Document:

FifthStreet--Natixis-MasterTransferAgreement19

Exhibit 10.2

LOAN SALE AND CONTRIBUTION AGREEMENT
by and between
FIFTH STREET SENIOR FLOATING RATE CORP., 
as the Seller
and
FS SENIOR FUNDING LLC, 
as the Buyer
Dated as of November 1, 2013

TABLE OF CONTENTS

Page

		
	ARTICLE I
	DEFINITIONS    1

		
	Section 1.01
	Definitions    1

		
	Section 1.02
	Other Terms    4

		
	Section 1.03
	Computation of Time Periods    4

		
	Section 1.04
	Interpretation    4

		
	Section 1.05
	References    5

		
	Section 1.06
	Calculations    5

		
	ARTICLE II
	TRANSFER OF COLLATERAL LOAN ASSETS    5

		
	Section 2.01
	Sale, Transfer and Assignment    5

		
	Section 2.02
	Purchase Price    8

		
	Section 2.03
	Payment of Purchase Price    8

		
	Section 2.04
	Closing Date Collateral Loans.    9

		
	Section 2.05
	Characterization    11

		
	ARTICLE III
	CONDITIONS PRECEDENT    12

		
	Section 3.01
	Conditions Precedent to Closing    12

		
	Section 3.02
	Conditions Precedent to all Purchases    13

		
	Section 3.03
	Release of Excluded Amounts    13

		
	ARTICLE IV
	REPRESENTATIONS AND WARRANTIES    14

		
	Section 4.01
	Representations and Warranties Regarding the Seller    14

		
	Section 4.02
	Representations and Warranties of the Seller Relating to the Agreement and the Collateral    18

	
			
	 
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TABLE OF CONTENTS
(continued)
Page

		
	Section 4.03
	Representations and Warranties Regarding the Buyer    19

		
	ARTICLE V
	COVENANTS    21

		
	Section 5.01
	Affirmative Covenants of the Seller    21

		
	Section 5.02
	Negative Covenants of the Seller    23

		
	ARTICLE VI
	OPTION TO REPURCHASE AND SUBSTITUTE COLLATERAL LOANS    24

		
	Section 6.01
	Substitution of Collateral Loans    24

		
	Section 6.02
	Seller’s Optional Right to Repurchase Collateral Loans    25

		
	ARTICLE VII
	INDEMNIFICATION BY THE ORIGINATOR    25

		
	Section 7.01
	Indemnification    25

		
	Section 7.02
	Liabilities to Obligors    26

		
	Section 7.03
	Operation of Indemnities    26

		
	ARTICLE VIII
	TERM AND TERMINATION    26

		
	Section 8.01
	Termination    26

		
	ARTICLE IX
	MISCELLANEOUS    27

		
	Section 9.01
	Amendments and Waivers    27

		
	Section 9.02
	Notices, Etc    27

		
	Section 9.03
	Binding Effect; Benefit of Agreement    27

		
	Section 9.04
	Governing Law; Consent to Jurisdiction; Waiver of Objection to Venue Service of Process    27

	
			
	 
	iii
	 

TABLE OF CONTENTS
(continued)
Page

		
	Section 9.05
	Waiver of Jury Trial    28

		
	Section 9.06
	Certain Taxes    28

		
	Section 9.07
	Non-Petition    28

		
	Section 9.08
	Recourse Against Certain Parties    28

		
	Section 9.09
	Protection of Right, Title and Interest in, to and under the Collateral; Further Action Evidencing Purchases    30

		
	Section 9.10
	Execution in Counterparts; Severability; Integration    30

		
	Section 9.11
	Heading and Exhibits    31

		
	Section 9.12
	Assignment    31

		
	Section 9.13
	No Waiver; Cumulative Remedies    31

Exhibit A    Form of Assignment
Schedule I    Initial Collateral Loans

	
			
	 
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LOAN SALE AND CONTRIBUTION AGREEMENT
THIS LOAN SALE AND CONTRIBUTION AGREEMENT, dated as of November 1, 2013 (this “Agreement”), is between FIFTH STREET SENIOR FLOATING RATE CORP., a Delaware corporation (together with its successors and assigns, “Fifth Street,” and in its capacity as seller hereunder, together with its successors and assigns, the “Seller”) and FS SENIOR FUNDING LLC, a Delaware limited liability company (together with its successors and assigns, the “Buyer”).
WHEREAS, in the regular course of its business, the Seller originates and/or otherwise acquires Collateral Loans;
WHEREAS, pursuant to this Agreement, the Buyer may from time to time purchase certain assets from the Seller and the Seller may from time to time sell and/or contribute to the Buyer certain assets originated or acquired by the Seller in its normal course of business, together with, among other things, certain related security interests and rights of payment thereunder;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I 
 
DEFINITIONS
Section 1.01    Definitions.
Capitalized terms used but not defined in this Agreement shall have the meanings attributed to such terms in the Credit Agreement.  In addition, as used herein, the following defined terms shall have the following meanings:
“Agreement” means this Loan Sale and Contribution Agreement, as the same shall be amended, supplemented, restated or modified from time to time.
“Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, public body, administrative tribunal, central bank, public office, court, arbitration or mediation panel, or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of government, including the FINRA, the SEC, the stock exchanges, any Federal, state, territorial, county, municipal or other government or governmental agency, arbitrator, board, body, branch, bureau, commission, court, department, instrumentality, master, mediator, panel, referee, system or other political unit or subdivision or other entity of any of the foregoing, whether domestic or foreign.
“Buyer” shall have the meaning provided in the first paragraph of this Agreement.
“Collateral” shall have the meaning provided in Section 2.01

    

“Collateral Management Agreement” means the Collateral Management Agreement, dated as of the date hereof, by and between Fifth Street, in its capacity as the Collateral Manager, and the Buyer, as the Borrower.
“Credit Agreement” means the Credit Agreement, dated as of the date hereof, by and among the Buyer, as Borrower, Natixis, New York Branch, as Administrative Agent, U.S. Bank, National Association, as Collateral Agent and Custodian, and the Lenders from time to time party thereto, as the same may be amended, supplemented, restated or modified from time to time.
“Event of Bankruptcy” means (a) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Seller or its debts, or of all or a substantial part of its assets, under any bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of all or a receiver, trustee, custodian, sequestrator, conservator or similar official for the Seller or for all or a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 consecutive days; (b) an order or decree approving or ordering any of the actions described in clause (a) shall be entered and the continuance of any such order or decree is unstayed and in effect for a period of 60 consecutive days; or (c) the Seller shall: (i) be wound up or dissolved, (ii) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (iii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (a) of this definition, (iv) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Seller or for all or a substantial part of its assets, (v) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (vi) cease to be able to, or admit in writing its inability to, pay its debts as they become due and payable, or make a general assignment for the benefit of creditors or (vii) take any action for the purpose of effecting any of the foregoing.
“Excluded Amounts” means (a) any amount received by, on or with respect to any Collateral Loan in the Collateral, which amount is attributable to the payment of any tax, fee or other charge imposed by any applicable Authority on such Collateral Loan and to the extent such amount is attributable to a time prior to the Purchase Date, (b) any amount representing escrows relating to taxes, insurance and other amounts in connection with any Collateral Loan which is held in an escrow account for the benefit of the related Obligor and the secured party (other than the Seller in its capacity as lender with respect to such Collateral Loan) pursuant to escrow arrangements, (c) any amount with respect to any Collateral Loan repurchased or substituted by the Seller under Article VI to the extent such amount is attributable to a time after the effective date of such repurchase or substitution, (d) any origination fee retained by the Seller in connection with the origination of any Collateral Loan and (e) any Equity Security related to any Collateral Loan that the Seller determines will not be transferred to the Buyer by the Seller in connection with the sale of any related Collateral Loan hereunder.
“Fifth Street” shall have the meaning provided in the first paragraph of this Agreement.
“Governmental Authorizations” means all franchises, permits, licenses, approvals, consents, orders and other authorizations of all Authorities.

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“Governmental Filings” means all filings, including franchise and similar tax filings, and the payment of all fees, assessments, interests and penalties associated with such filings with all Authorities.
“Indemnified Party” shall have the meaning provided in Section 7.01.
“Loan List” means the list of Collateral Loans provided by the Seller to the Buyer on each Purchase Date and incorporated as Schedule I to this Agreement by reference, as such list may be amended, supplemented or modified from time to time in accordance with this Agreement.
“Participation” shall have the meaning provided in Section 2.04(a).
“Payment in Full” means payment in full in cash of all Obligations (other than any unasserted contingent obligations), including without limitation all principal, interest, Commitment Fees, Administrative Expenses and fees, if any, payable under the Engagement Letter or any fee letter entered into in connection with the Loan Documents.
“Payment in Full Date” means the date on which a Payment in Full occurs and the Commitments are terminated.
“Purchase” means a purchase, transfer, settlement or other acquisition by the Buyer of Collateral from or as directed by the Seller pursuant to Section 2.01.
“Purchase Date” means any day on which any Collateral is acquired by the Buyer pursuant to the terms of this Agreement (including any Substitution Date), and including, for the avoidance of doubt, any day on which any Collateral is settled directly with the Buyer from a third party in a transaction intermediated, arranged and underwritten by the Seller and any day on which any Collateral is settled with the Buyer in a transaction in which the Buyer is the designee of the Seller under the instruments of conveyance relating to the applicable Collateral.
“Purchase Price” shall have the meaning provided in Section 2.02.
"Rating Condition" means, with respect to any action taken by the Seller specified in Section 5.02(e), a condition that is satisfied if DBRS has been notified in writing by the Borrower of such action or proposed action and none of the Borrower, the Collateral Manager, the Seller or any of the Secured Parties has received a written communication (including by electronic messages, facsimile, press release, posting to its internet website, or other means deemed acceptable to DBRS) objecting to such action or proposed action from DBRS within 10 Business Days following such notification by the Borrower; provided that such 10 Business Day period may be waived in writing by DBRS in its sole discretion.  If at any time the Loans are not then rated by DBRS, the Rating Condition will automatically be deemed to be satisfied at such time with respect to any action or proposed action.
“Related Contracts” means all credit agreements, indentures, notes, security agreements, leases, financing statements, guaranties, and other contracts, agreements, instruments and other papers evidencing, securing, guaranteeing or otherwise relating to any Collateral Loan or Eligible Instrument or other investment with respect to any Collateral or proceeds thereof (including the 

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related Underlying Instruments), together with all of the Seller’s right, title and interest in, to and under all property or assets securing or otherwise relating to any Collateral Loan or other loan or security of the Seller or Eligible Instrument or other investment with respect to any Collateral or proceeds thereof or any Related Contract.
“Replaced Loan” shall have the meaning provided in Section 6.01.
“Repurchase Price” means, on any date of determination with respect to any Credit Risk Loan or Defaulted Loan with respect to which the Seller elects to exercise its option to repurchase pursuant to Section 6.02 of this Agreement, an amount equal to at least the Market Value of such Credit Risk Loan or Defaulted Loan in accordance with Section 10.1(a)(vii) of the Credit Agreement. 
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, all as from time to time in effect, or any successor law, rules or regulations, and any reference to any statutory or regulatory provisions shall be deemed to be a reference to any successor statutory or regulatory provision.
“Seller” shall have the meaning provided in the first paragraph of this Agreement.
“Substitute Loan” shall have the meaning provided in Section 6.01. 
“Substitution Date” means any date on which the Seller transfers a Substitute Loan to the Buyer.
Section 1.02    Other Terms.
All accounting terms used but not specifically defined herein shall be construed in accordance with generally accepted accounting principles in the United States.  The symbol “$” shall mean the lawful currency of the United States of America.  All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9.
Section 1.03    Computation of Time Periods.
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,” the words “to” and “until” each mean “to but excluding”.
Section 1.04    Interpretation.
In this Agreement, unless a contrary intention appears:
(i)    the singular number includes the plural number and vice versa;
(ii)    reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by the Loan Documents;
(iii)    references to “including” means “including, without limitation”;

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(iv)    reference to day or days without further qualification means calendar days;
(v)    unless otherwise stated, reference to any time means New York, New York time;
(vi)    references to “writing” include printing, typing, lithography, electronic or other means of reproducing words in a visible form;
(vii)    reference to any agreement (including any Loan Document), document or instrument means such agreement, document or instrument as amended, modified, supplemented, replaced, restated, waived or extended and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of the other Loan Documents, and reference to any promissory note includes any promissory note that is an extension or renewal thereof or a substitute or replacement therefore; and
(viii)    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.
Section 1.05    References.
All section references (including references to the preamble), unless otherwise indicated, shall be to Sections (and the preamble) in this Agreement.
Section 1.06    Calculations.
Except as otherwise provided herein, all interest rate and basis point calculations hereunder will be made on the basis of a 360 day year and the actual days elapsed in the relevant period and will be carried out to at least three decimal places.
ARTICLE II     
 
TRANSFER OF COLLATERAL LOAN ASSETS
Section 2.01    Sale, Transfer and Assignment.
(a)    On the terms and subject to the conditions set forth in this Agreement (including the conditions to purchase set forth in Article III), on each Purchase Date, the Seller hereby sells, transfers, assigns, sets over and otherwise conveys to the Buyer, and the Buyer hereby Purchases and takes from the Seller all right, title and interest (whether now owned or hereafter acquired or arising and wherever located) of the Seller (including all obligations of the Seller as lender to fund any Revolving Collateral Loan or Delayed Funding Loan conveyed by the Seller to Buyer hereunder which obligations Buyer hereby assumes) in the property identified in clauses (i) - (v) below and all accounts, cash and currency, chattel paper, tangible chattel paper, electronic chattel paper, 

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copyrights, copyright licenses, equipment, fixtures, general intangibles, instruments, commercial tort claims, deposit accounts, inventory, investment property, letter-of-credit rights, accessions, proceeds and other property consisting of, arising out of, or related to any of the following (in each case excluding the Excluded Amounts) (collectively, the “Collateral”):
(i)    the Collateral Loans listed on each Loan List delivered by the Seller to the Buyer from time to time pursuant to this Agreement and all monies due, to become due or paid in respect of such Collateral Loans on and after the related Purchase Date, including but not limited to all Collections and other recoveries thereon, in each case as they arise after the related Purchase Date;
(ii)    all Liens with respect to the Collateral Loans referred to in clause (i) above; 
(iii)    all Related Contracts with respect to the Collateral Loans referred to in clause (i) above;
(iv)    all collateral security granted under any Related Contracts; and
(v)    all income and proceeds of the foregoing.
For the avoidance of doubt, and without limiting the foregoing, the term “Collateral” shall, for all purposes of this Agreement, be deemed to include any Collateral Loan settled directly with the Buyer from a third party in a transaction intermediated, arranged and underwritten by the Seller or any Collateral Loan acquired by the Buyer in a transaction in which the Seller passes its equitable title to the Buyer as designee of the Seller under the instruments of conveyance relating to the applicable Collateral Loan.
Seller agrees that for any transaction intermediated, arranged and underwritten by the Seller in which a Collateral Loan or Eligible Investment is settled directly with the Buyer or with respect to any Collateral Loan or Eligible Investment acquired by the Buyer in a transaction in which the Buyer is designee of the Seller, in each such case, the Seller shall have held a beneficial interest in such Collateral Loan or Eligible Investment for a period of at least 48 hours before such settlement or acquisition by the Buyer.
(b)    From and after each Purchase Date, the Collateral listed on the Loan List shall be deemed to be Collateral hereunder.
(c)    On any Purchase Date with respect to the Collateral to be acquired by the Buyer on that date, the Seller shall be deemed to, and hereby does, reaffirm and certify to the Buyer, the Collateral Agent, on behalf of the Secured Parties, and the Administrative Agent, as of such Purchase Date, that each of the representations and warranties in Section 4.02 is true and correct as of such Purchase Date.
(d)    Except as specifically provided in this Agreement, the sale and purchase of Collateral under this Agreement shall be without recourse to the Seller; it being understood that the Seller shall be liable to the Buyer for all representations, warranties, covenants and indemnities made by 

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the Seller pursuant to the terms of this Agreement, all of which obligations are limited so as not to constitute recourse to the Seller for the credit risk of the Obligors.
(e)    In connection with each Purchase of Collateral as contemplated by this Agreement, the Buyer hereby directs the Seller to, and the Seller agrees that it will deliver in accordance with the Credit Agreement, or cause to be delivered in accordance with the Credit Agreement (on behalf of the Borrower), to the Custodian, as agent and custodian for the Collateral Agent, each Collateral Loan being transferred to the Buyer on such Purchase Date in accordance with the applicable provisions of the Credit Agreement.  Each item of Collateral shall be delivered to the Custodian by:
(i)    with respect to such of the Collateral as constitutes an instrument, tangible chattel paper, a negotiable document, or money, causing the Custodian to take possession of such instrument indorsed to the Custodian or in blank, or such money, negotiable document, or tangible chattel paper, in the State of New York separate and apart from all other property held by the Custodian; 
(ii)    with respect to such of the Collateral as constitutes a certificated security in bearer form, causing the Custodian to take possession of the related security certificate in the State of New York;
(iii)    with respect to such of the Collateral as constitutes a certificated security in registered form, causing the Custodian to take possession of the related security certificate in the State of New York, indorsed to the Custodian or in blank by an effective indorsement, or registered in the name of the Custodian, upon original issue or registration of transfer by the issuer of such certificated security;
(iv)    with respect to such of the Collateral as constitutes an uncertificated security, causing the issuer of such uncertificated security to register the Custodian or its nominee for the account of the Custodian as the registered owner of such uncertificated security;
(v)    with respect to such of the Collateral as constitutes a security entitlement, causing the Securities Intermediary to indicate by book entry that the financial asset relating to such security entitlement has been credited to the Custodial Account;
(vi)    with respect to such of the Collateral as constitutes a deposit account, causing such deposit account to be established and maintained in the name of the Collateral Agent or the Custodian, as applicable, by a bank the jurisdiction of which for purposes of the UCC is the State of New York; and
(vii)    taking such additional or alternative procedures as may hereafter become appropriate to grant a first priority, perfected security interest in such items of the Collateral to the Collateral Agent, consistent with applicable law or regulations.
If any item of Collateral is a financial asset issued by an issuer that is not the United States of America, an agency or instrumentality thereof, or some other United States person or entity, and 

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if such item cannot be delivered as set forth above, such item may be delivered by the Collateral Agent holding such item in an account created and maintained in the name of the Collateral Agent with a banking or securities institution or a clearing agency or system located outside the United States such that the Collateral Agent holds a first priority, perfected security interest in such item of Collateral.
The Seller shall record and file (or cause to be recorded or filed) on or before the related Purchase Date all financing statements, and the Seller agrees to record and file (or cause to be recorded or filed) after the related Purchase Date all appropriate financing statements, continuation statements, and other amendments, meeting the requirements of applicable law in such manner and in such jurisdictions as are necessary to perfect and protect the interests of the Collateral Agent and the Secured Parties in the Collateral under the applicable Uniform Commercial Code against all creditors of and purchasers from the Seller.  The Seller promptly shall deliver (or cause to be delivered) file-stamped copies of such financing statements, continuation statements, and amendments to the Collateral Agent and the Administrative Agent.  The Seller shall also take such action requested by the Buyer or the Administrative Agent, from time to time hereafter, that may be necessary or appropriate to ensure that the Buyer has an enforceable ownership interest and its assigns under the Credit Agreement have an enforceable and perfected security interest in the Collateral Purchased by the Buyer as contemplated by this Agreement.
(f)    In connection with the Purchase by the Buyer of the Collateral as contemplated by this Agreement, the Seller further agrees that it will, at its own expense, indicate clearly and unambiguously in its computer files and its financial statements, on or prior to each Purchase Date, that such Collateral has been Purchased by the Buyer in accordance with this Agreement.
(g)    The Seller further agrees to deliver to the Buyer on or before each Purchase Date a computer file containing a true, complete and correct Loan List (which shall contain the related Principal Balance, outstanding principal balance, loan number and Obligor name for each Collateral Loan) as of the related Purchase Date.  Such file or list shall be marked as Schedule I to this Agreement, shall be delivered to the Buyer as confidential and proprietary, and is hereby incorporated into and made a part of this Agreement as such Schedule I may be supplemented and amended from time to time.
Section 2.02    Purchase Price.
The purchase price for each item of Collateral (including each Closing Date Collateral Loan) sold to the Buyer by the Seller under this Agreement shall be a dollar amount equal to the fair market value thereof as determined from time to time by the Seller and the Buyer and each such transaction shall be on terms no less favorable to the Buyer than it would obtain in an comparable arm’s length transaction with a Person that is not an Affiliate (in each case, the “Purchase Price”).
Section 2.03    Payment of Purchase Price.
(a)    The transfer of the Closing Date Collateral Loans from the Seller to the Buyer on the Closing Date will be in consideration for a capital contribution by the Seller to the Buyer. For any subsequent transfer or purchases the Purchase Price for any Collateral sold by the Seller to the 

