Act. In addition, for U.S. federal income tax purposes, we intend to elect to be treated as a RIC under Subchapter M of the Code. As a BDC and a RIC, we will be subject to certain constraints, including limitations imposed by the 1940 Act and the Code. We were formed in April 2025 and commenced operations in September 2025.

Our investment objective is to generate current income and capital appreciation by investing primarily in senior secured debt of U.S. middle-market companies with last twelve-month earnings of between $10 million and $50 million. Under normal circumstances, we expect that a majority of our portfolio will consist of senior first lien loans. We will also selectively invest in second lien loans, subordinated loans, and equity of private companies.

Subject to certain regulatory limitations, including the exemptive relief order received by the Investment Adviser and certain of its affiliates from the SEC to permit greater flexibility to negotiate the terms of co-investments, we will generally be offered the opportunity to invest in transactions that are within our investment objective and strategy and within the investment objective and strategy of other BDCs and private funds managed by the Investment Adviser and its affiliates as well as the Investment Adviser's allocation policies.

Our investment activities are managed by the Investment Adviser and supervised by the Board, of which two-thirds of the members are independent trustees.

Under the Investment Advisory Management Agreement, the Investment Adviser, subject to the overall supervision of the Board, manages the day-to-day operations of and provides investment advisory services to the Company. For providing these services, the Investment Adviser receives a fee from the Company, consisting of two components: a base management fee and an incentive fee. Under the Administration Agreement, the Company has agreed to reimburse the Administrator for its allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including rent and the Company's allocable portion of the costs of compensation and related expenses of the Chief Compliance Officer, Chief Financial Officer, Corporate Counsel and their respective staffs. The Company's Chief Financial Officer is the Chief Financial Officer of the Administrator.

We intend to create a diversified portfolio that includes primarily senior secured debt of middle-market companies in the United States with last twelve-months earnings of between $10 million and $50 million. Under normal circumstances, we expect that a majority of our portfolio will consist of senior first lien loans. We will also selectively invest in second lien loans, subordinated loans, and equity of private companies.

*Revenues:* We intend to generate revenue in the form of interest income on the debt securities we hold and capital gains and dividends, if any, on investment securities that we may acquire in portfolio companies. Our debt investments, whether in the form of first lien secured debt, second lien secured debt or subordinated debt, will typically have a term of to seven years and bear interest at a floating rate. Interest on debt securities is expected to generally be payable quarterly or semiannually. In some cases, our investments may provide for deferred interest payments or PIK interest. The principal amount of the debt securities and any accrued but unpaid interest

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generally becomes due at the maturity date. In addition, we may generate revenue in the form of amendment, commitment, origination, structuring or diligence fees, fees for providing significant managerial assistance and possibly consulting fees. Loan origination fees, OID and market discount or premium are capitalized and accreted or amortized using the effective interest method as interest income or, in the case of deferred financing costs, as interest expense. Dividend income, if any, will be recognized on an accrual basis on the ex-dividend date to the extent that we expect to collect such amounts. From time to time, the Company expects to receive certain fees from portfolio companies, which may or may not be non- recurring in nature. Such fees include loan prepayment penalties, structuring fees and amendment fees and agency fees, and are recorded as other investment income when earned. Litigation settlements are accounted for in accordance with the gain contingency provisions of ASC Subtopic 450-30, Gain Contingencies, or ASC 450-30.

We will recognize realized gains or losses on investments based on the difference between the net proceeds from the disposition and the amortized cost basis of the investment or derivative instrument, without regard to unrealized gains or losses previously recognized. We record current period changes in fair value of investments and derivative instruments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in the consolidated statements of operations. See "*— Critical Accounting Policies —Revenue Recognition*."

*Expenses:* Our primary operating expenses will include the payment of a management fee and the payment of an incentive fee to the Investment Adviser, if any, our allocable portion of overhead under our Administration Agreement and other operating costs as detailed below. Our management fee will compensate the Investment Adviser for its work in identifying, evaluating, negotiating, consummating and monitoring our investments. We will bear all other direct or indirect costs and expenses of our operations and transactions (provided such costs are not borne by the Investment Adviser pursuant to its agreement to bear certain initial organizational and offering costs as set forth above), including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the cost of calculating our NAV, including the cost of any third-party valuation services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the cost of effecting sales and repurchases of Shares and other securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fees payable to third parties relating to, or associated with, making investments, including fees and expenses
associated with performing due diligence and reviews of prospective investments or complementary businesses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• expenses incurred by the Investment Adviser in performing due diligence and reviews of in-vestments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• transfer agent and custodial fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fees and expenses associated with marketing efforts for the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fees and expenses associated with retaining subscription platforms for the sale of Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• U.S. federal and state registration fees and any stock exchange listing fees, if any;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fees and expenses associated with independent audits as well as internal and external legal costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• U.S. federal, state, local and foreign taxes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• independent trustees' fees and expenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• brokerage commissions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fidelity bond, trustees and officers, errors and omissions liability insurance and other insurance premiums;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• direct costs such as printing, mailing, long distance telephone and staff;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• costs associated with our reporting and compliance obligations, including under the 1940 Act and applicable U.S.
federal and state securities laws;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• interest on our debt and dividends on our preferred stock, if any; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all other expenses incurred by either the Administrator or us in connection with administering our business,
including payments under our Administration Agreement that will be based upon our allocable portion of overhead, and other expenses incurred by the Administrator in performing its obligations under our Administration Agreement, including rent and
our allocable portion of the costs of compensation and related expenses of our Chief Compliance Officer, Chief Financial Officer, Corporate Counsel and their respective staffs.

For the avoidance of doubt, the costs and expenses to be borne by the Company set forth above include the costs and expenses allocable with respect to the provision of in-house legal, tax, or other professional advice and/or services to the Company, including performing due diligence on its prospective portfolio companies, as deemed appropriate by the Administrator, where such in-house personnel perform services that would be paid by the Company if outside service providers provided the same services, subject to the Board's oversight.

**Contractual Obligations and Off-Balance Sheet Arrangements** 

As of September 16, 2025, we have commenced operations.

We could become a party to financial instruments with off-balance sheet risk in the normal course of our business to meet the financial needs of our portfolio companies. These instruments could include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet.

We have entered into an agreement with the Investment Adviser, or the Investment Advisory Management Agreement, under which the Investment Adviser, subject to the overall supervision of our Board, manages the day-to-day operations of, and provides investment advisory services to, us. Mr. Penn, our Chairman and Chief Executive Officer, is the managing member and a senior investment professional of, and has a financial and controlling interest in, the Investment Adviser. Under the terms of our Investment Advisory Management Agreement, the Investment Adviser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• determines the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner
of implementing such changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identifies, evaluates and negotiates the structure of the investments we make (including performing due diligence
on our prospective portfolio companies);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• closes and monitors the investments we make; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provides us with such other investment advisory, research and related services as we may need from time to time.

The Investment Adviser's services under our Investment Advisory Management Agreement are not exclusive, and it is free to furnish similar services, without the prior approval of our shareholders or our Board, to other entities so long as its services to us are not impaired. Our Board monitors for any potential conflicts that may arise upon such a development. For providing these services, the Investment Adviser receives a fee from us, consisting of two components—a base management fee and an incentive fee or, collectively, Management Fees.

Under the Administration Agreement, the Administrator furnishes us with office facilities, equipment and clerical, bookkeeping and record keeping services. Under our Administration Agreement, the Administrator performs, or oversees the performance of, our required administrative services, which include, among other activities, being responsible for the financial records we are required to maintain and preparing reports to our shareholders and reports filed with the SEC. In addition, the Administrator assists us in determining and publishing our NAV, oversees the preparation and filing of our tax returns and generally oversees the payment of our expenses and the performance of administrative and professional services rendered to us by others. For

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providing these services, facilities and personnel, we have agreed to reimburse the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including rent, technology systems, insurance, our allocable portion of the cost of compensation and related expenses of our Chief Compliance Officer, Chief Financial Officer and their respective staffs, certain tax and general legal advice and/or services provided to the Company by in-house professionals of the Administrator related to ongoing operations of the Company and/or services provided to the Company or portfolio companies by in-house professionals of the Administrator or its affiliates on matters related to potential or actual investments and transactions, including tax structuring and/or due diligence. The Administrator also offers on our behalf, significant managerial assistance to portfolio companies to which we are required to offer such assistance. To the extent that our Administrator outsources any of its functions, we will pay the fees associated with such functions on a direct basis without profit to the Administrator.

If any of the contractual obligations discussed above is terminated, our costs under any new agreements that we enter into could increase. In addition, we would likely incur significant time and expense in locating alternative parties to provide the services we receive under our Investment Advisory Management Agreement and our Administration Agreement. Any new investment management agreement would also be subject to approval by our shareholders.

***Critical Accounting Policies***

The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of our assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reported periods. In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair presentation of financial statements have been included. Actual results could differ from these estimates due to changes in the economic and regulatory environment, financial markets and any other parameters used in determining such estimates and assumptions, including the credit worthiness of our portfolio companies. We may reclassify certain prior period amounts to conform to the current period presentation. We have eliminated all intercompany balances and transactions. References to ASC serve as a single source of accounting literature. Subsequent events are evaluated and disclosed as appropriate for events occurring through the date the consolidated financial statements are issued. In addition to the discussion below, we describe our critical accounting policies in the notes to our consolidated financial statements.

***Investment Valuations***

We expect to determine our NAV for our Shares each month as of the last day of each calendar month. The NAV per Share will be determined by dividing the value of total assets attributable to the Shares minus liabilities, including accrued fees and expenses, attributable to the Shares by the total number of Shares outstanding at the date as of which the determination is made.

We expect to generally invest in illiquid securities including debt and equity investments of middle-market companies.

We expect that there may not be readily available market values for many of the investments, which are or will be in our portfolio, and we value such investments at fair value as determined in good faith by or under the direction of our Board using a documented valuation policy and a consistently applied valuation process, as described herein. With respect to investments for which there is no readily available market value, the factors that the Board may take into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any collateral, the portfolio company's ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate or revise our

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valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and the differences may be material. Our portfolio generally consists of illiquid securities, including debt and equity investments. With respect to investments for which market quotations are not readily available, or for which market quotations are deemed not reflective of the fair value, our Board undertakes a multi-step valuation process each quarter (which will be brought down on a monthly basis as described below), as described below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Our quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of our Investment Adviser responsible for the portfolio investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Preliminary valuation conclusions are then documented and discussed with the management of our Investment Adviser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Our Board also engages independent valuation firms to conduct independent appraisals of our investments for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment. The independent valuation firms review management's preliminary valuations in light of their own independent assessment and also in light of any market quotations obtained from an independent pricing service, broker, dealer or market maker;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The audit committee of our Board, once constituted, will review the valuations of the independent valuation firms on a quarterly basis, periodically assesses the valuation methodologies of the independent valuation firms, and responds to and supplements the valuation recommendations of the independent valuation firms to reflect any comments; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Our Board discusses these valuations and determines the fair value of each investment in our portfolio in good faith, based on the input of our Investment Adviser, the respective independent valuation firms and the audit committee.

Our Board generally uses market quotations to assess the value of our investments for which market quotations are readily available. We obtain these market values from independent pricing services or at the bid prices obtained from at least two brokers or dealers, if available, or otherwise from a principal market maker or a primary market dealer. The Investment Adviser assesses the source and reliability of bids from brokers or dealers. If the Board has a bona fide reason to believe any such market quote does not reflect the fair value of an investment, it may independently value such investments by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available.

To the extent we invest in derivative instruments in the future, such instruments would be valued in accordance with our valuation policy.

Fair value, as defined under ASC 820 is the price that we would receive upon selling an investment or pay to transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment or liability. ASC 820 emphasizes that valuation techniques maximize the use of observable market inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing an asset or liability based on market data obtained from sources independent of us. Unobservable inputs reflect the assumptions market participants would use in pricing an asset or liability based on the best information available to us on the reporting period date.

ASC 820 classifies the inputs used to measure these fair values into the following hierarchies:

Level 1: Inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities, accessible by us at the measurement date.

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Level 2: Inputs that are quoted prices for similar assets or liabilities in active markets, or that are quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term, if applicable, of the financial instrument.

Level 3: Inputs that are unobservable for an asset or liability because they are based on our own assumptions about how market participants would price the asset or liability.

A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and those differences may be material.

On December 3, 2020, the SEC adopted Rule 2a-5 under the 1940 Act, which establishes an updated regulatory framework for determining fair value in good faith for purposes of the 1940 Act. The new rule clarifies how fund boards of trustees can satisfy their valuation obligations and requires, among other things, the Board to periodically assess material valuation risks and take steps to manage those risks. The rule also permits boards of trustees, subject to board oversight and certain other conditions, to designate the fund's investment adviser to perform fair value determinations. The new rule went into effect on March 8, 2021 and had a compliance date of September 8, 2022. Our Board has not elected to designate the Investment Adviser as the valuation designee at this time.

When the Board determines the Company's NAV as of the last day of a month that is not also the last day of a calendar quarter, the Board intends to update the value of securities with reliable market quotations to the most recent market quotation. For securities without reliable market quotations, the Investment Adviser, acting on behalf of the Board, will prepare preliminary fair value estimates for each investment consistent with the methodologies set forth in the valuation policy. If an individual asset for which reliable market quotations are not readily available is known by the Investment Adviser to have experienced a significant observable change since the most recent quarter end, an independent valuation firm may from time-to-time be asked by the Investment Adviser to provide an independent fair value range for such asset.

***Revenue Recognition***

We record interest income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt investments with contractual PIK interest, which represents interest accrued and added to the loan balance that generally becomes due at maturity, we will generally not accrue PIK interest when the portfolio company valuation indicates that such PIK interest is not collectable. We do not accrue as a receivable interest on loans and debt investments if we have reason to doubt our ability to collect such interest. Loan origination fees, OID, market discount or premium and deferred financing costs on liabilities, which we do not fair value, are capitalized and then accreted or amortized using the effective interest method as interest income or, in the case of deferred financing costs, as interest expense. We record prepayment penalties on loans and debt investments as income. Dividend income, if any, is recognized on an accrual basis on the ex-dividend date to the extent that we expect to collect such amounts. From time to time, the Company receives certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring fees and amendment fees, and are recorded as other investment income when earned.

***Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation***

We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, using the specific identification method, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in fair values of

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our portfolio investments, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

***Foreign Currency Translation***

Our books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Fair value of investment securities, other assets and liabilities - at the exchange rates prevailing at the end
of the applicable period; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Purchases and sales of investment securities, income and expenses - at the exchange rates prevailing on the
respective dates of such transactions.

Although net assets and fair values are presented based on the applicable foreign exchange rates described above, we do not isolate that portion of the results of operations due to changes in foreign exchange rates on investments, other assets and debt from the fluctuations arising from changes in fair values of investments and liabilities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments and liabilities.

***Payment-in-Kind, or, PIK Interest***

We may have investments in our portfolio which contain a PIK interest provision. PIK interest is added to the principal balance of the investment and is recorded as income. In order for us to maintain our ability to be subject to tax as a RIC, substantially all of this income must be paid out to shareholders in the form of dividends for U.S. federal income tax purposes, even though we may not have collected any cash with respect to interest on PIK securities.

***Federal Income Taxes***

We intend to elect to be treated, and intend to qualify annually to maintain our election to be treated, as a RIC under Subchapter M of the Code. To qualify and maintain our RIC tax election, we must, among other requirements, meet certain annual source-of-income and quarterly asset diversification requirements. We also must annually distribute dividends for U.S. federal income tax purposes to our shareholders out of the assets legally available for distribution of an amount generally at least equal to 90% of the sum of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, or investment company taxable income, determined without regard to any deduction for dividends paid. We may make a "deemed sale" election in connection with the conversion to a RIC if it is anticipated that the assets will have a net-built-in gain as of the effective date of the conversion. If such election is made, the assets would be treated as sold and net recognized gain attributable to the direct or indirect corporate shareholders will be allocated to such shareholders.

Although not required for us to maintain our RIC tax status, in order to preclude the imposition of a 4% nondeductible U.S. federal excise tax imposed on RICs, we must distribute dividends for federal income tax purposes to our shareholders in respect of each calendar year an amount in accordance with the Excise Tax Avoidance Requirement. In addition, although we may distribute realized net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually, out of the assets legally available for such distributions in the manner described above, we may choose to retain such net capital gains or investment company taxable income, contingent on maintaining our ability to be subject to tax as a RIC, in order to provide us with additional liquidity.

Because U.S. federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and net realized gain recognized for financial reporting

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purposes. Differences between tax regulations and GAAP may be permanent or temporary. Permanent differences are reclassified among capital accounts in the consolidated financial statements to reflect their appropriate tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

**Quantitative and Qualitative Disclosures about Market Risk** 

We are subject to financial market risks, including valuation risk and interest rate risk. Uncertainty with respect to the economic effects of the overall market conditions has introduced significant volatility in the financial markets, and the effect of the volatility could materially impact our market risks, including those listed below.

***Valuation Risk***

Our investments may not have readily available market quotations (as such term is defined in Rule 2a-5), and those investments which do not have readily available market quotations are valued at fair value as determined in good faith by the Investment Adviser, subject to supervision of the Board, in accordance with its valuation policies and procedures. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is possible that the difference could be material.

In accordance with Rule 2a-5, our Investment Adviser, subject to the supervision of the Board, periodically assesses and manages material risks associated with the determination of the fair value of our investments.

***Interest Rate Risk***

The Company is subject to financial market risks, including changes in interest rates. Variable-rate loans are usually based on the secured overnight funding rate (or an alternative risk-free floating interest rate index) and typically have durations of three months, after which they reset to current market interest rates. Variable-rate investments subject to a floor generally reset by reference to the current market index after one to nine months only if the index exceeds the floor. In regards to variable-rate instruments with a floor, the Company does not benefit from increases in interest rates until such rates exceed the floor and thereafter benefit from market rates above any such floor. In contrast, the Company's cost of funds, to the extent it is not fixed, will fluctuate with changes in interest rates since it has no floor.

Because the Company borrows money to make investments, our net investment income is dependent upon the difference between the rate at which the Company borrows funds and the rate at which the Company invests these funds, as well as the Company's level of leverage. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on the Company's net investment income or net assets.

The Company may hedge against interest rate and foreign currency fluctuations by using standard hedging instruments such as futures, options and forward contracts. While hedging activities may insulate the Company against adverse changes in interest rates and foreign currencies, they may also limit our ability to participate in benefits of lower interest rates or higher exchange rates with respect to the Company's portfolio of investments with fixed interest rates or investments denominated in foreign currencies.

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**ITEM 3. PROPERTIES.** 

We do not own any real estate or other physical properties materially important to our operation. Our headquarters are located at 1691 Michigan Avenue, Miami Beach, Florida and are provided by the Administrator pursuant to the Administration Agreement. We believe that our office facilities are suitable and adequate for our business.

**ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.** 

As of October 30, 2025, there were 1,800,000 Shares outstanding. As of the date of the filing of this Registration Statement, the following table sets out certain ownership information with respect to our Shares for those persons who directly or indirectly own, control or hold with the power to vote five percent (5%) or more of our outstanding Shares, each of our trustees and officers and all officers and trustees as a group.

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| | | | |
|:---|:---|:---|:---|
| **Name and Address (1)** | **Type of**<br>**Ownership** | **Shares**<br>**Owned** | **Percentage** |
|  PennantPark Private Holdings, LP | Direct | 1000000 | 55.56% |
|  Chicago Painters and Decorators Pension Fund | Direct | 400000 | 22.22% |
|  City of Boca Raton General Employees' Pension Plan | Direct | 400000 | 22.22% |
|  **Total** |  | 1800000 | 100.00% |
|  **Total Number of Shares Outstanding at October 30, 2025** |  | 1800000 |  |

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<sup>(1)</sup> The business address of the Chief Compliance Officer is c/o PennantPark Private Income Fund Advisers LLC, 1691 Michigan Avenue, Miami Beach, Florida 33139.

As of October 30, 2025, we had 3 record holders of our Shares. These Shares were offered in connection with the Private Offering.

**ITEM 5. TRUSTEES AND EXECUTIVE OFFICERS.** 

**Board of Trustees and its Leadership Structure** 

Our business and affairs are managed under the direction of the Board. The Board consists of six members, four of whom are not "interested persons" of PPIF, PPIFA and PPIA or their respective affiliates as defined in Section 2(a)(19) of the 1940 Act. We refer to these individuals as our "independent trustees." The Board elects our officers, who serve at the discretion of the Board. The responsibilities of the Board include quarterly valuation of our assets, corporate governance activities, oversight of our financing arrangements and oversight of our investment activities.

Oversight of our investment activities extends to oversight of the risk management processes employed by PPIA as part of its day-to-day management of our investment activities. The Board reviews risk management processes throughout the year, consulting with appropriate representatives of PPIA as necessary and periodically requesting the production of risk management reports or presentations. The goal of the Board's risk oversight function is to ensure that the risks associated with our investment activities are accurately identified, thoroughly investigated and responsibly addressed. Investors should note, however, that the Board's oversight function cannot eliminate all risks or ensure that particular events do not adversely affect the value of investments.

The Board has established an audit committee, a nominating and corporate governance committee and a compensation committee and can establish additional committees from time to time as necessary. The scope of each committee's responsibilities is discussed in greater detail below. Arthur H. Penn, Chief Executive Officer of PennantPark, and therefore an interested person of PPIF, serves as Chairman of the Board. The Board believes

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that it is in the best interests of shareholders for Mr. Penn to lead the Board because of his broad experience with the day-to-day management and operation of other investment funds and his significant background in the financial services industry, as described below. The Board does not have a lead independent trustee. However, each of Jeffrey Flug and Samuel L. Katz, co-chairpersons of the audit committee, each of Marshall Brozost and Adam K. Bernstein, co-chairpersons of the nominating and corporate governance committee and Marshall Brozost, chairperson of the compensation committee, is an independent trustee and acts as a liaison between the independent trustees and management between meetings of the Board. He is involved in the preparation of agendas for board and committee meetings. The Board believes that its leadership structure is appropriate in light of the characteristics and circumstances of PPIF because the structure allocates areas of responsibility among the individual trustees and the committees in a manner that enhances effective oversight. The Board also believes that its small size creates a highly efficient governance structure that provides ample opportunity for direct communication and interaction between Investment Adviser and the Board. Each of our trustees has been selected such that the Board represents a range of backgrounds and experiences.

**Board of Trustees** 

Information regarding the Board is as follows:

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| | | |
|:---|:---|:---|
| **Name, Address**<br> **and Age <sup>(1)</sup>** | **Position(s) held with<br>the Registrant** | **Other Trusteeships Held by<br>Trustee or Nominee for Trustee<br>During the Past 5 years** |
| **Interested Trustees** |  |  |
| Arthur H. Penn (62) | Trustee<br>Chief Executive<br> Officer and<br> Chairman of the<br> Board of<br> Trustees<br> Mr. Penn is the Founder Chairman and Chief Executive Officer to the funds in the Fund Complex.<sup>(2)</sup> Previously, Mr. Penn was the Co-Founder of Apollo Investment Management, where he was a Managing Partner from 2004 to 2006. He also served as Chief Operating Officer of Apollo Investment Corporation from inception in 2004 to 2006 and served as President and Chief Operating Officer in 2006. He formerly was a Managing Partner of Apollo Value Fund L.P. (formerly Apollo Distressed Investment Fund, L.P.) from 2003 to 2006. | Director of PNNT since February 2007; Director of PFLT since October 2010; Trustee of PEIF since October 2025. |

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|:---|:---|:---|:---|
| **Name, Address**<br> **and Age <sup>(1)</sup>** | **Position(s) held with<br>the Registrant** | **Principal Occupation(s)**<br> **During the Past 5 Years** | **Other Trusteeships Held by<br>Trustee or Nominee for Trustee<br>During the Past 5 years** |
| José A. Briones, Jr. (55) | Trustee | Mr. Briones joined the Investment Adviser in December 2009 and is a Senior Partner. Before joining the Investment Adviser, Mr. Briones was a Partner of Apollo Investment Management, L.P. and a member of its investment committee since 2006. Before that, he was a Managing Director with UBS Securities LLC in the Financial Sponsors and Leveraged Finance Group from 2001 to 2006. Before joining UBS, he was a Vice President with JP Morgan in the Global Leveraged Finance Group from 1999 to 2001. From 1992 to 1999, Mr. Briones was a Vice President at BT Securities and BT Alex Brown Inc. in the Corporate Finance Department. | Director of PNNT since May 2022; Director of PFLT since May 2022; Trustee of PEIF since October 2025; KW Holdings Limited, since 2018;<br> Marketplace Events LLC, Chairman of the Board, from 2020 to 2024; MSpark, LLC, Chairman of the Board and President, from 2020 to 2024; PT Networks Intermediate Holdings, LLC, from 2019 to 2022.; Flock Financial, LLC, since 2024; Metropolitan YMCA of the<br> Oranges (NJ), since 2022. |
| **Independent Trustees** |  |  |  |
| Adam K. Bernstein (62) | Director | President of The Bernstein Companies, a Washington, D.C.-based real estate investment and development firm, since 1995 and President and Chief Executive Officer of Consortium Atlantic Realty Trust, Inc., a private real estate investment trust operating in the Mid-Atlantic region, from 2006. Also, Mr. Bernstein has served on the Board of Overseers of the School of Arts and Sciences at the University of Pennsylvania from 2012 to 2021 and the Board of Trustees of the School of Arts and Sciences at the University of Pennsylvania from 2018 to 2022. | Director of PNNT since February 2007; Director of PFLT since October 2010; Trustee of PEIF since October 2025; Advisory Board Member of University Research Corporation since 2020. |

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|:---|:---|:---|:---|
| **Name, Address**<br> **and Age <sup>(1)</sup>** | **Position(s) held with<br>the Registrant** | **Principal Occupation(s)**<br> **During the Past 5 Years** | **Other Trusteeships Held by<br>Trustee or Nominee for Trustee<br>During the Past 5 years** |
| Marshall Brozost (58) | Trustee | Partner at Allen Matkins Leck Gamble Mallory & Natsis LLP, where he serves as co-chair of the New York real estate group, since September 2023. Prior to Allen Matkins Leck Gamble Mallory & Natsis LLP, Mr. Brozost practiced law at McDermott Will & Emery LLP, From April 2022 to September 2023; Orrick, Herrington & Sutcliffe LLP, from July 2016 to April 2022; at Schulte Roth & Zabel LLP from May 2012 to July 2016; and at Dewey & LeBoeuf LLP from 2005 to 2012. | Director of PNNT since February 2007; Director of PFLT since October 2010; Trustee of PEIF since October 2025. |
| Jeffrey Flug (63) | Trustee | Mr. Flug was President of Union Square Hospitality Group, an exclusive chain of restaurants, from 2009 to June 2015. Mr. Flug served as Chief Executive Officer and Executive Director of Millennium Promise Alliance, Inc., a non-profit organization whose mission is to eradicate extreme global poverty, from 2006 to 2008. From 2000 to 2006, Mr. Flug was a Managing Director and Head of North American Institutional Sales at JP Morgan's Investment Bank. | Director of PNNT since February 2007; Director of PFLT since October 2010; Trustee of PEIF since October 2025; Shake Shack Inc., since September 2014; Tender Greens, a private company, since 2015. |

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|:---|:---|:---|:---|
| **Name, Address**<br> **and Age <sup>(1)</sup>** | **Position(s) held with<br>the Registrant** | **Principal Occupation(s)**<br> **During the Past 5 Years** | **Other Trusteeships Held by<br>Trustee or Nominee for Trustee<br>During the Past 5 years** |
| Samuel L. Katz (60) | Trustee | Managing Partner of TZP Group LLC, a private equity fund, since 2007. Chief Executive Officer and director of TZP Strategies Acquisition Corp. (Nasdaq: TZPS), a special purpose acquisition company. Before joining TZP Group, Mr. Katz was Chief Executive Officer of MacAndrews & Forbes Acquisition Holdings, Inc. from 2006 to 2007. Prior to that position, Mr. Katz was Chairman and Chief Executive Officer of the Cendant Travel Distribution Services Division from 2001 to 2005. | Director of PNNT since February 2007; Director of PFLT since October 2010; Trustee of PEIF since October 2025; TZP Strategies Acquisition Corp.; BQ Resorts, LLC; Lift Brands, Inc.; HomeRiver Group; Pyramid Hotel Group;<br> Triangle Home Fashions Holdings, LLC; Whitestone Home Furnishings, LLC (d/b/a The Saatva Company); Dwellworks; Rebath Member: Executive Committee of YRF Darca; Board of Advisors of Columbia University Irving Medical Center; |

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<sup>(1)</sup> The business address each of the foregoing is c/o PennantPark Private Income Fund Advisers LLC, 1691 Michigan Avenue, Miami Beach, Florida 33139.

<sup>(2)</sup> The term "Fund Complex" includes the Fund, PennantPark Floating Rate Capital ("PFLT"), PennantPark Investment Corporation ("PNNT") and PennantPark Enhanced Income Fund ("PEIF").

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|:---|:---|:---|:---|
|  **Independent Trustees<sup>(2)</sup>** |  |  |  |
| Adam K. Bernstein | Marshall Brozost | Jeffrey Flug | Samuel L. Katz |

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<sup>(1)</sup> The business address of the Chief Compliance Officer is c/o PennantPark Private Income Fund Advisers LLC, 1691 Michigan Avenue, Miami Beach, Florida 33139.

<sup>(2)</sup> Prior to our election to be regulated as a BDC, a majority of independent trustees will be elected to the Board.

**Officers Who Are Not Trustees** 

Information regarding our officers who are not trustees is as follows:

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|:---|:---|:---|
| **Name and Age** | **Position(s) Held with the**<br> **Fund; Term of Office and<br>Length of Time Served<sup>(1)</sup>** | **Principal Occupation(s)**<br> **During the Past 5 Years** |
|  Richard T. Allorto Jr. (53) | Chief Financial Officer | Chief Financial Officer and Treasurer to the funds in the Fund Complex. Mr. Allorto was most recently the Chief Financial Officer of Medley Management Inc. and served as the Chief Financial Officer of Sierra Income Corporation and before that Medley Capital Corporation. Before that, he was a Managing Director at GSC Group from 2001 to 2010. |

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|:---|:---|:---|
| **Name and Age** | **Position(s) Held with the**<br> **Fund; Term of Office and<br>Length of Time Served<sup>(1)</sup>** | **Principal Occupation(s)**<br> **During the Past 5 Years** |
|  Gerald "Jerry" Cummins (70) | Chief Compliance Officer | Chief Compliance Officer to the funds in the Fund Complex. Mr. Cummins joined the Company's outsourced compliance service provider, ACA Group, in 2022. Prior to joining ACA, Mr. Cummins previously served as a director of Alaric Compliance Services, LLC from 2014 to 2022. |
|  Adam Katz (43) | Secretary | Managing Director and General Counsel of PennantPark. Mr. Katz was most recently the Head of Legal, Chief Compliance Officer, and Corporate Secretary of Energize Ventures. Before that, he was Senior Counsel at Golub Capital. |

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<sup>(1)</sup> PennantPark Private Income Fund Advisers LLC, 1691 Michigan Avenue, Miami Beach, Florida 33139.

**Biographical Information** 

The Board has determined that each of the trustees is qualified to serve as our trustee, based on a review of the experience, qualifications, attributes and skills of each trustee, including those described below. The Board has determined that each trustee has significant experience in the investment or financial services industries and has held management, board or oversight positions in other companies and organizations. Each of our trustees has demonstrated high character and integrity and has expertise and diversity of experience to be able to offer advice and guidance to our management. For the purposes of this presentation, our trustees have been divided into two groups — independent trustees and interested trustees. Interested trustees are "interested persons" as defined in the 1940 Act.

***Interested Trustees***

***Arthur H. Penn*** provides the Board with business leadership and experience and knowledge of senior lending, mezzanine lending, leveraged finance, distressed debt and private equity businesses, as well as diverse management practices. Mr. Penn is the Chairperson and Chief Executive Officer to the funds in the Fund Complex and Managing Member of the Adviser and the Administrator. He has over 30 years of experience in the middle-market direct lending, mezzanine lending, leveraged finance, distressed debt, and private equity businesses. Art has been involved in originating, underwriting, executing, and monitoring investments in each of these businesses and oversees these activities at PennantPark.

During his career in the financial services industry prior to founding PennantPark, Art co-founded Apollo Investment Management in 2004, where he was a Managing Partner from 2004 to 2006. He also served as Chief Operating Officer of Apollo Investment Corporation from its inception in 2004 to 2006 and served as President and Chief Operating Officer of that company in 2006. Art was formerly a Managing Partner of Apollo Value Fund L.P. (formerly Apollo Distressed Investment Fund, L.P.) from 2003 to 2006. He also previously served as Global Head of Leveraged Finance at UBS Warburg LLC (now UBS Investment Bank) from 1999 through 2001. Prior to joining UBS Warburg, Art was Global Head of Fixed Income Capital Markets for BT Securities and BT Alex. Brown Incorporated from 1994 to 1999. From 1992 to 1994 Art served as Head of High-Yield Capital Markets at Lehman Brothers. Art holds a BS and an MBA from The Wharton School, University of Pennsylvania.

***José A. Briones, Jr.*** joined PennantPark in December 2009 and is a Senior Partner. He is responsible for and oversees originating, underwriting, executing, and monitoring investments for the Firm, and serves as a Portfolio Manager. He also oversees various strategic initiatives for the Firm.

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Most recently he was a Partner of Apollo Investment Management, L.P. and a member of its investment committee since 2006. Before that, he was a Managing Director with UBS Securities LLC in the Financial Sponsors and Leveraged Finance Group from 2001 to 2006. Before joining UBS, he was a Vice President with JP Morgan in the Global Leveraged Finance Group from 1999 to 2001. From 1992 to 1999, José was a Vice President at BT Securities and BT Alex Brown Inc. in the Corporate Finance Department. José holds an AB in Economics from Princeton University.

***Executive Officers Who Are Not Trustees***

***Richard T. Allorto, Jr.*** is ****Chief Financial Officer and Treasurer to the funds in the Fund Complex. Mr. Allorto was most recently the Chief Financial Officer of Medley Management Inc. and served as the Chief Financial Officer of Sierra Income Corporation and before that Medley Capital Corporation. Before that, he was a Managing Director at GSC Group from 2001 to 2010.

***Gerald Cummins* **serves as the Chief Compliance Officer to the funds in the Fund Complex pursuant to an agreement between the Company and ACA Group, LLC, a compliance consulting firm. Mr. Cummins has been a director of ACA Group or its predecessor firms since June 2014 and in that capacity he also serves as the Chief Compliance Officer to a credit fund complex with three public vehicles and two private funds, an internally managed BDC and a private credit manager. Prior to joining ACA Group, Mr. Cummins was a consultant for Barclays Capital Inc. from 2012 to 2013, where he participated in numerous compliance projects on pricing and valuation, compliance assessments, and compliance policy and procedure development. Prior to his consulting work at Barclays, Mr. Cummins was from 2010 to 2011 the Chief Operating Officer and the Chief Compliance Officer for BroadArch Capital and from 2009 to 2011 the Chief Financial Officer and Chief Compliance Officer to its predecessor New Castle Funds, a long-short equity asset manager. Prior to that, Mr. Cummins spent 25 years at Bear Stearns Asset Management (BSAM), where he was a Managing Director and held senior compliance, controllers and operations risk positions. Mr. Cummins graduated with a B.A. in Mathematics from Fordham University.

***Adam Katz*** is Managing Director and General Counsel of PennantPark and is Secretary of the Fund. Mr. Katz was most recently the Head of Legal, Chief Compliance Officer, and Corporate Secretary of Energize Ventures. Before that, he was Senior Counsel at Golub Capital. 

**Committees of the Board** 

***Audit Committee***

The members of the audit committee are Adam K. Bernstein, Marshall Brozost, Jeffrey Flug and Samuel L. Katz, each of whom is financially literate and meets the independence standards established by the SEC for audit committees and is independent for purposes of the 1940 Act. Each of Jeffrey Flug and Samuel L. Katz serve as co-chairpersons of the audit committee. The Board has determined Jeffrey Flug and Samuel L. Katz are each an "audit committee financial expert" as that term is defined under Item 407 of Regulation S-K of the Exchange Act.

The Audit Committee's risk oversight responsibilities will include overseeing the Company's accounting and financial reporting processes, including the annual audit of the Company's financial statements, the Company's systems of internal controls regarding finance and accounting, pre-approving the engagement of an independent registered public accounting firm to render audit and/or permissible non-audit services and evaluating the qualifications, performance and independence of the independent registered public accounting firm. The Audit Committee will consist solely of independent trustees.

***Nominating and Corporate Governance Committee***

The members of the nominating and corporate governance committee are Adam K. Bernstein, Marshall Brozost, Jeffrey Flug and Samuel L. Katz, each of whom is independent for purposes of the 1940 Act. Each of Marshall Brozost and Adam K. Bernstein serve as co-chairpersons of the nominating and corporate governance committee.

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The Nominating and Corporate Governance Committee's risk oversight responsibilities will include selecting, researching and nominating trustees for election by the Company's shareholders, developing and recommending to the Board a set of corporate governance principles and overseeing the evaluation of the Board and the Company's management. The Nominating and Corporate Governance Committee will consist solely of independent trustees.

***Compensation Committee***

The members of the compensation committee are Adam K. Bernstein, Marshall Brozost, Jeffrey Flug and Samuel L. Katz, each of whom is independent for purposes of the 1940 Act. Marshall Brozost serves as chairperson of the compensation committee.

The Compensation Committee's risk oversight responsibilities will include determining, or recommending to the Board for determining, the compensation of the Company's chief executive officer and all other executive officers, paid directly by the Company, if any, and assisting the Board with matters related to compensation, as directed by the Board. The Compensation Committee will consist solely of independent trustees.

**Portfolio Management** 

Our Investment Adviser, which manages our day-to-day investment activities under the supervision of our board of directors, has ten experienced portfolio managers. These senior investment professionals of the Investment Adviser have worked together for many years and average over 25 years of experience in the senior lending, mezzanine lending, leveraged finance, distressed debt and private equity businesses. In addition, our senior investment professionals have been involved in originating, structuring, negotiating, managing and monitoring investments in each of these businesses across changing economic and market cycles. We believe this experience and history has resulted in a strong reputation with financial sponsors, management teams, investment bankers, attorneys and accountants, which provides us with access to substantial investment opportunities across the capital markets. Below is a summary of their biographical information. Our portfolio managers receive no compensation from us. The compensation of these individuals is paid by our Investment Adviser and compensation includes a base salary and a bonus contingent upon past and future performance. In addition to Messrs. Penn and Briones, the investment committee includes:

In addition to Messrs. Penn and Briones, the investment committee includes:

**Salvatore Giannetti III** joined PennantPark in 2007 and is a Senior Partner. He is responsible for and oversees originating, underwriting, executing, and monitoring investments for the Firm, and serves as a Portfolio Manager. He also oversees various strategic initiatives for the Firm.

Sal started his career in investment banking at Chase Securities Inc. and its predecessor firms, Chemical Securities and Manufacturers Hanover. He was also a Managing Director at Bankers Trust / Deutsche Bank and UBS Investment Bank. Throughout his career, he has worked in the Investment Banking, Syndicated Loan, and Workout & Private Equity groups. In addition, Sal previously served on the Boards of American Gilsonite, PAS Technologies, UniversalPegasus International, and EnviroSolutions, among other companies. Sal holds a BA from Hampden-Sydney College and is on the Board of Trustees. He also holds an MBA from The Mason School at The College of William & Mary.

**Michael Appelbaum** joined PennantPark in August 2011 and is a Partner. Since joining PennantPark, he has been involved in originating, underwriting, executing, and monitoring investments for the Firm. Before joining PennantPark, Michael was an Analyst in the Leveraged Finance Group at Bank of America Merrill Lynch from 2010 to 2011. Before that, he was an Analyst in Aerospace & Defense Finance at CIT Group from 2007 to 2010. Michael holds a BS in Finance with Distinction from The Pennsylvania State University.

**Terence Clerkin** joined PennantPark in September 2012 and is a Partner. Since joining PennantPark, he has been involved in originating, underwriting, executing, and monitoring investments for the Firm. Before joining PennantPark, Terence was an Associate in the Mezzanine Group at Crescent Capital from 2010 to 2012. Before

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that, he was an Analyst at Moelis & Company from 2008 to 2010 and an Analyst at Bear, Stearns & Co. from 2007 to 2008. Terence holds a BA in Economics from the University of Michigan.

**Dan Horn** joined PennantPark in June 2015 and is a Senior Advisor. He is responsible for originating, underwriting, executing, and monitoring investments for the Firm and on behalf of clients based in the greater Midwest. Dan has spent most of the past 25 years doing leveraged finance and M&A transactions, mostly in the industrials sector. Before joining PennantPark, he spent two and half years at Loop Capital Markets in the Corporate Investment Banking Division based in Chicago from 2013 to 2015, two years in a similar role at boutique firm TTK Partners from 2011 to 2013, and 12 years at Deutsche Bank Securities and its predecessor firm, Bankers Trust from 1991 to 2003. He also served as Chief Financial Officer of Unicous Marketing from 2005 to 2008, and served as Vice President of Finance at GDX Automotive in 2004. Dan holds a BA in Accounting from DePaul University and an MBA from the University of Chicago.

**Ryan Raskopf** joined PennantPark in August 2007 and is a Partner. Since joining PennantPark, he has been involved in originating, underwriting, executing, and monitoring investments for the Firm. Before joining PennantPark, Ryan was an Analyst in the Financial Institutions Group at Credit Suisse Securities (USA) LLC from 2005 to 2007. Ryan holds a BA in both Economics and Political Science from Amherst College.

**James Stone** joined PennantPark in July 2015 and is a Partner. He is responsible for originating, underwriting, executing, and monitoring investments for the Firm and on behalf of clients based on the West Coast. Before joining PennantPark, James was a Managing Director and Head of Financial Sponsor Coverage at Cowen and Company, which he joined in 2012. He has over 20 years of leveraged finance experience, including Managing Director positions at Gleacher & Company, Macquarie Capital, Imperial Capital, and Credit Suisse. Before joining Credit Suisse, he served as a Vice President in the Financial Sponsor Coverage Group at DLJ, as an Associate in the Corporate Finance Department at BT Securities, and was an Associate at BT Alex. Brown. James holds a BA (cum laude) and an MBA (Beta Gamma Sigma), both from Columbia University.

**Steve Winograd** joined PennantPark in September 2015 and is a Partner, Head of Risk Management. He is responsible for originating, underwriting, structuring, negotiating, executing, managing, and monitoring investments for the Firm and on behalf of clients based on the East Coast. Before joining PennantPark, Steve spent 35 years as an Investment Banker originating and executing leveraged finance, M&A, public and private equity, and restructuring transactions for private equity firms and their portfolio companies. During this period he held senior positions in, and in some cases ran, the Financial Sponsors Groups of Bank of America Merrill Lynch from 2004 to 2011, Bear Stearns from 1994 to 2000, BMO Capital Markets from 2011 to 2015, Deutsche Bank from 2000 to 2004, and Drexel Burnham Lambert from 1984 to 1989. Steve also currently serves as an Independent Director of Shopko Stores. He previously served as an Independent Director of Caesars Entertainment Operating Company, The Gymboree Corporation, and Linn Acquisition Company, LLC. Steve holds a BA from Wesleyan University and an MBA (Beta Gamma Sigma) from Columbia University School of Business.

***Portfolio Management***

The Company's investment activities are managed by the Investment Adviser and supervised by the Board, of which two-thirds of the members are independent trustees. Under the Amended and Restated Investment Advisory Management Agreement, the Investment Adviser, subject to the overall supervision of the Board, manages the day-to-day operations of and provides investment advisory services to the Company. For providing these services, the Investment Adviser receives a fee from the Company, consisting of two components: a base management fee and an incentive fee.

Under the Administration Agreement, the Company has agreed to reimburse the Administrator for its allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including rent and the Company's allocable portion of the costs of compensation and related expenses of the Chief Compliance Officer, Chief Financial Officer, Corporate Counsel and their respective staffs. The Company's Chief Financial Officer is the Chief Financial Officer of the Administrator.

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In addition, pursuant to the terms of the Administration Agreement, the Administrator provides the Company with the office facilities and administrative services necessary to conduct its day-to-day operations. Mr. Penn is the managing member of the Investment Adviser and the Administrator.

**ITEM 6. EXECUTIVE COMPENSATION.** 

**Compensation of Executive Officers** 

None of our executive officers are currently compensated by us. Determining the compensation of the Company's chief executive officer and all other executive officers, paid directly by the Company, if any, will be the responsibility of the Compensation Committee following its establishment.

**Compensation of Trustees** 

Our Independent Trustees are entitled to receive annual cash retainer fees and annual fees for serving as a committee chair, determined based on our NAV attributable to the Shares and the paid-in, or stated, capital of the preferred shares of beneficial interest (if any) as of the beginning of each fiscal quarter. The Independent Trustees currently are Adam K. Bernstein, Marshall Brozost, Jeffrey Flug and Samuel L. Katz. Amounts payable under the arrangement are determined and paid quarterly in arrears as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Our Net Asset Value Attributable to the Shares and the Paid-In, or Stated,<br>Capital of the Preferred Shares of Beneficial Interest (if any)** | **Annual<br>Cash<br>Retainer** | **Chair of<br>the Audit<br>Committee** | **Chair of the<br>Nominating<br>Committee** | **Chair of the<br>Compensation<br>Committee** |
|  $0 to $75 million | $15000 | $2500 | $– $|  |
|  $75 million to $150 million | $30000 | $2500 | $– $|  |
|  > $150 million | $65000 | $2500 | $– $|  |

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Independent Trustees are also reimbursed for reasonable out-of-pocket expenses incurred in attending Board and committee meetings. We have obtained trustees' and officers' liability insurance on behalf of our Trustees and officers.

No compensation is expected to be paid to Trustees who are "interested persons" (as such term is defined in Section 2(a)(19) of the 1940 Act) of us or the Adviser.

The fees for the trustees who do not also serve in an executive officer capacity for the Company or the Investment Adviser will be established by the Board at a later date following the Company's organizational meeting.

The Company will also reimburse each of the independent trustees for all reasonable and authorized business expenses in accordance with its policies as in effect from time to time, including reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each in-person Board meeting and each in-person Board committee meeting not held concurrently with a Board meeting.

We have obtained trustees' and officers' liability insurance on behalf of our trustees and officers. We do not have a profit-sharing or retirement plan, and trustees do not receive any pension or retirement benefits. The Board reviews and determines the compensation of independent directors.

**ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND TRUSTEE INDEPENDENCE.** 

**Certain Relationships and Related Transactions** 

We have entered into an Amended and Restated Investment Advisory Management Agreement with our Investment Adviser. Pursuant to the Amended and Restated Investment Advisory Management Agreement, we will pay our Investment Adviser a base management fee and an incentive fee, and will reimburse our Investment Adviser for routine non-compensation overhead expenses, such as expenses incurred by the Investment Adviser

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or us in connection with administering our business, including expenses incurred in performing administrative services for us, and the reimbursement of the allocable portion of certain other expenses.

Certain of the executive officers, directors/trustees and finance professionals of the Investment Adviser who perform services for us on behalf of our Investment Adviser may also serve as officers, directors/trustees, managers, and/or key professionals of affiliates of PennantPark. These persons may have legal obligations with respect to those entities that are similar to their obligations to us. In the future, these persons and other affiliates of PennantPark may organize other investment programs and acquire for their own account investments that may be suitable for us.

**Allocation of our Investment Adviser's Time** 

We rely on our Investment Adviser to manage our day-to-day activities and to implement our investment strategy. Our Investment Adviser and certain of its affiliates are currently, and plan in the future to continue to be, involved with activities which are unrelated to us. As a result of these activities, our Investment Adviser, its personnel and certain of its affiliates will have conflicts of interest in allocating their time between us and other activities in which they are or may become involved, including, but not limited to, the management of other PennantPark entities. Our Investment Adviser and its personnel will devote only as much of its and their time to our business as our Investment Adviser and its personnel, in their judgment, determine is reasonably required, which may be substantially less than their full time. Therefore, our Investment Adviser, its personnel and certain affiliates may experience conflicts of interest in allocating management time, services and functions among us and any other business ventures in which they or any of their key personnel, as applicable, are or may become involved. This could result in actions that are more favorable to other affiliated entities than to us.

However, PennantPark believes that its professionals have sufficient time to fully discharge their responsibilities to us and to the other businesses in which they are involved. We believe that our affiliates and executive officers will devote the time required to manage our business and expect that the amount of time a particular executive officer or affiliate devotes to us will vary during the course of the year and depend on our business activities at the given time. It is difficult to predict specific amounts of time an executive officer or affiliate will devote to us. We expect that our executive officers and affiliates will generally devote more time to programs raising and investing capital than to programs that have completed their offering stages, though from time to time each program will have its unique demands.

**Allocation of Investments** 

The Investment Adviser and its affiliates currently advise and manage and expect that they will in the future advise and manage Other Accounts having investment guidelines substantially similar in whole or in part to those of the Company. As a result, the Investment Adviser may face conflicts in how it allocates both investment and disposition opportunities between the Company and the Other Accounts. The Investment Adviser intends to allocate such opportunities in a fair and equitable manner between the Company and the Other Accounts, in accordance with its investment allocation policy and the requirements of the 1940 Act. The Company may engage in co-investments with the Investment Adviser and its affiliates, including Other Accounts, pursuant to the Order granted to the Investment Adviser from the SEC, subject to conditions and restrictions in the Order.

The Order grants us the ability to negotiate terms other than price and quantity of co-investment transactions with other funds managed or owned by our Investment Adviser or certain affiliates, where co-investing would otherwise be prohibited by the 1940 Act, subject to the conditions included therein. Under the terms of the Order, a "required majority" (as defined in Section 57(o) of the 1940 Act) of our independent trustees who have no financial interest in the transaction must make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair to us and our shareholders and do not involve overreaching of us or our shareholders on the part of any person concerned and (2) the transaction is consistent with the interests of our shareholders and is consistent with our investment objective and strategies. The Order also imposes reporting and record keeping requirements and limitations on transactional fees.

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We may only co-invest with other funds managed by our Investment Adviser or certain affiliates in accordance with such Order and existing regulatory guidance, including the no-action position of the SEC set forth in Mass Mutual Life Ins. Co. (SEC No-Action Letter, June 7, 2000), on which similarly situated funds like the Company rely in order to co-invest in a single class of privately placed securities so long as certain conditions are met, including that the Investment Adviser, acting on the Company's behalf and on behalf of other clients, negotiates no term other than price.

In certain situations where co-investment with one or more funds managed or owned by our Investment Adviser or its affiliates is not permitted or appropriate, such as when there is an opportunity to invest in different securities of the same issuer on a differential basis between funds or where the different investments could be expected to result in a conflict between the interest of the Company and those of other funds managed by the Investment Adviser that cannot be mitigated or otherwise addressed pursuant to the policies and procedures of the Investment Adviser, the Investment Adviser must decide which client will proceed with the investment. The Investment Adviser will make these determinations based on policies and procedures, which are designed to reasonably ensure that investment opportunities are allocated fairly and equitably among affiliated funds over time and in a manner that is consistent with applicable laws, rules and regulations.

Affiliates of our Investment Adviser have no obligation to make their originated investment opportunities available to our Investment Adviser or to us and such opportunities may be provided to another affiliate of our Investment Adviser.

To mitigate the foregoing conflicts, our Investment Adviser and its affiliates will seek to allocate portfolio transactions on a fair and equitable basis, taking into account such factors as the relative amounts of capital available for new investments, the applicable investment programs and portfolio positions, the clients for which participation is appropriate and any other factors deemed appropriate.

**Director Independence** 

For information regarding the independence of our trustees, see "*Item 5. Trustees And Executive Officers.*"

**ITEM 8. LEGAL PROCEEDINGS** 

We are not currently subject to any material litigation.

**ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS** 

**Market Information** 

Our outstanding Shares will be offered and sold in transactions exempt from registration under the Securities Act under Section 4(a)(2), Regulation D and Regulation S. See *"Item 10. Recent Sales of Unregistered Securities"* for more information. There is no public market for our Shares currently, nor can we give any assurance that one will develop. Currently, the Company has authority to issue an unlimited number of its Shares.

Because our Shares have been and will be acquired by investors in one or more transactions "not involving a public offering," they are "restricted securities" and can be required to be held indefinitely. Such Shares cannot be sold, transferred, assigned, pledged or otherwise disposed of unless (1) our consent is granted, and (2) the Shares are registered under applicable securities laws or specifically exempted from registration (in which case the shareholder could, at our option, be required to provide us with a legal opinion, in form and substance satisfactory to us, that registration is not required). Accordingly, an investor must be willing to bear the economic risk of investment in the Shares until we are liquidated. No sale, transfer, assignment, pledge or other disposition, whether voluntary or involuntary, of the Shares can be made except by registration of the transfer on our books.

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Each transferee will be required to execute an instrument agreeing to be bound by these restrictions and the other restrictions imposed on the Shares and to execute such other instruments or certifications as are reasonably required by us.

**Holders** 

Please see "*Item 4. Security Ownership of Certain Beneficial Owners and Management*" for disclosure regarding the holders of our Shares.

**Distributions** 

To the extent that we have income available, we intend to make periodic distributions to our shareholders. Our distributions, if any, are determined by the Board. Any distributions to our shareholders will be declared out of assets legally available for distribution.

We intend to elect to be treated, and to qualify annually, as a RIC under Subchapter M of the Code. To maintain RIC qualification, we must distribute dividends for U.S. federal income tax purposes to our shareholders in respect of each tax year of an amount generally at least equal to 90% of our investment company taxable, determined without regard to any deduction for dividends paid. In addition, we are subject to ordinary income and capital gain distribution requirements under U.S. federal excise tax rules for each calendar year. If we do not meet the required distributions, we will be subject to a 4% nondeductible federal excise tax on the undistributed amount.

We currently intend to distribute net capital gains (*i.e*., net long-term capital gains in excess of net short-term capital losses), if any, at least annually out of the assets legally available for such distributions. However, we could decide in the future to retain such capital gains for investment and elect to treat such gains as deemed distributions to you. If this happens, you will be treated for U.S. federal income tax purposes as if you had received an actual distribution of the capital gains that we retain and reinvested the net after tax proceeds in us. In this situation, you would be eligible to claim a tax credit (or, in certain circumstances, a tax refund) equal to your allocable share of the tax we paid on the capital gains deemed distributed to you. See *"Item 1. Business — Certain U.S. Federal Income Tax Considerations — Tax-Exempt U.S. Shareholders."* We cannot assure you that we will achieve results that will permit us to pay any cash distributions, and if we issue senior securities, we will be prohibited from making distributions if doing so would cause us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if such distributions are limited by the terms of any of our borrowings.

Unless you elect to receive your distributions in cash, we intend to make such distributions (net of applicable withholding tax) in additional Shares under our DRIP. Although distributions paid in the form of additional Shares will generally be subject to U.S. federal, state and local taxes in the same manner as cash distributions, investors participating in our DRIP will not receive any corresponding cash distributions with which to pay any such applicable taxes. If you hold Shares in the name of a broker or financial intermediary, you should contact such broker or financial intermediary regarding your election to receive distributions in cash in lieu of Shares. Any distributions reinvested through the issuance of Shares through our DRIP will increase our gross assets on which the base management fee and the incentive fee are determined and paid to the Investment Adviser. See *"— Dividend Reinvestment Plan."*

**Dividend Reinvestment Plan** 

We have adopted an "opt out" distribution reinvestment plan (the "<u>DRIP</u>" or "<u>Plan</u>") that will provide for reinvestment of our dividends and other distributions (net of applicable withholding tax) on behalf of our shareholders, unless a shareholder elects to receive cash as provided below. As a result, if our Board authorizes, and we declare, a cash dividend or other distribution, then our shareholders who have not 'opted out' of our Plan will have their cash distribution automatically reinvested in additional Shares, rather than receiving a cash distribution.

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No action will be required on the part of registered shareholders to have their cash dividend or other distribution reinvested in Shares. A registered shareholder may elect to receive an entire distribution in cash by notifying the Plan administrator and our transfer agent and registrar, in writing, so that such notice is received by the Plan administrator no later than the record date for distributions to shareholders. The Plan administrator will set up an account for Shares acquired through the Plan for each shareholder who has not elected to receive dividends or other distributions in cash and to hold such Shares in non-certificated form. Upon request by a shareholder participating in the Plan, received in writing not less than ten (10) days prior to the record date, the Plan administrator will, instead of crediting Shares to the participant's account, issue a certificate registered in the participant's name for the number of whole Shares and a check for any fractional Share. Those shareholders whose Shares are held by a broker or other financial intermediary may receive dividends and other distributions in cash by notifying their broker or other financial intermediary of their election.

We and each investor agree and acknowledge that any dividends or other distributions received by the investor or reinvested by us on the investor's behalf will have no effect on the determination of the amount of such investor's undrawn Capital Commitment.

We will use newly issued Shares to fulfill our funding obligation under the Plan. Such Shares will be issued at a price per share equal to the most recent NAV per share determined by the Board, subject to adjustment to the extent required by Section 23 of the 1940 Act. Investors who receive distributions in the form of additional Shares will be subject to the same U.S. federal, state and local tax consequences as investors who elect not to reinvest distributions. Participation in the Plan will not in any way reduce the amount of an investor's capital commitment.

**ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.** 

The following table summarizes the Shares issued or sold since our inception which were not registered under the Securities Act:

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| **Date** | **Shares<br>Sold** | **Net Asset Value<br>per share** | **Proceeds<br>(In<br>thousands)** |
|  September 30, 2025 – Seed | 400 | $25.00 | $10 |
|  September 30, 2025 | 799600 | $25.00 | $19990 |
|  October 30, 2025 | 1000000 | $25.00 | $25000 |
|  **Shares issued or sold during the period from June 30, 2025 (inception) to October 30, 2025** | 1800000 | $25.00 | $45000 |

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The sales of our Shares pursuant to certain subscription agreements are intended to be exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof. We did not, and do not intend to, engage in general solicitation or advertising with regard to such sales of our Shares and did not, and do not intend to, offer securities to the public in connection with such issuance and sale. The investors who purchase Shares are intended to all be accredited investors.

**ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.** 

The following description is based on relevant portions of Delaware law and on the Amended and Restated Declaration of Trust and bylaws. This summary is not necessarily complete, and the Company refers investors to the Amended and Restated Declaration of Trust and the Company's bylaws for a more detailed description of the provisions summarized below.

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**General** 

The terms of the Amended and Restated Declaration of Trust authorize an unlimited number of Shares of any class and an unlimited number of preferred shares. The Amended and Restated Declaration of Trust provides that the Board may classify or reclassify any unissued Shares into one or more classes or series of shares or preferred shares by setting or changing the preferences, conversion or other rights, voting powers, restrictions, or limitations as to dividends, qualifications, or terms or conditions of redemption of the shares. There is currently no market for the Shares or preferred shares, and the Company can offer no assurances that a market for such shares will develop in the future. The Company does not intend for the Shares or the preferred shares to be listed on any national securities exchange. There are no outstanding options or warrants to purchase the Shares or preferred shares. No Shares or preferred shares have been authorized for issuance under any equity compensation plans. Under the terms of the Amended and Restated Declaration of Trust, shareholders shall be entitled to the same limited liability extended to shareholders of private Delaware for profit corporations formed under the Delaware General Corporation Law, 8 Del. C. § 100, et. seq. The Amended and Restated Declaration of Trust provides that no shareholder shall be liable for any debt, claim, demand, judgment or obligation of any kind of, against or with respect to us by reason of being a shareholder, nor shall any shareholder be subject to any personal liability whatsoever, in tort, contract or otherwise, to any person in connection with the Company's assets or the affairs of the Company by reason of being a shareholder.

None of the Company's Shares are subject to further calls or to assessments, sinking fund provisions, obligations of the Company or potential liabilities associated with ownership of the security (not including investment risks). In addition, except as may be provided by the Board in setting the terms of any class or series of Shares, no shareholder shall be entitled to exercise appraisal rights in connection with any transaction.

**Outstanding Securities** 

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|:---|:---|:---|:---|:---|
| **Title of Class** | **Amount Authorized** | **Amount Authorized** | **Amount Outstanding as<br>of October 30, 2025** | **Amount Outstanding as<br>of October 30, 2025** |
|  Common Shares |  | Unlimited |  | 1800000 |
|  Preferred Shares |  | Unlimited |  |  |

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***Common Shares***

Under the terms of the Amended and Restated Declaration of Trust, all Shares will have equal rights as to voting and, when they are issued, will be duly authorized, validly issued, and fully paid. Dividends and distributions may be paid to the holders of Shares if, as and when authorized by the Board and declared by the Company out of funds legally available therefore. Except as may be provided by the Board in setting the terms of classified or reclassified shares, the Shares will have no preemptive, exchange, conversion, appraisal or redemption rights. In the event of the Company's liquidation, dissolution or winding up, each share of the Shares would be entitled to share pro rata in all of the Company's assets that are legally available for distribution after it pays all debts and other liabilities and subject to any preferential rights of holders of the preferred shares, if any preferred shares are outstanding at such time. Subject to the rights of holders of any other class or series of shares, each share of Shares will be entitled to one vote on all matters submitted to a vote of shareholders, including the election of trustees. Except as may be provided by the Board in setting the terms of classified or reclassified shares, and subject to the express terms of any class or series of preferred shares, the holders of the Shares will possess exclusive voting power. There will be no cumulative voting in the election of trustees. Subject to the special rights of the holders of any class or series of preferred shares to elect trustees, each trustee will be elected by a plurality of the votes cast with respect to such trustee's election. Our Board may amend the Amended and Restated Declaration of Trust or bylaws to alter the vote required to elect trustees.

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***Redemptions by the Company***

Each Share is subject to redemption (out of the assets of the Company) by the Company at the redemption price equal to the then-current NAV per share of the relevant class or series of shares, determined in accordance with the Amended and Restated Declaration of Trust, at any time if the Board determines in its sole discretion that a shareholder has breached any of its representations or warranties contained in such shareholder's Subscription Agreement with the Company, and upon such redemption the holders of the Shares so redeemed will have no further right with respect thereto other than to receive payment of such redemption price. Prior to exercising any such redemption, the Company will provide written notice to the applicable shareholder notifying them of any breach of the representations or warranties contained in the Subscription Agreement, after receipt of which notice the applicable shareholder will be provided with no less than 10 business days to cure the breach to the reasonable satisfaction of the Company.

***Transferability of Common Shares***

Investors may transfer their Shares, solely at the Investment Adviser's discretion, provided that the transferee, as applicable, satisfies applicable eligibility and/or suitability requirements and the transfer is otherwise made in accordance with applicable securities, tax, anti-money laundering and other applicable laws and compliance with the terms of the Subscription Agreement. No transfer will be effectuated except by registration of the transfer on the Company's books. Each transferee must agree to be bound by the restrictions set forth in the Subscription Agreement and all other obligations as an investor in the Company.

Following an initial public offering or Listing, investors may be restricted from selling or transferring their Shares for a certain period of time by applicable securities laws or contractually by a lock-up agreement with the underwriters of the initial public offering or otherwise.

**Limitation on Liability of Trustees and Officers; Indemnification and Advance of Expenses** 

Delaware law permits a Delaware statutory trust to include in its declaration of trust a provision to indemnify and hold harmless any trustee or beneficial owner or other person from and against any and all claims and demands whatsoever with the exception of any act or omission that constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing. Our amended and restated declaration of trust provides that no shareholder will be subject in such capacity to any personal liability whatsoever to any Person (as defined in the Amended and Restated Declaration of Trust) in connection with Trust Property (as defined in the Amended and Restated Declaration of Trust) or the affairs of the Company. Shareholders will have the same limitation of personal liability as is extended to shareholders of a private corporation for profit incorporated under the Delaware General Corporation Law. No trustee or officer of the Company will be subject in such capacity to any personal liability whatsoever to any Person, save only liability to the Company or its shareholders arising from bad faith, willful misconduct, gross negligence or reckless disregard for his or her duty to such Person; and, subject to the foregoing exception, all such Persons will look solely to the Trust Property for satisfaction of claims of any nature arising in connection with the affairs of the Company. If any shareholder, trustee or officer, as such, of the Company, is made a party to any suit or proceeding to enforce any such liability, subject to the foregoing exception, he or she will not, on account thereof, be held to any personal liability. Any repeal or modification of the applicable section of the Amended and Restated Declaration of Trust will not adversely affect any right or protection of a trustee or officer of the Company existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.

Pursuant to our Amended and Restated Declaration of Trust, the Company will indemnify each person who at any time serves as a trustee, officer or employee of the Company (each such person being an "indemnitee") against any liabilities and expenses, including amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and reasonable counsel fees reasonably incurred by such indemnitee in connection with the defense or disposition of any action, suit or other proceeding, whether civil or criminal, before any court or

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administrative or investigative body in which he or she may be or may have been involved as a party or otherwise or with which he or she may be or may have been threatened, while acting in any capacity set forth in the applicable section of the Amended and Restated Declaration of Trust by reason of his having acted in any such capacity, except with respect to any matter as to which he or she will not have acted in good faith in the reasonable belief that his action was in the best interest of the Company or, in the case of any criminal proceeding, as to which he or she will have had reasonable cause to believe that the conduct was unlawful, provided, however, that no indemnitee will be indemnified thereunder against any liability to any person or any expense of such indemnitee arising by reason of (i) willful misconduct, (ii) bad faith, (iii) gross negligence, or (iv) reckless disregard of the duties involved in the conduct of his or her position (the conduct referred to in such clauses (i) through (iv) being sometimes referred to herein as "disabling conduct"). Notwithstanding the foregoing, with respect to any action, suit or other proceeding voluntarily prosecuted by any indemnitee as plaintiff, indemnification will be mandatory only if the prosecution of such action, suit or other proceeding by such indemnitee (1) was authorized by a majority of the Board or (2) was instituted by the indemnitee to enforce his or her rights to indemnification hereunder in a case in which the indemnitee is found to be entitled to such indemnification. The rights to indemnification set forth in the Amended and Restated Declaration of Trust will continue as to a person who has ceased to be a trustee or officer of the Company and will inure to the benefit of his or her heirs, executors and personal and legal representatives. No amendment or restatement of the Amended and Restated Declaration of Trust or repeal of any of its provisions will limit or eliminate any of the benefits provided to any person who at any time is or was a trustee or officer of the Company or otherwise entitled to indemnification thereunder in respect of any act or omission that occurred prior to such amendment, restatement or repeal.

Notwithstanding the foregoing, the Company will not indemnify an indemnitee unless there has been a determination (i) by a final decision on the merits by a court or other body of competent jurisdiction before whom the issue of entitlement to indemnification hereunder was brought that such indemnitee is entitled to indemnification hereunder or, (ii) in the absence of such a decision, by (1) a majority vote of a quorum of those independent trustees who are not parties to the proceeding ("<u>Disinterested</u> <u>Non-Party</u> <u>Trustees</u>"), that the indemnitee is entitled to indemnification hereunder, or (2) if such quorum is not obtainable or even if obtainable, if such majority so directs, independent legal counsel in a written opinion concludes that the indemnitee should be entitled to indemnification hereunder. All determinations to make advance payments in connection with the expense of defending any proceeding will be authorized and made in accordance with the immediately succeeding paragraph below.

In addition, the Amended and Restated Declaration of Trust permits the Company to make advance payments in connection with the expenses of defending any action with respect to which indemnification might be sought hereunder if the Company receives a written affirmation by the indemnitee of the indemnitee's good faith belief that the standards of conduct necessary for indemnification have been met and a written undertaking to reimburse the Company unless it is subsequently determined that the indemnitee is entitled to such indemnification and if a majority of the trustees determine that the applicable standards of conduct necessary for indemnification appear to have been met. In addition, at least one of the following conditions must be met: (i) the indemnitee will provide adequate security for his or her undertaking, (ii) the Company will be insured against losses arising by reason of any lawful advances, or (iii) a majority of a quorum of the Disinterested Non-Party Trustees, or if a majority vote of such quorum so direct, legal counsel in a written opinion, will conclude, based on a review of readily available facts (as opposed to a full trial-type inquiry), that there is substantial reason to believe that the indemnitee ultimately will be found entitled to indemnification.

Subject to any limitations provided by the 1940 Act and the Amended and Restated Declaration of Trust, the Company will have the power and authority to indemnify and provide for the advance payment of expenses to employees, agents and other Persons providing services to the Company or serving in any capacity at the request of the Company or provide for the advance payment of expenses for such Persons, provided that such indemnification has been approved by a majority of the Board.

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**Delaware Law and Certain Amended and Restated Declaration of Trust Provisions** 

***Organization and Duration***

We were formed in Delaware on April 24, 2025 and will remain in existence until dissolved in accordance with our Amended and Restated Declaration of Trust or pursuant to Delaware law.

***Purpose***

Under the Amended and Restated Declaration of Trust, the Company is permitted to engage in any business activity that lawfully may be conducted by a statutory trust organized under Delaware law and, in connection therewith, to exercise all of the rights and powers conferred upon us pursuant to the agreements relating to such business activity.

***Number of Trustees; Vacancies; Removal; Term and Election; Certain Transactions***

Each trustee shall serve during the continued lifetime of the Company until he or she dies, resigns or is removed, or, if sooner, until the next meeting of the Company's shareholders called for the purpose of electing trustees and until the election and qualification of his or her successor.

Upon and following the Company's election to be regulated as a BDC under the 1940 Act, a majority of the Board shall be independent trustees, the death, removal or resignation of an independent trustee pending the election of such independent trustee's successor by the remaining trustees.

The Amended and Restated Declaration of Trust provides that as of September 16, 2025, the trustees shall be the signatories to the Amended and Restated Declaration of Trust and the number of trustees shall be the number of persons so signing until changed by the trustees. Thereafter, the number of trustees shall be determined by a majority of the trustees then in office, provided that the number of trustees shall be no less than three or more than fifteen. No reduction in the number of trustees shall have the effect of removing any trustee from office prior to the expiration of his term. Trustees need not own Shares and may succeed themselves in office.