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Buyer on any Purchase Date shall be paid in a combination of (i) immediately available funds in cash and (ii) if the Buyer does not have sufficient funds in cash to pay the full amount of the Purchase Price, by means of a capital contribution by the Seller to the Buyer.
(b)    The Purchase Price for any Collateral Purchased by the Buyer to be settled directly with a third party on any Purchase Date shall be paid in immediately available funds, which may comprise, if the Buyer does not have sufficient funds in cash to pay the full amount of the Purchase Price (after taking into account any Loan the Buyer expects to receive pursuant to the Credit Agreement), amounts contributed by the Seller to the Buyer.
(c)    Notwithstanding any provision herein to the contrary, the Seller may on any Purchase Date elect to designate all or a portion of the Collateral proposed to be transferred to the Buyer on such date as a capital contribution to the Buyer.  In such event, the cash portion of the Purchase Price payable with respect to such transfer shall be reduced by that portion of the Purchase Price of the Collateral that was so contributed; provided that Collateral contributed to the Buyer as capital shall constitute Collateral for all purposes of this Agreement.  To the extent the fair market value of any Collateral purchased or acquired by replacement and substitution by Buyer pursuant to this Agreement exceeds the amount of cash paid or other consideration exchanged therefore, such excess shall be deemed to be a capital contribution from the Seller to the Buyer.
(d)    The Seller, in connection with each Purchase hereunder relating to any Collateral, shall be deemed to have certified, and hereby does certify, with respect to the Collateral to be Purchased by the Buyer on such day, that its representations and warranties contained in Article IV are true and correct in all material respects on and as of such day, with the same effect as though made on and as of such day.
(e)    Upon the payment of the Purchase Price for any Purchase, title to the Collateral included in such Purchase shall vest in Buyer, whether or not the conditions precedent to such Purchase and the other covenants and agreements contained herein were in fact satisfied; provided that Buyer shall not be deemed to have waived any claim it may have under this Agreement for the failure by the Seller in fact to satisfy any such condition precedent, covenant or agreement.
(f)    The Seller and the Buyer acknowledge and agree that, solely for administrative convenience, any transfer document or assignment agreement (or, in the case of any underlying promissory note, any chain of endorsement) required to be executed and delivered in connection with the transfer of a Collateral Loan in accordance with the terms of any Related Contracts may reflect that the Seller is assigning such Collateral Loan directly to the Buyer.  Nothing in such assignment agreements shall be deemed to impair the transfers of the Collateral Loans by the Seller to the Buyer in accordance with the terms of this Agreement.  The Seller shall hold the beneficial interest in such Collateral Loan for a period of at least 48 hours and the Seller shall sell and transfer such Collateral Loan to the Buyer in accordance with the terms of this Agreement.
Section 2.04    Closing Date Collateral Loans.    
(a)    On the Closing Date, (i) the Seller shall sell, transfer, assign, grant and convey without recourse, except as otherwise provided herein, to Buyer, and Buyer shall purchase from Seller on 

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terms no less favorable to Buyer than it would obtain in a comparable arm’s length transaction with a Person that is not an Affiliate, a 100% undivided participation interest in Seller’s interests in the Closing Date Collateral Loans and the Collateral relating thereto (collectively, the “Participation”), the legal title to which is held by the Seller, and (ii) the Buyer hereby acquires the Participation and assumes and agrees to perform and comply with all assumed obligations of the Seller with respect to each Closing Date Collateral Loan.  Other than for tax and accounting purposes, the parties hereby agree to treat the transfer of the Participation by Seller to Buyer as a sale and purchase on all of their respective relevant books and records.
(b)    The Seller and the Buyer hereby acknowledge and agree that (i) the sale, transfer, assignment, grant and conveyance of the Participation is being effectuated pursuant to this Agreement instead of an assignment of Seller’s legal interest in and title (which such legal interest and title will not be effective until the individual assignments become effective) to the Closing Date Collateral Loans and the Collateral related thereto because the conditions precedent under the Related Contracts to the transfer, assignment and conveyance of Seller’s legal interest in and title to the Closing Date Collateral Loans and the Collateral related thereto may not be fully satisfied as of the Closing Date and (ii) the sale, transfer, grant and conveyance of the Participation hereunder shall have the consequence that the Seller does not have an equitable interest in the Closing Date Collateral Loans and the Collateral related thereto and Buyer holds 100% of the equitable interest in the Closing Date Collateral Loans and the Collateral relating thereto. At no additional cost to Buyer, the Seller will prepare individual assignments consistent with the requirements of the Related Contracts and provide them to any Persons required under the Related Contracts, which assignments will become effective in accordance with the Related Contracts upon obtaining certain consents thereto or upon the passage of time or both.  The Seller and the Buyer agree to use their commercially reasonable efforts to cause such assignments to become effective prior to the end of the Assignment Period.  Upon any such assignment becoming effective, the related asset shall no longer be a Closing Date Collateral Loan, legal title will be transferred to the Buyer and the Participation with respect to such Closing Date Collateral Loan and Collateral relating thereto will terminate automatically. In addition, upon any such assignment becoming effective, Seller and Buyer agree, for administrative convenience, that Seller shall, in accordance with the Credit Agreement (on behalf of the Borrower) transfer or cause the transfer of the Closing Date Collateral Loan and the Collateral related thereto directly to the Custodian, as agent and custodian for the Collateral Agent, each assigned Closing Date Collateral Loan being transferred to the Buyer.  Each item shall be delivered to the Custodian in accordance with Section 2.01(e)(i).
Seller shall direct all Obligors, administrative agents and loan agents (as applicable) with respect to the participated Closing Date Collateral Loans and the Collateral related thereto to pay any Collections with respect thereto into the Collection Account. Upon Seller's receipt of any Collections, Buyer hereby instructs Seller to remit, and Seller shall remit, or cause its custodian to remit, such Collections (other than any Excluded Amounts, which shall be retained by Seller) within two Business Days of its receipt thereof directly to the Collection Account.
Upon receipt by Buyer or the Collateral Agent of the effective assignment of any Closing Date Collateral Loans and the Collateral participated pursuant to this Section 2.04, Seller, for value received, hereby sells, assigns, transfers and conveys to Buyer, and Buyer hereby irrevocably 

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purchases and assumes from Seller (i) all of Seller’s right, title and interest in, to and under the assigned Closing Date Collateral Loans and (ii) all right, title and interest with respect thereto. 
(c)    The Seller shall not be obligated to make any payment to the Buyer in anticipation of the receipt of funds from the related Obligor with respect to any Participation.  If the Seller is required at any time to return to a trustee, receiver, liquidator, custodian or other similar official any portion of the payments made by the Obligor to the Seller and transferred by the Seller to (and paid to) the Buyer, then the Buyer shall, on demand of the Seller, forthwith return to the Seller any such payments transferred (and paid) to the Buyer by the Seller in respect of the Participation, but without interest on such payments (unless the Seller is required to pay interest on such amounts to the Person recovering such payments).
(d)    In the event that any Closing Date Collateral Loan is not fully assigned by the Assignment Period Backstop Date, the Seller may optionally repurchase such Closing Date Collateral Loan from the Buyer in accordance with the definition of “Non-Elevation Repurchase” set forth in the Credit Agreement. 
(e)    The Seller hereby grants to the Buyer a security interest in all of the Seller’s right, title and interest in the Closing Date Collateral Loans and the Collateral relating thereto to secure the prompt and complete payment of all of the Seller obligations with respect to the Participation and all of the Seller’s obligations under this Section 2.04. The Buyer shall have, in addition to the rights and remedies which it may have under this Agreement, all other rights and remedies provided to a secured creditor under the UCC and other applicable law, which rights and remedies shall be cumulative. The Seller authorizes Buyer, the Administrative Agent and the Collateral Agent on behalf of the Secured Parties to file UCC financing statements naming the Seller as “debtor”, the Buyer as “assignor secured party” and the Collateral Agent as “assignee secured party”, or similar applicable designations, and describing the Collateral, in each jurisdiction that the Buyer deems necessary in order to protect the security interests in the Collateral granted under this Section 2.04.
Section 2.05    Characterization.
It is the intention of the parties hereto that the conveyance of all right, title and interest in, to and under the Collateral (including, without limitation, the Closing Date Collateral Loans) to the Buyer as provided in this Article II shall constitute an absolute sale, conveyance and transfer conveying good title, free and clear of any Lien and that the Collateral shall not be part of the Seller’s bankruptcy estate in the event of an Event of Bankruptcy with respect to the Seller.  Furthermore, it is not intended that such conveyance be deemed a pledge of the Collateral Loans and the other Collateral to the Buyer to secure a debt or other obligation of the Seller.  If, however, notwithstanding the intention of the parties, the conveyance provided for in this Article II is determined to be a transfer for security and not to be an absolute sale, then this Agreement shall also be deemed to be, and hereby is, a “security agreement” within the meaning of Article 9 of the UCC and the Seller hereby grants to the Buyer a security interest in all right, title and interest in, to and under the Collateral, now existing and hereafter created, to secure the prompt and complete payment of a loan deemed to have been made in an amount equal to the aggregate Purchase Price of the Collateral together with all of the other obligations of the Seller hereunder.  The Buyer shall have, in addition to the rights and remedies which it may have under this Agreement, all other rights and remedies 

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provided to a secured creditor under the UCC and other applicable law, which rights and remedies shall be cumulative. The  Seller's authorizes Buyer, the Administrative Agent and the Collateral Agent on behalf of the Secured Parties to file UCC financing statements naming the Seller as “debtor”, the Buyer as “assignor secured party” and the Collateral Agent as “assignee secured party”, or similar applicable designations, and describing the Collateral, in each jurisdiction that the Buyer deems necessary in order to protect the security interests in the Collateral granted under this Section 2.05.
ARTICLE III     
 
CONDITIONS PRECEDENT
Section 3.01    Conditions Precedent to Closing.
The closing hereunder is subject to the conditions precedent that (i) each of the conditions precedent to the execution, delivery and effectiveness of each other Loan Document (other than a condition precedent in any such other Loan Document relating to the effectiveness of this Agreement) shall have been fulfilled, and (ii) on or prior to the Closing Date, the Seller shall have delivered to the Buyer each of the items specified below in form and substance satisfactory to the Buyer.
(a)    Counterparts of this Agreement executed on behalf of the Seller.
(b)    All documents and information necessary to complete the Exhibit and Schedule to this Agreement, including the current Loan List (Schedule I hereto).
(c)    Certificate from an Authorized Officer of the Seller, dated as of the date of this Agreement, certifying as to and attaching (i) its Constituent Documents, (ii) its resolutions or other action of its board of directors or members approving, among other things, this Agreement and the transactions contemplated hereby, (iii) the incumbency and specimen signature of each of its Authorized Officers authorized to execute this Agreement and the other documents to be delivered by it hereunder (on which certificate the Buyer may conclusively rely), (iv) a good standing certificate from its state or jurisdiction of incorporation or organization and any other state or jurisdiction in which it is qualified to do business in which the failure to be so qualified would reasonably be expected to have a Material Adverse Effect.
(d)    Filed UCC-1 financing statements delivered by the Seller, as debtor, naming the Buyer, as secured party, and the Collateral Agent, as assignee, for the benefit of the Secured Parties, describing the Collateral and meeting the requirements of the laws of each jurisdiction in which it is necessary or reasonably desirable, or in which the Seller is required by applicable law, and in such manner as is necessary or reasonably desirable, to perfect the conveyance of the Collateral to the Buyer.

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Section 3.02    Conditions Precedent to all Purchases.
The obligations of the Buyer to Purchase the Collateral from the Seller on any Purchase Date (including the initial Purchase Date) shall be subject to the satisfaction of the following conditions precedent that:
(a)    all representations and warranties of the Seller contained in Sections 4.01 and 4.02 shall be true and correct in all material respects on and as of such date as though made on and as of such date and shall be deemed to have been made on and as of such date (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date);
(b)    the Seller shall have delivered to the Buyer a duly completed Loan List that is true, accurate and complete in all respects as of the related Purchase Date, which list shall be as of such date incorporated into and made a part of this Agreement;
(c)    on and as of such Purchase Date, the Seller shall have performed all of the obligations, covenants and agreements required to be performed by it on or prior to such date pursuant to the provisions of this Agreement, including ensuring that all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Buyer’s ownership interest in the Collateral Loans have been duly filed; 
(d)    no event has occurred and is continuing, or would result from such Purchase, that constitutes an Event of Default (unless such purchase would cure such Event of Default) and the Buyer makes such Purchase in accordance with the applicable provisions hereof and of the Credit Agreement;
(e)    except in connection with the transfer of a Substitute Loan in accordance with the provisions of this Agreement and of the Credit Agreement, the final day of the Reinvestment Period shall not have occurred; 
(f)    the Purchase Date shall be a Business Day falling during the Commitment Period; 
(g)    no applicable law shall prohibit or enjoin, and no order, judgment or decree of any federal, state or local court or governmental body, agency or instrumentality shall prohibit or enjoin, the making of any such Purchase by the Buyer in accordance with the provisions hereof; and
(h)    all corporate and legal proceedings and all instruments in connection with the transactions contemplated by this Agreement shall be reasonably satisfactory in form and substance to the Buyer and its assignees, and the Buyer shall have received from the Seller copies of all documents (including, without limitation, records of corporate proceedings, approvals and opinions) relevant to the transactions herein contemplated as the Buyer may reasonably have requested.
Section 3.03    Release of Excluded Amounts.
The parties acknowledge and agree that the Buyer has no interest in the Excluded Amounts.  Promptly upon the receipt by or release to the Buyer of any Excluded Amounts, the Buyer hereby 

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irrevocably agrees to deliver and release to the Seller such Excluded Amounts, which release shall be automatic and shall require no further act by the Buyer; provided that the Buyer shall execute and deliver such instruments of release and assignment or other documents, or otherwise confirm the foregoing release of such Excluded Amounts, as may be reasonably requested by the Seller in writing.
ARTICLE IV     
 
REPRESENTATIONS AND WARRANTIES
Section 4.01    Representations and Warranties Regarding the Seller.
As of the Closing Date and as of each Purchase Date, the Seller represents and warrants to the Buyer for the benefit of the Buyer and each of its successors and assigns that:
(a)    Due Organization. The Seller is a corporation duly incorporated and validly existing under the laws of the State of Delaware, with full power, authority and legal right to own its assets and properties, conduct the business in which it is now engaged and to execute and deliver and perform its obligations under this Agreement and the other Loan Documents to which it is a party.  
(b)    Due Qualification and Good Standing.  The Seller is in good standing in the State of Delaware.  The Seller is duly qualified to do business and, to the extent applicable, is in good standing and has obtained all material governmental licenses and approvals as required in Delaware and each other jurisdiction in which the failure to be so qualified, maintain good standing or obtain such license or approval, is likely to have a Material Adverse Effect.
(c)    Due Authorization; Execution and Deliver; Legal, Value and Binding; Enforceability; Valid Sale.  The execution and delivery by the Seller of, and the performance of its obligations under this Agreement and the other Loan Documents to which it is a party and the other instruments, certificates and agreements contemplated hereby and thereby are within its powers and have been duly authorized by all requisite action by it and have been duly executed and delivered by it and constitute its legal, valid and binding obligations enforceable against it in accordance with their respective terms, subject, as to enforcement, (A) to the effect of bankruptcy, insolvency or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency or similar event applicable to the Seller and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity).  This Agreement shall effect a valid sale, transfer and assignment of or grant of a security interest in the Collateral Loans from the Seller to the Buyer, enforceable against the Seller and creditors of and purchasers from the Seller, subject, as to enforcement, (A) to the effect of bankruptcy, insolvency or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency or similar event applicable to the Seller and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity). 
(d)    Non-Contravention.  None of the execution and delivery by the Seller of this Agreement or the other Loan Documents to which it is a party, the consummation of the transactions 

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herein or therein contemplated, or performance and compliance by it with the terms, conditions and provisions hereof or thereof, will (i) contravene in any material respect the terms of any Constituent Documents of the Seller, or any amendment thereof, (ii) (A) contravene in any material respect any applicable law, (B) conflict in any material respect, with or result in any breach of, any of the terms and provisions of, or constitute a default under, any indenture, loan, agreement, mortgage, deed of trust or other contractual restriction binding on or affecting it or any of its assets, or (C) contravene in any material respect any order, writ, injunction or decree binding on or affecting it or any of its assets or properties or (iii) result in a breach or violation of, or constitute a default under, any contractual obligation or any agreement or document to which it is a party or by which it or any of its assets are bound (or to which any such obligation, agreement or document relates), in each case which would have a Material Adverse Effect;
(e)    Governmental Authorizations; Governmental Filings.  Other than any filings the Seller may be required to file after the Closing Date as a public company subject to the Exchange Act and any registration it may be required to make after the Closing Date as an investment adviser pursuant to the Investment Advisers Act, the Seller has obtained, maintained and kept in full force and effect all Governmental Authorizations which are necessary for it to properly carry out its business, and has made all Governmental Filings necessary for the execution and delivery by it of the Loan Documents to which it is a party and the performance by the Seller of its obligations under this Agreement and the other Loan Documents, and no Governmental Authorization or Governmental Filing which has not been obtained or made is required to be obtained or made by it in connection with the execution and delivery by it of any Loan Document to which it is a party or the performance of its obligations under this Agreement and the other Loan Documents to which it is a party;
(f)    Compliance with Applicable Law.  The Seller has duly observed and complied with all applicable laws, including the Securities Act and the Investment Company Act, relating to the conduct of its business and its assets except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect.  
(g)    Taxes.  The Seller has filed or caused to be filed all tax returns which, to its knowledge, are required to be filed and has paid all taxes shown to be due and payable on such returns or on any assessments made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any applicable Authority (other than any amount of tax due, the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of the Seller).
(h)    Place of Business; No Changes.  The Seller’s location (within the meaning of Article 9 of the UCC) is the State of Delaware.  The Seller has not changed its name, whether by amendment of its certificate of incorporation, by reorganization or otherwise, and has not changed its location within the four months preceding the Closing Date.
(i)    Not an Investment Company.  The Seller is not required to be registered as an “investment company” within the meaning of the Investment Company Act.

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(j)    Sale Treatment.  Other than for accounting and tax purposes, the Seller has treated the transfer of Collateral Loans to the Buyer for all purposes as a sale and/or capital contribution and purchase on all of its relevant books and records.
(k)    Security Interest.
(i)    As described in Section 2.05 hereof, it is the intention of the parties hereto that the conveyance of the Collateral to the Buyer be, and be construed as, an absolute sale without recourse.  If, however, notwithstanding the intention of the parties, such conveyance is determined for any reason not to be an absolute sale, this Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in favor of the Buyer in all right, title and interest of the Seller in, to and under the Collateral Loans, which security interest shall be a first priority perfected security interest prior to all other Liens (except for Permitted Liens), and is enforceable as such against creditors of and purchasers from the Seller upon execution and delivery of this Agreement, subject, as to enforcement, (A) to the effect of bankruptcy, insolvency or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency or similar event applicable to the Seller and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity);
(ii)    the Collateral Loans, along with the Related Contracts, constitute “general intangibles,” “instruments,” “accounts,” “investment property,” or “chattel paper,” within the meaning of the applicable UCC;
(iii)    the Seller owns and has, and upon the sale and transfer thereof by the Seller to the Buyer, the Buyer will have good and marketable title to such Collateral Loans free and clear of any Lien (other than Permitted Liens), claim or encumbrance of any Person;
(iv)    the Seller has received all consents and approvals required by the terms of the Collateral Loans to the sale of the Collateral Loans hereunder to the Buyer (except (A) to the extent that the requirement for such consent is rendered ineffective under Section 9-406 of the UCC and (B) for any customary procedural requirements and agents’ and/or Obligors’ consents expected to be obtained in due course in connection with the transfer of the Collateral Loans to the Buyer (except, in the case of clause (B), for any such agents’ consents where the Seller or any of its Affiliates is the agent which the Seller has or will obtain));
(v)    the Seller has caused the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Collateral Loans granted to the Buyer under this Agreement to the extent perfection can be achieved by filing a financing statement;
(vi)    other than the security interest granted to the Buyer pursuant to this Agreement, the Seller has not pledged, assigned, sold, granted a security interest in or otherwise conveyed any of the Collateral Loans.  The Seller has not authorized the filing of 

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and is not aware of any financing statements naming the Seller as debtor that include a description of collateral covering the Collateral Loans other than any financing statement (A) relating to the security interest granted to the Buyer under this Agreement, or (B) that has been terminated or for which a release or partial release has been or will be timely filed.  The Seller is not aware of the filing of any judgment or tax Lien filings against the Seller;
(vii)    except with respect to any Collateral Loan for which there is no promissory note, all original executed copies of each promissory note that constitutes or evidences the Collateral Loans have been delivered in accordance with the Credit Agreement by the Seller at the direction of the Buyer as required under the Credit Agreement; and
(viii)    none of the promissory notes, if any, that constitute or evidence any Collateral Loans has any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Buyer.
(l)    Value Given.  The cash payments received by the Seller and the increase in the Seller’s equity interest in the Buyer as a result of any capital contribution by the Seller to the Buyer in respect of the Purchase Price of the Collateral Loans sold hereunder constitute reasonably equivalent value in consideration for the transfer to the Buyer of such Collateral Loans under this Agreement, such transfer was not made for or on account of an antecedent debt owed by the Seller to the Buyer, and such transfer was not and is not voidable or subject to avoidance under any applicable bankruptcy laws.
(m)    Bulk Transfer Laws.  The transfer, assignment and conveyance of the Collateral Loans by the Seller pursuant to this Agreement are not subject to the bulk transfer laws or any similar statutory provisions in effect in any applicable jurisdiction.
(n)    Origination and Collection Practices.  The origination and collection practices used by the Seller and any of its Affiliates with respect to each Collateral Loan prior to the Purchase Date with respect thereto have been consistent with the Servicing Standard.
(o)    Lack of Intent to Hinder, Delay or Defraud.  Neither the Seller nor any of its Affiliates has sold, or will sell, any interest in any Collateral Loans with any intent to hinder, delay or defraud any of their respective creditors.
(p)    Nonconsolidation.  The Seller conducts its affairs such that (i) the Buyer would not be substantively consolidated in the estate of the Seller and their respective separate existences would not be disregarded in the event of the Seller’s bankruptcy and (ii) in its capacity as designated manager of the Buyer, such that Buyer is in compliance with the provisions of the LLC Agreement (provided, however, the Seller does not hereby agree to maintain the solvency of the Buyer).
(q)    No Proceedings. There is no action, suit or proceeding pending against or, to the actual knowledge of a Senior Authorized Officer of the Seller after due inquiry, threatened against or adversely affecting (i) the Seller or (ii) the transactions contemplated by this Agreement, before any court, arbitrator or any governmental body, agency or official, in each case, which has had or would reasonably be expected to have a Material Adverse Effect.