Any of the trustees may resign their trust (without need for prior or subsequent accounting) by an instrument in writing signed by such trustees and delivered or mailed to the trustees or the chairperson, if any, the President or the Secretary, if any, and such resignation shall be effective upon such delivery, or at a later date according to the terms of the instrument. Any of the trustees may be removed (provided the aggregate number of trustees after such removal shall not be less than the minimum number required by the Amended and Restated Declaration of Trust) for cause only, and not without cause, and only by action taken by a majority of the remaining trustees (or in the case of the removal of an independent trustee, a majority of the remaining independent trustees). Upon the resignation or removal of a trustees, each such resigning or removed trustees shall execute and deliver such documents as the remaining trustees shall require for the purpose of conveying to the Company or the remaining trustees any Trust Property held in the name of such resigning or removed trustees. Upon the incapacity or death of any trustees, such trustees' legal representative shall execute and deliver on such trustees' behalf such documents as the remaining trustees shall require as provided in the preceding sentence. Except to the extent expressly provided in a written agreement with the Company, no trustees resigning and no trustees removed shall have any right to any compensation for any period following the effective date of his resignation or removal, or any right to damages on account of a removal.

Under the Amended and Restated Declaration of Trust, the Company is not required to hold annual meetings. Meetings of the trustees shall be held from time to time upon the call of the chairperson, if any, or the President or any two trustees. Regular meetings of the trustees may be held without call or notice at a time and place fixed by the Company's bylaws, the chairperson or by resolution or consent of the trustees. Notice of any other meeting shall be given by the Company and shall be delivered to the trustees orally or via electronic

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transmission not less than twenty-four (24) hours, or in writing not less than seventy-two (72) hours, before the meeting, but may be waived by any trustees either before or after such meeting. The attendance of a trustees at a meeting shall constitute a waiver of notice of such meeting except where a trustees attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been properly called or convened. Any time there is more than one trustees, a quorum for all meetings of the trustees shall be one-third, but not less than two, of the trustees. Unless provided otherwise in the Amended and Restated Declaration of Trust and except as required under the 1940 Act, any action of the trustees may be taken at a meeting by vote of a majority of the trustees present (a quorum being present) or without a meeting by written consent of the trustees.

The Amended and Restated Declaration of Trust also provides for some members of the Board to qualify as "<u>Continuing Trustees</u>," which term means trustees who either (i) have been members of the Board for a period of at least thirty-six months or (ii) were nominated to serve as members of the Board by a majority of the Continuing Trustees then members of the Board.

***Action by Shareholders***

The Company's shareholders will only have voting rights as required by the 1940 Act or as otherwise provided for in the Amended and Restated Declaration of Trust. Under the Amended and Restated Declaration of Trust, the Company is not required to hold annual meetings and the Company's bylaws provide that an annual meeting of shareholders will not be required in any year in which the election of trustees is not required to be held under the 1940 Act. The failure to hold an annual meeting will not invalidate the Company's existence or affect any otherwise valid corporate act of the Company.

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A special meeting of the Company's shareholders may be called at any time by a majority of the trustees, the chairperson or the President and shall be called by any trustees for any proper purpose upon written request of shareholders of the Company holding in the aggregate not less than thirty-three and one-third-of-one percent (33 1/3%) of the outstanding common Shares of the Company, such request specifying the purpose or purposes for which such meeting is to be called, provided that in the case of a meeting called by any trustees at the request of Company's shareholders for the purpose of electing trustees or removing the Investment Advisor, written request of shareholders of the Company holding more than fifty-one percent (51%) of the outstanding Shares of the Company or class or series of Shares having voting rights on the matter shall be required. For a special shareholder meeting to be called for a proper purpose (as used in the preceding sentence), it is not a requirement that such purpose relate to a matter on which shareholders are entitled to vote, provided that if such meeting is called for a purpose for which shareholders are not entitled to vote, no vote will be taken at such meeting.

***Amendment of the Declaration of Trust; No Approval by Shareholders***

The trustees may, without shareholder vote, amend or otherwise supplement the Amended and Restated Declaration of Trust. Shareholders shall only have the right to vote: (i) on any amendment to the amendment procedure, (ii) on any amendment that would adversely affect the powers, preferences or special rights of the Shares as determined by the trustees in good faith and (iii) on any amendment submitted to them by the trustees.

In connection with a Listing (if any) or otherwise deemed appropriate by the trustees, the trustees may, without the approval or vote of the Shareholders, amend or supplement the Amended and Restated Declaration of Trust or bylaws, as applicable, in any Company's shareholders, including, without limitation to classify the Board of trustees, to permit annual meetings of shareholders, to impose advance notice provisions or requirements for the bringing of shareholder nominations or proposals, to impose super-majority approval for certain types of transactions, to impose "control share" type provisions and to otherwise add provisions that may be deemed adverse to the Company's shareholders.

An amendment duly adopted by the Board and, if required, the Company's shareholders as aforesaid, shall become effective at the time of such adoption or at such other time as may be designated by the Board or Company's shareholders, as the case may be. No such amendment shall affect the rights, protections, immunities, indemnities, duties or obligations of the Wilmington Trust, National Association (the "<u>Delaware Trustee</u>") hereunder without the written consent of the Board.

A certification in recordable form signed by a majority of the Board setting forth an amendment and reciting that it was duly adopted by the trustees and, if required, the shareholders as aforesaid, or a copy of the Amended and Restated Declaration of Trust, as amended, in recordable form, and executed by a majority of the Board, will be conclusive evidence of such amendment when lodged among the records of the Company or at such other time designated by the Board.

***Derivative Actions***

No person, other than a trustee, who is not a shareholder will be entitled to bring any derivative action, suit or other proceeding on behalf of the Company. No shareholder may maintain a derivative action on behalf of the Company unless holders of at least fifty-one percent (51%) of the outstanding Shares join in the bringing of such action.

In addition to the requirements set forth in Section 3816 of the Delaware Statutory Trust Act, a shareholder may bring a derivative action on behalf of the Company only if the following conditions are met: (i) the shareholder or shareholders must make a pre-suit demand upon the Board to bring the subject action unless an effort to cause the Board to bring such an action is not likely to succeed; and a demand on the Board will only be deemed not likely to succeed and therefore excused if a majority of the Board, or a majority of any committee established to consider the merits of such action, is composed of trustees who are not "independent trustees" (as that term is defined in the

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Delaware Statutory Trust Act); and (ii) unless a demand is not required under clause (i) above, the Board must be afforded a reasonable amount of time to consider such shareholder request and to investigate the basis of such claim; and the Board will be entitled to retain counsel or other advisors in considering the merits of the request and may require an undertaking by the shareholders making such request to reimburse the Company for the expense of any such advisors in the event that the Board determines not to bring such action. For purposes of this paragraph, the Board may designate a committee of one or more trustees to consider a shareholder demand.

For the avoidance of doubt, the Amended and Restated Declaration of Trust's prohibition on derivate actions shall not apply to any claims asserted under the U.S. federal securities laws, including, without limitation, the 1940 Act.

***Exclusive Delaware Jurisdiction***

The Delaware Trustee, each trustees, each officer and, except as otherwise agreed in writing by the Company, the Investment Adviser and/or affiliates of the Investment Adviser, each Person legally or beneficially owning a Share or an interest in a Share of the Company (whether through a broker, dealer, bank, trust company or clearing corporation or an agent of any of the foregoing or otherwise), to the fullest extent permitted by law, including Section 3804(e) of the Delaware Statutory Trust Act, (a) irrevocably agrees that any claims, suits, actions or proceedings asserting a claim governed by the internal affairs (or similar) doctrine or arising out of or relating in any way to the Company, the Delaware Statutory Trust Act, the Amended and Restated Declaration of Trust or the bylaws (including, without limitation, any claims, suits, actions or proceedings to interpret, apply or enforce (i) the provisions of the Amended and Restated Declaration of Trust or the bylaws, or (ii) the duties (including fiduciary duties), obligations or liabilities of the Company to its shareholders or the trustees, or of officers or the trustees to the Company, to the Company's shareholders or each other, or (iii) the rights or powers of, or restrictions on, the Company, the officers, the trustees or the shareholders, or (iv) any provision of the Delaware Statutory Trust Act or other laws of the State of Delaware pertaining to trusts made applicable to the Company pursuant to Section 3809 of the Delaware Statutory Trust Act, or (v) any other instrument, document, agreement or certificate contemplated by any provision of the Delaware Statutory Trust Act, the Amended and Restated Declaration of Trust or the bylaws relating in any way to the Company (regardless, in each case, of whether such claims, suits, actions or proceedings (A) sound in contract, tort, fraud or otherwise, (B) are based on common law, statutory, equitable, legal or other grounds, or (C) are derivative or direct claims)), shall be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, any other court in the State of Delaware with subject matter jurisdiction; provided, however, that the Federal District Courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the 1940 Act, the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, (b) irrevocably submits to the exclusive jurisdiction of such courts in connection with any such claim, suit, action or proceeding, (c) irrevocably agrees not to, and waives any right to, assert in any such claim, suit, action or proceeding that (i) it is not personally subject to the jurisdiction of such courts or any other court to which proceedings in such courts may be appealed, (ii) such claim, suit, action or proceeding is brought in an inconvenient forum, or (iii) the venue of such claim, suit, action or proceeding is improper, (d) consents to process being served in any such claim, suit, action or proceeding by mailing, certified mail, return receipt requested, a copy thereof to such party at the address in effect for notices hereunder, and agrees that such service shall constitute good and sufficient service of process and notice thereof; provided, nothing in clause (d) of this paragraph shall affect or limit any right to serve process in any other manner permitted by law, and (e) irrevocably waives any and all right to trial by jury in any such claim, suit, action or proceeding.

***Term of the Company***

The trustees may, to the extent they deem appropriate, adopt a plan of liquidation at any time, which plan of liquidation may set forth the terms and conditions for implementing the dissolution and liquidation of the Company under the Amended and Restated Declaration of Trust. Shareholders of the Company shall not be

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entitled to vote on the adoption of any such plan or the dissolution and liquidation of the Company under the Amended and Restated Declaration of Trust except to the extent required by the 1940 Act or contemplated by the Amended and Restated Declaration of Trust. After a Listing (if any), the Company may be dissolved by the affirmative vote or consent of at least a majority of the trustees and seventy-five percent (75%) of the Continuing Trustees, without the vote of the Company's shareholders.

***Books and Reports***

We are required to keep appropriate books of our business at our principal offices. The books will be maintained for both tax and financial reporting purposes on an accrual basis in accordance with GAAP.

***No Appraisal Rights***

Except as may be provided by the Board in setting the terms of any class or series of Shares, no shareholder shall be entitled to exercise appraisal rights in connection with any transaction.

***Conflict with 1940 Act***

Our bylaws provide that, if and to the extent that any provision of the DGCL or any provision of our charter or bylaws conflicts with any provision of the 1940 Act, the applicable provision of the 1940 Act will control.

**ITEM 12. INDEMNIFICATION OF TRUSTEES AND OFFICERS.** 

*See "Item 11. Description of Registrant's Securities to be Registered – Limitation on Liability of Trustees and Officers; Indemnification and Advance of Expenses."* 

So long as we are regulated under the 1940 Act, the above indemnification and limitation of liability is limited by the 1940 Act or by any valid rule, regulation or order of the SEC thereunder. The 1940 Act provides, among other things, that a company may not indemnify any trustee or officer against liability to it or its security holders to which he or she might otherwise be subject by reason of his or her willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office unless a determination is made by final decision of a court, by vote of a majority of a quorum of trustees who are disinterested, non-party trustees or by independent legal counsel that the liability for which indemnification is sought did not arise out of the foregoing conduct. In addition, we have obtained liability insurance for our officers and trustees. We have also obtained trustees and officers/errors and omissions liability insurance for our trustees and officers.

**ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.** 

Set forth below is a list of our audited financial statements included in this Registration Statement.

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| | |
|:---|:---|
|  [Report of Independent Registered Public Accounting Firm](#fintoc50016_1) | F-1 |
|  [Consolidated Statement of Assets and Liabilities September 30, 2025](#fintoc50016_2) | F-2 |
|  [Notes to Consolidated Financial Statements](#fintoc50016_3) | F-3 |

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**ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.** 

There are not and have not been any disagreements between us and our accountant on any matter of accounting principles, practices or financial statement disclosure.

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**ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.** 

(a) List separately all financial statements filed

The financial statements included in this Registration Statement commence on page F-1.

(b) Exhibits

**Exhibit Index** 

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| | |
|:---|:---|
| 3.1 | [Certificate of Trust†](http://www.sec.gov/Archives/edgar/data/2089126/000119312525237220/d50016dex31.htm) |
| 3.2 | [Amended and Restated Declaration of Trust†](http://www.sec.gov/Archives/edgar/data/2089126/000119312525237220/d50016dex32.htm) |
| 3.3 | [Bylaws†](http://www.sec.gov/Archives/edgar/data/2089126/000119312525237220/d50016dex33.htm) |
| 10.1 | [Amended and Restated Investment Advisory Management Agreement by and between PennantPark Private Income Fund and PennantPark Private Income Fund Advisers, LLC†](http://www.sec.gov/Archives/edgar/data/2089126/000119312525298088/d50016dex101.htm) |
| 10.2 | [Fee Waiver Agreement by and between PennantPark Private Income Fund and PennantPark Private Income Fund Advisers, LLC†](http://www.sec.gov/Archives/edgar/data/2089126/000119312525298088/d50016dex102.htm) |
| 10.3 | [Administration Agreement by and between PennantPark Private Income Fund and PennantPark Investment Administration, LLC†](http://www.sec.gov/Archives/edgar/data/2089126/000119312525298088/d50016dex103.htm) |
| 10.4 | [Custody Agreement, by and between PennantPark Private Income Fund and State Street Bank and Trust Company†](http://www.sec.gov/Archives/edgar/data/2089126/000119312525298088/d50016dex104.htm) |
| 10.5 | [Expense Holiday Agreement, by and between PennantPark Private Income Fund and PennantPark Private Income Fund Advisers LLC†](http://www.sec.gov/Archives/edgar/data/2089126/000119312525298088/d50016dex105.htm) |
| 10.6 | [Expense Limitation Agreement, by and between PennantPark Private Income Fund and PennantPark Private Income Fund Advisers LLC†](http://www.sec.gov/Archives/edgar/data/2089126/000119312525298088/d50016dex106.htm) |
| 10.7 | [Trademark License Agreement by and between PennantPark Investment Advisers, LLC and PennantPark Private Income Fund†](http://www.sec.gov/Archives/edgar/data/2089126/000119312525298088/d50016dex107.htm) |
| 10.8 | [Distribution Reinvestment Plan†](http://www.sec.gov/Archives/edgar/data/2089126/000119312525298088/d50016dex108.htm) |
| 10.9 | [Form of Subscription Agreement (Immediate Funding)†](http://www.sec.gov/Archives/edgar/data/2089126/000119312525298088/d50016dex109.htm) |
| 10.1 | [Joint Code of Ethics of the Registrant†](http://www.sec.gov/Archives/edgar/data/2089126/000119312525298088/d50016dex1010.htm) |
| 10.11 | [Form of Indemnification Agreement†](http://www.sec.gov/Archives/edgar/data/2089126/000119312525298088/d50016dex1011.htm) |
| 10.12 | [Loan and Security Agreement, dated as of October 1, 2025, by and among PennantPark Investment Advisers, LLC, as the collateral manager, PennantPark Private Income Fund SPV LLC, as the borrower, PennantPark Private Income Fund, as the transferor, each of the lenders from time to time party thereto, CIBC Bank USA, as the administrative agent and Western Alliance Trust Company, N.A., as the collateral agent and the custodian\*](d50016dex1012.htm) |
| 21.1 | [List of Subsidiaries†](http://www.sec.gov/Archives/edgar/data/2089126/000119312525298088/d50016dex211.htm) |

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\* Filed herewith

† Previously filed.

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**SIGNATURES** 

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized.

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| | | |
|:---|:---|:---|
|  **PENNNANTPARK PRIVATE INCOME FUND** | **PENNNANTPARK PRIVATE INCOME FUND** | **PENNNANTPARK PRIVATE INCOME FUND** |
| By: | /s/ Arthur H. Penn | /s/ Arthur H. Penn |
|  | Name:  | Arthur H. Penn |
|  | Title: | President and Chief Executive Officer |

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Date: December 5, 2025

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**Index to Financial Statement** 

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|:---|:---|
|  [Report of Independent Registered Public Accounting Firm](#fintoc50016_1) | F-1 |
|  [Consolidated Statement of Assets and Liabilities September 30, 2025](#fintoc50016_2) | F-2 |
|  [Notes to Consolidated Financial Statement](#fintoc50016_3) | F-3 |

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PennantPark Private Income Fund

Report of Independent Registered Public Accounting Firm (PCAOB ID - 49)

September 30, 2025

**Report of Independent Registered Public Accounting Firm** 

To the Shareholders and the Board of Trustees of PennantPark Private Income Fund

**Opinion on the Financial Statement** 

We have audited the accompanying consolidated statement of assets and liabilities of PennantPark Private Income Fund (the Company), as of September 30, 2025, and the related notes to the consolidated financial statement (collectively, the financial statement). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of September 30, 2025, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion** 

These financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion.

/s/ RSM US LLP

We have served as the auditor of one or more PennantPark Investment Advisers, LLC's advised entities since 2013.

New York, New York

November 25, 2025

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PennantPark Private Income Fund and Subsidiaries

Consolidated Statement of Assets and Liabilities

September 30, 2025

(in thousands, except per share data)

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|:---|:---|
|  **Assets** | **Assets** |
|  Cash and cash equivalents (cost—$20,000) | $20000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total assets** | 20000 |
|  **Commitments and contingencies (Note 7)** |  |
|  **Net assets** |  |
|  Common stock, unlimited shares authorized, 800,000 shares issued and outstanding Par value $0.001 per share |  |
|  Paid-in capital in excess of par value | 20000 |
|  **Net asset value per share** | $25.00 |

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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENT

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PennantPark Private Income Fund and Subsidiaries

Notes to Consolidated Financial Statement

September 30, 2025

**1. ORGANIZATION** 

PennantPark Private Income Fund (the "Company") was organized as a Delaware statutory trust on April 24, 2025, and commenced operations on September 16, 2025. On October 10, 2025, the Company filed a registration statement on Form 10 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to register its securities pursuant to Section 12(g) of the Exchange Act. The Company intends to elect to be regulated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the "1940 Act").

The Company is classified as a partnership for U.S. federal income tax purposes. The Company intends to operate so as to qualify to be treated as a regulated investment company ("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code") for the taxable year ending September 30, 2026 and thereafter. The Company intends to qualify annually thereafter as a RIC.

The Company's investment objective is to generate both current income and capital appreciation while seeking to preserve capital. The Company seeks to achieve its investment objective by investing primarily in U.S. middle-market companies in the form of first lien secured debt, and, to a lesser extent, second lien secured debt, subordinated debt and equity investments.

On September 16, 2025, the Company entered into an investment advisory management agreement (the "Investment Management Agreement") with PennantPark Investment Advisers, LLC ("PPIA").

The Company entered into an administration agreement with State Street Bank and Trust Company ("State Street"), a Massachusetts trust company. Upon the Company's election to be regulated as a BDC, the Company will enter into an administration agreement (the "Administration Agreement") with PennantPark Investment Administration, LLC (the "Administrator") to serve as the Company's administrator.

PennantPark Private Income Fund SPV, LLC ("SPV"), is a wholly-owned financing subsidiary organized in Delaware as a limited liability company on August 26, 2025. The Company formed the SPV in order to establish the Credit Facility. See Note 6. Debt.

PPIF Investment Holdings LLC ("Subsidiary"), is a wholly-owned subsidiary organized in Delaware as a limited liability company on October 7, 2025. The Subsidiary will allow the Company to hold equity securities of certain portfolio companies treated as pass-through entities for U.S. federal income tax purposes while facilitating the Company's ability to qualify as a RIC under the Code.

From commencement of operations through September 30, 2025, the Company had no investment activity. On June 30, 2025, PennantPark Private Holdings, LP ("Private Holdings") purchased 400 shares of the Company's common stock, par value $0.001 per share, which represented all of the issued and outstanding shares of common stock, for an aggregate purchase price of $10,000. The shares were sold in reliance upon the available exemptions from registration requirements of Section 4(a)(2) of the Securities Act of 1933, as amended. On September 15, 2025, Private Holdings committed $25.0 million of capital to the Company, of which $11.1 million has been called.

The Company operates through a single operating and reporting segment with an investment objective to generate both current income and capital appreciation through debt and equity investments. The chief operating decision maker ("CODM") is comprised of the Company's Chief Executive Officer and Chief Financial Officer.

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PennantPark Private Income Fund and Subsidiaries

Notes to Consolidated Financial Statement (Continued)

September 30, 2025

The CODM assesses the performance and makes operating decisions of the Company on a consolidated basis primarily based on the Company's net increase (decrease) in net assets resulting from operations. As the Company's operations comprise of a single operating segment, the segment assets are reflected on the accompanying consolidated statement of assets and liabilities as "total assets".

**2. SIGNIFICANT ACCOUNTING POLICIES** 

The preparation of the Company's consolidated financial statement in conformity with U.S. generally accepted accounting principles ("GAAP"), requires management to make estimates and assumptions that affect the reported amount of the Company's assets and liabilities at the date of the consolidated financial statement and the reported amounts of income and expenses during the reported period. In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair presentation of consolidated financial statement have been included. Changes in the economic and regulatory environment, financial markets, the credit worthiness of the Company's portfolio companies and any other parameters used in determining these estimates and assumptions could cause actual results to differ from these estimates and assumptions. The Company eliminated intercompany balances and transactions. References to the Financial Accounting Standards Board's, or (the "FASB's"), Accounting Standards Codification, as amended (the "ASC"), serve as a single source of accounting literature. Subsequent events are evaluated and disclosed as appropriate for events occurring through the date the consolidated financial statement is issued.

The Company's consolidated financial statement is prepared in accordance with GAAP, consistent with ASC Topic 946, Financial Services – Investment Companies.

The Company's significant accounting policies consistently applied are as follows:

*(a) Income Taxes* 

The Company is classified as a partnership for U.S. federal income tax purposes and is generally not subject to U.S. federal income tax. Accordingly, no provision for U.S. income taxes have been made. Individual partners are responsible for reporting their share of the Partnership's income or loss on their own U.S. income tax returns.

*(b) Organization and Offering Costs* 

Organization costs consist of costs incurred to establish the Company and enable it legally to do business. Organization costs are expensed as incurred. Offering costs consist of costs incurred in connection with the offering of common shares of the Company. Offering costs are capitalized as a deferred charge and amortized to expense on a straight-line basis over 12 months.

Organizational expenses will include, without limitation, the cost of formation, including legal fees related to the creation and organization of the Company and its subsidiaries, its and their related documents of organization and the Company's election to be regulated as a BDC and the preparation of the registration statement.

Offering expenses will include, without limitation, expenses related to offerings, printing and other offering and marketing costs, including the fees of professional advisors, as well as the expenses of the Investment Adviser (as defined below) in negotiating and documenting other arrangements with the initial investors in the Company.

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PennantPark Private Income Fund and Subsidiaries

Notes to Consolidated Financial Statement (Continued)

September 30, 2025

On October 29, 2025, the Company entered into an Expense Holiday Agreement with the Investment Adviser pursuant to which the Investment Adviser agreed bear and pay the Company's organization and offering costs until the Company receives $300.0 million in gross proceeds from the sale of shares, excluding shares purchased by Private Holdings and by the Company's trustees and officers (the "Reimbursement Hurdle"). The Company has no obligation to reimburse the Investment Adviser for such advanced costs until the Company reaches the Reimbursement Hurdle. Once the Company has met the Reimbursement Hurdle it will record organization and offering costs up to an amount of $1.5 million (the "Organization and Offering Cap"). Organization and offering costs in excess of the Organization and Offering Cap will be borne by the Investment Adviser. The Company will not reimburse the Investment Adviser for any recorded organization and offering costs until the later of the second anniversary of the Expense Holiday Agreement (the "Second Anniversary Date") or the Company meeting the Reimbursement Hurdle. The Expense Holiday Agreement was effective as of September 16, 2025. See Note 7. Commitments and Contingencies for details of the Company's Expense Holiday Agreement.

*(c) Consolidation* 

As permitted under Regulation S-X and as explained by ASC paragraph 946-810-45-3, the Company will generally not consolidate its investment in a company other than an investment company wholly-owned subsidiary or a controlled operating company whose business consists of providing services to us. Accordingly, the Company has consolidated the results of the SPV in our consolidated financial statement. As of September 30, 2025, the SPV had not commenced operations, accordingly there were no operational results to consolidate in this consolidated financial statement. As of September 30, 2025, the Subsidiary was not organized, accordingly, there were no operational results to consolidate in this consolidated financial statement.

*(d) Other Related Party Transactions* 

The Company, the Investment Adviser and certain other affiliates have been granted an order for exemptive relief by the SEC for the Company to co-invest with other funds managed by the Investment Adviser. If we co-invest with other affiliated funds, our Investment Adviser would not receive compensation except to the extent permitted by the exemptive order and applicable law, including the limitations set forth in Section 57(k) of the 1940 Act.

**3. AGREEMENTS AND RELATED PARTY TRANSACTIONS** 

&nbsp;&nbsp;&nbsp;&nbsp;*(a) Investment Management Agreement* 

On October 17, 2025, the Company's board of trustees, including a majority of the trustees who are not interested persons of the Company, approved the assignment of the Investment Management Agreement to PennantPark Private Income Fund Advisers LLC, a wholly-owned subsidiary of PPIA ("PPIFA" and together with PPIA the "Investment Adviser"). Upon PPIFA becoming the Investment Adviser, the Investment Management Agreement was amended and restated on substantially identical terms. Under the Investment Management Agreement, the Investment Adviser, subject to the overall supervision of the Company's board of trustees, manages the day-to-day operations of and provides investment advisory services to the Company. For providing these services, the Investment Adviser receives a fee from the Company, consisting of two components – a base management fee and an incentive fee.

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PennantPark Private Income Fund and Subsidiaries

Notes to Consolidated Financial Statement (Continued)

September 30, 2025

*Base Management Fee* 

The base management fee ("Base Management Fee") will be calculated at an annual rate of 1.25% of the Company's average adjusted net assets and is payable quarterly in arrears. For purposes of the Investment Management Agreement, "adjusted net assets" means the Company's total assets less liabilities determined on a consolidated basis in accordance with GAAP. The Base Management Fee will be calculated based on the average adjusted value of the Company's net assets at the end of the two most recently completed calendar quarters and appropriately adjusted for any share issuances or repurchases during the current calendar quarter. For the period ended September 30, 2025, the Company recorded no Base Management Fee expense.

*Incentive Fee* 

The incentive fee has two parts, as follows: The first part is calculated and payable quarterly in arrears based on the Company's Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter. For this purpose, "Pre-Incentive Fee Net Investment Income" means interest income, dividend income and any other income, including any other fees (other than fees for providing managerial assistance) such as amendment, commitment, origination, prepayment penalties, structuring, diligence and consulting fees or other fees received from portfolio companies, accrued during the calendar quarter, minus the Company's operating expenses for the quarter (including the base management fee, any expenses payable under the Administration Agreement, and any interest expense or amendment fees under any credit facility and distribution paid on any issued and outstanding preferred shares, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as original issue discount, or OID, debt instruments with payment-in-kind, or PIK, interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, computed net of all realized capital losses or unrealized capital appreciation or depreciation. Pre-Incentive Fee Net Investment Income, expressed as a percentage of the value of the Company's net assets at the end of the immediately preceding calendar quarter, is compared to the hurdle rate of one and one-quarter-of-one percent (1.25%) per quarter (five percent (5.00%) annualized). The Company pays the Investment Adviser an incentive fee with respect to the Company's Pre-Incentive Fee Net Investment Income in each calendar quarter as follows: (1) no incentive fee in any calendar quarter in which the Company's Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate of one and one-quarter-of-one percent (1.25%) per quarter (five percent (5.00%) annualized), (2) 100% of the Company's Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than 1.4285% in any calendar quarter (5.7140% annualized) (the Company refers to this portion of the Company's Pre-Incentive Fee Net Investment Income (which exceeds the hurdle but is less than 1.4285%) as the "catch- up," which is meant to provide the Company's Investment Adviser with 12.50% of the Company's Pre-Incentive Fee Net Investment Income, as if a hurdle did not apply, if this net investment income exceeds 1.4285% in any calendar quarter), and (3) 12.50% of the amount of the Company's Pre-Incentive Fee Net Investment Income, if any, that exceeds 1.4285% in any calendar quarter. These calculations are pro-rated for any share issuances or repurchases during the relevant quarter, if applicable.

The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Management Agreement, as of the termination date) and equals 12.50% of the Company's realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. For the period ended September 30, 2025, the Company recorded no incentive fee expense.

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PennantPark Private Income Fund and Subsidiaries

Notes to Consolidated Financial Statement (Continued)

September 30, 2025

&nbsp;&nbsp;&nbsp;&nbsp;*(b) Management Fee Waiver Agreement* 

The Company has entered into a management fee waiver agreement with the Investment Adviser (the "Management Fee Waiver"). The Investment Adviser has agreed to fully waive Base Management Fees and Incentive Fees payable to the Investment Adviser under the Investment Management Agreement through the earlier of (x) the Company's election to be regulated as a business development company under the 1940 Act and (y) March 16, 2026. The Investment Adviser may amend or terminate the Management Fee Waiver, subject to approval of the Company's board of trustees.

The Base Management Fees and Incentive Fees payable by the Company after the termination of the Management Fee Waiver will be calculated as discussed above. The fees waived pursuant to the Management Fee Waiver are not subject to recoupment by the Investment Adviser.

&nbsp;&nbsp;&nbsp;&nbsp;*(c) Administration Agreement* 

On October 17, 2025, the Company's board of trustees, including a majority of the trustees who are not interested persons of the Company, approved the Administration Agreement between the Company and the Administrator. Under the Administration Agreement, the Administrator provides administrative services and office facilities to the Company. For providing these services, facilities and personnel, the Company has agreed to reimburse the Administrator for its allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including rent, technology systems, insurance and the Company's allocable portion of the cost of compensation and related expenses of the Company's Chief Compliance Officer, Chief Financial Officer, Corporate Counsel and their respective staffs.

Under the Administration Agreement, the Administrator may be reimbursed by the Company for the costs and expenses to be borne by the Company set forth above to include the costs and expenses allocable with respect to the provision of in-house legal, tax, or other professional advice and/or services to the Company, including performing due diligence on its prospective portfolio companies as deemed appropriate by the Administrator, where such in-house personnel perform services that would be paid by the Company if outside service providers provided the same services, subject to the Board's oversight.

Pursuant to a sub-administration services agreement between the Administrator and State Street (the "Sub-Administration Agreement"), State Street serves as the sub-administrator of the Company and is paid by the Administrator.

&nbsp;&nbsp;&nbsp;&nbsp;*(d) Expense Limitation and Reimbursement Agreement* 

On October 29, 2025, the Company entered into an Expense Limitation and Reimbursement Agreement, (the "Expense Limitation Agreement") with the Investment Adviser. Pursuant to the Expense Limitation Agreement, the Investment Adviser has agreed to reimburse expenses of the Company so that certain of the Company's expenses (the "Specified Expenses") will not exceed an annual rate of 1.25% of the of the Company's net assets (the "Expense Limitation").

Specified Expenses is defined to include all expenses incurred in the business of the Company, including organizational costs, with the exception of (i) the Base Management fee, (ii) the incentive fee, (iii) brokerage costs, (iv) dividend/interest payments (including any dividend payments, interest expenses, commitment fees, or other expenses related to any leverage incurred by the Company), (v) taxes, (vi) extraordinary expenses (as determined in the sole discretion of the Investment Adviser), and (vii) the indirect costs of investing in other investment companies including private funds that rely on Section 3(c)(1) or 3(c)(7) of the Investment Company Act (to the extent applicable).

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PennantPark Private Income Fund and Subsidiaries

Notes to Consolidated Financial Statement (Continued)

September 30, 2025

The Company has agreed to repay the amount reimbursed by the Investment Adviser when and if requested by the Investment Adviser, as promptly as possible, on a quarterly basis, but only if and to the extent that such reimbursement does not cause the Fund's Specified Expenses plus recoupment to exceed an annual rate of 1.25% of the value of the Company's net assets (or, if a lower expense limit is in effect, such lower limit) within the 36-month period after the Investment Adviser bears the expense ("Excess Expenses"). Unless renewed by the Investment Adviser, the Expense Limitation Agreement will terminate on September 30, 2026.

**4. CASH AND CASH EQUIVALENTS** 

Cash and cash equivalents represent cash invested in overnight money market funds. These temporary investments with original maturities of 90 days or less are deemed cash equivalents. Cash deposited at financial institutions is insured by the Federal Deposit Insurance Corporation ("FDIC"), up to specified limits. At times, such balances may exceed FDIC insured amounts. As of September 30, 2025, cash and cash equivalents consisted of money market funds and non-money market in the amounts of $0 and $20.0 million, respectively. The Company believes it is not exposed to any significant risk of loss on its cash and cash equivalents.

**5. SHAREHOLDERS' CAPITAL** 

As of September 30, 2025, the Company has received capital commitments of $45.0 million, of which $20.0 million has been called and $25.0 million remains unfunded. Profits and losses of the Company are allocated among all shareholders pro rata based on the number of Shares held by each shareholder.

**6. DEBT** 

On October 17, 2025, the Company's board of trustees approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the Consolidated Appropriations Act of 2018 (which includes the Small Business Credit Availability Act, or SBCAA). As a result, the asset coverage requirement applicable to the Company for senior securities was reduced from 200% (i.e., $1 of debt outstanding for each $1 of equity) to 150% (i.e., $2 of debt outstanding for each $1 of equity), subject to compliance with certain disclosure requirements. As of September 30, 2025, the Company had no outstanding debt and its corresponding asset coverage ratio, as computed in accordance with the 1940 Act, was 0%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a) Credit Facility* 

In October 2025, the SPV entered into a $65.0 million senior secured revolving credit facility with CIBC Bank USA (the "Credit Facility"). Pursuant to the terms of the Credit Facility the revolving period ends October 2028, the maturity date is October 2030 and borrowings are secured by all of the assets held by the SPV.

From October 2025 through October 2026, the Credit Facility bears interest at SOFR (or an alternative risk-free floating interest rate index) plus 187.5 basis points. After October 2026 through the revolving period, the applicable margin ranges from 187.5 to 200 basis points, depending on utilization. Following the revolving period, the applicable margin resets to 212.5 basis points for the remaining two years, maturing in October 2030. The Credit Facility is secured by all assets of the SPV. Both the Company and the SPV have made customary representations and warranties and are required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities.

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PennantPark Private Income Fund and Subsidiaries

Notes to Consolidated Financial Statement (Continued)

September 30, 2025

The Credit Facility contains covenants, including, but not limited to, restrictions of loan size, industry requirements, average life of loans, geographic and individual portfolio concentrations, minimum portfolio yield and loan payment frequency. Additionally, the Credit Facility requires the maintenance income ratio as well as restrictions on certain payments and issuance of debt.

**7. COMMITMENTS AND CONTINGENCIES** 

From time to time, the Company, the Investment Adviser or the Administrator may be a party to legal proceedings, including proceedings relating to the enforcement of the Company's rights under contracts with the Company's portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, the Company does not expect that these proceedings will have a material effect upon the Company's financial condition or results of operations.

Organizational and offering costs of the Company paid by the Investment Adviser will be subject to reimbursement by the Investment Adviser when such reimbursement is probable. The reimbursement is limited to the Organization and Offering Cap under the Expense Holiday Agreement. As the Company has not yet met the Reimbursement Hurdle, no such costs have been recorded. The total organization and offering costs incurred through September 30, 2025 were $1.3 million.

**8. SUBSEQUENT EVENTS** 

Subsequent events have been evaluated through the date the consolidated financial statement was issued. The following events occurred:

On October 30, 2025, the Company received the shareholders' remaining $25.0 million unfunded capital commitment. The capital contributions will be used primarily to fund portfolio investments.

On October 31, 2025, the Company elected to be regulated as BDC.

The Company elected to be classified as a corporation for U.S. federal income tax purposes as of November 1, 2025 in connection with its intended election to be treated as a RIC under the Code.

Subsequent to September 30, 2025, the Company made new investments totaling $49.4 million in senior secured loans across several portfolio companies with corresponding unfunded commitments of $8.2 million.

Subsequent to September 30, 2025, the SPV had $0 borrowings outstanding under the Credit Facility and $34.3 million of available borrowing capacity subject to leverage and borrowing base limitations.

## Exhibit 10.12

**Exhibit 10.12** 

**EXECUTION VERSION** 

**U.S. $65,000,000** 

**LOAN AND SECURITY AGREEMENT** 

by and among

**PENNANTPARK INVESTMENT ADVISERS, LLC,** 

as the Collateral Manager

**PENNANTPARK PRIVATE INCOME FUND SPV LLC,** 

as the Borrower

**PENNANTPARK PRIVATE INCOME FUND,** 

as the Transferor

**EACH OF THE LENDERS FROM TIME TO TIME PARTY HERETO,** 

as the Lenders

**CIBC BANK USA,** 

as the Administrative Agent

and

**WESTERN ALLIANCE TRUST COMPANY, N.A.,** 

as the Collateral Agent and the Custodian

Dated as of October 1, 2025

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**TABLE OF CONTENTS**

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| | | |
|:---|:---|:---|
|  |  | Page |
| ARTICLE I<br>DEFINITIONS | ARTICLE I<br>DEFINITIONS | ARTICLE I<br>DEFINITIONS |
|  Section 1.1 | Certain Defined Terms | 2 |
|  Section 1.2 | Other Terms | 66 |
|  Section 1.3 | Computation of Time Periods | 66 |
|  Section 1.4 | Interpretation | 66 |
|  Section 1.5 | Calculation of Borrowing Base | 68 |
|  Section 1.6 | Rates | 68 |
|  Section 1.7 | Exchange Rates; Currency Equivalents | 68 |
| ARTICLE II<br>THE NOTES | ARTICLE II<br>THE NOTES | ARTICLE II<br>THE NOTES |
|  Section 2.1 | The Notes | 69 |
|  Section 2.2 | Procedures for Advances by the Lenders | 69 |
|  Section 2.3 | Principal Repayments | 71 |
|  Section 2.4 | Determination of Interest | 73 |
|  Section 2.5 | Notations on Notes | 73 |
|  Section 2.6 | Reduction of Borrowing Base Deficiency | 73 |
|  Section 2.7 | Settlement Procedures | 74 |
|  Section 2.8 | Alternate Settlement Procedures | 76 |
|  Section 2.9 | Collections and Allocations | 78 |
|  Section 2.10 | Payments, Computations, Etc | 80 |
|  Section 2.11 | Fees | 81 |
|  Section 2.12 | Increased Costs; Capital Adequacy; Illegality | 81 |
|  Section 2.13 | Taxes | 84 |
|  Section 2.14 | Reinvestment; Discretionary Sales, Substitutions and Repurchases of Loans | 88 |
|  Section 2.15 | Assignment of the Sale Agreement | 93 |
|  Section 2.16 | Defaulting Lenders | 93 |
|  Section 2.17 | Mitigation Obligations; Replacement of Lenders | 94 |
|  Section 2.18 | Increase of Commitment; Facility Amount | 95 |
|  Section 2.19 | Interest Period Elections | 96 |
| ARTICLE III<br>CONDITIONS TO THE CLOSING DATE AND ADVANCES | ARTICLE III<br>CONDITIONS TO THE CLOSING DATE AND ADVANCES | ARTICLE III<br>CONDITIONS TO THE CLOSING DATE AND ADVANCES |
|  Section 3.1 | Conditions to Closing Date | 96 |
|  Section 3.2 | Conditions Precedent to All Advances and Acquisitions of Loans | 99 |
|  Section 3.3 | Custodianship; Transfer of Loans and Permitted Investments | 101 |

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|:---|:---|:---|
|  |  | Page |
| ARTICLE IV<br>REPRESENTATIONS AND WARRANTIES | ARTICLE IV<br>REPRESENTATIONS AND WARRANTIES | ARTICLE IV<br>REPRESENTATIONS AND WARRANTIES |
|  Section 4.1 | Representations and Warranties of the Borrower | 102 |
|  Section 4.2 | Representations and Warranties of the Borrower Relating to the Agreement and the Collateral | 112 |
|  Section 4.3 | Representations and Warranties of the Collateral Manager | 112 |
|  Section 4.4 | Representations and Warranties of the Collateral Agent and Custodian | 115 |
| ARTICLE V<br>GENERAL COVENANTS | ARTICLE V<br>GENERAL COVENANTS | ARTICLE V<br>GENERAL COVENANTS |
|  Section 5.1 | Affirmative Covenants of the Borrower | 116 |
|  Section 5.2 | Negative Covenants of the Borrower | 125 |
|  Section 5.3 | Affirmative Covenants of the Collateral Manager | 127 |
|  Section 5.4 | Negative Covenants of the Collateral Manager | 129 |
|  Section 5.5 | Affirmative Covenants of the Collateral Agent and Custodian | 130 |
|  Section 5.6 | Negative Covenants of the Collateral Agent and Custodian | 130 |
| ARTICLE VI<br>COLLATERAL MANAGEMENT | ARTICLE VI<br>COLLATERAL MANAGEMENT | ARTICLE VI<br>COLLATERAL MANAGEMENT |
|  Section 6.1 | Designation of the Collateral Manager | 130 |
|  Section 6.2 | Duties of the Collateral Manager | 131 |
|  Section 6.3 | Authorization of the Collateral Manager | 133 |
|  Section 6.4 | Collection of Payments; Accounts | 133 |
|  Section 6.5 | Realization Upon Defaulted or Delinquent Loans | 135 |
|  Section 6.6 | Collateral Manager Compensation | 135 |
|  Section 6.7 | Payment of Certain Expenses by the Collateral Manager | 136 |
|  Section 6.8 | Reports | 136 |
|  Section 6.9 | Annual Statement as to Compliance | 137 |
|  Section 6.10 | The Collateral Manager Not to Resign | 137 |
|  Section 6.11 | Collateral Manager Termination Events | 137 |
| ARTICLE VII<br>THE COLLATERAL AGENT | ARTICLE VII<br>THE COLLATERAL AGENT | ARTICLE VII<br>THE COLLATERAL AGENT |
|  Section 7.1 | Designation of Collateral Agent | 138 |
|  Section 7.2 | Duties of Collateral Agent | 139 |
|  Section 7.3 | Merger or Consolidation | 140 |
|  Section 7.4 | Collateral Agent Compensation; Reimbursement of Expenses | 141 |
|  Section 7.5 | Collateral Agent Removal | 141 |

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|  |  | Page |
|  Section 7.6 | Limitation on Liability | 141 |
|  Section 7.7 | Resignation of the Collateral Agent | 145 |
|  Section 7.8 | Access to Certain Documentation and Information Regarding the Collateral; Audits | 146 |
| ARTICLE VIII<br>SECURITY INTEREST | ARTICLE VIII<br>SECURITY INTEREST | ARTICLE VIII<br>SECURITY INTEREST |
|  Section 8.1 | Grant of Security Interest | 147 |
|  Section 8.2 | Release of Lien on Collateral | 148 |
|  Section 8.3 | Remedies | 149 |
|  Section 8.4 | Waiver of Certain Laws | 149 |
|  Section 8.5 | Power of Attorney | 149 |
| ARTICLE IX<br>EVENTS OF DEFAULT | ARTICLE IX<br>EVENTS OF DEFAULT | ARTICLE IX<br>EVENTS OF DEFAULT |
|  Section 9.1 | Events of Default | 150 |
|  Section 9.2 | Remedies | 152 |
| ARTICLE X<br>INDEMNIFICATION | ARTICLE X<br>INDEMNIFICATION | ARTICLE X<br>INDEMNIFICATION |
|  Section 10.1 | Indemnities by the Borrower | 154 |
|  Section 10.2 | Indemnities by the Collateral Manager | 155 |
|  Section 10.3 | Taxes | 155 |
| ARTICLE XI<br>THE ADMINISTRATIVE AGENT | ARTICLE XI<br>THE ADMINISTRATIVE AGENT | ARTICLE XI<br>THE ADMINISTRATIVE AGENT |
|  Section 11.1 | Appointment | 156 |
|  Section 11.2 | Standard of Care; Exculpatory Provisions | 156 |
|  Section 11.3 | The Administrative Agent's Reliance, Etc | 158 |
|  Section 11.4 | Credit Decision with Respect to the Administrative Agent | 159 |
|  Section 11.5 | Indemnification of the Administrative Agent | 159 |
|  Section 11.6 | The Successor Administrative Agent | 160 |
|  Section 11.7 | Delegation of Duties | 160 |
|  Section 11.8 | Payments by the Administrative Agent | 160 |
|  Section 11.9 | Collateral Matters | 160 |
|  Section 11.10 | Erroneous Payments | 161 |

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|  |  | Page |
| ARTICLE XII<br>MISCELLANEOUS | ARTICLE XII<br>MISCELLANEOUS | ARTICLE XII<br>MISCELLANEOUS |
|  Section 12.1 | Amendments and Waivers | 163 |
|  Section 12.2 | Notices, Etc | 165 |
|  Section 12.3 | Ratable Payments | 167 |
|  Section 12.4 | No Waiver; Remedies | 167 |
|  Section 12.5 | Binding Effect; Benefit of Agreement | 167 |
|  Section 12.6 | Term of this Agreement | 168 |
|  Section 12.7 | Governing Law; Jury Waiver | 168 |
|  Section 12.8 | Consent to Jurisdiction; Waivers | 168 |
|  Section 12.9 | Costs and Expenses | 169 |
|  Section 12.10 | No Proceedings | 169 |
|  Section 12.11 | Recourse Against Certain Parties | 170 |
|  Section 12.12 | Protection of Right, Title and Interest in the Collateral; Further Action Evidencing Advances | 171 |
|  Section 12.13 | Confidentiality | 171 |
|  Section 12.14 | Execution in Counterparts; Severability; Integration | 173 |
|  Section 12.15 | Waiver of Setoff | 174 |
|  Section 12.16 | Assignments by the Lenders | 174 |
|  Section 12.17 | Heading and Exhibits | 177 |
|  Section 12.18 | Benchmark Replacement | 177 |
|  Section 12.19 | Divisions | 178 |
|  Section 12.20 | Judgment Currency | 179 |
|  Section 12.21 | Recognition of the U.S. Special Resolution Regimes | 179 |
|  Section 12.22 | USA PATRIOT ACT | 180 |
|  Section 12.23 | Limited Recourse with Respect to the Transferor | 180 |
| ARTICLE XIII<br>TAX CONSIDERATIONS | ARTICLE XIII<br>TAX CONSIDERATIONS | ARTICLE XIII<br>TAX CONSIDERATIONS |
|  Section 13.1 | Acknowledgement of Parties | 180 |
| ARTICLE XIV<br>CUSTODIAN | ARTICLE XIV<br>CUSTODIAN | ARTICLE XIV<br>CUSTODIAN |
|  Section 14.1 | Designation of Custodian | 181 |
|  Section 14.2 | Duties of Custodian | 181 |
|  Section 14.3 | Merger or Consolidation | 183 |
|  Section 14.4 | Custodian Compensation | 184 |
|  Section 14.5 | Custodian Removal | 184 |
|  Section 14.6 | Limitation on Liability | 184 |
|  Section 14.7 | Custodian Resignation | 186 |

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-iv-

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**TABLE OF CONTENTS**

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| | | | |
|:---|:---|:---|:---|
|  |  | Page | Page |
|  Section 14.8 | Release of Documents |  | 186 |
|  Section 14.9 | Return of Required Loan Documents |  | 187 |
|  Section 14.10 | Access to Certain Documentation and Information Regarding the Collateral Portfolio |  | 187 |
|  Section 14.11 | Custodian as Agent |  | 188 |
|  Section 14.12 | Indemnification |  | 188 |

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-v-

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**TABLE OF CONTENTS**

**<u>EXHIBITS</u>**

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| | |
|:---|:---|
| EXHIBIT A-1 | Form of Funding Notice |
| EXHIBIT A-2 | Form of Repayment Notice |
| EXHIBIT A-3 | Form of Reinvestment Notice |
| EXHIBIT A-4 | Form of Borrowing Base Certificate |
| EXHIBIT A-5 | Form of Incumbency Certificate |
| EXHIBIT A-6 | Form of Payment Date Report |
| EXHIBIT A-7 | Form of Static Pool Analysis |
| EXHIBIT A-8 | Form of Notice of Continuation |
| EXHIBIT A-9 | Form of Commitment Reduction Notice |
| EXHIBIT B | Form of Promissory Note |
| EXHIBIT C | Form of Officer's Certificate as to Solvency |
| EXHIBIT D | Form of Officer's Closing Certificate |
| EXHIBIT E | Form of Release of Underlying Instruments |
| EXHIBIT F | Form of Compliance Certificate |
| EXHIBIT G | Form of Transferee Letter |
| EXHIBIT H | Form of Joinder Supplement |
| EXHIBIT I-1 | U.S. Tax Compliance Certificate – For Foreign Lenders that are not |
|  | Partnerships for U.S. Federal Income Tax Purposes |
| EXHIBIT I-2 | U.S. Tax Compliance Certificate – For Foreign Participants that are not |
|  | Partnerships For U.S. Federal Income Tax Purposes |
| EXHIBIT I-3 | U.S. Tax Compliance Certificate – For Foreign Participants that are |
|  | Partnerships For U.S. Federal Income Tax Purposes |
| EXHIBIT I-4 | U.S. Tax Compliance Certificate – For Foreign Lenders that are |
|  | Partnerships For U.S. Federal Income Tax Purposes |
| EXHIBIT J | Form of Custodian Certification |
| EXHIBIT K | Form of Assignment and Assumption |
| EXHIBIT L | Form of Annual Statement as to Compliance |
| EXHIBIT M | Form of Loan Checklist |

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**<u>SCHEDULES</u>**

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| | |
|:---|:---|
| SCHEDULE I | Loan Party Names |
| SCHEDULE II | Loan List |
| SCHEDULE III | Agreed-Upon Procedures |
| SCHEDULE IV | S&P Industry Classifications |
| SCHEDULE V | Approved Broker Dealers |

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**<u>ANNEXES</u>**

ANNEX A Addresses for Notices <br> ANNEX B Commitments

-vi-

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**<u>LOAN AND SECURITY AGREEMENT</u>**

**THIS LOAN AND SECURITY AGREEMENT** (as amended, modified, waived, supplemented, restated or replaced from time to time, this "<u>Agreement</u>") is made as of October 1, 2025, by and among:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) **PENNANTPARK INVESTMENT ADVISERS, LLC**, a Delaware limited liability company, as the Collateral Manager (as hereinafter defined);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) **PENNANTPARK PRIVATE INCOME FUND SPV LLC**, a Delaware limited liability company**,** as the borrower (the "<u>Borrower</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) **PENNANTPARK PRIVATE INCOME FUND**, as the Transferor (as hereinafter defined);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) **EACH OF THE LENDERS FROM TIME TO TIME PARTY HERETO** (together with its respective successors and assigns in such capacity, each a "<u>Lender</u>", collectively, the "<u>Lenders</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) **CIBC BANK USA** (together with its successors and assigns, "<u>CIBC</u>"), as the administrative agent hereunder (together with its successors and assigns in such capacity, the "<u>Administrative Agent</u>"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) **WESTERN ALLIANCE TRUST COMPANY, N.A.**, not in its individual capacity but as the collateral agent (together with its successors and assigns in such capacity, the "<u>Collateral Agent</u>") and the Custodian (together with its successors and assigns in such capacity, the "<u>Custodian</u>").

RECITALS

**WHEREAS**, the Borrower has requested that the Lenders extend credit hereunder by providing Commitments and making Advances from time to time for the purchase of certain Eligible Loans from the Transferor pursuant to the Sale Agreement and for the general business purposes of the Borrower;

**WHEREAS**, the Borrower has requested that the Collateral Manager act as the collateral manager of the Borrower and manage the Collateral; and

**WHEREAS**, the Lenders are willing to extend such credit to the Borrower on the terms and subject to the conditions set forth herein;

**NOW, THEREFORE**, based upon the foregoing Recitals, the mutual premises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

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**ARTICLE I** 

**DEFINITIONS** 

Section 1.1 <u>Certain Defined Terms</u>.

Certain capitalized terms used throughout this Agreement are defined in this <u>Section</u> <u>1.1</u>. As used in this Agreement and its schedules, exhibits and other attachments, unless the context requires a different meaning, the following terms shall have the following meanings:

"<u>1940 Act</u>": The United States Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder.

"<u>Accepted EBITDA Adjustment</u>": With respect to any calculation of EBITDA for any Loan, any of the following add-backs or adjustments to "reported EBITDA" or other term meaning non-adjusted EBITDA: (1) management fees, (2) board fees and expenses, (3) transaction advisory fees, or other one-time transaction fees or costs with the contemplated transaction, (4) adjustments to include full year EBITDA of acquired companies in an Obligor's trailing twelve month EBITDA and prior acquisition transaction and integrations costs, (5) financing fees including prepayment penalties, and (6) full year impact of payroll costs savings or other permanent hard cost savings where the implementation occurred prior to closing or at closing.

"<u>Account</u>": Any of the Collateral Account, the Principal Collection Account, the Interest Collection Account, the Unfunded Exposure Account, each Eligible Currency Account and any sub-accounts thereof deemed appropriate or necessary by the Administrative Agent or the Collateral Agent for convenience in administering such accounts.

"<u>Account Control Agreement</u>": The Account Control Agreement, dated as of the date hereof, among the Borrower, as the pledgor, the Administrative Agent, the Collateral Agent and the Securities Intermediary, as the same may be amended, modified, waived, supplemented or restated from time to time.

"<u>Accrual Period</u>": With respect to (a) the first Payment Date, the period from and including the Closing Date to but excluding the Determination Date preceding the first Payment Date, and (b) any subsequent Payment Date, the period from and including the Determination Date preceding the previous Payment Date to but excluding the Determination Date preceding the current Payment Date (or, in the case of the final Payment Date, to and including such Payment Date).

"<u>Adjusted Borrowing Value</u>": For any Loan, for any date of determination, an amount equal to the Assigned Value of such Loan at such time *multiplied by* the Outstanding Balance of such Loan.

"<u>Adjusted Daily Simple RFR</u>": For any day (an "<u>RFR Rate Day</u>"), a rate per annum equal to, for any Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Sterling, the greater of (i) the sum of (A) SONIA for the day (such day, a "<u>Sterling RFR Determination Day</u>") that is five (5) RFR Business Days prior to (I) if such RFR Rate Day is an RFR Business Day, such RFR Rate Day or (II) if such RFR Rate Day is not an RFR Business Day, the RFR Business Day immediately preceding such RFR Rate Day, in each case, as such SONIA is published by the SONIA Administrator on the SONIA Administrator's Website; <u>provided</u> that if by 5:00 p.m. (London time) on the second (2nd) RFR Business Day immediately following any Sterling RFR Determination Day, SONIA in respect of such Sterling RFR Determination Day has not been published on the SONIA Administrator's Website and a Benchmark Replacement Date with respect to the Adjusted Daily Simple RFR for Sterling has not occurred, then SONIA for such Sterling RFR Determination Day will be SONIA as published in respect of the first preceding RFR Business Day for which such SONIA was published on the SONIA Administrator's Website; <u>provided</u>, <u>further</u>, that SONIA as determined pursuant to this proviso shall be utilized for purposes of calculation of Adjusted Daily Simple RFR for no more than three (3) consecutive RFR Rate Days and (B) the SONIA Adjustment and (ii) the Floor; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Swiss Francs, the greater of (i) the sum of (A) SARON for the day (such day, a "<u>Swiss Francs RFR Determination Day</u>") that is five (5) RFR Business Days prior to (I) if such RFR Rate Day is an RFR Business Day, such RFR Rate Day or (II) if such RFR Rate Day is not an RFR Business Day, the RFR Business Day immediately preceding such RFR Rate Day, in each case, as such SARON is published by the SARON Administrator on the SARON Administrator's Website; <u>provided</u> that if by 5:00 p.m. (Zurich time) on the second (2nd) RFR Business Day immediately following any Swiss Francs RFR Determination Day, SARON in respect of such Swiss Francs RFR Determination Day has not been published on the SARON Administrator's Website and a Benchmark Replacement Date with respect to the Adjusted Daily Simple RFR for Swiss Francs has not occurred, then SARON for such Swiss Francs RFR Determination Day will be SARON as published in respect of the first preceding RFR Business Day for which such SARON was published on the SARON Administrator's Website; <u>provided</u>, <u>further</u>, that SARON as determined pursuant to this proviso shall be utilized for purposes of calculation of Adjusted Daily Simple RFR for no more than three (3) consecutive RFR Rate Days and (B) the SARON Adjustment and (ii) the Floor.

Any change in Adjusted Daily Simple RFR due to a change in the applicable RFR shall be effective from and including the effective date of such change in the RFR without notice to the Borrower.

"<u>Adjusted Eurocurrency Rate</u>": As to any Advance denominated in any applicable Eligible Foreign Currency (which, as of the date hereof, shall mean Australian Dollars and Euros), for any Interest Period, the rate per annum determined by the Administrative Agent to be equal to the quotient obtained by dividing: (a) the Eurocurrency Rate for such Advance for such Interest Period; by (b) one (1) minus the Eurocurrency Reserve Percentage for such Advance for such Interest Period; <u>provided</u> that if the Adjusted Eurocurrency Rate as so determined would ever be less than the Floor, then Adjusted Eurocurrency Rate shall be deemed to be the Floor.

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"<u>Adjusted Term CORRA</u>": For purposes of any calculation, the rate per annum equal to (a) Term CORRA for such calculation plus (b) the applicable Term CORRA Adjustment; <u>provided</u> that if Adjusted Term CORRA as so determined would ever be less than the Floor, then Adjusted Term CORRA will be deemed to be the Floor.

"<u>Administrative Agent</u>": CIBC, in its capacity as the administrative agent for Lenders hereunder, together with its permitted successors and assigns, including any successor appointed pursuant to <u>Section</u> <u>11.6</u>.

"<u>Administrative Expenses</u>": All amounts (including indemnification payments but excluding principal payments, interest payments and Non-Usage Fees) due or accrued and payable by the Borrower to any Person pursuant to any Transaction Document, including, but not limited to, any third party service provider to the Borrower, any Lender, the Collateral Agent, the Custodian, or the Securities Intermediary, and to any accountants, agents and counsel of any of the foregoing for their fees and expenses or any other Person in respect of any other fees, expenses, or other payments (including indemnification payments).

"<u>Administrative Questionnaire</u>": An administrative questionnaire in a form supplied by the Administrative Agent.

"<u>Advance</u>": Each funding by the Lenders hereunder (including each Loan Advance and each advance made for the purpose of funding the Unfunded Exposure Account pursuant to <u>Section</u> <u>2.2(e))</u>. The application of amounts on deposit in the Unfunded Exposure Account to fund a Revolving Loan or Delayed Draw Loan in accordance with <u>Section</u> <u>2.9(e)</u> shall not be considered an "Advance".

"<u>Advance Date</u>": With respect to any Advance, the date on which such Advance is made.

"<u>Advance Rate</u>": As follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) with respect to any Broadly Syndicated Loans, eighty percent (80.00%);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) with respect to First Lien Loans for which the applicable Obligor has EBITDA greater than or equal to $50,000,000, seventy-five percent (75.00%);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) with respect to First Lien Loans for which the applicable Obligor has EBITDA less than $50,000,000, seventy percent (70.00%);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) with respect to Qualified First Lien Loans for which the applicable Obligor has EBITDA greater than or equal to $50,000,000, seventy percent (70.00%);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) with respect to Qualified First Lien Loans for which the applicable Obligor has EBITDA less than $50,000,000, sixty-five percent (65.00%);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) with respect to Unitranche Loans, sixty-five percent (65.00%);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) with respect to First Lien Last Out Loans, fifty percent (50.00%); and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) with respect to Second Lien Loans, twenty-five percent (25.00%).

"<u>Advances Outstanding</u>": On any day, the aggregate principal amount of all Advances outstanding on such day, after giving effect to all repayments of Advances and the making of new Advances on such day.

"<u>Affiliate</u>": With respect to a Person, means any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person, or is a director or officer of such Person; <u>provided</u> that for purposes of determining whether any Loan is an Eligible Loan or any Obligor is an Eligible Obligor, the term Affiliate shall not include any Affiliate relationship among Obligors which may exist solely as a result of direct or indirect ownership of, or control by, a common Financial Sponsor. For purposes of this definition, "control," when used with respect to any specified Person means the possession, directly or indirectly, of the power to vote 20.00% or more of the voting securities of such Person or to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

"<u>Aggregate Unfunded Exposure Amount</u>": On any date of determination, the sum of the Unfunded Exposure Amounts of all Loans included in the Collateral.

"<u>Aggregate Unfunded Exposure Equity Amount</u>": On any date of determination, the sum of the Unfunded Exposure Equity Amounts of all Loans included in the Collateral.

"<u>Agreed-Upon Procedures Report</u>": The meaning specified in <u>Section</u> <u>5.1(t)(v)</u>.

"<u>Agreement</u>": The meaning specified in the Preamble.

"<u>Anti-Corruption Laws</u>": The Applicable Law in any jurisdiction that relates to anti-bribery or anti-corruption laws, regulations or ordinances, including the U.S. Foreign Corrupt Practices Act of 1977, as amended; the U.K. Bribery Act 2010, as amended; and the Loi Sapin II pour la transparence de la vie économique (Sapin II).

"<u>Anti-Money Laundering Laws</u>": The Applicable Law in any jurisdiction that relates to money laundering or terrorism financing, any predicate crime to money laundering, or any financial record keeping and reporting requirements related thereto.

"<u>Applicable Law</u>": For any Person or property of such Person, all existing and future laws, rules, regulations, statutes, treaties, codes, ordinances, permits, certificates, orders and licenses of and interpretations by any Governmental Authority which are applicable to such Person or property, 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.

"<u>Applicable Spread</u>": A rate per annum equal to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) prior to the twelve (12) month anniversary of the Closing Date, 1.875%;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) on and after the twelve (12) month anniversary of the Closing Date but prior to the earlier to occur of the Revolving Period End Date and the Termination Date, (x) if the Utilization on any date of determination is greater than fifty percent (50.00%) of the Facility Amount, 1.875% and (y) if the Utilization on any date of determination is less than fifty percent (50.00%) of the Facility Amount, 2.00%; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) after the earlier to occur of the Revolving Period End Date and the Termination Date, 2.125%;

<u>provided</u> that if an Event of Default has occurred and is continuing, at the election of the Administrative Agent (which election may be made retroactively by the Administrative Agent to the applicable date on which such Event of Default occurred, and which election shall be deemed in the case of an Event of Default described in <u>Section</u> <u>9.1(f)</u> with respect to the Borrower), the rate otherwise in effect shall be increased by 2.00%.

"<u>Approved Broker Dealer</u>": Each qualified broker-dealer listed on <u>Schedule V</u> hereto or approved by the Administrative Agent in its absolute discretion.

"<u>Approved Fund</u>": Any fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

"<u>Assigned Value</u>": With respect to each Loan, as of any Measurement Date, the Assigned Value of such Loan shall be (x) in the case of a Broadly Syndicated Loan, its BSL Assigned Value and (y) in the case of each Loan other than a Broadly Syndicated Loan:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) prior to the occurrence of a Value Adjustment Event, (i) if such Loan does not meet the Assigned Value Grid Criteria, the value of such Loan as determined by the Administrative Agent in its sole discretion (and communicated to the Borrower prior to the related acquisition date) or (ii) if such Loan meets the Assigned Value Grid Criteria, the lower of (A) the Purchase Price and (B) the Assigned Value Grid Percentage;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) after the occurrence and during the continuance of a Value Adjustment Event with respect to such Loan, the value determined by the Administrative Agent in its sole discretion (which determination may be made on any date following the occurrence the related Value Adjustment Event); <u>provided</u> that with respect to a Value Adjustment Event pursuant to <u>clauses (e)</u>, <u>(f)</u>, or <u>(g)</u> of the definition of Value Adjustment Event, in each case, the Assigned Value of such Loan shall be zero; <u>provided</u>, <u>further</u>, if the Borrower reasonably believes the credit profile of such Loan or any related Obligor has increased, the Borrower may request that the Administrative Agent reevaluate the amended Assigned Value of any such Loan whose Assigned Value was decreased due to the occurrence of a Value Adjustment Event, and the Administrative Agent may, in its sole discretion, assign a new amended Assigned Value to such Loan. The amended Assigned Value of each Loan shall be communicated by the Administrative Agent to the Borrower, the Collateral Manager, the Collateral Agent, and the Lenders pursuant to an Assigned Value Notice; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) with respect to any Loan that is not an Eligible Loan, zero.

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"<u>Assigned Value Grid Percentage</u>": With respect to any Loan (other than a Broadly Syndicated Loan), the percentage determined by reference to the related Obligor Net Senior Leverage Ratio and such Obligor's EBITDA as specified in the following table:

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| | | | |
|:---|:---|:---|:---|
| **Obligor Net Senior Leverage Ratio** | **EBITDA** | **EBITDA** | **EBITDA** |
| **Obligor Net Senior Leverage Ratio** | **$10-20MM** | **$20-50MM** | **>$50MM** |
|  < 4.00x | 100.0% | 100.0% | 100.0% |
|  4.00x - 4.50x | 92.5% | 100.0% | 100.0% |
|  4.51x - 5.00x | 87.0% | 93.5% | 100.0% |
|  5.01x - 5.50x | 82.5% | 88.0% | 94.0% |
|  5.51x - 6.00x | 78.5% | 84.0% | 89.0% |
|  6.01x - 6.50x | N/A | 80.0% | 85.0% |

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<u>provided</u> that the Assigned Value Grid Percentage with respect any Unitranche Loan shall be determined based on the row of the table above that corresponds with such Loan's Obligor Net Senior Leverage Ratio less 0.5x.

"<u>Assigned Value Grid Criteria</u>": With respect to any Eligible Loan (other than a Broadly Syndicated Loan), as of the date upon which such Loan is acquired by the Borrower: (1) such Loan is a Unitranche Loan or a First Lien Loan; (2) its Obligor Net Senior Leverage Ratio is not greater than 6.5x; (3) its Obligor Cash Interest Coverage Ratio is equal to or greater than 1.5x; (4) Non-Accepted EBITDA Adjustments made in connection with the calculation of EBITDA for purposes hereunder shall not exceed thirty-five percent (35.0%) of such calculation of EBITDA; and (5) the related Obligor has EBITDA greater than or equal to $10,000,000.

"<u>Assigned Value Notice</u>": A written notice (which may be in the form of an e-mail) delivered by the Administrative Agent to the Borrower, the Collateral Manager, the Lenders and the Collateral Agent specifying the value of a Loan determined in accordance with the terms of the definition of "Assigned Value" in this <u>Section</u> <u>1.1</u>.

"<u>Assignment and Assumption</u>": An assignment and assumption agreement in the form of <u>Exhibit</u> <u>K</u> to this Agreement (appropriately completed) delivered in connection with an assignment by any Lender pursuant to <u>Section</u> <u>12.16</u>.

"<u>Australian Dollars</u>", "<u>A$</u>" and "<u>AUD</u>": The lawful currency of Australia.

"<u>Availability</u>": As of any Measurement Date, an amount equal to the least of (a) (i) the Facility Amount *minus* (ii) the amount of the Aggregate Unfunded Exposure Amount that is not then on deposit in the Unfunded Exposure Account *minus* (iii) the FX Reserve Amount; (b)(i) the product of (A) the Borrowing Base as of such date *multiplied* by (B) the Weighted Average Advance Rate *minus* (ii) the amount of the Aggregate Unfunded Exposure Equity Amount that is not then on deposit in the Unfunded Exposure Account, *minus* (iii) the FX Reserve Amount, *plus* (iv) the Dollar Equivalent of the aggregate amount of Principal Collections on deposit in the Principal Collection Account and each Eligible Currency Account as of such date; and (c)(i) the aggregate Adjusted Borrowing Value of all Eligible Loans as of such date, *minus* (ii) the Minimum Credit Enhancement Amount, *minus* (iii) the amount of the

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Aggregate Unfunded Exposure Equity Amount that is not then on deposit in the Unfunded Exposure Account, *minus* (iv) the FX Reserve Amount, *plus* (v) the Dollar Equivalent of the aggregate amount of Principal Collections on deposit in the Principal Collection Account and each Eligible Currency Account as of such date.

"<u>Available Funds</u>": With respect to any Payment Date, all amounts on deposit in the Collection Account.

"<u>Available Tenor</u>": As of any date of determination and with respect to the then current Benchmark for any Currency, as applicable, if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an interest period pursuant to this Agreement, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of "Interest Period" pursuant to <u>clause (d)</u> of <u>Section</u> <u>12.18</u>.

"<u>Bankruptcy Code</u>": The United States Bankruptcy Reform Act of 1978 (11 U.S.C. § 101, *et seq.*), as amended from time to time.

"<u>Base Rate</u>": On any date, a fluctuating per annum interest rate equal to the highest of (a) the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the "bank prime loan" rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent), (b) the Federal Funds Rate plus 0.50% and (c) zero.