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(r)    Security Interest in Participations.  Section 2.04(e) creates a valid and continuing security interest (as defined in the applicable UCC) in favor of the Buyer in all right, title and interest of the Seller in, to and under the Closing Date Collateral Loans and the Collateral related thereto, which security interest shall be a first priority perfected security interest prior to all other Liens, and is enforceable as such against creditors of and purchasers from the Seller upon execution and delivery of this Agreement, subject, as to enforcement, (A) to the effect of bankruptcy, insolvency or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency or similar event applicable to the Seller and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity).
(s)    Externally Managed Company.  The Seller is an externally managed, non-diversified, closed-end management investment company.
(t)    Investments. The Seller was formed on May 22, 2013, and as of September 16, 2013, it holds investments of approximately $59,000,000. On July 17, 2013, the Seller announced that it raised approximately $100,000,000 in gross proceeds from its initial public offering of 6,666,668 common shares.
The representations and warranties set forth in this Section 4.01 shall survive the sale, transfer and assignment of the Collateral Loans to the Buyer.  Upon discovery by a Senior Authorized Officer of either the Seller or the Buyer of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice thereof to the other upon obtaining knowledge of such breach.
Section 4.02    Representations and Warranties of the Seller Relating to the Agreement and the Collateral.
The Seller hereby represents and warrants to the Buyer as of the Closing Date and as of each Purchase Date:
(a)    Valid Transfer and Security Interest.  This Agreement constitutes a valid transfer to the Buyer of all right, title and interest of the Seller in, to and under all of the Collateral, free and clear of any Lien of any Person claiming through or under the Seller or its Affiliates; provided that, the existence of any lien imposed by law on the property of an Obligor (as described in Section 1.3(o) of the Credit Agreement) of which the Seller has no knowledge shall not cause a breach of this Section 4.02(a).  If the conveyances contemplated by this Agreement are determined to be a transfer for security, then this Agreement constitutes a grant of a security interest in all of the Collateral to the Buyer, which security interest is a valid and first priority perfected security interest in all Collateral, subject only to Permitted Liens.  Neither the Seller nor any Person claiming through or under Seller shall have any claim to or interest in the Collection Account and if this Agreement constitutes the grant of a security interest in such property, except for the interest of the Seller in such property as a debtor for purposes of the UCC.
(b)    Eligibility of Collateral.  As of the Closing Date and each Purchase Date, (i) the Loan List is an accurate and complete listing of all Collateral as of the related Purchase Date and the 

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information contained therein with respect to the identity of such Collateral and the amounts owing thereunder is true and correct in all material respects as of the related Purchase Date and (ii) as of its Purchase Date, each such Collateral Loan satisfies or satisfied, as applicable, the definition of Collateral Loan.
(c)    Closing Date Collateral Loans.  On or prior to the Closing Date, with respect to each Closing Date Collateral Loan, the Seller shall have initiated the process of satisfying the conditions precedent in the applicable Related Contracts in respect of the individual assignments by which to transfer, assign and convey the Seller’s legal interest in each such Closing Date Collateral Loan to the Buyer.
(d)    No Fraud.  Each Collateral Loan was originated without any fraud or material misrepresentation by the Seller or, to the best of the Seller’s knowledge, on the part of the Obligor.
(e)    Ordinary Course of Business.  Any sale of Collateral Loans pursuant to this Agreement is in the ordinary course of business and financial affairs of the Seller.  Each remittance of Collections by the Seller to the Buyer, as transferee under this Agreement, will have been (i) in payment of a debt incurred by the Seller in the ordinary course of business or financial affairs of the Seller and the Buyer and (ii) made in the ordinary course of business or financial affairs of the Seller and the Buyer.
Section 4.03    Representations and Warranties Regarding the Buyer.
By its execution of this Agreement, the Buyer represents and warrants to the Seller that:
(a)    Due Organization.  The Buyer is a limited liability company duly organized and validly existing under the laws of the State of Delaware, with full power and authority to own its assets and properties, conduct the business in which it is now engaged and to execute and deliver and perform its obligations under this Agreement and the other Loan Documents to which it is a party;
(b)    Due Qualification and Good Standing.  The Buyer is in good standing in the State of Delaware.  The Buyer is duly qualified to do business and, to the extent applicable, is in good standing and has obtained or will obtain all material governmental licenses and approvals in Delaware and each other jurisdiction in which the failure to be so qualified, maintain good standing or obtain such license or approval, is likely to have a Material Adverse Effect;
(c)    Due Authorization; Execution and Delivery; Legal, Valid and Binding; Enforceability. The execution and delivery by the Buyer of, and the performance of its obligations under this Agreement, the other Loan Documents to which it is a party and the other instruments, certificates and agreements contemplated hereby or thereby are within its powers and have been duly authorized by all requisite action by it and have been duly executed and delivered by it and constitute its legal, valid and binding obligations enforceable against it in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally or general principles of equity, regardless of whether considered in a proceeding in equity or at law;

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(d)    Non-Contravention.  None of the execution and delivery by the Buyer of this Agreement or the other Loan Documents to which it is a party, the consummation of the transactions herein or therein contemplated, or performance and compliance by it with the terms, conditions and provisions hereof or thereof, will (i) contravene in any material respect or result in any breach of, any of the terms and provisions of, and will not constitute a default under, its Constituent Documents, (ii) conflict with or contravene in any material respect (A) any applicable law, (B) any indenture, agreement or other contractual restriction binding on or affecting it or any of its assets, or (C) contravene in any material respect any order, writ, injunction or decree binding on or affecting it or any of its assets or properties or (iii) result in a breach or violation of, or constitute a default under, any contractual obligation or any agreement or document to which it is a party or by which it or any of its assets are bound (or to which any such obligation, agreement or document relates), in each case which would have a Material Adverse Effect;
(e)    Governmental Authorizations; Governmental Filings.  No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with the execution, delivery and performance of any Loan Document (to which it is a party) or the consummation of any of the transactions contemplated thereby other than those that have already been duly made or obtained and remain in full force and effect or those recordings and filings in connection with the Liens granted to the Collateral Agent under the Loan Documents, except for any order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption, that, if not obtained, would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;
(f)    [Intentionally Omitted.]
(g)    Place of Business; No Changes.  The Buyer’s location (within the meaning of Article 9 of the UCC) is the State of Delaware.  The Buyer has not changed its name, whether by amendment of its certificate of formation, by reorganization or otherwise, and has not changed its location, within the four months preceding the Closing Date.
(h)    Sale Treatment.  Other than for accounting and tax purposes, the Buyer has treated the transfer of Collateral Loans from the Seller for all purposes as a sale and purchase on all of its relevant books and records and other applicable documents
(i)    Ordinary Course of Business.  Any purchase or sale of Collateral Loans pursuant to this Agreement is in the ordinary course of business and financial affairs of the Buyer.  Each remittance of Collections by the Seller to the Buyer, as transferee under this Agreement, will have been received by the Buyer in the ordinary course of business or financial affairs of the Buyer.

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ARTICLE V     
 
COVENANTS
Section 5.01    Affirmative Covenants of the Seller.
From the date hereof until the Payment in Full Date:
(a)    Compliance with Laws.  The Seller will comply in all material respects with all applicable requirements of law with respect to the Collateral Loans.
(b)    Preservation of Corporate Existence.  The Seller will preserve and maintain its corporate existence, material rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification has had, or would reasonably be expected to have, a Material Adverse Effect.
(c)    Performance and Compliance with Collateral.  The Seller will, at its expense, timely and fully perform and comply in all material respects with all provisions, covenants and other promises required to be observed by it under all agreements related to such Collateral.
(d)    Protection of Interest in Collateral.  With respect to the Collateral Purchased by the Buyer, the Seller will (i) sell such Collateral pursuant to and in accordance with the terms of this Agreement, (ii) (at the Seller’s expense) take all action necessary to perfect, protect and more fully evidence the Buyer’s or its assignee’s ownership of or security interest in such Collateral free and clear of any Lien other than the Lien created hereunder and Permitted Liens, including, without limitation, (a) filing and maintaining (at the Seller’s expense), effective financing statements naming the Seller, as debtor, the Buyer, as secured party, and the Collateral Agent, as assignee, in all necessary or appropriate filing offices, and filing continuation statements, amendments or assignments with respect thereto in such filing offices, and (b) executing or causing to be executed such other instruments or notices as may be necessary or appropriate, and (iii) take all additional action that the Buyer and the Collateral Agent or the Administrative Agent may reasonably request to perfect, protect and more fully evidence the respective interests of the parties to this Agreement in the Collateral and of the Collateral Agent under the Credit Agreement.
(e)    Delivery of Collections.  The Seller will cause all payments relating to all Collateral to be remitted directly to the Collection Account.  In the event any payments relating to any Collateral are remitted directly to the Seller or any Affiliate of the Seller, the Seller will remit (or will cause all such payments to be remitted) directly to the Collection Account within two (2) Business Days following receipt thereof, and, at all times prior to such remittance, the Seller will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of the Buyer (and its assignees).
(f)    Separate Identity.  The Seller acknowledges that the Administrative Agent, the Lenders and the other Secured Parties are entering into the transactions contemplated by the Credit Agreement in reliance upon the Buyer’s identity as a legal entity that is separate from the Seller 

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and each other Affiliate of the Seller.  Therefore, from and after the date of execution and delivery of this Agreement, the Seller will take all reasonable steps to maintain the Buyer’s identity as a legal entity that is separate from the Seller and each other Affiliate of the Seller and to make it manifest to third parties that the Buyer is an entity with assets and liabilities distinct from those of the Seller and each other Affiliate thereof and not just a division of the Seller or any such other Affiliate (except as otherwise required under GAAP or applicable tax law).  Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, the Seller agrees that:
(i)    the Seller will take all other actions necessary on its part to ensure that the Buyer is at all times in compliance with Section 5.18 of the Credit Agreement (provided, however, that the Seller does not hereby guaranty the solvency of the Buyer);
(ii)    the Seller shall maintain corporate records and books of account separate from those of the Buyer;
(iii)    the annual financial statements of the Seller shall disclose the effects of the Seller’s transactions in accordance with GAAP and the annual financial statements of the Seller shall not reflect in any way that the assets of the Buyer, including, without limitation, the Collateral, could be available to pay creditors of the Seller or any other Affiliate of the Seller;
(iv)    the Seller shall maintain an arm’s–length relationship with the Buyer and will not hold itself out as being liable for the debts of the Buyer;
(v)    except as otherwise permitted under the Credit Agreement, the Seller shall keep its assets and its liabilities wholly separate from those of the Buyer or, other than by reason of owning equity interests of the Buyer, for any decisions or actions relating to the Buyer;
(vi)    the Seller will avoid the appearance, and promptly correct any known misperception of any of the Seller’s creditors, that the assets of the Buyer are available to pay the obligations and debts of the Seller; 
(vii)    to the extent that the Seller services the Collateral Loans and performs other services on the Buyer’s behalf, the Seller will clearly identify itself as an agent for the Buyer in the performance of such duties; provided, however, that the Seller will not be required to so identify itself when communicating with the Obligors not in its capacity as agent for the Buyer but rather in its capacity as agent for a group of lenders; and
(viii)    the Seller shall take or refrain from taking, as applicable, each of the activities specified or assumed in the true sale and non-consolidation opinions of Dechert LLP delivered on the Closing Date, upon which the conclusions expressed therein are based.
(g)    Cooperation with Requests for Information or Documents.  The Seller will cooperate fully with all reasonable requests of the Buyer regarding the provision of any information or 

-22-

documents in the possession of or reasonably obtainable by the Seller without undue burden or expense which are necessary or desirable, including the provision of such information or documents in electronic or machine–readable format, to allow each of the Buyer and its assignees to carry out their responsibilities under the Loan Documents.
Section 5.02    Negative Covenants of the Seller.
From the date hereof until the Payment in Full Date:
(a)    Security Interests.  Except for the transfers hereunder, the Seller will not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien on any Collateral Loan, whether now existing or hereafter transferred hereunder, or any interest therein. The Seller will promptly notify the buyer of the existence of any Lien on any Collateral Loan and the Seller shall defend to right, title and interest of the Buyer and its assignees in, to and under the Collateral Loans, against all claims of third parties, provided that nothing in this Section 5.02(a) shall prevent or be deemed to prohibit the Liens created under the Credit Agreement; provided further that, the existence of any lien imposed by law on the property of an Obligor (as described in Section 1.3(o) of the Credit Agreement) of which the Seller has no knowledge shall not cause a breach of this Section 5.02(a).
(b)    Change of Name or Location of Loan Files.  The Seller shall not change its name, move the location of its principal place of business and chief executive office, or change the jurisdiction of its incorporation, unless the Seller gives 30 days’ prior written notice thereof to the Buyer, the Collateral Agent and the Administrative Agent and takes all actions required under the UCC of each relevant jurisdiction in order to continue the first priority perfected security interest of the Buyer and the Collateral Agent, for the benefit of the Secured Parties, in the Collateral.
(c)    Accounting of Purchases.  Other than for tax and consolidated accounting purposes, the Seller will not account for or treat (whether in financial statements or otherwise) the transactions contemplated hereby in any manner other than as a sale of the Collateral by the Seller to the Buyer; provided that for federal income tax reporting purposes, the Buyer is treated as a “disregarded entity” and, therefore, the transfer of Collateral by the Seller to the Buyer hereunder will not be recognized.
(d)    Change in Payment Instructions to Obligor.  The Seller shall not make any change in its instructions to Obligors regarding payments to be made to the Collection Account, unless the Administrative Agent shall have given its prior written consent to such change.
(e)    Indebtedness. Until the end of the Assignment Period, the Seller shall not (i) incur any Indebtedness for borrowed money or (ii) guarantee Indebtedness for borrowed money of any other Person unless, in each case, the Rating Condition shall have been satisfied in connection with the incurrence of such Indebtedness or such guarantee.

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ARTICLE VI     
 
OPTION TO REPURCHASE AND SUBSTITUTE COLLATERAL LOANS
Section 6.01    Substitution of Collateral Loans.  
On any day prior to the occurrence of an Event of Default (and thereafter with the prior consent of the Administrative Agent) and so long as the Buyer is permitted to do so pursuant to Section 10.1(a)(vii) of the Credit Agreement, the Seller may, subject to the conditions set forth in this Section 6.01, replace any Credit Risk Loan or Defaulted Loan with one or more other Collateral Loans, provided that no such replacement shall occur unless each of the following conditions is satisfied as of the date of such replacement and substitution:
(a)    the Seller has notified the Buyer, the Collateral Agent and the Administrative Agent in writing identifying the Collateral Loan to be replaced (a “Replaced Loan”) and the Collateral Loan(s) to be substituted therefore (each, a “Substitute Loan”);
(b)    each Substitute Loan is a Collateral Loan meeting the requirements set forth in the definition of Collateral Loan on the date of substitution;
(c)    the aggregate outstanding principal balance of such Substitute Loan(s) shall be equal to or greater than the outstanding principal balance of such Replaced Loan(s);
(d)    the substitution of any Substitute Loan will not cause a Default or an Event of Default to occur;
(e)    the Repurchase and Substitution Limits applicable to any such substitution are satisfied;
(f)    after giving effect to any such substitution, each Coverage Test shall be satisfied;
(g)    after giving effect to any such substitution, each Collateral Quality Test is maintained or improved;
(h)    after giving effect to any such substitution, the Eligibility Criteria shall be satisfied; 
(i)    the Seller shall deliver to the Buyer on the date of such substitution a revised Schedule I that shall include such Substitute Loan(s) and shall have deleted such Replaced Loan(s); and
(j)    the Seller shall deliver to the Buyer, the Collateral Agent and the Administrative Agent on the date of such substitution a certificate of an Authorized Officer stating that the foregoing conditions have been or will be met upon such replacement and substitution and an assignment substantially in the form of Exhibit A hereto with respect to such Substitute Loan(s).

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Section 6.02    Seller’s Optional Right to Repurchase Collateral Loans.
(a)    In addition to its right of substitution hereunder, on any day prior to the occurrence of an Event of Default (and thereafter with the prior consent of the Administrative Agent) and so long as the Buyer is permitted to do so pursuant to Section 10.1(a)(vii) of the Credit Agreement, the Seller may, subject to the conditions set forth in this Section 6.02, repurchase any Credit Risk Loan or Defaulted Loan at the Repurchase Price, provided that no such repurchase shall occur unless each of the following conditions is satisfied as of the date thereof:
(i)    the Repurchase and Substitution Limits applicable to any such repurchase are satisfied;
(ii)    the Seller shall deposit in the Collection Account the Repurchase Price with respect to such Credit Risk Loan or Defaulted Loan as of the date of such repurchase.  
(b)    Promptly upon request of the Seller to do so, the Buyer (or the Collateral Manager on its behalf) shall determine the Repurchase Price and shall notify the Seller of each thereof and of the Repurchase Price with respect thereto should the Seller elect to exercise its repurchase option.  No later than ten (10) Business Days after receipt of such information, the Seller may, at its option, by written notice to the Buyer, the Collateral Manager, the Administrative Agent and the Collateral Agent, elect to exercise its right to repurchase such Credit Risk Loan or Defaulted Loan and, on such date or within five (5) Business Days thereafter, repurchase such Credit Risk Loan or Defaulted Loan.   Failure by the Seller to exercise such option to repurchase any Credit Risk Loan or Defaulted Loan at any time shall not affect the ability of the Seller to exercise such right at a later date with respect to such Credit Risk Loan or Defaulted Loan provided the Repurchase Price is redetermined at such later time.
(c)    Contemporaneously with the receipt of the Repurchase Price, the Buyer shall sell, transfer, assign, set over and otherwise convey to the Seller, without recourse, all the right, title and interest of the Buyer in, to and under any Credit Risk Loan or Defaulted Loan repurchased by the Seller pursuant to Section 6.02(a), and the Buyer shall cause the Collateral Agent to release the Lien of the Credit Agreement thereon.