"<u>Benchmark</u>": Initially, with respect to any:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to Dollars, Term SOFR for the Available Tenor comparable to such Interest Period set forth below that is selected by the Borrower with written notice to the Administrative Agent no less than three (3) U.S. Government Securities Business Days prior to such Interest Period: (i) Term SOFR for an Available Tenor of one-month's duration; (ii) Term SOFR for an Available Tenor of three-month's duration; or (iii) Term SOFR for an Available Tenor of six-month's duration; <u>provided</u> that if a Benchmark Transition Event and the related Benchmark Replacement Date with respect to Term SOFR or the Term CORRA Reference Rate or the then-current Benchmark for such Currency, then "Benchmark" means, with respect to such Obligations, interest, fees, commissions or other amounts, the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to <u>Section</u> <u>12.18</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Sterling or Swiss Francs, the Adjusted Daily Simple RFR applicable for such Currency; <u>provided</u> that if a Benchmark Transition Event and the related Benchmark Replacement Date have occurred with respect to such Adjusted Daily Simple RFR or the then-current Benchmark for such Currency, then "Benchmark" shall mean, with respect to such Obligations, interest, fees, commissions or other amounts, the

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applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to <u>Section</u> <u>12.18</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to Canadian Dollars, the Term CORRA Reference Rate; <u>provided</u> that if a Benchmark Transition Event and the related Benchmark Replacement Date with respect to the Term CORRA Reference Rate or the then-current Benchmark for such Currency, then "Benchmark" means, with respect to such Obligations, interest, fees, commissions or other amounts, the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to <u>Section</u> <u>12.18;</u> or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Euros, EURIBOR; <u>provided</u> that if a Benchmark Transition Event and the related Benchmark Replacement Date with respect to EURIBOR or the then-current Benchmark for such Currency, then "Benchmark" means, with respect to such Obligations, interest, fees, commissions or other amounts, the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to <u>Section</u> <u>12.18</u>.

"<u>Benchmark Replacement</u>": With respect to any Benchmark Transition Event for any then-current Benchmark, the sum of: (i) the alternate benchmark rate that has been selected by the Administrative Agent in consultation with the Borrower giving due consideration to (A) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (B) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the then-current Benchmark for syndicated credit facilities denominated in the applicable Currency and (ii) the related Benchmark Replacement Adjustment; <u>provided</u> that, if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Transaction Documents.

"<u>Benchmark Replacement Adjustment</u>": With respect to any replacement of any then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period for any setting of such Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent in consultation with the Borrower for the applicable tenor giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for syndicated credit facilities denominated in the applicable Currency.

"<u>Benchmark Replacement Conforming Changes</u>": With respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the

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definition of "Base Rate," the definition of "Business Day," the definition of "Eurocurrency Banking Day," the definition of "RFR Business Day," the definition of "Interest Period," the definition of "U.S. Government Securities Business Day," timing and frequency of determining rates, timing (but not frequency) of making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides in consultation with the Borrower may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Transaction Documents).

"<u>Benchmark Replacement Date</u>": The earliest to occur of the following events with respect to the then-current Benchmark for any Currency:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) in the case of clause (1) or (2) of the definition of "Benchmark Transition Event," the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide such Benchmark (or component thereof) or, if such Benchmark is a term rate, all Available Tenors of such Benchmark (or such component thereof); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) in the case of clause (3) of the definition of "Benchmark Transition Event," the first date on which such Benchmark (or the published component used in the calculation thereof) has been or, if such Benchmark is a term rate, all Available Tenors of such Benchmark (or such component thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative or non-compliant with or non-aligned with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks; <u>provided</u> that such non-representativeness, non-compliance or non-alignment will be determined by reference to the most recent statement or publication referenced in such clause (3) and even if such Benchmark (or such component thereof) or, if such Benchmark is a term rate, any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) if such Benchmark is a term rate, the "Benchmark Replacement Date" will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

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"<u>Benchmark Transition Event</u>": With respect to the then-current Benchmark for any Currency, the occurrence of one or more of the following events with respect to such Benchmark:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide such Benchmark (or such component thereof) or, if such Benchmark is a term rate, all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, <u>provided</u> that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Benchmark (or such component thereof) or, if such Benchmark is a term rate, any Available Tenor of such Benchmark (or such component thereof);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, the central bank for the Currency applicable to such Benchmark, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide such Benchmark (or such component thereof) or, if such Benchmark is a term rate, all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, <u>provided</u> that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Benchmark (or such component thereof) or, if such Benchmark is a term rate, any Available Tenor of such Benchmark (or such component thereof); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such Benchmark (or such component thereof) or, if such Benchmark is a term rate, all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative or in compliance with or aligned with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks.

For the avoidance of doubt, if such Benchmark is a term rate, a "Benchmark Transition Event" will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

"<u>Benchmark Transition Start Date</u>": In the case of a Benchmark Transition Event with respect to any then-current Benchmark for any Currency, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement

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or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication).

"<u>Benchmark Unavailability Period</u>": With respect to the then-current Benchmark for any Currency, the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such Benchmark for all purposes hereunder and under any Transaction Document in accordance with <u>Section</u> <u>12.18</u> and (y) ending at the time that a Benchmark Replacement has replaced such Benchmark for all purposes hereunder and under any Transaction Document in accordance with <u>Section</u> <u>12.18</u>.

"<u>Beneficial Ownership Certification</u>": A certification regarding beneficial ownership required by the Beneficial Ownership Regulation, which certification shall be substantially similar in form and substance to the form of Certification Regarding Beneficial Owners of Legal Entity Customers published jointly, in May 2018, by the Loan Syndications and Trading Association and Securities Industry and Financial Markets Association.

"<u>Beneficial Ownership Regulation</u>": 31 C.F.R. § 1010.230.

"<u>BHC Act Affiliate</u>": The meaning assigned to the term "affiliate" in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).

"<u>Borrower</u>": The meaning specified in the Preamble.

"<u>Borrower Interest Coverage Ratio</u>": On any Payment Date, the ratio of (a) the Dollar Equivalent of the aggregate amount of Interest Collections received in the Collection Accounts during the preceding Accrual Period *minus* all Senior Collateral Manager Fees and Subordinated Collateral Manager Fees, unless in either case waived by the Collateral Manager, payable by the Borrower on such Payment Date to (b) the Borrower Interest Expense payable by the Borrower on such Payment Date.

"<u>Borrower Interest Expense</u>": With respect to the Borrower, as of any Payment Date, an amount equal to the Dollar Equivalent of the aggregate amount payable (whether or not actually paid) in interest, costs and Non-Usage Fees pursuant to <u>Section</u> <u>2.7</u> during the preceding Accrual Period.

"<u>Borrower's Notice</u>": Any (a) Funding Notice or (b) Reinvestment Notice.

"<u>Borrowing Base</u>": As of any Measurement Date, an amount equal to the difference of (i) the aggregate Adjusted Borrowing Value of all Eligible Loans as of such date *minus* (ii) an amount equal to the Excess Concentration Amount as of such date; <u>provided</u> that any Loan which at any time is no longer an Eligible Loan shall not be included in the calculation of "Borrowing Base".

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"<u>Borrowing Base Certificate</u>": A certificate setting forth the calculation of the Borrowing Base and the Availability as of each Measurement Date, in the form of <u>Exhibit</u> <u>A</u><u>-4</u>, prepared by the Collateral Manager.

"<u>Borrowing Base Deficiency</u>": The amount by which, on any date of determination, (a) the Advances Outstanding exceed (b) Availability.

"<u>Breakage Costs</u>": With respect to any Lender and to the extent requested by such Lender in writing (which writing shall set forth in reasonable detail the basis for requesting any such amounts), any amount or amounts as shall compensate such Lender for any loss (excluding loss of anticipated profits), cost or expense actually incurred by such Lender as a result of the liquidation or re-employment of deposits or other funds required by the Lender if any payment by the Borrower of Advances Outstanding or Interest occurs on a date other than a Payment Date, <u>provided</u> that the Breakage Costs in respect of any such payment by the Borrower on any Payment Date shall be deemed to be zero. All Breakage Costs shall be due and payable hereunder on each Payment Date in accordance with <u>Section</u> <u>2.7</u> and <u>Section</u> <u>2.8</u>. The determination by the applicable Lender of the amount of any such loss, cost or expense shall be conclusive absent manifest error.

"<u>Broadly Syndicated Loan</u>": A Loan that (i) is a First Lien Loan or a Unitranche Loan, (ii) has at least two (2) published quotes by an Approved Broker Dealer, (iii) has an original Tranche Size of at least $250,000,000, (iv) has a rating assigned by Moody's and/or S&P and (v) does not have a Moody's rating of less than "B3" or an S&P rating of less than "B-".

"<u>BSL Assigned Value</u>": With respect to each Broadly Syndicated Loan, the BSL Assigned Value of such Broadly Syndicated Loan shall be:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) prior to the occurrence of a BSL Value Adjustment Event, the lesser of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Purchase Price of such Broadly Syndicated Loan; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Market Value of such Broadly Syndicated Loan as of the date such Broadly Syndicated Loan was acquired by the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) after the occurrence and during the continuance of a BSL Value Adjustment Event with respect to such Broadly Syndicated Loan, the value determined by the Administrative Agent in its sole discretion (which determination may be made on any date following the occurrence the related BSL Value Adjustment Event); <u>provided</u> that with respect to a Value Adjustment Event pursuant to <u>clauses (b)</u>, <u>(c)</u>, or <u>(d)</u> of the definition of BSL Value Adjustment Event, in each case, the Assigned Value of such Broadly Syndicated Loan shall be zero; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) with respect to any Broadly Syndicated Loan that is not an Eligible Loan, zero.

"<u>BSL Value Adjustment Event</u>": With respect to any Broadly Syndicated Loan, the occurrence of any one or more of the following events after the related Funding Date:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Market Value of such Broadly Syndicated Loan decreases by seven and a half (7.5) percentage points or more from (x) the Market Value of such Broadly Syndicated Loan as of the date such Broadly Syndicated Loan was acquired by the Borrower or (y) the Market Value of such Broadly Syndicated Loan on the date of the most recent BSL Value Adjustment Event for such Broadly Syndicated Loan (any such occurrence, a "<u>Market Value BSL VAE</u>"); <u>provided</u> that, if (i) a Market Value BSL VAE occurs with respect to any Broadly Syndicated Loan, (ii) the S&P/LSTA U.S. Leveraged Loan 100 Index has declined by at least 10.0% from its value as of the date such Broadly Syndicated Loan was acquired by the Borrower, (iii) no other BSL Value Adjustment Event has occurred and is continuing with respect to such Broadly Syndicated Loan, and (iv) such Broadly Syndicated Loan has not been put on any watch list or had any outlook status changes, then, during the continuation of such Market Value BSL VAE, such Broadly Syndicated Loan shall have a BSL Assigned Value of 75% (or such higher value as determined by the Administrative Agent in its sole discretion) for a period of two (2) calendar months from the date on which such Market Value BSL VAE occurred and, thereafter, such BSL Assigned Value shall be determined by the Administrative Agent in its sole discretion; <u>provided</u>, <u>further</u>, that no more than 10.0% of the aggregate Adjusted Borrowing Value of all Eligible Loans may consist of Broadly Syndicated Loans that are subject to the BSL Assigned Value established by the immediately preceding proviso; <u>provided</u>, <u>further</u>, that upon the cure of such Market Value BSL VAE, so long as no other BSL Value Adjustment Event has occurred and is continuing with respect to such Broadly Syndicated Loan, the BSL Assigned Value for such Broadly Syndicated Loan shall be the BSL Assigned Value of such Broadly Syndicated Loan immediately prior to the occurrence of such Market Value BSL VAE;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the occurrence of an Insolvency Event with respect to the applicable Obligor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) an Obligor default in respect of any payment of principal, interest or commitment or non-use fees under such Loan (after giving effect to all applicable cure periods, but in no event longer than five (5) Business Days);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any Obligor default has occurred for which the Borrower (or the agent or required lenders pursuant to the Underlying Instruments, as applicable) has elected to exercise any of its material rights and remedies under the applicable Underlying Instruments in the case of default thereunder (including acceleration but excluding imposition of default interest);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the occurrence of a Material Modification with respect to such Loan that has been executed without the prior written consent of the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the failure by the applicable Obligor to deliver any monthly financial statements as required by the Underlying Instruments beyond that later of (i) any applicable grace or cure period and (ii) thirty (30) days after the end of the applicable month;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) the failure by the applicable Obligor to deliver (or if the Borrower or Collateral Manager fail to forward the same to the Administrative Agent) any financial statements (including audited and unaudited financial statements) as required by the Underlying Instruments, in each case, beyond the later of any applicable grace or cure period and (i) with respect to quarterly reports (including unaudited financial statements) required by the Underlying Instruments, ninety (90) days after the end of the applicable fiscal quarter of such Obligor, and (ii) with respect to annual reports (including audited financial statements) required by the Underlying Instruments, one hundred eighty-five (185) days after the end of the applicable fiscal year of such Obligor; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) any specified event or events with respect to such Loan agreed upon by the Borrower and the Administrative Agent on or prior to the date such Loan was first included as part of the Collateral.

"<u>Business Day</u>": Any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, the State of New York or in the city in which the designated Corporate Trust Office of the Collateral Agent is located.

"<u>CAD</u>" and "<u>Canadian Dollars</u>": The lawful currency of Canada.

"<u>Capital Stock</u>": Any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all similar ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

"<u>Cash</u>": Cash or legal currency of the United States or an Eligible Foreign Currency as at the time shall be legal tender for payment of all public and private debts in the applicable jurisdiction.

"<u>Certificated Security</u>": The meaning specified in Section 8-102(a)(4) of the UCC.

"<u>Change of Control</u>": The occurrence of any of the following events: (a) any change of control of the Collateral Manager or the Borrower ("control" being defined for purposes of this definition as the possession, directly or indirectly, of the power to direct or cause the direction of the management, actions and policies of a person, whether through voting rights, ownership rights, or by contract or otherwise), (b) the Collateral Manager ceases to be the investment advisor of the Fund, or (c) the Transferor ceases to own and control, of record and beneficially, directly or indirectly, 100.00% of the equity interests of the Borrower free and clear of all Liens other than Liens approved in writing by the Administrative Agent.

"<u>Clearing Agency</u>": An organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act.

"<u>Clearing Corporation</u>": The meaning specified in Section 8-102(a)(5) of the UCC.

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"<u>Closing Date</u>": October 1, 2025.

"<u>Code</u>": The Internal Revenue Code of 1986, as amended from time to time.

"<u>Collateral</u>": The meaning specified in <u>Section</u> <u>8.1(a)</u>.

"<u>Collateral Account</u>": Each Securities Account created and maintained on the books and records of the Collateral Agent (or any other party acceptable to the Administrative Agent in its sole discretion) entitled "Collateral Account" in the name of the Borrower and subject to the prior Lien of the Collateral Agent for the benefit of the Secured Parties.

"<u>Collateral Agent</u>": Western Alliance Trust Company, N.A., not in its individual capacity, but solely as Collateral Agent, its successor in interest pursuant to <u>Section</u> <u>7.3</u> or such Person as shall have been appointed Collateral Agent pursuant to <u>Section</u> <u>7.5</u>.

"<u>Collateral Agent Fee</u>": The fees, expenses and indemnities set forth as such in the Collateral Agent Fee Letter and as provided for in this Agreement or any other Transaction Document, including without limitation any Administrative Expenses payable to the Collateral Agent, the Custodian or the Securities Intermediary. Notwithstanding any other provision of this Agreement or the Collateral Agent Fee Letter, the Collateral Agent, the Securities Intermediary and Custodian agree that the aggregate amount of fees, expenses and indemnity payments included in the Collateral Agent Fee payable pursuant to <u>Sections 2.7(a)(2)</u>, <u>2.7(b)(1)</u> and <u>2.8(2)</u> shall be not greater than $150,000 during any rolling 12-month period (which amount may be increased on a *pro rata* basis in connection with an increase in the Commitments with the consent of the Administrative Agent in its sole discretion).

"<u>Collateral Agent Fee Letter</u>": The fee letter dated as of August 21, 2025, among the Collateral Agent, the Custodian, the Securities Intermediary, the Borrower and the Collateral Manager, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

"<u>Collateral Agent Termination Notice</u>": The meaning specified in <u>Section</u> <u>7.5</u>.

"<u>Collateral Manager</u>": Initially PennantPark Investment Advisers, LLC, a Delaware limited liability company, as collateral manager, acting solely pursuant to the terms of this Agreement or any other Person becoming Collateral Manager pursuant to the terms of this Agreement.

"<u>Collateral Manager Operating Agreement</u>": The Amended and Restated Limited Liability Company Agreement of the initial Collateral Manager, dated as of March 28, 2007, as the same may be amended, restated, modified or supplemented from time to time.

"<u>Collateral Manager Standard</u>": With respect to the servicing, management and administration of each Loan, and the Collateral taken as a whole, a standard requiring a degree of care, skill, prudence and diligence consistent with (i) the same care, skill, prudence and diligence with which the Collateral Manager services and administers loans for its own account or for the account of others, (ii) the customary and usual servicing practices that a prudent loan investor or lender would use in servicing assets of the nature and character of the Loans for its own account;

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and (iii) to the extent not inconsistent with the foregoing, the Collateral Manager's customary standards, policies and procedures.

"<u>Collateral Manager Termination Event</u>": The occurrence of any one of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any failure by the Collateral Manager to make, or cause the Borrower to make, any payment, transfer or deposit into the Collection Account as required by this Agreement, which failure continues unremedied for a period of two (2) Business Days, after giving effect to any applicable grace period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) [reserved];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the failure of the Collateral Manager to make any payment when due (whether or not waived but after giving effect to any related grace period) with respect to any recourse debt or other obligations, which debt or other obligations are in excess of $2,500,000 in the aggregate, or the occurrence of any event or condition that has resulted in the acceleration of such recourse debt or other obligations, whether or not waived;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) an Insolvency Event shall occur with respect to the Collateral Manager;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the occurrence of an Event of Default;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) PennantPark Investment Advisers, LLC ceases to be the Collateral Manager hereunder without the prior written consent of the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any failure by the Collateral Manager to deliver any Required Reports hereunder on or before the date occurring five (5) Business Days after the date such report is required to be made or given, as the case may be, under the terms of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) a default in any material respect (or, if any such covenant or agreement is qualified by materiality, a Material Adverse Effect or any similar qualifier, in any respect) in the performance, or breach, of any other covenant or agreement or the failure of any representation, warranty or certification made by the Collateral Manager in any Transaction Document or in any certificate delivered pursuant to any Transaction Document shall prove to have been incorrect when made in any material respect (or, if any such representation, warranty or certification is qualified by materiality, a Material Adverse Effect or any similar qualifier, in any respect) 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 Collateral Manager and (ii) the date on which any Responsible Officer of the Collateral Manager acquires knowledge thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the rendering against the Collateral Manager of one or more final judgments, decrees or orders for the payment of money in excess of $2,500,000 (exclusive of judgment amounts to the extent covered by applicable insurance) in

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aggregate, and the continuance of such judgment, decree or order unsatisfied and in effect for any period of more than thirty (30) consecutive days without a stay of execution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) the Collateral Manager Operating Agreement shall fail to be in full force and effect or shall have been amended in a manner that materially and adversely effects the interests of the Administrative Agent and the Lenders, as determined in the reasonable judgment of the Collateral Manager, without the prior written consent of the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) the Collateral Manager shall become required to register as an "investment company" within the meaning of the 1940 Act or the arrangements contemplated by the Transaction Documents shall require registration of the Collateral Manager as an "investment company" within the meaning of the 1940 Act; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) any of the following events occur with respect to the Collateral Manager:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a finding by any court or governmental body of competent jurisdiction in a final, non-appealable judgment, or an admission by the Collateral Manager in a settlement of any lawsuit, that it has committed fraud, willful misconduct, or a material violation of applicable securities laws, in each case which has a material adverse effect on the business of the Collateral Manager or the ability of the Collateral Manager to perform its duties under the Transaction Documents to which it is a party; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a conviction of, or plea of guilty or nolo contendere by a director or any senior officers, of the Collateral Manager in respect of a felony in connection with any activity of any Loan Party or any of its Subsidiaries or Affiliates; and

in the case of clauses (i) and (ii) above, which has a Material Adverse Effect on the business of the Collateral Manager or the ability of the Collateral Manager to perform its duties under the Transaction Documents to which it is a party, and such individual has not been removed from responsibility with respect to the Eligible Loans within thirty (30) days thereafter.

"<u>Collateral Manager Termination Notice</u>": The meaning specified in <u>Section</u> <u>6.11</u>.

"<u>Collection Account</u>": Collectively, the Interest Collection Account and the Principal Collection Account.

"<u>Collections</u>": (a) All cash collections and other cash proceeds of any Loan, including, without limitation or duplication, any Proceeds, any Interest Collections, Principal Collections, amendment fees, late fees, prepayment fees, waiver fees, settlement payments, re-financing amounts, rent, like-kind payments, recoveries, guaranty payments or other amounts received in respect thereof (but excluding (i) any Excluded Amounts and (ii) any amounts received by the Borrower from an Obligor following the sale of the related Loan by the Borrower pursuant to <u>Section</u> <u>2.14</u> which the Borrower is required to pay to the purchaser of such Loan) and (b) interest earnings on Permitted Investments or otherwise in any Account.

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"<u>Commitment</u>": With respect to each Lender, the commitment of such Lender to make Loan Advances in accordance herewith in an aggregate amount not to exceed (a) prior to the earlier to occur of the Revolving Period End Date or the Termination Date, the Dollar amount set forth opposite such Lender's name on <u>Annex</u> <u>B</u> hereto or the amount set forth as such Lender's "Commitment" on <u>Schedule</u> <u>I</u> to the Joinder Supplement relating to such Lender, as applicable, as such amounts may be reduced, increased or assigned from time to time pursuant to the provisions of this Agreement, and (b) on or after the earliest to occur of the Revolving Period End Date, the Termination Date or the termination of the Commitment of such Lender, zero.

"<u>Commitment Reduction Fee</u>": With respect to any reduction of the Facility Amount pursuant to <u>Section</u> <u>2.3(c)</u>, an amount equal to the product of (a) the amount of such reduction *multiplied by* (b) the applicable Commitment Reduction Percentage.

"<u>Commitment Reduction Percentage</u>": (a) Prior to the first anniversary of the Closing Date, 1.00% and (b) thereafter, zero.

"<u>Contractual Obligation</u>": With respect to any Person, any provision of any securities issued by such Person or any indenture, mortgage, deed of trust, contract, undertaking, agreement, instrument or other document to which such Person is a party or by which it or any of its property is bound or to which either is subject.

"<u>Corporate Trust Office</u>": The applicable designated corporate trust office of the Collateral Agent specified on <u>Annex A</u> hereto or such other address within the United States as the Collateral Agent may designate from time to time by notice to the Administrative Agent.

"<u>Cov-Lite Loan</u>": A Loan that does not require the applicable Obligor to maintain compliance with at least one of the following financial covenants during any reporting period applicable to such Loan, whether or not any action by, or event relating to, such Obligor has occurred: maximum total leverage, maximum senior leverage, maximum first lien leverage, minimum fixed charge coverage, minimum debt service coverage, minimum EBITDA, or other customary financial covenants.

"<u>Covenant Compliance Period</u>": The period beginning on the Closing Date and ending on the date on which the Commitments have been terminated and the Obligations have been paid in full (other than contingent indemnification and expense reimbursement obligations to the extent no claim giving rise thereto has been asserted).

"<u>Covered Party</u>": Any Secured Party that is one of the following: (i) a "covered entity" as that term is defined in, and interpreted in accordance with, 12 C.F.R. §252.82(b); (ii) a "covered bank" as that term is defined in, and interpreted in accordance with, 12 C.F.R. §47.3(b), or any subsidiary of such a covered bank to which 12 C.F.R. Part 47 applies in accordance with 12 C.F.R. §47.3(b); or (iii) a "covered FSI" as that term is defined in, and interpreted in accordance with, 12 C.F.R. §382.2(b).

"<u>Currency</u>": Dollars or an Eligible Foreign Currency.

"<u>Custodian</u>": Western Alliance Trust Company, N.A., not in its individual capacity, but solely as Custodian, its successor in interest pursuant to <u>Section</u> <u>14.3</u> or such Person

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as shall have been appointed Custodian pursuant to <u>Section</u> <u>14.5,</u> acting in the role of Custodian hereunder, including with respect to custody of Required Loan Documents and Loan Files.

"<u>Custodian Termination Notice</u>": The meaning specified in <u>Section</u> <u>14.5</u>.

"<u>Custody Facilities</u>": The designated document custody office of the Collateral Agent acting in its role as Custodian, which on the Closing Date is as specified on <u>Annex A</u> hereto immediately below the name of the Custodian or such other address within the United States as the Collateral Agent or the Custodian may designate from time to time by notice to the Administrative Agent, the Borrower and the Collateral Manager.

"<u>Daily Simple RFR Advance</u>": An Advance that bears interest at a rate based on Adjusted Daily Simple RFR.

"<u>Default</u>": Any event that, with the giving of notice or the lapse of time, or both, would become an Event of Default.

"<u>Default Right</u>": The meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

"<u>Defaulted Loan</u>": Any Loan with respect to which any of the following events have occurred and is continuing with respect to such Loan or the related Obligor (as applicable): (a) a default in respect of any payment of principal, interest or commitment or non-use fees under such Loan (after giving effect to all applicable cure periods, but in no event longer than five (5) Business Days); (b) the occurrence of an Insolvency Event with respect to the related Obligor; (c) any determination by the Collateral Manager or the Administrative Agent that such Loan is on non-accrual status, is written off or is charged off; (d) a default under such Loan (other than a default described in <u>clause (a)</u> above), together with the election by any agent or requisite number of lenders (including the Borrower) required to take any such action to (i) accelerate the Loan or (ii) commence to enforce any of their other rights or remedies pursuant to the applicable Underlying Instruments; (e) any portion of such Loan has been waived or forgiven; or (f) events described in clause (a), (d) or (e) of the definition of "Material Modification" unless otherwise consented to in writing by the Administrative Agent in its sole discretion.

"<u>Defaulting Lender</u>": Any Lender that (i) has failed to fund any portion of the Advances required to be funded by it hereunder within two (2) Business Days of the date required to be funded by it hereunder, (ii) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three (3) Business Days of the date when due, unless such amount is the subject of a good faith dispute, (iii) has notified the Borrower, the Administrative Agent or any other Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply or has failed to comply with its funding obligations under this Agreement or generally under other agreements in which it commits or is obligated to extend credit, or (iv) has become or is insolvent or has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or

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custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.

"<u>Delayed Draw Loan</u>": A Loan that (i) requires one or more future advances to be made to the Obligor, (ii) specifies a maximum amount that can be borrowed on one or more fixed borrowing dates and (iii) does not permit the re-borrowing of any amount previously repaid by the related Obligor; <u>provided</u> that such loan shall only be considered a Delayed Draw Loan for so long as any future funding obligations remain in effect and only with respect to any portion which constitutes a future funding obligation.

"<u>Deposit Account</u>": The meaning specified in Section 9-102 of the UCC.

"<u>Deposit Placement Program</u>": A network of FDIC-insured depository institutions and/or their affiliates who are FDIC-insured depository institutions (as defined in Section 3 of the Federal Deposit Insurance Act), that have entered into agreements with IntraFi Network LLC and/or its successors or assigns to collect and/or place deposits with the purpose of providing each participating institution's depositors increased access to FDIC deposit insurance.

"<u>Determination Date</u>": The last calendar day of the month preceding each Payment Date, with the first Determination Date occurring in February 2026.

"<u>Discretionary Sale</u>": The meaning specified in <u>Section</u> <u>2.14(c)</u>.

"<u>Disruption Event</u>": The occurrence of any of the following: (a) any Lender shall have notified the Administrative Agent of a determination by such Lender that it would be contrary to law or to the directive of any central bank or other Governmental Authority (whether or not having the force of law) to obtain any applicable Currency in the applicable interbank market, to fund any Advance, (b) any Lender shall have notified the Administrative Agent of a determination by such Lender that the rate at which deposits of any applicable Currency offered to such Lender in the applicable interbank market does not accurately reflect the cost to such Lender of making, funding or maintaining any Advance; (c) any Lender shall have notified the Administrative Agent of the inability of such Lender, as applicable, to obtain any applicable Currency in the applicable interbank market to make, fund or maintain any Advance or (d) adequate and reasonable means do not exist for ascertaining the Benchmark for any requested Interest Period, including because the Benchmark applicable to a Currency is not available or published on a current basis.

"<u>Dollar Equivalent</u>": On any date of determination, (1) with respect to any actual currency exchange between Dollars and an Eligible Foreign Currency, the applicable "spot" currency rate available through the Collateral Agent's (or an Affiliate's thereof) banking facilities (or, if the Collateral Agent has notified the Administrative Agent and the Borrower that it will no longer provide such services, through such other source determined by the Collateral Manager (with the consent of the Administrative Agent)) at the time of such exchange or calculation and (2) with respect to all other purposes, including in connection with reporting and calculations hereunder (a) if such amount is expressed in Dollars, such amount, (b) if such amount is expressed in an Eligible Foreign Currency, the equivalent of such amount in Dollars determined by using the rate of exchange for the purchase of Dollars with the Eligible Foreign

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Currency last provided (either by publication or otherwise provided to the Collateral Manager) by the applicable Bloomberg source (or such other publicly available source for displaying exchange rates as determined by the Collateral Manager from time to time) on the date that is two (2) Business Days immediately preceding the date of determination (or if such service ceases to be available or ceases to provide such rate of exchange, the equivalent of such amount in Dollars as determined by the Collateral Manager using any method of determination it deems appropriate in its sole discretion) and (c) if such amount is denominated in any other currency, the equivalent of such amount in Dollars as determined by the Collateral Manager using any method of determination it deems appropriate in its sole discretion. Any determination by the Collateral Manager pursuant to clauses (b) or (c) above shall be conclusive absent manifest error.

"<u>Dollars</u>": Means, and the conventional "$" signifies, the lawful currency of the United States.

"<u>EBITDA</u>": With respect to the last four (4) fiscal quarters with respect to the related Loan:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the meaning of "EBITDA", "Adjusted EBITDA" or any comparable definition in the Underlying Instruments for each such Loan; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) in any case that "EBITDA", "Adjusted EBITDA" or such comparable definition is not defined in such Underlying Instruments, an amount, for the Obligor on such Loan and any parent that is obligated pursuant to the Underlying Instruments for such Loan (determined on a consolidated basis without duplication in accordance with GAAP) equal to earnings from continuing operations for such period plus (to the extent deducted in determining earnings from continuing operations for such period) (a) interest expense, (b) income taxes, (c) depreciation and amortization, (d) EBITDA related to the periods prior to an add-on acquisition or add-on acquisition under letter of intent for such Obligor, (e) other non-cash charges and organization costs, (f) extraordinary losses in accordance with GAAP, (g) one-time, non-recurring or non-cash charges consistent with the applicable compliance statements and financial reporting packages provided by such Obligor, (h) change in deferred revenue, and (i) any other item the Borrower and the Administrative Agent mutually deem to be appropriate.

"<u>Eligible Currency Accounts</u>": The segregated trust accounts designated for each Eligible Foreign Currency as "[CURRENCY] Eligible Currency Account" in the name of the Borrower subject to the Lien of the Administrative Agent for the benefit of the Secured Parties, including any sub-account thereof. For the avoidance of doubt, there shall be one Eligible Currency Account (which shall constitute a collective reference in each case to one or more accounts, including a principal collection account, interest collection account and unfunded exposure account, for each Eligible Foreign Currency, and may include any subaccounts as may be necessary or convenient for the administration of this Agreement) for each Eligible Foreign Currency other than Dollars.

"<u>Eligible Foreign Currency</u>": Each Tier 1 Eligible Foreign Currency and Tier 2 Eligible Foreign Currency.

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"<u>Eligible Foreign Currency Equivalent</u>": At any time, with respect to any amount denominated in Dollars, the equivalent amount thereof in the applicable Eligible Foreign Currency as determined by the Collateral Manager in its sole discretion by reference to the applicable Bloomberg page (or such other publicly available service for displaying exchange rates as determined by the Collateral Manager from time to time), to be the exchange rate for the purchase of such Eligible Foreign Currency with Dollars on the date two Business Days prior to the date as of which the foreign exchange computation is made; <u>provided</u>, however, that if no such rate is available, the "Eligible Foreign Currency Equivalent" shall be determined by the Collateral Manager using any reasonable method of determination it deems appropriate in its sole discretion (and such determination shall be conclusive absent manifest error).

"<u>Eligible Foreign Jurisdiction</u>": Each Tier 1 Eligible Foreign Jurisdiction and Tier 2 Eligible Foreign Jurisdiction.

"<u>Eligible Loan</u>": Each Loan (i) for which the Administrative Agent has received the items set forth in <u>Section</u> <u>3.2(a)</u> or <u>3.2(b)</u>, as applicable, and the Custodian has received or will receive the related Required Loan Documents; <u>provided</u> that any Loan for which the Borrower (or the Collateral Manager on its behalf) has failed to deliver the Required Loan Documents described in <u>Section</u> <u>3.2(h)</u> within the time periods set forth therein, shall cease to be an Eligible Loan; and (ii) that satisfies each of the following eligibility requirements (unless otherwise waived by the Administrative Agent in its sole discretion):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) such Loan is a Broadly Syndicated Loan, First Lien Loan, Qualified First Lien Loan, Unitranche Loan, First Lien Last Out Loan or Second Lien Loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) such Loan has a Purchase Price of not less than 85.0%;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Obligor with respect to such Loan is an Eligible Obligor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) such Loan is payable in Dollars or an Eligible Foreign Currency and does not permit the currency in which such Loan is payable to be changed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) such Loan (1) was originated and underwritten, or purchased and re-underwritten, by the Transferor, the Borrower or any of its Affiliates in accordance with the Transferor's investment policy and (2) is fully documented to the satisfaction of the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) as of the date such Loan is first included as part of the Collateral, such Loan is not a Defaulted Loan and has not been a Defaulted Loan since its origination date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) if such Loan is a PIK Loan, such Loan is a Qualified PIK Loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) such Loan pays interest in Cash no less frequently than semi-annually;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) such Loan has an original term to maturity that does not exceed seven (7) years;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) the Borrower has good and marketable title to, and is the sole owner of, such Loan, and the Borrower has granted to the Collateral Agent a valid and perfected first priority security interest in the Loan and Underlying Instruments, for the benefit of the Secured Parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) such Loan does not constitute a bond, a security, Structured Finance Obligation, Zero Coupon Obligation, Finance Lease or chattel paper;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) such Loan is not a construction loan or a project finance loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) the primary Underlying Asset for such Loan is not real property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) such Loan is not an Equity Security or a component of an Equity Security and no portion thereof (including any conversion option, exchange option, warrant or other component thereof) is exchangeable or convertible into an Equity Security at the option of the Obligor at any time on or after the date it is included as part of the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) such Loan and the Underlying Instruments related thereto, are eligible to be sold, assigned or transferred to the Borrower, the rights to service, administer and enforce the rights and remedies in respect of such Loan under the applicable Underlying Instruments inure to the benefit of the holder of such Loan or its designee (subject to the rights of any applicable agent or Obligor), and neither the sale, transfer or assignment of such Loan to the Borrower, nor the granting of a security interest hereunder to the Administrative Agent, violates, conflicts with or contravenes in any material respect any Applicable Law or any contractual or other restriction, limitation or encumbrance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) such Loan is not subject to an offer of exchange, redemption, conversion or tender by its Obligor, or by any other Person, for cash, equity securities or any other type of consideration (other than a notice of prepayment in accordance with the terms of the Underlying Instruments);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) the Underlying Instruments with respect to such Loan provide that no part of the proceeds of such Loan or any other extension of credit made thereunder will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any such Margin Stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) such Loan, and any payment made with respect to such Loan, is not subject to any withholding tax, fee or governmental charge unless (i) the Obligor thereon is required under the terms of the related Underlying Instrument to make "gross-up" payments that cover the full amount of such withholding tax, fee or governmental charge on an after-tax basis, or (ii) the amount of any such withholding tax, fee or governmental charge has been disclosed in writing to the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) such Loan is not an interest only security;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) such Loan is not a letter of credit (<u>provided</u> this does not exclude Revolving Loans that include a letter of credit sub facility so long as the Borrower is not the issuer of letters of credit thereunder);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) such Loan provides for a fixed amount of principal payable on scheduled payment dates and/or at maturity and does not by its terms provide for earlier amortization or prepayment, in each case, at a price less than par;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the repayment of such Loan is not subject to any material non-credit related risk, (for example, a payment on a Loan of which is expressly contingent upon the occurrence or nonoccurrence of a catastrophe) as determined by the Collateral Manager in accordance with the Collateral Manager Standard;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) is not an obligation (other than a Revolving Loan or a Delayed Draw Loan) pursuant to which any future advance or funding to the Obligor may be required to be made by the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) the acquisition of such Loan will not cause the Borrower or the pool of Collateral to be required to register as an investment company under the 1940 Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) such Loan is in the form of and is treated by the related Obligor as indebtedness of such Obligor and is not a United States real property interest as defined under Section 897 of the Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) such Loan is Registered;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) such Loan and any Underlying Assets (or, with respect to sub<u>clause</u> <u>(ii)</u>, the acquisition thereof) (i) comply in all material respects with all Applicable Laws and (ii) to the knowledge of any Responsible Officer of the Collateral Manager, will not cause any Secured Party (in its commercially reasonable judgment and as evidenced by a written notice from such Secured Party) to fail to comply with any request or directive from any Governmental Authority having jurisdiction over such Secured Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) such Loan is eligible under its Underlying Instruments (giving effect to the provisions of Sections 9-406 and 9-408 of the UCC) to be sold to the Borrower and to have a security interest therein granted to the Collateral Agent, as agent for the Secured Parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) unless it is a Participation Interest acquired by the Borrower that has been elevated to a full assignment within thirty (30) days (or such longer period as may be agreed to by the Administrative Agent in its sole discretion) after the date such Participation Interest was acquired by the Borrower, such Loan is not a participation interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd) all consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority or any other Person required to be obtained, effected or given in connection with the making, acquisition or transfer of such Loan have been duly obtained, effected or given and are in full force and effect;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee) such Loan requires the related Obligor to pay customary maintenance, repair, insurance and taxes, together with all other ancillary costs and expenses, with respect to the related, underlying collateral of such Loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff) the Underlying Instruments for such Loan do not contain a confidentiality provision that would prohibit the Administrative Agent or any Secured Party from exercising any of their respective rights hereunder or obtaining all necessary information with regard to such Loan, so long as the Administrative Agent or such Secured Party, as applicable, has agreed to maintain the confidentiality of such information in accordance with the provisions of such Underlying Instruments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(gg) such Loan or any related Underlying Instrument has not been found to be illegal or unenforceable by the decision of a court of law or a Governmental Authority in a proceeding brought by the related Obligor, any other party obligated with respect to such Loan, or any Governmental Authority;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(hh) as of the date such Loan is first included as part of the Collateral, there are no proceedings pending or, to the best of any Responsible Officer of the Borrower's knowledge, threatened in writing wherein the Obligor of such Loan, any other obligated party or any governmental agency has alleged that such Loan or the Underlying Instrument which creates such Loan is illegal or unenforceable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if such Loan is evidenced by a promissory note or other instrument (including an assignment agreement or transfer document), such promissory note or other instrument has been delivered to the Custodian within the time period required by <u>Section</u> <u>3.2(h)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(jj) if such Loan is acquired by the Borrower from the Transferor, the Transferor has caused its master computer records to be clearly and unambiguously marked to indicate that such Loan has been sold to the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(kk) no selection procedure adverse to the interests of the Secured Parties was utilized by the Transferor, the Collateral Manager or the Borrower in the selection of such Loan for inclusion in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ll) such Loan, together with the Underlying Instruments related thereto, (i) contains provisions substantially to the effect that such Loan and such Underlying Instruments constitute the legal, valid and binding obligation of the related Obligor and each guarantor thereof, enforceable against such Obligor and each such guarantor in accordance with their terms, subject to customary bankruptcy, insolvency and equity limitations, (ii) is not subject to any (A) litigation or dispute or (B) offset, right of rescission, counterclaim or defense to payment, (iii) contains provisions substantially to the effect that the Obligor's and each guarantor's payment obligations thereunder are absolute and unconditional without any right of rescission, setoff, counterclaim or defense for any reason against the Transferor, the Borrower or any assignee of the Borrower and (iv) contain provisions requiring customary covenant compliance and other reporting requirements;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(mm) the Underlying Instruments with respect to such Loan contain a requirement that the applicable underlying Obligor deliver (i) quarterly financial statements after the end of each the first three fiscal quarters of each fiscal year of the Obligor (commencing with the first quarter required under the applicable Underlying Instruments, which shall be no greater than the second (2nd) quarter after the initial closing of such Loan), and (ii) audited annual financial statements after the end of each fiscal year of the Obligor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(nn) at the time of acquisition, if such Loan is a Cov-Lite Loan, the applicable Obligor has EBITDA greater than or equal to $50,000,000 and such Loan is either a Broadly Syndicated Loan, a First Lien Loan or a Unitranche Loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(oo) at the time of acquisition, if such Loan is a Broadly Syndicated Loan, a First Lien Loan, a Qualified First Lien Loan or a Unitranche Loan, the applicable Obligor has EBITDA greater than or equal to $5,000,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(pp) at the time of acquisition, if such Loan is a First Lien Last Out Loan or a Second Lien Loan, the applicable Obligor has EBITDA greater than or equal to $20,000,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(qq) at the time of acquisition, such Loan did not bear cash interest at a rate that was less than the Interest Rate applicable at such time (determined, solely for purposes of this clause (qq) using an Applicable Spread of 2.00% at all times);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(rr) the Administrative Agent has received the Borrower's internally approved credit/underwriting presentation (unless such credit/underwriting presentation was not prepared or received by the Borrower in connection with an amendment or other modification to a Loan), a copy of the loan agreement, credit agreement, indenture or other principal agreement pursuant to which the Loan has been issued or created with respect to such Loan, the most recent year's audited financial statements with respect to the applicable Obligor (or if audited financial statements are not available, (i) the most recent year's quality of earnings report with respect to such Obligor, or (ii) the pro forma financial statements with respect to such Obligor, if such Obligor is a newly formed Person) and most recent covenant compliance certificate, if any, required to be provided to the Borrower with respect to such Loan.

"<u>Eligible Obligor</u>": On any date of determination, any Obligor (or guarantor, as applicable) that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) is a business organization (and not a natural person) duly organized and validly existing under the laws of its jurisdiction of organization;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) is not a Governmental Authority;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) is not an Affiliate of any Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) is organized and incorporated and domiciled in the United States or any state thereof or an Eligible Foreign Jurisdiction;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) is not the subject of and, to the best of any Responsible Officer of the Borrower's knowledge is not threatened with any proceeding which would result in, an Insolvency Event with respect to such Obligor and, as of the date on which such Loan becomes part of the Collateral, to any Responsible Officer of the Borrower's knowledge, such Obligor has not experienced a material adverse change in its condition, financial or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) does not derive any portion of its business from payday lending, pawn shops, adult entertainment, internet gambling companies, marijuana related businesses, automobile title loans, tax refund anticipation loans, credit repair services, drug paraphernalia, fireworks distributors, tax evasion, assault weapons or firearms manufacturing, businesses engaged in predatory lending practices, strip mining, operation or management of private prisons, online dating or dating applications, unless prior written approval by the Administrative Agent in its sole discretion has been obtained; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) is not (i) a Sanctioned Person; (ii) a country, territory, organization, person or entity named on an Office of Foreign Asset Control (OFAC) list; (iii) 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; (iv) 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; (v) 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; or (vi) an Affiliate of any Person meeting any of the criteria set forth in <u>clauses (i)</u> through <u>(v)</u> above.

"<u>Equity Cure Notice</u>": A notice from the Borrower to the Administrative Agent which satisfies each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) such notice is delivered to the Administrative Agent not later than three (3) Business Days after the earlier to occur of (i) the date on which written notice of such Borrowing Base Deficiency shall have been given to the Borrower and (ii) the date on which any Responsible Officer of the Borrower acquires knowledge thereof; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) such notice sets forth evidence that (i) the Fund has made a capital call on its investors in an aggregate amount sufficient to, when combined with any amounts on deposit in the Principal Collection Account and other cash available to be contributed to the Borrower, cure the Borrowing Base Deficiency referenced in clause (a) upon the contribution of the proceeds of such capital call to the Borrower (together with such other amounts) or (ii) the Borrower has made other arrangements acceptable to the Administrative Agent (in its sole discretion) to otherwise cure the Borrowing Base Deficiency referenced in clause (a) within the timeframe specified in <u>Section</u> <u>9.1(p)</u>.

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"<u>Equity Security</u>": (i) Any equity security or any other security that is not eligible for purchase by the Borrower as a Loan, and (ii) any security purchased as part of a "unit" with a Loan and that itself is not eligible for purchase by the Borrower as a Loan.

"<u>ERISA</u>": The United States Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated or issued thereunder.

"<u>ERISA Affiliate</u>": (a) Any corporation that is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Borrower, (b) a trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Code) with the Borrower, or (c) for purposes of Section 302 of ERISA and Section 412 of the Code, a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Borrower.

"<u>Erroneous Payment</u>": The meaning specified in <u>Section</u> <u>11.10(a)</u>.

"<u>Erroneous Payment Deficiency Assignment</u>": The meaning assigned to such term in <u>Section</u> <u>11.10(d)</u>.

"<u>Erroneous Payment Impacted Class</u>": The meaning assigned to such term in <u>Section</u> <u>11.10(d)</u>.

"<u>Erroneous Payment Return Deficiency</u>": The meaning assigned to such term in <u>Section</u> <u>11.10(d)</u>.

"<u>Erroneous Payment Subrogation Rights</u>": The meaning specified in <u>Section</u> <u>11.10(d)</u>.

"<u>EUR</u>", "<u>Euro</u>" and "<u>€</u>": The lawful currency of the member state of the European Union in accordance with legislation of the European Union relating to the Economic and Monetary Union.

"<u>Eurocurrency Banking Day</u>": (a) For Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Euros, a TARGET Day and (b) for Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to any other applicable Eligible Foreign Currency, any day in which banks are open for foreign currency exchange business in the principal financial center of the country of such Eligible Foreign Currency; <u>provided</u> that for purposes of notice or repayment requirements in <u>Sections 2.2</u> and <u>2.3</u> in each case, such day is also a Business Day.

"<u>Eurocurrency Rate</u>": With respect to any Advances for any Interest Period:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) denominated in Australian Dollars, the greater of (i) the rate per annum equal to the Bank Bill Swap Reference Bid Rate, as administered by ASX Benchmarks Pty Limited (or any other Person that takes over the administration of such rate that is approved by the Administrative Agent) for a period comparable in length to such Interest Period, at approximately 10:30 a.m. (Sydney time) two Eurocurrency Banking Days prior to the commencement of such Interest Period and (ii) the Floor;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) denominated in Euros, the greater of (i) the rate per annum equal to the Euro Interbank Offered Rate ("<u>EURIBOR</u>") as administered by the European Money Markets Institute (or any other Person that takes over the administration of such rate that is approved by the Administrative Agent) for a period comparable in length to such Interest Period, at approximately 11:00 a.m. (Brussels time) two Eurocurrency Banking Days prior to the commencement of such Interest Period and (ii) the Floor; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in the case of any other applicable Eligible Foreign Currency, the rate per annum as designated with respect to such Eligible Foreign Currency at the time such Eligible Foreign Currency is approved by the Administrative Agent and the Lenders.

"<u>Eurocurrency Rate Advance</u>": An Advance that bears interest at a rate based on the Adjusted Eurocurrency Rate.

"<u>Eurocurrency Reserve Percentage</u>": For any day during any Interest Period, the reserve percentage in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, special, supplemental or other marginal reserve requirement) with respect to eurocurrency funding (currently referred to as "Eurocurrency liabilities" in Regulation D) or any other reserve ratio or analogous requirement of any central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Advances. The Adjusted Eurocurrency Rate for each outstanding Advance shall be adjusted automatically as of the effective date of any change in the Eurocurrency Reserve Percentage.

"<u>Event of Default</u>": The meaning specified in <u>Section</u> <u>9.1</u>.

"<u>Excepted Persons</u>": The meaning specified in <u>Section</u> <u>12.13(a)</u>.

"<u>Excess Concentration Amount</u>": As of any date of determination (and after giving effect to all Eligible Loans to be purchased or sold by the Borrower on such date), the Dollar Equivalent of the sum of the following amounts (without duplication):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the excess, if any, of (i) the Adjusted Borrowing Value of those Eligible Loans that are obligations of the Obligor and its respective Affiliates with the largest Obligor Exposure included in the Collateral *minus* (ii) the greater of (A) $8,700,000 and (B) 10.00% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the excess, if any, of (i) the Adjusted Borrowing Value of those Eligible Loans that are obligations of the Obligor and its respective Affiliates with the second largest Obligor Exposure included in the Collateral *minus* (ii) the greater of (A) $6,500,000 and (B) 7.50% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the excess, if any, of (i) the Adjusted Borrowing Value of those Eligible Loans that are obligations of the Obligor and its respective Affiliates with the third largest Obligor Exposure included in the Collateral *minus* (ii) the greater of (A)

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$6,500,000 and (B) 7.50% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) except with respect to the Loans described in <u>clauses (a)</u>, <u>(b)</u> and <u>(c)</u> above, the excess, if any, of (i) the aggregate Adjusted Borrowing Values of each Eligible Loan of any single Obligor and its Affiliates *minus* (ii) the greater of (A) $5,000,000 and (B) 5.00% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the excess, if any, of (i) the aggregate Adjusted Borrowing Value of those Eligible Loans with Obligors in any single S&P Industry Classification *minus* (ii) (A) with respect to the S&P Industry Classification representing the highest concentration of the Eligible Loans (determined by reference to Adjusted Borrowing Value), the greater of (1) $17,300,000 and (2) 20.00% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral; (B) with respect to the S&P Industry Classifications representing the second highest concentration of the Eligible Loans (determined by reference to Adjusted Borrowing Value), the greater of (1) $15,200,000 and (2) 17.5% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral; (C) with respect to the S&P Industry Classifications representing the third highest concentration of the Eligible Loans (determined by reference to Adjusted Borrowing Value), the greater of (1) $13,000,000 and (2) 15.00% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral; and (D) with respect to the S&P Industry Classifications other than those covered in <u>clauses (A)</u>, <u>(B)</u> and <u>(C)</u> hereof, the greater of (1) $10,800,000 and (2) 12.50% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the excess, if any, of (i) the aggregate Adjusted Borrowing Value of those Eligible Loans with underlying Obligors with EBITDA less than $15,000,000 *minus* (ii) the greater of (A) $30,300,000 and (B) 35.00% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) the excess, if any, of (i) the aggregate Adjusted Borrowing Value of those Eligible Loans with underlying Obligors with EBITDA less than $10,000,000 *minus* (ii) the greater of (A) $13,000,000 and (B) 15.00% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) the excess, if any, of (i) the aggregate commitments of those Eligible Loans that are Revolving Loans and the unfunded portion of Delayed Draw Loans *minus* (ii) the greater of (A) $13,000,000 and (B) 15.00% of the aggregate Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the excess, if any, of (i) the aggregate Adjusted Borrowing Value of those Eligible Loans that are payable in an Eligible Foreign Currency *minus* (ii) the greater of (A) $21,700,000 and (B) 25.00% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) the excess, if any, of (i) the aggregate Adjusted Borrowing Value of those Eligible Loans that are payable in a Tier 2 Eligible Foreign Currency *minus* (ii) the greater of (A) $8,700,000 and (B) 10.00% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) the excess, if any, of (i) the aggregate Adjusted Borrowing Value of those Eligible Loans that are Loans to Obligors domiciled in an Eligible Foreign Jurisdiction *minus* (ii) the greater of (A) $21,700,000 and (B) 25.00% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) the excess, if any, of (i) the aggregate Adjusted Borrowing Value of those Eligible Loans that are payable in a Tier 2 Eligible Foreign Jurisdiction *minus* (ii) the greater of (A) $8,700,000 and (B) 10.00% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) the excess, if any, of (i) the aggregate Adjusted Borrowing Value of those Eligible Loans which pay interest in Cash less frequently than quarterly, *minus* (ii) the greater of (A) $8,700,000 and (B) 10.00% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) the excess, if any, of (i) the aggregate Adjusted Borrowing Value of those Eligible Loans that are Qualified PIK Loans *minus* (ii) the greater of (A) $17,300,000 and (B) 20.00% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) the excess, if any, of (i) the aggregate Adjusted Borrowing Value of those Eligible Loans that are not Broadly Syndicated Loans, First Lien Loans or Unitranche Loans *minus* (ii) the greater of (A) $30,300,000 and (B) 35.00% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) the excess, if any, of (i) the aggregate Adjusted Borrowing Value of those Eligible Loans that are Second Lien Loans *minus* (ii) the greater of (A) $13,000,000 and (B) 15.00% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) the excess, if any, of (i) the aggregate Adjusted Borrowing Value of those Eligible Loans that are Qualified First Lien Loans *minus* (ii) the greater of (A) $21,700,000 and (B) 25.00% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) the excess, if any, of (i) the aggregate Adjusted Borrowing Value of those Eligible Loans (other than Broadly Syndicated Loans) that are Cov-Lite Loans *minus* (ii) the greater of (A) $17,300,000 and (B) 20.00% of the Adjusted Borrowing Value of all Eligible Loans included in the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) the excess, if any, of (i) the aggregate Adjusted Borrowing Value of those Eligible Loans that each have a Purchase Price of less than 95% *minus* (ii) the greater of (A) $8,700,000 and (B) 10.00% of the aggregate Adjusted Borrowing Value of all

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Eligible Loans in the Collateral; <u>provided</u> that any Eligible Loan with a Purchase Price of less than 95% may be excluded from this <u>clause (s)</u> in the sole discretion of the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) the excess, if any, of (i) the aggregate Adjusted Borrowing Value of those Eligible Loans that are Fixed Rate Loans minus (ii) the greater of (A) $8,700,000 and (B) 10.00% of the aggregate Adjusted Borrowing Value of all Eligible Loans in the Collateral; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) the excess, if any of the (i) aggregate Adjusted Borrowing Value of those Eligible Loans that are Participation Interests minus (ii) the greater of (A) $4,300,000 and (B) 5.00%;

<u>provided</u> that, on and after (a) the nine (9) month anniversary of the Closing Date (other than during the six (6) month period following the closing date of a Permitted Securitization) or (b) the six (6) month anniversary of the closing date of a Permitted Securitization, the Dollar amounts in the foregoing <u>clauses (a)</u> through <u>(u)</u> shall automatically and without any amendment be reduced to $0.

"<u>Exchange Act</u>": The United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>Excluded Amounts</u>": Any amount received in the Collection Account with respect to any Loan included as part of the Collateral, which amount (x) was not originally paid using Collections and (y) is attributable to (i) the reimbursement by the related Obligor of payment by the Borrower or the Transferor of any Tax, fee or other charge imposed by any Governmental Authority on such Loan or on any Underlying Assets, (ii) the reimbursement by the related Obligor of payment by the Borrower or the Transferor of other out-of-pocket expenses, (iii) any payments or reimbursements related to indemnification obligations, (iv) any escrows relating to Taxes, insurance and other amounts in connection with Loans which are held in an escrow account for the benefit of the Obligor and the secured party pursuant to escrow arrangements under Underlying Instruments, (v) any amount deposited into the Collection Account in error.

"<u>Excluded Taxes</u>": Any of the following Taxes imposed on or with respect to a Secured Party or required to be withheld or deducted from a payment to a Secured Party, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Secured Party being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in an Advance pursuant to a law in effect on the date on which (x) such Lender acquires such interest in an Advance (other than pursuant to an assignment request by the Borrower under <u>Section</u> <u>2.17</u>) or (y) such Lender changes its lending office, except in each case to the extent that, pursuant to <u>Section</u> <u>2.13</u>, amounts with respect to such Taxes were payable either to such Lender's assignor immediately before such Lender became a

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party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Secured Party's failure to comply with <u>Section</u> <u>2.13(g)</u>, and (d) any U.S. federal withholding Taxes imposed under FATCA.

"<u>Exposure Amount Shortfall</u>": The meaning specified in <u>Section</u> <u>2.2(e)</u>.

"<u>Facility Amount</u>": As of any date, an amount equal to the lesser of (a) $65,000,000 and (b) the aggregate principal amount of the Commitments provided by the Administrative Agent and the Lenders as of such date; <u>provided</u> that the Facility Amount may be increased pursuant to <u>Section</u> <u>2.18</u> or decreased pursuant to <u>Section</u> <u>2.3(c)</u>; <u>provided</u> that, the Facility Amount may not be increased without the written consent of the Borrower, the Administrative Agent and each Lender increasing its Commitment; and <u>provided</u>, <u>further</u>, that on or after the earlier to occur of the Revolving Period End Date or the Termination Date, the Facility Amount shall mean the Advances Outstanding.

"<u>FATCA</u>": Sections 1471 through 1474 of the Code, as in effect on the Closing Date (or any amended or successor version that is substantively comparable), any current or future regulations or official interpretations thereof (including any Revenue Rulings, Revenue Procedure, Notice or similar guidance issued by the IRS thereunder as a precondition to relief or exemption from Taxes under such provisions) and any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement between the United States and another jurisdiction facilitating the implementation thereof (or any law, regulation or official interpretation implementing such an intergovernmental agreement).

"<u>FDIC</u>": The Federal Deposit Insurance Corporation, and any successor thereto.

"<u>Federal Funds Rate</u>": For any period, the greater of (a) 0.00% and (b) a fluctuating rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it.

"<u>Fee Letter</u>": Individually and collectively, (i) that certain Fee Letter, dated as of the Closing Date, between the Administrative Agent, the Borrower and the Collateral Manager and (ii) each additional Fee Letter executed between any Lender, the Borrower and the Collateral Manager, in each case, as amended, modified, waived, supplemented, restated or replaced from time to time.

"<u>Finance Lease</u>": Any transaction in which the obligations of a lessee to pay rent or other amounts under a lease are on a triple net basis and are required to be classified and accounted for as a capital lease on the balance sheet of such lessee under GAAP. A Finance Lease shall not include obligations structured to comply with foreign law or religious restrictions, including, but not limited to, Islamic Shari'ah.

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"<u>Financial Asset</u>": The meaning specified in Section 8-102(a)(9) of the UCC.

"<u>Financial Sponsor</u>": Any Person, including any Subsidiary of such Person, whose principal business activity is acquiring, holding, and selling equity or preferred equity investments (including controlling interests) in otherwise unrelated companies that each are distinct legal entities with separate management, books and records and bank accounts, whose operations are not integrated with one another and whose financial condition and creditworthiness are independent of the other companies so owned by such Person.

"<u>First Lien Last Out Loan</u>": A Loan that would otherwise be a First Lien Loan or a Unitranche Loan except that at any time prior to and/or after an event of default under the related Underlying Instruments of the related Obligor, any portion of such Loan will be repaid after one or more loans (or class of loans) issued by the same Obligor have been paid in full in accordance with a specific waterfall of payments or other priority of payments; <u>provided</u> that such senior loan (or class of loans), together with any other indebtedness of the related Obligor that is senior to or *pari passu* with such senior loan (or class of loans) has an aggregate commitment of 2.0x more than the applicable Obligor's EBITDA (as determined at the time of acquisition); <u>provided</u>, <u>further</u>, that the Administrative Agent may, in its sole discretion, designate an Eligible Loan that would otherwise constitute a First Lien Last Out Loan as a First Lien Loan.

"<u>First Lien Loan</u>": A Loan (other than Unitranche Loan) (i) that is secured by a valid first priority perfected security interest or lien in, to or on substantially all of the assets of the Obligor under such Loan in all appropriate jurisdictions, subject to purchase money Liens, customary Liens for taxes or regulatory charges not then due and payable, Liens accorded priority by law in favor of the United States or any State or agency, and other permitted Liens under the related Underlying Instruments that are reasonable and customary for similar loans, (ii) for which the Collateral Manager determines in good faith that the enterprise value of the related Obligor or the value of the collateral securing the Loan (each as determined by the Collateral Manager in accordance with the Collateral Manager Standard) on the date such Loan is first included as part of the Collateral or on the date that any Value Adjustment Event occurs 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 the same collateral, (iii) that provides that the payment obligation of the Obligor on such Loan is senior to, and is not (and is not expressly permitted by its terms to become) subordinate in right of payment to, any other obligation for borrowed money of such Obligor, and (iv) that is not secured solely or primarily by the Capital Stock of its Obligor or any of such Obligor's Affiliates. For the avoidance of doubt, a First Lien Last Out Loan shall not constitute a First Lien Loan unless the Administrative Agent, in its sole discretion, designates such Eligible Loan that would otherwise constitute a First Lien Last Out Loan as a First Lien Loan.

"<u>Fitch</u>": Fitch, Inc. or any successor thereto.

"<u>Fixed Rate Loan</u>": Any Loan that bears a fixed rate of interest.

"<u>Floor</u>": A rate of interest equal to 0.0%.

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"<u>Foreign Lender</u>": A Lender that is not a U.S. Person.

"<u>Fund</u>": PennantPark Private Income Fund, a Delaware statutory trust.

"<u>Fund Operating Agreement</u>": The Amended and Restated Agreement and Declaration of Trust of the Fund, dated as of September 16, 2025, together with all amendments thereto, as the same may be amended, restated, modified or supplemented from time to time.

"<u>Funding Date</u>": In the case of any Loan Advance, the proposed Business Day on which a Loan Advance is to be made after the receipt by the Administrative Agent, the Collateral Agent and Lenders of a Funding Notice, subject to the required notice provisions of and together with the other required deliveries in accordance with <u>Section</u> <u>2.2</u>.

"<u>Funding Notice</u>": A notice in the form of <u>Exhibit</u> <u>A</u><u>-1</u> requesting an Advance, including the items required by <u>Section</u> <u>2.2</u>.

"<u>FX Reserve Amount</u>": As of any date of determination, an amount equal to the sum of (a) 5% of the Dollar Equivalent of the aggregate Advances Outstanding denominated in Canadian Dollars, *plus* (b) 5% of the Dollar Equivalent of the aggregate Advances Outstanding denominated in Euros, *plus* (c) 5% of the Dollar Equivalent of the aggregate Advances Outstanding denominated in Sterling, *plus* (d) 5% of the Dollar Equivalent of the aggregate Advances Outstanding denominated in Australian Dollars, *plus* (e) 5% of the Dollar Equivalent of the aggregate Advances Outstanding denominated in Swiss Francs.

"<u>GAAP</u>": Generally accepted accounting principles as in effect from time to time in the United States.

"<u>General Intangible</u>": The meaning specified in Section 9-102(a)(42) of the UCC.

"<u>Governing Documents</u>": (a) With respect to any corporation, company, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction) or the memorandum and articles of association, (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement and (c) with respect to any limited liability company, partnership, limited partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and, if applicable, any agreement, instrument, filing or notice with respect thereto filed in connection with its formation, registration or organization with the applicable Governmental Authority in the jurisdiction of its formation, registration or organization and, if applicable, any certificate or articles of formation or organization of such entity.

"<u>Governmental Authority</u>": With respect to any Person, any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any body or entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person (including any supra-national body exercising such powers or functions, such as the European Union or the European Central Bank).

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"<u>Guarantee Obligation</u>": As to any Person (the "<u>guaranteeing person</u>"), any obligation of (a) the guaranteeing person or (b) another Person (including any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the "<u>primary obligations</u>") of any other third Person (the "<u>primary obligor</u>") in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any Property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase Property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; <u>provided</u> that the term "Guarantee Obligation" shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The terms "Guarantee" and "Guaranteed" used as a verb shall have a correlative meaning. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person's maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith.

"<u>Highest Required Investment Category</u>": (i) With respect to ratings assigned by Moody's, "Aa2" or "P-1" for one (1) month instruments, "Aa2" and "P-1" for three (3) month instruments, "Aa3" and "P-1" for six (6) month instruments and "Aa2" and "P-1" for instruments with a term in excess of six (6) months, (ii) with respect to rating assigned by S&P, "A-1" for short-term instruments and "A" for long-term instruments, and (iii) with respect to rating assigned by Fitch (if such investment is rated by Fitch), "F-1+" for short-term instruments and "AAA" for long-term instruments.

"<u>Increased Commitment</u>": The meaning specified in <u>Section</u> <u>2.18</u>.

"<u>Increased Costs</u>": Any amounts required to be paid by the Borrower to the Administrative Agent or any Lender pursuant to <u>Section</u> <u>2.12</u>.

"<u>Indebtedness</u>": With respect to any Person at any date without duplication, (a) all indebtedness of such Person for borrowed money (whether by loan or the issuance and sale of debt securities) or for the deferred purchase price of Property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), (b) any other indebtedness of such Person which is evidenced by a note, bond, debenture or similar instrument, (c) all obligations of such Person in respect of letters of credit, acceptances or similar instruments issued or created for the account of such Person, (d) all liabilities secured by (or for which the holder of such obligations has an existing right, contingent

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or otherwise, to be secured by) any Lien on any Property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof, (e) all indebtedness of such Person under any swap, hedge or other similar transaction and (f) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in <u>clauses</u> <u>(a)</u> through <u>(e)</u> above. The amount of any Indebtedness under <u>clause</u> <u>(d)</u> shall be equal to the lesser of (A) the stated amount of the relevant obligations and (B) the fair market value of the Property subject to the relevant Lien. The amount of any Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor.

"<u>Indemnified Amounts</u>": The meaning specified in <u>Section</u> <u>10.1(a)</u>.

"<u>Indemnified Parties</u>": The meaning specified in <u>Section</u> <u>10.1(a)</u>.

"<u>Indemnified Taxes</u>": (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Transaction Document and (b) to the extent not otherwise described in clause (a) above, Other Taxes.

"<u>Independent Director</u>": The meaning specified in <u>Section</u> <u>4.1(t)(xxvi)</u>.

"<u>Indorsement</u>": The meaning specified in Section 8-102(a)(11) of the UCC, and "Indorsed" has a corresponding meaning.

"<u>Insolvency Event</u>": With respect to a specified Person, (a) the filing of a decree or order for relief by a court having jurisdiction over such Person or any substantial part of its property in an involuntary case under any applicable Insolvency Law now or hereafter in effect, or appointing a receiver, liquidator, provisional liquidator, assignee, custodian, trustee, sequestrator, restructuring officer or for any substantial part of its property, or ordering the winding-up or liquidation of such Person's affairs, and such decree, order or appointment shall remain unstayed and in effect for a period of sixty (60) consecutive days, (b) the commencement by such Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, (c) the consent by such Person to the appointment of or taking possession by a receiver, liquidator, provisional liquidator, assignee, custodian, trustee, sequestrator, restructuring officer or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or (d) the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing.

"<u>Insolvency Laws</u>": The Bankruptcy Code and all other applicable liquidation, winding-up, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, restructuring, or similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

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"<u>Insolvency Proceeding</u>": Any case, action or proceeding before any court or other Governmental Authority relating to any Insolvency Event.

"<u>Instrument</u>": The meaning specified in Section 9-102(a)(47) of the UCC.

"<u>Insurance Policy</u>": With respect to any Loan, an insurance certificate evidencing insurance covering liability and physical damages to, or loss of, the related Underlying Assets.

"<u>Interest</u>": For each Interest Period, the sum of the amounts determined (with respect to each day during such Interest Period) in accordance with the following formula:

 IR x P x 1 <br> D

where:

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| | | |
|:---|:---|:---|
| IR | = | the Interest Rate applicable on such day; |
| P | = | the Advances Outstanding on such day; and |
| D | = | 360 days (or, to the extent the Interest Rate is calculated using the Base Rate, 365 or 366 days, as applicable); |

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<u>provided</u> that (i) no provision of this Agreement shall require the payment or permit the collection of Interest in excess of the maximum permitted by Applicable Law and (ii) Interest shall not be considered paid by any distribution if at any time such distribution is rescinded or must otherwise be returned for any reason.

"<u>Interest Collection Account</u>": Each Securities Account created and maintained on the books and records of the Collateral Agent (or any other party acceptable to the Administrative Agent in its sole discretion) entitled "Interest Collection Account" in the name of the Borrower and subject to the prior Lien of the Collateral Agent for the benefit of the Secured Parties.

"<u>Interest Collections</u>": All payments of interest and fees on or received in respect of Loans and Permitted Investments, including (a) any payments of accrued interest received on the sale of Loans or Permitted Investments, (b) all payments of principal (including principal prepayments) on Permitted Investments purchased with the proceeds described in this definition and (c) origination, agency, structuring, management or other up-front fees, unused line, termination, make whole, prepayment and other fees in respect of the Loans; <u>provided</u> that Interest Collections shall not include (x) Sale Proceeds representing accrued interest that are applied toward payment for accrued interest on the purchase of a Loan (including in connection with a Substitution) and (y) interest received in respect of a Loan (including in connection with any sale thereof), which interest was purchased with Principal Collections.

"<u>Interest Election Request</u>": The meaning specified in <u>Section</u> <u>2.19</u>.

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"<u>Interest Period</u>": Each period commencing on a Business Day selected by Borrower pursuant to this Agreement and ending one, three or six months thereafter (in each case, to the extent such tenor is an Available Tenor), as selected by Borrower's irrevocable notice to Administrative Agent, as set forth in <u>Section</u> <u>2.19</u>; <u>provided</u> that the foregoing provision relating to Interest Periods is subject to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) with respect to Advances, any Interest Period that would otherwise extend beyond the Revolving Period End Date shall end on the Revolving Period End Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period), shall end on the last Business Day of the calendar month at the end of such Interest Period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Borrower shall select Interest Periods so as not to require a payment or prepayment of any Advance during an Interest Period for such Advance; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) no tenor that has been removed from this definition pursuant to <u>Section</u> <u>12.18(d)</u> shall be available for specification in any Funding Notice or Notice of Continuation.

"<u>Interest Rate</u>": (a) The Benchmark plus (b) the Applicable Spread; <u>provided</u> that, upon and during the occurrence of a Disruption Event, "Interest Rate" shall mean the Base Rate plus the Applicable Spread. Accrued and unpaid interest on Advances shall be payable on each Payment Date.