ARTICLE VII     
 
INDEMNIFICATION BY THE ORIGINATOR
Section 7.01    Indemnification.
The Seller agrees to indemnify, defend and hold harmless the Buyer, its officers, directors, employees and agents (any one of which is an “Indemnified Party”) from and against any and all claims, losses, penalties, fines, forfeitures, judgments (provided that any indemnification for damages is limited to actual damages, not consequential, special or punitive damages), reasonable legal fees and related costs and any other reasonable costs, fees and expenses that such Person may 

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sustain as a result of the Seller’s fraud or the failure of the Seller to perform its duties in compliance in all material respects with the terms of this Agreement, except to the extent arising from gross negligence, willful misconduct or fraud by the Person claiming indemnification, provided that the Seller shall not be liable for any consequential (including loss of profit), indirect, special or punitive damages hereunder.  Any Person seeking indemnification hereunder shall promptly notify the Seller if such Person receives a complaint, claim, compulsory process or other notice of any loss, claim, damage or liability giving rise to a claim of indemnification hereunder but failure to provide such notice shall not relieve the Seller of its indemnification obligations hereunder unless and to the extent the Seller is deprived of material substantive or procedural rights or defenses as a result thereof.  The Seller shall assume (with the consent of the Indemnified Party, such consent not to be unreasonably withheld) the defense and any settlement of any such claim and pay all expenses in connection therewith, including reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or decree which may be entered against the Indemnified Party in respect of such claim.  The parties agree that the provisions of this Section 7.01 shall not be interpreted to provide recourse to the Seller against loss by reason of the bankruptcy, insolvency or lack of creditworthiness of an Obligor with respect to a Collateral Loan.  The Seller shall have no liability for making indemnification hereunder to the extent any such indemnification constitutes recourse for uncollectible or uncollected Collateral Loans.
Section 7.02    Liabilities to Obligors.
Except with respect to the funding commitment assumed by the Buyer with respect to any Delayed Funding Loan or Revolving Collateral Loan, no obligation or liability to any Obligor under any of the Collateral Loans is intended to be assumed by the Buyer, the Collateral Agent or any of the other the Secured Parties under or as a result of this Agreement and the transactions contemplated hereby.
Section 7.03    Operation of Indemnities.
If the Seller has made any indemnity payments to an Indemnified Party pursuant to this Article VII and such Indemnified Party thereafter collects any such amounts from others, such Indemnified Party will repay such amounts collected to the Seller.
ARTICLE VIII     
 
TERM AND TERMINATION
Section 8.01    Termination.
This Agreement shall commence as of the date of execution and delivery hereof and shall continue in full force and effect until the earlier of (i) the Payment in Full Date and (ii) with the prior written consent of the Administrative Agent, the date specified by either party upon 30 days’ prior written notice to the other party as the termination date; provided that the termination of this Agreement pursuant to this Section 8.01 shall not discharge any Person from obligations incurred prior to any such termination of this Agreement.

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ARTICLE IX     
 
MISCELLANEOUS
Section 9.01    Amendments and Waivers.
Except as provided in this Section 9.01, no amendment, waiver or other modification of any provision of this Agreement shall be effective unless signed by the Buyer and Seller and consented to in writing by the Majority Lenders, other than an amendment to this Agreement to incorporate by reference and/or amend a Loan List on the related Purchase Date.  
Section 9.02    Notices, Etc.
All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing and mailed, e-mailed, transmitted or delivered, as to each party hereto, at its address set forth under its name on the signature pages hereof or at such other address as shall be designated by such party in a written notice to the other parties hereto.  All such notices and communications shall be effective, upon receipt, or in the case of (a) notice by mail, three Business Days after being deposited in the United States mail, first class postage prepaid, (b) notice by e-mail or by facsimile mail, when electronic confirmation or verbal communication of receipt is obtained.
Section 9.03    Binding Effect; Benefit of Agreement.
This Agreement shall inure to the benefit of, and the obligations hereunder shall be binding upon, the parties hereto and their respective successors and permitted assigns.  The Seller agrees that the Collateral Agent, as agent for the Secured Parties under the Credit Agreement, shall be a third party beneficiary hereof.  Any permitted assigns of the Buyer shall be third-party beneficiaries of this Agreement.  
Section 9.04    GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE SERVICE OF PROCESS.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.  EACH OF THE PARTIES HERETO HEREBY AGREES TO THE NON–EXCLUSIVE JURISDICTION OF ANY COURT LOCATED WITHIN THE STATE OF NEW YORK.  EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
Each of the Buyer and the Seller agrees that service of process may be effected by mailing a copy thereof by registered or certified mail, postage prepaid, to the Buyer or the Seller, as applicable, at its address specified in the signature pages to this Agreement or at such other address as the Collateral Agent and the Administrative Agent shall have been notified in accordance with 

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the Credit Agreement. Nothing in this Section 9.04 shall affect the right of the Collateral Agent or the Administrative Agent to serve legal process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Borrower in any other jurisdiction.
Section 9.05    WAIVER OF JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 9.06    Certain Taxes.  The Seller shall pay on demand any and all stamp, sales, excise and other taxes and fees payable or determined to be payable to any applicable Authority in connection with the execution, delivery, filing and recording of this Agreement and the other documents to be delivered hereunder.
Section 9.07    Non-Petition.
(a)    The Seller hereby agrees not to institute against, or join, cooperate with or encourage any other Person in instituting against the Buyer any bankruptcy, reorganization, receivership, arrangement, insolvency, moratorium or liquidation proceedings or other proceedings under federal or state bankruptcy or similar laws until at least one year and one day, or if longer, the applicable preference period then in effect plus one day, after the Payment in Full of the Loans and termination of all Commitments, provided that nothing in this Section 9.07 shall preclude, or be deemed to stop, the Seller (i) from taking any action prior to the expiration of the aforementioned one year and one day period, or if longer the applicable preference period then in effect plus one day, in (a) any case or proceeding voluntarily filed or commenced by the Buyer or (b) any involuntary insolvency proceeding filed or commenced against the Buyer by a Person other than the Seller or its Affiliates, or (ii) from commencing against the Buyer or any properties of the Buyer any legal action which is not a bankruptcy, reorganization, receivership, arrangement, insolvency, moratorium or liquidation proceeding or other proceeding under federal or state bankruptcy or similar laws. 
(b)    The provisions of this Section 9.07 shall survive the termination of this Agreement.
Section 9.08    Recourse Against Certain Parties.
(a)    No recourse under or with respect to any obligation, covenant or agreement (including, without limitation, the payment of any fees or any other obligations) of the Seller as contained in this Agreement, any other Loan Document or any other agreement, instrument or document entered into by it pursuant to or in connection with this Agreement or any other Loan Document shall be had against any stockholder, incorporator, authorized representative, officer, employee or director of the Seller by the enforcement of any assessment or by any legal or equitable 

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proceeding, by virtue of any statute or otherwise it being expressly agreed and understood that the agreements of the Seller contained in this Agreement, any other Loan Document and all of the other agreements, instruments and documents entered into by it pursuant to or in connection with this Agreement or any other Loan Document are, in each case, solely the corporate obligations of the Seller, and that no personal liability whatsoever shall attach to or be incurred by any stockholder, incorporator, authorized representative, officer, employee or director of the Seller, or any of them, under or by reason of any of the obligations, covenants or agreements of the Seller contained in this Agreement, any other Loan Document or in any other such instruments, documents or agreements, or which are implied therefrom, and that any and all personal liability of each stockholder, incorporator, authorized representative, officer, employee or director of the Seller, or any of them, for breaches by the Seller 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.  The provisions of this Section 9.08(a) shall survive the termination of this Agreement.
(b)    Notwithstanding any other provision of this Agreement, the obligations of the Buyer under this Agreement and any other Loan Document are limited recourse obligations of the Buyer payable solely from the Collateral and, following realization of the Collateral, and application of the proceeds thereof in accordance with the Priority of Payments and all obligations of and any claims by the Seller against the Buyer hereunder after any such realization and application shall be extinguished and shall not thereafter revive.  No recourse under or with respect to any obligation, covenant or agreement (including, without limitation, the payment of any fees or any other obligations) of the Buyer as contained in this Agreement, any other Loan Document or any other agreement, instrument or document entered into by it pursuant to or in connection with this Agreement or any other Loan Document shall be had against any member, manager, authorized representative, officer, employee or director of the Buyer 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 Buyer contained in this Agreement, any other Loan Document and all of the other agreements, instruments and documents entered into by it pursuant to or in connection with this Agreement and any other Loan Document are, in each case, solely the limited liability company obligations of the Buyer, and that no personal liability whatsoever shall attach to or be incurred by any authorized representative, member, manager, officer, employee or director of the Buyer or any of them, under or by reason of any of the obligations, covenants or agreements of the Buyer contained in this Agreement, any other Loan Document or in any other such instruments, documents or agreements, or which are implied therefrom, and that any and all personal liability of each authorized representative, member, manager, officer, employee or director of the Buyer, or any of them, for breaches by the Buyer 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.  The provisions of this Section 9.08(b) shall survive the termination of this Agreement.

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Section 9.09    Protection of Right, Title and Interest in, to and under the Collateral; Further Action Evidencing Purchases.
(a)    The Seller shall cause all financing statements and continuation statements and any other necessary documents perfecting the Buyer’s security and interest in the Collateral to be promptly recorded, registered and filed, and at all times to be kept recorded, registered and filed, all in such manner and in such places as may be required by law fully to preserve and protect the perfection and priority of the security interest of the Buyer in all property comprising the Collateral.  The Seller shall deliver to the Buyer the file–stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recording, registration or filing.  The Seller shall cooperate fully with the Buyer in connection with the obligations set forth above and will execute any and all documents reasonably required to fulfill the intent of this Section 9.09(a).
(b)    The Seller agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that the Buyer, the Administrative Agent or the Collateral Agent, on behalf of the Secured Parties, may reasonably request in order to perfect, protect or more fully evidence the Purchases hereunder and the security and/or interest granted in the Collateral.  
(c)    If the Seller fails to perform any of its obligations hereunder, the Buyer or the Administrative Agent may (but shall not be required to) perform, or cause performance of, such obligation; and the Buyer’s, the Collateral Agent’s or the Administrative Agent’s costs and expenses incurred in connection therewith shall be payable by the Seller.  The Seller irrevocably authorizes the Buyer, the Collateral Agent or the Administrative Agent at any time (so long as it has filed to perform its obligations hereunder) at the Buyer’s, the Collateral Agent’s or the Administrative Agent’s sole discretion and appoints the Collateral Agent and the Administrative Agent as its attorney–in–fact to act on behalf of the Seller (i) to execute on behalf of the Seller and to file financing statements on behalf of the Seller, as debtor, necessary or desirable in the Buyer’s, the Collateral Agent’s and the Administrative Agent’s sole discretion to perfect and to maintain the perfection and priority of the security interest of the Buyer (and its assignees) in the Collateral 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 Buyer, the Collateral Agent or the Administrative Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the security interests of the Buyer (and its assignees) in the Collateral.  This appointment is coupled with an interest and is irrevocable.
Section 9.10    Execution in Counterparts; Severability; Integration.
This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts (including by facsimile), 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.  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, together with the Credit Agreement and the other 

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Loan Documents, to the extent that a party is a signatory thereto, and any agreements or letters (including fee letters) executed in connection herewith contains the final 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 9.11    Heading and Exhibits.
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 9.12    Assignment.
Notwithstanding anything to the contrary contained herein, this Agreement may not be assigned by the Buyer or the Seller except as permitted by this Section 9.12 or by the Credit Agreement.  Simultaneously with the execution and delivery of this Agreement, the Buyer shall assign all of its right, title and interest herein to the Collateral Agent for the benefit of the Secured Parties, to which assignment the Seller hereby expressly consents.  Upon assignment, the Seller agrees to perform its obligations hereunder for the benefit of the Collateral Agent for the benefit of the Secured Parties and the Collateral Agent, in such capacity, shall be a third party beneficiary hereof.  The Collateral Agent on behalf of the Secured Parties under the Credit Agreement upon such assignment may enforce the provisions of this Agreement, exercise the rights of the Buyer and enforce the obligations of the Seller hereunder without joinder of the Buyer.
Section 9.13    No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of the Buyer or the Seller, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law.  Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given.

[Remainder of Page Intentionally Left Blank.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers as of the day and year first above written.
FIFTH STREET SENIOR FLOATING RATE CORP., 
as the Seller
By:                               
Name:                                 
Title:                                  

FS SENIOR FUNDING LLC,  
as the Buyer
By:                               
Name:                                 
Title:FifthStreet--Natixis-CollateralManagementAgreement13

Exhibit 10.3

COLLATERAL MANAGEMENT AGREEMENT
dated as of November 1, 2013
by and between
FS SENIOR FUNDING LLC, 
as Borrower
and
FIFTH STREET SENIOR FLOATING RATE CORP., 
as Collateral Manager

		
	SECTION 1.
	DEFINITIONS; RULES OF CONSTRUCTION    1

		
	SECTION 2.
	APPOINTMENT; GENERAL DUTIES AND AUTHORITY OF THE COLLATERAL MANAGER    5

		
	SECTION 3.
	PURCHASE AND SALE TRANSACTIONS    11

		
	SECTION 4.
	SERVICES TO OTHER BORROWERS; CERTAIN AFFILIATED ACTIVITIES    13

		
	SECTION 5.
	CONFLICTS OF INTEREST    17

		
	SECTION 6.
	RECORDS; CONFIDENTIALITY    17

		
	SECTION 7.
	ACTIONS OF THE COLLATERAL MANAGER    18

		
	SECTION 8.
	COMPENSATION    19

		
	SECTION 9.
	SERVICING STANDARD; BENEFIT OF THE AGREEMENT    20

		
	SECTION 10.
	LIMITS OF COLLATERAL MANAGER RESPONSIBILITY    20

		
	SECTION 11.
	NO JOINT VENTURE    23

		
	SECTION 12.
	TERM; REPLACEMENT OF THE COLLATERAL MANAGER    23

		
	SECTION 13.
	REMOVAL FOR CAUSE    25

		
	SECTION 14.
	OBLIGATIONS OF RESIGNING OR REMOVED COLLATERAL MANAGER    26

		
	SECTION 15.
	ASSIGNMENTS; DELEGATION    27

		
	SECTION 16.
	REPRESENTATIONS AND WARRANTIES    28

		
	SECTION 17.
	NON-PETITION; LIMITED RECOURSE    32

		
	SECTION 18.
	NOTICES    33

		
	SECTION 19.
	BINDING NATURE OF AGREEMENT; SUCCESSORS AND ASSIGNS    34

		
	SECTION 20.
	ENTIRE AGREEMENT; AMENDMENT    34

		
	SECTION 21.
	CONTROLLING LAW    34

		
	SECTION 22.
	SUBMISSION TO JURISDICTION    35

		
	SECTION 23.
	WAIVER OF JURY TRIAL    35

		
	SECTION 24.
	CONFLICT WITH THE CREDIT AGREEMENT    35

		
	SECTION 25.
	SUBORDINATION; CONSENT TO ASSIGNMENT    35

		
	SECTION 26.
	INDULGENCES NOT WAIVERS    36

		
	SECTION 27.
	THIRD PARTY BENEFICIARIES    36

		
	SECTION 28.
	TITLES NOT TO AFFECT INTERPRETATION    36

		
	SECTION 29.
	EXECUTION IN COUNTERPARTS    36

		
	SECTION 30.
	PROVISIONS SEPARABLE    37

2

THIS COLLATERAL MANAGEMENT AGREEMENT (this “Agreement”), dated as of November 1, 2013, is entered into by and between FS SENIOR FUNDING LLC, a Delaware limited liability company (together with its successors and assigns permitted hereunder, the “Borrower”), and FIFTH STREET SENIOR FLOATING RATE CORP., a Delaware corporation (“Fifth Street” and in its capacity as collateral manager, and together with its successors and assigns permitted hereunder, the “Collateral Manager”).
RECITALS:
WHEREAS, pursuant to a Credit Agreement, dated as of November 1, 2013 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrower, the Lenders from time to time parties thereto, Natixis, New York Branch, as Administrative Agent (together with any successor administrative agent permitted under the Credit Agreement, the “Administrative Agent”), and U.S. Bank, National Association, as Collateral Agent (together with any successor collateral agent and custodian permitted under the Credit Agreement, the “Collateral Agent”) and as Custodian (together with any successor collateral agent and custodian permitted under the Credit Agreement, the “Custodian”), the Lenders intend to make Loans under and as defined therein to the Borrower;
 WHEREAS, the Borrower intends to pledge certain Collateral Loans, Equity Securities, Eligible Investments and certain other assets as set forth in the Credit Agreement to the Collateral Agent as security for the Loans;
WHEREAS, the Borrower desires to appoint Fifth Street as the Collateral Manager to provide the services described herein and Fifth Street desires to accept such appointment;
WHEREAS, the Credit Agreement will authorize the Borrower to enter into this Agreement, pursuant to which the Collateral Manager agrees to perform, on behalf of the Borrower, certain duties with respect to the acquisition, administration and disposition of Collateral in the manner and on the terms set forth herein and to perform such additional duties as are consistent with the terms of this Agreement and the Credit Agreement as the Borrower may from time to time reasonably request; and
WHEREAS, the Collateral Manager has the capacity to provide the services required hereby and is prepared to perform such services upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the agreements herein set forth, the parties hereto agree as follows:
		
	Section 1.
	Definitions; Rules of Construction

(a)    Definitions
Capitalized terms used and not defined herein shall have the meanings set forth in the Credit Agreement.  As used in this Agreement:

“Administrative Agent” shall have the meaning set forth in the recitals.
“Advisers Act” shall mean the United States Investment Advisers Act of 1940, as amended.
“Agreement” shall have the meaning set forth in the preamble.
“Appointment Procedures” shall mean, with respect to the appointment of a successor Collateral Manager, the following procedures:
(A)    Borrower shall, within 30 days of a Collateral Manager Termination Notice Date, propose a successor to the Collateral Manager (a “Proposed Successor”) that meets the criteria set forth in Section 12(e).  The Administrative Agent shall have 30 days from the date of its receipt of the written proposal of a Proposed Successor to reject, based upon reasonable grounds, the Borrower’s proposal in writing (each such period, an "Objection Period").  If the Administrative Agent does not reject such proposed replacement in writing within such Objection Period pursuant to the immediately preceding sentence, such replacement shall be deemed to be approved.  In the event any Proposed Successor is rejected in writing by the Administrative Agent, the Borrower may propose additional replacements pursuant to the foregoing process; provided that, if such additional proposed replacement has been objected to by the Administrative Agent during the applicable Objection Period in accordance with the foregoing, then (until a successor has been approved) the Borrower may continue to propose a successor Collateral Manager until the date (the “Proposal End Date”) that is 90 days after the Collateral Manager Termination Notice Date.  If any Proposed Successor is approved by the Administrative Agent, then such Proposed Successor will be the new Collateral Manager upon the Proposed Successor accepting such appointment by a written assumption (pursuant to which it shall agree to be bound by the terms set forth in this Agreement) in form and substance reasonably satisfactory to the Administrative Agent and the Borrower.
(B)    If no successor Collateral Manager has been appointed pursuant to clause (A) above on or prior to the Proposal End Date, the Administrative Agent shall have the right to (i) terminate this Agreement in accordance with Section 12 or (ii) appoint a successor Collateral Manager, which appointment will not require the consent of, nor be subject to the disapproval of the Borrower. 
For purposes of this definition, the Administrative Agent shall act at the direction of the Majority Lenders.  
“Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, administrative tribunal, central bank, public office, court, arbitration or mediation panel, or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of government, including the SEC, the stock exchanges, any federal, state, territorial, county, municipal or other government or governmental agency, arbitrator, board, body, branch, bureau, commission, court, department, instrumentality, master, mediator, panel, referee, system or other political unit or subdivision or other entity of any of the foregoing, whether domestic or foreign.    
“Borrower” shall have the meaning set forth in the preamble.

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“Cause” shall have the meaning set forth in Section 13.
“Client” means with respect to any specified Person, any Person or account for which the specified Person provides investment management services or provides investment advice.
“Collateral Agent” shall have the meaning set forth in the recitals.
“Collateral Manager” shall have the meaning set forth in the preamble.
“Collateral Manager Affiliate” means (1) any director or officer of the Collateral Manager (or any Person performing a similar function), (2) any Person directly or indirectly controlling, under common control with or controlled by the Collateral Manager and (3) all current employees of the Collateral Manager (other than employees performing only clerical, administrative, support or similar functions).  For the purposes of this definition “control” means the power, directly or indirectly, to direct the management or policies of a Person, whether through ownership of securities, by contract or otherwise and (1) a Person’s directors or officers are presumed to control such Person, (2) a Person is presumed to control a corporation if such Person (a) directly or indirectly has the right to vote 25% or more of a class of the corporation’s voting securities or (b) has the power to sell or direct the sale of 25% or more of a class of the corporation’s voting securities, (3) a Person is presumed to control a partnership if such Person has the right to receive on dissolution, or has contributed, 25% or more of the capital of such partnership, (4) a Person is presumed to control a limited liability company if the Person (a) directly or indirectly has the right to vote 25% or more of a class of interest in such limited liability company, (b) has the right to receive on dissolution, or has contributed, 25% or more of the capital of such limited liability company or (c) is an appointed or elected manager of such limited liability company (other than an independent manager), and (5) a Person is presumed to control a trust if it is a trustee or managing agent of such trust.
“Collateral Manager Breach” shall have the meaning set forth in Section 10(a).
“Collateral Manager Party” shall have the meaning set forth in Section 10(a).
“Collateral Manager Related Person” means with respect to the Collateral Manager, without duplication, each Affiliate, each Collateral Manager Affiliate, their respective Clients and their respective partners, managers, members, shareholders, directors, officers and employees.
“Collateral Manager Termination Notice Date” shall mean (i) any date that the Collateral Manager delivers notice of its resignation pursuant to Section 12(b) and (ii) any date that the Borrower delivers notice of its decision to appoint a successor collateral manager pursuant to Section 13(c).
“Constituent Documents” means the articles or certificate of incorporation and bylaws (or the comparable documents for the applicable jurisdiction), in the case of a corporation, the partnership agreement, in the case of a partnership, or the certificate of formation and limited liability company agreement, in the case of a limited liability company.
“Credit Agreement” shall have the meaning set forth in the recitals.