"<u>Investment</u>": With respect to any Person, any direct or indirect loan, advance or investment by such Person in any other Person, whether by means of share purchase, capital contribution, loan or otherwise, excluding the acquisition of Loans, Permitted Investments and the acquisition of Equity Securities otherwise permitted by the terms hereof which are related to such Loans.

"<u>Investment Property</u>": The meaning specified in Section 9-102(a)(49) of the UCC.

"<u>IRS</u>": The United States Internal Revenue Service.

"<u>Joinder Supplement</u>": An agreement among the Borrower (if applicable), a Lender and the Administrative Agent in the form of <u>Exhibit</u> <u>H</u> to this Agreement (appropriately completed) delivered in connection with a Person becoming a Lender hereunder after the Closing Date.

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"<u>Lender</u>": The meaning specified in the Preamble, including collectively, each financial institution (i) listed on <u>Annex B</u> as having Commitments or (ii) which may from time to time become a Lender hereunder by executing and delivering a Joinder Supplement and/or an Assignment and Assumption, as applicable, to the Administrative Agent and the Borrower (and for purposes of <u>Section</u> <u>2.12</u> and <u>Section</u> <u>2.13</u> of this Agreement any successor, assignee or participant).

"<u>Lien</u>": Any mortgage, lien, pledge, charge, right, claim, security interest or encumbrance of any kind of or on any Person's assets or properties in favor of any other Person.

"<u>Loan</u>": Any commercial loan or note, which is originated or acquired by the Borrower.

"<u>Loan Advance</u>": The meaning specified in <u>Section</u> <u>2.2(a)</u>.

"<u>Loan Assignment Agreement</u>": The meaning specified in <u>Section</u> <u>6.4(e)</u>.

"<u>Loan Checklist</u>": An electronic copy of a checklist, in the form of <u>Exhibit M</u>, delivered by or on behalf of the Borrower to the Custodian, for each Loan, of all Required Loan Documents to be included within the respective Loan File, which shall specify whether such document is an original or a copy.

"<u>Loan File</u>": With respect to each Loan, a file containing (a) each of the documents and items as set forth on the Loan Checklist with respect to such Loan and (b) duly executed originals or copies of any other relevant records relating to such Loans and the Underlying Assets pertaining thereto.

"<u>Loan List</u>": That certain list of Loans attached hereto as <u>Schedule II</u>, as such Schedule shall be deemed to be updated from time to time by reference to the list of Loans set forth on the most recently delivered Borrowing Base Certificate.

"<u>Loan Parties</u>": The Borrower, the Transferor, and the Collateral Manager.

"<u>Loan Register</u>": The meaning specified in <u>Section</u> <u>5.3(k)</u>.

"<u>Margin Stock</u>": "Margin Stock" as defined under Regulation U.

"<u>Market Value</u>": With respect to any Broadly Syndicated Loan, as of any date of determination, the market value (expressed as a percentage) of such Broadly Syndicated Loan, determined as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) if such Broadly Syndicated Loan has fewer than three (3) published quotes by Approved Broker Dealers, the lowest of such quotes; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) if such Broadly Syndicated Loan has three (3) or more published quotes by Approved Broker Dealers, the average of such quotes.

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"<u>Material Adverse Effect</u>": With respect to any event or circumstance, a material adverse effect on (a) the business, assets, financial condition, operations, performance or properties of the Borrower or the Collateral Manager, in each case, taken as a whole, (b) the validity, enforceability or collectability of this Agreement or any other Transaction Document or the validity, enforceability or collectability of the Loans generally or any material portion of the Loans, (c) the rights and remedies of the Administrative Agent, the Lenders or the Secured Parties with respect to matters arising under this Agreement or any other Transaction Document, (d) the ability of each of the Borrower or the Collateral Manager to perform its obligations under any Transaction Document to which it is a party, or (e) the status, existence, perfection, priority or enforceability of the Administrative Agent's or the other Secured Parties' lien on any material portion of the Collateral.

"<u>Material Modification</u>": Any amendment or waiver of, or modification or supplement to an Underlying Instrument governing a Loan (it being agreed and understood that a release document or similar instrument executed or delivered in connection with a disposition that is otherwise permitted under the Underlying Instrument shall not constitute an amendment or waiver of, or modification or supplement to such Underlying Instrument) executed or effected on or after the date on which the Borrower acquired such Loan that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) reduces or waives any or all of the principal amount of such Loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) waives, extends or postpones the final maturity or due date of any principal or interest payment; <u>provided</u> that this <u>clause (b)</u> shall not apply (i) to any election for interest to be deferred or capitalized and added to the principal amount in respect of a Qualified PIK Loan and already expressly permitted by the terms of the Underlying Instruments or (ii) in connection with a re-pricing, refinancing, or other request of the Obligor reflecting market terms then existing at such time (as determined by the Collateral Manager) that is not in connection with financial or operational difficulties affecting, or the credit deterioration of, the related Obligor, in each case, so long as the Collateral Manager certifies to the Administrative Agent in writing that (x) such election was not made due to credit deterioration of any related Obligor and (y) the modification is not made to avoid (or has the effect of avoiding) a default under such Loan's underlying documents or a Value Adjustment Event hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) reduces the amount of interest due, or permits any interest due in cash to be deferred or capitalized and added to the principal amount of such Loan; <u>provided</u> that this <u>clause (c)</u> shall not apply (i) to any election for interest to be deferred or capitalized and added to the principal amount in respect of a Qualified PIK Loan and already expressly permitted by the terms of the Underlying Instruments or (ii) in connection with a re-pricing, refinancing, or other request of the Obligor reflecting market terms then existing at such time (as determined by the Collateral Manager) that is not in connection with financial or operational difficulties affecting, or the credit deterioration of, the related Obligor, in each case, so long as the Collateral Manager certifies to the Administrative Agent in writing that (x) such election was not made due to credit deterioration of any related Obligor and (y) the modification is not made to avoid (or has the effect of avoiding) a default under such Loan's underlying documents or a Value Adjustment Event hereunder;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) contractually or structurally subordinates such Loan by operation of a priority of payments, turnover provisions or the transfer of assets in order to limit recourse to the related Obligor or the granting of Liens (other than Permitted Liens) on any of the Underlying Assets securing such Loan other than in a manner expressly permitted by the terms of the Underlying Instruments as of the date such Loan was acquired by the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) substitutes, alters or releases a material portion of the Underlying Assets securing such Loan, and each such substitution, alteration or release, as determined in the commercially reasonable discretion of the Administrative Agent, materially and adversely affects the value of such Loan; <u>provided</u> that the foregoing shall not apply to any such release in conjunction with a contemporaneous disposition by the related Obligor accompanied by a mandatory reinvestment of the applicable net proceeds or mandatory repayment of such Loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) amends, waives, forbears, supplements or otherwise modifies in any way the definition of "Net Senior Leverage Ratio", "Net Total Leverage Ratio", "Cash Interest Coverage Ratio", "EBITDA", "permitted lien" or "indebtedness" (or any respective comparable definitions in its Underlying Instruments) or the definition of any component thereof in a manner that, in the commercially reasonable discretion of the Administrative Agent, materially adversely affects the value of such Loan; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) modifies any default or event of default with respect to such Loan in a manner that, in the commercially reasonable discretion of the Administrative Agent, materially adversely affects the value of such Loan.

"<u>Measurement Date</u>": Each of (i) the Closing Date; (ii) the date of any Borrower's Notice; (iii) with respect to any Loan, the earlier to occur of (a) the date that any Responsible Officer of the Collateral Manager has actual knowledge of the occurrence of any Value Adjustment Event or (b) the date that the Assigned Value of any Loan is adjusted; (iv) unless such date is two (2) or fewer days prior to the next Payment Date, the Business Day prior to the date any Principal Collections are to be released pursuant to <u>Section</u> <u>2.7(b)</u>; (v) the date on which any Loan included in the latest calculation of the Borrowing Base fails to meet one or more of the criteria listed in the definition of "Eligible Loan" (other than any criteria thereof waived by the Administrative Agent on or prior to the date of acquisition of such Loan by the Borrower); (vi) the date any Loan described in the foregoing <u>subclause (v)</u> again satisfies all of the criteria listed in the definition of "Eligible Loan" and is first re-included in the calculation of the Borrowing Base; (vii) the date on or prior to each Reinvestment, Discretionary Sale or Substitution pursuant to <u>Section</u> <u>2.14</u> and <u>Section</u> <u>3.2</u>, as applicable; (viii) each Reporting Date (<u>provided</u> that in each case that the Reporting Date is the applicable Measurement Date, the calculations reported as of such date shall be made as of the last day of the immediately preceding calendar month); and (ix) each other date requested by the Administrative Agent with at least one (1) Business Day advance notice.

"<u>Minimum Credit Enhancement Amount</u>": As of any date, an amount equal to the greater of (a) the sum of the Adjusted Borrowing Values of all Eligible Loans owing by the four (4) Obligors which have the greatest Obligor Exposure and (b) $15,000,000.

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"<u>Minimum Credit Enhancement Amount Test</u>": As of any date, the test that is satisfied if the aggregate Adjusted Borrowing Value of all Eligible Loans as of such date *plus* the Dollar Equivalent of the amount of Principal Collections on deposit in the Principal Collection Account as of such date *minus* the Advances Outstanding is equal to or greater than the Minimum Credit Enhancement Amount.

"<u>Moody's</u>": Moody's Investors Service, Inc., and any successor thereto.

"<u>Multiemployer Plan</u>": A "multiemployer plan" as defined in Section 4001(a)(3) of ERISA that is or was at any time during the current year or the preceding six (6) years contributed to by the Borrower or any ERISA Affiliate on behalf of its employees.

"<u>Non-Accepted EBITDA Adjustment</u>": With respect to any calculation of EBITDA for any Loan, any add-back or adjustment to "reported EBITDA" or other term meaning non-adjusted EBITDA that is not an Accepted EBITDA Adjustment.

"<u>Non</u><u>-Usage Fee</u>": A fee payable quarterly in arrears for each day during the Revolving Period equal to the sum of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) for each day during (a) the first nine (9) months following the Closing Date or (b) the first six (6) months following the closing date of a Permitted Securitization, the sum of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) for each day during such Accrual Period that the Advances Outstanding on such day are less than or equal to the product of seventy-five percent (75.00%) *multiplied* by the Facility Amount on such day, the sum of the products for each such day during such Accrual Period of (A) one divided by 360, (B) one-half of one percent (0.50%) and (C) the Unused Facility Amount as of each such day; *plus*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) for each day during such Accrual Period that the Advances Outstanding on such day are greater than the product of seventy-five percent (75.00%) *multiplied* by the Facility Amount on such day, the sum of the products for each such day during such Accrual Period of (A) one divided by 360, (B) one-quarter of one percent (0.25%) and (C) the Unused Facility Amount as of each such day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) thereafter, the sum of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) for each day during such Accrual Period that the Advances Outstanding on such day are less than the product of fifty percent (50.00%) *multiplied* by the Facility Amount on such day, the sum of the products for each such day during such Accrual Period of (A) one divided by 360, (B) three-quarters of one percent (0.75%) and (C) the Unused Facility Amount as of each such day; *plus*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) for each day during such Accrual Period that the Advances Outstanding on such day are greater than or equal to the product of fifty percent

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(50.00%) *multiplied* by the Facility Amount on such day, but less than or equal to the product of seventy-five percent (75.00%) *multiplied* by the Facility Amount on such day, the sum of the products for each such day during such Accrual Period of (A) one divided by 360, (B) one-half of one percent (0.50%) and (C) the Unused Facility Amount as of each such day; *plus*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) for each day during such Accrual Period that the Advances Outstanding on such day are greater than the product of seventy-five percent (75.00%) *multiplied* by the Facility Amount on such day, the sum of the products for each such day during such Accrual Period of (A) one divided by 360, (B) one-quarter of one percent (0.25%) and (C) the Unused Facility Amount as of each such day.

"<u>Note</u>": The meaning specified in <u>Section</u> <u>2.1</u>.

"<u>Noteless Loan</u>": A Loan with respect to which the Underlying Instruments do not require the Obligor to execute and deliver, and the Obligor has not executed and delivered to the Borrower, a promissory note evidencing any indebtedness created under such Loan.

"<u>Notice of Continuation</u>": Each notice required to be delivered by the Borrower in respect of any continuation of any Advance bearing interest at Term SOFR, in the form of <u>Exhibit</u> <u>A</u><u>-8</u> or such other form approved by Administrative Agent in its sole discretion.

"<u>Notice of Exclusive Control</u>": The meaning specified in the Account Control Agreement.

"<u>Obligations</u>": The unpaid principal amount of, and interest (including interest accruing after the maturity of the Advances and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) on the Advances, the Erroneous Payment Subrogation Rights and all other obligations and liabilities of the Borrower to the Secured Parties, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, or out of or in connection with any Transaction Document, and any other document to which the Borrower is a party made, delivered or given in connection therewith or herewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including all fees and disbursements of external counsel to the Administrative Agent, the Collateral Agent, the Custodian, the Securities Intermediary or to the Lenders that are required to be paid by the Borrower pursuant to the terms of the Transaction Documents), or otherwise.

"<u>Obligor</u>": With respect to any Loan, any Person or Persons obligated to make payments pursuant to or with respect to such Loan, including any guarantor thereof. For purposes of determining whether any Loan is made to an Eligible Obligor, all Loans included as part of the Collateral or to be transferred to the Collateral, the Obligor of which is an Affiliate of another Obligor, shall be aggregated with all Loans of such Affiliate Obligor; for example, if Corporation A is an Affiliate of Corporation B, and the sum of the Adjusted Borrowing Values of all of

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Corporation A's Loans included as part of the Collateral constitutes 10.00% of the aggregate Adjusted Borrowing Value for all Loans and the sum of the Adjusted Borrowing Value of all of Corporation B's Loans included as part of the Collateral constitutes 10.00% of the aggregate Adjusted Borrowing Value of all Loans, the Obligor concentration for Corporation A and Corporation B would each be 20.00%.

"<u>Obligor Cash Interest Coverage Ratio</u>": With respect to any Loan for any Relevant Test Period, either (a) the meaning of "Cash Interest Coverage Ratio" or comparable definition set forth in the Underlying Instruments for such Loan, or (b) in the case of any Loan with respect to which the related Underlying Instruments do not include a definition of "Cash Interest Coverage Ratio" or comparable definition, the ratio of (i) the Dollar Equivalent of EBITDA to (ii) the Dollar Equivalent of Obligor Cash Interest Expense of such Obligor as of the Relevant Test Period, as calculated by the Collateral Manager (on behalf of the Borrower) in good faith; <u>provided</u> that in calculating "Cash Interest Coverage Ratio" under either of <u>clause (a)</u> or <u>clause (b)</u> above, EBITDA of the applicable Obligor shall in any event be deemed to be no greater than EBITDA of such Obligor as computed in accordance with the definition of "EBITDA" hereunder; <u>provided</u>, <u>further</u>, that, for the purposes of calculating Obligor Cash Interest Coverage Ratio for any Obligor in any Relevant Test Period in which such Obligor issued or originated Indebtedness, the Obligor Cash Interest Expense resulting from such Indebtedness shall be annualized based on the period from the date on which such Indebtedness was originated or issued to the last day of such Relevant Test Period.

"<u>Obligor Cash Interest Expense</u>": With respect to any Obligor for any period, the amount which, in conformity with GAAP, would be set forth opposite the caption "interest expense" or any like caption reflected on the most recent financial statements delivered by such Obligor to the Borrower for such period.

"<u>Obligor Exposure</u>": With respect to any Obligor, the aggregate Adjusted Borrowing Value of all Loans owned by the Borrower in respect of which such Obligor is the related Obligor.

"<u>Obligor Net Senior Leverage Ratio</u>": With respect to any Loan for any Relevant Test Period, either (a) the meaning of "Net Senior Leverage Ratio" or comparable definition set forth in the Underlying Instruments for such Loan, or (b) in the case of any Loan with respect to which the related Underlying Instruments do not include a definition of "Net Senior Leverage Ratio" or comparable definition, the ratio of (i) the Dollar Equivalent of the "senior indebtedness" (as defined in the Underlying Instruments or comparable definition thereof, including such Loan) of the applicable Obligor as of the date of determination, excluding any junior indebtedness and any unsecured indebtedness of such Obligor or non-recourse indebtedness of such Obligor secured solely by the real property and related improvements and fixtures of such Obligor as of such date, *minus* the Dollar Equivalent of the Unrestricted Cash of such Obligor as of such date to (ii) the Dollar Equivalent of EBITDA of such Obligor with respect to the applicable Relevant Test Period, as calculated by the Borrower and Collateral Manager in good faith; <u>provided</u> that in calculating "Net Senior Leverage Ratio" under either of <u>clause (a)</u> or <u>clause (b)</u> above, EBITDA of the applicable Obligor shall in any event be deemed to be no greater than EBITDA of such Obligor as computed in accordance with the definition of "EBITDA" hereunder.

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"<u>Obligor Net Total Leverage Ratio</u>": With respect to any Loan for any Relevant Test Period, either (a) the meaning of "Net Total Leverage Ratio" or comparable definition set forth in the Underlying Instruments for such Loan, or (b) in the case of any Loan with respect to which the related Underlying Instruments do not include a definition of "Net Total Leverage Ratio" or comparable definition, the ratio of (i) the Dollar Equivalent of the "total indebtedness" (as defined in the Underlying Instruments or comparable definition thereof, including such Loan) of the applicable Obligor as of the date of determination, *minus* the Dollar Equivalent of the Unrestricted Cash of such Obligor as of such date to (ii) the Dollar Equivalent of EBITDA of such Obligor with respect to the applicable Relevant Test Period, as calculated by the Borrower and Collateral Manager in good faith; <u>provided</u> that in calculating "Net Total Leverage Ratio" under either of <u>clause (a)</u> or <u>clause (b)</u> above, EBITDA of the applicable Obligor shall in any event be deemed to be no greater than EBITDA of such Obligor as computed in accordance with the definition of "EBITDA" hereunder.

"<u>Officer's Certificate</u>": A certificate signed by a Responsible Officer of the Person providing the applicable certification, as the case may be.

"<u>Opinion of Counsel</u>": A written opinion of counsel, which opinion and counsel are acceptable to the Administrative Agent in its reasonable discretion, <u>provided</u> that Proskauer Rose LLP shall be an acceptable counsel for purposes of delivering any Opinion of Counsel hereunder.

"<u>Original Obligor Cash Interest Coverage Ratio</u>": With respect to any Loan, the Obligor Cash Interest Coverage Ratio for such Loan on the date such Loan (i) was first included as part of the Collateral or (ii) if applicable, was most recently assigned a new Assigned Value by the Administrative Agent pursuant to <u>clause (a)(iii)</u> of the definition of Assigned Value after the occurrence of a Value Adjustment Event, as set forth in the applicable Assigned Value Notice with respect to such Loan.

"<u>Original Obligor Net Senior Leverage Ratio</u>": With respect to any Loan, the Obligor Net Senior Leverage Ratio for such Loan on the date such Loan (i) was first included as part of the Collateral or (ii) if applicable, was most recently assigned a new Assigned Value by the Administrative Agent pursuant to <u>clause (a)(iii)</u> of the definition of Assigned Value after the occurrence of a Value Adjustment Event, as set forth in the applicable Assigned Value Notice with respect to such Loan.

"<u>Other Connection Taxes</u>": With respect to any Secured Party, Taxes imposed as a result of a present or former connection between such Secured Party and the jurisdiction imposing such Tax (other than connections arising from such Secured Party 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 Transaction Document, or sold or assigned an interest in any Advance, Commitment or Transaction Document).

"<u>Other Taxes</u>": All present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security

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interest under, or otherwise with respect to, any Advance, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to <u>Section</u> <u>2.17(b)</u>).

"<u>Outstanding Balance</u>": With respect to any Loan as of any date of determination, (a) if such Loan is denominated and payable in Dollars, the outstanding principal balance of any advances or funded loans made by the Borrower to the related Obligor pursuant to the related Underlying Instruments as of such date of determination and (b) if such Loan is denominated and payable in a Currency other than Dollars, the equivalent in Dollars of the outstanding principal balance of any advances or loans, determined by the Collateral Manager using the using the then current spot rate as set forth in the definition of "Dollar Equivalent", made by the Borrower to the related Obligor pursuant to the related Underlying Instruments as of such date of determination, in each case, exclusive of any interest and PIK Interest.

"<u>Participant Register</u>": The meaning specified in <u>Section</u> <u>12.16(b)</u>.

"<u>Participation Interest</u>": A participation interest in a loan that would, at the time of acquisition by the Borrower or the Borrower's commitment to acquire the same, satisfy each of the following criteria: (i) such participation would constitute an Eligible Loan were it acquired directly, (ii) the seller of the participation is the lender on the subject loan, (iii) the aggregate participation in the loan does not exceed the principal amount or commitment of such loan, (iv) such participation does not grant, in the aggregate, to the participant in such participation a greater interest than the seller holds in the loan or commitment that is the subject of the participation, (v) the entire purchase price for such participation is paid in full at the time of its acquisition, (vi) the participation provides the participant all of the economic benefit and risk of the whole or part of the loan or commitment that is the subject of the loan participation and (vii) such participation is documented under a Sale Agreement or a Loan Syndications and Trading Association, Loan Market Association or similar agreement standard for loan participation transactions among institutional market participants.

"<u>Payment Date</u>": (x) The twentieth (20<sup>th</sup>) day of each March, June, September and December, or, if such day is not a Business Day, the next succeeding Business Day, commencing in March 2026 and (y) the Termination Date.

"<u>Payment Date Report</u>": A certificate setting forth, among other things, a calculation of Availability, the aggregate outstanding principal balance of the Advances, the Aggregate Unfunded Exposure Amount, the Borrowing Base, and the application of payments to be made on the next Payment Date pursuant to <u>Section</u> <u>2.7</u> or <u>2.8</u> hereof (as applicable), the currency calculations set forth in Section 5.1(q), in the form of <u>Exhibit</u> <u>A</u><u>-6</u>, prepared by the Collateral Manager.

"<u>Payment Duties</u>": The meaning specified in <u>Section</u> <u>7.2(b)(iii)</u>.

"<u>Payment Recipient</u>": The meaning specified in <u>Section</u> <u>11.10(a)</u>.

"<u>Pension Plan</u>": The meaning specified in <u>Section</u> <u>4.1(w)</u>.

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"<u>Periodic Term SOFR Determination Day</u>": The meaning specified in the definition of "Term SOFR".

"<u>Permitted Investments</u>": Negotiable instruments or securities or other investments, which may include obligations or securities of issuers for which the Collateral Agent or an Affiliate of the Collateral Agent provides services or receives compensation that (i) except in the case of demand or time deposits and investments in money market funds, are represented by instruments in bearer or registered form or ownership of which is represented by book entries by a Clearing Agency or by a Federal Reserve Bank in favor of depository institutions eligible to have an account with such Federal Reserve Bank who hold such investments on behalf of their customers, (ii) as of any date of determination, mature by their terms on or prior to the Business Day preceding the next Payment Date unless such Permitted Investments are issued by the Collateral Agent or an Affiliate thereof in its capacity as a banking institution, in which event such Permitted Investments may mature on such Payment Date and (iii) evidence:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) direct obligations of, and obligations fully guaranteed as to full and timely payment by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) demand deposits, time deposits, bank deposit products of or certificates of deposit of depository institutions or trust companies incorporated under the laws of the United States or any state thereof and subject to supervision and examination by federal or state banking or depository institution authorities; <u>provided</u> that at the time of the Borrower's investment or contractual commitment to invest therein, the commercial paper, if any, and short-term unsecured debt obligations (other than such obligation whose rating is based on the credit of a Person other than such institution or trust company) of such depository institution or trust company shall have a credit rating from each Rating Agency in the Highest Required Investment Category granted by such Rating Agency;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) commercial paper, or other short term obligations, having, at the time of the Borrower's investment or contractual commitment to invest therein, a rating in the Highest Required Investment Category granted by each Rating Agency;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) demand deposits, time deposits or certificates of deposit that are fully insured by the FDIC and either have a rating on their certificates of deposit or short-term deposits from Moody's and S&P of "P-1" and "A-1", respectively, and if rated by Fitch, from Fitch of "F-1+";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) investments in taxable money market funds or other regulated investment companies having, at the time of the Borrower's investment or contractual commitment to invest therein, a rating of the Highest Required Investment Category from each Rating Agency (as applicable); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) time deposits (having maturities of not more than 90 days) by an entity the commercial paper of which has, at the time of the Borrower's investment or contractual

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commitment to invest therein, a rating of the Highest Required Investment Category granted by each Rating Agency; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) interest bearing deposits, including but not limited to Deposit Placement Programs, in United States Dollars held at Western Alliance Bank or a bank that is well-capitalized as reflected on the subject bank's Consolidated Report of Condition and Income or such other report of condition as is required by the bank's primary Federal banking regulator.

"<u>Permitted Liens</u>": 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 Underlying Assets, Liens permitted under the related Underlying Instruments, (d) as to agented Loans, Liens in favor of the agent on behalf of all of the lenders with respect to such Loan, (e) Liens granted pursuant to or by the Transaction Documents, and (f) Liens in favor of the Collateral Agent and permitted under the Account Control Agreement.

"<u>Permitted RIC Distribution</u>": Any distribution made to the Transferor to the extent required to allow the Transferor to make sufficient distributions to qualify as a regulated investment company, and to otherwise eliminate federal or state income or excise taxes payable by the Transferor in or with respect to any taxable year of the Transferor (or any calendar year, as relevant); <u>provided</u> that the amount of any such payments made in or with respect to any such taxable year (or calendar year, as relevant) of the Transferor shall not exceed 115.0% of the amounts that the Borrower would have been required to distribute to the Transferor to: (i) allow the Borrower to satisfy the minimum distribution requirements that would be imposed by Section 852(a) of the Code (or any successor thereto) to maintain its eligibility to be taxed as a regulated investment company for any such taxable year, (ii) reduce to zero for any such taxable year the Borrower's liability for federal income taxes imposed on (x) its investment company taxable income pursuant to Section 852(b)(1) of the Code (or any successor thereto), or (y) its net capital gain pursuant to Section 852(b)(3) of the Code (or any successor thereto), and (iii) reduce to zero the Borrower's liability for federal excise taxes for any such calendar year imposed pursuant to Section 4982 of the Code (or any successor thereto), in the case of each of the foregoing clauses (i), (ii) or (iii), calculated assuming that the Borrower had qualified to be taxed as a regulated investment company under the Code.

"<u>Permitted Securitization</u>": Any private or public term or conduit securitization transaction undertaken by the Borrower or an Affiliate thereof that is secured, directly or indirectly, by any Loan currently or formerly included in the Collateral or any portion thereof or any interest therein released from the Lien of this Agreement, including, without limitation, any collateralized loan obligation or collateralized debt obligation offering or other asset securitization or term facility.

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"<u>Person</u>": An individual, partnership, limited partnership, corporation, limited liability company, joint stock company, trust (including a statutory or business trust), unincorporated association, sole proprietorship, joint venture, government (or any agency, instrumentality or political subdivision thereof), estate, company, limited liability partnership, nonprofit corporation, group, sector, territory or other entity or organization.

"<u>PIK Interest</u>": Interest accrued on a Loan that is added to the principal amount of such Loan instead of being paid as it accrues, <u>provided</u> that the interest of any Loan that is paid with the proceeds of a permitted drawing on a Revolving Loan shall not constitute PIK Interest.

"<u>PIK Loan</u>": A Loan that by its terms permits the deferral or capitalization of payment of accrued and unpaid interest.

"<u>Plan Asset Rules</u>": 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 or any successor regulations, as modified or deemed to be modified by Section 3(42) of ERISA, and the rules and regulations thereunder.

"<u>Platform</u>": Any electronic system, including Intralinks<sup>®</sup>, ClearPar<sup>®</sup> and any other internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent or any of their respective Related Parties or any other Person, providing for access to data protected by passcodes or other security system.

"<u>Principal Collection Account</u>": Each Securities Account created and maintained on the books and records of the Collateral Agent (or any other party acceptable to the Administrative Agent in its sole discretion) entitled "Principal Collection Account" in the name of the Borrower and subject to the prior Lien of the Collateral Agent for the benefit of the Secured Parties.

"<u>Principal Collections</u>": All amounts received by the Borrower or the Collateral Agent that are not Interest Collections or Excluded Amounts to the extent received in cash by or on behalf of the Borrower or the Collateral Agent.

"<u>Pro Rata Share</u>": With respect to a Lender, the percentage obtained by dividing the Commitment of such Lender (as determined pursuant to the definition of Commitment) by the aggregate Commitments of all the Lenders (as determined pursuant to the definition of Commitment).

"<u>Proceeds</u>": With respect to any Collateral, all property that is receivable or received when such Collateral is collected, sold, liquidated, foreclosed, exchanged, or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes all rights to payment with respect to any insurance relating to such Collateral, net of all out-of-pocket expenses incurred in connection with any such collection, sale, liquidation, foreclosure, exchange or disposal.

"<u>Property</u>": Any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including Capital Stock.

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"<u>Public Lenders</u>": The meaning specified in <u>Section</u> <u>12.2(d)</u>.

"<u>Purchase Price</u>": With respect to any Loan, an amount (expressed as a percentage of par) equal to (i) the purchase price (or, if different principal amounts of such Loan were purchased at different purchase prices, the weighted average of such purchase prices) paid by the Transferor or the Borrower (as applicable) for such Loan (exclusive of any interest, PIK Interest and original issue discount) divided by (ii) the principal balance of the portion of such Loan purchased by the Borrower outstanding as of the date of such purchase (exclusive of any interest, PIK Interest and original issue discount); <u>provided</u> that the Purchase Price of any Loan determined to be equal to or greater than ninety-five percent (95.0%) in accordance with the foregoing calculation shall be deemed to be one hundred percent (100%).

"<u>QFC</u>": The meaning assigned to the term "qualified financial contract" in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

"<u>Qualified First Lien Loan</u>": A Loan that would otherwise be a First Lien Loan except that at any time prior to and/or after an event of default under the related Underlying Instruments of the related Obligor, any portion of such Loan will be repaid after one or more loans (or class of loans) issued by the same Obligor have been paid in full in accordance with a specific waterfall of payments or other priority of payments and such senior loan (or class of loans), together with any other indebtedness of the related Obligor that is senior to or pari passu with such senior loan (or class of loans) has an aggregate commitment of more than 1.0x but less than or equal to 2.0x the applicable Obligor's EBITDA (as determined at the time of acquisition).

"<u>Qualified Institution</u>": (x) Western Alliance Trust Company, N.A. or (y) a depository institution or trust company organized under the laws of the United States or any one of the States thereof or the District of Columbia (or any domestic branch of a foreign bank), (i)(a) that has either (1) a long-term unsecured debt rating of "A" or better by S&P and "A2" or better by Moody's or (2) a short-term unsecured debt rating or certificate of deposit rating of "A-1" or better by S&P or "P-1" or better by Moody's, (b) the parent corporation of which has either (1) a long-term unsecured debt rating of "A" or better by S&P and "A2" or better by Moody's or (2) a short-term unsecured debt rating or certificate of deposit rating of "A-1" or better by S&P and "P-1" or better by Moody's or (c) is otherwise acceptable to the Administrative Agent and (ii) the deposits of which are insured by the FDIC.

"<u>Qualified PIK Loan</u>": Any PIK Loan that requires the Obligor to pay a portion of the accrued and unpaid interest in Cash on a current basis pursuant to the terms of the related Underlying Instruments at an interest rate of not less than the Benchmark *plus* 2.00% per annum.

"<u>Rating Agencies</u>": Each of S&P, Fitch and Moody's.

"<u>Reference Time</u>": With respect to any setting of the then-current Benchmark for Dollars (other than Term SOFR), means the time determined by the Administrative Agent in accordance with the Benchmark Replacement Conforming Changes.

"<u>Register</u>": The meaning specified in <u>Section</u> <u>12.16(b)</u>.

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"<u>Registered</u>": With respect to any registration-required obligation within the meaning of Section 163(f)(2) of the Code, a debt obligation that is in registered form within the meaning of Section 5f.103-1(c) of the Treasury Regulations.

"<u>Regulation U</u>": Regulation U of the Board of Governors of the Federal Reserve System, 12 C.F.R. §221, or any successor regulation.

"<u>Reinvestment</u>": The meaning specified in <u>Section</u> <u>2.14(a)(i)</u>.

"<u>Reinvestment Notice</u>": Each notice required to be delivered by the Borrower in respect of any Reinvestment of Principal Collections pursuant to <u>Section</u> <u>3.2(b)</u> in the form of <u>Exhibit</u> <u>A</u><u>-3</u>.

"<u>Related Parties</u>": With respect to any Person, such Person's Affiliates and the partners, directors, officers, managers, employees, agents and advisors of such Person and of such Person's Affiliates.

"<u>Release Date</u>": The meaning specified in <u>Section</u> <u>2.14(d)</u>.

"<u>Relevant Governmental Body</u>": (a) With respect to a Benchmark Replacement in respect of Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Dollars, the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto; and (b) with respect to a Benchmark Replacement in respect of Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, any Eligible Foreign Currency, (1) the central bank for the Currency in which such Obligations, interest, fees, commissions or other amounts are denominated, or calculated with respect to, or any central bank or other supervisor which is responsible for supervising either (A) such Benchmark Replacement or (B) the administrator of such Benchmark Replacement or (2) any working group or committee officially endorsed or convened by (A) the central bank for the Currency in which such Obligations, interest, fees, commissions or other amounts are denominated, or calculated with respect to, (B) any central bank or other supervisor that is responsible for supervising either (i) such Benchmark Replacement or (ii) the administrator of such Benchmark Replacement, (C) a group of those central banks or other supervisors or (D) the Financial Stability Board or any part thereof.

"<u>Relevant Test Period</u>": With respect to any Loan, the relevant test period for the calculation of Obligor Net Senior Leverage Ratio, Obligor Net Total Leverage Ratio or Obligor Cash Interest Coverage Ratio, as applicable, for such Loan in accordance with the related Underlying Instruments or, if no such period is provided for therein, (i) for Obligors delivering monthly financing statements, each period of the last twelve (12) consecutive reported calendar months, and (ii) for Obligors delivering quarterly financing statements, each period of the last four (4) consecutive reported fiscal quarters of the principal Obligor on such Loan; <u>provided</u> that with respect to any Loan for which the relevant test period is not provided for in the related Underlying Instruments, if an Obligor is a newly-formed entity as to which twelve (12) consecutive calendar months have not yet elapsed, "Relevant Test Period" shall initially include

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the period from the date of formation of such Obligor to the most recently ended month or fiscal quarter (as the case may be), with applicable amounts in such period annualized for purposes of such calculations, and shall subsequently include each period of the last twelve (12) consecutive reported calendar months or four (4) consecutive reported fiscal quarters (as the case may be) of such Obligor.

"<u>Repayment Notice</u>": Each notice required to be delivered by the Borrower in respect of any repayment of Advances Outstanding, in the form of <u>Exhibit</u> <u>A</u><u>-2</u>.

"<u>Replacement Collateral Manager</u>": The meaning specified in <u>Section</u> <u>6.11(a)</u>.

"<u>Replacement Collateral Manager Fee</u>": The fee payable to the Replacement Collateral Manager or any successor Collateral Manager on each Payment Date in arrears in respect of each Accrual Period after the resignation or removal of PennantPark Investment Advisers, LLC (or any other Affiliate of any Loan Party) as Collateral Manager hereunder, which fee shall be an amount equal to (A) (i) the sum of the Adjusted Borrowing Value of all Eligible Loans owned by the Borrower on each day of such Accrual Period *divided* by (ii) the number of days in such Accrual Period *multiplied by* (B) a rate equal to 0.25% *per annum*; <u>provided</u>, however, the Replacement Collateral Manager shall be entitled to receive payment for such greater amount as agreed among the Replacement Collateral Manager, the Borrower and the Administrative Agent.

"<u>Reportable Event</u>": A reportable event within the meaning of Section 4043 of ERISA, other than those events as to which the thirty (30) day notice period referred to in Section 4043(c) of ERISA has been waived.

"<u>Reporting Date</u>": The twentieth (20<sup>th</sup>) day of each calendar month or, if such day is not a Business Day, the next succeeding Business Day, with the first Reporting Date occurring on November 20, 2025, unless a Payment Date Report is required to be delivered that month.

"<u>Required Funding Amount</u>": If (i) (A) no Event of Default has occurred and is continuing, <u>and</u> (B) the Revolving Period End Date has not occurred, in each case as of the date of determination and after giving effect to any withdrawal from the Unfunded Exposure Account on such date of determination, the Unfunded Exposure Equity Amount, and (ii) (A) an Event of Default has occurred and continuing, <u>or</u> (B) the Revolving Period End Date has occurred, in either case as of the date of determination and after giving effect to any withdrawal from the Unfunded Exposure Account on such date of determination, the Unfunded Exposure Amount.

"<u>Required Lenders</u>": (a) The Administrative Agent and (b) the Lenders representing an aggregate of more than 50.00% of (i) prior to the earlier to occur of the Revolving Period End Date or the Termination Date, the aggregate Commitments of the Lenders then in effect and (ii) thereafter, the Advances Outstanding, and the Commitment of, and the portion of any Advances Outstanding, as applicable, held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders. For purposes of determining the number of Lenders pursuant to this definition, groups of Lenders that are Affiliates shall be treated as one (1) Lender.

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"<u>Required Loan Document Exception</u>": The meaning specified in Section 14.2(b)(i).

"<u>Required Loan Documents</u>": For each Loan, the following documents or instruments, in each case as specified on the related Loan Checklist:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) unless such Loan is a Noteless Loan, the original executed promissory note (or, in the case of a lost note, a copy of the executed underlying promissory note accompanied by an original executed affidavit and indemnity from the Borrower to the Collateral Agent); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) unless such Loan is a Noteless Loan, an unbroken chain of original endorsements from each prior holder of such promissory note to the Borrower, (ii) executed copies of an unbroken chain of executed assignment and assumption agreements, transfer documents or instruments relating to such Loan evidencing the assignment of such Loan from each prior third party owner thereof to the Borrower, (iii) an original executed assignment and assumption agreement, transfer document or instrument relating to such Loan evidencing the assignment of such Loan to the Borrower that, to the extent required by the Underlying Instruments, is counter-signed by the applicable underlying administrative agent, (iv) a copy of the loan register held by the administrative agent for such Loan showing that the Borrower is the lender of record with respect to such Loan or (v) a copy of the executed credit or loan agreement to which the Borrower was an original signatory (which includes the Borrower's commitment).

"<u>Required Reports</u>": Collectively, the compliance certificate, in the form of <u>Exhibit F</u> hereto, the Borrowing Base Certificate, the Payment Date Report, financial statements of each Obligor, the Borrower, the Transferor and the Collateral Manager required to be delivered under the Transaction Documents (including pursuant to <u>Section</u> <u>5.1(s)</u> but not pursuant to <u>6.8(c)</u>), the Transferor's underwriting memoranda related to each Loan, the annual static pool report the annual statements as to compliance and the annual independent public accountant's report (including pursuant to <u>Section</u> <u>5.1(t)(v)</u>).

"<u>Responsible Officer</u>": With respect to (i) the Borrower, any duly authorized officer of such Person, certified as such pursuant to an executed incumbency certificate delivered to the Administrative Agent, in the form of <u>Exhibit A-5</u> hereto, and (ii) any other Person, any Person with direct responsibility for the administration of this Agreement and also, with respect to a particular matter, any duly authorized officer of such Person to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject.

"<u>Restricted Payment</u>": (i) Any dividend or other distribution, direct or indirect, on account of any class of equity interests of the Borrower now or hereafter outstanding, except a dividend paid solely in interests of that class of equity interests or in any junior class of equity interests of the Borrower; (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any class of equity interests of the Borrower now or hereafter outstanding; and (iii) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire equity interests of the Borrower now or hereafter outstanding.

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"<u>Revaluation Date</u>": With respect to any Advance denominated in an Eligible Foreign Currency, each of the following: (i) the date of the borrowing of such Advance, but only as to the amounts so borrowed on such date, (ii) each date of a continuation of such Advance pursuant to the terms of this Agreement, but only as to the amounts so continued on such date, (iii) each date the Borrowing Base is calculated in accordance with the terms hereof and (iv) such additional dates as the Administrative Agent shall determine or the Required Lenders shall require.

"<u>Review Criteria</u>": The meaning specified in <u>Section</u> <u>14.2(b)(i)</u>.

"<u>Revolving Loan</u>": Any Loan (other than a Delayed Draw Loan) that is a senior secured obligation (including funded and unfunded portions of revolving credit lines, unfunded commitments under specific facilities, letter of credit facilities and other similar loans and investments) that under the Underlying Instruments relating thereto may require one or more future advances to be made to the Obligor by the Borrower and which provides that such borrowed money may be repaid and reborrowed from time to time; <u>provided</u> that any such Loan will be a Revolving Loan only until all commitments by the Borrower to make advances to the Obligor thereof expire, are terminated, or are irrevocably reduced to zero.

"<u>Revolving Period</u>": The period commencing on the Closing Date and ending on the day preceding the earlier to occur of the Revolving Period End Date or the Termination Date.

"<u>Revolving Period End Date</u>": The earliest to occur of (a) the Scheduled Revolving Period End Date, (b) the date that is ninety (90) days after the termination of the "Investment Period" (as defined in the Fund Operating Agreement) and (c) the date of the declaration of the Revolving Period End Date pursuant to <u>Section</u> <u>9.2(a)</u>.

"<u>RFR</u>": For any Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, (a) Dollars, Term SOFR, (b) Canadian Dollars, Term CORRA, (c) Sterling, SONIA and (d) Swiss Francs, SARON.

"<u>RFR Advance</u>": Individually and collectively as the context may require, a Daily Simple RFR Advance or a Term RFR Advance.

"<u>RFR Business Day</u>": For any Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, (a) Dollars, any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which banks are closed for general business in New York, New York, (b) Canadian Dollars, any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which banks are closed for general business in Toronto, Ontario, Canada, (c) Sterling, any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which banks are closed for general business in London, and (d) Swiss Francs, any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which banks are closed for the settlement of payments and foreign exchange transactions in Zurich; <u>provided</u> that for purposes of notice requirements in <u>Sections 2.2</u> and <u>2.3</u> in each case, such day is also a Business Day.

"<u>RFR Rate Day</u>": The meaning specified in the definition of "Adjusted Daily Simple RFR".

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"<u>S&P</u>": S&P Global Ratings (or its successors in interest).

"<u>S&P Industry Classification</u>": The industry classifications set forth in <u>Schedule IV</u> hereto, as such industry classifications shall be updated with the consent of the Borrower, the Administrative Agent and the Required Lenders if S&P publishes revised industry classifications.

"<u>Sale Agreement</u>": The Sale and Contribution Agreement, dated as of the Closing Date, between the Transferor and the Borrower, as amended, modified, waived, supplemented, restated or replaced from time to time.

"<u>Sale Proceeds</u>": With respect to any Loan, all proceeds received as a result of the sale of such Loan, net of all out-of-pocket expenses of the Borrower, the Collateral Manager and the Collateral Agent incurred in connection with any such sale.

"<u>Sanctioned Person</u>": Any Person, group, sector, territory or country that is the subject or target of any Sanctions, including without limitation, any legal entity that is deemed to be a subject or target of Sanctions based on the direct or indirect ownership or control of such entity by any other Sanctioned Person.

"<u>Sanctions</u>": Any and all economic or financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes and anti-terrorism laws, including but not limited to those imposed, administered or enforced from time to time by: (a) the United States of America, including those administered by the U.S. Department of the Treasury's Office of Foreign Assets Control, the U.S. Department of State, the U.S. Department of Commerce, or through any existing or future executive order; (b) the United Nations Security Council; (c) the European Union (including any member state thereof); (d) the United Kingdom; (e) the State Secretariat for Economic Affairs (Switzerland); or (f) any other Governmental Authorities with jurisdiction over such Person.

"<u>SARON</u>": A rate equal to the Swiss Average Rate Overnight as administered by the SARON Administrator.

"<u>SARON Adjustment</u>": A percentage equal to -0.0571% (negative 5.71 basis points) per annum.

"<u>SARON Administrator</u>": SIX Swiss Exchange AG (or any successor administrator of the Swiss Average Rate Overnight).

"<u>SARON Administrator's Website</u>": SIX Swiss Exchange AG's website, currently at https://www.six-group.com, or any successor source for the Swiss Average Rate Overnight identified as such by the SARON Administrator from time to time.

"<u>Scheduled Payment</u>": Each scheduled payment of principal and/or interest required to be made by an Obligor on the related Loan, as adjusted pursuant to the terms of the related Underlying Instruments, if applicable.

"<u>Scheduled Revolving Period End Date</u>": October 2, 2028.

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"<u>Second Lien Loan</u>": Any Loan (i) that does not satisfy all of the requirements set forth in the definition of "First Lien Loan" or "First Lien Last Out Loan", (ii) that is secured by a valid second (or higher) priority perfected security interest or lien in, to or on substantially all of the assets of the Obligor under such Loan in all appropriate jurisdictions, subject to purchase money Liens, customary Liens for taxes or regulatory charges not then due and payable, Liens accorded priority by law in favor of the United States or any State or agency, and other permitted Liens under the related Underlying Instruments that are reasonable and customary for similar loans (including liens securing "first lien" loans), (iii) for which the Collateral Manager determines in good faith that the enterprise value of the related Obligor or the value of the collateral securing the Loan (each as determined by Collateral Manager in accordance with a methodology acceptable to the Administrative Agent) on the date such Loan is first included as part of the Collateral or on the date that any Value Adjustment Event occurs 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 the same collateral, (iv) that is not (and is not expressly permitted by its terms to become) subordinate in right of payment to any obligation for borrowed money of the Obligor (excluding customary terms applicable to a second lien lender under customary intercreditor provisions, including such as after an event of default in connection with a first priority lien or with respect to the liquidation of the Obligor or certain specified collateral for such Loan), and (v) that is not secured solely or primarily by the Capital Stock of its Obligor or any of such Obligor's Affiliates.

"<u>Secured Party</u>": (i) Each Lender, (ii) the Administrative Agent, (iii) the Collateral Agent, (iv) the Custodian and (v) the Securities Intermediary.

"<u>Securities Account</u>": The meaning specified in Section 8-501(a) of the UCC.

"<u>Securities Act</u>": The U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Securities Intermediary</u>": (i) A Clearing Corporation; or (ii) a Person, including a bank or broker, that in the ordinary course of its business maintains Securities Accounts for others and is acting in that capacity. The initial Securities Intermediary under the Account Control Agreement shall be Western Alliance Trust Company, N.A.

"<u>Security Certificate</u>": The meaning specified in Section 8-102(a)(16) of the UCC.

"<u>Security Entitlement</u>": The meaning specified in Section 8-102(a)(17) of the UCC.

"<u>Senior Collateral Manager Fee</u>": So long as PennantPark Investment Advisers, LLC or any Affiliate of any Loan Party is the Collateral Manager, the fee payable to Collateral Manager on each Payment Date in arrears in respect of each Accrual Period, which fee shall be an amount equal to (A) (i) the sum of the Adjusted Borrowing Value of all Eligible Loans owned by the Borrower on each day of such Accrual Period divided by (ii) the number of days in such Accrual Period multiplied by (B) a rate equal to 0.25% *per annum*.

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"<u>SOFR</u>": A rate equal to the secured overnight financing rate as administered by the SOFR Administrator.

"<u>SOFR Administrator</u>": The Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

"<u>Solvent</u>": As to any Person at any time, having a state of affairs such that all of the following conditions are met: (a) the fair value of the property of such Person is greater than the amount of such Person's liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code; (b) the present fair saleable value of the property of such Person in an orderly liquidation of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts and other liabilities as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in a business or a transaction, and does not propose to engage in a business or a transaction, for which such Person's property assets would constitute unreasonably small capital.

"<u>SONIA</u>": A rate equal to the Sterling Overnight Index Average as administered by the SONIA Administrator.

"<u>SONIA Adjustment</u>": A percentage equal to 0.0326% (3.26 basis points).

"<u>SONIA Administrator</u>": The Bank of England (or any successor administrator of the Sterling Overnight Index Average).

"<u>SONIA Administrator's Website</u>" The Bank of England's website, currently at http://www.bankofengland.co.uk, or any successor source for the Sterling Overnight Index Average identified as such by the SONIA Administrator from time to time.

"<u>Sterling</u>", "<u>GBP</u>" and "<u>£</u>": The lawful currency of the United Kingdom.

"<u>Sterling RFR Determination Day</u>": The meaning specified in the definition of "Adjusted Daily Simple RFR".

"<u>Structured Finance Obligation</u>": Any obligation secured directly by, referenced to, or representing ownership of, a pool of receivables or other Financial Assets of any Obligor that is a single purpose bankruptcy remote special purpose entity established to finance such Financial Assets, including collateralized debt obligations and mortgage-backed securities, including (but not limited to) collateral debt obligations, collateral loan obligations, asset backed securities and commercial mortgage backed securities or any resecuritization thereof.

"<u>Subordinated Collateral Manager Fee</u>": So long as PennantPark Investment Advisers, LLC or any Affiliate of any Loan Party is the Collateral Manager, the fee payable to the Collateral Manager on each Payment Date in arrears in respect of each Accrual Period, which

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fee shall be an amount equal to (A) (i) the sum of the Adjusted Borrowing Value of all Eligible Loans owned by the Borrower on each day of such Accrual Period divided by (ii) the number of days in such Accrual Period multiplied by (B) a rate equal to 0.25% *per annum*.

"<u>Subsidiary</u>": As to any Person, a corporation, partnership, company, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership, company, limited liability company or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly, through one or more intermediaries, or both, by such Person.

"<u>Substitution</u>": The meaning specified in <u>Section</u> <u>2.14(b)</u>.

"<u>Swiss Franc</u>" or "<u>CHF</u>": The lawful currency of Switzerland.

"<u>Swiss Francs RFR Determination Day</u>": The meaning specified in the definition of "Adjusted Daily Simple RFR".

"<u>Syndicate Communications</u>": Collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Obligor pursuant to any Transaction Document or the transactions contemplated therein which is distributed to the Administrative Agent and each Lender by means of electronic communications pursuant to <u>Article XII</u>, including through the Platform.

"<u>Tape</u>": The meaning specified in <u>Section</u> <u>7.2(b)(vi)</u>.

"<u>TARGET Day</u>": Any day on which TARGET2 is open for the settlement of payments in Euros.

"<u>Taxes</u>": 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, additions to tax or penalties applicable thereto.

"<u>Term CORRA</u>": The Term CORRA Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the "Term CORRA Determination Day") that is two (2) RFR Business Days prior to the first day of such Interest Period, as such rate is published by the Term CORRA Administrator. If as of 5:00 p.m. (Toronto time) on any Term CORRA Determination Day the Term CORRA Reference Rate for the applicable tenor has not been published by the Term CORRA Administrator and a Benchmark Replacement Date with respect to the Term CORRA Reference Rate has not occurred, then Term CORRA will be the Term CORRA Reference Rate for such tenor as published by the Term CORRA Administrator on the first preceding RFR Business Day for which such Term CORRA Reference Rate for such tenor was published by the Term CORRA Administrator so long as such first preceding RFR Business Day is not more than three (3) RFR Business Days prior to such Term CORRA Determination Day. If Term CORRA determined as set forth above shall ever be less than the Floor, then Term CORRA shall be deemed to be the Floor.

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"<u>Term CORRA Adjustment</u>": For any calculation with respect to a Term CORRA Rate Advance, a percentage per annum as set forth below for the applicable Interest Period therefor:

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| | |
|:---|:---|
| **Interest Period** | **Percentage** |
|  1 month | 0.29547% |
|  3 month | 0.32138% |
|  6 month | 0.49375% |

---

"<u>Term CORRA Administrator</u>": CanDeal Benchmark Administration Services Inc. ("CanDeal") or, in the reasonable discretion of the Administrative Agent, TSX Inc. or an affiliate of TSX Inc. as the publication source of the CanDeal/TMX Term CORRA benchmark that is administered by CanDeal (or a successor administrator of the Term CORRA Reference Rate selected by the Administrative Agent in its reasonable discretion).

"<u>Term CORRA Determination Day</u>": The meaning provided in the definition of "Term CORRA".

"<u>Term CORRA Rate Advance</u>": An Advance that bears interest at a rate determined by reference to Adjusted Term CORRA.

"<u>Term CORRA Reference Rate</u>": The forward-looking term rate based on CORRA.

"<u>Term RFR Advance</u>": Individually and collectively as the context may require, a Term SOFR Advance or a Term CORRA Rate Advance.

"<u>Term SOFR</u>": The greater of (a) the Floor and (b) the forward-looking term rate based on SOFR for a tenor comparable to the applicable Available Tenor selected by the Borrower in accordance with the definition of "Benchmark" on the day (such day, the "<u>Periodic Term SOFR Determination Day</u>") that is two (2) U.S. Government Securities Business Days prior to the first day of the applicable Interest Period, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. on any Periodic Term SOFR Determination Day, Term SOFR for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to Term SOFR has not occurred, then Term SOFR will be Term SOFR for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which Term SOFR for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day.

"<u>Term SOFR Administrator</u>": CME Group Benchmark Administration Limited (CBA) (or a successor administrator of Term SOFR selected by the Administrative Agent in its reasonable discretion and in consultation with the Borrower).

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"<u>Term SOFR Advance</u>": An Advance that bears interest at a rate based on Term SOFR.

"<u>Termination Date</u>": The earlier of (a) the date that is two (2) years after the Revolving Period End Date or (b) the date of the declaration of the Termination Date or the date of the automatic occurrence of the Termination Date pursuant to <u>Section</u> <u>9.2(a)</u>.

"<u>Tier 1 Eligible Foreign Currency</u>": Canadian Dollars and Sterling.

"<u>Tier 1 Eligible Foreign Jurisdiction</u>": Canada and the United Kingdom.

"<u>Tier 2 Eligible Foreign Currency</u>": Australian Dollars, Euros and Swiss Francs.

"<u>Tier 2 Eligible Foreign Jurisdiction</u>": Australia, Austria, Belgium, Denmark, Finland, Germany, Ireland, Luxembourg, Norway, The Netherlands, Sweden, and Switzerland.

"<u>Tranche Size</u>": With respect to any Loan, the dollar value of the tranche of Indebtedness of the applicable Obligor currently held or contemplated for purchase by the Borrower, which may include any last out component (but not any second lien component) and, in the sole discretion of the Administrative Agent, any Indebtedness under another tranche that (x) is an obligation of the same Obligor under the same Underlying Instrument, (y) *pari passu* with such Loan and (z) has the same material terms as such Loan.

"<u>Transaction</u>": The meaning specified in <u>Section</u> <u>3.2</u>.

"<u>Transaction Documents</u>": This Agreement, the Sale Agreement, the Account Control Agreement, the Fee Letter, each Note, any Joinder Supplement, any Transferee Letter, any Assignment and Assumption and the Collateral Agent Fee Letter.

"<u>Transferee Letter</u>": The meaning specified in <u>Section</u> <u>12.16</u>.

"<u>Transferor</u>": PennantPark Private Income Fund, as seller of Loans to the Borrower.

"<u>Transferor Loan</u>": Each Loan sold and/or contributed by the Transferor or an Affiliate thereof to the Borrower.

"<u>Transferor Purchased Loan Balance</u>": As of any date of determination, an amount equal to the aggregate Outstanding Balance of all Transferor Loans acquired by the Borrower prior to such date.

"<u>UCC</u>": The Uniform Commercial Code as from time to time in effect in the applicable jurisdiction or jurisdictions.

"<u>Unadjusted Benchmark Replacement</u>": The applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

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"<u>Uncertificated Security</u>": The meaning specified in Section 8-102(a)(18) of the UCC.

"<u>Underlying Assets</u>": With respect to a Loan, any property or other assets designated and pledged as collateral to secure repayment of such Loan, including to the extent provided for in the relevant Underlying Instruments, a pledge of the stock, membership or other ownership interests in the related Obligor and all Proceeds from any sale or other disposition of such property or other assets.

"<u>Underlying Instruments</u>": The loan agreement, credit agreement, indenture or other agreement pursuant to which a Loan or Permitted Investment has been issued or created and each other agreement that governs the terms of or secures the obligations represented by such Loan or Permitted Investment or of which the holders of such Loan or Permitted Investment are the beneficiaries.

"<u>Unfunded Exposure Account</u>": Each Securities Account created and maintained on the books and records of the Collateral Agent (or any other party acceptable to the Administrative Agent in its sole discretion) entitled "Unfunded Exposure Account" in the name of the Borrower and subject to the prior Lien of the Collateral Agent for the benefit of the Secured Parties.

"<u>Unfunded Exposure Amount</u>": On any date of determination, with respect to any Loan, the aggregate amount (without duplication) of the Dollar Equivalent of unfunded commitments (which shall include all unfunded revolver commitments and unfunded portions of delayed draw term loans).

"<u>Unfunded Exposure Equity Amount</u>": On any date of determination, with respect to any Loan, an amount equal to (a) the Unfunded Exposure Amount with respect to such Loan *minus* (b) the product of (i) the Unfunded Exposure Amount with respect to such Loan *multiplied* by (ii) the Advance Rate applicable to such Loan.

"<u>Unfunded Exposure Shortfall</u>": The meaning specified in <u>Section</u> <u>2.9(e)(iii)</u>.

"<u>United States</u>": The United States of America.

"<u>Unitranche Loan</u>": A loan that (i) satisfies clauses (i) through (iv) of the definition of "First Lien Loan," (ii) has an Obligor Net Senior Leverage Ratio equal to its Obligor Net Total Leverage Ratio and (iii) has an Obligor Net Senior Leverage Ratio greater than 5.5x (as determined at the time of acquisition).

"<u>Unrestricted Cash</u>": The meaning of "Unrestricted Cash" or any comparable definition in the Underlying Instruments for each Loan, and in any case that "Unrestricted Cash" or such comparable definition is not defined in such Underlying Instruments, all cash available for use for general corporate purposes and not held in any reserve account or legally or contractually restricted for any particular purposes or subject to any lien (other than blanket liens permitted under or granted in accordance with such Underlying Instruments), as reflected on the most recent financial statements of the relevant Obligor that have been delivered to the Borrower.

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"<u>Unused Facility Amount</u>": At any time, (a) the Facility Amount *minus* (b) the Advances Outstanding at such time.

"<u>USA Patriot Act</u>": The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.

"<u>U.S. Government Securities Business Day</u>": Any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

"<u>U.S. Person</u>": A "United States person" within the meaning of Section 7701(a)(30) of the Code.

"U<u>.S. Special Resolution Regime</u>": Each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

"<u>U.S. Tax Compliance Certificate</u>": The meaning specified in <u>Section</u> <u>2.13(g)</u>.

"<u>Utilization</u>": At any time, an amount (expressed as a percentage) equal to (a) the Advances Outstanding at such time *divided by* (b) the Facility Amount.

"<u>Value Adjustment Event</u>": With respect to (x) any Broadly Syndicated Loan, the occurrence of a BSL Value Adjustment Event and (y) any Loan (other than a Broadly Syndicated Loan), the occurrence of any one or more of the following events after the related Funding Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) (i) The Obligor Cash Interest Coverage Ratio for any period of determination with respect to any Eligible Loan (a) declines to eighty-five percent 85.00% of the applicable Original Obligor Cash Interest Coverage Ratio, and (b) is less than 1.50 to 1.00 or (ii) the Obligor Net Senior Leverage Ratio for any period of determination (x) increases by 1.00 times as compared to the applicable Original Obligor Net Senior Leverage Ratio, and (y) is greater than 4.00 to 1.00; <u>provided</u> that, after the occurrence of a Value Adjustment Event pursuant to this clause (a)(ii), each subsequent increase of the Obligor Net Senior Leverage Ratio by 0.50 times or more shall constitute an additional Value Adjustment Event;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the occurrence of a Material Modification with respect to such Loan that has been executed without the prior written consent of the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the failure by the applicable Obligor to deliver any monthly financial statements as required by the Underlying Instruments beyond that later of (i) any applicable grace or cure period and (ii) thirty (30) days after the end of the applicable month;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the failure by the applicable Obligor to deliver (or if the Borrower or Collateral Manager fail to forward the same to the Administrative Agent) any financial

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statements (including audited and unaudited financial statements) as required by the Underlying Instruments, in each case, beyond the later of any applicable grace or cure period and (i) with respect to quarterly reports (including unaudited financial statements) required by the Underlying Instruments, ninety (90) days after the end of the applicable fiscal quarter of such Obligor, and (ii) with respect to annual reports (including audited financial statements) required by the Underlying Instruments, one hundred eighty-five (185) days after the end of the applicable fiscal year of such Obligor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the occurrence of an Insolvency Event with respect to the applicable Obligor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) an Obligor default in respect of any payment of principal, interest or commitment or non-use fees under such Loan (after giving effect to all applicable cure periods, but in no event longer than five (5) Business Days);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any Obligor default has occurred for which the Borrower (or the agent or required lenders pursuant to the Underlying Instruments, as applicable) has elected to exercise any of its material rights and remedies under the applicable Underlying Instruments in the case of default thereunder (including acceleration but excluding imposition of default interest); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) any specified event or events with respect to such Loan agreed upon by the Borrower and the Administrative Agent on or prior to the date such Loan was first included as part of the Collateral.

"<u>Warranty Loan</u>": Any Loan for which the Transferor becomes subject to an obligation under the Sale Agreement to repurchase or substitute such Loan.

"<u>Weighted Average Advance Rate</u>": As of any date of determination with respect to all Eligible Loans included in the Borrowing Base, the amount obtained by (x) summing the products obtained by multiplying:

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| | | |
|:---|:---|:---|
| The Advance Rate at such time applicable to each such Eligible Loan | X | The sum of (i) the aggregate Adjusted Borrowing Value of such Eligible Loan *minus* (ii) an amount equal to the Excess Concentration Amount as of such date attributable to such Eligible Loan |

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and dividing such sum by (y) the sum of (i) the aggregate Adjusted Borrowing Value of all Eligible Loans *minus* (ii) an amount equal to the aggregate Excess Concentration Amount of all Eligible Loans as of such date; <u>provided</u> that for the purpose of determining the number of Eligible Loans for the purpose of the foregoing proviso, all Eligible Loans to a single Obligor shall be treated as one (1) Eligible Loan.

"<u>Withdrawal Conditions</u>": The meaning specified in <u>Section</u> <u>2.9(e)(i)</u>.

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"<u>Withholding Agent</u>": Any Loan Party and the Administrative Agent, or the Collateral Agent to the extent required by Applicable Law.

"<u>Zero Coupon Obligation</u>": A debt obligation that does not bear interest for all or part of the period that it is outstanding or that provides for periodic payments in cash less frequently than quarterly or that pays interest only at its stated maturity.

Section 1.2 <u>Other Terms</u>.

All accounting terms used but not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in the State of New York, and used but not specifically defined herein, are used herein as defined therein.

Section 1.3 <u>Computation of Time Periods</u>.

Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding."

Section 1.4 <u>Interpretation</u>.

In each Transaction Document, unless a contrary intention appears:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the singular number includes the plural number and vice versa;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) reference to any Person includes such Person's successors and assigns but, if applicable, only if such successors and assigns are permitted by the Transaction Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) reference to any gender includes each other gender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) reference to day or days without further qualification means calendar days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) reference to any time means Chicago, Illinois time unless otherwise specified;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) reference to any agreement (including any Transaction Document), document or instrument means such agreement, document or instrument as amended, modified, waived, supplemented, restated or replaced and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of the other Transaction Documents, and reference to any promissory note includes any promissory note that is an extension or renewal thereof or a substitute or replacement therefor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) reference to any Applicable Law means such Applicable Law as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder and reference to any Section or other provision of any Applicable Law means that provision of such Applicable Law from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such Section or other provision;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) reference to any delivery or transfer to the Collateral Agent or the Custodian with respect to the Collateral in this Agreement means delivery or transfer to the Collateral Agent or the Custodian for the benefit of the Collateral Agent on behalf of the Secured Parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) for the purposes of calculating the Borrowing Base and Availability (including whether any Borrowing Base Deficiency exists), the Excess Concentration Amount, the Minimum Credit Enhancement Amount (including whether the Minimum Credit Enhancement Amount Test is satisfied), the Transferor Purchased Loan Balance, and for the purposes of any other calculation required hereunder, the effect of the acquisition or disposition of Loans and Permitted Investments shall be calculated on a trade date basis;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) for purposes of calculating the Borrowing Base, Availability, Unfunded Exposure Amount and Unfunded Exposure Shortfall on any date of determination, the Borrowing Base, Availability, Unfunded Exposure Amount and Unfunded Exposure Shortfall of the applicable Loans (or Advances) shall be converted to Dollars, if necessary, by the Collateral Manager using the then current spot rate in the definition of "Dollar Equivalent";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) all amounts denominated in an Eligible Foreign Currency will be deposited into the applicable Eligible Currency Account and will remain in such account unless otherwise provided for herein; the Collateral Agent shall maintain records designating the amounts in each Eligible Currency Account as Principal Collections, Interest Collections or as amounts to be reserved against the Unfunded Exposure Amount; and the Collateral Agent's reports shall indicate the same;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) all calculations performed by the Administrative Agent hereunder or under any Transaction Document shall be binding on the parties hereto and shall be deemed to be accurate, absent manifest error;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) "including" means "including without limitation";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) references herein to the knowledge or actual knowledge of a Person shall mean, except as explicitly provided herein, the actual knowledge following reasonable inquiry under the circumstances of a Responsible Officer of such Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) for purposes of this Agreement, an Event of Default shall be deemed to be continuing until it is waived in accordance with <u>Section</u> <u>9.1</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) any use of "material" or "materially" or words of similar meaning in this Agreement with respect to any Loan Party shall mean material, as determined by the Administrative Agent in its reasonable discretion; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) multiple Loans of the same type to a single Obligor shall be treated as a single Loan.

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Section 1.5 <u>Calculation of Borrowing Base</u>.

In connection with amounts to be calculated for purposes of determining the Borrowing Base and generally preparing the Borrowing Base Certificate, all amounts shall be expressed in Dollars.

Section 1.6 <u>Rates</u>.

The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to (a) the continuation of, administration of, submission of, calculation of or any other matter related to any Benchmark, any component definition thereof or rates referenced in the definition thereof or any alternative, successor or replacement rate thereto (including any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement) will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, such Benchmark or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Benchmark Replacement Conforming Changes. The Administrative Agent and its affiliates or other related entities may engage in transactions that affect the calculation of a Benchmark, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto, in each case, in a manner adverse to the Borrower. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain any Benchmark pursuant to the terms of this Agreement, and shall have no liability to the Borrower, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.

Section 1.7 <u>Exchange Rates; Currency Equivalents.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Administrative Agent shall determine the Dollar Equivalent amounts of credit extensions hereunder denominated in Eligible Foreign Currencies. Such Dollar Equivalent shall become effective as of such Revaluation Date and shall be the Dollar Equivalent of such amounts until the next Revaluation Date to occur. Except for purposes of financial statements delivered by the Borrower hereunder or calculating financial covenants hereunder or except as otherwise provided herein, the applicable amount of any Currency (other than Dollars) for purposes of the Transaction Documents shall be such Dollar Equivalent amount as so determined by the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Wherever in this Agreement in connection with a borrowing, conversion, continuation or prepayment of an RFR Advance or Eurocurrency Rate Advance, an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such borrowing or Advance is denominated in an Eligible Foreign Currency, such amount shall be the relevant Eligible Foreign Currency Equivalent of such Dollar amount (rounded to the nearest unit of such Eligible Foreign Currency, with 0.5 of a unit being rounded upward).

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**ARTICLE II** 

**THE NOTES** 

Section 2.1 <u>The Notes</u>.

On the terms and conditions hereinafter set forth, the Borrower shall deliver, if requested by the Administrative Agent or any Lender, (i) on the Closing Date, to each requesting Lender at the applicable address set forth on <u>Annex</u> <u>A</u> to this Agreement, and (ii) on the effective date of any Joinder Supplement, to each additional Lender requesting a Note, at the address set forth in the applicable Joinder Supplement, a duly executed promissory note in substantially the form of <u>Exhibit</u> <u>B</u> (each a "<u>Note</u>"), dated as of the date of this Agreement or the effective date of such Joinder Supplement (as applicable), each in a face amount equal to the applicable Lender's Commitment as of the Closing Date or the effective date of any Joinder Supplement, as applicable, and otherwise duly completed. Each Note shall evidence obligations in an amount equal, at any time, to the Advances Outstanding by such Lender under the applicable Note on such day.