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"Daily Average Collateral Loan Commitment Amount" means, for any Quarterly Payment Date, the daily average Aggregate Principal Balance of all Collateral Loans for the Due Period relating to such Quarterly Payment Date (as certified by the Collateral Manager to the Collateral Agent and based on the average of the Aggregate Principal Balance of all Collateral Loans as of the reporting dates set forth in the last three Collateral Reports).
“Event of Bankruptcy” means (a) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Collateral Manager or its debts, or of all or a substantial part of its assets, under any bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of all or a receiver, trustee, custodian, sequestrator, conservator or similar official for the Collateral Manager or for all or a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days; (b) an order or decree approving or ordering any of the actions described in clause (a) shall be entered; or (c) the Collateral Manager shall: (i) be wound up or dissolved, (ii) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (iii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (a) of this definition, (iv) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Collateral Manager or for all or a substantial part of its assets, (v) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (vi) cease to be able to, or admit in writing its inability to, pay its debts as they become due and payable, or make a general assignment for the benefit of creditors or (vii) take any action for the purpose of effecting any of the foregoing.
“Fifth Street” shall have the meaning set forth in the preamble.
“Governmental Authorizations” means all franchises, permits, licenses, approvals, consents and other authorizations of all Authorities.
“Governmental Filings” means all filings, including franchise and similar tax filings, and the payment of all fees, assessments, interests and penalties associated with such filings with all Authorities.
“Indemnified Party” shall have the applicable meaning set forth in Section 10(b).
“Indemnifying Party” shall have the applicable meaning set forth in Section 10(b).
“Losses” shall mean, collectively, all expenses, losses, damages, liabilities, demands, charges or claims of any kind or nature whatsoever (including reasonable attorneys’ fees and accountants’ fees and costs and expenses relating to investigating or defending any demands, charges and claims).
“Managed Assets” shall mean, collectively, the Collateral Loans, the Equity Securities, the Eligible Investments and any other assets from time to time owned by the Borrower.

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“Officer’s Certificate” means a certificate delivered to the Collateral Agent or other Person entitled to receive the same under this Agreement or any other Loan Document signed by an Authorized Officer of the Collateral Manager, or by an Authorized Officer of the Borrower, as required by this Agreement or any other Loan Document.
“Payment in Full” means payment in full in cash of all Obligations (other than any unasserted contingent obligations), including without limitation all principal, interest, Commitment Fees, Administrative Expenses and fees, if any, payable under the Engagement Letter or any fee letter entered into in connection with the Loan Documents.
“Payment in Full Date” means the date on which a Payment in Full occurs and the Commitments are terminated.
“Personnel” shall have the meaning set forth in Section 4(e).
“Proposed Successor” shall have the meaning set forth in the definition of Appointment Procedures.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, all as from time to time in effect, or any successor law, rules or regulations, and any reference to any statutory or regulatory provisions shall be deemed to be a reference to any successor statutory or regulatory provision.
“Senior Collateral Management Fee” means a senior collateral management fee in the amount (as certified by the Collateral Manager to the Collateral Agent) equal to the product of (i) 0.40% per annum, (ii) the Daily Average Collateral Loan Commitment Amount (including, for avoidance of doubt, Defaulted Loans and the unfunded portions of the Collateral Loans) and (iii) a fraction, the numerator of which is equal to the number of days in the related Due Period and the denominator of which is 360.
“Subordinated Collateral Management Fee” means a senior collateral management fee in the amount (as certified by the Collateral Manager to the Collateral Agent) equal to the product of (i) 0.40% per annum, (ii) the Daily Average Collateral Loan Commitment Amount (including, for avoidance of doubt, Defaulted Loans and the unfunded portions of the Collateral Loans) and (iii) a fraction, the numerator of which is equal to the number of days in the related Due Period and the denominator of which is 360.
(b)    Rules of Construction
The rules of construction set forth in Sections 1.2-1.5 of the Credit Agreement are hereby incorporated herein by reference.
		
	Section 2.
	Appointment; General Duties and Authority of the Collateral Manager

(a)    Fifth Street is hereby appointed as Collateral Manager of the Borrower for the purpose of performing certain duties as specified herein, including directing and supervising 

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the investment and reinvestment of Managed Assets and performing certain administrative functions on behalf of the Borrower in accordance with and subject to the applicable provisions of the Credit Agreement, this Agreement and the other Loan Documents applicable to it, including, without limitation, Section 7 and Section 9 hereof, and Fifth Street hereby accepts such appointment and agrees to perform the duties and responsibilities of the Collateral Manager pursuant to the terms herein.  The Collateral Manager shall have the power to execute and deliver all necessary and appropriate documents and instruments on behalf of the Borrower in connection with performing its obligations set forth herein.
(b)    Subject to the provisions of Section 5, Section 7, Section 9 and Section 10, the Collateral Manager agrees, and is hereby authorized, to provide the following services to or on behalf of the Borrower (in accordance with the terms, requirements and limitations set forth in the Credit Agreement, the Borrower’s LLC Agreement and other Loan Documents, as applicable):
(i)    selection of the Managed Assets to be acquired by the Borrower in accordance with the Master Transfer Agreement, this Agreement and the Credit Agreement;
(ii)    investment and reinvestment of the Collateral in accordance with this Agreement and the Credit Agreement;
(iii)    designation of any Principal Proceeds for reinvestment or for deposit into the Future Funding Reserve Account in accordance with Section 8.2(d) of the Credit Agreement;
(iv)    disposition or tender of any Managed Asset and delivery of any instruction or certificate to the Custodian with respect thereto;
(v)    (A) performance of investment-related duties and functions (including, without limitation, the furnishing of direction letters and certificates) as required hereunder and under the Credit Agreement with regard to purchases, sales, substitutions or other dispositions of Managed Assets and deposits in certain accounts; and (B) execution and delivery of all necessary and appropriate documents and instruments on behalf of the Borrower with respect thereto;
(vi)    monitoring and keeping appropriate records of the assets that constitute the Collateral on an ongoing basis and provision to or on behalf of the Borrower of all reports, schedules, certificates and other data that the Borrower is required to prepare and deliver under the Credit Agreement (including the Collateral Reports and Payment Date Reports), in such forms, and containing such information, required thereby, in sufficient time for such required reports, schedules, certificates and data to be reviewed and delivered by or on behalf of the Borrower to the parties entitled thereto under the Credit Agreement; provided that the Collateral Manager shall review the contents of the Collateral Reports, Payment Date Reports, instructions, statements and certificates and upon verification shall make such Collateral Reports and Payment Date Reports available to each Rating Agency then rating the Loans and notify the Collateral Agent of any comments to such reports, in each case, no later than 10 Business Days after its receipt of such reports from the Collateral 

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Agent and with respect to the Collateral Reports and Payment Date Reports, the Collateral Manager shall notify the Collateral Agent of any discrepancies of which it has knowledge no later than five Business Days after receipt so that such discrepancies can be reconciled prior to the date such reports are due;
(vii)    advising and, as applicable, directing the Collateral Agent and/or Custodian in connection with all actions to be taken by the Collateral Agent and/or Custodian at the direction of the Borrower or of the Collateral Manager, in each case subject to the applicable terms thereof and the terms hereof;
(viii)    negotiating on behalf of the Borrower with prospective sellers or purchasers of Collateral Loans as to the terms relating to the purchase, sale and disposition of such Collateral Loans;
(ix)    monitoring the ratings of the Collateral Loans, consulting on behalf of the Borrower with the Rating Agency at such times as may be reasonably requested by the Rating Agency and providing the Rating Agency with any information reasonably requested in connection with the Rating Agency’s monitoring of the Collateral and the Rating Agency’s maintenance of its ratings of the Loans, and providing to the Administrative Agent copies of all information provided by the Collateral Manager to the Rating Agency in connection with any Credit Estimate;
(x)    subject to the calculations made by the Collateral Agent pursuant to Section 8.9(b) of the Credit Agreement, determining compliance with the Coverage Tests;
(xi)    determining whether any Collateral Loan is a Senior Secured Loan, Second Lien Loan, Unsecured Loan, Fixed Rate Obligation, Cov-Lite Loan, Eligible Cov-Lite Loan, DIP Loan, Revolving Collateral Loan, Delayed Funding Loan, PIK Loan, Credit Risk Loan, Discount Loan, a Current Pay Obligation, Defaulted Loan, Credit Improved Loan, Bridge Loan, Synthetic Security, Zero Coupon Loan, Real Estate Loan, Structured Finance Obligation, Step-Up Loan, Step-Down Loan, Subordinated Loan, Specified Collateral Loan and/or Equity Security (and, if necessary, determining whether any Equity Security is Margin Stock);
(xii)    determining whether any payment will be made, and the amount thereof, pursuant to Section 5.31 of the Credit Agreement;
(xiii)    determining whether any investment is an Eligible Investment;
(xiv)    determining the timing and amount of Borrowings to be made under the Notes (and effectuating such Borrowings);
(xv)    supervising the Collateral Loans, including communicating and negotiating with Obligors, executing amendments on behalf of the Borrower, providing recommendations to the Borrower to provide consents and waivers (subject to the terms and conditions set forth in Section 5.19 of the Credit Agreement), enforcing and (subject to the 

7

provisions hereof) collecting on the Collateral Loans and otherwise managing the Collateral Loans on behalf of the Borrower;
(xvi)    identifying each Collateral Loan in its servicing records to reflect that such Collateral Loan is owned by the Borrower
(xvii)    directing the Collateral Agent and/or the Custodian to take, or taking on behalf of the Borrower, as applicable, any appropriate actions, as agent and attorney-in-fact of the Borrower, with respect to any Managed Asset, including, without limitation:
		
	(A)
	purchasing and retaining such Managed Asset (or the retention of any such Equity Security or other asset that is not Margin Stock) and the selection of the dates for purchase;

		
	(B)
	selling or otherwise disposing of such Managed Asset, and selecting the dates for such sale or disposition as required or permitted under the Credit Agreement;

		
	(C)
	if applicable, tendering such Managed Asset pursuant to an Offer;

		
	(D)
	if applicable, consenting to or refusing to consent to any proposed amendment, modification or waiver pursuant to an Offer or otherwise;

		
	(E)
	retaining or disposing of any Managed Asset received pursuant to an Offer;

		
	(F)
	waiving a default with respect to any Defaulted Loan;

		
	(G)
	voting to accelerate the maturity of any Defaulted Loan;

		
	(H)
	making determinations with respect to the Borrower's exercise (including, but not limited to, any waiver, modification or variation) of any rights (including, but not limited to, voting rights and rights arising in connection with the bankruptcy or insolvency of an issuer or an Obligor or the consensual or non-judicial restructuring of the debt or equity of an issuer or an Obligor) or remedies in connection with the Collateral Loans and participating in a committee or group formed by creditors of an issuer or an Obligor under a Managed Asset; 

		
	(I)
	after or in connection with a Payment in Full or in connection with any payment, prepayment or refinancing of the Loans, advising the Borrower as to when, in the view of the Collateral Manager, it would be in the best interest of the Borrower to liquidate all or any portion of the Borrower’s assets and rendering such assistance as may be necessary or required by the Borrower in connection with such liquidation or any actions necessary to effectuate a Payment in Full, payment, prepayment or refinancing of the Loans;

8

		
	(J)
	advising and assisting the Borrower with respect to the valuation of any Managed Asset, to the extent required or permitted by the Credit Agreement;

		
	(K)
	monitoring and, as required by the Credit Agreement, reporting on the performance of each entity in which the Borrower shall have invested and, where appropriate, providing advice at the policy level to the management of any entity in which the Borrower shall have invested, including in relation to the designation of members of the board of directors or similar governing body of any such entity, if applicable;

		
	(L)
	providing strategic and financial planning advice to the Borrower, including advice on utilization of assets;

		
	(M)
	obtaining tax, accounting and other professional services required by the Borrower; and

		
	(N)
	exercising any other rights or remedies with respect to any Managed Asset as provided in the Constituent Documents of the Borrower or of the issuer of or Obligor under such Managed Asset or as provided in the Related Contracts governing the terms of such Managed Asset, or the taking of any other action not inconsistent with the terms of this Agreement and the Credit Agreement that the Collateral Manager reasonably determines to be in the best interests of the Borrower;

provided that, notwithstanding any provisions of this Agreement, in no event shall the Collateral Manager direct the Collateral Agent and/or Custodian to effect, or effect on behalf of the Borrower, any purchase or sale of a Managed Asset that is not in compliance with the applicable provisions of the Credit Agreement;
(xviii)    in the event that a request to draw on any Revolving Collateral Loan or Delayed Funding Loan is received (A) first directing the Collateral Agent to use amounts on deposit in the Future Funding Reserve Account to fund such draw and (B) if sufficient funds are not then available in the Future Funding Reserve Account to cover such draw, directing the Collateral Agent to withdraw funds in the Collection Account representing Principal Proceeds in an amount so that such draw may be fully funded and (C) if the sum of the amounts then available under clause (A) and clause (B) is not sufficient to fully fund such draw, make a Borrowing by preparing a Notice of Borrowing for the remaining amounts needed to fund such draw; 
(xix)    [reserved]; 
(xx)    compiling and preparing certain reports on behalf of the Borrower and performing such other functions and complying with such other reporting duties and responsibilities as are provided hereunder and in the Credit Agreement, including without limitation, preparing any reports required to be prepared by the Collateral Manager, as set forth in the Credit Agreement;

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(xxi)    monitoring compliance by the Borrower with the Eligibility Criteria as they relate to the acquisition of Collateral Loans; and
(xxii)    performing (and acting as agent of the Borrower in order to perform on behalf of the Borrower) all obligations of the Borrower under the Credit Agreement relating to investment management, servicing, administration and reporting in connection with the Managed Assets and otherwise complying with such other duties and responsibilities expressly required of the Collateral Manager in the applicable Loan Documents.
(c)    The Collateral Manager shall, and is hereby authorized to, perform its obligations hereunder and under the Credit Agreement in a manner that is consistent with the terms of the Credit Agreement.
(d)    The Collateral Manager shall not be bound to comply with any amendment, waiver or modification to the Credit Agreement that could reasonably be expected to adversely affect in any material respect the Collateral Manager, unless the Collateral Manager has consented thereto in writing.
(e)    The Borrower acknowledges, and the Collateral Manager agrees, that the principals, employees and professional staff of the Collateral Manager will devote such time and effort in conducting activities on behalf of the Borrower as the Collateral Manager reasonably deems appropriate to perform its duties in accordance with this Agreement and in accordance with reasonable commercial standards.
(f)    Subject to any directions of the Borrower to the Collateral Manager in writing and subject to the Credit Agreement and the provisions hereof, the Borrower hereby makes, constitutes and appoints the Collateral Manager, with full power of substitution (any person in favor of which such power of substitution shall be exercised being referred to as a “subattorney”), as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead (i) to sign, execute, certify, swear to, acknowledge, deliver, file, receive and record any and all documents, and to make any payment, which the Collateral Manager reasonably deems necessary or appropriate in connection with its duties under this Agreement and (ii) to (A) vote in its discretion any Managed Assets included in the Collateral, (B) execute proxies, waivers, consents, amendments and other documents, instruments and certificates with respect to such Managed Assets, (C) endorse, transfer or deliver such Managed Assets and execute and deliver all transfer documentation with respect hereto, and (D) participate in or consent (or decline to consent) to any modification, work-out, restructuring, bankruptcy proceeding, class action, plan or reorganization, merger, combination, consolidation, liquidation or similar plan or transaction with regard to such Managed Assets.  This grant of power-of-attorney is coupled with an interest and, to the extent permitted by applicable law, irrevocable, and it shall survive and not be affected by the subsequent dissolution or bankruptcy of the Borrower; provided that this grant of power of attorney shall expire, and the Collateral Manager and any subattorney shall cease to have any power to act as the Borrower’s agent or attorney-in-fact, upon termination of this Agreement or upon the removal or resignation of the Collateral Manager becoming effective in accordance with Section 12 or 13(a), as applicable.  The Borrower shall execute and deliver to the Collateral Manager all such other powers of attorney, proxies, and other orders, and all such instruments, as the Collateral Manager may reasonably request for the 

10

purpose of enabling the Collateral Manager to exercise the rights and power which it is entitled to exercise pursuant to this Agreement.  Each of the Collateral Manager and the Borrower shall take such other actions, and furnish such certificates, opinions and other documents, as may be reasonably requested by the other party hereto in order to effectuate the purposes of this Agreement and to facilitate compliance with applicable laws and regulations and the terms of this Agreement.
(g)    In furtherance of the foregoing, the Collateral Manager, on behalf of the Borrower, shall provide prompt written notification to the Borrower, the Administrative Agent, the Collateral Agent and DBRS upon a Senior Authorized Officer of the Collateral Manager becoming aware of the occurrence of a Default or an Event of Default.
		
	Section 3.
	Purchase and Sale Transactions

(a)    In executing transactions with respect to the Collateral (other than Collateral Loans originated by Fifth Street which are subject to Section 3(b) below), the Collateral Manager will use commercially reasonable efforts to obtain the best execution but has no obligation to obtain the lowest purchase prices or highest sale prices available.  The Collateral Manager may choose to execute transactions utilizing electronic trading platforms and may incur incidental fees as a result, if in the Collateral Manager’s reasonable business judgment, electronic execution will improve execution quality. Subject to the objective of obtaining best execution, the Collateral Manager may take into consideration all factors the Collateral Manager reasonably determines to be relevant, including the provision by the broker of services of value to the Collateral Manager in managing accounts for itself, its Affiliates and others.  Such services may be used in connection with the other proprietary or advisory activities or investment operations of the Collateral Manager and/or its Affiliates.  The Collateral Manager may aggregate sales and purchase orders placed with respect to the Collateral with similar orders being made simultaneously for itself, its Affiliates or other Clients taking into consideration the availability of purchasers or sellers, the selling or purchase price, brokerage commissions or mark-ups or mark-downs and other expenses.  If any such aggregated order is not filled at the same price, such order may be allocated on an average price or other appropriate basis.  However, no provision in this Agreement shall require the Collateral Manager or any of its Affiliates to execute orders as part of concurrent authorizations or to aggregate sales.  In the event that a sale or purchase of a Collateral Loan occurs as part of any aggregate sale or purchase order (other than Collateral Loans originated by Fifth Street which are subject to Section 3(b)), the objective of the Collateral Manager shall be to allocate the executions among itself, its Affiliates and the relevant Clients in a manner reasonably believed by the Collateral Manager to be equitable for the Clients involved (taking into account, among other factors, the constraints imposed by the Credit Agreement on the Borrower).  The Collateral Manager and its Affiliates may also at certain times simultaneously seek to purchase or dispose of Collateral for the Borrower, themselves and/or their other Clients.  Subject to applicable law and the requirements of any governing documents applicable thereto, investment opportunities sourced by the Collateral Manager (other than to Collateral Loans originated by Fifth Street) will generally be allocated to the Borrower in a manner that the Collateral Manager believes, in its reasonable business judgment, to be appropriate given factors that it believes to be relevant.  The Borrower acknowledges that the determinations pursuant to this Section 3 made by the Collateral Manager are subjective and represents the Collateral Manager’s evaluation at the time that the Borrower will be benefited by better purchase or sales 

11

prices, lower commission expenses and beneficial timing of transactions or a combination of these and other factors.  
(b)    With respect to Collateral Loans originated by Fifth Street, such Collateral Loans may be offered to the Borrower and acquired by the Borrower in accordance with the Master Transfer Agreement and the Credit Agreement.  The Borrower agrees that Fifth Street is not obligated to offer any such Collateral Loan to the Borrower.
(c)    Subject to Sections 3(a) and 3(b) hereof and the Credit Agreement, as applicable, the Collateral Manager is hereby authorized to effect Client cross-transactions where the Collateral Manager causes a transaction to be effected between the Borrower and another Client advised by it or by any of its Collateral Manager Affiliates, including, without limitation, other entities investing in, entering into or warehousing assets similar to the Collateral Loans.  The Collateral Manager may engage in a Client cross-transaction involving the Borrower any time that the Collateral Manager believes such transaction to be fair to the Borrower and its other Client.  The Borrower hereby consents to any such Client cross-transactions between the Borrower and another Client of the Collateral Manager or one of its Collateral Manager Affiliates.
(d)    The Borrower acknowledges and agrees that the Collateral Manager and Collateral Manager Related Persons may invest for their own accounts or for the accounts of others in securities, obligations, and other assets that would be appropriate investments for the Borrower.  Such investments may be the same as or different from those made on behalf of the Borrower.  The Borrower acknowledges that the Collateral Manager and Collateral Manager Related Persons may enter into, for their own accounts or for the accounts of others, credit default swaps relating to Obligors or issuers with respect to the Collateral.  The Borrower understands that the Collateral Manager and Collateral Manager Related Persons may have economic interests in (including, without limitation, controlling equity interests or other equity or debt interests), be lenders to, receive payments from, render services to, engage in transactions with or have other relationships with Obligors or issuers with respect to the Collateral.  In particular, the Collateral Manager and Collateral Manager Related Persons may make or hold investments in an Obligor’s or issuer’s securities or obligations that may be pari passu, senior or junior in ranking to an investment in such Obligor’s or issuer’s securities or obligations held by the Borrower or otherwise have interests different from or adverse to those of the Borrower.  The Borrower agrees that, in the course of managing the Collateral held by the Borrower, the Collateral Manager may consider its relationships with other Clients (including Obligors or issuers) and Collateral Manager Related Persons.  The Collateral Manager may decline to make a particular investment for the Borrower in view of such relationships.  In addition, individuals who are partners, managers, members, shareholders, directors, officers, employees or agents of the Collateral Manager or of one or more Collateral Manager Related Persons may serve on boards of directors of, or otherwise have ongoing relationships with, such Obligors or issuers.  As a result, such individuals may possess information relating to Obligors or issuers of Collateral that is (a) not known to or (b) known but restricted as to its use by the individuals at the Collateral Manager responsible for monitoring the Collateral and performing the other obligations of the Collateral Manager under this Agreement.  Each of such ownership and other relationships may result in securities laws restrictions on transactions in such securities by the Borrower and otherwise create conflicts of interest for the Borrower.  The Borrower acknowledges and agrees 

12

that, in all such instances, the Collateral Manager and Collateral Manager Related Persons may in their discretion make investment recommendations and decisions that may be the same as or different from those made with respect to the Borrower’s investments and they have no duty, in making or managing such investments, to act in a way that is favorable to the Borrower.
(e)    The Borrower agrees that neither the Collateral Manager nor any Collateral Manager Related Person is under any obligation to offer investment opportunities of which it becomes aware to the Borrower or to account to the Borrower for (or share with the Borrower or inform the Borrower of) any such transaction or any benefit received by it from any such transaction or to inform the Borrower before purchasing any loans and other investments for its own account or offering any opportunities to purchase loans and other investments to any of its Affiliates or to other funds or Clients that the Collateral Manager or any of its Affiliates may manage or advise or to third parties.  The Borrower understands that the Collateral Manager and Collateral Manager Related Persons may have, for their own accounts or for the accounts of others, portfolios with substantially the same portfolio criteria as are applicable to the Borrower.  Furthermore, the Collateral Manager and each Collateral Manager Related Person may make an investment on behalf of any Client or on their own behalf without offering the investment opportunity or making any investment on behalf of the Borrower and, accordingly, investment opportunities may not be allocated among all such Clients.  The Borrower acknowledges that affirmative obligations may arise in the future, whereby the Collateral Manager or Collateral Manager Related Persons are obligated to offer certain investments to Clients before or without the Collateral Manager’s offering those investments to the Borrower.  The Borrower agrees that the Collateral Manager may make investments on behalf of the Borrower in securities or obligations that it has declined to invest in or enter into for its own account, the account of any of the Collateral Manager Related Persons or the account of any other Client.
(f)    Subject to Sections 3(a) and 3(b) hereof and the Credit Agreement, as applicable, the Collateral Manager may effect transactions with the Borrower or its Affiliates in accordance with applicable law (i) on an agency basis or (ii) on a principal basis where the Collateral Manager or any of its Collateral Manager Affiliates sells assets to or purchases assets from the Borrower on terms and at prices that would be applicable to such transaction at an arm’s length basis with an independent third party.
		
	Section 4.
	Services to Other Borrowers; Certain Affiliated Activities

(a)    The relationship between the Collateral Manager and the Borrower as described in this Agreement permits the Collateral Manager and its Affiliates to act in multiple capacities (i.e., act as principal or agent in addition to acting on behalf of the Borrower), and, subject only to the Collateral Manager’s execution obligations set forth in Section 3 hereof and the Credit Agreement, to effect transactions with or for the Borrower’s account in instances in which the Collateral Manager and its Affiliates may have multiple interests.  In this regard the Borrower acknowledges that the Collateral Manager and the Collateral Manager Related Persons may have multiple proprietary, advisory, transactional and financial and other interests in other issuers of collateralized debt obligations that invest in assets of a similar nature to those of the Borrower, and in obligations, securities, instruments and companies that may be purchased, sold or held for the 

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Borrower’s account.  The Collateral Manager and its Affiliates may originate and invest in Managed Assets on behalf of themselves and their Affiliates and act and may act as adviser to Clients in investment banking, financial advisory, asset management and other capacities related to instruments that may be purchased, sold or held on the Borrower’s behalf, and the Collateral Manager and its Affiliates may originate obligations or securities that the Borrower may purchase, sell or hold subject to the provisions of this Agreement and of the Credit Agreement.  The Collateral Manager and its Affiliates may syndicate Collateral Loans and/or act as agent for the lenders with respect to a Collateral Loan acquired by the Borrower.  The Collateral Manager serves and expects in the future that it and/or its Affiliates will serve as collateral manager, collateral servicer, investment advisor or sub-advisor for other loan financing vehicles, collateral loan obligation vehicles, structured finance vehicles, loan funds, loan separate account and the like.  At times, these activities and activities of the Collateral Manager and/or its Affiliates for their own respective accounts may cause the Collateral Manager or its Affiliates to take actions adverse to the interests of the Borrower.  The Collateral Manager and/or Collateral Manager Related Persons will at certain times (a) be seeking to purchase or sell securities or obligations for the Borrower while simultaneously seeking to take the same or opposite action for themselves, or their other Clients and/or (b) take short positions or enter into short credit default swaps with respect to certain Collateral or Obligors included in the Collateral.  The Borrower understands that such actions may have an adverse impact on the market which the Collateral Manager seeks to access on behalf of the Borrower.  The Collateral Manager and/or Collateral Manager Related Persons may give advice, and take action, with respect to any of their Clients or their respective proprietary accounts that may differ from the advice given, or may involve a different timing or nature of action taken, than with respect to any one or all of the Collateral Manager’s advisory accounts (including the Borrower), and effect transactions for such Clients or their respective proprietary accounts at prices or rates that may be more or less favorable than the prices or rates applying to transactions effected for the Borrower. 
(b)    The Borrower acknowledges that the ability of the Collateral Manager and its Affiliates to effect or recommend transactions may be restricted by applicable regulatory requirements in the United States or elsewhere or by their internal policies designed to comply with such requirements.  As a result, there may be periods when the Collateral Manager will not initiate or recommend certain types of transactions in certain obligations or securities on behalf of the Borrower.
(c)    Nothing herein shall prevent the Collateral Manager and/or Collateral Manager Related Persons from (1) acting as principal, agent or fiduciary for other Clients in connection with obligations or securities simultaneously held by the Borrower or of the type eligible for acquisition by the Borrower or limiting any relationships the Collateral Manager and/or Collateral Manager Related Persons may have with any Obligor or issuer of any Collateral or (2) engaging, to the extent permitted by law and not prohibited by the Credit Agreement, in its or their customary business, other businesses or from rendering services of any kind to the Borrower and its Affiliates, the Collateral Agent, the Administrative Agent, the Lenders or any other Person.  There is no limitation or restriction on the ability of the Collateral Manager or any of its Affiliates now or in the future to act as collateral manager, Collateral Manager, investment advisor or sub-advisor (or in a similar role) to other Persons.

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Without prejudice to the generality of the foregoing, the Collateral Manager or any Collateral Manager Related Person may, among other things:
(i)    serve as shareholders, directors (whether supervisory or managing), managers, officers, employees, agents, nominees or signatories for the Borrower or any Affiliate thereof, or for any Obligor or issuer or Affiliate of any Obligor or issuer of any of the Collateral; provided, that, in the commercially reasonable opinion of the Collateral Manager, such activity will not have a material adverse effect on the Collateral;
(ii)    receive fees for services of whatever nature rendered to the Obligor or issuer of any of the Collateral; provided, that with respect to such services, the Collateral Manager is not acting as an agent for the Borrower and that such activity will not (in the commercially reasonable judgment of the Collateral Manager)  have a material adverse effect on the Collateral;
(iii)    be retained to provide services unrelated to this Agreement to the Borrower or its Affiliates or to any other Person and be paid therefor;
(iv)    be a secured or unsecured creditor of, or hold an equity interest in (A) the Borrower or any Affiliate thereof or (B) any Obligor or issuer of any Collateral;
(v)    subject to Sections 3 and 5 hereof, applicable law and the Credit Agreement, sell any Collateral to, or purchase any Collateral from, the Borrower while acting in the capacity of principal or agent;
(vi)    originate, underwrite, act as an agent with respect to, act as a distributor of or make a market in any Collateral;
(vii)    serve as a member of any “creditors’ board” or “creditors’ committee” with respect to any Obligor or issuer with respect to any Collateral; and
(viii)    act as collateral manager, collateral servicer, investment manager and/or sub-advisor in other corporate loan financing vehicles, collateralized loan obligation vehicles, structured finance vehicles, funds or separate accounts.
(d)    The Borrower acknowledges and agrees that:
(i)    the Collateral Manager and/or its Affiliates have proprietary interests in, and may manage or advise, accounts or investment funds that have investment objectives similar or dissimilar to those of the Borrower and/or that engage in transactions in the same types of securities, obligations and investments as the Borrower, and as a result may compete with the Borrower for appropriate investment opportunities;
(ii)    issuers or Obligors of securities or obligations held by the Borrower may have publicly or privately traded securities or obligations, including securities or obligations that are senior to, or have interests different from or adverse to, the securities 

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that are pledged to secure the Notes, in which the Collateral Manager and/or its Affiliates may be an investor or may make a market;
(iii)    the  trading activities of the Collateral Manager and/or its Affiliates generally are carried out without reference to positions held by the Borrower and may have an effect on the value of the positions so held, or may result in the Collateral Manager and/or its Affiliates having an interest in the applicable Obligor or issuer adverse to that of the Borrower;
(iv)    the Collateral Manager and/or its Affiliates may create, write or issue derivative instruments with respect to which the underlying obligations or securities may be those in which the Borrower invests;
(v)    the Collateral Manager, any Collateral Manager Related Person or any member of their families or a Person advised by the Collateral Manager and/or its Affiliates may have an interest in a particular transaction or in investments of the same kind or class, or investments of a different kind or class of the same issuer or Obligor, as those whose acquisition or sale the Collateral Manager may direct hereunder; and
(vi)    the Collateral Manager and/or its Affiliates may obtain and keep any profits, commissions and fees accruing to them in connection with their activities as agent or principal in transactions for the Borrower’s account and other activities for themselves and other Clients and their own accounts, and the Collateral Manager’s fees as set forth in this Agreement shall not be abated thereby.
(e)    In connection with their activities with the Collateral Manager, the Borrower understands that the directors, officers and employees of the Collateral Manager (the “Personnel”) may receive information regarding the Collateral Manager’s proposed activities or activities or proposed activities of any Obligor or any issuer of securities that is not generally available to the public.  However, there will be no obligation on the part of such Personnel to make available for use by advisory accounts any information or strategies known to them or developed in connection with their advisory, proprietary or other activities.  In addition, the Collateral Manager will be under no obligation to make available any research or analysis prior to its public dissemination.  Furthermore, the Collateral Manager shall have no obligation to recommend for purchase or sale by the Borrower any obligation or security that the Collateral Manager or its Personnel may purchase for themselves or for any other Clients.  The Borrower understands that the policies of the Collateral Manager are such that certain Personnel may have or obtain information that, by virtue of the Collateral Manager’s internal policies relating to confidential communications, cannot or may not be used by the Collateral Manager on behalf of the Borrower.  In addition, the Collateral Manager and Collateral Manager Related Persons, in connection with their other business activities, may acquire material non-public confidential information that may restrict the Collateral Manager from purchasing obligations or securities or selling obligations or securities for itself, for its Affiliates or for its Clients (including the Borrower) or otherwise using such information for the benefit of itself, its Affiliates or its Clients.  The Collateral Manager shall have no obligation to seek to obtain any material non-public information about any Obligor or any issuer, and will not effect transactions for the Borrower on the basis of any material non-public information as may come into its possession.

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(f)    The Borrower acknowledges and agrees that, although the officers and employees of the Collateral Manager will devote as much time to the Borrower as the Collateral Manager deems necessary and appropriate, the officers and employees may have conflicts in allocating their time and services among the Borrower and the Collateral Manager’s and its Affiliates’ other Clients and proprietary accounts.  
		
	Section 5.
	Conflicts of Interest

In certain circumstances, the interests of the Borrower and/or the Lenders with respect to matters as to which the Collateral Manager is advising the Borrower may conflict with the interests of the Collateral Manager.  The Borrower hereby acknowledges that various potential and actual conflicts of interest may exist with respect to the Collateral Manager as described in this Agreement; provided that nothing in this Section 5 shall be construed as altering the duties of the Collateral Manager as set forth herein, in the Credit Agreement or other Loan Documents (as applicable) or under applicable law.
		
	Section 6.
	Records; Confidentiality

(a)    The Collateral Manager shall maintain appropriate books of account and records in which full, true and correct entries in all material respects in accordance with GAAP shall be made of all material financial matters and transactions relating to the Borrower’s business, activities and services performed hereunder, and such books of account and records shall be accessible for inspection and copying by representatives of the Borrower, the Administrative Agent and the Collateral Agent, or their designees (at the Borrower’s expense, in the case of not more than one inspection during any fiscal year except during the continuance of an Event of Default) upon reasonable advance notice and during normal business hours, provided that (i) any expenses incurred by the Borrower hereunder shall be reasonable and documented and (ii) the Collateral Manager shall not be required to disclose any information which it is required by law or contract to keep confidential.
(b)    The Collateral Manager shall keep confidential any and all such information obtained in connection with the services rendered hereunder and shall not disclose any such information to third parties that are not Affiliates of the Collateral Manager or the Borrower except (i) with the prior written consent of the Borrower, (ii) such information as the Rating Agency shall request in connection with the rating of the Collateral Loans or any Credit Estimate, (iii) as required by law, regulation, court order, request by a governmental regulatory agency with jurisdiction over the Collateral Manager or the rules or regulations of any self-regulating organization, body or official having jurisdiction over the Collateral Manager, (iv) to its professional advisors, (v) as expressly permitted in the Credit Agreement or in any other Loan Document, (vi) to the extent necessary in connection with the duties or rights of the Collateral Manager hereunder, under the Credit Agreement or under any other Loan Document, (vii) subject to the second succeeding sentence, in connection with other transactions managed or to be managed by the Collateral Manager or its Affiliates or an assessment by others of the Collateral Manager or its Affiliates performance or investment management business or (viii) such information as shall have been publicly disclosed other than in violation of this Agreement.  For purposes of this Section 6, the Lenders, prospective Lenders, the Collateral Agent, the Administrative Agent or any other party, prospective or otherwise, to an 

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agreement contemplated by the Credit Agreement, shall in no event be considered “third parties that are not Affiliates of the Collateral Manager or the Borrower.”  Notwithstanding anything to the contrary herein, the Collateral Manager shall have the right to disclose (in summary form) the Collateral Manager’s performance with respect to the Collateral owned by the Borrower from time to time in connection with the marketing of other portfolios, funds and accounts managed or to be managed by the Collateral Manager or any of its Affiliates.
(c)    Notwithstanding anything herein to the contrary, the Collateral Manager (and each employee, representative, or other agent of the Collateral Manager) may disclose to any and all other persons, without limitations of any kind, the tax treatment and tax structure of the transactions described here and all materials of any kind (including opinions or other tax analyses) that are provided to the Collateral Manager relating to such tax treatment and tax structure. However any such information relating to the tax treatment or tax structure is required to be kept confidential to the extent reasonably necessary to comply with applicable federal or state securities law.  For purposes of this paragraph, the terms “tax treatment” and “tax structure” have the meaning given to such terms under United States Treasury Regulation Section 1.6011-4(c) and applicable state and local law.
(d)    If requested by the Majority Lenders, the Collateral Manager agrees that representatives of the Majority Lenders (or an independent third party auditing firm selected by the Majority Lenders) shall (at the Borrower's expense) conduct an audit and/or field examination of the Collateral Manager, at reasonable times in a manner so as to not unduly disrupt the business of the Collateral Manager, for the purpose of examining the servicing and administration of the Collateral Loans, the results of which audit and/or field examination shall be promptly provided to the Lenders, provided that no more than one such audit or field examination shall be conducted during any fiscal year of the Collateral Manager.
(e)    If requested by the Administrative Agent or the Majority Lenders, the Collateral Manager shall participate (and shall use commercially reasonable efforts to cause the Investment Advisor to participate) in a meeting with the Administrative Agent and the Lenders requested pursuant to Section 5.6(c) of the Credit Agreement.
		
	Section 7.
	Actions of the Collateral Manager

The Collateral Manager shall not take any action that, in its judgment, subject to the Servicing Standard, would (i) materially adversely affect the status of the Borrower for purposes of United States federal or state law or other law that, in its judgment, subject to the Servicing Standard, is applicable to the Borrower, (ii) if taken on behalf of the Borrower, not be permitted by the Borrower’s Constituent Documents, copies of which the Collateral Manager acknowledges it has received, (iii) violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Borrower, including, without limitation, actions that would violate United States federal, state or other applicable securities law, the violation of which would have a Material Adverse Effect, (iv)  require registration of the Borrower or the pool of Collateral as an “investment company” under the Investment Company Act, or (v) cause the Borrower to violate any provision of the Credit Agreement or any other Loan Document to which the Borrower is a party, in each case in any material respect (provided that, in and of itself, failure of the Borrower to satisfy any Coverage 

18

Tests, Collateral Quality Tests, Concentration Limitations or Eligibility Criteria shall not be considered such a violation).  If the Collateral Manager is ordered to take any such action on behalf of the Borrower, the Collateral Manager shall promptly notify the Borrower, the Administrative Agent and the Collateral Agent of the Collateral Manager’s judgment that such action would, in its reasonable business judgment, have one or more of the consequences set forth above and need not take such action, unless the Borrower again requests the Collateral Manager to do so and the Administrative Agent has consented thereto in writing.  Notwithstanding any such request, the Collateral Manager need not take such action unless arrangements reasonably satisfactory to it are made to insure or indemnify the Collateral Manager, its partners, members, managers, stockholders, directors, officers, employees, professional advisors and agents from any liability and expense it may incur as a result of such action.  Neither the Collateral Manager nor its partners, members, managers, stockholders, directors, officers, employees, professional advisors or agents shall be liable to the Borrower or any other Person, except as provided in Section 10.  Notwithstanding anything contained in this Agreement to the contrary, any indemnification or insurance provided for in this Section 7, Section 10 or Section 14 shall be payable out of the Collateral in accordance with the Priority of Payments set forth in Section 9.1 of the Credit Agreement and it is acknowledged that indemnification or insurance arrangements provided for in this Section 7, Section 10 or Section 14 may not be reasonably satisfactory if the Person who would benefit therefrom does not expect sufficient funds may be available under Section 9.1 of the Credit Agreement to satisfy all contingencies.  The Collateral Manager covenants that it shall comply in all material respects with all laws and regulations applicable to it in connection with the performance of its duties under this Agreement and the Credit Agreement.  Notwithstanding anything in this Agreement or the Credit Agreement, the Collateral Manager shall not intentionally take any action that it knows or should be reasonably expected to know would cause a Default or an Event of Default under the Credit Agreement.
		