Section 2.2 <u>Procedures for Advances by the Lenders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the limitations set forth in this <u>Section</u> <u>2.2</u>, the Borrower may, during the Revolving Period, request the Lenders to make advances of funds (each, a "<u>Loan Advance</u>") by delivering to the Administrative Agent the information and documents set forth in this <u>Section</u> <u>2.2</u> at the applicable times provided herein; <u>provided</u> that the Borrower shall not be permitted to request an Advance denominated in an Eligible Foreign Currency more than two (2) times in any calendar week. Upon receipt of such information and documents, the Administrative Agent will provide notification to the Lenders with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) With respect to Advances, no later than 11:00 a.m., (i) with respect to Advances bearing interest at the Base Rate, on the date of the proposed Funding Date, (ii) with respect to Advances bearing interest at Term SOFR, one (1) Business Day (or such shorter period as permitted by the Administrative Agent in its sole discretion, but not later than 11:00 a.m. on the date of the proposed Funding Date) prior to the proposed Funding Date, (iii) in the case of a borrowing of Term CORRA Rate Advances, three (3) RFR Business Days prior to the proposed Funding Date, (iv) in the case of a borrowing of Eurocurrency Rate Advances, three (3) Eurocurrency Banking Days prior to the proposed Funding Date and (v) in the case of a borrowing of Daily Simple RFR Advances, three (3) RFR Business Days prior to the proposed Funding Date, the Borrower shall deliver:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) to the Administrative Agent a wire disbursement and authorization form, to the extent not previously delivered; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) to the Administrative Agent and the Collateral Agent a duly completed Funding Notice (including a duly completed Borrowing Base Certificate updated to the date such Advance is requested and giving pro forma effect to the Advance requested and the use of the proceeds thereof) which shall (a) specify the desired amount and Currency of such Advance, which amount shall not cause the Dollar

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Equivalent of the Advances Outstanding to exceed the Availability and, other than the initial Advance on the Closing Date, must be in a minimum amount of $1,000,000 (or the Dollar Equivalent in the applicable Eligible Foreign Currency) and in integral multiples of $500,000 (or the Dollar Equivalent in the applicable Eligible Foreign Currency) in excess thereof (or, in the case of any Advance to be applied to fund any draw under a Revolving Loan or Delayed Draw Loan, such lesser amount as may be required to fund such draw), to be allocated to each Lender in accordance with its Pro Rata Share, (b) specify the proposed Funding Date of such Advance, (c) specify the Interest Period and the Available Tenor for such Advance, (d) specify the Loan(s) to be financed on such Funding Date (including the appropriate Obligor, Outstanding Balance, Assigned Value and Purchase Price for each Loan) and, with respect to any Revolving Loan or Delayed Draw Loan, the amount to be deposited in the Unfunded Exposure Account in connection with the acquisition of such Loan(s) pursuant to <u>Section</u> <u>2.9(e)</u>, (e) include a calculation showing that, on a pro-forma basis, the Borrower is in compliance with the Minimum Credit Enhancement Amount Test, (f) include a representation that all conditions precedent for an Advance described in <u>Article</u> <u>III</u> hereof have been met, and (g) the Interest Period therefor, which shall be a period contemplated by the definition of the term "Interest Period"; <u>provided</u> that if no Interest Period is specified in the Funding Notice, then the Interest Period for such Advance shall be one month. Each Funding Notice shall be irrevocable. If any Funding Notice is received by the Administrative Agent after 11:00 a.m. or on a day that is not a Business Day, an RFR Business Day or a Eurocurrency Banking Day, as applicable, such Funding Notice shall be deemed to be received by the Administrative Agent at 9:00 a.m. on the next Business Day, an RFR Business Day or a Eurocurrency Banking Day, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) On the proposed Funding Date, subject to the limitations set forth in this <u>Section</u> <u>2.2</u> and upon satisfaction of the applicable conditions set forth in <u>Article</u> <u>III</u>:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) each Lender shall make available to the Administrative Agent in same day funds in the applicable Currency, by no later than 2:00 p.m., an amount equal to such Lender's Pro Rata Share, of the least of (A) the amount requested by the Borrower for such Advance, (B) the aggregate unused Commitments then in effect and (C) the maximum amount that, after taking into account the proposed use of the proceeds of such Advance, could be advanced to the Borrower hereunder without causing the Advances Outstanding to exceed the Availability;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) upon receipt of the amounts described in <u>clause (i)</u>, the Administrative Agent shall promptly fund such amounts by wire transfer to the account designated by the Borrower in the applicable Funding Notice given pursuant to this <u>Section</u> <u>2.2</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) notwithstanding <u>clauses (i)</u> and <u>(ii)</u> of this <u>Section</u> <u>2.2(c)</u> with respect to the funding of the initial Advance hereunder, the Lenders and the Administrative Agent may net any fees and reimbursable expenses owing to it on the Closing Date (as set forth in the executed closing statement) from the amount funded by the Lenders to the Administrative Agent pursuant to <u>clause (i)</u> and/or the amount of such Advance funded by the Administrative Agent to the Borrower pursuant to <u>clause (ii)</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) On each Funding Date, the obligation of each Lender to remit its Pro Rata Share of any Loan Advance shall be several from that of each other Lender and the failure of any Lender to so make such amount available to the Borrower shall not relieve any other Lender of its obligation hereunder. Notwithstanding anything to the contrary herein, no Lender shall be obligated to make any Loan Advance on or after the earlier to occur of the Revolving Period End Date or the Termination Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Notwithstanding anything to the contrary herein, upon the occurrence of the Revolving Period End Date, if the amount on deposit in the Unfunded Exposure Account is less than the Required Funding Amount, the Administrative Agent shall, on behalf of the Borrower, request an Advance in the amount of such shortfall (the "<u>Exposure Amount Shortfall</u>"). Following receipt of such request, the Lenders shall fund such Exposure Amount Shortfall in accordance with <u>Section</u> <u>2.2(b)</u>, notwithstanding anything to the contrary herein (including the Borrower's failure to satisfy any of the conditions precedent set forth in <u>Section</u> <u>3.2</u>), except that no Lender shall make any Advance to the extent that, after giving effect to such Advance, the Advances Outstanding would exceed the Availability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Each Advance shall be denominated in a single Currency as the Borrower may request in accordance herewith and must be used to acquire or, in the case of any Revolving Loan or Delayed Draw Loan, to fund a draw with respect to, Eligible Loans denominated in the same Currency as such Advance. Advances of more than one Currency may be outstanding at the same time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Notwithstanding anything to the contrary herein, no more than six (6) Advances shall be outstanding hereunder at any one time.

Section 2.3 <u>Principal Repayments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Borrower shall be entitled at its option, at any time, to repay the Advances Outstanding; <u>provided</u> that the Borrower shall give prior written notice of such repayment in the form of <u>Exhibit A-2</u> to the Administrative Agent (with a copy to the Collateral Agent) at least (i) with respect to Advances bearing interest at the Base Rate or, on the proposed date of such repayment or with respect to Advances bearing interest at Term SOFR, one (1) Business Day prior to the date of such repayment, (ii) in the case of Term CORRA Rate Advances, three (3) RFR Business Days prior to the date of such repayment (which shall be an RFR Business Day), (iii) in the case of Eurocurrency Rate Advances, three (3) Eurocurrency Banking Days prior to the date of such repayment (which shall be a Eurocurrency Banking Day) and (iv) in the case of Daily Simple RFR Advances, three (3) RFR Business Days prior to the date of such repayment (which shall be an RFR Business Day). Any repayment of Advances Outstanding (other than with respect to repayments of Advances Outstanding made by the Borrower to reduce a Borrowing Base Deficiency to zero) shall be in a minimum amount of $500,000 (or the Dollar Equivalent in the applicable Eligible Foreign Currency) and in integral multiples of $100,000 (or the Dollar Equivalent in the applicable Eligible Foreign Currency) in excess thereof (other than any such partial repayment of Advances Outstanding which is funded (A) solely with proceeds from the repayment of a Revolving Loan or (B) solely with amounts otherwise distributable to the Borrower under <u>Section</u> <u>2.7(a)(1</u><u>6</u><u>)</u>, <u>Section</u> <u>2.7(b)(</u><u>6</u><u>)</u> or <u>Section</u> <u>2.8(1</u><u>1</u><u>)</u>). In connection with any such repayment of Advances Outstanding, the Borrower shall

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deliver to the Administrative Agent by 1:00 p.m. (1) instructions to repay such Advances Outstanding and (2) funds sufficient to repay such Advances Outstanding together with all accrued Interest and any Breakage Costs, but only to the extent such accrued Interest and/or Breakage Costs are requested with such repayment by the applicable Lender; <u>provided</u> that, the Advances Outstanding will not be repaid unless sufficient funds have been remitted to pay all such amounts in the succeeding sentence in full. The Administrative Agent shall apply amounts received from the Borrower pursuant to this <u>Section</u> <u>2.3(a)</u> to the pro rata repayment of the Advances Outstanding and to the payment of accrued Interest on the amount of the Advances Outstanding to be repaid and to the payment of any Breakage Costs. Any amount so repaid may, subject to the terms and conditions hereof, be reborrowed during the Revolving Period. Any Repayment Notice relating to any repayment pursuant to this <u>Section</u> <u>2.3(a)</u> shall be irrevocable. Upon receipt of any notice or instructions from the Borrower pursuant to this <u>Section</u> <u>2.3(a)</u>, the Administrative Agent will provide notification to the Lenders with respect thereto. Any prepayment of Advances Outstanding under this <u>Section</u> <u>2.3(a)</u> shall be applied first to the Advances that bear interest at the Base Rate and then, ratably, to RFR Advances and Eurocurrency Rate Advances and in the case of Term RFR Advances and Eurocurrency Rate Advances, in the direct order of Interest Period maturities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Unless sooner prepaid pursuant to the terms hereof, the Advances Outstanding shall be repaid in full on the Termination Date or on such later date as is agreed to in writing by the Borrower, the Collateral Manager, the Administrative Agent and each of the Lenders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Commitment Reductions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Prior to the Revolving Period End Date, the Borrower shall have the right to permanently reduce all or a portion of the unfunded amount of the Commitments upon not less than ten (10) Business Days' prior written notice to the Administrative Agent (with a copy to the Collateral Agent) of any such reduction, which notice shall substantially be in the form of <u>Exhibit A-9</u> and shall specify the effective date of such reduction. Such notice of reduction shall be effective only upon receipt and shall permanently reduce the Commitments of each Lender, pro rata, in the amount of the reduction and on the date specified in such notice; <u>provided</u> that no such reduction will reduce the Commitments below the Dollar Equivalent of the Advances Outstanding at such time. Any notice of reduction delivered to Administrative Agent shall be irrevocable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The reduction of the Commitments pursuant to <u>Section</u> <u>2.3(c)(i)</u> shall be permanent and in an amount not less than $5,000,000 and the Commitments, once reduced, shall not be reinstated. The reduction of the Commitments pursuant to this <u>Section</u> <u>2.3(c)</u> shall be applied ratably among the Lenders in accordance with their respective Pro Rata Share. Simultaneously with the reduction of the Commitments pursuant to this <u>Section</u> <u>2.3(c)</u>, Borrower shall pay to the Lenders in accordance with their Pro Rata Share the applicable Commitment Reduction Fee payable hereunder in respect of the amount of the Commitments so reduced. Upon receipt of a notice of reduction from the Borrower pursuant to <u>Section</u> <u>2.3(c)(i)</u>, the Administrative Agent shall

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promptly notify each Lender of the contents thereof and of such Lender's ratable share of such reduction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Except in the case of a reduction of all Commitments and repayment in full of all Advances Outstanding on the Termination Date, the Borrower will not reduce the Commitments if, after giving effect to such reduction, it would result in (x) an Unfunded Exposure Shortfall or (y) the Facility Amount being less than $10,000,000.

Section 2.4 <u>Determination of Interest</u>.

The Administrative Agent shall calculate and determine the Interest (including unpaid Interest related thereto, if any, due and payable on a prior Payment Date and the Benchmark) to be paid by the Borrower on each Payment Date for the related Interest Period and shall advise the Collateral Manager and the Collateral Agent thereof no later than the third Business Day prior to such Payment Date.

Section 2.5 <u>Notations on Notes</u>.

Each Lender is hereby authorized to enter on a schedule attached to the Note with respect to such Lender, as applicable, a notation (which may be computer generated) or to otherwise record in its internal books and records or computer system with respect to each Advance made by the applicable Lender of (a) the date and principal amount thereof and (b) each payment and repayment of principal thereof. Any such recordation shall, absent manifest error, constitute prima facie evidence of the Advances Outstanding, as applicable, under each such Note. The failure of any Lender to make any such notation on the schedule attached to the applicable Note shall not limit or otherwise affect the obligation of the Borrower to repay the Advances in accordance with the terms set forth herein.

Section 2.6 <u>Reduction of Borrowing Base Deficiency</u>.

Any Borrowing Base Deficiency may be reduced to zero by the Borrower taking one or more of the following actions, which after giving effect thereto, cause the aggregate Advances Outstanding to no longer exceed Availability at such time:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) posting cash collateral in Dollars to the Principal Collection Account;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) repaying Advances Outstanding in accordance with <u>Section</u> <u>2.3(a)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) posting additional Eligible Loans as Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) selling Loans in accordance with <u>Section</u> <u>2.14</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) taking any other action identified in an Equity Cure Notice that has been approved by the Administrative Agent (in its reasonable discretion) pursuant to clause (b)(ii) of the definition of "Equity Cure Notice".

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Section 2.7 <u>Settlement Procedures</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Interest Collections</u>. On each Payment Date, so long as no Event of Default has occurred and is continuing, the Collateral Manager shall direct the Collateral Agent (which direction shall be deemed given upon receipt by the Collateral Agent of the related Payment Date Report) to pay pursuant to the latest Payment Date Report (and the Collateral Agent shall make payment from the Interest Collection Account to the extent of Available Funds, in reliance on the information set forth in such Payment Date Report) to the following Persons, the following amounts in the following order of priority:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) to the Borrower (or, at the Borrower's election and with prior written notice to the Administrative Agent, to its direct or indirect equity holders), in respect of Taxes (but excluding all Taxes imposed on net income), registration and filing fees then due and owing by the Borrower (or its direct and indirect equity holders) that are attributable solely to the operations of the Borrower, not to exceed $10,000 in the aggregate during any calendar year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) to the Collateral Agent, the Custodian and the Securities Intermediary, pro rata, in an amount equal to any accrued and unpaid Collateral Agent Fees, subject to the periodic limitation specified in the definition of Collateral Agent Fee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) (x) initially, to PennantPark Investment Advisers, LLC, and (y) after the resignation or removal of PennantPark Investment Advisers, LLC (or any other Affiliate of any Loan Party) as the Collateral Manager hereunder, to the Collateral Manager (including, for the avoidance of doubt, the Replacement Collateral Manager, if applicable), to pay any accrued and unpaid Senior Collateral Manager Fees, or the Replacement Collateral Manager Fees, as applicable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) to the Administrative Agent, in an amount equal to any accrued and unpaid fees, expenses and indemnities of the Administrative Agent set forth in the Transaction Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) to the Administrative Agent to be distributed *pro rata* to each Lender, in an amount equal to (a) any accrued and unpaid Interest with respect to Advances made by such Lender, (b) any accrued and unpaid Non-Usage Fee (such Non-Usage Fee to be allocated based on the unused Commitment of each Lender) and (c) any accrued and unpaid Breakage Costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) to the Administrative Agent, to be distributed *pro rata* to each Lender, in an amount equal to any Commitment Reduction Fees then due and payable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) if a Borrowing Base Deficiency exists, to the Administrative Agent to be distributed *pro rata* to each Lender to repay Advances, in an amount necessary to reduce the Borrowing Base Deficiency to zero;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) to the Transferor, to make any applicable Permitted RIC Distribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) to the Collateral Manager to pay out-of-pocket costs and expenses of the Collateral Manager;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) to the Administrative Agent, to be distributed to the affected Lenders, any amounts accrued and unpaid in respect of Increased Costs and Taxes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) (a) *first*, to the Administrative Agent, to be distributed to the Administrative Agent and each applicable Lender, to pay all other Administrative Expenses of the Administrative Agent and the Lenders, as applicable and (b) *second*, to the Collateral Agent, Custodian and the Securities Intermediary, to pay any unpaid Collateral Agent Fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) (a) during the Revolving Period and so long as no Default or Event of Default has occurred and is continuing, at the election of the Borrower, to fund the Unfunded Exposure Account in an amount necessary to cause all amounts in the Unfunded Exposure Account to equal the Aggregate Unfunded Exposure Equity Amount, or (b) after the Revolving Period or if a Default or an Event of Default has occurred and is continuing, to fund the Unfunded Exposure Account in an amount necessary to cause the amounts in the Unfunded Exposure Account to equal the Aggregate Unfunded Exposure Amount;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) to the Administrative Agent to be distributed to the Administrative Agent, any applicable Lender, the Indemnified Parties, or the Secured Parties, as applicable, all other amounts then due and owing, including any unpaid Administrative Expenses, any amounts accrued and unpaid under the Fee Letter, Increased Costs, Taxes, and indemnities, but other than the principal of Advances Outstanding, then due under this Agreement, including, without limitation, any other Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14) unless waived by the Collateral Manager, to the Collateral Manager, to pay any accrued and unpaid Subordinated Collateral Manager Fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15) to be distributed at the discretion of the Collateral Manager (i) during the Revolving Period, to the Principal Collection Account to be used with respect to any Reinvestment of Principal Collections and the acquisition of Loans as permitted by this Agreement, (ii) to repay the Advances Outstanding or (iii) to reimburse the Collateral Manager for any unreimbursed amounts paid by the Collateral Manager on the Borrower's behalf pursuant to this Agreement, to the extent not otherwise reimbursed hereunder; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(16) any remaining amounts shall be distributed (i) if a Default has occurred and is continuing, to the Interest Collection Account, or (ii) otherwise, to the Borrower.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Principal Collections</u>. On each Payment Date, so long as no Event of Default has occurred and is continuing, the Collateral Manager shall direct (which direction shall be deemed given upon receipt by the Collateral Agent of the related Payment Date Report) the Collateral Agent to pay pursuant to the latest Payment Date Report (and the Collateral Agent shall make payment from the Principal Collection Account to the extent of Available Funds, in reliance on the information set forth in such Payment Date Report) to the following Persons, the following amounts in the following order of priority:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) to the extent not paid pursuant to <u>Section</u> <u>2.7(a)</u>, to the applicable Person, in the order of priority set forth in <u>Section</u> <u>2.7(a)</u>, such amounts payable pursuant to <u>clauses (1)</u> through <u>(7)</u> thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) during the Revolving Period, to the Principal Collection Account, to be distributed at the discretion of the Collateral Manager (i) to be used with respect to any Reinvestment of Principal Collections and the acquisition of Loans as permitted by this Agreement or (ii) to repay the Advances Outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) after the Revolving Period End Date, to the extent not paid pursuant to <u>Section</u> <u>2.7(a)</u>, to the applicable Person, in the order of priority set forth in <u>Section</u> <u>2.7(a)</u>, such amounts payable pursuant to <u>clauses (8)</u> though <u>(9)</u> thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) after the Revolving Period End Date, to the Administrative Agent to be distributed *pro rata* to the Lenders to repay the Advances until paid in full;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) after the Revolving Period End Date, to the extent not paid pursuant to <u>Section</u> <u>2.7(a)</u>, to the applicable Person, in the order of priority set forth in <u>Section</u> <u>2.7(a)</u>, such amounts payable pursuant to <u>clauses (10)</u> through <u>(15)</u> thereof; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) after the Revolving Period End Date, any remaining amounts shall be distributed (i) if a Default has occurred and is continuing, to the Principal Collection Account, or (ii) otherwise, to the Borrower.

Section 2.8 <u>Alternate Settlement Procedures</u>.

On each Business Day (a) following the occurrence of and during the continuation of an Event of Default or (b) following the declaration of the occurrence, or the deemed occurrence, as applicable, of the Termination Date pursuant to <u>Section</u> <u>9.2(a)</u>, the Collateral Manager (or, after delivery of a Notice of Exclusive Control, the Administrative Agent) shall direct (which direction shall be deemed given upon receipt by the Collateral Agent of the related Payment Date Report) the Collateral Agent to pay pursuant to the latest Payment Date Report or such other direction as may be timely given by the Administrative Agent (and the Collateral Agent shall make payment from the Collection Account to the extent of Available Funds, in reliance on the information set forth in such Payment Date Report or such other direction) to the following Persons, the following amounts in the following order of priority:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) to the Borrower, in respect of Taxes (but excluding all Taxes imposed on net income), registration and filing fees then due and owing by the Borrower (or its direct and indirect equity holders) that are attributable solely to the operations of the Borrower; <u>provided</u> that amounts payable with respect to Taxes, registration and filing fees pursuant to this <u>clause (1)</u> during any one (1) year shall not, individually or in the aggregate, exceed $10,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) to the Collateral Agent, the Custodian and the Securities Intermediary pro, rata, in an amount equal to any accrued and unpaid Collateral Agent Fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) (x) initially, to PennantPark Investment Advisers, LLC, and (y) after the resignation or removal of PennantPark Investment Advisers, LLC (or any other Affiliate of any Loan Party) as the Collateral Manager hereunder, to the Collateral Manager (including, for the avoidance of doubt, the Replacement Collateral Manager, if applicable), to pay any accrued and unpaid Senior Collateral Manager Fees, or the Replacement Collateral Manager Fees, as applicable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) to the Administrative Agent, in an amount equal to any accrued and unpaid fees, expenses and indemnities set forth in the Transaction Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) to the Administrative Agent to be distributed *pro rata* to each Lender, in an amount equal to any accrued and unpaid Non-Usage Fee (such Non-Usage Fee to be allocated based on the unused Commitment of each Lender), and any accrued and unpaid Breakage Costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) to the Administrative Agent to be distributed *pro rata* to each Lender any accrued and unpaid Interest with respect to Advances made by such Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) to the Administrative Agent to be distributed *pro rata* to the Lenders to repay the principal on the Advances Outstanding of such Lenders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) to the Transferor, to make any applicable Permitted RIC Distribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) (a) *first,* to the Administrative Agent to be distributed to the Administrative Agent, any applicable Lender, the Indemnified Parties, or the Secured Parties, as applicable, all other fees and amounts, including any unpaid Administrative Expenses, any amounts accrued and unpaid under the Fee Letter, Breakage Costs, Increased Costs, Taxes, and indemnities, but other than the principal of Advances Outstanding, then due under this Agreement and (b) *second*, to the Collateral Agent, the Custodian and the Securities Intermediary, to pay any unpaid Collateral Agent Fees and Administrative Expenses;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) unless waived by the Collateral Manager, to the Collateral Manager, to pay any accrued and unpaid Subordinated Collateral Manager Fees; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) to the extent the Obligations have been paid in full (other than contingent indemnification and expense reimbursement obligations to the extent no claim giving rise thereto has been asserted), any remaining amounts shall be distributed to the Borrower.

Section 2.9 <u>Collections and Allocations</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Collections</u>. The Collateral Manager shall promptly identify any Collections received as being on account of Interest Collections or Principal Collections and shall transfer, or cause to be transferred, all Collections received directly by it to the appropriate Account within two (2) Business Days after such Collections are received in accordance with <u>Section</u> <u>5.1(f)</u>. Upon the transfer of Collections to the relevant Account, the Collateral Manager shall direct the Securities Intermediary to segregate Principal Collections and Interest Collections and transfer the same in accordance with <u>Section</u> <u>5.1(f)</u>. All Collections in a currency other than Dollars shall be deposited into the applicable Eligible Currency Account. For purposes of <u>Section</u> <u>2.7</u> or <u>Section</u> <u>2.8</u>, any Principal Collections and Interest Collections shall be applied on any Payment Date (i) first, to make payments in the applicable Currency and (ii) second, to make payments in any other Currency (*pro rata* based on available amounts from each other Currency), as converted by the Collateral Agent at the direction of the Collateral Manager using the then current spot rate as set forth in the definition of "Dollar Equivalent"; <u>provided</u> that such payments shall be subject to availability of such funds pursuant to <u>Section</u> <u>2.7</u> or <u>Section</u> <u>2.8</u>. The Collateral Manager shall instruct the Collateral Agent on the Determination Date immediately preceding each Payment Date, to convert amounts on deposit in each Eligible Currency Account into Dollars to the extent necessary to make payments pursuant to <u>Section</u> <u>2.7</u> or <u>Section</u> <u>2.8</u> (as determined by the Collateral Manager using the then current spot rate as set forth in the definition of "Dollar Equivalent"). Any Collections on deposit in any Eligible Currency Account denominated in an Eligible Foreign Currency may be converted by the Collateral Agent at the direction of the Collateral Manager into another Eligible Foreign Currency on any Business Day (other than a Payment Date) using the then current spot rate as set forth in the definition of "Dollar Equivalent" so long as no Borrowing Base Deficiency exists either prior to or after giving effect to such conversion. The Collateral Manager shall provide no less than one (1) Business Day's prior written notice to the Administrative Agent and the Collateral Agent of any such conversion. The Collateral Agent may rely conclusively on the determination of the spot rate provided to it and the Collateral Agent shall not be liable for any losses, shortfalls or expenses associated with the determination of such rate or conversion and delivery of such amounts on behalf of the Borrower of such amounts. It is understood and agreed that any foreign exchange transaction effected by the Collateral Agent may be entered with the bank serving as Collateral Agent or its affiliates acting as principal or otherwise through customary banking channels. The Collateral Agent shall be entitled at all times to comply with any legal or regulatory requirements applicable to currency or foreign exchange transactions. It is acknowledged and agreed that the bank serving as Collateral Agent or any affiliates of the Collateral Agent involved in any such foreign exchange transactions may make a margin or

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banking income from foreign exchange transactions entered into pursuant to this section for which they shall not be required to account to any person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Excluded Amounts</u>. The Collateral Manager may withdraw from the Collection Account any deposits thereto constituting Excluded Amounts, <u>provided</u> that the Collateral Manager shall, concurrently with such withdrawal, deliver to the Administrative Agent and each Lender a report setting forth the calculation of such Excluded Amounts in form and substance reasonably satisfactory to the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Initial Deposits</u>. On the Funding Date with respect to any Loan, the Collateral Manager will deposit into the Collection Account or the applicable Eligible Currency Account, as applicable, all Collections, if any, received on or before such Funding Date in respect of Loans being transferred to and included as part of the Collateral on such date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Investment of Funds</u>. Until the occurrence of an Event of Default, to the extent there are uninvested amounts deposited in the Collection Account, all such amounts shall be invested in Permitted Investments selected by the Collateral Manager or Borrower (or pursuant to standing instructions provided by the Collateral Manager or Borrower); <u>provided</u> that, from and after the occurrence of an Event of Default, to the extent there are uninvested amounts in the Collection Account, all such amounts may be invested in Permitted Investments selected by the Administrative Agent (which may be standing instructions). Absent any direction from the Collateral Manager, Borrower or Administrative Agent, as applicable, all funds shall remain uninvested. All earnings (net of losses and investment expenses) thereon shall be retained or deposited into the applicable Collection Account, as applicable, and shall be applied on each Payment Date pursuant to the provisions of <u>Section</u> <u>2.7</u> and <u>Section</u> <u>2.8</u> (as applicable). For the avoidance of doubt, funds in any Eligible Currency Account, Collateral Account and Unfunded Exposure Account shall remain uninvested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Unfunded Exposure Account</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Borrower shall not acquire any Delayed Draw Loan or Revolving Loan unless, in each case, immediately after giving effect to such acquisition or issuance, the Borrower shall have deposited an amount equal to the Required Funding Amount (if any). Subject to the satisfaction of the Withdrawal Conditions, amounts on deposit in the Unfunded Exposure Account may be withdrawn by the Borrower (x) to fund any draw requests of the relevant Obligors under any Revolving Loan or Delayed Draw Loan or (y) to make a deposit into the Principal Collections Account. Any such withdrawal will be subject to the following conditions (the "<u>Withdrawal Conditions</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) after giving effect to any such withdrawal under <u>clause (x)</u> above, no Borrowing Base Deficiency exists; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) after giving effect to any such withdrawal under <u>clause (x)</u> or <u>(y)</u> above, the aggregate amount on deposit in the Unfunded Exposure Account is equal to or greater than the aggregate Required Funding Amount with respect to all Loans included in the Collateral.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Any draw request made by an Obligor under a Revolving Loan or Delayed Draw Loan, along with wiring instructions for the applicable Obligor, shall be forwarded by the Borrower to the Collateral Agent (with a copy to the Administrative Agent) along with an instruction to the Collateral Agent to withdraw the applicable amount from the Unfunded Exposure Account and a certification that the conditions to fund such draw are satisfied, and the Collateral Agent shall fund such draw request in accordance with such instructions from the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If the Borrower shall receive any Principal Collections from an Obligor with respect to a Revolving Loan and, as of the date of such receipt (and after taking into account such repayment), the aggregate amount on deposit in the Unfunded Exposure Account is less than the aggregate Required Funding Amount with respect to all Loans included in the Collateral (the amount of such shortfall, in each case, the "<u>Unfunded Exposure Shortfall</u>"), the Collateral Agent shall deposit into the Unfunded Exposure Account an amount of such Principal Collections equal to the lesser of (a) the aggregate amount of such Principal Collections and (b) the Unfunded Exposure Shortfall as directed by the Borrower (or Collateral Manager on its behalf).

Section 2.10 <u>Payments, Computations, Etc.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Unless otherwise expressly provided herein, all amounts to be paid or deposited by the Borrower or the Collateral Manager to the Administrative Agent or the other Secured Parties hereunder shall be paid or deposited in accordance with the terms hereof no later than 1:00 p.m. on the day when due in lawful money of the United States in immediately available funds and any amount not received before such time shall be deemed received on the next Business Day. The Borrower or the Collateral Manager, as applicable, shall, to the extent permitted by law, pay to the Secured Parties interest on all amounts not paid or deposited when due hereunder at the Interest Rate applicable during an Event of Default, payable on demand; <u>provided</u> that such interest rate shall not at any time exceed the maximum rate permitted by Applicable Law. Such interest shall be for the account of the applicable Secured Party. All computations of interest and other fees hereunder shall be made on the basis of a year consisting of 360 days (other than calculations with respect to the Base Rate and each RFR Advance denominated in Sterling, which shall be based on a year consisting of 365 or 366 days) for the actual number of days elapsed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of the payment of Interest or any fee payable hereunder, as the case may be. To the extent that Available Funds are insufficient on any Payment Date to satisfy the full amount of any Increased Costs pursuant to <u>Section</u> <u>2.12</u>, such unpaid amounts shall remain due and owing and shall accrue interest at the Interest Rate until repaid in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If any Advance requested by the Borrower is not effectuated as a result of the Borrower's actions or failure to fulfill any condition under <u>Section</u> <u>3.2</u> applicable to the Borrower, as the case may be, on the date specified therefor, the Borrower shall indemnify the applicable Lender against any reasonable loss, cost or expense incurred by the applicable Lender,

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including any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by the applicable Lender to fund or maintain such Advance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) If at any time after the Closing Date, the Advances Outstanding hereunder are not allocated among the Lenders in accordance with their respective Pro Rata Shares, the Lenders agree to make such purchases and sales of interests in the Advances Outstanding between themselves so that each Lender is then holding its relevant Pro Rata Share of Advances Outstanding based on their Commitments at such time (such purchases and sales shall be arranged through the Administrative Agent and each Lender hereby agrees to execute such further instruments and documents, if any, as the Administrative Agent may reasonably request in writing in connection therewith), with all subsequent extensions of credit under this Agreement to be made in accordance with the respective Pro Rata Shares, of the Lenders from time to time party to this Agreement as provided herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) In the event the Collateral Agent receives instructions from the Collateral Manager or the Borrower which conflict with any instruction received by the Administrative Agent, the Collateral Agent shall rely on and follow the instructions given by the Administrative Agent.

Section 2.11 <u>Fees</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Collateral Agent shall be entitled to receive the Collateral Agent Fee in accordance with <u>Sections</u> <u>2.7</u> and <u>2.8</u>, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) On each Payment Date during the Revolving Period and, if applicable, the Payment Date immediately after the end of the Revolving Period, the Borrower shall pay to the Administrative Agent, for the benefit of the Lenders, the allocated portion (based on the unused Commitment of each Lender) of the Non-Usage Fee.

Section 2.12 <u>Increased Costs; Capital Adequacy; Illegality</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If either (i) the introduction of or any change (including any change by way of imposition or increase of reserve requirements) in or in the interpretation of any Applicable Law or (ii) the compliance by the Administrative Agent or any Lender with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), shall (a) subject the Administrative Agent or any Lender to any Tax or increased Tax of any kind whatsoever (other than (A) Indemnified Taxes that are covered under <u>Section</u> <u>2.13(a)</u> and (B) Excluded Taxes) with respect to this Agreement or change the basis of taxation of payments to the Lender in respect thereof with respect to its interest in the Collateral, or any right or obligation to make Advances hereunder, or on any payment made hereunder, (b) impose, modify or deem applicable any reserve requirement (including any reserve requirement imposed by the Board of Governors of the Federal Reserve System, but excluding any reserve requirement, if any, included in the determination of Interest), special deposit or similar requirement against assets of, deposits with or for the amount of, or credit extended by, any Lender or (c) impose any other condition affecting the ownership interest in the Collateral conveyed to the Secured Parties hereunder or the Administrative Agent's or any Lender's rights hereunder or under any other Transaction Document, the result of which is to increase the cost to

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the Administrative Agent or any Lender or to reduce the amount of any sum received or receivable by the Administrative Agent or any Lender under this Agreement or under any other Transaction Document, and in each case the Administrative Agent or such Lender has made a similar determination with respect to other facilities similarly situated other than for the reason of identifiable legal differences between such facilities, then on the Payment Date following demand by the Administrative Agent or such Lender (which demand shall be accompanied by a statement setting forth the basis for such demand), and in any case the Borrower shall pay directly to the Administrative Agent or such Lender such additional amount or amounts as will compensate the Administrative Agent or such Lender for such additional or increased cost incurred or such reduction suffered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If either (i) the introduction of or any change in or in the interpretation of any law, guideline, rule, regulation, directive or request or (ii) compliance by the Administrative Agent or any Lender with any law, guideline, rule, regulation, directive or request from any central bank or other Governmental Authority or agency (whether or not having the force of law), including compliance by the Administrative Agent or any Lender with any request or directive regarding capital adequacy has or would have the effect of reducing the rate of return on the capital of the Administrative Agent or any Lender as a consequence of its obligations hereunder or arising in connection herewith to a level below that which the Administrative Agent or any such Lender could have achieved but for such introduction, change or compliance (taking into consideration the policies of the Administrative Agent or such Lender with respect to capital adequacy) by an amount deemed by the Administrative Agent or such Lender to be material, and in each case the Administrative Agent or such Lender has made a similar determination with respect to other facilities similarly situated other than for the reason of identifiable legal differences between such facilities, then from time to time, on the Payment Date following demand by the Administrative Agent or such Lender (which demand shall be accompanied by a statement setting forth the basis for such demand), the Borrower shall pay directly to the Administrative Agent or such Lender such additional amount or amounts as will compensate the Administrative Agent or such Lender for such reduction; <u>provided</u> that notwithstanding anything in this <u>Section</u> <u>2.12(b)</u> to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a "change in law" for the purposes of <u>clause (i)</u> above, regardless of the date enacted, adopted or issued. If the issuance of any amendment or supplement to Interpretation No. 46 or to Statement of Financial Accounting Standards No. 140 by the Financial Accounting Standards Board or any other change in accounting standards, including GAAP, or the issuance of any other pronouncement, release or interpretation, causes or requires the consolidation of all or a portion of the assets and liabilities of the Transferor, the Borrower or any Secured Party with the assets and liabilities of the Administrative Agent or any Lender or shall otherwise impose any loss, cost, expense, reduction of return on capital or other loss, such event shall constitute a circumstance on which the Administrative Agent or such Lender may base a claim for reimbursement under this <u>Section</u> <u>2.12</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If as a result of any event or circumstance similar to those described in <u>clause</u> <u>(a)</u> or <u>(b)</u> of this <u>Section</u> <u>2.12</u>, the Administrative Agent or any Lender is required to

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compensate a bank or other financial institution providing liquidity support, credit enhancement or other similar support to the Administrative Agent or such Lender in connection with this Agreement or the funding or maintenance of Advances hereunder (under other facilities similarly situated other than for the reason of identifiable legal differences between such facilities), then within twenty-two (22) days after demand by the Administrative Agent or such Lender, the Borrower shall pay to the Administrative Agent or such Lender such additional amount or amounts as may be necessary to reimburse the Administrative Agent or such Lender for any amounts payable or paid by it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In determining any amount provided for in this <u>Section</u> <u>2.12</u>, the Administrative Agent or any applicable Lender may use any reasonable averaging and attribution methods. The Administrative Agent or any Lender making a claim under this <u>Section</u> <u>2.12</u> shall submit to the Collateral Manager a written description as to such additional or increased cost or reduction and the calculation thereof, which written description shall be conclusive absent manifest error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If a Disruption Event with respect to any Lender occurred, such Lender shall in turn so notify the Borrower, whereupon all Advances Outstanding in the applicable Currency of the affected Lender in respect of which Interest accrues at the Benchmark shall immediately be converted into Advances Outstanding in respect of which Interest accrues at the Base Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Failure or delay on the part of the Administrative Agent or any Lender to demand compensation pursuant to this <u>Section</u> <u>2.12</u> shall not constitute a waiver of the Administrative Agent's or such Lender's right to demand or receive such compensation. Notwithstanding anything to the contrary in this <u>Section</u> <u>2.12</u>, the Borrower shall not be required to compensate the Administrative Agent or any Lender pursuant to this <u>Section</u> <u>2.12</u> for any amounts incurred more than six (6) months prior to the date that the Administrative Agent or such Lender notifies the Borrower of the Administrative Agent's or such Lender's intention to claim compensation therefor; <u>provided</u> that, if the circumstances giving rise to such claim have a retroactive effect, then such six (6) month period shall be extended to include the period of such retroactive effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Each Lender agrees that it will take such commercially reasonable actions as the Borrower may reasonably request that will avoid the need to pay, or reduce the amount of, any increased amounts referred to in this <u>Section</u> <u>2.12</u> or <u>Section</u> <u>2.13</u>; <u>provided</u> that no Lender shall be obligated to take any actions that would, in the reasonable opinion of such Lender, be disadvantageous to such Lender. In no event will the Borrower be responsible for increased amounts referred to in this <u>Section</u> <u>2.12</u> which relates to any other entities to which any Lender provides financing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The payment of amounts under this <u>Section</u> <u>2.12</u> shall be on an after-Tax basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Other than with respect to a Benchmark Transition Event (for which reference is made to <u>Section</u> <u>12.18</u>), if the Administrative Agent reasonably determines (which determination shall be conclusive and binding absent manifest error) that "Term SOFR" cannot

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be determined pursuant to the definition thereof, the Administrative Agent will promptly so notify the Borrower and each Lender. Upon notice thereof by the Administrative Agent to the Borrower, the Borrower may revoke any request for an Advance bearing interest at the applicable Benchmark that cannot be determined pursuant to the foregoing sentence and, failing that, all Advances and all Advances Outstanding shall bear interest at the Base Rate plus the Applicable Spread, in each case, computed as otherwise described herein until the Administrative Agent revokes such notice(s); <u>provided</u>, however, the Administrative Agent may, in consultation with the Borrower and the applicable Lender, establish an alternative interest rate with respect to such Advances during the pendency of such period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) If any Lender determines that any applicable law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain or fund Advances whose interest is determined by reference to Term SOFR or to determine to charge interest rates based upon Term SOFR then, upon notice thereof by such Lender to the Borrower (through the Administrative Agent), any obligation of such Lender to make or continue Advances that bear interest at Term SOFR shall be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay (pursuant to <u>Section</u> <u>2.3(a)</u>) or, if applicable, convert all Advances that bear interest at Term SOFR of such Lender to Advances that bear interest at the Base Rate, on the Payment Date therefor, if such Lender may lawfully continue to maintain such Advances that bear interest at Term SOFR to such day, or immediately, if such Lender may not lawfully continue to maintain such Advances that bear interest at Term SOFR.

Section 2.13 <u>Taxes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Defined Terms</u>. For purposes of this <u>Section</u> <u>2.13</u>, the term "Applicable Law" includes FATCA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Payments Free of Taxes</u>. Any and all payments by or on account of any obligation of the Borrower under this Agreement or any Transaction Documents shall be made without deduction or withholding for any Taxes, except as required by Applicable Law. If any Applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then (i) the applicable Withholding Agent shall be entitled to make such deduction or withholding, (ii) the applicable Withholding Agent shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law, and (iii) if such Tax is an Indemnified Tax, then the sum payable by the Borrower 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 <u>Section</u> <u>2.13</u>) the applicable Secured Party receives an amount equal to the sum it would have received had no such deduction or withholding been made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Payment of Other Taxes by the Borrower</u>. The Borrower 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.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Indemnification by the Borrower</u>. The Borrower shall indemnify each applicable Secured Party, within ten (10) 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 <u>Section</u> <u>2.13</u>) payable or paid by such Secured Party or required to be withheld or deducted from a payment to such Secured Party 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 Borrower by a Secured Party (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Secured Party, shall be conclusive absent manifest error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Indemnification by the Lenders</u>. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (x) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (y) any Taxes attributable to such Lender's failure to comply with the provisions of <u>Section</u> <u>12.16(d)</u> relating to the maintenance of a Participant Register and (z) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Transaction 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 this Agreement or any other Transaction 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 <u>Section</u> <u>2.13(e)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Evidence of Payments</u>. As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this <u>Section</u> <u>2.13</u>, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Status of Lenders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any Secured Party that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Transaction Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Secured Party, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Secured Party is subject to backup withholding or

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information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in <u>Sections 2.13(g)(ii)(1)</u>, <u>(ii)(2)</u> and <u>(ii)(4)</u> below) shall not be required if in the Secured Party's reasonable judgment such completion, execution or submission would subject such Secured Party to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Secured Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Without limiting the generality of the foregoing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. 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 Transaction Document, executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, 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 Transaction Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. executed copies of IRS Form W-8ECI;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit I-1 to the effect that such Foreign Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, a "10 percent shareholder" of the Borrower (or its sole owner, as applicable) within the meaning of Section 881(c)(3)(B) of the Code, or a "controlled foreign corporation" related to the Borrower

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(or its sole owner, as applicable) as described in Section 881(c)(3)(C) of the Code (a "<u>U.S. Tax Compliance Certificate</u>") and (y) executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit I-2 or Exhibit I-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; <u>provided</u> that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit I-4 on behalf of each such direct and indirect partner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies 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 Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) if a payment made to a Secured Party under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Secured Party 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 Secured Party shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by Applicable Law and at such time or times reasonably requested by the Borrower 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 Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Secured Party has complied with such Secured Party's obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this <u>Section</u> <u>2.13(g)(ii)(4)</u>, "FATCA" shall include any amendments made to FATCA after the Closing Date.

Each Secured Party 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

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certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Treatment of Certain Refunds</u>. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this <u>Section</u> <u>2.13</u> (including by the payment of additional amounts pursuant to this <u>Section</u> <u>2.13</u>), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this <u>Section</u> <u>2.13</u> with respect to the Taxes giving rise to such refund), net of all 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). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this <u>Section</u> <u>2.13(h)</u> (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 to such Governmental Authority. Notwithstanding anything to the contrary in this <u>Section</u> <u>2.13(h)</u>, in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this <u>Section</u> <u>2.13(h)</u> 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 Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This <u>Section</u> <u>2.13(h)</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Survival</u>. Each party's obligations under this <u>Section</u> <u>2.13</u> shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and Advances and the repayment, satisfaction or discharge of all obligations under any Transaction Document.

Section 2.14 <u>Reinvestment; Discretionary Sales, Substitutions and Repurchases of Loans</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Reinvestment</u>. On the terms and conditions hereinafter set forth as certified in writing to the Administrative Agent and the Collateral Agent, on any date prior to the Revolving Period End Date (in the case of clause (i) below) or the Termination Date (in the case of clause (ii) below), and without limiting the provisions of <u>Section</u> <u>2.7</u> on each Payment Date, the Borrower may withdraw funds on deposit in the Principal Collection Account for the following purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) to reinvest such funds in Loans to be pledged hereunder (a "<u>Reinvestment</u>"), so long as (1) all applicable conditions precedent set forth in <u>Section</u> <u>3.2</u> have been satisfied, (2) each Loan acquired by the Borrower in connection with such reinvestment shall be an Eligible Loan, (3) no Event of Default has occurred and is continuing and, immediately after giving effect to such Reinvestment, no Default or Event of Default shall have occurred, and (4) immediately after giving effect to such Reinvestment, there shall not exist a Borrowing Base Deficiency; <u>provided</u> that, notwithstanding anything to the contrary set forth in <u>Section</u> <u>3.2</u>, in the event a

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Borrowing Base Deficiency shall have existed immediately prior to giving effect to such Reinvestment, the Borrower may effect a Reinvestment so long as, immediately after giving effect to such Reinvestment and any other sale or transfer or other action taken in accordance with <u>Section</u> <u>2.6</u> substantially contemporaneous therewith, the Borrowing Base Deficiency is reduced to zero Dollars ($0); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) to make payments in respect of the Advances Outstanding at such time in accordance with and subject to the terms of <u>Section</u> <u>2.3</u>.

Upon the satisfaction of the applicable conditions set forth in <u>Section</u> <u>2.14(a)</u> (as certified by the Borrower to the Administrative Agent and the Collateral Agent, and as acknowledged by the Administrative Agent to the Collateral Agent), the Collateral Agent will release funds from the Principal Collection Account to the Borrower in an amount not to exceed the lesser of (A) the amount requested by the Borrower and (B) the amount on deposit in the Principal Collection Account on such day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Substitutions</u>. The Borrower may, subject to <u>clauses</u> <u>(e)</u> and <u>(f)</u> below, replace any Loan with another Loan (each such sale and reinvestment, a "<u>Substitution</u>") so long as (i) each substitute Loan acquired by the Borrower in connection with a Substitution shall be an Eligible Loan, (ii) all applicable conditions precedent set forth in <u>Section</u> <u>3.2</u> have been satisfied with respect to each Loan to be acquired by the Borrower in connection with such Substitution and (iii) from and after the Revolving Period End Date, the cash principal payment schedule with respect to any substitute Loan acquired by the Borrower in connection with a Substitution shall be substantially similar to the Loan sold or otherwise transferred in connection with such Substitution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Discretionary Sales</u>. During the Revolving Period, upon notice by the Borrower, unless waived by the Administrative Agent, (with a copy to the Collateral Agent), the Borrower shall be permitted, subject to <u>clauses</u> <u>(e)</u> and <u>(f)</u> below, to sell Loans (or portions thereof, each, a "<u>Discretionary Sale</u>"); <u>provided</u> that the Borrower shall make a deposit in the Collection Account in immediately available funds in an amount equal to the net cash price received by the Borrower pursuant to any Discretionary Sale promptly upon the Borrower's receipt of such cash price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Repurchase or Substitution of Warranty Loans</u>. Not later than five (5) Business Days following the earlier of (i) knowledge by any Responsible Officer of the Borrower or any Responsible Officer of the Collateral Manager that any Loan constitutes a Warranty Loan or (ii) receipt by the Borrower from the Administrative Agent of written notice thereof, the Borrower shall either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) cause the Transferor to repurchase such Loan and make a deposit to the Collection Account in immediately available funds in an amount equal to (A) the Outstanding Balance of the related Loan as of the date of the repurchase, multiplied by (B) the Purchase Price, plus, only with respect to the repurchase of Warranty Loans, any expenses or fees with respect to such Loan; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) substitute for such Warranty Loan a substitute Eligible Loan, <u>provided</u> that all requirements with respect to Substitutions set forth in this <u>Section</u> <u>2.14</u> are satisfied.

Upon receipt of written certification from the Borrower certifying to the confirmation of the deposit of the amounts set forth in <u>Section</u> <u>2.14(d)(i)</u> into the Collection Account or the delivery by the Borrower of a substitute Eligible Loan for each Warranty Loan (the date of such confirmation or delivery, the "<u>Release Date</u>"), such Warranty Loan and related Underlying Assets shall be removed from the Collateral and, as applicable, the substitute Eligible Loan and related Underlying Assets shall be included in the Collateral. On the Release Date of each Warranty Loan, the Collateral Agent, for the benefit of the Secured Parties, shall automatically and without further action be deemed to release to the Borrower, without recourse, representation or warranty, all the right, title and interest and any Lien of the Collateral Agent, for the benefit of the Secured Parties in, to and under the Warranty Loan and any related Underlying Assets and all future monies due or to become due with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Conditions to Sales, Substitutions and Repurchases</u>. Any Discretionary Sale or sale pursuant to a Substitution effected pursuant to this <u>Section</u> <u>2.14</u> shall be subject to the satisfaction of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Borrower shall deliver a Borrowing Base Certificate to the Administrative Agent (with a copy to Collateral Agent) that gives effect to the contemplation of a Discretionary Sale or a sale pursuant to a Substitution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Borrower shall deliver a list of all Loans to be sold or substituted to the Administrative Agent (with a copy to Collateral Agent);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) as certified in writing to the Administrative Agent by the Borrower, no selection procedures adverse to the interests of the Administrative Agent or the Lenders were utilized by the Borrower or the Collateral Manager, as applicable, in the selection of the Loans to be sold or substituted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the Borrower shall notify the Administrative Agent and Collateral Agent of any amount to be deposited into the Collection Account in connection with any sale or Substitution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) as certified in writing to the Administrative Agent (with a copy to Collateral Agent) by the Borrower, the representations and warranties contained in <u>Section</u> <u>4.1</u> and <u>4.2</u> hereof shall continue to be true and correct in all material respects (except for such representations and warranties as are qualified by materiality, a Material Adverse Effect or any similar qualifier, which representations and warranties shall be true in all respects, and except for those representations and warranties made as of a specific date which are true, correct, and complete as of such date) following any sale or Substitution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) any repayment of Advances Outstanding in connection with any sale or Substitution of Loans hereunder shall comply with the requirements set forth in <u>Section</u> <u>2.3</u>;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) as certified in writing to the Administrative Agent by the Borrower (which certification may be included in the related Borrowing Base Certificate), any Discretionary Sale or sale in connection with a Substitution shall be made by the Collateral Manager, on behalf of the Borrower, to an unaffiliated third party purchaser in a transaction (1) reflecting arms-length market terms and (2) in which the Borrower makes no representations, warranties or covenants and provides no indemnification for the benefit of any other party to such sale (other than that the Borrower has good title thereto, free and clear of all Liens and has the right to sell the related Loan) (and the parties agree that the assignment agreement form attached as an exhibit to the applicable Underlying Instrument (solely to the extent such assignment agreement form (x) is reasonable and customary for a credit facility of the type to which such sale relates and (y) does not contain atypical or unusually burdensome covenants or representations and warranties in respect of the Borrower, in each case, in the Collateral Manager's reasonable and good faith discretion) shall satisfy this <u>clause (2)</u>); <u>provided</u> that if a Default or Event of Default has occurred and is continuing (other than a Default or Event of Default arising from a Borrowing Base Deficiency which will be cured in connection with such Discretionary Sale or Substitution) any Discretionary Sale or sale in connection with a Substitution to an Affiliate of the Borrower shall require the prior written consent of the Administrative Agent in its reasonable discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) (A) no Collateral Manager Termination Event, Default or Event of Default shall have occurred and be continuing and, immediately after giving effect to any Discretionary Sale or Substitution, as applicable, no Collateral Manager Termination Event, Default or Event of Default shall have occurred; (B) notwithstanding anything set forth in this <u>Section</u> <u>2.14</u>, immediately after giving effect to any Discretionary Sale or Substitution, as applicable, there shall not exist a Borrowing Base Deficiency; <u>provided</u> that, notwithstanding the foregoing or anything to the contrary set forth in <u>Section</u> <u>3.2</u>, in the event a Borrowing Base Deficiency shall have existed immediately prior to giving effect to a Substitution, such Borrower may effect such Substitution so long as, immediately after giving effect to such Substitution and any other sale or transfer or other action taken in accordance with <u>Section</u> <u>2.6</u> substantially contemporaneous therewith, the Borrowing Base Deficiency shall be reduced to zero ($0); and (C) unless consented to by the Administrative Agent in its sole discretion, (x) the net cash price received by the Borrower pursuant to any Discretionary Sale, shall be greater than the Adjusted Borrowing Value of the Loan sold in connection with such Discretionary Sale and (y) the Adjusted Borrowing Value of the substitute Loan acquired by the Borrower in connection with any Substitution shall be greater than the Adjusted Borrowing Value of the Loan sold or otherwise transferred in connection with such Substitution; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) the Borrower and Collateral Manager (on behalf of the Borrower) shall pay an amount equal to all Breakage Costs and all other accrued and unpaid costs and expenses (including reasonable legal fees) of the Administrative Agent, the Lenders and the Collateral Agent in connection with any such sale, Substitution or repurchase (including, but not limited to, expenses incurred in connection with the release of the Lien of the Collateral Agent on behalf of the Secured Parties and any other party having an interest in the Loan in connection with such sale, Substitution or repurchase).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Limitations on Sales, Substitutions and Repurchases</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The aggregate Outstanding Balance of all Loans (other than Warranty Loans) which are transferred by the Borrower in connection with a Substitution, a Discretionary Sale or pursuant to a Restricted Payment during any 2-week rolling period shall not exceed, collectively, 10.00% of the highest aggregate Outstanding Balance of all Loans during the 2-week period preceding such date (or such lesser number of day as shall have elapsed since the Closing Date as of such date); <u>provided</u> that, the limitation set forth in this <u>clause (f)(i)</u> shall not apply with respect to any Substitution or Discretionary Sale so long as the Administrative Agent has provided its prior written consent (in its sole discretion) to such Substitution or Discretionary Sale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The aggregate Outstanding Balance of all Transferor Loans (other than Warranty Loans) which are transferred by the Borrower to the Transferor or an Affiliate thereof in connection with a Substitution, a Discretionary Sale or the transfer to the Transferor pursuant to a Restricted Payment shall not exceed twenty percent (20.00%) of the Transferor Purchased Loan Balance measured as of the date of such Substitution, Discretionary Sale or dividend; <u>provided</u> that the aggregate Outstanding Balance of all Transferor Loans (other than Warranty Loans) that are Defaulted Loans which are transferred by the Borrower to the Transferor or an Affiliate thereof in connection with a Substitution, a Discretionary Sale or a transfer to the Transferor pursuant to a Restricted Payment shall not exceed in the aggregate ten percent (10.00%) of the Transferor Purchased Loan Balance, measured as of the date of such Substitution, Discretionary Sale or Restricted Payment; <u>provided</u>, <u>further</u>, that, the limitations set forth in this <u>Section</u> <u>2.14(f)(i)</u> shall not apply with respect to any Discretionary Sale to a Person in connection with a Permitted Securitization so long as the Administrative Agent has provided its prior written consent (in its sole discretion) to such Discretionary Sale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Notwithstanding the limitation set forth in <u>Sections 2.14(f)(i)</u> and <u>(ii)</u>, and subject to satisfaction of all other applicable requirements set forth in this <u>Section</u> <u>2.14</u> or elsewhere in this Agreement, so long as the Administrative Agent provides its prior written consent (to be provided or withheld by the Administrative Agent in its sole discretion in each instance) for each such transfer, the Borrower may transfer Loans that are not Eligible Loans to the Transferor or an Affiliate thereof in connection with a Substitution, a Discretionary Sale or the transfer to the Transferor pursuant to a Restricted Payment in such amounts as would cause the aggregate Outstanding Balance of all Loans (other than Warranty Loans) transferred by the Borrower to the Transferor or an Affiliate thereof to exceed the limitations set forth in <u>Section</u> <u>2.14(f)(i)</u> and <u>(ii)</u>; <u>provided</u>, <u>however</u>*,* that such transfer may not cause the sale of Loans pursuant to the Transaction Documents to fail to qualify as a true sale such that Proskauer Rose LLP or another legal counsel of national standing could no longer render a customary true sale opinion with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Notices to Lenders</u>. The Administrative Agent shall provide the Lenders with copies of any notices and, if requested by the Lenders, other materials received by the Administrative Agent pursuant to this <u>Section</u> <u>2.14</u> in connection with any sale, Substitution, or repurchase of Loans. The Borrower (or Collateral Manager, on its behalf) shall deliver an

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Officer's Certificate to the Collateral Agent, on which it may conclusively rely, to the effect that all conditions precedent to such sale, Substitution or repurchase of Loans, as the case may be, have been satisfied (which Officer's Certificate shall be deemed to have been provided upon the delivery of an order or trade ticket in respect of such sale, Substitution or repurchase).

Section 2.15 <u>Assignment of the Sale Agreement.</u>

The Borrower hereby assigns to the Collateral Agent, for the ratable benefit of the Secured Parties hereunder, all of the Borrower's right, title and interest in and to, but none of its obligations under, the Sale Agreement and any UCC financing statements filed under or in connection therewith to secure the prompt, complete and indefeasible payment and performance in full when due, whether by lapse of time, acceleration or otherwise, of the Obligations of the Borrower arising in connection with this Agreement and each other Transaction Document, whether now or hereafter existing, due or to become due, direct or indirect, absolute or contingent. In furtherance and not in limitation of the foregoing, the Borrower hereby assigns to the Collateral Agent for the benefit of the Secured Parties its right to indemnification under the Sale Agreement. The Borrower confirms that, following the occurrence and during the continuation of an Event of Default, the Collateral Agent, on behalf of the Secured Parties, shall have the right to enforce the Borrower's rights and remedies under the Sale Agreement and any UCC financing statements filed under or in connection therewith for the benefit of the Secured Parties.

Section 2.16 <u>Defaulting Lenders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) That Defaulting Lender's right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in <u>Section</u> <u>12.1</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, or otherwise), shall be applied at such time or times as may be determined by the Administrative Agent as follows: *first*, to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent hereunder; *second*, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Advance in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; *third*, if so determined by the Administrative Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of that Defaulting Lender to fund Advances under this Agreement; *fourth*, to the payment of any amounts owing to the Lenders, as a result of any judgment of a court of competent jurisdiction obtained by any Lender against that Defaulting Lender as a result of that Defaulting Lender's breach of its obligations under this Agreement; *fifth*, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower

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as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against that Defaulting Lender as a result of that Defaulting Lender's breach of its obligations under this Agreement; and *sixth*, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; <u>provided</u> that if such payment is a payment of the principal amount of any Advances in respect of which that Defaulting Lender has not fully funded its appropriate share, such payment shall be applied solely to pay the Advances of all non-Defaulting Lenders on a *pro rata* basis prior to being applied to the payment of any Advances of that Defaulting Lender. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this <u>Section</u> <u>2.16</u> shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If the Borrower and the Administrative Agent agree in writing that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any cash collateral), that Lender will, to the extent applicable, purchase at par that portion of Advances Outstanding of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Advances to be held on a *pro rata* basis by the Lenders in accordance with their Pro Rata Shares, whereupon that Lender will cease to be a Defaulting Lender; <u>provided</u> that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and <u>provided</u>, <u>further</u>, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender's having been a Defaulting Lender.

Section 2.17 <u>Mitigation Obligations; Replacement of Lenders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Designation of a Different Lending Office</u>. If any Lender requests compensation under <u>Section</u> <u>2.12</u>, or requires the Borrower to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to <u>Section</u> <u>2.13</u>, then such Lender shall (at the request of the Borrower) use reasonable efforts to designate a different lending office for funding or booking its Advances hereunder or assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgement of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to <u>Section</u> <u>2.12</u> or <u>Section</u> <u>2.13</u>, as the case may be, in the future and (ii) would not otherwise be disadvantageous to such Lender. Upon receipt of such estimate, the Borrower may approve the proposed designation or assignment, in which case the Lender shall use reasonable efforts to effect the same. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such approved designation or assignment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Replacement of Lenders</u>. If any Lender (other than CIBC) requests compensation under <u>Section</u> <u>2.12</u>, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to <u>Section</u> <u>2.13</u>, or if any Lender is a Defaulting Lender hereunder, or if any Lender does not consent to any

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amendment or modification (including in the form of a consent or waiver) that requires the approval of all or all affected Lenders in accordance with the terms of <u>Section</u> <u>12.1</u> which is approved by the Borrower, the Administrative Agent and the Required Lenders, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, <u>Section</u> <u>12.16</u>), all of its interests, rights and obligations under this Agreement and the Transaction Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); <u>provided</u> that:

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) in the case of any such assignment resulting from a claim for compensation under <u>Section</u> <u>2.12</u> or payments required to be made pursuant to <u>Section</u> <u>2.13,</u> such assignment will result in a reduction in such compensation or payments thereafter; and

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

A Lender shall not 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 Borrower to require such assignment and delegation cease to apply.

Section 2.18 <u>Increase of Commitment; Facility Amount</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At any time during the Revolving Period, <u>provided</u> that no Event of Default has occurred and is continuing, the Commitment for any Lender may be increased or, subject to <u>Section 12.16</u>, one or more new Lenders may be added hereunder, in each case, in connection with a corresponding increase in the Facility Amount upon the written request of the Borrower with the prior written consent of the Administrative Agent and such Lender (and with notice to the Collateral Agent) (an "<u>Increased Commitment</u>"); <u>provided</u> that (i) following such Increased Commitment, the Facility Amount shall not exceed $300,000,000 and (ii) no Lender shall be required to increase its commitment. Except for upfront fees payable to Lenders providing any Increased Commitment, any such Increased Commitment shall be on the same terms (including the pricing and maturity date) as, and pursuant to the documentation applicable to, the Commitments provided pursuant to the Agreement as of the Closing Date. Prior to, or on the date of, the effectiveness of any such Increased Commitment, if requested by the Administrative Agent or any increasing Lender, the Borrower shall execute and deliver to the applicable Lender a revised Note in an aggregate face amount equal to such Lender's revised Commitment. The Borrower confirms that each Lender, in its sole and absolute discretion, without regard to the value or performance of the facility documented hereby or any other factor, may elect not to increase its Commitment. Upon such increase, <u>Annex B</u> hereto shall be deemed to be revised to reflect such increase in each increasing Lender's Commitment.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Borrower shall have the option to (i) request that any Advance bear interest at Term SOFR or (ii) continue any Advance that bears interest at Term SOFR as an Advance that bears interest at Term SOFR upon the expiration of the applicable Interest Period and the succeeding Interest Period of that continued Advance shall commence on the last day of the Interest Period of the Advance to be continued. Any such election must be made by no later than 12:00 p.m. on the third (3rd) U.S. Government Securities Business Day prior to (1) the Interest Period of any proposed Advance that bears interest at Term SOFR, or (2) the end of the Interest Period with respect to any Advance that bears interest at Term SOFR to be continued as such. If no election is received with respect to an Advance that bears interest at Term SOFR by no later than 12:00 p.m. on the third (3rd) U.S. Government Securities Business Day prior to the end of the Interest Period with respect thereto, such Loan shall be converted to a Loan that bears interest at Adjusted Daily Simple RFR at the end of its Interest Period. In the case of any continuation, such election must be made pursuant to a Notice of Continuation, to the Administrative Agent (with a copy to the Collateral Agent). Notwithstanding the foregoing, at no time shall there be more than six (6) Advances that bear interest at Term SOFR outstanding.

Section 2.19 <u>Interest Period Elections</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to <u>Section</u> <u>2.2(b)</u>, each Advance shall initially have the Interest Period specified in the related Funding Notice. Thereafter, the Borrower may elect the Interest Period for any Term RFR Advance and Eurocurrency Rate Advance no later than 12:00 p.m. on the third (3rd) U.S. Government Securities Business Day prior to the end of the current Interest Period with respect to such Advance, which shall be a period contemplated by the definition of the term " Interest Period" and subject to <u>clause (c)</u> below. The Borrower shall make such election by notice to Administrative Agent (with a copy to the Collateral Agent) in writing (the "<u>Interest Election Request</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Content of Interest Election Requests</u>. Each written Interest Election Request shall specify (i) the Advance to which such Interest Election Request applies, (ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day and (iii) the Interest Period therefor after giving effect to such election.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Failure to Elect</u>. If the Borrower does not deliver a timely and complete Interest Election Request with respect to an Advance prior to the end of the Interest Period therefor, then, unless such Advance is repaid as provided herein, at the end of such Interest Period such Advance shall continue with an Interest Period that is the same tenor as the Interest Period that just ended.

**ARTICLE III** 

**CONDITIONS TO THE CLOSING DATE AND ADVANCES** 

Section 3.1 <u>Conditions to Closing Date.</u>

No Lender and neither the Administrative Agent nor the Collateral Agent shall be obligated to take, fulfill or perform any other action hereunder, until the following conditions have been satisfied, in the sole discretion of, or waived in writing, by the Administrative Agent:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement and the other Transaction Documents shall have been duly executed by, and delivered to, the parties hereto and thereto, and the Administrative Agent shall have received such other documents, instruments, agreements and legal opinions as the Administrative Agent shall reasonably request in writing in connection with the transactions contemplated by this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Administrative Agent shall have received satisfactory evidence that the Borrower, the Transferor and the Collateral Manager have obtained all required consents and approvals of all Persons to the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby or thereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Borrower and the Collateral Manager shall each have delivered to the Administrative Agent a certification in the form of <u>Exhibit D</u>, and such certification shall, with respect to the Borrower, include a representation that the Borrower has neither incurred nor suffered to exist any Indebtedness as of the Closing Date (for the avoidance of doubt, other than Indebtedness incurred or permitted hereunder);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Borrower, the Transferor and the Collateral Manager shall each have delivered to the Administrative Agent a certificate as to whether such entity is Solvent in the form of <u>Exhibit C</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Borrower and Collateral Manager shall have delivered to the Administrative Agent certification that no Default, Event of Default or Collateral Manager Termination Event has occurred and is continuing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Administrative Agent shall have received the executed legal opinion or opinions of Proskauer Rose LLP, counsel to the Borrower, the Transferor and the Collateral Manager, covering (A) authority, (B) enforceability of this Agreement and the other Transaction Documents, (C) true sale and non-consolidation matters, and (D) UCC, perfection and other closing matters; in each case, in form and substance acceptable to the Administrative Agent in its reasonable discretion;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Administrative Agent shall have received the executed legal opinion of Alston & Bird LLP, counsel to the Collateral Agent and Custodian, covering (A) authority, (B) enforceability of this Agreement and the other Transaction Documents, and (C) other closing matters; in each case, in form and substance acceptable to the Administrative Agent in its reasonable discretion;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Borrower and the Administrative Agent shall have executed the Fee Letter, and the Borrower shall have paid all fees due and unpaid under the Fee Letter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Borrower and the Collateral Agent shall have executed the Collateral Agent Fee Letter, and the Borrower shall have paid all fees due and unpaid under the Collateral Agent Fee Letter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Upon request, each applicable Lender shall have received a duly executed copy of its Note, in a principal amount equal to the Commitment of the Lender;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) The Administrative Agent shall have received a secretary's or officer's certificate of each Loan Party (i) that includes a copy of the resolutions, in form and substance reasonably satisfactory to the Administrative Agent, of the board of directors, manager(s) or member(s) of such Loan Party, as applicable, authorizing (A) the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party, and (B) the borrowings contemplated hereunder, and a certification that such resolutions have not been amended, modified, revoked or rescinded, (ii) that includes a copy of the Governing Documents of such Loan Party and a certification that, except as disclosed therein, there has not been any amendment, modification or supplement to such Governing Documents, (iii) that includes, a certification as to the incumbency and signature of the officers of such Loan Party executing any Transaction Document and (iv) that includes certificates dated as of a recent date from the Secretary of State or other appropriate authority, evidencing the good standing of such Loan Party (A) in the jurisdiction of its organization and (B) in each other jurisdiction where its ownership, lease or operation of Property or the conduct of its business requires it to qualify as a foreign Person except, as to this <u>clause (B)</u>, where the failure to so qualify could not be reasonably expected to have a Material Adverse Effect, which certificate shall be in form and substance satisfactory to the Administrative Agent and shall be executed by a corporate secretary or Responsible Officer of such Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) The Administrative Agent shall have received the results of a recent search by a Person satisfactory to the Administrative Agent, of the UCC, judgment and tax lien filings which may have been filed with respect to personal property of each Loan Party, and bankruptcy and pending lawsuits with respect to the Loan Parties and the results of such search shall be satisfactory to the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) The Administrative Agent shall have received (i) all documentation and other information requested by the Administrative Agent in its sole discretion and/or required by regulatory authorities with respect to the Borrower and the Collateral Manager under applicable "know your customer" and anti-money laundering rules and regulations, including the USA Patriot Act, and (ii) a Beneficial Ownership Certification with respect to the Borrower, in each case, in form and substance reasonably satisfactory to the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) The results of the due diligence procedures, as carried out by the Administrative Agent, are satisfactory to the Administrative Agent, in its sole discretion; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) The representations and warranties contained in <u>Section</u> <u>4.1</u> and <u>Section</u> <u>4.2</u> are true, correct and complete in all material respects on and as of the Closing Date (except for such representations and warranties as are qualified by materiality, a Material Adverse Effect or any similar qualifier, which representations and warranties shall be true in all respects, and except for those representations and warranties made as of a specific date which are true, correct, and complete as of such date);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) To the extent invoiced prior to the Closing Date, the Administrative Agent and the Lenders shall have received evidence reasonably satisfactory to it that the documented fees and expenses of counsel and third-party diligence service providers to the Administrative Agent and the Lenders, and of counsel to the Custodian, the Collateral Agent and the Securities

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Intermediary in connection with the transactions contemplated hereby, shall have been paid by the Borrower; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated by this Agreement and the other Transaction Documents shall be reasonably satisfactory in form and substance to the Administrative Agent, and the Administrative Agent shall have received such other documents and legal opinions in respect of any aspect or consequence of the transactions contemplated hereby or thereby as it shall reasonably request in writing.

Section 3.2 <u>Conditions Precedent to All Advances and Acquisitions of Loans</u>.

Each Loan Advance under this Agreement, each Reinvestment of Principal Collections pursuant to <u>Section</u> <u>2.14(a)(i)</u> and each acquisition of Loans in connection with a Substitution pursuant to <u>Section</u> <u>2.14(b)</u> (each, a "<u>Transaction</u>") shall be subject to the further conditions precedent that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) With respect to any Loan Advance, the Collateral Manager on the Borrower's behalf shall have delivered to the Administrative Agent (with a copy to the Collateral Agent), by not later than the deadline set forth in <u>Section</u> <u>2.2(b)</u> (or such shorter period as may be agreed to by the Administrative Agent and each Lender), a Funding Notice in the form of <u>Exhibit</u> <u>A</u><u>-1</u> and a Borrowing Base Certificate with respect to each Loan proposed to be acquired by the Borrower in connection with such Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) With respect to any Reinvestment of Principal Collections permitted by <u>Section</u> <u>2.14(a)(i)</u> and each acquisition of Loans in connection with a Substitution pursuant to <u>Section</u> <u>2.14(b)</u>, the Collateral Manager on the Borrower's behalf shall have delivered to the Administrative Agent (with a copy to the Collateral Agent), no later than 12:00 p.m. on the date of such Transaction, a Reinvestment Notice in the form of <u>Exhibit</u> <u>A</u><u>-3</u> and a Borrowing Base Certificate, executed by the Collateral Manager and on the Borrower's behalf.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) On the date of such Transaction the following shall be true and correct, and the Borrower and the Collateral Manager shall have certified in the related Borrower's Notice that all conditions precedent to the requested Transaction have been satisfied and shall thereby be deemed to have certified that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The representations and warranties contained in <u>Section</u> <u>4.1</u> and <u>Section</u> <u>4.2</u> are true, correct and complete in all material respects on and as of such day as though made on and as of such day and shall be deemed to have been made on such day (except for such representations and warranties as are qualified by materiality, a Material Adverse Effect or any similar qualifier, which representations and warranties shall be true in all respects, and except for those representations and warranties made as of a specific date which are true, correct, and complete as of such date);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) No event has occurred, or would result from such Transaction or from the application of proceeds thereof, that constitutes an Event of Default, Default, Change of Control or Collateral Manager Termination Event;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) On and as of such day, immediately after giving effect to such Transaction, the Advances Outstanding does not exceed the Availability (or, to the extent permitted under <u>Section</u> <u>2.14</u>, that any existing Borrowing Base Deficiency is reduced to zero); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) No Applicable Law shall prohibit or enjoin the making of such Advance by any Lender or the proposed acquisition of Loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) (i) With respect to any Loan Advance under this Agreement or any Reinvestment of Principal Collections pursuant to <u>Section</u> <u>2.14(a)(i)</u>, the Revolving Period End Date shall not have occurred and (ii) with respect to any Transaction, the Termination Date shall not have occurred;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) On the date of such Transaction, the Administrative Agent shall have received such other approvals, opinions or documents as the Administrative Agent may reasonably require;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Borrower and Collateral Manager shall have delivered to the Administrative Agent (and, if applicable, to Collateral Agent) all reports required to be delivered as of the date of such Transaction including all deliveries required by <u>Section</u> <u>2.2</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Borrower shall have paid all fees then required to be paid and, without duplication of <u>Section</u> <u>2.11</u>, shall have reimbursed the Lenders, the Collateral Agent, the Custodian and the Administrative Agent for all fees, costs and expenses then required to be paid in connection with the closing of the transactions contemplated hereunder and under the other Transaction Documents, including the reasonable attorney fees and any other legal and document preparation costs incurred by the Lenders, the Collateral Agent, the Custodian and the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) In connection with each Transaction, unless otherwise waived by the Administrative Agent in its sole discretion, (i) the Borrower (or the Collateral Manager on its behalf) shall have delivered to the Custodian (with a copy to the Administrative Agent), no later than 12:00 p.m. on the date of such Transaction, (a) a Loan Checklist and an electronic copy of the loan agreement, credit agreement, indenture or other principal agreement pursuant to which the Loan has been issued or created with respect to each Loan proposed to be pledged as Collateral by the Borrower in connection with such Transaction and (b) in the case of a Noteless Loan, a copy of each transfer document or instrument relating to such Noteless Loan evidencing the assignment of such Noteless Loan to the Borrower and an undated transfer or assignment document or instrument relating to such Noteless Loan, signed by the Borrower, as assignor, and the administrative agent (only in the event such administrative agent is an Affiliate of the Borrower) but not dated and not specifying an assignee and (ii) within three (3) Business Days following any related Advance Date with respect to any Loan, the Borrower shall deliver all other Required Loan Documents with respect to each Loan pledged as Collateral by the Borrower in connection with such Transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Borrower shall have delivered to the Administrative Agent an Officer's Certificate (which may be part of the applicable Borrower's Notice) in form and

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substance reasonably satisfactory to the Administrative Agent certifying that each of the foregoing conditions precedent has been satisfied; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Except as previously disclosed to the Administrative Agent, no event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect on any Loan Party since the last Reporting Date.

Section 3.3 <u>Custodianship; Transfer of Loans and Permitted Investments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Collateral Agent and the Custodian, as applicable, shall hold all Certificated Securities and Instruments delivered to it as Collateral in accordance with the terms hereof in physical form at the Custody Facilities or at such other location identified to the Administrative Agent and the Borrower. Any successor Collateral Agent shall be a state or national bank or trust company which is not an Affiliate of the Borrower and which is a Qualified Institution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each time that the Borrower (or the Collateral Manager on behalf of the Borrower) shall direct or cause the acquisition of any Loan or Permitted Investment, the Borrower shall (or the Collateral Manager on behalf of the Borrower), if such Permitted Investment or, in the case of a Loan, the related promissory note or, with respect to a Noteless Loan, assignment documentation has not already been delivered to the Custodian in accordance with the requirements set forth in <u>clause (a)</u> of the definition of "Required Loan Documents", cause the delivery of such Permitted Investment or, in the case of a Loan, the related promissory note or, with respect to a Noteless Loan, assignment documentation in accordance with the requirements set forth in <u>clause (a)</u> of the definition of "Required Loan Documents" to the Custodian at the Custody Facilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Borrower (or the Collateral Manager on behalf of the Borrower) shall direct that the Collateral Agent cause all Collateral acquired by the Borrower that constitutes Financial Assets to be credited to the Collateral Account, and shall cause all Loans and Permitted Investments acquired by the Borrower to be delivered to the Collateral Agent or the Custodian, as applicable, by one of the following means (and shall take any and all other actions necessary to create and perfect in favor of the Collateral Agent a valid security interest in each Loan and Permitted Investment, which security interest shall be senior to that of any other creditor of the Borrower (whether now existing or hereafter acquired) (other than pursuant to Permitted Liens)):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) in the case of an Instrument or a Certificated Security represented by a Security Certificate in registered form by having it Indorsed to the Collateral Agent or in blank by an effective Indorsement or registered in the name of the Administrative Agent and by (A) delivering such Instrument to the Custodian or delivering such Security Certificate to the Collateral Agent at the Custody Facilities (or at such other location identified to the Administrative Agent and the Borrower) and (B) causing the Collateral Agent or the Custodian, as applicable, to maintain (on behalf of the Administrative Agent) continuous possession of such Instrument or Security Certificate at the Custody Facilities (or at such other location identified to the Administrative Agent and the Borrower);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) in the case of an Uncertificated Security, by (A) causing the Administrative Agent to become the registered owner of such Uncertificated Security and (B) causing such registration to remain effective;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) in the case of any Security Entitlement, by causing each such Security Entitlement to be credited to a Securities Account in the name of the Borrower pursuant to the Account Control Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) in the case of General Intangibles (including any Loan or Permitted Investment not evidenced by an Instrument) by filing, maintaining and continuing the effectiveness of, a financing statement naming the Borrower as debtor and the Administrative Agent as secured party and describing the Loan or Permitted Investment (as the case may be) as the collateral at the filing office of the Secretary of State of the State of Delaware (it being understood that a UCC financing statement describing the collateral as "all assets of the Borrower" or words of similar effect will be deemed to satisfy the requirements of this <u>clause (iv)</u> in the case of any General Intangibles to be delivered by the Borrower).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The security interest of the Collateral Agent in any Collateral disposed of in a transaction permitted by this Agreement shall, immediately and without further action on the part of the Collateral Agent, be released and the Collateral Agent shall immediately release such Collateral to, or as directed by, the Borrower.

**ARTICLE IV** 

**REPRESENTATIONS AND WARRANTIES** 

Section 4.1 <u>Representations and Warranties of the Borrower</u>.

The Borrower represents and warrants as follows as of the Closing Date, each Advance Date, and as of each other date provided under this Agreement or the other Transaction Documents on which such representations and warranties are required to be (or deemed to be) made:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Organization and Good Standing</u>. The Borrower has been duly organized, and is validly existing as a limited liability company in good standing, under the laws of Delaware, with all requisite limited liability company power and authority to own or lease its properties and conduct its business as such business is presently conducted, and had at all relevant times, and now has all necessary power, authority and legal right to acquire, own and sell the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Due Qualification</u>. The Borrower is (i) duly qualified to do business and is in good standing as a limited liability company in its jurisdiction of registration or incorporation, and (ii) to the extent applicable, has obtained all necessary qualifications, licenses and approvals, in each other jurisdiction in which the nature of its business requires such qualifications, licenses or approvals, except where the failure to be so qualified, licensed or approved could not reasonably be expected to have a Material Adverse Effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Power and Authority; Due Authorization; Execution and Delivery</u>. The Borrower (i) has all necessary limited liability company power, authority and legal right to (a) execute and deliver each Transaction Document to which it is a party, and (b) carry out the terms of the Transaction Documents to which it is a party, and (ii) has duly authorized by all necessary limited liability company action, the execution, delivery and performance of each Transaction Document to which it is a party and the transfer and assignment of an ownership and security interest in the Collateral on the terms and conditions herein provided. This Agreement and each other Transaction Document to which it is a party have been duly executed and delivered by it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Binding Obligation</u>. Each Transaction Document to which it is a party constitutes a legal, valid and binding obligation of it enforceable against it in accordance with its respective terms, except as such enforceability may be limited by Insolvency Laws and by general principles of equity (whether considered in a suit at law or in equity).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>No Violation</u>. The consummation of the transactions contemplated by each Transaction Document to which it is a party and the fulfillment of the terms thereof will not (i) conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, its Governing Documents or any material Contractual Obligation of it, (ii) result in the creation or imposition of any Lien (other than the security interest granted to the Collateral Agent, on behalf of the Secured Parties, pursuant to this Agreement, and Permitted Liens) upon any of its properties pursuant to the terms of any such Contractual Obligation, or (iii) violate any Applicable Law in any material respect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Agreements</u>. The Borrower is not a party to any agreement or instrument or subject to any limited liability company restriction that has resulted or could reasonably be expected to result in a Material Adverse Effect. It is not a party to or otherwise subject or has any of its property that is subject to any indenture or other agreement or instrument evidencing Indebtedness of it, or any other agreement or instrument where a default could reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>No Proceedings</u>. (i) As of the Closing Date, there is no litigation, proceeding or investigation pending or, to the knowledge of any Responsible Officer of the Borrower, threatened against the Borrower, before any Governmental Authority, and, (ii) as of any date thereafter, there is no litigation, proceeding or investigation pending or, to the knowledge of any Responsible Officer of the Borrower, threatened against the Borrower, before any Governmental Authority (x) asserting the invalidity of any Transaction Document to which the Borrower is a party, (y) seeking to prevent the consummation of any of the transactions contemplated by any Transaction Document to which the Borrower is a party or (z) that could reasonably be expected to have Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>All Consents Required</u>. All approvals, authorizations, consents, orders, licenses, filings or other actions of any Person or of any Governmental Authority (if any) required for the due execution, delivery and performance by the Borrower of each Transaction Document to which the Borrower is a party have been obtained, except where the failure to obtain such approval, authorization, consent, order, license, filing or other action could not reasonably be expected to have a Material Adverse Effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Bulk Sales</u>. The execution, delivery and performance of this Agreement and the transactions contemplated hereby do not require compliance with any "bulk sales" act or similar statutory provisions in effect in any applicable jurisdiction by the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Solvency</u>. The Borrower is not the subject of any Insolvency Proceedings or Insolvency Event. The transactions under the Transaction Documents to which the Borrower is a party do not and will not render the Borrower not Solvent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Taxes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Borrower is and has always been treated as a disregarded entity of the Transferor for U.S. federal income tax purposes and no election has been filed by the Borrower to be treated as a corporation for U.S. federal income tax purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Transferor is and has always been treated as a disregarded entity for U.S. federal income tax purposes and no election has been filed by the Transferor to be treated as either a partnership or a corporation for U.S. federal income tax purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Each of the Borrower and the Transferor has timely filed or caused to be timely filed (taking into account valid extensions of the time for filing) all material Tax returns required to be filed by it and has timely paid all material Taxes due, except Taxes that are being contested in good faith by appropriate proceedings and for which it has set aside on its books adequate reserves in accordance with GAAP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Exchange Act Compliance; Regulations T, U and X</u>. None of the transactions contemplated herein or in the other Transaction Documents (including the use of the proceeds from the transfer of the Collateral) will violate or result in a violation of Section 7 of the Exchange Act, or any regulations issued pursuant thereto, including Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. The Borrower does not own or intend to carry or purchase, and no proceeds from the Advances will be used to carry or purchase, any "margin stock" within the meaning of Regulation U or to extend "purpose credit" within the meaning of Regulation U.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Security Interest</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) This Agreement creates a valid and continuing security interest (as defined in the UCC as in effect from time to time in the State of New York) in the Collateral in favor of the Collateral Agent, on behalf of the Secured Parties, which security interest is validly perfected under Article 9 of the UCC and is prior to all other Liens other than Permitted Liens, and is enforceable as such against creditors of and purchasers from the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) this Agreement constitutes a security agreement within the meaning of Section 9-102(a)(73) of the UCC as in effect from time to time in the State of New York.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Collateral is comprised of "instruments", "general intangibles", "certificated securities", "security entitlements", "uncertificated securities", "cash",

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"deposit accounts", "securities accounts", "investment property" and "proceeds" (each as defined in the applicable UCC) and such other categories of collateral under the applicable UCC as to which the Borrower has complied with its obligations under <u>Section</u> <u>4.1(m)(i)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) with respect to Collateral that constitutes Deposit Accounts:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the Borrower has taken all steps necessary to enable the Collateral Agent to obtain "control" (within the meaning of the UCC as in effect from time-to-time in the State of New York) with respect to each such Account; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) such Accounts are not in the name of any Person other than the Borrower, subject to the Lien of the Collateral Agent. The Borrower has not instructed the depository bank of any Account to comply with the instructions of any Person other than the Collateral Agent; <u>provided</u> that, until the Collateral Agent delivers a Notice of Exclusive Control, the Borrower and the Collateral Manager may cause cash in such Accounts to be invested in Permitted Investments, and the proceeds thereof to be distributed in accordance with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) with respect to Collateral that constitutes Security Entitlements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) all of such Security Entitlements have been credited to an Account that is a Securities Account and the securities intermediary for each such Securities Account has agreed to treat all assets credited to such Account as Financial Assets within the meaning of the UCC as in effect from time-to-time in the State of New York;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the Borrower has taken all steps necessary to enable the Collateral Agent to obtain "control" (within the meaning of the UCC as in effect from time-to-time in the State of New York) with respect to each Account that is a Securities Account; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the Accounts that are Securities Accounts are not in the name of any Person other than the Borrower, subject to the Lien of the Collateral Agent. The Borrower has not instructed the securities intermediary of any Account that is a Securities Account to comply with the entitlement order of any Person other than the Collateral Agent; <u>provided</u> that, until the Collateral Agent delivers a Notice of Exclusive Control, the Borrower and the Collateral Manager may cause cash in the Accounts that are Securities Accounts to be invested in Permitted Investments, and the proceeds thereof to be distributed in accordance with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) all Accounts constitute "deposit accounts" as defined in Section 9-102 of the UCC as in effect from time-to-time in the State of New York or a "securities account" as defined in the Section 8-501(a) of the UCC as in effect from time-to-time in the State of New York;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) the Borrower owns and has good and marketable title to the Collateral free and clear of any Lien of any Person (other than Permitted Liens);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) the Borrower has received all consents and approvals required by the terms of any Loan to the granting of a security interest in the Loans hereunder to the Collateral Agent, on behalf of the Secured Parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) the Borrower has taken all necessary steps to authorize the Collateral Agent or the Administrative Agent to file all appropriate financing statements in the proper filing office in the appropriate jurisdictions under Applicable Law in order to perfect the security interest in that portion of the Collateral in which a security interest may be perfected by filing pursuant to Article 9 of the UCC as in effect in the Borrower's jurisdiction of organization;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) upon the delivery to the Collateral Agent or Custodian (as applicable) of all Collateral constituting "instruments" and "certificated securities" (as defined in the UCC as in effect from time to time in the jurisdiction where the Collateral Agent's or the Custodian's Corporate Trust Office is located), the crediting of all Collateral that constitutes Financial Assets (as defined in the UCC as in effect from time to time in the State of New York) to an Account and the filing of the financing statements described in this <u>Section</u> <u>4.1(m)</u> in the jurisdiction in which the Borrower is located, such security interest shall be a valid and first priority (subject to Permitted Liens) perfected security interest in that portion of the Collateral in which a security interest may be created under Article 9 of the UCC as in effect from time to time in the State of New York;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) other than Permitted Liens, the Borrower has not pledged, assigned, sold, granted a security interest in or otherwise conveyed any of the Collateral. No Responsible Officer of the Borrower has authorized the filing of nor are they aware of any financing statements against the Borrower that include a description of any collateral included in the Collateral other than any financing statement (A) relating to the security interest granted to the Borrower under the Sale Agreement or (B) that has been terminated and/or fully and validly assigned to the Collateral Agent on or prior to the date hereof. There are no judgments or tax lien filings against the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) all original executed copies of each underlying promissory note that constitute or evidence each Loan have been or, subject to the delivery requirements contained herein, will be delivered to the Custodian;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) none of the underlying promissory notes that constitute or evidence the Loans has any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Collateral Agent on behalf of the Secured Parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) with respect to Collateral that constitutes a "certificated security," such certificated security has been delivered to the Collateral Agent on behalf of the Secured Parties and, if in registered form, has been specially Indorsed to the

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Collateral Agent or in blank by an effective Indorsement or has been registered in the name of the Collateral Agent upon original issue or registration of transfer by the Borrower of such certificated security; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) with respect to Collateral that constitutes an Uncertificated Security, the Borrower has caused the Collateral Agent to gain "control" of such Collateral pursuant to Section 8-106(c) of the UCC and such control remains effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>Reports Accurate</u>. All information, exhibits, financial statements, documents, books, records or reports relating to the Borrower furnished or to be furnished to the Administrative Agent, the Collateral Agent, the Custodian or any Lender by any Loan Party in connection with this Agreement are true, complete and correct in all material respects (or, (A) in the case of information of a general economic or general industry nature, or if not prepared by or under the direction of the Borrower, true and correct in all material respects to the knowledge of any Responsible Officer of the Borrower or (B) in the case of any projections and forward-looking information, such has been prepared in good faith and is reasonable in light of information available to any Responsible Officer of the Borrower at the relevant time).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Location of Offices</u>. The Borrower's location (within the meaning of Article 9 of the UCC) is, and at all times has been, the State of Delaware. The Borrower has not changed its name (whether by amendment of its certificate of formation, by reorganization or otherwise) or its jurisdiction of organization and has not changed its location within the four (4) months preceding the Closing Date, in each case other than any change of name or other corporate change for which notice has been duly provided pursuant to <u>Section</u> <u>5.1(o)(vii)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Legal Name</u>. Each Loan Party's exact legal name is, and at all times has been the name as set forth on <u>Schedule</u> <u>I</u> hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Sale Agreement</u>. The Sale Agreement is the only agreement pursuant to which the Borrower purchases Collateral from the Transferor or any of its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Value Given</u>. The Borrower has given reasonably equivalent value to the Transferor of each Loan in consideration for the transfer to the Borrower of each Loan, and no such transfer has been made for or on account of an antecedent debt, and no such transfer is or may be voidable or subject to avoidance under any section of the Bankruptcy Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Accounting</u>. The Borrower accounts for the transfers to it of interests in Collateral as sales of such Collateral for financial accounting purposes and for legal purposes on its books, records and financial statements, in each case consistent with GAAP and with the requirements set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) <u>Special Purpose Entity</u>. The Borrower has not and shall not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the sale of Collateral as permitted hereunder, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) merge into or consolidate with any Person or dissolve, wind-up, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, amend, modify, terminate or fail to comply with the provisions of its operating agreement except as otherwise permitted pursuant to <u>Section</u> <u>5.2(h)</u>, or fail to observe limited liability company formalities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) form, acquire or own any Subsidiary, own any equity interest in any other entity (other than any Equity Security received in exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the Obligor thereof), or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) fail to pay its debts and liabilities from its assets as the same shall become due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) seek its dissolution, termination, liquidation or winding up in whole or in part;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower, the Transferor or any other Person;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi) divide or permit any division of the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; <u>provided</u>, <u>however</u>, that the Borrower's assets may be included in a consolidated financial statement of its Affiliate <u>provided</u> that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower'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 Borrower's own separate balance sheet;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xix) fail to pay its own liabilities and expenses only out of its own funds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxi) acquire the obligations of or securities issued by its Affiliates or members, it being understood that this <u>clause (xxi)</u> shall not prevent the Borrower from acquiring Loans from the Transferor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxii) guarantee any obligation of any person, including an Affiliate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiv) fail to use separate invoices and checks bearing its own name;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxvi) (A) fail at any time to have at least one (1) independent director (the "<u>Independent Director</u>") which shall be a natural Person approved by the Administrative Agent in its sole discretion, which director must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three (3) years of employment experience and who is provided by Puglisi & Associates, CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, Stewart Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Independent Directors, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional independent directors and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Director and is not, and has never been, and will not while serving as Independent Director be, any of the following: (w) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders or Affiliates (other than as an Independent Director of the Borrower or any of its equityholders or Affiliates that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Directors and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (w), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Independent Director during the Covenant Compliance Period shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies <u>clause (w)</u> above by reason of being the Independent Director of a "special purpose entity" affiliated with the Borrower shall be qualified to serve as an Independent Director of the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxvii) fail to provide in its Governing Document that the unanimous consent of all members and the consent of the Independent Director are required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against the Borrower, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, provisional liquidator assignee, trustee, sequestrator, custodian, restructuring officer or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower's creditors,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a "disregarded entity" for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) <u>Beneficial Ownership Certification</u>**.** As of the Closing Date, the information included in the Beneficial Ownership Certification is true and correct in all material respects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Investment Company Act</u>. The Borrower is not, and is not "controlled by", an "investment company" within the meaning of, and is not subject to regulation under, the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) <u>ERISA</u>. The Borrower (i) does not maintain, nor are any employees of the Borrower permitted to participate in, an "employee pension benefit plan," as such term is defined in Section 3 of ERISA which is subject to Title IV of ERISA (a "<u>Pension Plan</u>") and (ii) has no underlying assets which constitute "plan assets" within the meaning of the Plan Asset Rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) <u>Compliance with Law</u>. The Borrower has complied in all material respects with all Applicable Law to which it may be subject, and no item of Collateral contravenes any Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) <u>No Material Adverse Effect</u>. Except as previously disclosed to the Administrative Agent, no event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect on the Borrower since the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) <u>Amendments</u>. No Loan has been amended, modified or waived since the Closing Date or the related Funding Date, as the case may be, except for amendments, modifications or waivers, if any, to such Loan otherwise permitted under <u>Section</u> <u>6.4(a)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) <u>Full Payment</u>. As of the date of the Borrower's acquisition thereof, any Responsible Officer of the Borrower has no knowledge of any fact which should lead it to expect that any Loan will not be repaid by the relevant Obligor in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) <u>Sanctions; Anti-Money Laundering Laws; and Anti-Corruption Laws</u>. Neither the Borrower nor any Affiliate of the Borrower is a Sanctioned Person or otherwise identified on any list maintained by the Office of Foreign Asset Control of the U.S. Department of the Treasury or such other list or such similar lists relating to Sanctions. The Borrower maintains or is otherwise subject to policies and procedures reasonably designed to ensure compliance with Anti-Money Laundering Laws and Anti-Corruption Laws.

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Section 4.2 <u>Representations and Warranties of the Borrower Relating to the Agreement and the Collateral</u>.

The Borrower represents and warrants as follows as of the Closing Date, each Funding Date, and as of each other date provided under this Agreement or the other Transaction Documents on which such representations and warranties are required to be (or deemed to be) made:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Eligibility of Collateral</u>. The Borrower has conducted such due diligence and other review as it considered necessary with respect to the Loans set forth on the Loan List. As of the Closing Date and each Funding Date, (i) the Loan List and the information contained in each Funding Notice delivered pursuant to <u>Section</u> <u>2.2</u>, is an accurate and complete listing of all Loans included in the Collateral as of the related Funding Date and the information contained therein with respect to the identity of such Loans and the amounts owing thereunder is true, correct and complete as of the related Funding Date, (ii) each such Loan included in the Borrowing Base is an Eligible Loan, (iii) each Loan included in the Collateral is free and clear of any Lien of any Person (other than Permitted Liens) and in compliance with all Applicable Laws and (iv) with respect to each Loan included in the Collateral, all consents, licenses, approvals or authorizations of or registrations or declarations of any Governmental Authority or any Person required to be obtained, effected or given by the Borrower in connection with the transfer of an ownership interest or security interest in such Collateral to the Collateral Agent as agent for the benefit of the Secured Parties have been duly obtained, effected or given and are in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>No Fraud</u>. Each Loan was originated without any fraud or material misrepresentation by the Borrower or its Affiliates or to the knowledge of any Responsible Officer of the Borrower or its Affiliates.

Section 4.3 <u>Representations and Warranties of the Collateral Manager</u>.

The Collateral Manager represents and warrants as follows as of the Closing Date, each Funding Date, and as of each other date provided under this Agreement or the other Transaction Documents on which such representations and warranties are required to be (or deemed to be) made:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Organization and Good Standing</u>. The Collateral Manager has been duly organized, and is validly existing as a limited liability company in good standing, under the laws of the State of Delaware, with all requisite limited liability company power and authority to own or lease its properties and conduct its business as such business is presently conducted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Due Qualification</u>. The Collateral Manager is (i) duly qualified to do business and is in good standing as a limited liability company in its jurisdiction of registration or incorporation, and (ii) to the extent applicable, has obtained all necessary qualifications, in each other jurisdiction in which the nature of its business requires such qualifications, except where the failure to be so qualified, could not reasonably be expected to have a Material Adverse Effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Power and Authority; Due Authorization; Execution and Delivery</u>. The Collateral Manager (i) has all necessary limited liability company power, authority and legal right to (a) execute and deliver each Transaction Document to which it is a party, and (b) carry out the terms of the Transaction Documents to which it is a party, and (ii) has duly authorized by all necessary limited liability company action, the execution, delivery and performance of each Transaction Document to which it is a party. This Agreement and each other Transaction Document to which the Collateral Manager is a party have been duly executed and delivered by the Collateral Manager.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Binding Obligation</u>. Each Transaction Document to which the Collateral Manager is a party constitutes a legal, valid and binding obligation of the Collateral Manager enforceable against the Collateral Manager in accordance with its respective terms, except as such enforceability may be limited by Insolvency Laws and by general principles of equity (whether considered in a suit at law or in equity).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>No Violation</u>. The consummation of the transactions contemplated by each Transaction Document to which it is a party and the fulfillment of the terms thereof will not (i) conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the Collateral Manager's certificate of formation, limited liability company agreement or any Contractual Obligation of the Collateral Manager which, in the case of any Contractual Obligation, could reasonably be expected to have a Material Adverse Effect, (ii) result in the creation or imposition of any Lien (other than the security interest granted to the Collateral Agent, on behalf of the Secured Parties pursuant to this Agreement, and Permitted Liens) upon any of the Collateral Manager's properties pursuant to the terms of any such Contractual Obligation, or (iii) violate any Applicable Law except where such violation could not be reasonably expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>No Proceedings</u>. (i) As of the Closing Date, there is no litigation, proceeding or investigation pending or, to the knowledge of any Responsible Officer of the Collateral Manager, threatened against the Collateral Manager, before any Governmental Authority and, (ii) as of any date thereafter, there is no litigation, proceeding or investigation pending or, to the knowledge of any Responsible Officer of the Collateral Manager, threated against the Collateral Manager before any Governmental Authority (x) asserting the invalidity of any Transaction Document to which the Collateral Manager is a party, (y) seeking to prevent the consummation of any of the transactions contemplated by any Transaction Document to which the Collateral Manager is a party or (z) that could reasonably be expected to have Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>All Consents Required</u>. All approvals, authorizations, consents, orders, licenses, filings or other actions of any Person or of any Governmental Authority (if any) required for the due execution, delivery and performance by the Collateral Manager of each Transaction Document to which the Collateral Manager is a party have been obtained, except where the failure to obtain such approval, authorization, consent, order, license, filing or other action could not reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Reports Accurate</u>. All information, exhibits, financial statements, documents, books, records or reports relating to the Borrower or the Collateral Manager

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furnished or to be furnished by the Collateral Manager to the Administrative Agent, the Collateral Agent, the Custodian or any Lender by any Loan Party in connection with this Agreement are true, complete and correct in all material respects (or, (A) in the case of information of a general economic or general industry nature, or if not prepared by or under the direction of the Collateral Manager, true and correct in all material respects to the knowledge of any Responsible Officer of the Collateral Manager or (B) in the case of any projections and forward-looking information, such has been prepared in good faith and is reasonable in light of information available to the Collateral Manager at the relevant time).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Solvency</u>. The Collateral Manager is not the subject of any Insolvency Proceedings or Insolvency Event. The transactions under the Transaction Documents to which the Collateral Manager is a party do not and will not render the Collateral Manager not Solvent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>[Reserved]</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>ERISA</u>. The Collateral Manager has no underlying assets which constitute "plan assets" within the meaning of the Plan Asset Rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Investment Company Act</u>. The Collateral Manager is registered as an investment adviser under the Investment Advisers Act of 1940, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Compliance with Law</u>. The Collateral Manager has complied with all Applicable Law to which it may be subject, except where such noncompliance could not reasonably be expected to have a Material Adverse Effect, and no item of Collateral contravenes any Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>No Material Adverse Effect</u>. Except as previously disclosed to the Administrative Agent, no event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect on the Collateral Manager since the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Eligibility of Collateral</u>. The Collateral Manager has conducted such due diligence and other review as it considered necessary with respect to the Loans set forth on the Loan List. As of the Closing Date and each Funding Date, (i) the Loan List and the information contained in each Funding Notice delivered pursuant to <u>Section</u> <u>2.2</u>, is an accurate and complete listing of all Loans included in the Collateral as of the related Funding Date and the information contained therein with respect to the identity of such Loans and the amounts owing thereunder is true, correct and complete as of the related Funding Date, (ii) each such Loan included in the Borrowing Base is an Eligible Loan, (iii) each Loan included in the Collateral is free and clear of any Lien of any Person (other than Permitted Liens) and in compliance with all Applicable Laws and (iv) with respect to each Loan included in the Collateral, all consents, licenses, approvals or authorizations of or registrations or declarations of any Governmental Authority or any Person required to be obtained, effected or given by the Collateral Manager in connection with the transfer of an ownership interest or security interest in such Collateral to the Collateral Agent as agent for the benefit of the Secured Parties have been duly obtained, effected or given and are in full force and effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>No Fraud</u>. Each Loan was originated without any fraud or material misrepresentation by the Collateral Manager or its Affiliates.

Section 4.4 <u>Representations and Warranties of the Collateral Agent and Custodian</u>.

Each of the Collateral Agent and Custodian, as applicable, represents and warrants as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Organization; Power and Authority</u>. It is a duly organized and validly existing national banking association in good standing under the laws of the United States. It has full requisite power, authority and legal right to execute, deliver and perform its obligations as Collateral Agent or Custodian, as applicable, under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Due Authorization</u>. The execution and delivery of this Agreement and the consummation of the transactions provided for herein have been duly authorized by all necessary association action on its part, either in its individual capacity or as Collateral Agent or Custodian, as applicable, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>No Conflict</u>. The execution and delivery of this Agreement, the performance of the transactions contemplated hereby and the fulfillment of the terms hereof will not conflict with, result in any breach of its constitutional documents or any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which the Collateral Agent or Custodian, as applicable, is a party or by which it or any of its property is bound.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>No Violation</u>. The execution and delivery of this Agreement, the performance of the Transactions contemplated hereby to be performed by it and the fulfillment of the terms hereof applicable to it will not conflict with or violate, in any material respect, any Applicable Law as to the Collateral Agent or Custodian, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>All Consents Required</u>. All approvals, authorizations, consents, orders or other actions of any Person or Governmental Authority applicable to the Collateral Agent or Custodian, as applicable, required in connection with the execution and delivery of this Agreement, the performance by the Collateral Agent or Custodian, as applicable, of the transactions contemplated hereby and the fulfillment by the Collateral Agent or Custodian, as applicable, of the terms hereof have been obtained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Validity, Etc.</u> The Agreement constitutes the legal, valid and binding obligation of the Collateral Agent, enforceable against the Collateral Agent in accordance with its terms, except as such enforceability may be limited by applicable Insolvency Laws and by general principles of equity (whether considered in a suit at law or in equity).

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**ARTICLE V** 

**GENERAL COVENANTS** 

Section 5.1 <u>Affirmative Covenants of the Borrower</u>.

The Borrower covenants and agrees with the Lenders that during the Covenant Compliance Period:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Compliance with Law</u>. The Borrower will comply in all material respects with all Applicable Law, including those with respect to the Collateral or any part thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Preservation of Company Existence</u>. The Borrower will (i) preserve and maintain its limited liability company existence, rights, franchises and privileges in the jurisdiction of its formation, (ii) qualify and remain qualified in good standing as a limited liability company in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification could reasonably be expected to have, a Material Adverse Effect and (iii) maintain the Governing Documents of the Borrower in full force and effect and shall not amend the same without the prior written consent of the Administrative Agent except as permitted under <u>Section</u> <u>5.2(h)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Performance and Compliance with Collateral</u>. The Borrower will, at its expense, timely and fully perform and comply (or cause the Transferor to perform and comply pursuant to the Sale Agreement) with all material provisions, covenants and other material promises required to be observed by it under the Collateral, the Transaction Documents and all other agreements related to such Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Keeping of Records and Books of Account; Inspection Rights</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Borrower will keep proper books of record and account in which full, true and correct entries in conformity with GAAP and all requirements of law are made of all dealings and transactions in relation to its business and activities. The Borrower, the Transferor and the Collateral Manager will permit representatives and agents of the Administrative Agent or the Collateral Agent to visit and inspect any of its properties or the properties of its Affiliates, to examine it and its Affiliates corporate, financial and operating records relating to the Collateral, the Eligible Loans, and make copies of the Required Loan Documents, and to discuss its affairs, finances and accounts with its directors and officers (<u>provided</u> that (A) representatives of such Person may be present at any such discussion and (B) any third party's confidential information subject to a confidentiality agreement with a Loan Party that prohibits the disclosure of such third party's information to the Administrative Agent may be redacted from the information provided to the Administrative Agent pursuant to this <u>Section</u> <u>5.1(d)</u>), all at the expense of the Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable (and in any event not less than two (2) Business Days') advance written notice from the Administrative Agent to such Person; <u>provided</u> that when an Event of Default exists the Administrative Agent (or any representative or agent thereof) may do any of the foregoing at any time and without

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advance notice (other than discussions with auditors and other third parties, for which reasonable prior notice shall still be required); <u>provided</u>, <u>further</u>, that so long as no Event of Default shall have occurred and be continuing (at which time no limits shall apply), (x) no more than two (2) such inspections or audits shall be conducted in any calendar year and (y) the Borrower shall not be obligated to reimburse the Administrative Agent for more than one (1) inspection or audit in any calendar year. For purposes of clarity, any Lender or its designated representatives having requested to attend in the case of physical inspections may, at such Lender's expense, accompany the Administrative Agent in the case of such physical inspections.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) In connection with the foregoing <u>clause (i)</u>, the Administrative Agent (through any of its officers, employees, or agents) shall have the right, from time to time hereafter (A) at any time that an Event of Default has occurred and is continuing, to communicate directly with any and all of the Borrower's account debtors and Obligors to verify the existence and terms thereof, and (B) from time to time, upon reasonable advance notice, to audit the Collateral, or any portion thereof, in order to verify any Loan Party's financial condition or the amount, quality, value, condition of, or any other matter relating to, the Collateral; and each of the Transferor and the Borrower shall, and shall cause the Collateral Manager to permit any designated representative of the Administrative Agent to visit and inspect any of the properties of the Transferor, the Borrower or the Collateral Manager, as applicable, to inspect and to discuss their respective finances and any of their respective properties and Collateral, during normal business hours. The Borrower shall reimburse the Administrative Agent for any expense incurred in the exercise of the foregoing provisions. Audit fees and other charges for the inspections contemplated in this <u>Section</u> <u>5.1(d)</u> shall be as follows: (a) a fee of $1,000.00 ****per day, per auditor, <u>plus</u> reasonable and documented out-of-pocket expenses for each field audit of the Transferor, the Borrower or any other Loan Party or Person performed by personnel employed by the Administrative Agent, and (b) the reasonable and documented out-of-pocket charges and expenses paid or incurred by the Administrative Agent if it elects to employ the services of one or more third Persons to perform field audits of the Transferor, the Borrower, any other Loan Party or the Collateral Manager or to appraise the Collateral, or any portion thereof; <u>provided</u> that so long as no Event of Default shall have occurred and be continuing, (x) the Borrower shall not be obligated to reimburse the Administrative Agent for more than one (1) field audit or appraisal of the Collateral, in either case, in any calendar year and (y) no more than two (2) such field audits and appraisals shall be conducted in any one (1) year. For purposes of clarity, any Lender or its designated representatives having requested to attend in the case of physical inspections may, at such Lender's expense, accompany the Administrative Agent in the case of such physical inspections.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Protection of Interest in Collateral</u>. With respect to the Collateral acquired by the Borrower, the Borrower will (i) acquire such Collateral pursuant to and in accordance with the terms of the Sale Agreement and (ii) at the Borrower's expense, take all action reasonably necessary to perfect, protect and evidence the Borrower's ownership of such Collateral free and clear of any Lien, including (a) with respect to the Loans and that portion of the Collateral in which a security interest may be perfected by filing and maintaining (at the Borrower's expense), effective financing statements against the Obligor in all necessary or

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appropriate filing offices, (including any amendments thereto or assignments thereof) and filing continuation statements, amendments or assignments with respect thereto in such filing offices, (including any amendments thereto or assignments thereof) and (b) executing or causing to be executed such other instruments or notices as may be reasonably necessary or appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Deposit of Collections</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Borrower shall, or cause the Collateral Manager to, instruct each Obligor or any relevant administrative agent, as applicable, to deliver all Collections in respect of the Collateral to the Collateral Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Borrower shall transfer, or cause to be transferred, all Collections to the Collateral Account within two (2) Business Days after such Collections are received.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Borrower shall, within two (2) Business Days after receipt thereof, direct the Collateral Agent to transfer from the Collateral Account (A) all Collections received by it in respect of the Collateral attributable to Interest Collections to the Interest Collection Account, (B) other than as provided in <u>clause (C)</u>, all Collections received by it in respect of the Collateral attributable to Principal Collections to the Principal Collection Account and (C) to the extent provided in <u>Section</u> <u>2.9(e)</u>, Collections to the Unfunded Exposure Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Special Purpose Entity</u>. The Borrower shall be in compliance with the special purpose entity requirements set forth in <u>Section</u> <u>4.1(t)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>[Reserved]</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Events of Default</u>. Promptly following any Responsible Officer of the Borrower's knowledge or notice of the occurrence of any Event of Default or Default, the Borrower will provide the Administrative Agent and the Collateral Agent with written notice of the occurrence of such Event of Default or Default of which any Responsible Officer of the Borrower has knowledge or has received notice. In addition, such notice will include a written statement of a Responsible Officer of the Borrower setting forth the details of such event and the action that the Borrower proposes to take with respect thereto. The Administrative Agent will provide each Lender with a copy of any such notice promptly upon receipt thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Obligations</u>. Each Loan Party shall pay its respective Indebtedness and other obligations promptly and in accordance with their terms and pay and discharge promptly when due all lawful claims for labor, materials and supplies or otherwise that, if unpaid, might give rise to a Lien upon the Collateral or any part thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Taxes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Borrower will at all times continue to be treated as a disregarded entity of the Transferor for U.S. federal income tax purposes. The Borrower is and has always been treated as a disregarded entity of the Transferor for U.S. federal income tax purposes and no election has been filed or will be filed in the future by the

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Borrower to be treated as a corporation for U.S. federal income tax purposes. The Borrower will, unless otherwise required by applicable law, treat the Advances and Notes as indebtedness for U.S. federal income tax purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Borrower will at all times continue to be owned by the Transferor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Transferor is and has always been treated as a partnership for U.S. federal income tax purposes. The Transferor will, unless otherwise required by applicable law, treat the Advances and Notes as indebtedness for U.S. federal income tax purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Each of the Borrower and the Transferor will timely file or cause to be timely filed (taking into account valid extensions of the time for filing) all material Tax returns required to be filed by it and will timely pay all material Taxes due (including all Taxes on the income and gain or the Borrower and the Transferor), except Taxes that are being contested in good faith by appropriate proceedings and for which it has set aside on its books adequate reserves in accordance with GAAP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Use of Proceeds</u>. The Borrower will use the proceeds of the Advances only to acquire Loans or fund unfunded commitments with respect to Loans, to make distributions to its members in accordance with the terms hereof or to pay related fees and expenses (including expenses payable hereunder).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Obligor Notification Forms</u>. The Administrative Agent may, in its discretion after the occurrence of an Event of Default, send notification forms giving each relevant administrative agent or Obligor, as applicable, notice of the Secured Parties' interest in the Collateral and the obligation to make payments as directed by the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Notices</u>. The Borrower will furnish each of the following documents to the Collateral Agent and the Administrative Agent, which shall forward copies of the same to the Lenders:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Income Tax Liability</u>. Within ten (10) Business Days after the receipt of revenue agent reports or other written proposals, determinations or assessments of the IRS or any other taxing authority which propose, determine or otherwise set forth positive adjustments to the Tax liability of, or assess or propose the collection of Taxes required to have been withheld by, the Borrower which equal or exceed $100,000 in the aggregate, telephonic or facsimile notice (confirmed in writing within five (5) Business Days) specifying the nature of the items giving rise to such adjustments and the amounts thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Auditors' Management Letters</u>. Promptly after the receipt thereof, any auditors' management letters received by the Borrower;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Representations and Warranties</u>. Promptly after any Responsible Officer of the Borrower receiving knowledge or notice of the same, the Borrower shall notify the Administrative Agent if any representation or warranty set forth in <u>Section</u> <u>4.1</u> or <u>Section</u> <u>4.2</u> was incorrect in any material respect (except for such representations and warranties as are qualified by materiality, a Material Adverse Effect or any similar qualifier, which representations and warranties shall have been incorrect in any respect) at the time it was given or deemed to have been given and at the same time deliver to the Administrative Agent a written notice setting forth in reasonable detail the nature of such facts and circumstances. In particular, but without limiting the foregoing, the Borrower shall notify the Administrative Agent in the manner set forth in the preceding sentence before any Funding Date of any facts or circumstances within the knowledge of any Responsible Officer of the Borrower which would render any of the said representations and warranties untrue in any material respect (except for such representations and warranties as are qualified by materiality, a Material Adverse Effect or any similar qualifier, which representations and warranties would be rendered untrue in any respect) as of such Funding Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>ERISA</u>. (1) Promptly after receiving notice of any Reportable Event with respect to any Pension Plan sponsored or maintained by the Borrower (or any ERISA Affiliate thereof), a copy of such notice and (2) promptly after any Responsible Officer of the Borrower becoming aware thereof, notice that Borrower has underlying assets which constitute "plan assets" within the meaning of the Plan Asset Rules;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Proceedings</u>. As soon as possible and in any event within three (3) Business Days after any Responsible Officer of the Borrower or the Transferor receives notice or obtains knowledge thereof or at the request of the Administrative Agent, notice of any settlement of, material judgment (including a material judgment with respect to the liability phase of a bifurcated trial) in or commencement of any material labor controversy, material litigation, material action, material suit or material proceeding before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting the Collateral, the Transaction Documents, the Secured Parties' interest in the Collateral, or any Loan Party or any of its Affiliates; <u>provided</u> that notwithstanding the foregoing, any settlement, judgment, labor controversy, litigation, action, suit or proceeding affecting the Collateral, the Transaction Documents, the Secured Parties' interest in the Collateral, the Borrower in excess of $250,000, or the Transferor in excess of $2,500,000 shall be deemed to be material for purposes of this <u>Section</u> <u>5.1(o)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <u>Notice of Certain Events</u>. Promptly and in any event within two (2) Business Days after a Responsible Officer of the Collateral Manager or any Responsible Officer of the Borrower obtains actual knowledge of the occurrence and the continuance thereof, notice of (1) any Event of Default, (2) any Value Adjustment Event, (3) any other event or circumstance that could reasonably be expected to have a Material Adverse Effect, (4) any event or circumstance whereby any Loan which was included in the latest calculation of the Borrowing Base as an Eligible Loan shall fail to meet one or more of the criteria (other than criteria waived by the Administrative Agent on or prior to the related Funding Date in respect of such Loan) listed in the definition of "Eligible Loan",

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or (5) any amendment to the Governing Documents of the Transferor if such amendment materially and adversely effects the interests of the Administrative Agent and the Lenders, as determined in the reasonable judgement of the Collateral Manager;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) <u>Corporate Changes</u>. As soon as possible and in any event within five (5) Business Days after the effective date thereof, notice of any change in the name, jurisdiction of organization, corporate structure, tax characterization or location of records of the Borrower; <u>provided</u> that the Borrower agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the UCC or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) <u>Accounting Changes</u>. As soon as possible and in any event within two (2) Business Days after the effective date thereof, notice of any material change in the accounting policies of the Borrower relating to loan accounting or revenue recognition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Contest Recharacterization</u>. The Borrower shall in good faith contest any attempt to recharacterize the treatment of the Loans as property of the bankruptcy estate of the Transferor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Payment Date Reporting</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Borrower shall deliver (or shall cause to be delivered) a Payment Date Report, for the previous quarter ending as of the applicable Determination Date, and delivered to the Administrative Agent and Collateral Agent not later than 3:00 p.m. on the day that is two (2) Business Days preceding the related Payment Date. Each such Payment Date Report shall contain instructions to the Collateral Agent to withdraw funds on the related Payment Date from the applicable Collection Account and pay or transfer amounts set forth in such report in the manner specified, and in accordance with the priorities established, in <u>Section</u> <u>2.7</u> or <u>Section</u> <u>2.8</u>, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) [Reserved].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If and to the extent the Collateral Manager may be required to calculate or to report in a Payment Date Report or other accounting hereunder or under the Collateral Manager Operating Agreement, the Dollar Equivalent of any amount, including the outstanding principal amount of an Eligible Loan, the Advances, the Borrowing Base or other such calculation or amount involving an Eligible Foreign Currency, it shall use (A) the Dollar Equivalent identified in or (B) the Assigned Value provided in, as the case may be, the collateral database compiled and delivered (or caused to be compiled and delivered) to the Collateral Manager by the Collateral Agent for the related collection or reporting period or other such amount as is identified in such calculation or such report by the Collateral Manager.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) In preparing the Payment Date Report and other information and statements required hereunder, the Collateral Agent shall provide the Collateral Manager

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with such information and data maintained pursuant to the terms of this Agreement to assist the Collateral Manager in preparing the Payment Date Report and to the extent required hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) In each Payment Date Report, the Collateral Manager shall further include a statement in the Borrowing Base Certificate delivered pursuant to <u>Section</u> <u>5.1(t)</u> as to the amount and type (whether Principal Collections, Interest Collections or other Collections) of all Collections received since the prior Reporting Date, all Principal Collections and Interest Collections on deposit as of such Reporting Date and a detailed aging of each Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Sanctions; Anti-Money Laundering Laws; and Anti-Corruption Laws</u>. The Borrower shall at all times comply with Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws applicable to it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Financial Statements</u>. The Borrower shall furnish to the Administrative Agent for distribution to each Lender:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) as soon as available, but in any event within ninety (90) days after the end of each fiscal year of the Transferor, a copy of the audited consolidated balance sheet of the Transferor and the audited consolidated balance sheet of the Borrower (if prepared separately from the Transferor), in each case, as at the end of such year and the related statements of income and retained earnings and of cash flows for such year, setting forth in each case in comparative form the figures for the previous year, and, in the case of financial statements of Transferor, reported on without a "going concern" or like qualification or exception, or qualification arising out of the scope of the audit, by an independent certified public accountants of nationally recognized standing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) as soon as available, but in any event not later than forty-five (45) days after the end of each of the first three (3) quarterly periods of each fiscal year of the Transferor, the unaudited balance sheet of the Borrower and the Transferor as at the end of such quarter and the related unaudited statements of income and retained earnings and of cash flows of the Borrower and the Transferor for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year, and prepared on a consolidated and consolidating basis, and each of which shall be certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year-end audit adjustments);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or officer, as the case may be, and disclosed therein); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) as soon as available, but in any event not later than five (5) Business Days after Borrower's receipt thereof, the Obligors' financial results in

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connection with the applicable Underlying Instruments, together with the back-up financial and covenant compliance statements of the applicable Obligors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) <u>Certificates; Other Information</u>. The Borrower shall furnish to the Administrative Agent for distribution to each Lender:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) concurrently with the delivery of the financial statements of the Borrower and the Transferor referred to in <u>Section</u> <u>5.1(s)(i)</u>, a certificate of the independent certified public accountants firm reporting on such financial statements stating that in making the examination necessary therefor no knowledge was obtained of any Default or Event of Default, except as specified in such certificate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) on each Measurement Date, a Borrowing Base Certificate showing the Borrowing Base and the Availability as of such date, certified as complete and correct by a Responsible Officer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) within five (5) Business Days following the receipt by the Borrower or the Collateral Manager of any material amendment, restatement, waiver or other modification to any Underlying Instrument of an Eligible Loan, a copy of such amended, modified, restated or waived Underlying Instrument thereof, together with any documentation prepared by the Borrower or the Collateral Manager in connection with such document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) within five (5) Business Days after the same are filed, copies of all financial statements, filings and reports which the Borrower or the Transferor may make to, or file with, the Securities and Exchange Commission or any successor or analogous Governmental Authority, if any;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) within one hundred twenty (120) days after the date of each anniversary of the Closing Date, a report covering such period of a firm of independent certified public accountants of nationally recognized standing (or any other party identified by the Administrative Agent) to the effect that such accountants (or such other party) have applied certain agreed-upon procedures (the "<u>Agreed-Upon Procedures Report</u>") (a copy of which procedures are attached hereto as <u>Schedule III</u>, it being understood that the Transferor and the Administrative Agent may provide an updated <u>Schedule III</u> reflecting any further amendments to such <u>Schedule III</u> agreed to between the Transferor and the Administrative Agent from time to time) a copy of which shall replace the then existing <u>Schedule III</u>) to certain documents and records relating to the Collateral and the Loan Parties, compared the information contained in three random Borrowing Base Certificates (<u>provided</u> that the Administrative Agent, in its sole discretion, may elect that such analysis include (x) a smaller number of Borrowing Base Certificates and (y) only a subset of Loans included in each Borrowing Base Certificate) and Payment Date Reports, in each case, delivered during the period covered by such Agreed-Upon Procedures Report with such documents and records and that no matters came to the attention of such accountants (or such other party) that caused them to believe that (A) the information and the calculations included in such Borrowing Base Certificates and Payment Date Reports were not determined or performed in accordance

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with the provisions of this Agreement, except for such exceptions as such accountants (or such other party) shall believe to be immaterial and such other exceptions as shall be set forth in such statement, or (B) a Collateral Manager Termination Event occurred during the applicable reporting period; <u>provided</u> that, if the Administrative Agent has provided written notice to the Borrower that the Administrative Agent has, in its reasonable discretion, elected to directly engage a firm of independent certified public accountants of nationally recognized standing (or any other party identified by the Administrative Agent) to provide an Agreed-Upon Procedures Report for an applicable fiscal year, the Borrower shall not be obligated to separately furnish an Agreed-Upon Procedures Report for such fiscal year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) promptly, such additional financial and other information as any Lender may from time to time reasonably request in writing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) within ninety (90) days after each anniversary of the Closing Date, a static pool report in the form of <u>Exhibit A-7</u> or another form acceptable to the Administrative Agent in its sole discretion shall be provided to the Administrative Agent; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) concurrently with the delivery of the financial statements referred to in <u>Sections 5.1(s)(i)</u> and <u>5.1(s)(ii)</u>, a fully and properly completed compliance certificate in the form of <u>Exhibit F</u>, certified on behalf of the Borrower by a Responsible Officer of the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) <u>Further Assurances</u>. The Borrower will execute any and all further documents, financing statements, agreements and instruments, and take all further action (including filing UCC and other financing statements, agreements or instruments) that may be required under applicable law, or that the Administrative Agent may reasonably request in writing, in order to effectuate the transactions contemplated by the Transaction Documents and in order to grant, preserve, protect, perfect or more fully evidence the validity and first priority (subject to Permitted Liens) of the security interests and Liens created or intended to be created hereby. Such security interests and Liens will be created hereunder and the Borrower shall deliver or cause to be delivered to the Administrative Agent all such instruments and documents (including legal opinions and lien searches) as it shall reasonably request in writing to evidence compliance with this <u>Section</u> <u>5.1(u)</u>. The Borrower agrees to provide such evidence as the Administrative Agent shall reasonably request in writing as to the perfection and priority status of each such security interest and Lien.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Non</u><u>-Consolidation</u>. The Borrower shall at all times act in a manner such that each of the assumptions made by Proskauer Rose LLP in their opinion delivered pursuant to <u>Section</u> <u>3.1(f)</u> is true and accurate in all material respects. The Borrower shall at all times observe and be in compliance in all material respects with all covenants and requirements in the Governing Documents of the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) <u>Know Your Customer Laws</u>. The Borrower will furnish to the Administrative Agent promptly, from time to time, information and documentation reasonably

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requested in writing by the Administrative Agent or any Lender for the purpose of compliance with "know your customer" laws, including the Beneficial Ownership Regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) <u>Other</u>. The Borrower will furnish to the Administrative Agent promptly, from time to time, such other information, documents, records or reports reasonably available to it respecting the Collateral or the condition or operations, financial or otherwise, of the Collateral Manager or the Borrower as the Administrative Agent or any Lender may from time to time reasonably request in writing in order to protect the interests of the Administrative Agent or the other Secured Parties under or as contemplated by this Agreement.

Section 5.2 <u>Negative Covenants of the Borrower</u>.

The Borrower covenants and agrees with the Lenders that during the Covenant Compliance Period:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Other Business</u>. It will not (i) engage in any business other than (A) entering into and performing its obligations under the Transaction Documents and other activities contemplated by the Transaction Documents, (B) the acquisition, ownership and management of the Collateral and (C) the sale of Loans as permitted hereunder, (ii) incur any Indebtedness, obligation, liability or contingent obligation of any kind other than pursuant to this Agreement, or (iii) form any Subsidiary or make any Investment in any other Person except as permitted hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Collateral Not to be Evidenced by Instruments</u>. The Borrower will take no action to cause any Loan that is not, as of the Closing Date or the related Funding Date, as the case may be, evidenced by an Instrument, to be so evidenced except in connection with the enforcement or collection of such Loan or unless such Instrument is immediately delivered to the Custodian, together with an Indorsement in blank, as collateral security for such Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Security Interests</u>. Except as otherwise permitted herein and in respect of any Discretionary Sale, Substitution or sale of a Warranty Loan, the Borrower will not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien (other than the security interest granted to the Collateral Agent, on behalf of the Secured Parties, pursuant to this Agreement or Permitted Liens) on any Collateral, whether now existing or hereafter transferred hereunder, or any interest therein. The Borrower will promptly notify the Administrative Agent and the Collateral Agent of the existence of any Lien (other than the security interest granted to the Collateral Agent, on behalf of the Secured Parties, pursuant to this Agreement or Permitted Liens) on any Collateral and the Borrower shall defend the right, title and interest of the Collateral Agent, as agent for the Secured Parties in, to and under the Collateral against all claims of third parties (other than Permitted Liens).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Mergers, Acquisitions, Sales, etc.</u> It will not be a party to any merger or consolidation, or purchase or otherwise acquire any of the assets or any stock of any class of, or any partnership or joint venture interest in, any other Person, or sell, transfer, convey or lease any of its assets, or sell or assign with or without recourse any Collateral or any interest therein (other than as permitted pursuant to this Agreement, the Sale Agreement).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Restricted Payments</u>. The Borrower shall not make any Restricted Payments other than distributions (including Permitted RIC Distributions) of (i) amounts paid to it in accordance with <u>Section</u> <u>2.7</u> and <u>Section</u> <u>2.8</u> on a Payment Date as set forth in the related Payment Date Report, (ii) the proceeds of Advances or (iii) other amounts with the prior consent of the Administrative Agent in its sole discretion; <u>provided</u> that, distributions may be made only if immediately before and after giving effect to such distribution, (x) the Advances Outstanding shall not exceed Availability and (y) no Default or Event of Default shall exist.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Change of Location of Underlying Instruments</u>. The Borrower shall not, without the prior consent of the Administrative Agent, consent to the Collateral Agent or the Custodian, as applicable, moving any Certificated Securities or Instruments from the Collateral Agent's or the Custodian's Custody Facilities on the Closing Date, unless the Borrower has given at least thirty (30) days' written notice to the Administrative Agent and has taken all actions required under the UCC of each relevant jurisdiction in order to continue the first priority perfected security interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>ERISA Matters</u>. Except as would not reasonably be expected to have a Material Adverse Effect, the Borrower will not (i) engage in any transaction, with respect to a plan sponsored or maintained by the Borrower, that is a prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code for which an exemption is not available or has not previously been obtained from the United States Department of Labor, (ii) knowingly permit to exist any accumulated funding deficiency, as defined in Section 302(a) of ERISA and Section 412(a) of the Code, or funding deficiency with respect to any Pension Plan of an ERISA Affiliate, if any, other than a Multiemployer Plan, (iii) fail to make or knowingly permit any ERISA Affiliate to fail to make, any payments to a Multiemployer Plan that the Borrower or any ERISA Affiliate may be required to make under the collective bargaining agreement relating to such Multiemployer Plan or any law pertaining thereto, (iv) terminate any Pension Plan of an ERISA Affiliate, if any, or (v) knowingly permit to exist any occurrence of any Reportable Event with respect to a Pension Plan of an ERISA Affiliate, if any. The Borrower will not take any actions that would cause the underlying assets of the Borrower to constitute "plan assets" within the meaning of the Plan Asset Rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Operating Agreement</u>. The Borrower will not amend, modify, waive or terminate any provision of its Governing Document in any matter that is materially adverse to the Lenders or otherwise prohibited under this Agreement without the prior written consent of the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Changes in Payment Instructions to Obligors</u>. The Borrower will not make any change, or permit the Collateral Manager to make any change, in its instructions to any relevant administrative agent or Obligor, as applicable, regarding payments to be made with respect to the Collateral to the Collection Account, unless the Administrative Agent has consented to such change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Extension or Amendment of Collateral</u>. The Borrower will not, except as otherwise permitted in <u>Section</u> <u>6.4(a)</u>, extend, amend or otherwise modify the terms of any Loan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Fiscal Year</u>. The Borrower shall not change its fiscal year or method of accounting without providing the Administrative Agent with prior written notice (i) providing a detailed explanation of such changes and (ii) including pro forma financial statements demonstrating the impact of such change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Sanctions; Anti-Money Laundering Laws; and Anti-Corruption Laws</u>. It shall not, directly or indirectly, use any proceeds hereunder, or lend, contribute, or otherwise make available such proceeds to any Subsidiary, joint venture partner, or other Person, (i) to fund any activities or any business of or with a Sanctioned Person; or (ii) in any manner that would be prohibited by, or would otherwise cause any party hereto to be in breach of, Sanctions, Anti-Money Laundering Laws or Anti-Corruption Laws.

Section 5.3 <u>Affirmative Covenants of the Collateral Manager</u>.

During the Covenant Compliance Period:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Compliance with Law</u>. The Collateral Manager will comply in all material respects with all Applicable Law relative to the conduct of its business or to its assets, including those with respect to the Collateral or any part thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Preservation of Company Existence</u>. The Collateral Manager will (i) preserve and maintain its limited liability company existence, rights, franchises and privileges in the jurisdiction of its formation and (ii) qualify and remain qualified in good standing as a limited liability company in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification could reasonably be expected to have, a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Performance and Compliance with Collateral</u>. The Collateral Manager will duly fulfill and comply with all material obligations on the part of the Borrower to be fulfilled or complied with under or in connection with each item of Collateral, other than the funding, reimbursement or payment obligations of the Borrower under or in connection with each item of Collateral, and will do nothing to impair the rights of the Collateral Agent, as agent for the Secured Parties, or of the Secured Parties in, to and under the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Keeping of Records and Books of Account; Inspection Rights</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Collateral Manager will maintain and implement administrative and operating procedures (including an ability to recreate records evidencing Collateral in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Collateral and the identification of the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Collateral Manager will on or prior to the date hereof, mark its master data processing records and other books and records relating to the Collateral with a legend, acceptable to the Administrative Agent, describing the transfer of the Collateral from the Borrower to the Collateral Agent as agent for the Secured Parties hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>[Reserved]</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Events of Default</u>. Promptly following any Responsible Officer of the Collateral Manager's knowledge or notice of the occurrence of any Event of Default or Default, the Collateral Manager will provide the Administrative Agent and the Collateral Agent with written notice of the occurrence of such Event of Default or Default of which any Responsible Officer of the Collateral Manager has knowledge or has received notice. In addition, such notice will include a written statement of a Responsible Officer of the Collateral Manager setting forth the details of such event and the action that the Collateral Manager proposes to take with respect thereto. The Administrative Agent will provide each Lender with a copy of any such notice promptly upon receipt thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) [<u>Reserved</u>].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Other</u>. The Collateral Manager will promptly furnish to the Administrative Agent such other information, documents, records or reports reasonably available to it respecting the Collateral or the condition or operations, financial or otherwise, of the Collateral Manager as the Administrative Agent or any Lender may from time to time reasonably request in writing in order to protect the interests of the Administrative Agent or Secured Parties under or as contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Proceedings</u>. The Collateral Manager will furnish to the Administrative Agent, as soon as possible and in any event within three (3) Business Days after any Responsible Officer of the Collateral Manager receives notice or obtains knowledge thereof or at the request of the Administrative Agent, notice of any settlement of, material judgment (including a material judgment with respect to the liability phase of a bifurcated trial) in or commencement of any material labor controversy, material litigation, material action, material suit or material proceeding before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting the Collateral, the Transaction Documents, the Secured Parties' interest in the Collateral, or any Loan Party or any of its Affiliates; <u>provided</u> that notwithstanding the foregoing, any settlement, judgment, labor controversy, litigation, action, suit or proceeding affecting the Collateral, the Transaction Documents, the Secured Parties' interest in the Collateral, the Borrower in excess of $250,000, or the Transferor in excess of $2,500,000, shall be deemed to be material for purposes of this <u>Section</u> <u>5.3(i)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Required Notices</u>. The Collateral Manager will furnish to the Administrative Agent and the Collateral Agent, promptly upon any Responsible Officer of the Collateral Manager becoming aware thereof (and in any event within two (2) Business Days), notice of any Change of Control or the occurrence of any default by an Obligor on any Loan. The Administrative Agent will furnish copies of any such notice to the Lenders within two (2) Business Days of receipt thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Loan Register</u>. The Collateral Manager will maintain, or cause to be maintained, with respect to each Noteless Loan a register (which may be in physical or electronic form and readily identifiable as the loan asset register) (each, a "<u>Loan Register</u>") in which it will record, or cause to be recorded, (v) the principal amount of such Noteless Loan, (w) the amount of any principal or interest due and payable from the Obligor thereunder, (x) the amount of any sum in respect of such Noteless Loan received from the related Obligor, (y) the date of origination of such Noteless Loan and (z) the maturity date of such Noteless Loan. At any time a

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Noteless Loan is included in the Collateral, the Collateral Manager shall deliver to the Administrative Agent and the Custodian a copy of the related Loan Register, together with a certificate of a Responsible Officer of the Collateral Manager certifying to the accuracy of such Loan Register as of the date of acquisition of such Noteless Loan by the Borrower.

Section 5.4 <u>Negative Covenants of the Collateral Manager</u>.

During the Covenant Compliance Period:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Mergers, Acquisition, Sales, etc.</u> The Collateral Manager will not consolidate with or merge into any other Person or convey or transfer its properties and assets substantially as an entirety to any Person unless the Collateral Manager is the surviving entity or sell more than fifty percent (50.00%) of its voting securities to any Person and/or such Person's Affiliates, unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Collateral Manager has delivered to the Borrower and the Administrative Agent an Officer's Certificate and an Opinion of Counsel each stating that any consolidation, merger, conveyance or transfer and such supplemental agreement comply with this Section and that all conditions precedent herein <u>provided</u> for relating to such transaction have been complied with and, in the case of the Opinion of Counsel, that such supplemental agreement is legal, valid and binding with respect to the Collateral Manager and such other matters as the Borrower or the Administrative Agent may reasonably request in writing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Collateral Manager shall have delivered notice of such consolidation, merger, conveyance or transfer to the Borrower and the Administrative Agent; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) after giving effect thereto, no Default or Event of Default shall have occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Change of Location of Underlying Instruments</u>. Subject to <u>Section</u> <u>14.8</u>, the Collateral Manager shall not, without the prior consent of the Administrative Agent, consent to the Collateral Agent or the Custodian moving any Certificated Securities or Instruments from the Collateral Agent's or the Custodian's Custody Facilities, as applicable, on the Closing Date, unless the Collateral Manager has given at least thirty (30) days' written notice to the Administrative Agent and has authorized the Administrative Agent to take all actions required under the UCC of each relevant jurisdiction in order to continue the first priority perfected security interest of the Collateral Agent as agent for the Secured Parties in the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Change in Payment Instructions to Obligors</u>. The Collateral Manager will not make any change in its instructions to Obligors or any relevant administrative agent, as applicable, regarding payments to be made with respect to the Collateral in accordance with <u>Section</u> <u>2.9</u> hereof, unless the Administrative Agent has consented to such change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Extension or Amendment of Collateral</u>. Except as otherwise permitted under <u>Section</u> <u>6.4(a)</u>, the Collateral Manager will not extend, amend or otherwise modify the terms of any Loan on behalf of the Borrower.

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Section 5.5 <u>Affirmative Covenants of the Collateral Agent and Custodian</u>.

During the Covenant Compliance Period:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Compliance with Law</u>. The Collateral Agent and Custodian will comply in all material respects with all Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Preservation of Existence</u>. The Collateral Agent and Custodian will preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its formation and qualify and remain qualified in good standing in each jurisdiction where failure to preserve and maintain such existence, rights, franchises, privileges and qualification has had, or could reasonably be expected to have, a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Location of Underlying Instruments</u>. Subject to <u>Section</u> <u>14.8</u>, the Underlying Instruments delivered to the Custodian shall remain at all times in the possession of the Custodian at the Custody Facilities unless notice of a different address is given in accordance with the terms hereof or unless the Administrative Agent agrees to allow certain Underlying Instruments to be released to the Collateral Manager on a temporary basis in accordance with the terms hereof, except as such Underlying Instruments may be released pursuant to this Agreement.

Section 5.6 <u>Negative Covenants of the Collateral Agent and Custodian</u>.

During the Covenant Compliance Period:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Underlying Instruments</u>. Neither the Collateral Agent nor the Custodian, as applicable, will dispose of any documents constituting the Underlying Instruments in any manner that is inconsistent with the performance of its obligations as the Collateral Agent or the Custodian, as applicable, pursuant to this Agreement and will not dispose of any Collateral except as contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>No Changes to Collateral Agent Fee</u>. Neither the Collateral Agent nor the Custodian will make any changes to the Collateral Agent Fee set forth in the Collateral Agent Fee Letter without the prior written approval of the Administrative Agent and the Borrower.

**ARTICLE VI** 

**COLLATERAL MANAGEMENT** 

Section 6.1 <u>Designation of the Collateral Manager</u>.

Subject to <u>Section</u> <u>6.11</u>, the servicing, administering and collection of the Collateral shall be conducted by the Collateral Manager. The Collateral Manager may, with the prior written consent of the Administrative Agent, subcontract with any other Person for servicing, administering or collecting the Collateral; <u>provided</u> that (i) the Collateral Manager shall select any such Person with reasonable care and shall be solely responsible for the fees and expenses payable to such Person and (ii) the Collateral Manager shall not be relieved of, and

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shall remain liable for, the performance of the duties and obligations of the Collateral Manager pursuant to the terms hereof without regard to any subcontracting arrangement.

Section 6.2 <u>Duties of the Collateral Manager</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Appointment</u>. The Borrower hereby appoints the Collateral Manager as its agent to service the Collateral and enforce its rights and remedies in, to and under such Collateral. The Collateral Manager hereby accepts such appointment and agrees to perform the duties and obligations with respect thereto as set forth herein. The Collateral Manager and the Borrower hereby acknowledge that the Administrative Agent and the other Secured Parties are third party beneficiaries of the obligations undertaken by the Collateral Manager hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Duties</u>. The Collateral Manager shall take or cause to be taken all such actions as may be reasonably necessary or advisable to collect on the Collateral from time to time, all in accordance with Applicable Law. Without limiting the foregoing, the duties of the Collateral Manager shall include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) preparing and submitting claims to, and acting as post-billing liaison with, Obligors on each Loan (for which no administrative or similar agent exists);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) maintaining all necessary records and reports with respect to the Collateral and providing such reports to the Administrative Agent in respect of the management and administration of the Collateral (including information relating to its performance under this Agreement) as may be required hereunder or as the Administrative Agent may reasonably request in writing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) maintaining and implementing administrative and operating procedures (including an ability to recreate management and administration records evidencing the Collateral in the event of the destruction of the originals thereof) and keeping and maintaining all documents, books, records and other information reasonably necessary or advisable for the collection of the Collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) promptly delivering to the Administrative Agent and the Collateral Agent, from time to time, such information and management and administration records (including information relating to its performance under this Agreement) as the Administrative Agent or the Collateral Agent may from time to time reasonably request in writing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) identifying each Loan clearly and unambiguously in its records to reflect that such Loan is owned by the Borrower and that the Borrower is granting a security interest therein to the Collateral Agent for the benefit of the Secured Parties pursuant to this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) notifying the Administrative Agent of any material action, suit, proceeding, dispute, offset, deduction, defense or counterclaim (1) that is or is threatened to be asserted by an Obligor with respect to any Loan (or portion thereof) of which any Responsible Officer of the Collateral Manager has knowledge or has received notice; or (2) that could reasonably be expected to have a Material Adverse Effect;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) [reserved];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) maintaining the first priority, perfected security interest of the Collateral Agent, as agent for the Secured Parties, in the Collateral subject to Permitted Liens;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) so long as PennantPark Investment Advisers, LLC or one of its Affiliates is the Collateral Manager and to the extent that such Loan Files are not held by the Custodian, whether at the Custody Facilities or otherwise, maintaining the Loan File(s) with respect to Loans included as part of the Collateral; <u>provided</u> that upon the occurrence and during the continuance of an Event of Default or a Collateral Manager Termination Event, the Administrative Agent may request the Loan File(s) to be sent to the Administrative Agent or its designee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) so long as PennantPark Investment Advisers, LLC or one of its Affiliates is the Collateral Manager, to the extent that such Loan Files are not held by the Custodian, whether at the Custody Facilities or otherwise, with respect to each Loan included as part of the Collateral, making the Loan File available for inspection by the Administrative Agent, upon reasonable advance notice, at the offices of the Collateral Manager during normal business hours; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) directing the Collateral Agent to make payments pursuant to the instructions set forth in the latest Payment Date Report in accordance with <u>Section</u> <u>2.7</u> and <u>Section</u> <u>2.8</u> and preparing such other reports as required pursuant to <u>Section</u> <u>5.1(q)</u> and <u>Section</u> <u>6.8</u>.