	Section 8.
	Compensation

(a)    Subject to and in accordance with the Priority of Payments and other applicable terms of the Credit Agreement, the Borrower shall pay to the Collateral Manager, for services rendered under this Agreement, the Collateral Management Fees, pursuant to the Priority of Payments and payable in arrears on each Quarterly Payment Date to the extent provided in the Credit Agreement.
(b)    Unless otherwise specified herein or in the Credit Agreement, the Collateral Manager shall be responsible for all of its ordinary expenses and costs incurred by it in the performance of its services under this Agreement; provided that the Borrower shall bear, or reimburse the Collateral Manager for, to the extent funds are available therefor in accordance with and subject to the limitations contained in the Credit Agreement, the following expenses and costs (which shall constitute “Administrative Expenses” under the Credit Agreement): (i) any fees, expenses or other amounts payable to the Rating Agency, any web service provider, and any accountants, counsel and other professional advisors engaged by the Collateral Manager on behalf of the Borrower; (ii) any extraordinary, out-of-pocket costs and expenses incurred by the Collateral Manager in the performance of its obligations and exercise of its rights under this Agreement, the Credit Agreement or any other Loan Document, (iii) any reasonable fees and expenses incurred by it to employ outside 

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lawyers, consultants or outside professionals (but not including, for the avoidance of doubt, employee salaries) reasonably necessary with respect to its obligations and rights under this Agreement, excluding, however, any such fees and expenses incurred in connection with any dispute between the Collateral Manager and the Collateral Agent, the Administrative Agent or any Lender relating to this Agreement or the Credit Agreement, (iv) brokerage commissions paid on an arms-length basis, transfer fees, registration costs, taxes and other similar costs and transaction related expenses and fees arising out of transactions effected for the Borrower’s account; (v) reasonable, out-of-pocket expenses of communicating with the Administrative Agent and/or the Lenders, and (vi) any reasonable, out-of-pocket fees and expenses incurred by the Collateral Manager to employ asset pricing, asset valuation and asset rating services, and third party accounting, programming, software, data entry and other services that are retained by the Borrower or by the Collateral Manager on behalf of the Borrower in order to provide the services provided by the Collateral Manager pursuant to this Agreement.
(c)    If this Agreement is terminated pursuant to Sections 12 and 13 or the Collateral Manager resigns or is removed, then the removed Collateral Manager shall be entitled to receive any accrued and unpaid Collateral Management Fee which remains due and owing pro rata with the payment of accrued and unpaid Collateral Management Fee to the replacement Collateral Manager, and reimbursement of reasonable expenses when payable in accordance with the Priority of Payments and prorated for any partial period elapsing from the last day of the prior Due Period to (but excluding) the effective date of such termination, resignation or removal (which shall be such day as the successor Collateral Manager has accepted its appointment in writing).  Such Collateral Management Fee due to a removed Collateral Manager shall be due and payable on each Quarterly Payment Date, commencing on the first Quarterly Payment Date following the date of such termination, resignation or removal, subject to the Priority of Payments.
		
	Section 9.
	Servicing Standard; Benefit of the Agreement 

The Collateral Manager shall perform its duties and obligations hereunder and under the other Loan Documents in accordance with the terms of this Agreement, the other Loan Documents applicable to it and in accordance with the Servicing Standard.  The Collateral Manager shall not have any obligation to perform any duties other than as specified herein and in the Credit Agreement and the other Loan Documents (as applicable). 
		
	Section 10.
	Limits of Collateral Manager Responsibility

(a)    In rendering the services called for hereunder and under the terms of the Credit Agreement applicable to the Collateral Manager, the Collateral Manager assumes no responsibility under this Agreement other than to perform its duties and obligations hereunder and under the terms of the Credit Agreement applicable to it and, except as set forth in the next sentence, shall not be responsible for any action or inaction of the Borrower, the Collateral Agent, the Custodian or the Administrative Agent in following or declining to follow any direction or advice of the Collateral Manager.  None of the Collateral Manager, its Affiliates and their respective partners, members, managers, stockholders, directors, officers, employees and agents (each a “Collateral Manager Party”) will be liable to the Borrower, the Collateral Agent, the Custodian, the Administrative Agent, the Lenders or any other Person for any Losses incurred (including reasonable 

20

attorneys’ and accountants’ fees and expenses), or for any decrease in the value of the Collateral as a result of, the actions taken or recommended, or for any omissions (including, with respect to the Collateral Agent, the Custodian, the Administrative Agent or any Lender, any failure to timely grant any consent requested by the Collateral Manager) by, the Collateral Manager, its Affiliates or their respective partners, members, managers, stockholders, directors, officers, employees or agents under or in connection with this Agreement or the terms of the Credit Agreement applicable to it, except that the Collateral Manager shall be so liable as and to the extent specified in Section 10(b)(ii) for such Losses that arise (i) by reason of any act or omission of the Collateral Manager constituting bad faith, willful misconduct, gross negligence or fraud by the Collateral Manager in the performance of, or reckless disregard by the Collateral Manager with respect to, the obligations of the Collateral Manager hereunder and under the terms of the Credit Agreement applicable to the Collateral Manager or (ii) by any breach of the representations and warranties of the Collateral Manager set forth in Section 16 (a “Collateral Manager Breach”); provided that, no Collateral Manager Party shall be liable to the Borrower, the Collateral Agent, the Custodian, the Administrative Agent, the Lenders or any other Person for any consequential (including loss of profit), indirect, special or punitive damages under this Agreement or the Credit Agreement or any other Loan Document.  Nothing contained herein shall be deemed to waive any liability which cannot be waived under applicable state or federal law or any rules or regulations adopted thereunder.
(b)    (i)    The Borrower shall indemnify and hold harmless (the Borrower in such case, the “Indemnifying Party”) the Collateral Manager, its Affiliates and their respective partners, members, managers, stockholders, directors, officers, employees and agents (in each such case, an “Indemnified Party”) from and against any and all Losses arising out of or in connection with the transactions contemplated by the this Agreement, the Credit Agreement or any other Loan Document or any acts or omissions of any such Indemnified Party; provided, that the Borrower will not be liable for any Losses to the extent that such Losses are incurred as a result of any acts or omissions by any such Indemnified Party that constitute a Collateral Manager Breach.
(ii)    The Collateral Manager shall indemnify and hold harmless (the Collateral Manager in such case, the “Indemnifying Party”) the Borrower, its Affiliates and their respective partners, members, managers, stockholders, directors, officers, employees and agents (any such party in each such case, the “Indemnified Party”) from and against any and all Losses arising out of or in connection with a Collateral Manager Breach; provided, that the Collateral Manager will not be liable for any Losses to the extent that such Losses are incurred as a result of any acts or omissions by such Indemnified Party that constitute bad faith, willful misconduct, gross negligence or fraud by such Indemnified Party hereunder or under the terms of any other Loan Document applicable to it.  No partners, members, managers, stockholders, directors, officers, employees or agents of the Collateral Manager shall be liable for the Collateral Manager’s obligations hereunder.
(iii)    If for any reason the indemnity provided for in this Section 10 is unavailable, then the Indemnifying Party shall contribute to the amount paid or payable by the Indemnified Party as a result of any Losses in such proportion as is appropriate to reflect 

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the relative benefits received by the Indemnifying Party on the one hand and the Indemnified Party on the other hand.
(c)    An Indemnified Party shall (or, with respect to the Collateral Manager’s partners, members, managers, stockholders, directors, officers, employees and agents, the Collateral Manager shall cause such Indemnified Party to) within ten (10) Business Days of receiving notice thereof, notify the Indemnifying Party if the Indemnified Party receives a complaint, claim, compulsory process or other notice of any loss, claim, damage or liability giving rise to a claim for indemnification under this Section 10, but failure to so notify the Indemnifying Party or to comply with Section 10 shall not relieve such Indemnifying Party from its obligations under paragraph Section 10(b) unless and to the extent that such failure results in the forfeiture by the Indemnifying Party of substantial rights and defenses.
(d)    With respect to any claim made or threatened against an Indemnified Party, or compulsory process or request served upon such Indemnified Party for which such Indemnified Party is or may be entitled to indemnification under this Section 10, such Indemnified Party shall (or with respect to the Collateral Manager’s partners, members, managers, stockholders, directors, officers, employees and agents, the Collateral Manager shall cause such Indemnified Party to):
(i)    at the Indemnifying Party’s expense, provide the Indemnifying Party with such information and cooperation with respect to such claim as the Indemnifying Party may reasonably require, including, but not limited to, making appropriate personnel available to the Indemnifying Party at such reasonable times as the Indemnifying Party may request;
(ii)    at the Indemnifying Party’s expense, cooperate and take all such steps as the Indemnifying Party may reasonably request to preserve and protect any defense to such claim;
(iii)    in the event suit is brought with respect to such claim, upon reasonable prior notice, afford to the Indemnifying Party the right, which the Indemnifying Party may exercise in its sole discretion and at its expense, to participate in the investigation, defense and settlement of such claim, and, to the extent that it shall wish, to assume the defense thereof, with counsel reasonably satisfactory to such Indemnified Party (who shall not, except with the consent of the Indemnified Party, be counsel to the Indemnifying Party), and, after notice from the Indemnifying Party to such Indemnified Party of its election so to assume the defense thereof, the Indemnifying Party shall not be liable to such Indemnified Party for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such Indemnified Party, in connection with the defense thereof unless such Indemnified Party reasonably determines that counsel selected by the Indemnifying Party has a conflict of interest due to conflicting interests of the Indemnifying Party and the Indemnified Party, in which case such Indemnifying Party shall pay the reasonable fees and disbursements of one additional counsel selected by the Indemnified Party (in addition to any local counsel) separate from its own counsel for all Indemnified Parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances; and

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(iv)    neither incur any material expense to defend against nor release or settle any such claim or make any admission with respect thereto (other than routine or incontestable admission or factual admissions the failure to make that could expose such Indemnified Party to (A) unindemnified liability or (B) any liability in respect of which, in the good faith determination of such Indemnified Party, the Indemnifying Party is unlikely to have sufficient funds available to indemnify the Indemnified Party in full (taking into account (where the Indemnifying Party is the Borrower) the Priority of Payments set forth in Section 9.1 of the Credit Agreement)) without the prior written consent of the Indemnifying Party; provided that the Indemnifying Party shall have advised such Indemnified Party that such Indemnified Party is entitled to be indemnified hereunder with respect to such claim.
(e)    No Indemnified Party shall, without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, settle or compromise any claim giving rise to a claim for indemnity hereunder, or permit a default or consent to the entry of any judgment in respect thereof; provided that such Indemnified Party shall not be required to seek or obtain such consent if it determines in good faith, that the Indemnifying Party is unlikely to have sufficient funds available to indemnify it in full, taking into account (where the Indemnifying Party is the Borrower) the Priority of Payments set forth in Section 9.1 of the Credit Agreement.
(f)    No Indemnifying Party shall, without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld or delayed, settle or compromise any claim giving rise to a claim for indemnity hereunder if such settlement includes a statement as to or an admission of fault, culpability or a failure to act by or on behalf of an Indemnified Party.
		
	Section 11.
	No Joint Venture

The Borrower and the Collateral Manager are not partners or joint venturers with each other and nothing herein shall be construed to make them such partners or joint venturers or impose any liability as such on either of them. The Collateral Manager’s relation to the Borrower shall be deemed to be solely that of an independent contractor.
		
	Section 12.
	Term; Replacement of the Collateral Manager

(a)    This Agreement shall commence as of the date first set forth above and shall continue in force until the first of the following occurs: (i) the final liquidation of the Collateral and the final distribution of the proceeds of such liquidation, (ii) the Payment in Full Date or (iii) the early termination of this Agreement in accordance with this Section 12 or Section 13.
(b)    The Collateral Manager may resign, upon ninety (90) days’ prior written notice (or such shorter notice as the Borrower and the Administrative Agent may agree to in writing) to the Borrower, the Administrative Agent and the Collateral Agent.

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(c)    No later than five (5) Business Days after its receipt of notice of any resignation of the Collateral Manager, the Collateral Agent shall transmit copies of such notice to the Lenders.
(d)    No resignation of the Collateral Manager will be effective unless a successor has been appointed and approved (and has accepted such appointment in writing) in accordance with the Appointment Procedures.
(e)    No resignation of the Collateral Manager will be effective until the appointment of a successor Collateral Manager that satisfies the following criteria:
(i)    such successor has the ability to professionally and competently perform duties similar to those imposed upon the Collateral Manager hereunder;
(ii)    such successor is legally qualified and has the capacity to act as successor to the Collateral Manager under this Agreement in the assumption of all of the responsibilities, duties and obligations of the Collateral Manager hereunder and under the terms of the Credit Agreement applicable to the Collateral Manager;
(iii)    such successor has assumed in writing (in form and substance reasonably satisfactory to the Administrative Agent, the Majority Lenders and the Borrower), all of the responsibilities, duties and obligations of the Collateral Manager under this Agreement and the Credit Agreement and is ready and able to assume the duties of the Collateral Manager;
(iv)    the appointment of such successor does not cause or result in the Borrower becoming, or require the pool of Collateral to be registered as, an investment company under the Investment Company Act or to become subject to income or withholding tax or other material adverse tax consequences that would not have been imposed but for such appointment; and
(v)    the Rating Condition has been satisfied.
(f)    If this Agreement is terminated pursuant to this Section 12, such termination shall be without any further liability or obligation of either party to the other, except as provided in Sections 12(h) and 12(i) below.
(g)    Upon the acceptance of its appointment by the successor Collateral Manager, all authority and power of the Collateral Manager under this Agreement, whether with respect to the Collateral or otherwise, shall automatically and without further action by any person or entity pass to and be vested in the successor Collateral Manager.  The Borrower, the Administrative Agent, the Collateral Agent, the outgoing Collateral Manager and the successor shall take such action consistent with this Agreement and the terms of the Credit Agreement applicable to the Collateral Manager, as shall be necessary to effect any such succession.

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(h)    This Section 12(h) and Section 8 (with respect to fees accrued and expenses incurred prior to such termination) and Sections 10, 12(f), 14, 17, 21 through 24, 26 and 28 shall survive any termination of this Agreement pursuant to this Section 12 or Section 13.
(i)    Notwithstanding any termination of this Agreement or the removal or resignation of the Collateral Manager, the Borrower shall remain liable for its obligations under Section 10 and the Collateral Manager shall remain liable for its obligations under Section 10 relating to any Collateral Manager Breaches.
		
	Section 13.
	Removal for Cause

(a)    This Agreement may be terminated and the Collateral Manager may be removed, without payment to the Collateral Manager of any penalty, for Cause upon prior written notice to the Collateral Manager and DBRS by the Borrower or the Administrative Agent acting at the direction of the Majority Lenders.  For purposes of determining “Cause” with respect to any such termination of the Collateral Manager, such term will mean any one of the following events:
(i)    willful violation or willful breach by the Collateral Manager of any provision of this Agreement or any other Loan Document applicable to it;
(ii)    violation or breach by the Collateral Manager of any provision of this Agreement or any other Loan Document applicable to it (other than a breach contemplated by Section 13(a)(i) or (ix)) in any material respect, if such violation or breach is not cured by the Collateral Manager within thirty (30) days of the earlier of (A) any Senior Authorized Officer of the Collateral Manager or the Investment Advisor becoming aware of such violation or breach or (B) the Collateral Manager, or receiving notice from, the Borrower, the Collateral Agent or the Administrative Agent of such violation or breach; 
(iii)    the failure of any representation, warranty, certification or statement made or delivered by the Collateral Manager in or pursuant to this Agreement or any other Loan Document applicable to it to be correct when made, if such failure could reasonably be expected to have a Material Adverse Effect or a material adverse effect to the Collateral and no correction is made for a period of thirty (30) days after the first to occur of (A) the actual knowledge of such failure by any Senior Authorized Officer of the Collateral Manager or the Investment Advisor and (B) the Collateral Manager’s receipt of notice of such failure from the Borrower, the Collateral Agent or the Administrative Agent;
(iv)    the occurrence of an Event of Bankruptcy;
(v)    (x) the occurrence of an act by the Collateral Manager, the Borrower or the Investment Advisor or any of their respective officers or managers that constitutes fraud or a felonious criminal offense in the performance of its obligations under this Agreement or any other Loan Document applicable to it, (y) the Collateral Manager, the Borrower or the Investment Advisor being indicted for a criminal offense related to the commercial lending or asset management business of the Collateral Manager, the Borrower or the Investment Advisor, respectively, or (z) any officer, director or manager of any of the 

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Collateral Manager, the Borrower or the Investment Advisor having responsibility for the administration of the Collateral or the performance by the Collateral Manager or the Borrower, respectively, of its obligations under this Agreement or any other Loan Document being indicted for a criminal offense materially related to the business of the Collateral Manager, the Borrower or the Investment Advisor, respectively, and such officer, director or manager has not been removed from having such responsibility within 30 days of such indictment;
(vi)    the occurrence of any other Event of Default under the Credit Agreement that results directly from any breach by the Collateral Manager of its duties under this Agreement or any other Loan Document applicable to it; 
(vii)    the Borrower or the pool of Collateral has become required to be registered as an investment company under the provisions of the Investment Company Act, as a result of a material breach by the Collateral Manager in violation of this Agreement; 
(viii)    the inability of the Collateral Manager to perform its duties under this Agreement due to the termination of, or the non-performance of, the Investment Adviser under the Investment Advisory Agreement;
(ix)    an assignment by the Collateral Manager in violation of Section 15; or
(x)    the occurrence of an Event of Default under Section 6.1(h) or Section 6.1(m) of the Credit Agreement.
(b)    If any event listed in Section 13(a) occurs, the Collateral Manager shall give prompt written notice thereof (and in all cases within five (5) Business Days) to the Borrower, the Administrative Agent and the Collateral Agent upon an Authorized Officer of the Collateral Manager’s becoming aware of the occurrence of such event.
(c)    If the Collateral Manager is removed for Cause, the Borrower may choose (subject to the right of the Majority Lenders to terminate the Reinvestment Period or to accelerate the Loans and/or terminate the Commitments in accordance with the terms of the Credit Agreement), upon written notice to the Administrative Agent and the Collateral Agent, to appoint a successor collateral manager in accordance with the Appointment Procedures, so long as the requirements set forth in clauses (i) through (v) of Section 12(e) with respect to the appointment of a successor collateral manager are satisfied.
		
	Section 14.
	Obligations of Resigning or Removed Collateral Manager

From and after the effective date of the resignation or removal of the Collateral Manager in accordance with this Agreement, such Collateral Manager shall not be entitled to compensation for further services hereunder, but shall, subject to the provisions of Section 8(b), be paid all compensation and expense reimbursement accrued to the effective date of resignation or removal 

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and shall be entitled to receive any amounts owing to it under Section 10. After the date any resignation or removal is effective, the Collateral Manager shall, at the Borrower’s expense:
(a)    reasonably promptly deliver to the Borrower or the successor Collateral Manager, as directed by the Borrower, all property and documents of the Borrower relating to the Collateral then in the custody of the Collateral Manager and, at the Borrower’s expense, take all other actions reasonably requested by the Administrative Agent to facilitate the transition of the successor Collateral Manager;
(b)    reasonably promptly deliver to the Collateral Agent an accounting with respect to the books and records delivered to the Borrower or the successor Collateral Manager appointed pursuant to Section 12; and
(c)    reasonably cooperate in any proceedings, even after its resignation or removal, that arise in connection with this Agreement, the Credit Agreement or the Loan Documents or any of the Collateral (excluding any such proceedings in which claims are asserted against the Collateral Manager or any Affiliate of the Collateral Manager); provided that the Collateral Manager has received or has been offered indemnity and expense reimbursement reasonably acceptable to the Collateral Manager.
		