It is acknowledged and agreed that in circumstances in which a Person other than the Borrower, the Transferor or the Collateral Manager acts as lead agent with respect to any Loan, the Collateral Manager shall perform its administrative and management duties hereunder only to the extent that, as a lender under the related loan syndication Underlying Instruments, it has the right to do so.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In performing its duties, the Collateral Manager shall perform its obligations in accordance with the Collateral Manager Standard.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding anything to the contrary contained herein, the exercise by the Administrative Agent or the Secured Parties of their rights hereunder (including, but not limited to, the delivery of a Collateral Manager Termination Notice), shall not release the Collateral Manager, the Transferor or the Borrower from any of their duties or responsibilities with respect to the Collateral except to the extent provided in <u>Section</u> <u>6.11</u> hereof. The Secured Parties, the Administrative Agent and the Collateral Agent and the Custodian shall not have any obligation or liability with respect to any Collateral, other than to use reasonable care in the custody and preservation of Collateral in such party's possession, nor shall any of them be obligated to perform any of the obligations of the Collateral Manager hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) It is hereby acknowledged and agreed that, in addition to acting in its capacity as Collateral Manager pursuant to the terms of this Agreement, PennantPark Investment Advisers, LLC will engage in other business and render other services outside the scope of its

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capacity as Collateral Manager (including acting as administrative agent or as a lender with respect to Underlying Instruments). It is hereby further acknowledged and agreed that such other activities shall in no way whatsoever adversely alter, amend or modify any of the Collateral Manager's rights, duties or obligations under the Transaction Documents.

Section 6.3 <u>Authorization of the Collateral Manager</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each of the Borrower, the Administrative Agent, and each Lender hereby authorizes the Collateral Manager to take any and all reasonable steps in its name and on its behalf reasonably necessary or desirable in the determination of the Collateral Manager and not inconsistent with the security interest granted by the Borrower to the Collateral Agent, on behalf of the Secured Parties, hereunder, to collect all amounts due under any and all Collateral, including endorsing any of their names on checks and other instruments representing Collections, executing and delivering any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Collateral and, after the delinquency of any Collateral and to the extent permitted under and in compliance with Applicable Law, to commence proceedings with respect to enforcing payment thereof. The Borrower and the Collateral Agent, on behalf of the Secured Parties (and at the direction of the Administrative Agent) shall furnish the Collateral Manager with any powers of attorney and other documents necessary or appropriate to enable the Collateral Manager to carry out its management and administrative duties hereunder, and shall cooperate with the Collateral Manager to the fullest extent in order to ensure the collectability of the Collateral. In no event shall the Collateral Manager be entitled to make any Secured Party, the Collateral Agent or the Custodian a party to any litigation without such party's express prior written consent, or to make the Borrower a party to any litigation (other than any foreclosure or similar collection procedure) without the Administrative Agent's consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) After the declaration of the Termination Date, at the direction of the Administrative Agent, the Collateral Manager shall take such action as the Administrative Agent may deem reasonably necessary or advisable to enforce collection of the Collateral; <u>provided</u> that upon the occurrence and during the continuation of an Event of Default, the Administrative Agent may, in accordance with <u>Section</u> <u>5.1(m)</u>, notify any relevant administrative agent or Obligor, as applicable, with respect to any Collateral of the assignment of such Collateral to the Collateral Agent, on behalf of the Secured Parties, and direct that payments of all amounts due or to become due be made directly to the Administrative Agent or any collection agent, sub-agent or account designated by the Administrative Agent and, upon such notification and at the expense of the Borrower, the Collateral Agent may enforce collection of any such Collateral, and adjust, settle or compromise the amount or payment thereof.

Section 6.4 <u>Collection of Payments; Accounts</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Collection Efforts, Modification of Collateral</u>. The Collateral Manager will collect or use its commercially reasonable efforts to cause to be collected, all payments called for under the terms and provisions of the Loans included in the Collateral as and when the same become due. The Borrower (or the Collateral Manager on its behalf) may waive, modify or otherwise vary any provision of an item of Collateral (including, but not limited to, any Loan) in its sole discretion, <u>provided</u> that if an Event of Default has occurred and is continuing, the

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written consent of the Administrative Agent shall be required in connection with any waiver, modification and/or amendment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Taxes and other Amounts</u>. The Collateral Manager will collect all payments with respect to amounts due for Taxes, assessments and insurance premiums relating to each Loan to the extent required to be paid to the Borrower for such application under the Underlying Instrument and remit such amounts in accordance with <u>Section</u> <u>2.7</u> and <u>Section</u> <u>2.8</u> to the appropriate Governmental Authority or insurer as required by the Underlying Instruments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Payments to Collection Account</u>. On or before the applicable Funding Date, the Collateral Manager shall have instructed all Obligors and/or any relevant administrative agents to make all payments owing to the Borrower in respect of the Collateral in accordance with <u>Section</u> <u>2.9</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Accounts</u>. Each of the parties hereto hereby agrees that the Collateral Account shall be deemed to be a Securities Account, together with any additional subaccounts as the Collateral Agent may determine from time to time are necessary for administrative convenience. Each of the parties hereto hereby agrees to cause the Collateral Agent to agree with the parties hereto that with respect to the Collateral Account, (A) the cash and other property (subject to <u>Section</u> <u>6.4(e)</u> below with respect to any property other than investment property, as defined in Section 9-102(a)(49) of the UCC) is to be treated as a Financial Asset and (B) the jurisdiction governing the Account, all Cash and other Financial Assets credited to the Account and the securities intermediary's jurisdiction (within the meaning of Section 9-304(b) of the UCC) shall, in each case, be the State of New York. In no event may any Financial Asset held in the Collateral Account be registered in the name of, payable to the order of, or specially Indorsed to, the Borrower, unless such Financial Asset has also been Indorsed in blank or to the Collateral Agent. In addition, for an Eligible Foreign Currency, the Collateral Agent shall establish an Eligible Currency Account (which may include a Principal Collection Account, Interest Collection Account and Unfunded Exposure Account) for such Eligible Foreign Currency. Any amounts received by the Collateral Agent that are denominated in an Eligible Foreign Currency that are required to be deposited into the Principal Collection Account or the Interest Collection Account shall be deposited by the Collateral Agent into the applicable Eligible Currency Account for such Eligible Foreign Currency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Underlying Instruments</u>. Notwithstanding any term hereof (or any term of the UCC that might otherwise be construed to be applicable to a "securities intermediary" as defined in the UCC) to the contrary, the Collateral Agent shall not be under any duty or obligation in connection with the acquisition by the Borrower, or the grant by the Borrower to the Administrative Agent, of any Loan to examine or evaluate the sufficiency of the documents or instruments delivered to it by or on behalf of the Borrower under the related Underlying Instruments, or otherwise to examine the Underlying Instruments, in order to determine or compel compliance with any applicable requirements of or restrictions on transfer (including any necessary consents). The Collateral Agent (or the Custodian, on its behalf) shall hold any Instrument delivered to it evidencing any Loan transferred to the Administrative Agent hereunder as custodial agent for the Administrative Agent in accordance with the terms of this Agreement. 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 Borrower to the

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Collateral Agent hereunder from time to time which 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 or PDF copy of a transfer document described in clause (a)(ii) of the definition of "Required Loan Documents" (such document, a "<u>Loan Assignment Agreement</u>") in favor of the Borrower as assignee, (b) any such Loan Assignment Agreement (and the registration of the related Loans on the books and records of the applicable obligor or bank agent) shall be registered in the name of the Borrower and (c) any duty on the part of the 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 and any other related Required Loan Documents that may be delivered to it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Adjustments</u>. If (i) the Collateral Manager makes a deposit into the Collection Account on behalf of the Borrower in respect of a Collection of a Loan and such Collection was received by the Collateral Manager in the form of a check that is not honored for any reason or (ii) the Collateral Manager makes a mistake with respect to the amount of any Collection and deposits an amount that is less than or more than the actual amount of such Collection, the Collateral Manager shall appropriately adjust the amount subsequently deposited into the Collection Account to reflect such dishonored check or mistake. Any Scheduled Payment in respect of which a dishonored check is received shall be deemed not to have been paid.

Section 6.5 <u>Realization Upon Defaulted or Delinquent Loans</u>.

The Collateral Manager will use reasonable efforts consistent with the Underlying Instruments to exercise available remedies relating to a Loan that is delinquent in the payment of any amounts due thereunder or with respect to which the related Obligor defaults in the performance of any of its obligations thereunder in order to maximize recoveries thereunder. The Collateral Manager will comply in all material respects with Applicable Law in exercising such remedies, including but not limited to acceleration and foreclosure, and employ practices and procedures including reasonable efforts to enforce all obligations of Obligors by foreclosing upon and causing the sale of such Underlying Assets at public or private sale. Notwithstanding any of the foregoing, the Collateral Manager shall not be obligated to breach any of its duties or responsibilities under any Underlying Instruments to comply with this <u>Section</u> <u>6.5</u>.

Section 6.6 <u>Collateral Manager Compensation</u>.

As compensation for its administrative and management activities hereunder and reimbursement for its expenses, the Collateral Manager or its designee shall be entitled to receive the Senior Collateral Manager Fee, the Subordinated Collateral Manager Fee and reimbursement of its expenses pursuant to the provisions of <u>Section</u> <u>2.7</u> and <u>Section</u> <u>2.8</u>, as applicable.

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Section 6.7 <u>Payment of Certain Expenses by the Collateral Manager</u>.

The initial Collateral Manager will be required to pay all expenses incurred by it in connection with its activities under this Agreement, including fees and disbursements of its independent accountants, material Taxes imposed on the Collateral Manager, expenses incurred by the Collateral Manager in connection with payments and reports pursuant to this Agreement, and all other fees and expenses not expressly stated under this Agreement for the account of the Borrower, except to the extent reimbursement thereof is permitted under <u>Sections 2.7</u> and <u>2.8</u>. The Borrower will be required to pay all reasonable fees and expenses owing to any bank or trust company in connection with the maintenance of the Accounts.

Section 6.8 <u>Reports</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Borrower</u><u>'</u><u>s Notice</u>. On each Funding Date and on the date of each Reinvestment of Principal Collections pursuant to <u>Section</u> <u>2.14(a)(i)</u> or acquisition by the Borrower of Loans in connection with a Substitution pursuant to <u>Section</u> <u>2.14(b)</u>, the Borrower (or the initial Collateral Manager on its behalf) will provide the applicable Borrower's Notice and a Borrowing Base Certificate, each updated as of such date, to the Administrative Agent (with a copy to the Collateral Agent).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>[Reserved]</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Obligor Financial Statements; Other Reports</u>. The Collateral Manager will deliver to the Administrative Agent (with a copy to the Collateral Agent), to the extent received by the Borrower or the Collateral Manager pursuant to the Underlying Instruments, the complete financial covenant reporting package with respect to each Obligor and with respect to each Loan for such Obligor (including any financial statements, management discussion and analysis, executed covenant compliance certificates and related covenant calculations with respect to such Obligor and with respect to each Loan for such Obligor) provided to the Borrower or the Collateral Manager for the periods required by the Underlying Instruments, which delivery shall be made within ten (10) Business Days after receipt by the Borrower or the Collateral Manager as specified in the Underlying Instruments. Upon demand by the Administrative Agent or any Lender in writing, the Collateral Manager will provide such other information reasonably available to it as the Administrative Agent or such Lender may reasonably request with respect to any Obligor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Amendments to Loans</u>. The Collateral Manager will furnish via electronic communication pursuant to procedures approved by the Administrative Agent, to the Administrative Agent, a copy of any material amendment, restatement, supplement, waiver or other material modification to the Underlying Instruments of any Loan (along with any internal documents prepared by the Collateral Manager and provided to its credit committee in connection with such amendment, restatement, supplement, waiver or other modification) within ten (10) Business Days of receipt of such amendment, restatement, supplement, waiver or other modification.

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Section 6.9 <u>Annual Statement as to Compliance</u>.

The Collateral Manager will provide to the Administrative Agent (with a copy to the Collateral Agent), within one hundred twenty (120) days following the end of each fiscal year of the Collateral Manager, commencing with the fiscal year ending on December 31, 2025, a fiscal report and certificate signed by a Responsible Officer of the Collateral Manager substantially in the form of <u>Exhibit</u> <u>L</u> hereto certifying that (a) a review of the activities of the Collateral Manager, and the Collateral Manager's performance pursuant to this Agreement, for the fiscal period ending on the last day of such fiscal year has been made under such Person's supervision and (b) the Collateral Manager has performed or has caused to be performed in all material respects all of its obligations under this Agreement throughout such year and no Collateral Manager Termination Event has occurred and is continuing or, if any such Collateral Manager Termination Event has occurred and is continuing, a statement describing the nature thereof and the steps being taken to remedy such Collateral Manager Termination Event.

Section 6.10 <u>The Collateral Manager Not to Resign</u>.

The Collateral Manager shall not resign from the obligations and duties hereby imposed on it except upon the Collateral Manager's determination that (i) the performance of its duties hereunder is or becomes impermissible under Applicable Law and (ii) there is no reasonable action that the Collateral Manager could take to make the performance of its duties hereunder permissible under Applicable Law. Any such determination permitting the resignation of the Collateral Manager shall be evidenced as to <u>clause</u> <u>(i)</u> above by an Opinion of Counsel to such effect delivered to the Administrative Agent.

Section 6.11 <u>Collateral Manager Termination Events</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Upon the occurrence of a Collateral Manager Termination Event, notwithstanding anything herein to the contrary, the Administrative Agent, by written notice to the Collateral Manager and a copy to the Collateral Agent (such notice, a "<u>Collateral Manager Termination Notice</u>"), may, in its sole discretion, terminate all of the rights and obligations of the Collateral Manager as Collateral Manager under this Agreement. Following any such termination, the Administrative Agent may, in its sole discretion, assume or delegate the servicing, administering and collection of the Collateral (and direct the Collateral Agent prior to the appointment and replacement of the Collateral Manager as to the servicing, administering and collection of the Collateral); <u>provided</u> that, at least five (5) Business Days prior to any appointment of a replacement Collateral Manager (the "<u>Replacement Collateral Manager</u>") hereunder, the Administrative Agent shall notify the Borrower of such proposed replacement and shall consult with the Borrower regarding such replacement and the Transferor shall have the right to purchase the Collateral in accordance with <u>Section</u> <u>9.2(c)</u>; <u>provided</u>, <u>further</u>, that until any such assumption or delegation, the Collateral Manager shall (i) unless otherwise notified by the Administrative Agent, continue to act in such capacity pursuant to <u>Section</u> <u>6.1</u> and (ii) as requested by the Administrative Agent (A) terminate some or all of its activities as Collateral Manager hereunder in the manner requested by the Administrative Agent in its sole discretion as reasonably necessary or desirable, (B) provide such information as may be requested by the Administrative Agent to facilitate the transition of the performance of such activities to the Administrative Agent or any agent thereof and (C) take all other actions reasonably requested by

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the Administrative Agent in writing, in each case to facilitate the transition of the performance of such activities to the Administrative Agent or any agent thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon the appointment of the Replacement Collateral Manager, the Collateral Manager agrees to cooperate and use its commercially reasonable efforts in effecting the transition of the responsibilities and rights of servicing of the Collateral, including the transfer to the Replacement Collateral Manager for the administration by it of all cash amounts that shall at the time be held by the Collateral Manager for deposit, or have been deposited by the Collateral Manager, or thereafter received with respect to the Collateral and the delivery to the Replacement Collateral Manager in an orderly and timely fashion of all files and records with respect to the Collateral and a computer data file in readable form containing all information necessary to enable the Replacement Collateral Manager to service the Collateral. In addition, the Collateral Manager agrees to cooperate and use its commercially reasonable efforts in providing, at the expense of the Collateral Manager, the Replacement Collateral Manager with reasonable access (including at the premises of the Collateral Manager) to the employees of the Collateral Manager, and any and all of the books, records (in electronic or other form) or other information reasonably requested by it to enable the Replacement Collateral Manager to assume the servicing functions hereunder and under this Agreement and to maintain a list of key servicing personnel and contact information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Collateral Manager will, upon the request of the Replacement Collateral Manager following the occurrence of a Collateral Manager Termination Event, provide the Replacement Collateral Manager with a power of attorney providing that the Replacement Collateral Manager is authorized and empowered to execute and deliver, on behalf of the Collateral Manager, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do so or accomplish all other acts or things reasonably necessary or appropriate to effect the purposes of such notice of termination or to perform the duties of the Collateral Manager under this Agreement.

**ARTICLE VII** 

**THE COLLATERAL AGENT** 

Section 7.1 <u>Designation of Collateral Agent</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Initial Collateral Agent</u>. The role of the Collateral Agent with respect to the Underlying Instruments relating to the Permitted Investments shall be conducted by the Person designated as Collateral Agent hereunder (or by the Custodian on its behalf) from time to time in accordance with this <u>Section</u> <u>7.1</u>. Until the Administrative Agent shall give to Western Alliance Trust Company, N.A. a Collateral Agent Termination Notice, Western Alliance Trust Company, N.A. is hereby appointed as, and hereby accepts such appointment and agrees to perform the duties and obligations of, Collateral Agent pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Successor Collateral Agent</u>. Upon the Collateral Agent's receipt of a Collateral Agent Termination Notice from the Administrative Agent of the designation of a successor Collateral Agent pursuant to the provisions of <u>Section</u> <u>7.5</u>, the Collateral Agent agrees that it will terminate its activities as Collateral Agent hereunder.

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Section 7.2 <u>Duties of Collateral Agent</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Appointment</u>. Each of the Borrower and the Administrative Agent hereby designate and appoint the Collateral Agent to act as its agent and hereby authorizes the Collateral Agent to take such actions on its behalf and to exercise such powers and perform such duties as are expressly granted to the Collateral Agent by this Agreement. The Collateral Agent hereby accepts such agency appointment to act as Collateral Agent pursuant to the terms of this Agreement, until its resignation or removal as Collateral Agent pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Duties</u>. On or before the initial Funding Date, and until its removal pursuant to <u>Section</u> <u>7.5</u>, the Collateral Agent shall perform, on behalf of the Administrative Agent and the Secured Parties, the following duties and obligations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) [Reserved].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) [Reserved].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Collateral Agent shall make payments in accordance with <u>Section</u> <u>2.7</u> and <u>Section</u> <u>2.8</u> (the "<u>Payment Duties</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Collateral Agent shall provide a daily report to the Administrative Agent and the Collateral Manager of (x) all deposits to and withdrawals from the Accounts for each Business Day and the outstanding balances as of the end of each Business Day, and (y) a report of settled trades for each Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) On or before the Closing Date, the Collateral Agent shall accept from the Collateral Manager delivery of the information required to be set forth in the Borrowing Base Certificate in hard copy and on computer tape; <u>provided</u> that the computer tape is in format to be agreed upon by the Collateral Agent and the Collateral Manager on or prior to closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) Not later than 12:00 noon on the fourth Business Day prior to each Reporting Date, or if a Payment Date month, the fourth Business Day prior the Payment Date (or, in each case, such shorter period as permitted by the Collateral Agent in its sole discretion), the Collateral Manager shall deliver to the Collateral Agent the loan tape, which shall include but not be limited to the following information: (w) for each Loan, the name and number of the related Obligor, the collection status, the loan status, an indication of whether or not such Loan is an Eligible Loan, whether or not such Loan satisfies the Assigned Value Grid Criteria, the date of each Scheduled Payment and the Outstanding Balance, (x) the Borrowing Base, (y) a list of Required Loan Document Exceptions as provided to it by the Custodian, and (z) the Adjusted Borrowing Value of each Loan and such other information, including any information related to an Eligible Foreign Currency, as may be reasonably required for the Collateral Agent to perform its duties hereunder (such loan tape, the "<u>Tape</u>"). The Collateral Agent shall accept delivery of the Tape.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) Prior to the related Payment Date, the Collateral Agent shall review the Payment Date Report to ensure that it is complete on its face and, based solely

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on the information provided in the Tape, that the following items in such Payment Date Report have been accurately calculated, if applicable, and reported: (A) the Borrowing Base, (B) the Collateral Agent Fee, (C) the Adjusted Borrowing Value of each Loan and (D) Availability. The Collateral Agent by a separate written report shall notify the Administrative Agent and the Collateral Manager of any disagreements with the Payment Date Report based on such review not later than the Business Day preceding such Payment Date to such Persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) In performing its duties, all calculations made by the Collateral Agent pursuant to this <u>Section</u> <u>7.2(b)</u> using Advance Rate, EBITDA and Unrestricted Cash of any Obligor (or, with respect to Advance Rate, Loan) shall be made using such amounts and an Eligible Foreign Currency as provided by the Borrower or the Collateral Manager to the Collateral Agent on the Tape.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) In performing its duties, the Collateral Agent shall use a commercially reasonable degree of care and attention required or expected with respect to the provision of similar services and similar loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Reliance on Tape</u>. With respect to the duties described in <u>Section</u> <u>7.2(b)</u>, the Collateral Agent, is entitled to rely conclusively, and shall be fully protected in so relying, on the contents of each Tape, including, but not limited to, the completeness and accuracy thereof, provided by the Collateral Manager. The Collateral Agent shall have no liability for any errors in the content of any Tape and, except as specifically provided herein, shall not be required to verify, recompute, reconcile or recalculate any such information or data. Without limiting the generality of any terms of the foregoing, (i) the Collateral Agent shall have no liability for (A) any failure, inability or unwillingness on the part of the Collateral Manager to provide accurate and complete information on a timely basis to the Collateral Agent or otherwise on the part of the Collateral Manager to comply with the terms of this Agreement or any other Transaction Document or (B) any inaccuracy or error in the performance of or observance by the Collateral Agent of any of its duties hereunder or any other failure of the Collateral Agent to comply with the terms of this Agreement in each case, that is caused by or results from any such inaccurate, incomplete or untimely information received by the Collateral Agent and (ii) the Collateral Agent shall rely conclusively on the information in the Tape as to the correct characterization or categorization of any Loan, including the Collateral Manager's determination of whether such Loan is an Eligible Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Collateral Manager, the Administrative Agent and the Borrower, as applicable, shall cooperate with the Collateral Agent as reasonably requested in performing the duties set forth in Section 7.2 hereof.

Section 7.3 <u>Merger or Consolidation</u>.

Any Person (i) into which the Collateral Agent may be merged or consolidated, (ii) that may result from any merger or consolidation to which the Collateral Agent shall be a party, or (iii) that may succeed to the properties and assets of the Collateral Agent substantially as a whole, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Collateral Agent hereunder, shall be the successor to the

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Collateral Agent under this Agreement and any other Transaction Document to which it is a party without further act of any of the parties to this Agreement.

Section 7.4 <u>Collateral Agent Compensation; Reimbursement of Expenses</u>.

As compensation for its collateral agent activities hereunder, the Collateral Agent shall be entitled to the fees and expenses of the Collateral Agent included in the Collateral Agent Fee and payable pursuant to the provision of <u>Section</u> <u>2.7</u> or <u>Section</u> <u>2.8</u>, as applicable. The Collateral Agent's entitlement to receive the Collateral Agent Fee shall cease on the earlier to occur of: (i) its removal as Collateral Agent pursuant to <u>Section</u> <u>7.5</u> or (ii) the termination of this Agreement. The Borrower shall pay, subject to and in accordance with pursuant to the provision of <u>Section</u> <u>2.7</u> or <u>Section</u> <u>2.8</u>, as applicable, all reasonable and documented out-of-pocket expenses of the Collateral Agent, including, without limitation, reasonable and documented fees and out-of-pocket disbursements of counsel, in connection with the administration of this Agreement and the other Transaction Documents and any documents and instruments referred to therein, including without limitation in connection with an Event of Default or the enforcement of this Agreement or the other Transaction Documents and the instruments referred to therein and any collection, bankruptcy, insolvency and other enforcement proceedings resulting therefrom.

Section 7.5 <u>Collateral Agent Removal</u>.

The Collateral Agent may be removed, with or without cause, by the Administrative Agent by notice given in writing to the Collateral Agent (the "<u>Collateral Agent Termination Notice</u>"); <u>provided</u> that notwithstanding its receipt of a Collateral Agent Termination Notice, the Collateral Agent shall continue to act in such capacity until a successor Collateral Agent has been appointed, has agreed to act as Collateral Agent hereunder, and has received all Underlying Instruments held by the previous Collateral Agent.

Section 7.6 <u>Limitation on Liability</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Collateral Agent may conclusively rely on and shall be fully protected in acting upon any certificate, instrument, opinion, notice, electronic communication, letter, telegram or other document delivered to it and that in good faith it reasonably believes to be genuine and that has been signed, sent or presented by the proper party or parties. The Collateral Agent may rely conclusively on and shall be fully protected in acting upon (a) the written instructions of any designated officer of the Administrative Agent or, prior to the occurrence of an Event of Default or Collateral Manager Termination Event, the Collateral Manager or (b) the verbal instructions of the Administrative Agent or, prior to the occurrence of an Event of Default or Collateral Manager Termination Event, the Collateral Manager.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Collateral Agent may consult counsel satisfactory to it and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Collateral Agent shall not be liable for any error of judgment, or for any act done or step taken or omitted by it, in good faith, or for any mistakes of fact or law, or

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for anything that it may do or refrain from doing in connection herewith except, notwithstanding anything to the contrary contained herein, in the case of its willful misconduct, bad faith, grossly negligent or reckless performance or omission of its duties and in the case of its grossly negligent performance of its Payment Duties and in the case of its grossly negligent performance of its duties in taking and retaining custody of the Underlying Instruments. Under no circumstances will the Collateral Agent be liable for indirect, special, consequential or incidental damages, such as loss of use, revenue or profit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Collateral Agent makes no warranty or representation and shall have no responsibility (except as expressly set forth in this Agreement) as to the content, enforceability, completeness, validity, sufficiency, value, genuineness, ownership or transferability of the Collateral, and will not be required to and will not make any representations as to the validity or value (except as expressly set forth in this Agreement) of any of the Collateral. The Collateral Agent shall not be obligated to take any legal action hereunder that might in its judgment involve any expense or liability unless it has been furnished with an indemnity reasonably satisfactory to it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Collateral Agent shall have no duties or responsibilities except such duties and responsibilities as are specifically set forth in this Agreement and no covenants or obligations shall be implied in this Agreement against the Collateral Agent. As to any matters not expressly provided for by this Agreement (including, without limitation, any discretionary actions or enforcement actions to be taken after the occurrence of an Event of Default), the Collateral Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Administrative Agent; <u>provided</u> that the Collateral Agent shall not be required to take any action that exposes it to liability unless it is furnished with an indemnification reasonably satisfactory to it. The Collateral Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Transaction Documents or any other document furnished in connection herewith or therewith in accordance with a request of the Administrative Agent and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Collateral Agent shall not be required to expend or risk its own funds in the performance of its duties hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) 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 Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Collateral Agent may assume the genuineness of any such Required Loan Document it may receive and the genuineness and due authority of any signatures appearing thereon, and shall be entitled to assume that each Required Loan Document it may receive is what it purports to be. If an original "security" or "instrument" as defined in Section 8-102 and Section 9-102(a)(47) of the UCC, respectively, is or shall be or become available with respect to any Collateral to be held by the Collateral Agent under this Agreement, it shall be the sole responsibility of the Borrower to make or cause delivery thereof to the Collateral Agent, and the Collateral Agent shall not be under any obligation at any time to determine whether any such

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original security or instrument has been or is required to be issued or made available in respect of any Collateral or to compel or cause delivery thereof to the Collateral Agent. Without prejudice to the generality of the foregoing, the Collateral Agent shall be without liability to the Borrower, the Collateral Manager, the Administrative Agent or any other Person for any damage or loss resulting from or caused by events or circumstances beyond the Collateral Agent's reasonable control, including nationalization, expropriation, currency restrictions, the interruption, disruption or suspension of the normal procedures and practices of any securities market, power, mechanical, communications or other technological failures or interruptions, computer viruses or the like, fires, floods, earthquakes or other natural disasters, civil and military disturbance, acts of war or terrorism, riots, revolution, acts of God, work stoppages, strikes, national disasters of any kind, or other similar events or acts; errors by the Borrower, the Collateral Manager or the Administrative Agent (including any Responsible Officer of any thereof) in its instructions to the Collateral Agent; or changes in applicable law, regulation or orders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) In the event that (i) the Borrower, the Collateral Manager, the Administrative Agent, Lenders, or the Collateral Agent shall be served by a third party with any type of levy, attachment, writ or court order with respect to any Loan or Required Loan Document or (ii) a third party shall institute any court proceeding by which any Required Loan Document shall be required to be delivered otherwise than in accordance with the provisions of this Agreement, the party receiving such service shall promptly deliver or cause to be delivered to the other parties to this Agreement copies of all court papers, orders, documents and other materials concerning such proceedings. The Collateral Agent shall, to the extent permitted by law, continue to hold and maintain all the Required Loan Documents that are the subject of such proceedings pending a final, nonappealable order of a court of competent jurisdiction permitting or directing disposition thereof. Upon final determination of such court, the Collateral Agent shall dispose of such Required Loan Documents as directed by the Administrative Agent, which shall give a direction consistent with such determination. Expenses of the Collateral Agent incurred as a result of such proceedings shall be borne by the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) In case any reasonable question arises as to its duties hereunder, the Collateral Agent may, in the absence of a continuing of an Event of Default or the occurrence of the Termination Date, request written instructions from the Collateral Manager and during the existence of an Event of Default or following the occurrence of the Termination Date, request written instructions from the Administrative Agent, and shall be entitled at all times to refrain from taking any action unless it has received such instructions from the Collateral Manager or the Administrative Agent, as applicable. The Collateral Agent shall in all events have no liability, risk or cost for any action taken pursuant to and in compliance with the instruction of the Collateral Manager or the Administrative Agent, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Without limiting the generality of any terms of this section, the Collateral Agent shall have no liability for any failure, inability or unwillingness on the part of the Collateral Manager, the Administrative Agent, any agent or the Borrower to provide accurate and complete information on a timely basis to the Collateral Agent, or otherwise on the part of any such party to comply with the terms of this Agreement, and shall have no liability for any inaccuracy or error in the performance or observance on the Collateral Agent's part of any of its duties hereunder that is caused by or results from any such inaccurate, incomplete or untimely

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information received by it, or other failure on the part of any such other party to comply with the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) The Collateral Agent shall not be deemed to have knowledge or notice of any matter, including an Event of Default, unless actually known to a Responsible Officer of the Collateral Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) The Collateral Agent may exercise any of its rights or powers hereunder or perform any of its duties hereunder with respect to any foreign exchange transaction, either directly or, by or through agents or attorneys, and the Collateral Agent shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed hereunder with due care by it. Neither the Collateral Agent nor any of its affiliates, directors, officers, shareholders, agents or employees will be liable to the Collateral Manager, the Borrower or any other Person, except by reason of acts or omissions by the Collateral Agent constituting bad faith, willful misconduct, gross negligence or reckless disregard of the Collateral Agent's duties hereunder. The Collateral Agent shall in no event have any liability for the actions or omissions of the Borrower, the Collateral Manager, the Administrative Agent, or any other Person, and shall have no liability for any inaccuracy or error in any duty performed by it that results from or is caused by inaccurate, untimely or incomplete information or data received by it from the Borrower, the Collateral Manager, the Administrative Agent, or another Person except to the extent that such inaccuracies or errors are caused by the Collateral Agent's own bad faith, willful misconduct, gross negligence or reckless disregard of its duties hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) It is understood and agreed that any foreign exchange transaction effected by the Collateral Agent acting at the direction of the Administrative Agent, the Borrower or the Collateral Manager may be entered with Western Alliance Trust Company, N.A. or its affiliates acting as principal or otherwise through customary banking channels. The Collateral Agent shall be entitled at all times to comply with any legal or regulatory requirements applicable to currency or foreign exchange transactions. Each party hereto acknowledges that the Collateral Agent or any affiliates of the Collateral Agent involved in any such foreign exchange transactions may make a margin or banking income from foreign exchange transactions entered into pursuant to this section for which they shall not be required to account to the Borrower, the Administrative Agent or the Collateral Manager. All risk and expense incident to such conversion is the responsibility of the Borrower, the Administrative Agent or the Collateral Manager. The Collateral Agent shall have no (x) responsibility for fluctuations in exchange rates affecting any collections or conversion thereof and (y) to the extent it complies with the instructions provided by the respective party, liability for any losses incurred or resulting from the rates obtained in such foreign exchange transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) The Collateral Agent shall have no obligation to supervise, verify, monitor or administer the performance of the Collateral Manager or the Borrower and shall have no liability for any action taken or omitted by the Collateral Manager (including any successor to the Collateral Manager) or the Borrower. The Collateral Agent may act through its agents, attorneys and custodians in performing any of its duties and obligations under this Agreement, it being understood by the parties hereto that the Collateral Agent will not be liable for any acts or omissions of any such agents, attorneys or custodians acting for and on behalf of the Collateral Agent appointed by it with due care. Neither the Collateral Agent nor any of its officers,

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directors, employees or agents shall be liable, directly or indirectly, for any damages or expenses arising out of the services performed under this Agreement other than damages or expenses that result from the bad faith, willful misconduct, gross negligence or reckless disregard of it or them or the failure to perform materially in bad faith in accordance with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) For the avoidance of doubt, the Collateral Agent shall not be under any obligation (i) to monitor, determine or verify the unavailability or cessation of Term SOFR, Adjusted Daily Simple RFR, Term CORRA Reference Rate or EURIBOR (or other Benchmark), or whether or when there has occurred, or to give notice to any other transaction party of the occurrence of, any Benchmark Transition Event or Benchmark Replacement Date, (ii) to select, determine or designate any Benchmark Replacement, or other successor or replacement benchmark index, or whether any conditions to the designation of such a rate have been satisfied, (iii) to select, determine or designate any Benchmark Replacement Adjustment or other modifier to any replacement or successor index, or (iv) to determine whether or what Benchmark Replacement Conforming Changes are necessary or advisable, if any, in connection with any of the foregoing. Neither the Collateral Agent nor the Custodian shall be liable (other than in connection with any action or omission on the part of the Collateral Agent or Custodian, as applicable, constituting gross negligence or willful misconduct under the Transaction Documents to which it is a party) for any inability, failure or delay on its part to perform any of their respective duties set forth in this Agreement or the other Transaction Documents as a result of the unavailability of any applicable Benchmark and absence of a designated Benchmark Replacement, including as a result of any inability, delay, error or inaccuracy on the part of any other transaction party, in providing any direction, instruction, notice or information required or contemplated by the terms of this Agreement and the other Transaction Documents, and reasonably required for the performance of such duties. In connection with each item of floating rate Collateral, the Borrower (or the Collateral Manager on its behalf) is responsible in each instance to (i) monitor the status of the applicable benchmark, (ii) determine whether a substitute index should or could be selected, (iii) determine the selection of any such substitute index, and (iv) exercise any right related to the foregoing on behalf of the Borrower or any other Person, and the Collateral Agent shall have no responsibility or liability therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) For so long as the Collateral Agent is the same entity as the Custodian, the Collateral Agent shall be entitled to the same rights, immunities, indemnities and protections afforded to the Custodian hereunder.

Section 7.7 <u>Resignation of the Collateral Agent</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Collateral Agent shall not resign from the obligations and duties hereby imposed on it except upon (a) ninety (90) days written notice to the Borrower, the Collateral Manager, the Administrative Agent and each Lender, or (b) the Collateral Agent's determination that (i) the performance of its duties hereunder is or becomes impermissible under Applicable Law and (ii) there is no reasonable action that the Collateral Agent could take to make the performance of its duties hereunder permissible under Applicable Law. Any such determination permitting the resignation of the Collateral Agent shall be evidenced as to <u>clause</u> <u>(i)</u> above by an Opinion of Counsel to such effect delivered to the Administrative Agent. No such resignation shall become effective until a successor Collateral Agent shall have assumed the responsibilities and obligations of the Collateral Agent hereunder. Upon the resignation of

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the Collateral Agent, the Administrative Agent shall appoint a successor Collateral Agent and if it does not do so within thirty (30) days of the Collateral Agent's resignation, the Borrower may so appoint the successor and if it does not do so within sixty (60) days of the Collateral Agent's resignation, Collateral Agent may petition a court of competent jurisdiction for the appointment of a successor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon ninety (90) days prior written notice to the Borrower, the Collateral Manager, the Administrative Agent and each Lender, the Collateral Agent will have the right to assign its obligations hereunder with the prior written consent of the Administrative Agent and the Borrower, which consents shall not be unreasonably withheld, <u>provided</u> that such assignment must be to a Person that is a nationally reputable collateral agent with experience providing services of the type that Collateral Agent is obligated to provide hereunder and with respect to loans of the type represented by the Loans. In addition, the Collateral Agent may execute any of its duties under this Agreement by or through agents; <u>provided</u> that the Collateral Agent shall remain primarily liable for the due performance of its duties hereunder.

Section 7.8 <u>Access to Certain Documentation and Information Regarding the Collateral; Audits</u>.

The Collateral Manager, the Borrower and the Collateral Agent shall provide to the Administrative Agent access to the Underlying Instruments and all other documentation regarding the Collateral including in such cases where the Administrative Agent is required in connection with the enforcement of the rights or interests of the Secured Parties, or by applicable statutes or regulations, to review such documentation, such access being afforded without charge but only (i) upon two (2) Business Days' prior written request, (ii) during normal business hours and (iii) subject to the Collateral Manager's and Collateral Agent's normal security and confidentiality procedures; <u>provided</u> that the Administrative Agent may, and shall upon request of any Lender, permit each Lender to be included on any such review, and shall use commercially reasonable efforts to schedule any review on a day when Lenders desiring to participate in such review may be included. From time to time at the discretion of the Administrative Agent, the Administrative Agent may review the Collateral Manager's collection and administration of the Collateral in order to assess compliance by the Collateral Manager with <u>Article</u> <u>VI</u> and may conduct an audit of the Collateral, the Underlying Instruments, and the information contained in the Borrowing Base Certificates and Payment Date Reports in conjunction with such a review. Such review shall be reasonable in scope and shall be completed in a reasonable period of time. The fees and expenses of the Collateral Agent incurred under this <u>Section</u> <u>7.8</u> shall be borne by the Borrower; <u>provided</u> that so long as no Event of Default has occurred and is continuing, the Borrower shall be responsible for all costs and expenses for only one (1) such visit per fiscal year.

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**ARTICLE VIII** 

**SECURITY INTEREST** 

Section 8.1 <u>Grant of Security Interest</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement constitutes a security agreement and the Advances effected hereby constitute secured loans by the applicable Lenders to the Borrower under Applicable Law. For such purpose, the Borrower hereby transfers, conveys, assigns and grants as of the Closing Date to the Collateral Agent, as agent for the Secured Parties, a lien and continuing security interest in all of the Borrower's right, title and interest in, to and under (in each case, whether now owned or existing, or hereafter acquired or arising) all Accounts, Cash, General Intangibles, Instruments and Investment Property and any and all of the following property (the "<u>Collateral</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all Loans, Permitted Investments and Equity Securities, all payments thereon or with respect thereto and all contracts to purchase, commitment letters, confirmations and due bills relating to any Loans, Permitted Investments or Equity Securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Accounts and all Cash and Financial Assets credited thereto and all income from the investment of funds therein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all Transaction Documents to which the Borrower is a party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) all Cash and other funds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) all Collections, rights in Underlying Assets and Underlying Instruments, Insurance Policies, all Required Loan Documents and related records and assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) all accounts, accessions, profits, income benefits, proceeds, substitutions and replacements, whether voluntary or involuntary, of and to any of the property of the Borrower described in the preceding clauses; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) any and all other property of any type or nature owned by the Borrower;

in each case, whether now existing or hereafter arising or acquired by the Borrower, and wherever the same may be located, to secure the prompt, complete and indefeasible payment and performance in full when due, whether by lapse of time, acceleration or otherwise, of the Obligations of the Borrower arising in connection with this Agreement and each other Transaction Document, whether now or hereafter existing, due or to become due, direct or indirect, or absolute or contingent, including all Obligations. Notwithstanding any of the other provisions set forth in this Agreement, this Agreement shall not constitute a grant of a security interest in (A) any Excluded Amounts, (B) any amounts received by the Borrower from an Obligor following the sale of the related Loan by the Borrower pursuant to <u>Section</u> <u>2.14</u> which the Borrower is required to pay to the purchaser of such Loan, and (C) any property to the extent

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that such grant of a security interest is prohibited by any Applicable Law not in effect as of the date hereof or requires a consent not obtained of any Governmental Authority pursuant to such Applicable Law, <u>provided</u> that (x) immediately at such time as the prohibition shall no longer be applicable, such security interest shall attach immediately to such assets and (y) the Collateral includes any Proceeds of any such assets. The powers conferred on the Collateral Agent and the other Secured Parties hereunder are solely to protect the Collateral Agent's and the other Secured Parties' interests in the Collateral and shall not impose any duty upon the Administrative Agent or any Secured Party to exercise any such powers. Each of the Collateral Agent and each Secured Party shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to the Borrower for any act or failure to act hereunder, except for its own gross negligence or willful misconduct. If the Borrower fails to perform or comply with any of its agreements contained herein, the Collateral Agent, at its option and at the direction of the Administrative Agent, but without any obligation to do so, may itself perform or comply, or otherwise cause performance or compliance, with such agreement. The expenses of the Administrative Agent incurred in connection with such performance or compliance, together with interest thereon at the rate *per annum* applicable to Advances, shall be payable by the Borrower to the Collateral Agent on demand and shall constitute Obligations secured hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The grant of a security interest under this <u>Section</u> <u>8.1</u> does not constitute and is not intended to result in a creation or an assumption by the Collateral Agent or any of the other Secured Parties of any obligation of the Borrower or any other Person in connection with any or all of the Collateral or under any agreement or instrument relating thereto. Anything herein to the contrary notwithstanding, (i) the Borrower shall remain liable under any applicable Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the exercise by the Collateral Agent, as agent for the Secured Parties, of any of its rights in the Collateral shall not release the Borrower from any of its duties or obligations under any applicable Collateral, and (iii) none of the Collateral Agent or any other Secured Party shall have any obligations or liability under the Collateral by reason of this Agreement, nor shall the Collateral Agent or any other Secured Party be obligated to perform any of the obligations or duties of the Borrower thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding anything to the contrary, the Borrower, the Collateral Manager, the Administrative Agent, the Collateral Agent and each Lender hereby agree to treat, and to cause each of their respective Affiliates to treat, each Note as indebtedness for purposes of United States federal and state income tax or state franchise tax to the extent permitted by Applicable Law and shall file its tax returns or reports, or cause its Affiliates to file such tax returns or reports, in a manner consistent with such treatment.

Section 8.2 <u>Release of Lien on Collateral</u>.

At the same time as (i) any Collateral expires by its terms and all amounts in respect thereof have been paid in full by the related Obligor and deposited in the Collection Account, (ii) such Loan has been the subject of a Discretionary Sale, Substitution or a sale of a Warranty Loan pursuant to <u>Section</u> <u>2.14</u> or (iii) this Agreement terminates in accordance with <u>Section</u> <u>12.6</u>, the Collateral Agent, as agent for the Secured Parties will, to the extent requested

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by the Collateral Manager, release its interest in such Collateral. In connection with any sale of such Collateral, the Collateral Agent, as agent for the Secured Parties, will after the deposit by the Collateral Manager of the Proceeds of such sale into the Collection Account, at the sole expense of the Borrower, execute and deliver to the Collateral Manager any assignments, bills of sale, termination statements and any other releases and instruments as the Collateral Manager may reasonably request in order to effect the release and transfer of such Collateral; <u>provided</u> that, the Collateral Agent, as agent for the Secured Parties, will make no representation or warranty, express or implied, with respect to any such Collateral in connection with such sale or transfer and assignment. Nothing in this section shall diminish the Collateral Manager's obligations pursuant to <u>Section</u> <u>6.5</u> with respect to the Proceeds of any such sale.

Section 8.3 <u>Remedies</u>.

Upon the occurrence of an Event of Default, the Collateral Agent and Secured Parties shall have, with respect to the Collateral granted pursuant to <u>Section</u> <u>8.1</u>, and in addition to all other rights and remedies available to the Collateral Agent and Secured Parties under this Agreement or other Applicable Law, all rights and remedies set forth in <u>Section</u> <u>9.2</u>.

Section 8.4 <u>Waiver of Certain Laws</u>.

Each of the Borrower and the Collateral Manager agrees, to the full extent that it may lawfully so agree, that neither it nor anyone claiming through or under it will set up, claim or seek to take advantage of any appraisement, valuation, stay, extension or redemption law now or hereafter in force in any locality where any Collateral may be situated in order to prevent, hinder or delay the enforcement or foreclosure of this Agreement, or the absolute sale of any of the Collateral or any part thereof, or the final and absolute putting into possession thereof, immediately after such sale, of the purchasers thereof, and each of the Borrower and the Collateral Manager, for itself and all who may at any time claim through or under it, hereby waives, to the full extent that it may be lawful so to do, the benefit of all such laws, and any and all right to have any of the properties or assets constituting the Collateral marshaled upon any such sale, and agrees that the Administrative Agent or any court having jurisdiction to foreclose the security interests granted in this Agreement may sell the Collateral as an entirety or in such parcels as the Administrative Agent or such court may determine.

Section 8.5 <u>Power of Attorney</u>.

Each of the Borrower and the Collateral Manager hereby irrevocably appoints the Administrative Agent its true and lawful attorney (with full power of substitution) in its name, place and stead and at the Borrower's expense, in connection with the enforcement of the rights and remedies provided for (and subject to the terms and conditions set forth) in this Agreement during the continuance of an Event of Default, including the following powers: (a) to give any necessary receipts or acquittance for amounts collected or received hereunder, (b) to make all necessary transfers of the Collateral in connection with any such sale or other disposition made pursuant hereto, (c) to execute and deliver for value all necessary or appropriate bills of sale, assignments and other instruments in connection with any such sale or other disposition, the Borrower and the Collateral Manager hereby ratifying and confirming all that such attorney (or any substitute) shall lawfully do hereunder and pursuant hereto, and (d) to sign any agreements,

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orders or other documents in connection with or pursuant to any Transaction Document. Nevertheless, if so requested by the Administrative Agent, the Borrower shall ratify and confirm any such sale or other disposition by executing and delivering to the Administrative Agent or such purchaser all proper bills of sale, assignments, releases and other instruments as may be designated in any such request. This appointment is coupled with an interest, given by way of security to secure the performance of the Obligations and is irrevocable.

**ARTICLE IX** 

**EVENTS OF DEFAULT** 

Section 9.1 <u>Events of Default</u>.

The following events shall be Events of Default ("<u>Events of Default</u>") hereunder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any failure by the Borrower to pay any principal when due (including on the Termination Date) and such failure to pay is not cured within two (2) Business Days after the due date of such payment; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any failure by the Borrower to pay all accrued and unpaid Interest, Non-Usage Fees and Breakage Costs on any Payment Date and such failure to pay is not cured within two (2) Business Days after the due date of such payment; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) failure to pay, on the Termination Date, the outstanding principal of all Advances Outstanding, and all Interest and all fees accrued and unpaid thereon together with all other Obligations; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any Loan Party fails to make any payments not addressed by <u>Section</u> <u>9.1(a)</u> through <u>(c)</u> when due under the Transaction Documents and the same continues unremedied for a period of thirty (30) days after the earlier to occur of (i) the date on which written notice of such failure shall have been given to the applicable Loan Party and (ii) the date on which any Responsible Officer of the applicable Loan Party acquires knowledge thereof; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) a default in any material respect (or, if any such covenant or agreement is qualified by materiality, a Material Adverse Effect or any similar qualifier, in any respect) in the performance, or breach, of any other covenant or agreement or the failure of any representation, warranty or certification made by any Loan Party in any Transaction Document or in any certificate delivered pursuant to any Transaction Document shall prove to have been incorrect when made in any material respect (or, if any such representation, warranty or certification is qualified by materiality, a Material Adverse Effect or any similar qualifier, in any respect) 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 such Loan Party and (ii) the date on which any Responsible Officer of such Loan Party acquires knowledge thereof; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the occurrence of an Insolvency Event relating to the Borrower, the Transferor or the Collateral Manager; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) the occurrence of a Change of Control; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) the occurrence of a Collateral Manager Termination Event; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the rendering of one or more final judgments, decrees or orders by a court or arbitrator of competent jurisdiction against the Borrower and the Transferor for the payment of money in excess individually or in the aggregate of $250,000 (in the case of the Borrower) or $2,500,000 (in the case of the Transferor) (in each case exclusive of judgment amounts to the extent covered by applicable insurance), and there is a period of thirty (30) consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) the Borrower shall assign or attempt to assign any of its rights, obligations or duties under this Agreement without the prior written consent of the Administrative Agent (such consent to be provided) in the sole and absolute discretion of the Administrative Agent; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) the Borrower shall fail to qualify as a bankruptcy-remote entity based upon the criteria set forth in <u>Section</u> <u>4.1(t)</u>, such that Proskauer Rose LLP or another law firm reasonably acceptable to the Administrative Agent could no longer render a customary non-consolidation opinion with respect thereto; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) any Transaction Document, or any material portion of a Lien granted thereunder, shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of any Loan Party thereto; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) any Loan Party or any Affiliate thereof or any Governmental Authority shall, directly or indirectly, contest in any manner the effectiveness, validity, binding nature or enforceability of any Transaction Document or any lien or security interest thereunder; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) (i) failure of the Transferor or the Collateral Manager to pay when due any principal of or interest on or any other amount payable in respect of one or more items of Indebtedness with an aggregate principal amount of $2,500,000 or more, in each case, beyond any applicable grace or cure period, if any, provided therefor; or (ii) breach or default by the Transferor or the Collateral Manager with respect to any other material term of (1) one or more items of Indebtedness in the individual or aggregate principal amounts referred to in <u>clause (i)</u> above, or (2) any loan agreement, mortgage, indenture or other agreement relating to such item(s) of Indebtedness, in each case beyond any applicable grace or cure period, if any, provided therefor, if the effect of such breach or default is to cause that Indebtedness to become or be declared due and payable (or subject to a compulsory repurchase or redeemable) prior to its stated maturity or the stated maturity of any underlying obligation, as the case may be; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) any security interest securing any obligation under any Transaction Document shall, in whole or in part, cease to be a first priority perfected security interest (subject only to the Permitted Liens) except as otherwise expressly permitted to be released in accordance with the applicable Transaction Document; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) the existence of a Borrowing Base Deficiency which continues unremedied for (x) two (2) consecutive Business Days or (y) if an Equity Cure Notice is delivered with respect to such Borrowing Base Deficiency, ten (10) Business Days, in each case, after the earlier to occur of (i) the date on which written notice of such Borrowing Base Deficiency shall have been given to the Borrower and (ii) the date on which any Responsible Officer of the Borrower acquires knowledge thereof; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) the Borrower shall become required to register as an "investment company" within the meaning of the 1940 Act or the arrangements contemplated by the Transaction Documents shall require registration as an "investment company" within the meaning of the 1940 Act; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) the IRS or any other Governmental Authority shall file notice of a lien pursuant to Section 6323 of the Code with regard to any of the material assets of the Borrower, or the Pension Benefit Guaranty Corporation shall file notice of a lien pursuant to Section 4068 of ERISA with regard to any assets of the Borrower and such lien shall not have been released within five (5) Business Days, unless in each case, a reserve has been established therefor in accordance with GAAP and such lien is being diligently contested in good faith by the Borrower (except to the extent that the amount secured by such Lien exceeds $250,000); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) the Borrower Interest Coverage Ratio is less than 1.50x on any Payment Date and is unremedied after two (2) Business Days; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) any failure on the part of the Borrower to comply with the covenant set forth in <u>Section</u> <u>5.1(g)</u> with respect to the matters set forth in <u>Section</u> <u>4.1(t)(xxvi)</u>.

Section 9.2 <u>Remedies</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Upon the occurrence of an Event of Default, the Administrative Agent may, or, at the direction of the Required Lenders shall, by notice to the Borrower (with a copy to the Collateral Agent, it being agreed that the failure to give such notice shall not impair the rights of the Administrative Agent or the Lenders hereunder), declare (i) the Termination Date to have occurred and the Notes and all other Obligations to be immediately due and payable in full (without presentment, demand, protest or notice of any kind all of which are hereby waived by the Borrower) or (ii) the Revolving Period End Date to have occurred; <u>provided</u> that in the case of any event involving the Borrower described in <u>Section</u> <u>9.1(f)</u>, the Notes and all other Obligations shall be immediately due and payable in full (without presentment, demand, notice of any kind, all of which are hereby expressly, waived by the Borrower) and the Termination Date shall be deemed to have occurred automatically upon the occurrence of any such event. The Administrative Agent shall forward a copy of any notice delivered to the Borrower pursuant to this <u>Section</u> <u>9.2(a)</u> to the Lenders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) On and after the declaration or occurrence of the Termination Date, the Collateral Agent, for the benefit of the Secured Parties, shall have, in addition to all other rights and remedies under this Agreement or otherwise, all other rights and remedies provided under the UCC of each applicable jurisdiction and other Applicable Laws, which rights shall be cumulative. The Borrower and the Collateral Manager hereby agree that they will, at the

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Borrower's expense and at the direction of the Administrative Agent, forthwith, (i) assemble all or any part of the Loans as directed by the Administrative Agent and make the same available to the Administrative Agent at a place to be designated by the Administrative Agent and (ii) without notice except as specified below, sell the Loans or any part thereof upon such terms, in such lots, to such buyers, and according to such other instructions as the Administrative Agent may deem commercially reasonable; <u>provided</u> that, notwithstanding anything to the contrary set forth herein, the Administrative Agent will not cause or direct the sale of any Loans or other Collateral on and after the declaration or occurrence of the Termination Date unless either (i) the Administrative Agent determines that the anticipated proceeds of a sale or liquidation of all or any portion of the Collateral (after deducting the reasonable expenses of such sale or liquidation) would be sufficient to discharge in full the Obligations (or in the case of a sale of less than all of the Collateral, an amount sufficient to discharge the amount of the Obligations attributable to such portion of the Collateral); or (ii) the Required Lenders direct such sale and liquidation. The Borrower agrees that, to the extent notice of sale shall be required by law, ten (10) days' notice to the Borrower of any sale hereunder shall constitute reasonable notification. All cash Proceeds received by the Administrative Agent in respect of any sale of, collection from, or other realization upon, all or any part of the Loans (after payment of any amounts incurred in connection with such sale) shall be deposited into the Collection Account and to be applied pursuant to <u>Section</u> <u>2.8</u>. The occurrence of a Termination Date as defined in <u>clauses</u> <u>(a)</u> through <u>(b)</u>, inclusive, of the definition of "Termination Date" shall constitute a Termination Date for the purposes of this <u>Section</u> <u>9.2</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) (i) If the Administrative Agent elects to replace the Collateral Manager pursuant to <u>Section</u> <u>6.11</u> or the Administrative Agent or the Replacement Collateral Manager elects to sell the Collateral in whole or in part, at a public or private sale, in one or more transactions, the Collateral Manager (on behalf of itself or the Borrower) and/or any Affiliate designated by the Borrower may purchase the Collateral, in whole but not in part, prior to such sale at a purchase price that is not less than the amount of the Obligations as of the date of such proposed sale. The Borrower's right to purchase the Collateral and any related limitation on the Administrative Agent's or the Replacement Collateral Manager's right to sell any or all of the Collateral then or in the future shall terminate at 4:00 p.m. on the fifth (5th) Business Day following the Business Day on which the Borrower has received notice of the Administrative Agent's or the Replacement Collateral Manager's election to sell all or any portion of such Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) It is understood that the Borrower and/or any Affiliate of the Borrower may purchase the Collateral at a price not less than the amount of the Obligations as of the date of such proposed sale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Notwithstanding anything herein to the contrary, neither the Administrative Agent nor any Replacement Collateral Manager shall have any right to sell the Collateral during the time that the Borrower is entitled to exercise its right to purchase the Collateral pursuant to this <u>Section</u> <u>9.2(c)</u>, and the sale of the Collateral by the Administrative Agent or any Replacement Collateral Manager shall be subject to this <u>Section</u> <u>9.2(c)</u>.

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**ARTICLE X** 

**INDEMNIFICATION** 

Section 10.1 <u>Indemnities by the Borrower</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Without limiting any other rights that any such Person may have hereunder or under Applicable Law, the Borrower hereby agrees to indemnify the Administrative Agent, the Collateral Agent, the Custodian, the Securities Intermediary, the Secured Parties, the Lenders and each of their respective successors, assigns and directors, officers, employees, agents and advisors (collectively, the "<u>Indemnified Parties</u>"), forthwith on demand, from and against any and all damages, losses, claims (whether brought by or involving the Borrower or any other third party), liabilities and related costs, expenses and disbursements of any kind or nature whatsoever (including the reasonable and documented out-of-pocket fees and disbursements of counsel (and, if reasonably necessary, of one local counsel in each relevant jurisdiction), which in the case of the Administrative Agent and the Lenders shall be limited to one outside counsel for all such Indemnitees (and, if reasonably necessary, of one local counsel in each relevant jurisdiction for all Indemnitees) and, if in the reasonable opinion of an Indemnified Party, representation of all Indemnified Parties by such counsel would be inappropriate due to the existence of an actual or potential conflict of interest, one additional outside counsel for each group of Indemnified Parties with such conflict but excluding in all cases the allocated costs of in-house counsel) (all of the foregoing being collectively referred to as the "<u>Indemnified Amounts</u>") awarded against or incurred by such Indemnified Party and other non-monetary damages of any such Indemnified Party or any of them arising out of or as a result of this Agreement (including enforcement of the indemnification obligations hereunder) or having an interest in the Collateral or in respect of any Loan included in the Collateral, excluding, however, any Indemnified Amounts to the extent resulting from gross negligence or willful misconduct on the part of such Indemnified Party as determined by a court of competent jurisdiction in a final non-appealable judgment. In no event shall the Collateral Manager or the Borrower be liable for special, indirect or consequential losses or damages of any kind whatsoever (including but not limited to lost profits) even if the Collateral Manager or the Borrower has been advised of the likelihood of such damages and regardless of the form of such action; <u>provided</u> that, such restriction shall not limit the Borrower's or the Collateral Manager's indemnification obligations for any third party claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any amounts subject to the indemnification provisions of this <u>Section</u> <u>10.1</u> shall be paid by the Borrower to the Indemnified Party on the Payment Date following such Person's demand therefor, accompanied by a reasonably detailed description in writing of the related damage, loss, claim, liability and related costs and expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If for any reason the indemnification provided above in this <u>Section</u> <u>10.1</u> is unavailable to the Indemnified Party or is insufficient to hold an Indemnified Party harmless, then the Borrower shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by such Indemnified Party on the one hand and the Borrower on the other hand but also the relative fault of such Indemnified Party as well as any other

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relevant equitable considerations; <u>provided</u> that the Borrower shall not be required to contribute in respect of any Indemnified Amounts excluded in <u>Section</u> <u>10.1(a)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The obligations of the Borrower under this <u>Section</u> <u>10.1</u> shall survive the resignation or removal of the Administrative Agent, the Collateral Manager, the Collateral Agent, the Custodian or the Securities Intermediary and the termination of this Agreement.

Section 10.2 <u>Indemnities by the Collateral Manager</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Without limiting any other rights that any such Person may have hereunder or under Applicable Law, the Collateral Manager hereby agrees to indemnify each Indemnified Party, forthwith on demand, from and against any and all Indemnified Amounts (except to the extent resulting from (i) gross negligence or willful misconduct on the part of such Indemnified Party as determined by a court of competent jurisdiction in a final non-appealable judgment, (ii) the diminution in value of Loans or (iii) credit related performance of the Obligors of the Loans) awarded against or incurred by any such Indemnified Party by reason of the Collateral Manager's (1) breach of Applicable Law, (2) bad faith, gross negligence or willful misconduct, or (3) breach of any of its covenants, representations or warranties under this Agreement or any other Transaction Document. The provisions of this indemnity shall run directly to and be enforceable by an injured party subject to the limitations hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any amounts subject to the indemnification provisions of this <u>Section</u> <u>10.2</u> shall be paid by the Collateral Manager to the Indemnified Party within five (5) Business Days following such Person's demand therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Collateral Manager shall have no liability for making indemnification hereunder to the extent any such indemnification constitutes recourse for uncollectible or uncollected Loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The obligations of the Collateral Manager under this <u>Section</u> <u>10.2</u> shall survive the resignation or removal of the Administrative Agent or the Collateral Agent and the termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Any indemnification pursuant to this <u>Section</u> <u>10.2</u> shall not be payable from the Collateral.

Section 10.3 <u>Taxes</u>.

<u>Section</u> <u>10.1</u> and <u>Section</u> <u>10.2</u> shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

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**ARTICLE XI** 

**THE ADMINISTRATIVE AGENT** 

Section 11.1 <u>Appointment</u>.

Each Secured Party hereby appoints and authorizes the Administrative Agent as its agent hereunder and under the Transaction Documents and hereby further authorizes the Administrative Agent to appoint additional agents and bailees (including the Collateral Agent) to act on its behalf and for the benefit of each of the Secured Parties. Each Secured Party further authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Transaction Documents as are delegated to the Administrative Agent by the terms hereof and thereof, together with such actions and powers as are reasonably incidental thereto. In furtherance, and without limiting the generality, of the foregoing, each Secured Party hereby appoints the Administrative Agent as its agent to execute and deliver all further instruments and documents, and take all further action that the Administrative Agent may deem reasonably necessary or appropriate or that a Secured Party may reasonably request in writing in order to perfect, protect or more fully evidence the security interests granted by the Borrower hereunder, or to enable any of them to exercise or enforce any of their respective rights hereunder, including the execution by the Administrative Agent as secured party/assignee of such financing or continuation statements, or amendments thereto or assignments thereof, relative to all or any of the Collateral now existing or hereafter arising, and such other instruments or notices, as may be reasonably necessary or appropriate for the purposes stated hereinabove. The Lenders may direct the Administrative Agent to take any such incidental action hereunder. With respect to other actions which are incidental to the actions specifically delegated to the Administrative Agent hereunder, the Administrative 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 direction of the Lenders; <u>provided</u> that the Administrative Agent shall not be required to take any action hereunder if the taking of such action, in the reasonable determination of the Administrative Agent, shall be in violation of any Applicable Law or contrary to any provision of this Agreement or shall expose the Administrative Agent to liability hereunder or otherwise. In the event the Administrative Agent requests the consent of a Lender pursuant to the foregoing provisions and the Administrative Agent does not receive a consent (either positive or negative) from such Person within ten (10) Business Days of such Person's receipt of such request, then such Lender shall be deemed to have declined to consent to the relevant action.

Section 11.2 <u>Standard of Care; Exculpatory Provisions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Administrative Agent shall exercise such rights and powers vested in it by this Agreement and the other Transaction Documents, and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Transaction Documents. Without limiting the generality of the foregoing, the Administrative Agent:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) shall not be subject to any fiduciary or other implied (or express) duties arising under agency doctrine of any applicable law, regardless of whether a Default has occurred and is continuing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Transaction Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Transaction Documents), <u>provided</u> that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Transaction Document or Applicable Law; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) shall not, except as expressly set forth herein and in the other Transaction Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Transaction Documents) or (ii) in the absence of its own gross negligence or willful misconduct in connection with its duties expressly set forth herein as determined by a final, non-appealable judgment by a court of competent jurisdiction. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Collateral Manager, the Borrower or a Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Transaction Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Transaction Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in <u>Article III</u> or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent. The Administrative Agent shall not otherwise, except as expressly set forth herein and in the other Transaction Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Administrative Agent or any of its Affiliates in any capacity. Except as otherwise provided in this <u>Article XI</u>, the provisions of this <u>Article XI</u> are solely for the benefit of the Administrative Agent, the Lenders and any letter of credit issuing banks hereunder, and the Borrower shall not have rights as a third-party beneficiary of any of such provisions.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) CIBC and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Loan Parties and their respective Affiliates as though CIBC were not the Administrative Agent hereunder and without notice to or consent of any Lender. Each Lender acknowledges that, pursuant to such activities, CIBC or its Affiliates may receive information regarding the Loan Parties or their respective Affiliates (including information that may be subject to confidentiality obligations in favor of the Loan Parties or such Affiliate) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them. With respect to their Advances (if any), CIBC and its Affiliates shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though CIBC were not the Administrative Agent, and the terms "Lender" and "Lenders" include CIBC and its Affiliates, to the extent applicable, in their individual capacities.

Section 11.3 <u>The Administrative Agent</u><u>'</u><u>s Reliance, Etc.</u>

Neither the Administrative Agent nor any of its Related Parties shall be liable for any action taken or omitted to be taken by it or them as the Administrative Agent under or in connection with this Agreement or any of the other Transaction Documents, except for its or their own respective gross negligence or willful misconduct. Without limiting the foregoing, the Administrative Agent: (i) may consult with legal counsel (including counsel for any Loan Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation and shall not be responsible for any statements, warranties or representations made by any other Person in or in connection with this Agreement; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any of the other Transaction Documents on the part of any Loan Party or to inspect the property (including the books and records) of any Loan Party; (iv) shall not be responsible for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any of the other Transaction Documents or any other instrument or document furnished pursuant hereto or thereto; (v) may rely upon and shall incur no liability under or in respect of this Agreement or any of the other Transaction Documents by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by facsimile or electronic notice) believed by it to be genuine and signed or sent by the proper party or parties, or upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person; and (vi) shall be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, confirmation from the Lenders of their obligation to indemnify the Administrative Agent against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. In determining compliance with any condition hereunder to the making of an Advance, that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Advance.

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Section 11.4 <u>Credit Decision with Respect to the Administrative Agent</u>.

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, or any of the Administrative Agent's Affiliates, and based upon such documents and information as it has deemed appropriate, made its own evaluation and decision to enter into this Agreement and the other Transaction Documents to which it is a party. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent, or any of the Administrative Agent's Affiliates, and based on such documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under this Agreement and the other Transaction Documents to which it is a party. The Administrative Agent shall have no duty or responsibility, either initially or on a continuing basis, to make any such investigation or any such appraisal on behalf of Lenders or to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the making of the Advances or at any time or times thereafter, and the Administrative Agent shall have no responsibility with respect to the accuracy of or the completeness of any information provided to Lenders.

Each Lender, by delivering its signature page to this Agreement or any Joinder Supplement and funding any Advance shall be deemed to have acknowledged receipt of, and consented to and approved, each Transaction Document and each other document required to be approved by the Administrative Agent, Required Lenders or Lenders.

Section 11.5 <u>Indemnification of the Administrative Agent</u>.

Each Lender agrees to indemnify the Administrative Agent (to the extent not reimbursed by the Borrower or the Collateral Manager), ratably in accordance with its Pro Rata Share from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Administrative Agent in any way relating to or arising out of this Agreement or any of the other Transaction Documents, or any action taken or omitted by the Administrative Agent hereunder or thereunder; <u>provided</u> that, the Lenders shall not be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent's gross negligence or willful misconduct. The payment of amounts under this <u>Section</u> <u>11.5</u> shall be on an after-Tax basis. Without limitation of the foregoing, each Lender agrees to reimburse the Administrative Agent, ratably in accordance with its Pro Rata Share promptly upon demand for any out-of-pocket expenses (including counsel fees) incurred by the Administrative Agent in connection with the administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement and the other Transaction Documents, to the extent that such expenses are incurred in the interests of or otherwise in respect of the Lenders hereunder and/or thereunder and to the extent that the Administrative Agent is not reimbursed for such expenses by the Borrower or the Collateral Manager.

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Section 11.6 <u>The Successor Administrative Agent</u>.

The Administrative Agent may resign as the Administrative Agent upon thirty (30) days' notice to the Lenders. If the Administrative Agent resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a successor administrative agent for the Lenders, with the approval of the Borrower at all times other than during the existence of a Default or an Event of Default (which approval of the Borrower shall not be unreasonably withheld, conditioned or delayed). Upon the acceptance of its appointment as the successor administrative agent hereunder, the Person acting as such successor administrative agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent and the term "Administrative Agent" means such successor administrative agent and the retiring Administrative Agent's appointment, powers and duties as the Administrative Agent shall be terminated. After any retiring Administrative Agent's resignation or removal hereunder as the Administrative Agent, the provisions of this <u>Article</u> <u>XI</u> and <u>Sections 12.9</u> and <u>12.11</u> shall continue to inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent under this Agreement.

Section 11.7 <u>Delegation of Duties</u>.

The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Transaction Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facility as well as activities as the Administrative Agent.

Section 11.8 <u>Payments by the Administrative Agent</u>.

Unless specifically allocated to a specific Lender pursuant to the terms of this Agreement, all amounts received by the Administrative Agent on behalf of the Lenders shall be paid by the Administrative Agent to the Lenders in accordance with their respective Pro Rata Shares in the applicable Advances Outstanding, or if there are no Advances Outstanding in accordance with their most recent Commitments, on the Business Day received by the Administrative Agent, unless such amounts are received after 12:00 p.m. on such Business Day, in which case the Administrative Agent shall use its reasonable efforts to pay such amounts to each Lender on such Business Day, but, in any event, shall pay such amounts to such Lender not later than the following Business Day. The Administrative Agent shall pay amounts owing to each Lender in accordance with the written instructions delivered by each such Lender to the Administrative Agent.

Section 11.9 <u>Collateral Matters</u>.

Each of the Lenders irrevocably authorizes the Administrative Agent, at its option and in its discretion:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to release any Lien on any Collateral granted to or held by the Collateral Agent, for the ratable benefit of the Secured Parties, under any Transaction Document (i) upon the termination of the Commitment and payment in full of all Obligations (other than contingent indemnification and expense reimbursement obligations to the extent no claim giving rise thereto has been asserted), (ii) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Transaction Document, or (iii) if approved, authorized or ratified in writing in accordance with <u>Section</u> <u>12.1</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) to subordinate or release any Lien on any Collateral granted to or held by the Collateral Agent under any Transaction Document to the holder of any other Lien on the Collateral.

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent's authority to release or subordinate the Collateral Agent's interest in particular types or items of property pursuant to this <u>Section</u> <u>11.9</u>. In each case as specified in this <u>Section</u> <u>11.9</u>, the Administrative Agent will, at the Borrower's expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request in writing to evidence the release of such item of Collateral from the assignment and security interest granted under the Transaction Documents or to subordinate its interest in such item, in each case in accordance with the terms of the Transaction Documents and this <u>Section</u> <u>11.9</u>.

Section 11.10 <u>Erroneous Payments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If the Administrative Agent notifies a Lender, a Secured Party, or any other Person that has received funds on such Person's behalf (each, a "<u>Payment Recipient</u>") that the Administrative Agent has determined at any time in its sole discretion that any funds received by such Payment Recipient from the Administrative Agent or any of its Affiliates were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient, whether or not known to such Payment Recipient (any such funds or portion thereof, however received or characterized, an "<u>Erroneous Payment</u>") and demands the return of such Erroneous Payment, such Erroneous Payment shall at all times remain the property of the Administrative Agent, be segregated by the Payment Recipient and held in trust for the benefit of the Administrative Agent, and such Payment Recipient shall (or shall cause any Payment Recipient on its behalf to) promptly, but in no event later than two Business Days thereafter, return to the Administrative Agent the amount of any such Erroneous Payment, in same day funds (in the currency so received), together with interest thereon from and including the date such Erroneous Payment was received by such Payment Recipient to the date such amount is repaid to the Administrative Agent in same day funds at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect. A notice of the Administrative Agent to any Payment Recipient under this clause (a) shall be conclusive, absent manifest error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Without limiting immediately preceding <u>clause (a)</u>, each Payment Recipient hereby further agrees that if it receives a payment, prepayment or repayment (however received or characterized) from the Administrative Agent (or any of its Affiliates) that (x) is in a different amount than, or on a different date from, that specified in a notice of payment,

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prepayment or repayment sent by the Administrative Agent (or any of its Affiliates) relating thereto, (y) was not preceded or accompanied by such a notice, or (z) such Payment Recipient otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part), in each case (i) an error shall be presumed to have been made absent written confirmation from the Administrative Agent to the contrary and (ii) such Payment Recipient shall (or shall cause any Payment Recipient on its behalf to) promptly, but in no event later than one Business Day of its knowledge of such error, notify the Administrative Agent of its receipt of such payment, prepayment or repayment, the details thereof in reasonable detail and that it is so notifying the Administrative Agent pursuant to this <u>Section</u> <u>11.10(b)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each Payment Recipient hereby authorizes the Administrative Agent to set off, net and apply any and all amounts at any time owing to such Payment Recipient under any Transaction Document, or otherwise payable or distributable by the Administrative Agent to such Payment Recipient from any source, against any amount due to the Administrative Agent under <u>clause</u> <u>(a)</u> above or under the indemnification provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In the event that an Erroneous Payment (or portion thereof) is not recovered by the Administrative Agent for any reason, after demand therefor by the Administrative Agent in accordance with <u>clause</u> <u>(a)</u> above, from any Lender that has received such Erroneous Payment (or portion thereof) (and/or from any Payment Recipient who received such Erroneous Payment (or portion thereof) on its respective behalf) (such unrecovered amount, an "<u>Erroneous Payment Return Deficiency</u>"), upon the Administrative Agent's notice to such Lender at any time, (i) such Lender shall be deemed to have assigned its Advances (but not its Commitments) with respect to which such Erroneous Payment was made (the "<u>Erroneous Payment Impacted Class</u>") in an amount equal to the Erroneous Payment Return Deficiency (or such lesser amount as the Administrative Agent may specify) (such assignment of the Advances (but not Commitments) of the Erroneous Payment Impacted Class, the "<u>Erroneous Payment Deficiency Assignment</u>") at par *plus* any accrued and unpaid interest (with the assignment fee to be waived by the Administrative Agent in such instance), and is hereby (together with the Borrower) deemed to execute and deliver an Assignment and Assumption (or, to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to a Platform as to which the Administrative Agent and such parties are participants) with respect to such Erroneous Payment Deficiency Assignment, and such Lender shall deliver any notes evidencing such Advances to the Borrower or the Administrative Agent, (ii) the Administrative Agent as the assignee Lender shall be deemed to have acquired the Erroneous Payment Deficiency Assignment, (iii) upon such deemed acquisition, the Administrative Agent as the assignee Lender shall become a Lender hereunder with respect to such Erroneous Payment Deficiency Assignment and the assigning Lender shall cease to be a Lender hereunder with respect to such Erroneous Payment Deficiency Assignment, excluding, for the avoidance of doubt, its obligations under the indemnification provisions of this Agreement and its applicable Commitments which shall survive as to such assigning Lender and (iv) the Administrative Agent may reflect in the Register its ownership interest in the Advances subject to the Erroneous Payment Deficiency Assignment. So long as any sale of Advances complies with the terms of <u>Section</u> <u>12.16</u>, the Administrative Agent may, in its discretion, sell any Advances acquired pursuant to an Erroneous Payment Deficiency Assignment and upon receipt of the proceeds of such sale, the Erroneous Payment Return Deficiency owing by the applicable Lender shall be reduced by the net proceeds of the sale of such Advance (or portion thereof), and the

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Administrative Agent shall retain all other rights, remedies and claims against such Lender (and/or against any recipient that receives funds on its respective behalf). For the avoidance of doubt, no Erroneous Payment Deficiency Assignment will reduce the Commitments of any Lender and such Commitments shall remain available in accordance with the terms of this Agreement. In addition, each party hereto agrees that, except to the extent that the Administrative Agent has sold an Advance (or portion thereof) acquired pursuant to an Erroneous Payment Deficiency Assignment, and irrespective of whether the Administrative Agent may be equitably subrogated, the Administrative Agent shall be contractually subrogated to all the rights and interests of the applicable Lender or Indemnitee under the Transaction Documents with respect to each Erroneous Payment Return Deficiency (the "<u>Erroneous Payment Subrogation Rights</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The parties hereto agree that an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Borrower or any other Loan Party, except, in each case, to the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by the Administrative Agent or applicable Lender, Indemnitee or other Payment Recipient from the Borrower or any other Loan Party for the purpose of making payment in respect of Obligations owed by the Borrower or any other Loan Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) To the extent permitted by applicable law, no Payment Recipient shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Erroneous Payment received, including, without limitation, any defense based on "discharge for value" or any similar doctrine.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Each party's obligations, agreements and waivers under this <u>Section</u> <u>11.10</u> shall survive the resignation or replacement of the Administrative Agent, any transfer of rights or obligations by, or the replacement of, a Lender, the termination of the Commitments and/or the repayment, satisfaction or discharge of all obligations (or any portion thereof) under any Transaction Document.

**ARTICLE XII** 

**MISCELLANEOUS** 

Section 12.1 <u>Amendments and Waivers</u>.

Except as provided in this <u>Section</u> <u>12.1</u>, no amendment, waiver or other modification of any provision of this Agreement shall be effective without the written agreement of the Borrower, the Administrative Agent and the Required Lenders; <u>provided</u> that no amendment, waiver or consent shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) increase the Commitment of any Lender or the amount of Advances of any Lender, in any case, without the written consent of such Lender;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) waive, extend or postpone any date fixed by this Agreement or any other Transaction Document for any payment or mandatory prepayment of principal, interest, fees or other amounts due to the Lenders (or any of them) or any scheduled or mandatory reduction of the Commitments hereunder or under any other Transaction Document (including as a result of any modification to the definition of "Revolving Period" or "Scheduled Revolving Period End Date") without the written consent of each Lender directly and adversely affected thereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) reduce the principal of, or the rate of interest specified herein on, any Advance or Obligation, or any fees or other amounts payable hereunder or under any other Transaction Document without the written consent of each Lender directly and adversely affected thereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) change <u>Section</u> <u>2.7</u>, <u>2.8</u> or any related definitions or provisions in a manner that would alter the order of application of proceeds or would alter the pro rata sharing of payments required thereby, in each case, without the written consent of each Lender directly and adversely affected thereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) change any provision of this Section or reduce the percentages specified in the definition of "Required Lenders" or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender directly affected thereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) consent to the assignment or transfer by any Loan Party of such Loan Party's rights and obligations under any Transaction Document to which it is a party (except as expressly permitted hereunder), in each case, without the written consent of each Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) make any modification to the definition of (i) "Availability", "Advance Rate", "Adjusted Borrowing Value", "Borrowing Base", "Dollar Equivalent" or "Excess Concentration Amount", in each case, which would have a material adverse effect on the calculation of the Borrowing Bases or the Availability or (ii) "Eligible Loan" in a manner that would reduce or make less restrictive the requirements for a Loan to be an Eligible Loan, in either case without the written consent of each Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) release all or substantially all of the Collateral or release any Transaction Document (other than as specifically permitted or contemplated in this Agreement or the applicable Transaction Document) without the written consent of each Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) provide for any additional duties or obligations to be performed by the Collateral Agent or the Custodian or modify the rights of the Collateral Agent or the Custodian hereunder in any manner materially adverse to the Collateral Agent or the Custodian without the written consent of the Collateral Agent or the Custodian; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) provide for any additional duties or obligations to be performed by the Collateral Manager or modify the rights of the Collateral Manager hereunder in any manner materially adverse to the Collateral Manager without the written consent of the Collateral Manager;

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<u>provided</u>, <u>further</u>, that (i) any amendment of the Agreement that is solely for the purpose of adding a Lender or waiving, extending or postponing any fee to the Administrative Agent may be effected without the written consent of any Lender and, at any time that an Event of Default has occurred and is continuing, the Borrower, (ii) no such amendment, waiver or modification materially adversely affecting the rights or obligations of the Collateral Agent shall be effective without the written agreement of such Person, (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent, affect the rights or duties of the Administrative Agent under this Agreement or any other Transaction Document, (iv) any amendment of the Agreement that a Lender is advised by its legal or financial advisors to be necessary or desirable in order to avoid the consolidation of the Borrower with such Lender for accounting purposes may be effected without the written consent of the Borrower or any other Lender and (v) the Administrative Agent and the Borrower shall be permitted to amend any provision of the Transaction Documents (and such amendment shall become effective without any further action or consent of any other party to any Transaction Document) if the Administrative Agent and the Borrower shall have jointly identified a factual error or any error or omission of a technical or immaterial nature in any such provision. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender.

Section 12.2 <u>Notices, Etc.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to <u>Section</u> <u>12.2(b)</u> below), all notices and other communications provided for herein shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by electronic communication, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if to the Borrower, the Collateral Manager, the Collateral Agent or Custodian, as set forth on <u>Annex A</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if to the Administrative Agent, to CIBC, as set forth on <u>Annex A</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and internet or intranet websites) pursuant to procedures approved by the Administrative Agent; <u>provided</u> that, the foregoing shall not apply to notices to any Lender pursuant to <u>Article</u> <u>II</u> if such Lender has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; <u>provided</u> that, approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed

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received upon the sender's receipt of an acknowledgement from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgement); <u>provided</u> that, if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing <u>clause</u> <u>(i)</u> of notification that such notice or communication is available and identifying the website address therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make Syndicate Communications available to the Lenders by posting such Syndicate Communications on the Platform. The Platform is provided by the Administrative Agent "as is" and "as available". The Agent Parties (defined below) do not warrant the accuracy or completeness of the Syndicate Communications or the adequacy of the Platform and expressly disclaim liability for errors or omissions in the Syndicate Communications. No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Syndicate Communications or the Platform. In no event shall the Administrative Agent or any of its Affiliates (collectively, the "<u>Agent Parties</u>") have any liability to the Borrower, any Lenders or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower's or any Agent Party's transmission or posting of Obligor materials through the Platform or via email, except to the extent such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; <u>provided</u>, however, that in no event shall any Agent Party have any liability to the Borrower, any Lender or any other Person for indirect, incidental, consequential or punitive damages (as opposed to direct or actual damages).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding the foregoing, the Borrower hereby acknowledges that certain of the Lenders (each, a "<u>Public Lender</u>") may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Person's securities. The Borrower hereby agrees that (i) all Syndicate Communications that are to be made available to Public Lenders shall be clearly and conspicuously marked "PUBLIC" which, at a minimum, shall mean that the word "PUBLIC" shall appear prominently on the first page thereof; (ii) by marking Syndicate Communications "PUBLIC", the Borrower shall be deemed to authorize the Administrative Agent and the Lenders to treat such Syndicate Communications as not containing any material non-public information with respect to the Borrower or any Affiliate thereof or their respective securities for purposes of United States Federal and state securities laws; (iii) all Syndicate Communications marked "PUBLIC" are permitted to be made available through the Platform; and (iv) the Administrative Agent shall be entitled to treat any Syndicate Communications that are not marked "PUBLIC" as being suitable only for posting on a portion of the Platform designated as "Non-Public Information".

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Collateral Agent agrees (unless the Collateral Agent requests otherwise) to accept and act upon instructions or directions pursuant to this Agreement sent by unsecured email, facsimile transmission or other similar unsecured electronic methods; <u>provided</u> that any Person providing such instructions or directions shall provide to the Collateral Agent an incumbency certificate listing Responsible Officers designated to provide such instructions or directions, which incumbency certificate shall be amended whenever a person is added or deleted from the listing. If such person elects to give the Collateral Agent email or facsimile instructions (or instructions by a similar electronic method) and the Collateral Agent in its discretion elects to act upon such instructions, the Collateral Agent's reasonable understanding of such instructions shall be deemed controlling. The Collateral Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Collateral Agent reasonable reliance upon and compliance with such instructions notwithstanding such instructions conflicting with or being inconsistent with a subsequent written instruction. Any person providing such instructions or directions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Collateral Agent, including without limitation the risk of the Collateral Agent acting on unauthorized instructions, and the risk of interception and misuse by third parties.

Section 12.3 <u>Ratable Payments</u>.

If any Secured Party, whether by setoff or otherwise, has payment made to it with respect to any portion of the Obligations owing to such Secured Party (other than payments received pursuant to <u>Section</u> <u>10.1</u>) in a greater proportion than that received by any other Secured Party, such Secured Party agrees, promptly upon demand, to purchase for cash without recourse or warranty a portion of the Obligations held by the other Secured Parties so that after such purchase each Secured Party will hold its ratable proportion of the Obligations; <u>provided</u> that if all or any portion of such excess amount is thereafter recovered from such Secured Party, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

Section 12.4 <u>No Waiver; Remedies</u>.

No failure on the part of the Administrative Agent, the Collateral Agent, the Custodian or a Secured Party to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies herein provided are cumulative and not exclusive of any rights and remedies provided by law.

Section 12.5 <u>Binding Effect; Benefit of Agreement</u>.

This Agreement shall be binding upon and inure to the benefit of the Loan Parties, the Administrative Agent, the Collateral Agent, the Custodian, the Secured Parties and their respective successors and permitted assigns. Each Indemnified Party and each Indemnified Party shall be an express third party beneficiary of this Agreement.

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Section 12.6 <u>Term of this Agreement</u>.

This Agreement, including the Borrower's representations and covenants set forth in <u>Articles</u> <u>IV</u> and <u>V</u>, and the Collateral Manager's representations, covenants and duties set forth in <u>Articles</u> <u>IV</u> and <u>V</u>, create and constitute the continuing obligation of the parties hereto in accordance with its terms, and shall remain in full force and effect during the Covenant Compliance Period; <u>provided</u> that the rights and remedies with respect to any breach of any representation and warranty made or deemed made by the Borrower or the Collateral Manager pursuant to <u>Articles</u> <u>IV</u> and <u>V</u>, the provisions, including the indemnification and payment provisions, of <u>Article</u> <u>X</u>, <u>Section</u> <u>2.13</u>, <u>Section</u> <u>12.9</u>, <u>Section</u> <u>12.10</u> and <u>Section</u> <u>12.11</u>, shall be continuing and shall survive any termination of this Agreement.

Section 12.7 <u>Governing Law; Jury Waiver</u>.

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREUNDER.

Section 12.8 <u>Consent to Jurisdiction; Waivers</u>.

Each of the Borrower, the Collateral Manager, the Lenders, the Collateral Agent and the Administrative Agent hereby irrevocably and unconditionally:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Transaction Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York sitting in New York City, the courts of the United States for the Southern District of New York, and appellate courts from any thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient forum and agrees not to plead or claim the same;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to its address as provided in <u>Section</u> <u>12.2</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this <u>Section</u> <u>12.8</u> any special, exemplary, punitive or consequential damages.

Section 12.9 <u>Costs and Expenses</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In addition to the rights of indemnification granted to the Indemnified Parties under <u>Article</u> <u>X</u> hereof, each of the Transferor and Borrower agrees to pay on demand all reasonable out-of-pocket costs and expenses of the Administrative Agent, the Collateral Agent, the Custodian, the Securities Intermediary and the Secured Parties incurred in connection with the preparation, execution, delivery, administration (including periodic auditing and reporting), renewal, amendment or modification of, or any waiver or consent issued in connection with, this Agreement and the other documents to be delivered hereunder or in connection herewith, including the reasonable fees and out-of-pocket expenses of a single external counsel for each of (x) the Administrative Agent and the Lenders and (y) the Collateral Agent, the Custodian and the Securities Intermediary (plus additional local counsel as reasonably necessary), in each case with respect thereto and with respect to advising such Secured Parties as to their respective rights and remedies under this Agreement and the other documents to be delivered hereunder or in connection herewith, and all costs and expenses, if any (including reasonable counsel fees and expenses), incurred by the Administrative Agent, the Collateral Agent, the Custodian, the Securities Intermediary or the Secured Parties in connection with the enforcement of this Agreement by such Person and the other documents to be delivered hereunder or in connection herewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Borrower shall pay on the Payment Date following receipt of a request therefor, all other costs and expenses that have been invoiced at least two (2) Business Days prior to such Payment Date and incurred by the Administrative Agent and the Secured Parties, in each case in connection with periodic audits of the Loan Parties' books and records, the Collateral, the Underlying Instruments, and the information contained in the Borrowing Base Certificates and Payment Date Reports.

Section 12.10 <u>No Proceedings</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each of the parties hereto (other than the Administrative Agent) hereby agrees that it will not institute against, or join any other Person in instituting against, the Borrower any Insolvency Proceeding so long as there shall not have elapsed one (1) year and one (1) day (or such longer preference period and one (1) day as shall then be in effect) since the end of the Covenant Compliance Period. The provisions of this <u>Section</u> <u>12.10</u> are a material inducement for the Secured Parties to enter into this Agreement and the transactions contemplated hereby and are an essential term hereof. The parties hereby agree that monetary damages are not adequate for a breach of the provisions of this <u>Section</u> <u>12.10</u> and the Administrative Agent may seek and obtain specific performance of such provisions (including injunctive relief), including, without limitation, in any bankruptcy, reorganization, arrangement, winding up, insolvency, moratorium, winding up or liquidation proceedings, or other proceedings under U.S. federal or state bankruptcy or similar laws of any jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The provisions of this <u>Section</u> <u>12.10</u> shall survive the termination hereof.

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Section 12.11 <u>Recourse Against Certain Parties</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No recourse under or with respect to any obligation, covenant or agreement (including the payment of any fees or any other obligations) of the Administrative Agent, any Secured Party, or any Loan Party as contained in this Agreement or any other agreement, instrument or document entered into by it pursuant hereto or in connection herewith shall be had against any incorporator, affiliate, stockholder, member, officer, partner, employee, administrator, partner, organizer or director of the Administrative Agent, any Secured Party, or any Loan Party 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 the agreements of the Administrative Agent, any Secured Party, or any Loan Party contained in this Agreement and all of the other agreements, instruments and documents entered into by it pursuant hereto or in connection herewith are, in each case, solely the corporate or limited partnership obligations of the Administrative Agent, any Secured Party, or any Loan Party, and that no personal liability whatsoever shall attach to or be incurred by the Administrative Agent, any Secured Party, any Loan Party or any incorporator, stockholder, affiliate, officer, partner, employee or director of the Administrative Agent, any Secured Party, or any Loan Party under or by reason of any of the obligations, covenants or agreements of the Administrative Agent, any Secured Party, or any Loan Party contained in this Agreement or in any other such instruments, documents or agreements, or that are implied therefrom, and that any and all personal liability of the Administrative Agent, any Secured Party, or any Loan Party and each incorporator, stockholder, affiliate, officer, partner, employee administrator, partner, organizer or director of the Administrative Agent, any Secured Party, or any Loan Party, or any of them, for breaches by the Administrative Agent, any Secured Party, or any Loan Party of any such obligations, covenants or agreements, which liability may arise either at common law or at equity, by statute or constitution, or otherwise, is hereby expressly waived as a condition of and in consideration for the execution of this Agreement; <u>provided</u> that the foregoing non-recourse provisions shall in no way affect any rights the Secured Parties might have against any incorporator, affiliate, stockholder, officer, employee or director of any Loan Party to the extent of any fraud, misappropriation, embezzlement or any other financial crime constituting a felony by such Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding any contrary provision set forth herein, no claim may be made by any Loan Party or any other Person against the Administrative Agent and the Secured Parties or their respective Affiliates, directors, officers, employees, attorneys or agents for any special, indirect, consequential or punitive damages in respect to any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith; and each Loan Party hereby waives, releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No obligation or liability to any Obligor under any of the Loans is intended to be assumed by the Administrative Agent and the Secured Parties under or as a result of this Agreement and the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The provisions of this <u>Section</u> <u>12.11</u> shall survive the termination of this Agreement.

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Section 12.12 <u>Protection of Right, Title and Interest in the Collateral; Further Action Evidencing Advances</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) [Reserved].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Borrower agrees that from time to time, at its expense, it will promptly authorize, execute and deliver all instruments and documents, and take all actions, that the Administrative Agent may reasonably request in writing in order to perfect, protect or more fully evidence the security interest granted in the Collateral, or to enable the Administrative Agent or the Secured Parties to exercise and enforce their rights and remedies hereunder or under any other Transaction Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If the Borrower or the Collateral Manager fails to perform any of its obligations hereunder, the Administrative Agent or any Secured Party may upon the occurrence and during the continuation of an Event of Default (but shall not be required to) perform, or cause performance of, such obligation; and the Administrative Agent's or such Secured Party's costs and expenses incurred in connection therewith shall be payable by the Borrower as provided in <u>Article</u> <u>X</u>. The Borrower irrevocably authorizes the Administrative Agent and appoints the Administrative Agent as its attorney-in-fact to act on behalf of the Borrower (i) to execute on behalf of the Borrower as debtor and to file financing statements reasonably necessary or desirable in the Administrative Agent's sole discretion to perfect and to maintain the perfection and priority of the interest of the Secured Parties in the Collateral, including those that describe the Collateral as "all assets," or words of similar effect, and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Collateral as a financing statement in such offices as the Administrative Agent in its sole discretion deems reasonably necessary or desirable to perfect and to maintain the perfection and priority of the interests of the Secured Parties in the Collateral. This appointment is coupled with an interest, given by way of security to secure the performance of the Obligations and is irrevocable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Without limiting the generality of the foregoing, the Borrower will, not earlier than six (6) months and not later than three (3) months prior to the fifth anniversary of the date of filing of the financing statement referred to in <u>Section</u> <u>5.1(u)</u> or any other financing statement filed pursuant to this Agreement or in connection with any Advance hereunder, unless the Covenant Compliance Period shall have ended, authorize, execute and deliver and file or cause to be filed an appropriate continuation statement with respect to such financing statement.

Section 12.13 <u>Confidentiality</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each of the Administrative Agent, the Secured Parties, the Collateral Agent and each Loan Party shall maintain and shall cause each of its employees and officers to maintain the confidentiality of the Agreement and all information with respect to the other parties, including all information regarding the business and beneficial ownership of the Borrower and the Collateral Manager hereto and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that each such party and its officers and employees may (i) disclose such information to its external accountants, investigators, auditors, attorneys, investors,

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potential investors or other agents, engaged by such party in connection with any due diligence or comparable activities with respect to the transactions and Loans contemplated herein and the agents of such Persons ("<u>Excepted Persons</u>"); <u>provided</u> that each Excepted Person shall, as a condition to any such disclosure, agree for the benefit of the Administrative Agent, the Secured Parties, the Collateral Agent and the Loan Parties that such information shall be used solely in connection with such Excepted Person's evaluation of, or relationship with, the Borrower and its affiliates, (ii) disclose the existence of the Agreement, but not the financial terms thereof, (iii) disclose such information as is required by Applicable Law and (iv) disclose the Agreement and such information in any suit, action, proceeding or investigation (whether in law or in equity or pursuant to arbitration) involving any of the Transaction Documents for the purpose of defending itself, reducing its liability, or protecting or exercising any of its claims, rights, remedies, or interests under or in connection with any of the Transaction Documents. It is understood that the financial terms that may not be disclosed except in compliance with this <u>Section</u> <u>12.13(a)</u> include all fees and other pricing terms, and all Events of Default, Collateral Manager Termination Events, and priority of payment provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Anything herein to the contrary notwithstanding, each Loan Party hereby consents to the disclosure of any nonpublic information with respect to it (i) to the Administrative Agent, the Collateral Agent or the Secured Parties by each other, (ii) by the Administrative Agent, the Collateral Agent and the Secured Parties to any prospective or actual assignee or participant of any of them provided such Person agrees to hold such information confidential in accordance with the terms hereof or (iii) by the Administrative Agent, and the Secured Parties to any Rating Agency, any commercial paper dealer or other provider of a surety, guaranty or credit or liquidity enhancement to any Lender, and to any officers, directors, employees, outside accountants and attorneys of any of the foregoing, provided each such Person is informed of the confidential nature of such information and agrees to maintain the confidentiality thereof. In addition, the Secured Parties and the Administrative Agent, may disclose any such nonpublic information as required pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each of the Administrative Agent, the Secured Parties and the Collateral Agent agrees that (i) it will keep the information of the Obligors confidential in the manner required by the applicable Underlying Instruments, (ii) it will hold confidential any information provided to it by the Borrower or the Transferor in connection with a prospective Loan in the same manner and pursuant to the same procedures and exceptions that it applies to confidential information delivered directly to it when acting in the same capacity as it is acting under this Agreement, (iii) it will use any information described in <u>clauses (i)</u> and <u>(ii)</u> above only in connection with this Agreement, and (iv) if (a) the Borrower or the Transferor delivers information in connection with a Loan or a prospective Loan that was prepared by a third party (other than the Obligor or any agent thereof), and (b) such third party has entered into an agreement with the Borrower or the Transferor restricting the ability of the Borrower or the Transferor to rely on such report, it will not have any direct rights against such third party (or the party which has engaged such third party) unless otherwise expressly acknowledged and agreed to by such third party or engaging party.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding anything herein to the contrary, the foregoing shall not be construed to prohibit (i) disclosure of any and all information that is or becomes publicly known; (ii) disclosure of any and all information (a) if required to do so by any applicable statute, law, rule or regulation, (b) to any government agency or regulatory body having or claiming authority to regulate or oversee any respects of the Administrative Agent's, the Secured Parties', the Collateral Agent's or the Borrower's business or that of their respective Affiliates, (c) pursuant to any subpoena, civil investigative demand or similar demand or request of any court, regulatory authority, arbitrator or arbitration to which the Administrative Agent, the Secured Parties, the Collateral Agent or the Borrower or an officer, director, employer, shareholder or affiliate of any of the foregoing is a party, (d) in any preliminary or final offering circular, registration statement or contract or other document approved in advance by the Borrower or the Collateral Manager or (e) to any affiliate, independent or internal auditor, agent (including any potential sub-or-successor Collateral Manager), employee or attorney of the Collateral Agent having a need to know the same, <u>provided</u> that the Collateral Agent advises such recipient of the confidential nature of the information being disclosed and such person agrees to the terms hereof for the benefit of the Borrower and the Collateral Manager; or (iii) any other disclosure authorized by the Borrower or the Collateral Manager, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Notwithstanding any other provision of this Agreement, each Loan Party shall each have the right to keep confidential from the Administrative Agent and the Collateral Agent and/or the Secured Parties, for such period of time as such Loan Party determines is reasonable (i) any information that any Loan Party reasonably believes to be in the nature of trade secrets and (ii) any other information that any Loan Party or any of their respective Affiliates, or the officers, employees or directors of any of the foregoing, is required to by law as evidenced by an Opinion of Counsel.

Section 12.14 <u>Execution in Counterparts; Severability; Integration</u>.

This Agreement (including any amendment, modification or waiver in respect of this Agreement) may be executed in any number of counterparts and by different parties hereto in separate counterparts (including by e-mail or other electronic communication), each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. The words "execution," "signed," "signature," and words of similar import herein shall be deemed to include electronic or digital signatures or the keeping of records in electronic form, each of which shall be of the same effect, validity and enforceability as manually executed signatures or a paper-based recordkeeping system, as the case may be, to the extent and as provided for under applicable law, including the Electronic Signatures in Global and National Commerce Act of 2000 (15 USC § 7001 et seq.), the Electronic Signatures and Records Act of 1999 (NY State Technology Law §§ 301-309), or any other similar state laws based on the Uniform Electronic Transactions Act. Delivery of an executed counterpart signature page of this Agreement by facsimile or any such electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement. In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. This Agreement, the other Transaction Documents and any agreements or letters (including fee letters) executed in connection herewith contain the final

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and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings.

Section 12.15 <u>Waiver of Setoff</u>.

Each of the parties hereto hereby waives any right of setoff it may have or to which it may be entitled under this Agreement from time to time against any Lender or its assets.

Section 12.16 <u>Assignments by the Lenders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Lender may at any time assign, or grant a security interest or sell a participation interest in or sell any Advance or Commitment (or portion thereof) or any Note (or any portion thereof) to any Person; <u>provided</u> that, as applicable, (i) no transfer of any Advance or Commitment (or any portion thereof) or of any Note (or any portion thereof) shall be made unless such transfer is exempt from the registration requirements of the Securities Act and any applicable state securities laws or is made in accordance with the Securities Act and such laws, and is made only to either an "accredited investor" as defined in paragraphs (a)(1), (2), (3), or (7) of Rule 501 of Regulation D under the Securities Act or any entity in which all of the equity owners come within such paragraphs or to a "qualified institutional buyer" as defined in Rule 144A under the Securities Act which in each case is a "qualified purchaser" as defined in the 1940 Act, (ii) in the case of an assignment of any Advance or Commitment (or any portion thereof) or of any Note (or of any portion thereof) the assignee executes and delivers to the Collateral Manager, the Borrower and the Administrative Agent a fully executed Joinder Supplement substantially in the form of <u>Exhibit</u> <u>H</u> hereto (unless such assignee is already a Lender hereunder) and a transferee letter substantially in the form of <u>Exhibit</u> <u>G</u> hereto (a "<u>Transferee Letter</u>"), (iii) the consent of the Administrative Agent shall be required for any assignment, and (iv) so long as no Event of Default has occurred or is continuing, the consent of the Borrower (which may be by e-mail, such consent not to be unreasonably withheld, conditioned or delayed and shall be deemed given if no response is made by the Borrower within ten (10) Business Days after delivery to the Borrower of notice of a proposed assignment or sale of a participation interest) shall be required for any assignment or sale of a participation interest, other than an assignment or sale (x) to a Lender, an Affiliate of a Lender or an Approved Fund or (y) required by Applicable Law or Governmental Authority. The parties to any such assignment, grant or sale of a participation interest shall execute and deliver to such assigning Lender for its acceptance and recording in its books and records, such agreement or document as may be satisfactory to such parties. The Borrower shall not assign or delegate, or grant any interest in, or permit any Lien to (other than Permitted Liens) exist upon, any of the Borrower's rights, obligations or duties under the Transaction Documents without the prior written consent of the Administrative Agent. Notwithstanding anything contained in this Agreement to the contrary, (i) CIBC shall not need prior consent of the Borrower or any other party hereto to consolidate with or merge into any Person or convey or transfer substantially all of its properties and assets, including as part of such a transaction all or substantially all of its Advances, Commitments and Notes, to any Person, or (ii) if any Lender becomes a Defaulting Lender, unless such Lender shall have been deemed to no longer be a Defaulting Lender pursuant to <u>Section</u> <u>2.16(b)</u>, then, in each case, the Administrative Agent shall have the right to cause such Person to assign its entire interest in the Advances and Commitments and this Agreement to a transferee selected by the

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Administrative Agent prior to the occurrence of an Event of Default with the consent of the Borrower, in an assignment which satisfies the conditions set forth in the first sentence of this <u>Section</u> <u>12.16(a)</u>. Assignments shall be subject to the following additional conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) no assignments shall be made to (x) the Borrower, the Fund or any of the Borrower's, or the Fund's, respective Affiliates or Subsidiaries or (y) any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this <u>clause</u> <u>(y)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) no assignments shall be made to a natural person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) except in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender's Commitment or Loan Advances of any class, the amount of the Commitment or Loan Advances of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent in writing (which may be by e-mail), <u>provided</u> that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) 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, <u>provided</u> that this clause shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lender's rights and obligations in respect of one (1) class of Commitments or Loan Advances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500, such fee to be paid by either the assigning Lender or the assignee Lender or shared between such Lenders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower and its affiliates and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee's compliance procedures and applicable laws, including Federal and state securities laws, and containing payment instruction for such assignee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its lending offices, a copy of each transfer pursuant to <u>Section</u> <u>12.16(a)</u> delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Advances owing to, each

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Lender pursuant to the terms hereof from time to time (the "<u>Register</u>"). Transfer by a Lender of its rights hereunder or under any Note may be effected only by the recording by the Administrative Agent of the identity of the transferee in the Register. The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant's interest in the Commitments, Advances or other obligations under the Transaction Documents (the "<u>Participant Register</u>"); <u>provided</u> 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, Advances or its other obligations under any Transaction Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Advance or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Collateral Agent and the Custodian may, at any time, assign all or any part of its rights and obligations hereunder as Collateral Agent or as Custodian, as applicable; <u>provided</u>, however, that any such assignee shall (i) be a bank or other financial institution organized and doing business under the laws of the United States or of any state thereof, (ii) be authorized under such laws to exercise corporate trust powers, (iii) have a combined capital and surplus of at least $200,000,000, (iv) be subject to supervision or examination by a United States federal or state banking authority, (v) have a long-term unsecured debt rating of at least "Baa1" by Moody's and "BBB+" by S&P, (vi) have an office within the United States; (vii) be in the business of providing collateral agent services consistent with those required pursuant to this Agreement and (viii) is reasonably acceptable to the Administrative Agent and prior to the occurrence of an Event of Default the Borrower and the Collateral Manager; and <u>provided</u>, <u>further</u>, that such assignment shall not be effective unless (i), prior to such assignment, the Collateral Agent shall have given ninety (90) days written notice to the Borrower, the Collateral Manager, the Administrative Agent and each Lender describing such assignment and (ii) such assignee has assumed the responsibilities and obligations of the Collateral Agent or the Custodian, as applicable, being assigned to it in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Borrower agrees that each participant shall be entitled to the benefits of <u>Section</u> <u>2.12</u> and <u>2.13</u> (subject to the requirements and limitations therein, including the requirements under <u>Section</u> <u>2.13(g)</u> (it being understood that the documentation required under <u>Section</u> <u>2.13(g)</u> 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 <u>Section</u> <u>12.16(b)</u>; <u>provided</u> that such participant (A) agrees to be subject to the provisions of <u>Section</u> <u>2.17</u> as if it were an assignee under <u>Section</u> <u>12.16(a)</u>; and (B) shall not be entitled to receive any greater payment

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under <u>Sections 2.12</u> or <u>2.13</u>, 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; <u>provided</u>, <u>further</u>, that the terms of any such participation shall not entitle the participant to direct such Lender as to the manner in which it votes in connection with any amendment, supplement or other modification of this Agreement or any waiver or consent with respect to any departure from the terms hereof, in each case unless and to the extent that the subject matter thereof is one as to which the consent of all Lenders is required in order to approve the same.

Section 12.17 <u>Heading and Exhibits</u>.

The headings herein are for purposes of references only and shall not otherwise affect the meaning or interpretation of any provision hereof. The schedules and exhibits attached hereto and referred to herein shall constitute a part of this Agreement and are incorporated into this Agreement for all purposes.

Section 12.18 <u>Benchmark Replacement</u>. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Benchmark Replacement</u>. Notwithstanding anything to the contrary herein or in any other Transaction Document, upon the occurrence of a Benchmark Transition Event, the Benchmark Replacement determined in accordance with the definition thereof will replace such Benchmark for all purposes hereunder and under any other Transaction Document in respect of any Benchmark setting at or after 5:00 p.m. on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided by the Administrative Agent to the Borrower and the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Transaction Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders. No replacement of a Benchmark with a Benchmark Replacement pursuant to this <u>Section</u> <u>12.18(a)</u> will occur prior to the applicable Benchmark Transition Start Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Benchmark Replacement Conforming Changes</u>. In connection with the implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Transaction Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Transaction Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Notices; Standards for Decisions and Determinations</u>. The Administrative Agent will promptly notify the Borrower and the Lenders of (A) the occurrence of a Benchmark Transition Event and its related Benchmark Transition Start Date, (B) the implementation of any Benchmark Replacement, (C) the effectiveness of any Benchmark Replacement Conforming Changes, (D) the removal or reinstatement of any tenor of a Benchmark pursuant to Section <u>12.18(d)</u> below and (E) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent

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or Lender (or group of Lenders) pursuant to this <u>Section</u> <u>12.18</u>, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Transaction Document, except, in each case, as expressly required pursuant to this <u>Section</u> <u>12.18</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Unavailability of Tenor of Benchmark</u>. Notwithstanding anything to the contrary herein or in any other Transaction Document, at any time (including in connection with the implementation of a Benchmark Replacement), (A) if the then-current Benchmark is a term rate and either (1) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (2) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of "Interest Period" for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (B) if a tenor that was removed pursuant to clause (A) above either (1) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (2) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of "Interest Period" for all Benchmark settings at or after such time to reinstate such previously removed tenor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Benchmark Unavailability Period</u>. Upon the Borrower's receipt of notice of the commencement of a Benchmark Unavailability Period with respect to a given Benchmark, the Borrower may revoke any pending request for an Advance to be made during any Benchmark Unavailability Period. During any Benchmark Unavailability Period, all Advances shall bear interest at the Base Rate, computed as otherwise described herein; <u>provided</u>, however, the Administrative Agent may, in consultation with the Borrower, establish an alternative interest rate with respect to such Advances during the pendency of such period. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of the Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Base Rate.

Section 12.19 <u>Divisions</u>.

Any reference herein to a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a division of or by a limited liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a division or allocation), as if it were a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale or transfer, or similar term, as applicable, to, of or with a separate Person. Notwithstanding anything to the contrary in this Agreement, (i) any division of a limited liability company shall constitute a separate Person hereunder, and each resulting division of any limited liability company that, prior to such division, is a Subsidiary, a Loan Party, a joint venture or any other like term shall remain a

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Subsidiary, a Loan Party, a joint venture, or other like term, respectively, after giving effect to such division, to the extent required under this Agreement, and any resulting divisions of such Persons shall remain subject to the same restrictions and corresponding exceptions applicable to the pre-division predecessor of such divisions, and (ii) in no event shall the Transferor or the Borrower be permitted to effectuate a division.

Section 12.20 <u>Judgment Currency.</u>

This is an international loan transaction in which the specification of Dollars or an Eligible Foreign Currency, as the case may be (the "<u>Specified Currency</u>"), and payment in New York City, New York or the country of the Specified Currency, as the case may be (the "<u>Specified Place</u>"), is of the essence, and the Specified Currency shall be the currency of account in all events relating to Advances denominated in the Specified Currency. The payment obligations of the Borrower under this Agreement shall not be discharged or satisfied by an amount paid in another currency or in another place, whether pursuant to a judgment or otherwise, to the extent that the amount so paid on conversion to the Specified Currency and transfer to the Specified Place under normal banking procedures does not yield the amount of the Specified Currency at the Specified Place due hereunder. If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder in the Specified Currency into another currency (the "<u>Second Currency</u>"), the rate of exchange that shall be applied shall be the rate at which in accordance with normal banking procedures the Administrative Agent could purchase the Specified Currency with the Second Currency on the Business Day next preceding the day on which such judgment is rendered. The obligation of the Borrower in respect of any such sum due from it to the Administrative Agent or any Lender hereunder or under any other Transaction Document (in this Section called an "<u>Entitled Person</u>") shall, notwithstanding the rate of exchange actually applied in rendering such judgment be discharged only to the extent that on the Business Day following receipt by such Entitled Person of any sum adjudged to be due hereunder in the Second Currency such Entitled Person may in accordance with normal banking procedures purchase and transfer to the Specified Place the Specified Currency with the amount of the Second Currency so adjudged to be due; and the Borrower hereby, as a separate obligation and notwithstanding any such judgment (but subject to the provisions set forth in <u>Section</u> <u>14.12</u>), agrees to indemnify such Entitled Person against, and to pay such Entitled Person on demand, in the Specified Currency, the amount (if any) by which the sum originally due to such Entitled Person in the Specified Currency hereunder exceeds the amount of the Specified Currency so purchased and transferred.

Section 12.21 <u>Recognition of the U.S. Special Resolution Regimes</u>.

To the extent that this Agreement and/or any other Transaction Document constitutes a QFC, the Borrower agrees with each Secured Party as of the Closing Date as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In the event a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of this Agreement and/or any other Transaction Document, and any interest and obligation in or under this Agreement and/or any other Transaction Document from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement and/or

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any other the Transaction Document, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the event that a Covered Party or a BHC Act Affiliate of such Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement and/or any other Transaction Document that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement and/or any other Transaction Document were governed by the laws of the United States or a state of the United States.

Section 12.22 <u>USA PATRIOT ACT</u>.

Each Secured Party subject to the USA Patriot Act hereby notifies the Borrower that, pursuant to the requirements of the USA Patriot Act, it may be required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Secured Party to identify the Borrower in accordance with the USA Patriot Act.

Section 12.23 <u>Limited Recourse with Respect to the Transferor</u>.

The Administrative Agent and each Lender hereby acknowledges that pursuant to Section 2.12 of the Fund Operating Agreement, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets of such series only and not against the assets of the Fund. The Administrative Agent and each Lender acknowledge that recourse against the Borrower is limited to the Collateral only and not to the general assets of the Fund or the Fund's rights and interest in or relating to any other series.

**ARTICLE XIII** 

**TAX CONSIDERATIONS** 

Section 13.1 <u>A</u><u>cknowledgement of Parties</u>.

The parties hereto acknowledge and agree that, for U.S. federal income tax purposes, financial accounting and other purposes, the parties will treat the Advances and the Notes as indebtedness and not as equity interests in the Borrower unless otherwise required by Applicable Law.

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**ARTICLE XIV** 

**CUSTODIAN** 

Section 14.1 <u>Designation of Custodian</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Initial Custodian</u>. The role of Custodian with respect to the Required Loan Documents shall be conducted by the Person designated as Custodian hereunder from time to time in accordance with <u>Section</u> <u>14.2</u>. The Custodian hereby accepts such agency appointment to act as Custodian pursuant to the terms of this Agreement, until its resignation or removal as Custodian pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Successor Custodian</u>. Upon the Custodian's receipt of a Custodian Termination Notice from the Administrative Agent of the designation of a successor Custodian pursuant to the provisions of <u>Section</u> <u>14.5</u>, the Custodian agrees that it will terminate its activities as Custodian hereunder.

Section 14.2 <u>Duties of Custodian.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Appointment</u>. Each of the Borrower and the Administrative Agent hereby designate and appoint the Custodian to act as its agent and hereby authorizes the Custodian to take such actions on its behalf and to exercise such powers and perform such duties as are expressly granted to the Custodian by this Agreement. The Borrower and the Administrative Agent hereby appoint Western Alliance Trust Company, N.A. to act as Custodian, for the benefit of the Secured Parties. The Custodian hereby accepts such appointment and agrees to perform the duties and obligations with respect thereto set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Duties</u>. From the Closing Date until its removal pursuant to <u>Section</u> <u>14.5</u>, the Custodian shall perform, on behalf of the Administrative Agent and the Secured Parties, the following duties and obligations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Custodian shall take and retain custody of the Required Loan Documents delivered by the Borrower as provided in the definition of "Eligible Loan" in accordance with the terms and conditions of this Agreement, all for the benefit of the Secured Parties and subject to the Lien thereon in favor of the Collateral Agent, as agent for the Secured Parties. Prior to the first Reporting Date occurring at least five (5) Business Days following its receipt of any Required Loan Documents and the related Loan Checklist (the "<u>Review Period</u>"), the Custodian shall review the Required Loan Documents delivered to it to confirm that (A) each document contains an original or a reproduction of an original signature and (B) based on a review of the applicable note, the related initial Loan balance when entered into or obtained by the Borrower, Loan identification number and Obligor name with respect to such Loan is referenced on the related Loan Checklist and is not a duplicate Loan (such items (A) through (B) collectively, the "<u>Review Criteria</u>"). In order to facilitate the foregoing review by the Custodian, in connection with each delivery of Required Loan Documents hereunder to the Custodian, the Collateral Manager shall provide to the Custodian an electronic file (in EXCEL or a comparable format acceptable to the Custodian) listing Loan identification

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number, name of Obligor, and initial Loan balance and the related Loan Checklist per file that contains a list of all Required Loan Documents and whether they require original signatures, the Loan identification number and the name of the Obligor and the initial Loan balance when entered into or obtained by the Borrower with respect to each related Loan. If, at the conclusion of such review, the Custodian shall determine that any Review Criteria are not satisfied, the Custodian shall provide to the Collateral Manager for inclusion in the Tape delivered on the applicable Reporting Date with a list of the non-complying Loans and the applicable Review Criteria that they fail to satisfy (each a "Required Loan Document Exception"). The Collateral Manager shall have ten (10) Business Days to correct any non-compliance with any Review Criteria as stated in the preceding sentence. After the Review Period, the Custodian shall execute and deliver to the Collateral Manager and the Administrative Agent a certification substantially in the form attached hereto as <u>Exhibit J</u>, including an attached exception report. In addition, if requested in writing in the form of <u>Exhibit E</u> by the Collateral Manager and approved by the Administrative Agent within ten (10) Business Days of the Custodian's delivery of such report, the Custodian shall return the Required Loan Documents for any Loan which fails to satisfy a Review Criteria to the Borrower. Other than the foregoing, the Custodian shall not have any responsibility for reviewing any Underlying Instruments. Notwithstanding anything herein to the contrary, the Custodian's obligation to review the Required Loan Documents shall be limited to reviewing such Required Loan Documents based on the information provided on the Loan Checklist.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) In taking and retaining custody of the Required Loan Documents, the Custodian shall be deemed to be acting as the agent of the Secured Parties; <u>provided</u> that the Custodian makes no representations as to the existence, perfection or priority of any Lien on the Underlying Instruments or the instruments therein; and <u>provided</u>, <u>further</u>, that the Custodian's duties as agent shall be limited to those expressly contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) All Required Loan Documents (to the extent physically received by the Custodian) that are (i) originals or physical copies shall be kept in fire resistant vaults, rooms or cabinets at the address of the Custodian located at the Custody Facilities, or at such other office as shall be specified to the Administrative Agent, the Borrower, and the Collateral Manager by the Custodian in a written notice delivered at least thirty (30) days prior to such change and (ii) in electronic form (it being agreed that Required Loan Documents shall only be permitted to be delivered in electronic form with respect to Noteless Loans) shall be held electronically in such electronic format in which such Required Loan Documents were received. All Required Loan Documents shall be placed together with an appropriate identifying label and maintained in such a manner so as to permit retrieval and access. The Custodian shall segregate the physical Required Loan Documents on its inventory system and will not commingle the physical Required Loan Documents with any other files of the Custodian.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) On each Reporting Date, the Custodian shall provide a report to the Administrative Agent, the Borrower, and the Collateral Manager (in a form acceptable to the Administrative Agent) identifying each Loan for which it holds Required Loan

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Documents, the non-complying Loans and the applicable Review Criteria that any non-complying Loan fails to satisfy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Notwithstanding any provision to the contrary elsewhere in the Transaction Documents, the Custodian shall not have any fiduciary relationship with any party hereto or any Secured Party in its capacity as such, and no implied covenants, functions, obligations or responsibilities shall be read into this Agreement, the other Transaction Documents or otherwise exist against the Custodian. Without limiting the generality of the foregoing, it is hereby expressly agreed and stipulated by the other parties hereto that the Custodian shall not be required to exercise any discretion hereunder and shall have no investment or management responsibility. The Custodian shall not be deemed to assume any obligations or liabilities of the Borrower or Collateral Manager hereunder or under any other Transaction Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) The Administrative Agent may direct the Custodian to take any action incidental to its duties hereunder. With respect to other actions which are incidental to the actions specifically delegated to the Custodian hereunder, the Custodian 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 direction of the Administrative Agent; <u>provided</u> that, the Custodian shall not be required to take any action hereunder at the request of the Administrative Agent or otherwise if the taking of such action, in the reasonable determination of the Custodian, (x) shall be in violation of any Applicable Law or contrary to any provisions of this Agreement or (y) shall expose the Custodian to liability hereunder or otherwise (unless it has received indemnity which it reasonably deems to be satisfactory with respect thereto). In the event the Custodian requests the consent of the Administrative Agent and the Custodian does not receive a consent (either positive or negative) from the Administrative Agent within ten (10) Business Days of its receipt of such request, then the Administrative Agent shall be deemed to have declined to consent to the relevant action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) The Custodian shall not be liable for any action taken, suffered or omitted by it in accordance with the request or direction of any Secured Party, to the extent that this Agreement provides such Secured Party the right to so direct the Custodian.

Section 14.3 <u>Merger or Consolidation.</u>

Any Person (a) into which the Custodian may be merged or consolidated, (b) that may result from any merger or consolidation to which the Custodian shall be a party or (c) that may succeed to the properties and assets of the Collateral Agent substantially as a whole, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Custodian hereunder, shall be the successor to the Custodian under this Agreement and any other Transaction Document to which it is a party without further act of any of the parties to this Agreement.

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Section 14.4 <u>Custodian Compensation.</u>

As compensation for its Custodian activities hereunder, the Custodian shall be entitled to the fees and expenses of the Custodian as set forth in the Collateral Agent Fee Letter and under the Transaction Documents, payable pursuant to the extent of funds available therefor pursuant to the provisions of <u>Sections 2.7</u> and <u>2.8</u>, as applicable. The Custodian's entitlement to receive fees (other than any previously accrued and unpaid fees) shall cease on the earlier to occur of: (a) its removal as Custodian and the appointment and acceptance by the successor Custodian pursuant to <u>Section</u> <u>14.5</u>, (b) its resignation as Custodian pursuant to <u>Section</u> <u>14.7</u> of this Agreement or (c) the termination of this Agreement.

Section 14.5 <u>Custodian Removal.</u>

The Custodian may be removed, with or without cause, by the Administrative Agent (or the Borrower with the Administrative Agent's consent in its sole discretion) by notice given in writing to the Custodian (the "<u>Custodian Termination Notice</u>"); <u>provided</u> that, notwithstanding its receipt of a Custodian Termination Notice, the Custodian shall continue to act in such capacity (and, for the avoidance of doubt, so long as it continues to act in such capacity, shall continue to receive the fees and any other amounts to which it is entitled to receive in such capacity under the terms of this Agreement and the Collateral Agent Fee Letter) until a successor Custodian has been appointed and has agreed to act as Custodian hereunder.

Section 14.6 <u>Limitation on Liability.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Custodian may conclusively rely on and shall be fully protected in acting upon any written notice, electronic communication, instruction, statement, certificate, request, waiver, consent, instrument, opinion, report, letter or other paper or document furnished to it in accordance with this Agreement, which it in good faith reasonably believes to be genuine and that has been signed, sent or presented by the proper party (which in the case of any instruction from or on behalf of the Borrower shall be a Responsible Officer) or parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Custodian may consult counsel selected with due care and shall not be liable for any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Custodian shall not be liable for any error of judgment, or for any act done or step taken or omitted by it, in good faith, or for any mistakes of fact or law, or for anything that it may do or refrain from doing in connection herewith except in the case of its willful misconduct, bad faith, grossly negligent or reckless performance or omission of its duties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Custodian makes no warranty or representation and shall have no responsibility (except as expressly set forth in this Agreement) as to the content, enforceability, completeness, validity, sufficiency, value, genuineness, ownership or transferability of the Collateral, and will not be required to and will not make any representations as to the validity or value (except as expressly set forth in this Agreement) of any of the Collateral. The Custodian shall not be obligated to take any legal action hereunder that might in its reasonable judgment involve any expense or liability unless it has been furnished with an indemnity reasonably satisfactory to it.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Custodian shall have no duties or responsibilities except such duties and responsibilities as are specifically set forth in this Agreement and no covenants or obligations shall be implied in this Agreement against the Custodian.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Custodian shall not be required to expend or risk its own funds in the performance of its duties hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) It is expressly agreed and acknowledged that the Custodian is not guaranteeing performance of or assuming any liability for the obligations of the other parties hereto or any parties to the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Custodian may assume the genuineness of any such Required Loan Document it may receive and the genuineness and due authority of any signatures appearing thereon, and shall be entitled to assume that each Required Loan Document it may receive is what it purports to be. If an original "security" or "instrument" as defined in Section 8-102 and Section 9-102(a)(47) of the UCC, respectively, is or shall be or become available with respect to any Collateral to be held by the Custodian under this Agreement, it shall be the sole responsibility of the Borrower to make or cause delivery thereof to the Custodian, and the Custodian shall not be under any obligation at any time to determine whether any such original security or instrument has been or is required to be issued or made available in respect of any Collateral or to compel or cause delivery thereof to the Custodian. Without prejudice to the generality of the foregoing, the Custodian shall be without liability to the Borrower, the Collateral Manager, the Administrative Agent or any other Person for any damage or loss resulting from or caused by events or circumstances beyond the Custodian's reasonable control, including nationalization, expropriation, currency restrictions, the interruption, disruption or suspension of the normal procedures and practices of any securities market, power, mechanical, communications or other technological failures or interruptions, computer viruses or the like, fires, floods, earthquakes or other natural disasters, civil and military disturbance, acts of war or terrorism, riots, revolution, acts of God, work stoppages, strikes, national disasters of any kind, or other similar events or acts; errors by the Borrower, the Collateral Manager or the Administrative Agent (including any Responsible Officer of any thereof) in its instructions to the Custodian; or changes in applicable law, regulation or orders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Custodian may exercise any of its rights or powers hereunder or perform any of its duties hereunder either directly or, by or through agents or attorneys, and the Custodian shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed hereunder with due care by it. Neither the Custodian nor any of its affiliates, directors, officers, shareholders, agents or employees will be liable to the Collateral Manager, the Borrower or any other Person, except by reason of acts or omissions by the Custodian constituting bad faith, willful misconduct, gross negligence or reckless disregard of the Custodian's duties hereunder. The Custodian shall in no event have any liability for the actions or omissions of the Borrower, the Collateral Manager, the Administrative Agent, or any other Person, and shall have no liability for any inaccuracy or error in any duty performed by it that results from or is caused by inaccurate, untimely or incomplete information or data received by it from the Borrower, the Collateral Manager, the Administrative Agent, or another Person except to the extent that such inaccuracies or errors are caused by the Custodian's own bad faith, willful misconduct, gross negligence or reckless disregard of its duties hereunder.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) In case any reasonable question arises as to its duties hereunder, the Custodian may, prior to the occurrence of an Event of Default, request instructions from the Collateral Manager and may, after the occurrence of an Event of Default, request instructions from the Administrative Agent, and shall be entitled at all times to refrain from taking any action unless it has received instructions from the Collateral Manager or the Administrative Agent, as applicable. The Custodian shall in all events have no liability, risk or cost for any action taken pursuant to and in compliance with the instruction of the Administrative Agent. In no event shall the Custodian be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Custodian has been advised of the likelihood of such loss or damage and regardless of the form of action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) The Custodian shall not be deemed to have knowledge or notice of any matter, including an Event of Default, unless actually known to a responsible officer of the Custodian.

Section 14.7 <u>Custodian Resignation.</u>

The Custodian may resign and be discharged from its duties or obligations hereunder by giving not less than ninety (90) days written notice thereof to the Administrative Agent, the Borrower, and the Collateral Manager. For the avoidance of doubt, the Custodian shall be entitled to receive, as and when such amounts are payable in accordance with this Agreement, any fees accrued through the effective date of its resignation pursuant to and in accordance with this <u>Section</u> <u>14.7</u>. Notwithstanding anything herein to the contrary, the Custodian may not resign prior to a successor Custodian being appointed. For the avoidance of doubt, any Collateral Agent Fee shall be payable to the Custodian so resigning until such time as a successor Custodian shall have been appointed.

Section 14.8 <u>Release of Documents.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Release for Servicing</u>. From time to time and as appropriate for the enforcement or servicing of any of the Collateral, the Custodian is hereby authorized (unless and until such authorization is revoked by the Administrative Agent) to, and shall, upon written receipt from the Collateral Manager of a request for release of documents and receipt in the form annexed hereto as <u>Exhibit E</u>, release to the Collateral Manager within two (2) Business Days of receipt of such request, the related Required Loan Documents or the documents set forth in such request and receipt to the Collateral Manager. All documents so released to the Collateral Manager shall be held by the Collateral Manager in trust for the benefit of the Collateral Agent on behalf of the Secured Parties, in accordance with the terms of this Agreement. The Collateral Manager shall return to the Custodian the Required Loan Documents or other such documents (i) promptly upon the request of the Administrative Agent, or (ii) when the Collateral Manager's need therefor in connection with such enforcement or servicing no longer exists, unless the Loan shall be liquidated or sold, in which case, upon receipt of an additional request for release of documents and receipt certifying such liquidation or sale from the Collateral Manager to the Custodian in the form annexed hereto as <u>Exhibit</u> <u>E</u>, the Collateral Manager's request and receipt submitted pursuant to the first sentence of this subsection shall be released by the Custodian to the Collateral Manager.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Release for Payment</u>. Upon receipt by the Custodian of the Collateral Manager's request for release of documents and receipt in the form annexed hereto as <u>Exhibit E</u> (which certification shall include a statement to the effect that all amounts received in connection with such payment or repurchase have been credited to the Collection Account as provided in this Agreement), the Custodian shall promptly release the related Required Loan Documents to the Collateral Manager.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Limitation on Release</u>. During the occurrence and continuance of an Event of Default, the foregoing provision with respect to the release to the Collateral Manager of the Required Loan Documents and documents by the Custodian upon request by the Collateral Manager shall be operative only to the extent that the Administrative Agent have consented to such release. Promptly after delivery to the Custodian of any request for release of documents, the Collateral Manager shall provide notice of the same to the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Shipment of Required Loan Documents</u>. Written instructions as to the method of shipment and shipper(s) the Custodian is directed to utilize in connection with the transmission of Required Loan Documents in the performance of the Custodian's duties hereunder shall be delivered by the Borrower, the Collateral Manager or the Administrative Agent to the Custodian prior to any shipment of any Underlying Instruments hereunder. The Collateral Manager shall arrange for the provision of such services at the cost and expense of the Borrower (or, at the Custodian's option, the Borrower shall reimburse the Custodian for all reasonable and documented costs and expenses of the Custodian consistent with such instructions) and shall maintain such insurance against loss or damage to the Underlying Instruments as the Collateral Manager deems appropriate.

Section 14.9 <u>Return of Required Loan Documents.</u>

The Borrower may, with the prior written consent of the Administrative Agent (such consent not to be unreasonably withheld), require that the Custodian return each Required Loan Document (as applicable), respectively (a) delivered to the Custodian in error, (b) as to which the lien on the Underlying Asset has been so released pursuant to <u>Section</u> <u>8.2</u>, (c) that has been the subject of a Discretionary Sale or Substitution pursuant to <u>Section</u> <u>2.14</u> or (d) that is required to be redelivered to the Borrower in connection with the termination of this Agreement, in each case by submitting to the Custodian and the Administrative Agent a written request in the form of <u>Exhibit E</u> hereto (signed by both the Collateral Manager and the Administrative Agent) specifying the Collateral to be so returned and reciting that the conditions to such release have been met (and specifying the Section or Sections of this Agreement being relied upon for such release). The Custodian shall upon its receipt of each such request for return executed by the Borrower and the Administrative Agent promptly, but in any event within two (2) Business Days, return the Underlying Instruments so requested to the Borrower.

Section 14.10 <u>Access to Certain Documentation and Information Regarding the Collateral Portfolio.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Collateral Manager, the Borrower and the Custodian shall, at the Borrower's expense, provide to the Administrative Agent access to the Underlying Instruments and all other documentation regarding the Collateral including in such cases where the

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Administrative Agent is required in connection with the enforcement of the rights or interests of the Secured Parties, or by applicable statutes or regulations, to review such documentation, such access being afforded without charge but only (i) upon two (2) Business Days' prior written request, (ii) during normal business hours and (iii) subject to the Collateral Manager's and Custodian's normal security and confidentiality procedures; <u>provided</u> that the Administrative Agent may, and shall upon request of any Lender, permit each Lender to be included on any such review, and shall use commercially reasonable efforts to schedule any review on a day when Lenders desiring to participate in such review may be included. From time to time at the discretion of the Administrative Agent, the Administrative Agent may review the Collateral Manager's collection and administration of the Collateral in order to assess compliance by the Collateral Manager with <u>Article VI</u> and may conduct an audit of the Collateral, and Underlying Instruments in conjunction with such a review. Such review shall be reasonable in scope and shall be completed in a reasonable period of time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Without limiting the foregoing provisions of <u>Section</u> <u>14.10(a)</u>, from time to time on request of the Administrative Agent, the Custodian shall permit certified public accountants or other independent auditors acceptable to the Administrative Agent to conduct a review of the Underlying Instruments and all other documentation regarding the Collateral. Up to two such reviews per fiscal year shall be at the expense of the Borrower and additional reviews in a fiscal year shall be at the expense of the requesting Lender(s); <u>provided</u> that, after the occurrence and during the continuance of an Event of Default, any such reviews, regardless of frequency, shall be at the expense of the Borrower.

Section 14.11 <u>Custodian as Agent.</u>

The Custodian agrees that, with respect to any Underlying Instruments at any time or times in its possession, the Custodian shall be the agent of the Collateral Agent, for the benefit of the Secured Parties, for purposes of perfecting (to the extent not otherwise perfected) the Collateral Agent's security interest in the Collateral and for the purpose of ensuring that such security interest is entitled to first priority status under the UCC. For so long as the Custodian is the same entity as the Collateral Agent, the Custodian shall be entitled to the same rights, immunities, indemnities and protections afforded to the Collateral Agent hereunder.

Section 14.12 <u>Indemnification.</u>

For the avoidance of doubt, the Custodian shall be entitled to all of the benefits of the indemnification provisions to the extent and in the manner set forth in <u>Article X</u>.

[*Remainder of page intentionally left blank; signature pages follow.*]

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

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| | |
|:---|:---|
| **BORROWER:** | **BORROWER:** |
| **PENNANTPARK PRIVATE INCOME FUND SPV LLC,** as the Borrower | **PENNANTPARK PRIVATE INCOME FUND SPV LLC,** as the Borrower |
| By: PennantPark Private Income Fund, its Designated Manager | By: PennantPark Private Income Fund, its Designated Manager |
| By: | /s/ Jeffrey S. Sion |
|  | Name: Jeffrey S. Sion |
|  | Title: Authorized Signatory |

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[*Signatures continued on the following page.*]

[Signature Page to Loan and Security Agreement]

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| | |
|:---|:---|
| **COLLATERAL MANAGER:** | **COLLATERAL MANAGER:** |
| **PENNANTPARK INVESTMENT ADVISERS, LLC,** as Collateral Manager | **PENNANTPARK INVESTMENT ADVISERS, LLC,** as Collateral Manager |
| By: | /s/ Jeffrey S. Sion |
|  | Name: Jeffrey S. Sion |
|  | Title: Authorized Signatory |

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[*Signatures continued on the following page.*]

[Signature Page to Loan and Security Agreement]

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| | |
|:---|:---|
| **TRANSFEROR:** | **TRANSFEROR:** |
| **PENNANTPARK PRIVATE INCOME FUND,** as Transferor | **PENNANTPARK PRIVATE INCOME FUND,** as Transferor |
| By: | /s/ Jeffrey S. Sion |
|  | Name: Jeffrey S. Sion |
|  | Title: Authorized Signatory |

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[*Signatures continued on the following page.*]

[Signature Page to Loan and Security Agreement]

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| | |
|:---|:---|
| **ADMINISTRATIVE AGENT:** | **ADMINISTRATIVE AGENT:** |
| **CIBC BANK USA,** as the Administrative Agent | **CIBC BANK USA,** as the Administrative Agent |
| By: | /s/ Nick Koziak |
|  | Name: Nick Koziak |
|  | Title: Managing Director |
| **LENDERS:** | **LENDERS:** |
| **CIBC BANK USA,** as a Lender | **CIBC BANK USA,** as a Lender |
| By: | /s/ Nick Koziak |
|  | Name: Nick Koziak |
|  | Title: Managing Director |

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[*Signatures continued on the following page.*]

[Signature Page to Loan and Security Agreement]

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| | |
|:---|:---|
| **THE COLLATERAL AGENT:** | **THE COLLATERAL AGENT:** |
| **WESTERN ALLIANCE TRUST COMPANY, N.A.,** not in its individual capacity but solely as Collateral Agent | **WESTERN ALLIANCE TRUST COMPANY, N.A.,** not in its individual capacity but solely as Collateral Agent |
| By: | /s/ Michael J. Baker |
|  | Name: Michael J. Baker |
|  | Title: Vice President |
| **THE CUSTODIAN:** | **THE CUSTODIAN:** |
| **WESTERN ALLIANCE TRUST COMPANY, N.A.,** not in its individual capacity but solely as the Custodian | **WESTERN ALLIANCE TRUST COMPANY, N.A.,** not in its individual capacity but solely as the Custodian |
| By: | /s/ Michael J. Baker |
|  | Name: Michael J. Baker |
|  | Title: Vice President |

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[Signature Page to Loan and Security Agreement]

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**<u>Annex A</u>**

If to Borrower:

**PENNANTPARK PRIVATE INCOME FUND SPV LLC** 

1691 Michigan Avenue, Suite 500

Miami Beach, FL 33139

Attention: Admin Ops

Email: admin_ops@pennantpark.com

If to Collateral Manager:

**PENNANTPARK INVESTMENT ADVISERS, LLC**

1691 Michigan Avenue, Suite 500

Miami Beach, FL 33139

Attention: Admin Ops

Email: admin_ops@pennantpark.com

If to the Administrative Agent:

**CIBC BANK USA** 

as the Administrative Agent

120 South LaSalle Street

Chicago, Illinois 60603

Attention: Shanita Griggs

Email: Shanita.Griggs@cibc.com

Telephone: (312) 564-2936

with a copy to:

**CIBC BANK USA** 

120 S. LaSalle Street

Chicago, IL 60603

Attention: Nick Koziak

Email: Nick.Koziak@cibc.com

Telephone: (312) 564-6031

Annex A

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**<u>Annex A</u>**

If to the Collateral Agent or the Securities Intermediary:

**WESTERN ALLIANCE TRUST COMPANY, N.A.** 

800 Town & Country – Ste. 400

Houston, TX 77024

Attention: Corporate Trust –: PennantPark Private Income Fund SPV, LLC

Email: <u>PPPIFSPV@westernalliancetrust.com</u>

With copies to (which shall not constitute notice):

**WESTERN ALLIANCE TRUST COMPANY, N.A.** 

1 E. Washington Street, Ste 1400

Phoenix, AZ 85004

Attention: Corporate Trust — PennantPark Private Income Fund SPV, LLC

Email: <u>PPPIFSPV@westernalliancetrust.com</u>

If to the Custodian:

**WESTERN ALLIANCE TRUST COMPANY, N.A.** 

3601 Minnesota Drive, Suite 800

Bloomington, MN 55435

Attention: Corporate Trust — PennantPark Private Income Fund SPV, LLC

Email: <u>PPPIFSPV@westernalliancetrust.com</u>

Annex A

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**<u>Annex B</u>**

**<u>COMMITMENTS</u>**

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| | |
|:---|:---|
| Lender | Commitment |
|  CIBC Bank USA | $65000000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total:** | $**65000000** |

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Annex B