	Section 15.
	Assignments; Delegation

(a)    Except as otherwise provided in this Section 15, the Collateral Manager may not assign or, so long as the Collateral Manager is an investment adviser registered pursuant to the Advisers Act, be deemed for the purposes of Section 205(a)(2) of the Advisers Act to have assigned, its rights and responsibilities under this Agreement without (i) satisfying the Rating Condition with respect thereto and (ii) the prior consent of the Borrower and the Administrative Agent.
(b)    The Collateral Manager may, without satisfying the Rating Condition and without obtaining the consent of the Borrower or the Administrative Agent, assign any of its rights or obligations under this Agreement to an Affiliate provided that such Affiliate (i) is directly or indirectly wholly owned by, and under the voting control of, the BDC, (ii) is duly qualified and has the ability to professionally and competently perform duties similar to those imposed upon the Collateral Manager pursuant to this Agreement and the other Loan Documents, (iii) has the legal right and capacity to act as Collateral Manager under this Agreement and the other Loan Documents, (iv) shall not cause the Borrower or the pool of Collateral to become required to register under the provisions of the Investment Company Act, (v) performs its obligations under this Agreement and the Loan Documents using substantially the same credit and collection policies, and (vi) immediately after the assignment, employs or otherwise has the benefit of the services of the same key personnel performing the duties required under this Agreement who would have performed the duties had the assignment not occurred; provided that the Collateral Manager shall deliver prior notice to the Rating Agency, the Administrative Agent and the Collateral Agent of any assignment made pursuant to this sentence.  Any assignee under this Agreement shall, before such assignment becomes effective, execute and deliver to the Borrower and the Administrative Agent (and the Administrative Agent shall promptly provide a copy thereof to the Lenders) a counterpart of this Agreement which shall be reasonably acceptable to the Administrative Agent and the Majority Lenders.  Upon the execution 

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and delivery of any such assignment by the assignee, and satisfaction of the foregoing conditions, the Collateral Manager will be released from further obligations pursuant to this Agreement except with respect to its obligations and agreements arising under Section 6, 9, 10, 12(f), 12(g), 17, 21 through 24, 26 and 28 in respect of acts or omissions occurring prior to such assignment and except with respect to its obligations under Section 14 after such assignment.
(c)    This Agreement shall not be assigned by the Borrower without satisfying the Rating Condition and the prior written consent of the Collateral Manager and the Administrative Agent (at the direction of the Majority Lenders), except in the case of assignment by the Borrower (i) to an entity that is a successor to the Borrower permitted under the Credit Agreement, in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Borrower is bound thereunder or (ii) to the Collateral Agent as contemplated by the Granting clauses of the Credit Agreement. The Borrower may assign its rights, title and interest in (but not its obligations under) this Agreement to the Collateral Agent for the benefit of the Secured Parties pursuant to the Credit Agreement; and the Collateral Manager by its signature below agrees to, and acknowledges, such assignment.  In the event of any assignment of this Agreement by the Borrower, the Borrower shall (x) use reasonable efforts to, or cause such assignee to, execute and deliver to the Collateral Manager such documents as the Collateral Manager shall consider reasonably necessary to effect fully such assignment and (y) notify the Rating Agency, the Administrative Agent and the Collateral Agent of any such assignment as soon as reasonably practicable thereafter.
(d)    The Collateral Manager may perform any or all of its duties (including rendering investment advice) hereunder or under the Credit Agreement directly or by or through its Affiliates or other third parties; provided that, other than with respect to the Investment Advisor and pursuant to the Investment Advisory Agreement, the Collateral Manager shall not delegate any duties with respect to asset selection or trade execution duties and shall perform such duties itself.  The Collateral Manager shall exercise reasonable care in the selection of any such third parties.  Any fees and expenses of any such third parties (except as otherwise provided in Section 8(b) hereof) shall be borne by the Collateral Manager.  The Collateral Manager shall remain fully responsible and liable for its duties and obligations hereunder and under the Credit Agreement and no such delegation shall relieve the Collateral Manager of any liability with respect to the performance of such duties and obligations notwithstanding any delegation to any such third party. The Collateral Manager may consult with nationally recognized counsel and accountants in their capacity as such, as reasonably selected by the Collateral Manager and the Collateral Manager shall be fully protected, in acting or failing to act hereunder if any action or inaction is taken or not taken, in each case in good faith by the Collateral Manager in accordance with the advice or opinion of such counsel or accountants and subject to the Servicing Standard.  The Collateral Manager shall not permit the Company to be subject to any additional federal, state or other income taxation in connection with any delegation pursuant to this Section 15(d).
		
	Section 16.
	Representations and Warranties 

(a)    The Borrower hereby represents and warrants to the Collateral Manager as of the date hereof as follows:

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(i)    the Borrower is a limited liability company duly organized and validly existing under the laws of the State of Delaware, with full power and authority to own and operate its assets and properties, conduct the business in which it is now engaged and to execute and deliver and perform its obligations under this Agreement and the other Loan Documents to which it is a party;
(ii)    the Borrower is in good standing in the State of Delaware.  The Borrower is duly qualified to do business and, to the extent applicable, is in good standing in each other jurisdiction in which the nature of its business, assets and properties, including the performance of its obligations under this Agreement, the other Loan Documents to which it is a party and its Constituent Documents to which it is a party, requires such qualification, except where the failure to be so qualified or in good standing is not likely to have a Material Adverse Effect;
(iii)    the execution and delivery by the Borrower of, and the performance of its obligations under, the Loan Documents to which it is a party and the other instruments, certificates and agreements contemplated thereby are within its powers and authority and have been duly authorized by all requisite action by it and have been duly executed and delivered by it and constitute its legal, valid and binding obligations enforceable against it in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally or general principles of equity, regardless of whether considered in a proceeding in equity or at law;
(iv)    none of the execution and delivery by the Borrower of this Agreement or the other Loan Documents to which it is a party, the consummation of the transactions herein or therein contemplated, or performance and compliance by it with the terms, conditions and provisions hereof or thereof, will (i) contravene in any respect the terms of any Constituent Documents of the Borrower, or any amendment thereof, (ii) (A) contravene in any material respect any applicable law, (B) conflict in any material respect with any indenture, agreement or other contractual restriction binding on or affecting it or any of its assets, including any Related Contract to which Borrower is a party, or (C) contravene in any material respect any order, writ, judgment, award, injunction, decree, rule or regulation binding on or affecting it from any court or regulatory, administrative or governmental agency, body or authority or arbitrator having or asserting jurisdiction over the Borrower or its properties or (iii) result in a breach or violation of, or constitute a default under, or permit the acceleration of any obligation or liability in, or but for any requirement of the giving of notice or the passage of time (or both) would constitute such a conflict with, breach or violation of, or default under, or permit any such acceleration in, any contractual obligation or any agreement or document to which it is a party or by which it or any of its assets are bound (or to which any such obligation, agreement or document relates), in each case which would have a Material Adverse Effect;
(v)    no order, consent, approval, license, authorization, declaration or validation of, or filing, recording or registration with, or exemption by, any governmental 

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or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with the execution, delivery and performance of any Loan Document (to which it is a party) or the consummation of any of the transactions contemplated thereby other than those that have already been duly made or obtained and remain in full force and effect or those recordings and filings in connection with the Liens granted to the Collateral Agent under the Loan Documents, except for any order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption, that, if not obtained, would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;
(vi)    the Borrower has duly observed and complied with all applicable laws relating to the conduct of its business and its assets except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect.  The Borrower has preserved and kept in full force and effect its legal existence.  The Borrower has preserved and kept in full force and effect its rights, privileges, qualifications and franchises, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect;
(vii)    the Borrower is not required to register as an “investment company” or a company controlled by an “investment company” under the Investment Company Act; and
(viii)    true and complete copies of the Credit Agreement and each other Loan Document to which it is a party and all other documents contemplated therein and the Borrower’s Constituent Documents have been or, no later than the Closing Date, will be delivered to the Collateral Manager and the Borrower agrees to deliver a true and complete copy of each amendment to the documents referred to in this Section 16(a)(viii) to the Collateral Manager as promptly as practicable after its adoption or execution.
(b)    The Collateral Manager hereby represents and warrants to the Borrower as of the date hereof as follows:
(i)    the Collateral Manager is a corporation duly incorporated and validly existing under the laws of the State of Delaware, with full power and authority to own and operate its assets and properties, conduct the business in which it is now engaged and to execute and deliver and perform its obligations under this Agreement and the other Loan Documents to which it is a party;
(ii)    the Collateral Manager is in good standing in the State of Delaware.  The Collateral Manager is duly qualified to do business and, to the extent applicable, is in good standing in each other jurisdiction in which the nature of its business, assets and properties, including the performance of its obligations under this Agreement, the other Loan Documents to which it is a party and its Constituent Documents to which it is a party, requires such qualification, except where the failure to be so qualified or in good standing is not likely to have a Material Adverse Effect;

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(iii)    the execution and delivery by the Collateral Manager of, and the performance of its obligations under, the Loan Documents to which it is a party and the other instruments, certificates and agreements contemplated thereby are within its powers and authority and have been duly authorized by all requisite action by it and have been duly executed and delivered by it and constitute its legal, valid and binding obligations enforceable against it in accordance with their respective terms, subject, as to enforcement, (A) to the effect of bankruptcy, insolvency or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency or similar event applicable to the Collateral Manager and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity);
(iv)    none of the execution and delivery by the Collateral Manager of this Agreement or the other Loan Documents to which it is a party, the consummation of the transactions herein or therein contemplated, or performance and compliance by it with the terms, conditions and provisions hereof or thereof, will (i) contravene in any material respect the terms of any Constituent Documents of the Collateral Manager, or any amendment thereof, (ii) (A) contravene in any material respect any applicable law, (B) conflict in any material respect with any indenture, agreement or other contractual restriction binding on or affecting it or any of its assets, including any Related Contract to which the Collateral Manager is a party or is bound, or (C) contravene in any material respect any order, writ, judgment, award, injunction, decree rule or regulation binding on or affecting it from any court or regulatory, administrative or governmental agency, body or authority or arbitrator having or asserting jurisdiction over the Collateral Manager or its properties or (iii) result in a breach or violation of, or constitute a default under, or permit the acceleration of any obligation or liability in, or but for any requirement of the giving of notice or the passage of time (or both) would constitute such a conflict with, breach or violation of, or default under, or permit any such acceleration in, any contractual obligation or any agreement or document to which it is a party or by which it or any of its assets are bound (or to which any such obligation, agreement or document relates), in each case which would have a Material Adverse Effect;
(v)    other than any filings the Collateral Manager may be required to file after the Closing Date as a public company subject to the Exchange Act and any registration it may be required to make after the Closing Date as an investment adviser pursuant to the Investment Advisers Act, the Collateral Manager has obtained, maintained and kept in full force and effect all Governmental Authorizations which are necessary for it to properly carry out its business, and has made all Governmental Filings necessary for the execution and delivery by it of the Loan Documents to which it is a party and the performance by the Collateral Manager of its obligations under this Agreement and the other Loan Documents, and no Governmental Authorization or Governmental Filing which has not been obtained or made is required to be obtained or made by it in connection with the execution and delivery by it of any Loan Document to which it is a party or the performance of its obligations under this Agreement and the other Loan Documents to which it is a party;

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(vi)    the Collateral Manager has duly observed and complied with all applicable laws, including the Securities Act and the Investment Company Act, relating to the conduct of its business and its assets except where the failure to do so could not reasonably be expected to result in a material adverse effect upon the performance by the Collateral Manager of its duties under, or on the validity or enforceability of this Agreement and the provisions of the Credit Agreement and any other Loan Document applicable to the Collateral Manager thereunder or could reasonably be expected to constitute “Cause” hereunder.  The Collateral Manager has preserved and kept in full force and effect its legal existence.  The Collateral Manager has preserved and kept in full force and effect its rights, privileges, qualifications and franchises, except where the failure to do so is not likely to have a Material Adverse Effect; 
(vii)    there is no charge, investigation, action, suit or proceeding before any court, exchange or regulatory agency pending or, to the actual knowledge of the Collateral Manager, threatened, that in either case would have a material adverse effect upon the performance by the Collateral Manager of its duties under this Agreement; and
(viii)    to the Collateral Manager’s knowledge, no event constituting Cause hereunder has occurred and is continuing and no event that with the giving of notice or passage of time would become an event constituting Cause has occurred or is continuing and no such event would occur as a result of its entering into or performing its obligations under this Agreement. 
(ix)    (i) the Collateral Manager does not hold itself out to the public as an investment adviser and to the extent the Collateral Manager provides any investment advice to any Person, it provides investment advice solely to its wholly owned Subsidiaries, and (ii) the Collateral Manager is not required to register as an investment adviser under the Advisers Act.
		
	Section 17.
	Non-Petition; Limited Recourse

The Collateral Manager shall continue to serve as Collateral Manager under this Agreement notwithstanding that the Collateral Manager shall not have received amounts due it under this Agreement because sufficient funds were not then available hereunder to pay such amounts in accordance with the Priority of Payments. The Collateral Manager hereby agrees that it shall not institute against, or join, cooperate with or encourage any other Person in instituting against, the Borrower for any reason whatsoever, including, without limitation, the non-payment to the Collateral Manager of any amounts due to it hereunder, any bankruptcy, reorganization, receivership, arrangement, insolvency, moratorium or liquidation proceedings or other proceedings under United States federal or state bankruptcy or similar laws until at least one year and one day or, if longer, the applicable preference period then in effect plus one day, after the Payment in Full; provided that nothing in this Section 17 shall preclude, or be deemed to stop, the Collateral Manager (A) from taking any action prior to the expiration of the applicable aforementioned period in (x) any case or proceeding voluntarily filed or commenced by the Borrower or (y) any involuntary insolvency proceeding filed or commenced against the Borrower by a Person other than the Collateral Manager or (B) from commencing against the Borrower or any properties of the Borrower any legal action 

32

which is not a bankruptcy, reorganization, receivership, arrangement, insolvency, moratorium or liquidation proceeding or other proceeding under United States federal or state bankruptcy or similar laws.  The Collateral Manager hereby acknowledges and agrees that the Borrower’s obligations hereunder will be solely the company obligations of the Borrower, and that the Collateral Manager will not have any recourse to any of the officers, directors, employees, shareholders, Affiliates, members, managers, agents, partners, principals, incorporators or agents of the Borrower, its Affiliates or their respective successors or assigns with respect to any claims, losses, damages, liabilities, indemnities or other obligations in connection with any Transactions contemplated hereby.  Notwithstanding any other provision of this Agreement or any other Loan Document, recourse by the Collateral Manager in respect of any obligations of the Borrower hereunder (including, without limitation, the obligation of the Borrower to indemnify the Indemnified Parties under Section 10(b)) will be limited to the Collateral as applied in accordance with the Priority of Payments and, on the exhaustion thereof in accordance with the terms of the Credit Agreement, all obligations of and all claims against the Borrower arising from this Agreement or any Loan Document or any transactions contemplated hereby or thereby shall be extinguished and shall not thereafter revive. The provisions of this Section 17 shall survive the termination of this Agreement for any reason whatsoever.
		
	Section 18.
	Notices

Unless expressly provided otherwise herein, all notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given, made and received when delivered against receipt or upon actual receipt of registered or certified mail, postage prepaid, return receipt requested, or, in the case of facsimile notice, when received in legible form, addressed as set forth below:
(a)    If to the Borrower:
FS Senior Funding LLC 
c/o Fifth Street Senior Floating Rate Corp. 
10 Bank Street, 12th Floor 
White Plains, NY 10606 
Attention: Bernard D. Berman 
Telephone No.: (914) 286-6800 
Facsimile No.: (914) 328-4214 
Email: bernie@fifthstreetfinance.com
(b)    If to the Collateral Manager :
Fifth Street Senior Floating Rate Corp. 
10 Bank Street, 12th Floor 
White Plains, NY 10606 
Attention: Bernard D. Berman 
Telephone No.: (914) 286-6800 
Facsimile No.: (914) 328-4214 
Email: bernie@fifthstreetfinance.com

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(c)    If to the Administrative Agent:
Natixis, New York Branch 
1251 Avenue of the Americas 
New York, New York 10036 
Attention:  Evelyn Clarke 
Facsimile No.: 646.282.2361
(d)    If to the Collateral Agent:
U.S. Bank National Association 
Corporate Trust Services 
One Federal Street, 3rd Floor 
Boston, Massachusetts 02110 
Reference:  FS Senior Funding LLC Secured Accounts 
Email: craig.healy@usbank.com 
Facsimile No.: 866-476-5522
Any party may change the address or fax number to which communications or copies directed to such party are to be sent by giving notice to the other parties of such change of address or fax number in conformity with the provisions of this Section 18 for the giving of notice.
		
	Section 19.
	Binding Nature of Agreement; Successors and Assigns

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and permitted assigns as provided herein.
		
	Section 20.
	Entire Agreement; Amendment

This Agreement and the Credit Agreement contain the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersede all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof.  The express terms hereof and thereof control and supersede any course of performance or usage of the trade inconsistent with any of the terms hereof.  This Agreement may not be modified, supplemented or amended other than by an agreement in writing executed by the parties hereto and with the consent of the Majority Lenders, provided, that, notwithstanding the foregoing, the Borrower and the Collateral Manager, without the consent of any Lender, may amend any provision of this Agreement to reflect a change that is (1) of an inconsequential nature or (2) clarifying any ambiguity, defect or inconsistency in this Agreement in a manner that is not adverse to the Borrower or any Lender.  The Collateral Manager shall notify the Rating Agency and the Administrative Agent of any amendment to this Agreement at least 10 Business Days prior to the execution thereof.
		
	Section 21.
	Controlling Law

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THIS AGREEMENT AND ALL MATTERS ARISING OUT OF OR RELATING IN ANY WAY WHATSOEVER (WHETHER IN CONTRACT, TORT OR OTHERWISE) TO THE FOREGOING SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, INCLUDING NEW YORK GENERAL OBLIGATIONS LAW §§ 5-1401 AND 5-1402 BUT OTHERWISE WITHOUT REGARD TO THE PRINCIPLES THEREOF GOVERNING CONFLICTS OF LAW.
		
	Section 22.
	Submission to Jurisdiction

(a)    Each of the Collateral Manager and the Borrower irrevocably (i) submits to the nonexclusive jurisdiction of any federal or New York state or federal court sitting in the Borough of Manhattan in The City of New York in any action or proceeding arising out of or relating to the Credit Agreement or this Agreement and (ii) waives any objection which it may have at any time to the laying of venue of any proceedings brought in any such court, waives any claim that such proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such proceedings, that such court does not have any jurisdiction over such party.  Nothing in this Agreement precludes either party from bringing proceedings in any other jurisdiction, nor will the bringing of proceedings in any one or more jurisdictions preclude the bringing of proceedings in any other jurisdiction;
(b)    The Collateral Manager and the Borrower irrevocably and unconditionally agree that service of any and all process in any such action or proceeding may be effected by the mailing or delivery of copies of such process by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party at its address set forth in Section 18 hereof or at such other address as may be permitted thereunder, and 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 or court.
		
	Section 23.
	Waiver of Jury Trial

EACH OF THE BORROWER AND THE COLLATERAL MANAGER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED THEREBY OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES HERETO.  EACH OF THE BORROWER AND THE COLLATERAL MANAGER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR SUCH PARTIES ENTERING INTO THIS AGREEMENT.
		
	Section 24.
	Conflict with the Credit Agreement

Except as set forth in Section 2(d), in the event that this Agreement requires any action to be taken with respect to any matter and the Credit Agreement requires that a different action be taken with respect to such matter, and such actions are mutually exclusive, the provisions of the 

35

Credit Agreement in respect thereof shall control. In respect of any other conflict between the terms of this Agreement and the Credit Agreement, the terms of the Credit Agreement shall control.
		
	Section 25.
	Subordination; Consent to Assignment

The Collateral Manager agrees that the payment of all amounts to which it is entitled pursuant to this Agreement shall be subordinated to the extent set forth in, and the Collateral Manager agrees to be bound by the provisions of, the Priority of Payments set forth in Section 9.1 of the Credit Agreement as if the Collateral Manager were a party to the Credit Agreement.
The Collateral Manager hereby (i) consents to the assignment of the Borrower’s rights, title and interest in this Agreement to the Collateral Agent for the benefit of the Secured Parties as provided in the Granting Clause and Section 14.1 of the Credit Agreement and the enforcement by the Collateral Manager of its rights thereunder, (ii) agrees to perform any provisions of the Credit Agreement applicable to the Collateral Manager subject to the terms of this Agreement, and (iii) acknowledges that the Borrower has assigned all of its right, title and interest in, to and under this Agreement to the Collateral Agent for the benefit of the Secured Parties and (iv) agrees that all of the representations, covenants and agreements made by the Collateral Manager under this Agreement are also for the benefit of the Collateral Agent on behalf of the Secured Parties and the Administrative Agent on behalf of the Lenders.
		
	Section 26.
	Indulgences Not Waivers

Neither the failure nor any delay on the part of any party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.  No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.
		
	Section 27.
	Third Party Beneficiaries

The parties hereto agree that the Collateral Agent (on behalf of the Secured Parties), the Administrative Agent and the Lenders shall be express third party beneficiaries of this Agreement, entitled to the benefits hereof and to enforce the provisions hereof to the same extent as if each of them were a party hereto.
		
	Section 28.
	Titles Not to Affect Interpretation

The titles of paragraphs and subparagraphs contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.
		
	Section 29.
	Execution in Counterparts

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This Agreement may be executed in any number of counterparts by electronic or other written form of communication, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument.  This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.
		
	Section 30.
	Provisions Separable

The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
FS SENIOR FUNDING LLC, 
as Borrower 

By:         
Name:          
Title:         
    

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
FIFTH STREET SENIOR FLOATING RATE CORP., 
as Collateral Manager

By:         
Name:          
Title:         
    

[Signature Page to Collateral Servicing Agreement]

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